Net1 Reports Second Quarter 2012 Results
- Revenue of $92.1 million, an increase of 3% in US dollars and 22% in constant currency
- GAAP earnings per share of $0.56, an increase of 154% in US dollars and 199% in constant currency
- Fundamental earnings per share of $0.39, an increase of 2% in US dollars and 20% in constant currency
JOHANNESBURG, Feb. 9, 2012 /PRNewswire/ -- Net 1 UEPS Technologies, Inc. (Nasdaq: UEPS; JSE: NT1) today announced results for the second quarter of fiscal 2012.
Summary Financial Metrics
Three months ended December 31, |
|||||
2011 |
2010 |
% change in USD |
% change in ZAR |
||
(All figures in USD '000s except per share data) |
|||||
Revenue |
92,058 |
89,011 |
3% |
22% |
|
GAAP net income |
25,094 |
9,948 |
152% |
197% |
|
Fundamental net income (1) |
17,677 |
17,511 |
1% |
19% |
|
GAAP earnings per share ($) |
0.56 |
0.22 |
154% |
199% |
|
Fundamental earnings per share ($) (1) |
0.39 |
0.39 |
2% |
20% |
|
Fully-diluted shares outstanding ('000's) |
44,967 |
45,494 |
(1)% |
||
Average period USD/ ZAR exchange rate |
8.18 |
6.94 |
18% |
||
Six months ended December 31, |
|||||
2011 |
2010 |
% change in USD |
% change in ZAR |
||
(All figures in USD '000s except per share data) |
|||||
Revenue |
191,984 |
153,294 |
25% |
37% |
|
GAAP net income |
44,862 |
17,377 |
158% |
183% |
|
Fundamental net income (1) |
39,309 |
34,034 |
15% |
25% |
|
GAAP earnings per share ($) |
1.00 |
0.38 |
162% |
186% |
|
Fundamental earnings per share ($) (1) |
0.87 |
0.75 |
16% |
26% |
|
Fully-diluted shares outstanding ('000's) |
45,026 |
45,455 |
(1)% |
||
Average period USD/ ZAR exchange rate |
7.82 |
7.14 |
10% |
||
(1) Fundamental net income and earnings per share is a non-GAAP measure and is described below under "Use of Non-GAAP Measures — Fundamental net income and fundamental earnings per share." See Attachment B for a reconciliation of GAAP net income to fundamental net income and earnings per share.
Factors impacting comparability of our 2Q 2012 and 2Q 2011 results
- Unfavorable impact from the strengthening of the US dollar: The US dollar appreciated by 18% against the ZAR during 2Q 2012 which negatively impacted our reported results;
- Net taxation benefit related to the replacement of STC with a dividends withholding tax in South Africa: As a result of a recent change in South African tax law that will replace STC with a dividends withholding tax, our tax expense decreased by $11.8 million, as we recorded a $20.0 million deferred tax benefit which was offset by an $8.2 million foreign tax credit valuation allowance;
- Inclusion of revenue contribution from KSNET at lower operating margin (before acquired intangible asset amortization) than our legacy business: The inclusion of KSNET for a full fiscal quarter contributed to an increase in revenues for the 2Q 2012; however, because KSNET has an operating margin (before acquired intangible asset amortization) that is lower than our legacy businesses, it reduced our overall operating margin. KSNET also contributed to the increase in selling, general and administration and depreciation and amortization expenses;
- Lower revenues from hardware, software and related technology sales segment: Hardware, software and related technology sales were adversely impacted by lower revenues from all major segment contributors;
- Lower intangible asset amortization related to acquisition: Additional intangible asset amortization related to the acquisitions of KSNET and Eason was more than offset by the full impairment of Net1 UTA's intangibles in 2011;
- Lower interest income and increased interest expense resulting from KSNET acquisition: We paid the KSNET purchase price with a combination of cash and long-term debt, which reduced interest income and increased interest expense; and
- Fiscal 2011 unrealized foreign exchange gain and transaction-related expenses: During the 2Q 2011, we recognized, in selling, general and administration expense, an unrealized foreign exchange gain of $2.7 million and incurred transaction-related expenses of $1.8 million, primarily for the acquisition of KSNET.
Comments and Outlook
"Our 2Q 2012 results continued the strong momentum of our businesses from the previous quarter," said Dr. Serge Belamant, Chairman and Chief Executive Officer of Net1. "I am particularly pleased with SASSA's decision to award the social grants tender on a national basis to Net1, as well as the conclusion of our BEE transaction, both of which put us in a strong strategic position to drive long-term growth. We are honored and privileged to provide the highest levels of service and convenience at the lowest cost to the South African government as well as its citizens. Our focus over the next several months will be to execute on the expectations laid upon us by providing a comprehensive, seamless and superior service to this important constituency," he concluded.
"The next twelve months will require substantial investment in capital equipment and establishment costs as we implement the new SASSA contract," said Herman Kotze, Chief Financial Officer of Net1. "The substantial increase in the beneficiaries, although at a lower price, should increase our monthly pension and welfare revenue by approximately 45% in ZAR and once we are fully phased in, at the very least maintain our operating income that we generate from our current contract. We currently expect to be fully phased-in by the second quarter of fiscal 2013. We anticipate capital expenditure of $45-$50 million during the next twelve months. The next three quarters are difficult for us to predict at this time, given the timing and magnitude of investments required in any given quarter, however we anticipate still being profitable on a fundamental earnings basis for the second half of fiscal 2012," he concluded.
Results of Operations by Segment and Liquidity
Our frequently asked questions and operating metrics will be updated and posted on our website (www.net1.com).
South African transaction-based activities
Segment revenue was $46.4 million in 2Q 2012, down 1% compared with 2Q 2011 in USD and up 17% on a constant currency basis. In ZAR, the increase in segment revenue was primarily due to modest growth in our pension and welfare business, the acquisition of Eason's prepaid airtime and electricity business and increased transaction volumes in rural merchant acquiring and MediKredit. Segment operating income margin was 34% compared to 40% a year ago and has declined due to the inclusion of increased low-margin prepaid airtime sales and Eason intangible asset amortization. Excluding amortization of acquisition-related intangibles, 2Q 2012 segment operating income margin was 38%, compared to 43% during 2Q 2011.
International transaction-based activities
KSNET continues to be the largest contributor to this segment. XeoHealth generated additional implementation revenue during 2Q 2012 and since December 2011, has begun to generate recurring transaction-based revenues. Revenue was $28.8 million in 2Q 2012, up 66% in USD compared with 2Q 2011 and 95% higher on a constant currency basis, primarily as a result of the inclusion of KSNET for a full quarter as well as contributions from XeoHealth. Segment operating income margin remained consistent at 1%. Excluding the amortization of intangibles but including the start-up costs related to Net1 Virtual Card and XeoHealth in the United States and MVC activities at Net1 UTA, operating income margin was unchanged at 12%.
Smart card accounts
Segment revenue was $7.3 million in 2Q 2012, down 14% compared with 2Q 2011 in USD and up 1% on a constant currency basis. Operating income margin remained consistent at 45%.
Financial services
UEPS-based lending contributes the majority of the revenue and operating income in this operating segment. We continue to incur start-up expenditures related to our SmartLife business and other financial services offerings. Segment revenue was $1.9 million in 2Q 2012, up 18% compared with 2Q 2011 in USD and 39% higher on a constant currency basis, principally due to an increase in lending activities. 2Q 2012 segment operating income margin was 53% compared with 62% during 2Q 2011 and decreased primarily due to start-up expenditures incurred by SmartLife.
Hardware, software and related technology sales
Segment revenue was $7.6 million in 2Q 2012, down 49% compared with 2Q 2011 in USD and 40% lower on a constant currency basis. The decrease in revenue and operating income was due to a lower contribution from all contributors to hardware and software sales. Excluding amortization of all intangibles, segment operating margin was 13% compared to 16% during 2Q 2011.
Cash flow and liquidity
At December 31, 2011, we had cash and cash equivalents of $81 million, down from $95 million at June 30, 2011. The decrease in cash was due to a strengthening in the USD against the ZAR, the repayment of principal under our KSNET debt and the acquisition of SmartLife and the Eason prepaid electricity and airtime business, offset by cash generated from operations and a net settlement received from the former shareholders of KSNET. For 2Q 2012, we utilized net cash of $6.2 million for operating activities, compared to cash flow of $5.0 million in 2Q 2011. Excluding the impact of interest paid under our Korean debt, the decrease in cash provided by operating activities resulted from the timing of receipts of accounts receivable in our South African transaction-based activities operating segment offset by increased profitability. Capital expenditures for 2Q 2012 and 2011 were $5.1 million and $4.0 million, respectively.
Use of Non-GAAP Measures
US securities laws require that when we publish any non-GAAP measures, we disclose the reason for using the non-GAAP measure and provide reconciliation to the directly comparable GAAP measure. The presentation of fundamental net income and fundamental earnings per share and headline earnings per share are non-GAAP measures.
Fundamental net income and fundamental earnings per share
Fundamental net income and earnings per share is GAAP net income and earnings per share to adjusted for (1) the amortization of acquisition-related intangible assets (net of deferred taxes), (2) stock-based compensation charges and (3) unusual non-recurring items, including the effects of a change in South African tax law and the creation of a valuation allowance related to foreign tax credits, amortization of KSNET debt facility fees, transaction-related costs and an unrealized foreign exchange movements. Management believes that the fundamental net income and earnings per share metric enhances its own evaluation, as well as an investor's understanding, of our financial performance. Attachment B presents the reconciliation between GAAP and fundamental net income and earnings per share.
Headline earnings per share ("HEPS")
The inclusion of HEPS in this press release is a requirement of our listing on the JSE. HEPS basic and diluted is calculated using net income which has been determined based on GAAP. Accordingly, this may differ to the headline earnings per share calculation of other companies listed on the JSE as these companies may report their financial results under a different financial reporting framework, including but not limited to, International Financial Reporting Standards.
HEPS basic and diluted is calculated as GAAP net income adjusted for the loss (profit) on sale of property, plant and equipment, net of related tax effects, the loss attributable to the sale of 10% of SmartLife and the profit on liquidation of SmartSwitch Nigeria. Attachment C presents the reconciliation between our net income used to calculate earnings per share basic and diluted and HEPS basic and diluted.
Conference Call
We will host a conference call to review 2Q 2012 results on February 10, 2012, at 8:00 Eastern Time. To participate in the call, dial 1-800-860-2442 (U.S. only), 1-866-605-3852 (Canada only), 0-800-917-7042 (U.K. only) or 0-800-200-648 (South Africa only) ten minutes prior to the start of the call. Callers should request "Net1 call" upon dial-in. The call will also be webcast on our homepage, www.net1.com. Please click on the webcast link at least ten minutes prior to the call. A webcast of the call will be available for replay on our website through March 2, 2012.
About Net1 (www.net1.com)
Net1 is a leading provider of alternative payment systems that leverage its Universal Electronic Payment System, or UEPS, to facilitate biometrically secure real-time electronic transaction processing to unbanked and under-banked populations of developing economies around the world in an online or offline environment. In addition to payments, UEPS can be used for banking, healthcare management, payroll, remittances, voting and identification.
Net1 operates market-leading payment processors in South Africa, Republic of Korea, Ghana and Iraq. In addition, Net1's proprietary Mobile Virtual Card technology offers secure mobile payments and banking services in developed and emerging countries while its MediKredit and XeoHealth subsidiaries provide its proprietary 5010 and ICD-10 compliant real-time claims adjudication system.
Net1 has a primary listing on the Nasdaq and a secondary listing on the JSE Limited.
Forward-Looking Statements
This announcement contains forward-looking statements that involve known and unknown risks and uncertainties. A discussion of various factors that cause our actual results, levels of activity, performance or achievements to differ materially from those expressed in such forward-looking statements are included in our filings with the Securities and Exchange Commission. We undertake no obligation to revise any of these statements to reflect future events.
NET 1 UEPS TECHNOLOGIES, INC. |
|||||||||||
Unaudited Condensed Consolidated Statements of Operations |
|||||||||||
Three months ended |
Six months ended |
||||||||||
December 31, |
December 31, |
||||||||||
2011 |
2010 |
2011 |
2010 |
||||||||
(In thousands, except per share data) |
(In thousands, except per share data) |
||||||||||
REVENUE |
$ |
92,058 |
$ |
89,011 |
$ |
191,984 |
$ |
153,294 |
|||
EXPENSE |
|||||||||||
Cost of goods sold, IT processing, servicing and support |
34,168 |
29,182 |
67,112 |
47,249 |
|||||||
Selling, general and administration |
28,872 |
28,763 |
55,929 |
59,089 |
|||||||
Depreciation and amortization |
8,790 |
9,092 |
17,869 |
13,996 |
|||||||
OPERATING INCOME |
20,228 |
21,974 |
51,074 |
32,960 |
|||||||
INTEREST INCOME |
1,820 |
1,350 |
3,817 |
4,434 |
|||||||
INTEREST EXPENSE |
2,355 |
3,430 |
4,971 |
3,678 |
|||||||
INCOME BEFORE INCOME TAXES |
19,693 |
19,894 |
49,920 |
33,716 |
|||||||
INCOME TAX EXPENSE |
(5,378) |
9,836 |
5,174 |
16,043 |
|||||||
NET INCOME FROM CONTINUING OPERATIONS BEFORE EARNINGS (LOSS) FROM EQUITY-ACCOUNTED INVESTMENTS |
25,071 |
10,058 |
44,746 |
17,673 |
|||||||
EARNINGS (LOSS) FROM EQUITY-ACCOUNTED INVESTMENTS |
19 |
(166) |
104 |
(382) |
|||||||
NET INCOME |
25,090 |
9,892 |
44,850 |
17,291 |
|||||||
ADD NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTEREST |
(4) |
(56) |
(12) |
(86) |
|||||||
NET INCOME ATTRIBUTABLE TO NET1 |
$ |
25,094 |
$ |
9,948 |
$ |
44,862 |
$ |
17,377 |
|||
Net income per share, in United States dollars |
|||||||||||
Basic earnings attributable to Net1 shareholders |
$0.56 |
$0.22 |
$1.00 |
$0.38 |
|||||||
Diluted earnings attributable to Net1 shareholders |
$0.56 |
$0.22 |
$1.00 |
$0. 38 |
|||||||
NET 1 UEPS TECHNOLOGIES, INC. |
|||||||
Condensed Consolidated Balance Sheets |
|||||||
Unaudited |
(A) |
||||||
December 31, |
June 30, |
||||||
2011 |
2011 |
||||||
(In thousands, except share data) |
|||||||
ASSETS |
|||||||
CURRENT ASSETS |
|||||||
Cash and cash equivalents |
$ |
80,864 |
$ |
95,263 |
|||
Pre-funded social welfare grants receivable |
3,532 |
4,579 |
|||||
Accounts receivable, net of allowances of – December: $798; June: $728 |
93,197 |
82,780 |
|||||
Finance loans receivable |
9,474 |
8,141 |
|||||
Deferred expenditure on smart cards |
56 |
51 |
|||||
Inventory |
5,082 |
6,725 |
|||||
Deferred income taxes |
6,610 |
15,882 |
|||||
Total current assets before settlement assets |
198,815 |
213,421 |
|||||
Settlement assets |
125,582 |
186,668 |
|||||
Total current assets |
324,397 |
400,089 |
|||||
PROPERTY, PLANT AND EQUIPMENT, NET OF ACCUMULATED DEPRECIATION OF – December: $70,892; June: $50,007 |
33,776 |
35,807 |
|||||
EQUITY-ACCOUNTED INVESTMENTS |
1,545 |
1,860 |
|||||
GOODWILL |
183,827 |
209,570 |
|||||
INTANGIBLE ASSETS, NET OF ACCUMULATED AMORTIZATION OF – December: $42,017; June: $37,118 |
103,408 |
119,856 |
|||||
OTHER LONG-TERM ASSETS, including reinsurance assets |
38,288 |
14,463 |
|||||
TOTAL ASSETS |
685,241 |
781,645 |
|||||
LIABILITIES |
|||||||
CURRENT LIABILITIES |
|||||||
Accounts payable |
9,535 |
11,360 |
|||||
Other payables |
60,311 |
71,265 |
|||||
Current portion of long-term borrowings |
18,791 |
15,062 |
|||||
Income taxes payable |
3,067 |
6,709 |
|||||
Total current liabilities before settlement obligations |
91,704 |
104,396 |
|||||
Settlement obligations |
125,582 |
186,668 |
|||||
Total current liabilities |
217,286 |
291,064 |
|||||
DEFERRED INCOME TAXES |
24,748 |
52,785 |
|||||
LONG-TERM BORROWINGS |
86,708 |
110,504 |
|||||
OTHER LONG-TERM LIABILITIES, including insurance policy liabilities |
25,519 |
1,272 |
|||||
TOTAL LIABILITIES |
354,261 |
455,625 |
|||||
COMMITMENTS AND CONTINGENCIES |
|||||||
EQUITY |
|||||||
NET1 EQUITY: |
|||||||
COMMON STOCK |
|||||||
Authorized: 200,000,000 with $0.001 par value; |
|||||||
Issued and outstanding shares, net of treasury - December: 45,002,304; June: 45,152,805 |
59 |
59 |
|||||
PREFERRED STOCK |
|||||||
Authorized shares: 50,000,000 with $0.001 par value; |
|||||||
Issued and outstanding shares, net of treasury: 2011: -; 2010: - |
- |
- |
|||||
ADDITIONAL PAID-IN-CAPITAL |
137,446 |
136,430 |
|||||
TREASURY SHARES, AT COST: December: 13,455,090; June: 13,274,434 |
(175,823) |
(174,694) |
|||||
ACCUMULATED OTHER COMPREHENSIVE LOSS |
(73,834) |
(33,779) |
|||||
RETAINED EARNINGS |
439,852 |
394,990 |
|||||
TOTAL NET1 EQUITY |
327,700 |
323,006 |
|||||
NON-CONTROLLING INTEREST |
3,280 |
3,014 |
|||||
TOTAL EQUITY |
330,980 |
326,020 |
|||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
$ |
685,241 |
$ |
781,645 |
|||
(A) – Derived from audited financial statements |
|||||||
NET 1 UEPS TECHNOLOGIES, INC. |
||||||||||
Unaudited Condensed Consolidated Statements of Cash Flows |
||||||||||
Three months ended |
Six months ended |
|||||||||
December 31, |
December 31, |
|||||||||
2011 |
2010 |
2011 |
2010 |
|||||||
(In thousands) |
(In thousands) |
|||||||||
Cash flows from operating activities |
||||||||||
Net income |
$ |
25,090 |
$ |
9,892 |
$ |
44,850 |
$ |
17,291 |
||
Depreciation and amortization |
8,790 |
9,092 |
17,869 |
13,996 |
||||||
(Earnings) Loss from equity-accounted investments |
(19) |
166 |
(104) |
382 |
||||||
Fair value adjustments |
(551) |
3,344 |
(772) |
238 |
||||||
Interest payable |
2,113 |
67 |
3,775 |
140 |
||||||
Profit on disposal of property, plant and equipment |
(26) |
(3) |
(34) |
(8) |
||||||
Net loss on sale of 10% of SmartLife |
81 |
- |
81 |
- |
||||||
Profit on liquidation of subsidiary |
- |
- |
(3,994) |
- |
||||||
Realized loss on sale of SmartLife investments |
- |
- |
25 |
- |
||||||
Stock-based compensation charge |
543 |
1,558 |
1,039 |
2,996 |
||||||
Facility fee amortized |
83 |
1,728 |
199 |
1,728 |
||||||
(Increase) Decrease in accounts receivable, pre-funded social welfare grants receivable and finance loans receivable |
(19,044) |
(12,203) |
(15,795) |
(1,248) |
||||||
Increase in deferred expenditure on smart cards |
(58) |
- |
(14) |
- |
||||||
Decrease in inventory |
920 |
2,168 |
601 |
66 |
||||||
Decrease in accounts payable and other payables |
(2,679) |
(2,248) |
(2,348) |
3,777 |
||||||
Decrease in taxes payable |
(7,355) |
(6,364) |
(10,962) |
(1,230) |
||||||
Decrease in deferred taxes |
(14,088) |
(12,165) |
(13,396) |
(12,938) |
||||||
Net cash (used in) provided by operating activities |
(6,200) |
(4,968) |
21,020 |
25,190 |
||||||
Cash flows from investing activities |
||||||||||
Capital expenditures |
(5,120) |
(4,011) |
(9,586) |
(4,779) |
||||||
Proceeds from disposal of property, plant and equipment |
174 |
11 |
268 |
18 |
||||||
Acquisition of SmartLife, net of cash acquired |
- |
- |
(1,673) |
- |
||||||
Acquisition of prepaid business |
(4,481) |
- |
(4,481) |
- |
||||||
Settlement from former shareholders of KSNET (Acquisition of KSNET, net of cash acquired) |
4,945 |
(230,225) |
4,945 |
(230,225) |
||||||
Advance of loans to equity-accounted investment |
- |
- |
- |
(375) |
||||||
Repayment of loan by equity-accounted investment |
30 |
34 |
63 |
407 |
||||||
Purchase of investments related to SmartLife |
- |
- |
(2,320) |
- |
||||||
Proceeds from maturity of investments related to SmartLife |
- |
- |
2,321 |
- |
||||||
Net change in settlement assets |
30,349 |
(31,641) |
33,796 |
(47,185) |
||||||
Net cash generated from (used in) investing activities |
25,897 |
(265,832) |
23,333 |
(282,139) |
||||||
Cash flows from financing activities |
||||||||||
Loan portion related to options |
- |
- |
- |
20 |
||||||
Long-term borrowings obtained |
- |
116,353 |
- |
116,353 |
||||||
Repayment of long-term borrowings |
(7,185) |
- |
(7,185) |
- |
||||||
Payment of facility fee |
- |
(3,088) |
- |
(3,088) |
||||||
Utilization of short-term borrowings |
- |
419 |
- |
419 |
||||||
Proceeds on sale of 10% of SmartLife |
107 |
- |
107 |
- |
||||||
Acquisition of remaining 19.9% of Net1 UTA |
- |
(594) |
- |
(594) |
||||||
Acquisition of treasury stock |
- |
- |
(1,129) |
- |
||||||
Net change in settlement obligations |
(30,349) |
31,641 |
(33,796) |
47,185 |
||||||
Net cash (used in) generated from financing activities |
(37,427) |
144,731 |
(42,003) |
160,295 |
||||||
- |
- |
|||||||||
Effect of exchange rate changes on cash |
(3,389) |
(2,709) |
(16,749) |
14,295 |
||||||
Net decrease in cash and cash equivalents |
(21,119) |
(128,778) |
(14,399) |
(82,359) |
||||||
Cash and cash equivalents – beginning of period |
101,983 |
200,161 |
95,263 |
153,742 |
||||||
Cash and cash equivalents – end of period |
$ |
80,864 |
$ |
71,383 |
$ |
80,864 |
$ |
71,383 |
||
Net 1 UEPS Technologies, Inc. Attachment A Operating segment revenue, operating income (loss) and operating margin: Three months ended December 31, 2011 and 2010 and September 30, 2011 |
||||||||||
Change - actual |
Change – constant exchange rate(1) |
|||||||||
Key segmental data, in '000, except margins |
Q2 '12 |
Q2 '11 |
Q1 '12 |
Q2 '12 vs Q2'11 |
Q2 '12 vs Q1 '12 |
Q2 '12 vs Q2 '11 |
Q2 '12 vs Q1 '12 |
|||
Revenue: |
||||||||||
SA transaction-based activities |
$46,448 |
$46,737 |
$49,902 |
(1)% |
(7)% |
17% |
7% |
|||
International transaction-based activities |
28,835 |
17,385 |
30,255 |
66% |
(5)% |
95% |
10% |
|||
Smart card accounts |
7,264 |
8,434 |
8,252 |
(14)% |
(12)% |
1% |
1% |
|||
Financial services |
1,944 |
1,651 |
2,111 |
18% |
(8)% |
39% |
6% |
|||
Hardware, software and related technology sales |
7,567 |
14,804 |
9,406 |
(49)% |
(20)% |
(40)% |
(7)% |
|||
Total consolidated revenue |
$92,058 |
$89,011 |
$99,926 |
3% |
(8)% |
22% |
6% |
|||
Consolidated operating income (loss): |
||||||||||
SA transaction-based activities |
$15,766 |
$18,578 |
$20,183 |
(15)% |
(22)% |
0% |
(10)% |
|||
International transaction-based activities |
241 |
139 |
684 |
73% |
(65)% |
104% |
(59)% |
|||
Operating income excluding amortization |
3,369 |
2,171 |
3,991 |
55% |
(16)% |
83% |
(3)% |
|||
Amortization of intangible assets |
(3,128) |
(2,032) |
(3,307) |
54% |
(5)% |
81% |
9% |
|||
Smart card accounts |
3,302 |
3,832 |
3,750 |
(14)% |
(12)% |
2% |
1% |
|||
Financial services |
1,026 |
1,028 |
1,411 |
0% |
(27)% |
18% |
(16)% |
|||
Hardware, software and related technology sales |
909 |
(49) |
1,937 |
nm |
(53)% |
nm |
(46)% |
|||
Corporate/ Eliminations |
(1,016) |
(1,554) |
2,881 |
(35)% |
(135)% |
(23)% |
(141)% |
|||
Total operating income |
$20,228 |
$21,974 |
$30,846 |
(8)% |
(34)% |
8% |
(24)% |
|||
Operating income margin (%) |
||||||||||
SA transaction-based activities |
34% |
40% |
40% |
|||||||
International transaction-based activities |
1% |
1% |
2% |
|||||||
International transaction-based activities excluding amortization |
12% |
12% |
13% |
|||||||
Smart card accounts |
45% |
45% |
45% |
|||||||
Financial services |
53% |
62% |
67% |
|||||||
Hardware, software and related technology sales |
12% |
0% |
21% |
|||||||
Overall operating margin |
22% |
25% |
31% |
|||||||
(1) – This information shows what the change in these items would have been if the USD/ ZAR exchange rate that prevailed during 2Q 2012 also prevailed during 2Q 2011 and 1Q 2012. |
||||||||||
Six months ended December 31, 2012 and 2011 |
|||||||
Change - actual |
Change – constant exchange rate(1) |
||||||
Key segmental data, in '000, except margins |
F2012 |
F2011 |
F2012 vs F2011 |
F2012 vs F2011 |
|||
Revenue: |
|||||||
SA transaction-based activities |
$96,350 |
$91,626 |
5% |
15% |
|||
International transaction-based activities |
59,090 |
17,855 |
100% |
100% |
|||
Smart card accounts |
15,516 |
16,404 |
(5)% |
4% |
|||
Financial services |
4,055 |
2,901 |
40% |
53% |
|||
Hardware, software and related technology sales |
16,973 |
24,508 |
(31)% |
(24)% |
|||
Total consolidated revenue |
$191,984 |
$153,294 |
25% |
37% |
|||
Consolidated operating income (loss): |
|||||||
SA transaction-based activities |
$35,949 |
$36,326 |
(1)% |
8% |
|||
International transaction-based activities |
925 |
(569) |
(263)% |
(278)% |
|||
Operating income excluding amortization |
7,355 |
1,463 |
403% |
451% |
|||
Amortization of intangible assets |
(6,430) |
(2,032) |
216% |
247% |
|||
Smart card accounts |
7,052 |
7,454 |
(5)% |
4% |
|||
Financial services |
2,437 |
1,825 |
34% |
46% |
|||
Hardware, software and related technology sales |
2,846 |
(2,388) |
(219)% |
(231)% |
|||
Corporate/ Eliminations |
1,865 |
(9,688) |
(119)% |
(121)% |
|||
Total operating income |
$51,074 |
$32,960 |
55% |
70% |
|||
Operating income margin (%) |
|||||||
SA transaction-based activities |
37% |
40% |
|||||
International transaction-based activities |
2% |
(3)% |
|||||
International transaction-based activities excluding amortization |
12% |
8% |
|||||
Smart card accounts |
45% |
45% |
|||||
Financial services |
60% |
63% |
|||||
Hardware, software and related technology sales |
17% |
(10)% |
|||||
Overall operating margin |
27% |
22% |
|||||
(1) – This information shows what the change in these items would have been if the USD/ ZAR exchange rate that prevailed during year to date fiscal 2012 also prevailed during year to date fiscal 2011. |
|||||||
Net 1 UEPS Technologies, Inc. Attachment B Reconciliation of GAAP net income and earnings per share, basic, to fundamental net income and earnings per share, basic: Three months ended December 31, 2011 and 2010 |
|||||||||||
Net Income (USD'000) |
EPS, basic (USD) |
Net Income (ZAR'000) |
EPS, basic (ZAR) |
||||||||
2011 |
2010 |
2011 |
2010 |
2011 |
2010 |
2011 |
2010 |
||||
GAAP |
25,094 |
9,948 |
56 |
22 |
205,148 |
69,040 |
457 |
152 |
|||
Amortization of intangible assets, net of tax |
3,656 |
4,302 |
29,893 |
29,857 |
|||||||
Stock-based compensation charge |
543 |
1,558 |
4,439 |
10,813 |
|||||||
Facility fees for KSNET debt |
110 |
1,728 |
899 |
11,993 |
|||||||
Change in tax law |
(20,031) |
- |
(163,760) |
- |
|||||||
Create FTC valuation allowance |
8,232 |
- |
67,298 |
- |
|||||||
Loss on sale of 10% of SmartLife |
73 |
- |
597 |
- |
|||||||
Gain on FEC, net of tax |
- |
(1,799) |
- |
(12,485) |
|||||||
Acquisition-related costs |
- |
1,774 |
- |
12,313 |
|||||||
Fundamental |
17,677 |
17,511 |
39 |
39 |
144,514 |
121,531 |
322 |
267 |
|||
Six months ended December 31, 2011 and 2010 |
|||||||||||
Net Income (USD'000) |
EPS, basic (USD) |
Net Income (ZAR'000) |
EPS, basic (ZAR) |
||||||||
2011 |
2010 |
2011 |
2010 |
2011 |
2010 |
2011 |
2010 |
||||
GAAP |
44,862 |
17,377 |
100 |
38 |
350,808 |
124,088 |
780 |
273 |
|||
Amortization of intangible assets, net of tax |
7,196 |
6,916 |
56,268 |
49,393 |
|||||||
Stock-based compensation charge |
1,040 |
2,996 |
8,132 |
21,394 |
|||||||
Change in tax law |
(18,315) |
- |
(150,373) |
- |
|||||||
Create FTC valuation allowance |
8,232 |
- |
67,588 |
- |
|||||||
Profit on liquidation of subsidiary |
(3,994) |
- |
(31,232) |
- |
|||||||
Loss on sale of 10% of SmartLife |
77 |
- |
602 |
- |
|||||||
Facility fees for KSNET debt |
211 |
1,728 |
1,650 |
12,340 |
|||||||
Gain on FEC, net of tax |
- |
(114) |
- |
(813) |
|||||||
Acquisition-related costs |
- |
5,131 |
- |
36,640 |
|||||||
Fundamental |
39,309 |
34,034 |
87 |
75 |
303,443 |
243,042 |
674 |
535 |
|||
Net 1 UEPS Technologies, Inc. Attachment C Reconciliation of net income used to calculate earnings per share basic and diluted and headline earnings per share basic and diluted: Three months ended December 31, 2011 and 2010 |
||||
2011 |
2010 |
|||
Net income (USD'000) |
25,094 |
9,948 |
||
Adjustments: |
||||
Loss on sale of 10% of SmartLife (USD'000) |
73 |
- |
||
Profit on sale of property, plant and equipment (USD'000) |
(26) |
(3) |
||
Tax effects on above (USD'000) |
7 |
1 |
||
Net income used to calculate headline earnings (USD'000) |
25,148 |
9,946 |
||
Weighted average number of shares used to calculate net income per share basic earnings and headline earnings per share basic earnings ('000) |
44,935 |
45,433 |
||
Weighted average number of shares used to calculate net income per share diluted earnings and headline earnings per share diluted earnings ('000) |
44,967 |
45,494 |
||
Headline earnings per share: |
||||
Basic earnings – common stock and linked units, in US cents |
56 |
22 |
||
Diluted earnings – common stock and linked units, in US cents |
56 |
22 |
||
Six months ended December 31, 2011 and 2010 |
||||
2011 |
2010 |
|||
Net income (USD'000) |
44,862 |
17,377 |
||
Adjustments: |
||||
Profit on liquidation of subsidiary (USD'000) |
(3,994) |
- |
||
Loss on sale of 10% of SmartLife (USD'000) |
77 |
- |
||
Profit on sale of property, plant and equipment (USD'000) |
(34) |
(8) |
||
Tax effects on above (USD'000) |
10 |
3 |
||
Net income used to calculate headline earnings (USD'000) |
40,921 |
17,372 |
||
Weighted average number of shares used to calculate net income per share basic earnings and headline earnings per share basic earnings ('000) |
44,995 |
45,409 |
||
Weighted average number of shares used to calculate net income per share diluted earnings and headline earnings per share diluted earnings ('000) |
45,026 |
45,455 |
||
Headline earnings per share: |
||||
Basic earnings – common stock and linked units, in US cents |
91 |
38 |
||
Diluted earnings – common stock and linked units, in US cents |
91 |
38 |
||
SOURCE Net 1 UEPS Technologies, Inc.
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