JOHANNESBURG, SOUTH AFRICA--(Marketwired - August 20, 2015) -
- Q4 2015 Revenue and FEPS of $164 million and $0.58, a constant currency increase after adjusting for the SASSA recovery in 2014, of 22% and 30%, respectively;
- Strategic investments in Hong Kong and Nigeria-based businesses and ZAZOO partnerships with Funifi and BitX; and
- Cash and equivalents of $117.6 million as of June 30, 2015, and operating cash flow of $31.8 million in Q4 2015.
Net 1 UEPS Technologies, Inc. (
Summary Financial Metrics | |||||||||
Three months ended June 30, | |||||||||
2015 | 2014 | % change in USD | % change in ZAR | ||||||
(All figures in USD '000s except per share data) | |||||||||
Revenue | 164,286 | 182,753 | (10%) | 4% | |||||
Revenue excluding SASSA recovery(1)(2) | 164,286 | 156,118 | 5% | 22% | |||||
GAAP net income | 23,914 | 28,584 | (16%) | (3%) | |||||
Fundamental net income(1) | 27,233 | 44,362 | (39%) | (29%) | |||||
Fundamental net income excluding SASSA recovery(1) | 27,233 | 25,185 | 8% | 24% | |||||
GAAP earnings per share ($) | 0.51 | 0.59 | (13%) | 1% | |||||
Fundamental earnings per share ($)(1) | 0.58 | 0.91 | (36%) | (26%) | |||||
Fundamental earnings per share excluding SASSA recovery(1) | 0.58 | 0.52 | 12% | 30% | |||||
Fully-diluted shares outstanding ('000's) | 46,944 | 48,855 | (4%) | (4%) | |||||
Average period USD/ ZAR exchange rate | 12.04 | 10.42 | 16% | ||||||
Year ended June 30, | |||||||||
2015 | 2014 | % change in USD | % change in ZAR | ||||||
(All figures in USD '000s except per share data) | |||||||||
Revenue | 625,979 | 581,656 | 8% | 18% | |||||
Revenue excluding SASSA recovery(1)(2) | 625,979 | 555,021 | 13% | 24% | |||||
GAAP net income | 94,735 | 70,111 | 35% | 49% | |||||
Fundamental net income(1) | 108,205 | 101,343 | 7% | 17% | |||||
Fundamental net income excluding SASSA recovery(1) | 108,205 | 82,166 | 32% | 45% | |||||
GAAP earnings per share ($) | 2.03 | 1.51 | 34% | 48% | |||||
Fundamental earnings per share ($)(1) | 2.32 | 2.18 | 6% | 17% | |||||
Fundamental earnings per share excluding SASSA recovery(1) | 2.32 | 1.77 | 31% | 44% | |||||
Fully-diluted shares outstanding ('000's) | 46,913 | 46,603 | 1% | 1% | |||||
Average period USD/ ZAR exchange rate | 11.43 | 10.40 | 10% | ||||||
(1) Revenue excluding SASSA recovery, Fundamental net income, Fundamental net income excluding SASSA recovery, Fundamental earnings per share and Fundamental earnings per share excluding SASSA recovery are non-GAAP measures and are 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.
(2) Revenue excluding SASSA recovery is Revenue earned during 2014 less approximately $26.6 million received from SASSA related to the recovery of additional implementation costs incurred during the beneficiary re-registration process in fiscal 2012 and 2013
Factors impacting comparability of our Q4 2015 and Q4 2014 results
- Unfavorable impact from the strengthening of the US dollar against the ZAR: The US dollar appreciated by 16% against the ZAR during Q4 2015, which negatively impacted our reported results;
- Higher revenue resulting from an increase in low-margin prepaid airtime and electricity sales: Our revenue has increased as a result of the growth of our prepaid electricity and prepaid airtime offering during Q4 2015, with prepaid airtime having lower margins compared with our other South African businesses;
- Increased contribution by KSNET: Our results were positively impacted by growth in our South Korean operations;
- Growth in financial services: The expansion of our financial services offering resulted in higher year-over-year revenue and operating income from UEPS-based lending during Q4 2015;
- Ad hoc hardware sales in fiscal 2015: We sold more terminals and cards during Q4 2015 as a result of ad hoc orders received from our customers;
- $26.6 million recovery of expenses and 2014 implementation costs: In Q4 2014, we received approximately $26.6 million, or approximately $19.1 million, net of tax, from SASSA related to the recovery of additional implementation costs incurred during the beneficiary re-registration process in fiscal 2012 and 2013; and
- Fair value charge resulting from issue of equity instruments pursuant to BEE transactions: The fair value non-cash charge of $11.3 million related to our BEE transactions adversely impacted our reported results during Q4 2014.
Comments and Outlook
"I am thrilled with our 2015 performance as we were able to execute on our strategy extremely well. The continued local and international interest we receive as a result of our proven ability to implement state of the art, functional and robust solutions that allow for the financial inclusion of all citizens, as well as our card and mobile centric solutions that can be provided individually or in unison, provides us with a bespoke end-to-end financial technology solution relevant to both developed and developing world economies," said Dr. Belamant, Chairman and CEO. "Our ZAZOO initiative is gaining momentum as demonstrated by its financial performance, and its latest agreements with companies such as Uber, Microsoft, and BitX and our investment in T24. ZAZOO's pipeline has numerous other deals and it is well positioned to grow exponentially over a short period of time. We also believe that our entry into Nigeria via our investment in One Credit provides us the opportunity to deploy our entire solution in this vast, under-penetrated and profitable economy," he concluded.
"Our financial and operating performance, including the increased investment in our newer growth and international initiatives, continues to track the strategic developments in our business," said Herman Kotzé, Chief Financial Officer of Net1. "We expect to sustain the momentum in our business and continue our product, client and geographic diversification, and for fiscal 2016 anticipate our fundamental earnings per share to be at least $2.57, assuming an updated constant currency base of ZAR11.43/$1 and a share count of 46.7 million shares," he concluded.
Results of Operations by Segment and Liquidity
Our operating metrics will be updated and posted on our website (www.net1.com).
South African transaction processing
Segment revenue was $59.8 million in Q4 2015, down 32% compared with Q4 2014 in USD and down 22% on a constant currency basis. In ZAR, revenue increased 12% in fiscal 2015 compared to fiscal 2014 (after excluding the impact of the recovery in fiscal 2014 of implementation costs related to our SASSA contract). The increase in segment revenues, exclusive of such recovery, was primarily due to more low-margin transaction fees generated from beneficiaries using the South African National Payment System and more inter-segment transaction processing activities. In addition, revenue from the distribution of social welfare grants grew modestly during the year and was in-line with the increase in unique welfare cardholder recipients, net of removal of invalid and fraudulent beneficiaries, offset by the loss of MediKredit revenue as a result of the sale of that business.
Segment operating income margin was 19% and 44%, respectively, and decreased primarily due to the recovery of SASSA implementation costs in 2014. Segment operating income margin excluding the recovery of implementation costs was 20% for Q4 2014.
International transaction processing
Segment revenue was $42.6 million in Q4 2015, up 1% compared with Q4 2014 in USD and 17% on a constant currency basis. Revenue increased primarily due to increased transaction processing activities in South Korea during Q4 2015. Operating income during the year to date fiscal 2015 was higher due to increase in revenue contribution from KSNET, but partially offset by ZAZOO start-up costs in the UK and India. Segment operating income margin in Q4 2015 and Q4 2014 was 17% and 16%, respectively.
Financial inclusion and applied technologies
Segment revenue was $73.0 million in Q4 2015, up 14% compared with Q4 2014 in USD and 32% on a constant currency basis. Financial inclusion and applied technologies revenue and operating income increased primarily due to higher prepaid airtime sales driven by the rollout of our prepaid airtime product, an increase in the number of UEPS-based loans as we rolled out our product nationally, more ad hoc terminal and card sales and, in ZAR, an increase in intersegment revenues. Smart Life did not contribute to operating income in fiscal 2015 and 2014 due to the FSB suspension of its license. Smart Life resumed operating activities in early fiscal 2016, following the upliftment of suspension of its license by the FSB. Segment operating income margin was 27% and 28%, respectively, and decreased primarily as a result of more low-margin prepaid airtime and hardware sales.
Corporate/eliminations
The decrease in our corporate expenses in Q4 2015 resulted primarily from the non-cash charge related to the equity instruments issued pursuant to our BEE transactions in Q4 2014 and lower US government investigation and US lawsuit expenses, partially offset by increases in general corporate audit fees, executive emoluments and other corporate head office-related expenses.
Cash flow and liquidity
At June 30, 2015, we had cash and cash equivalents of $117.6 million, up from $58.7 million at June 30, 2014. The increase in our cash balances from June 30, 2014, was primarily due to the expansion of all of our core businesses, and to a lesser extent, to the cash conservation resulting from the sale of loss-incurring businesses, offset by provisional tax payments, investments, capital expenditures and the scheduled Korean debt repayment in October 2014.
Excluding the impact of interest received, interest paid under our Korean debt and taxes, the increase in cash from operating activities resulted from improved trading activity during fiscal 2015. During fiscal 2015, we paid interest of $3.6 million under our South Korean debt facility. Capital expenditures for Q4 2015 and 2014 were $11.6 million and $6.6 million, respectively, and have increased primarily due to the acquisition of more payment processing terminals in South Korea and ATMs in South Africa.
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 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 amortization of KSNET debt facility fees and US government investigations-related and US lawsuit expenses; as well as in fiscal 2015, a refund (net of taxes) related to Korean industry-wide litigation that has now been finalized and in fiscal 2014, the equity instruments charged related to our December 2014 BEE transactions, transaction-related costs and the net loss on deconsolidation of subsidiaries and business, net of tax.
Fundamental net income excluding SASSA recovery and fundamental earnings per share excluding SASSA recovery is Fundamental net income and earnings per share less the recovery received from SASSA in 2014 of $19.2 million, after taxes.
Management believes that the fundamental net income and earnings per share, as well as the fundamental net income and earnings per share excluding SASSA recovery, metrics enhances its own evaluation, as well as an investor's understanding, of our financial performance.
Attachment B presents the reconciliation between GAAP net income and earnings per share, basic, to fundamental net income and earnings per share, basic and to fundamental net income and earnings per share, basic excluding recovery from SASSA.
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 profit on sale of property, plant and equipment, and, in fiscal 2014, the net loss on deconsolidation of subsidiaries and asset group, net of related tax effects. Attachment C presents the reconciliation between our net income used to calculate earnings per share basic and diluted and HEPS basic and diluted and the calculation of the denominator for headline diluted earnings per share.
Conference Call
We will host a conference call to review Q4 2015 results on August 21, 2015, at 8:00 Eastern Time. To participate in the call, dial 1-855-481-5362 (US and Canada), 0808-162-4061 (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 the Net1 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 the Net1 website through September 13, 2015.
Fiscal 2016 earnings call dates
We expect to host quarterly conference calls to review our fiscal 2016 quarterly results in accordance with the schedule provided in the table below:
Conference call to review quarter ended: | Tentative date | |
September 30, 2015 (Q1, 2016) | November 6, 2015 | |
December 31, 2015 (Q2, 2016) | February 5, 2016 | |
March 31, 2016 (Q3, 2016) | May 6, 2016 | |
June 30, 2016 (Q4, 2016) | August 26, 2016 | |
The dates provided above are tentative and we will confirm the final dates and dial-in details closer to the quarterly conference call date.
About Net1 (www.net1.com)
Net1 is a leading provider of alternative payment systems that leverage its Universal Electronic Payment System ("UEPS") or utilize its proprietary mobile technologies. The Company operates market-leading payment processors in South Africa and the Republic of Korea.
UEPS permits the Company 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. Net1's UEPS/EMV solution is interoperable with global EMV standards that seamlessly enable access to all the UEPS functionality in a traditional EMV environment. In addition to payments, UEPS can be used for banking, healthcare management, payroll, remittances, voting and identification.
Net1's mobile technologies include its proprietary mobile payments solution - MVC, which offers secure mobile-based payments, as well as mobile banking and prepaid value-added services in developed and emerging countries. The Company intends to deploy its varied mobile solutions through its ZAZOO business unit, which is an aggregation of innovative technology companies and is based in the United Kingdom.
Net1 has a primary listing on the NASDAQ and a secondary listing on the Johannesburg Stock Exchange.
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. | |||||||||||||
Consolidated Statements of Operations | |||||||||||||
Unaudited | (A) | ||||||||||||
Three months ended | Year ended | ||||||||||||
June 30, | June 30, | ||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||
(In thousands, except per share data) | (In thousands, except per share data) | ||||||||||||
REVENUE | $ | 164,286 | $ | 182,753 | $ | 625,979 | $ | 581,656 | |||||
EXPENSE | |||||||||||||
Cost of goods sold, IT processing, servicing and support | 80,582 | 72,641 | 297,856 | 260,232 | |||||||||
Selling, general and administration | 40,797 | 46,156 | 158,919 | 168,072 | |||||||||
Equity instruments issued pursuant to BEE transactions | - | 11,268 | - | 11,268 | |||||||||
Depreciation and amortization | 10,294 | 10,041 | 40,685 | 40,286 | |||||||||
OPERATING INCOME | 32,613 | 42,647 | 128,519 | 101,798 | |||||||||
INTEREST INCOME | 4,467 | 4,824 | 16,355 | 14,817 | |||||||||
INTEREST EXPENSE | 1,096 | 1,761 | 4,456 | 7,473 | |||||||||
INCOME BEFORE INCOME TAX EXPENSE | 35,984 | 45,710 | 140,418 | 109,142 | |||||||||
INCOME TAX EXPENSE | 11,980 | 17,260 | 44,136 | 39,379 | |||||||||
NET INCOME BEFORE EARNINGS FROM EQUITY-ACCOUNTED INVESTMENTS | 24,004 | 28,450 | 96,282 | 69,763 | |||||||||
EARNINGS FROM EQUITY-ACCOUNTED INVESTMENTS | 219 | 96 | 452 | 298 | |||||||||
NET INCOME | 24,223 | 28,546 | 96,734 | 70,061 | |||||||||
LESS (ADD): NET INCOME (LOSS) ATTRIBUTABLE TO NON-CONTROLLING INTEREST | 309 | (38) | 1,999 | (50) | |||||||||
NET INCOME ATTRIBUTABLE TO NET1 | $ | 23,914 | $ | 28,584 | $ | 94,735 | $ | 70,111 | |||||
Net income per share, in United States dollars | |||||||||||||
Basic earnings attributable to Net1 shareholders | $ | 0.51 | $ | 0.59 | $ | 2.03 | $ | 1.51 | |||||
Diluted earnings attributable to Net1 shareholders | $ | 0.51 | $ | 0.59 | $ | 2.02 | $ | 1.50 | |||||
(A) - Derived from audited financial statements | |||||||||||||
NET 1 UEPS TECHNOLOGIES, INC. | ||||||||||||
Consolidated Balance Sheets | ||||||||||||
(A) | (A) | |||||||||||
June 30, | June 30, | |||||||||||
2015 | 2014 | |||||||||||
(In thousands, except share data) | ||||||||||||
ASSETS | ||||||||||||
CURRENT ASSETS | ||||||||||||
Cash and cash equivalents | $ | 117,583 | $ | 58,672 | ||||||||
Pre-funded social welfare grants receivable | 2,306 | 4,809 | ||||||||||
Accounts receivable, net of allowances | 148,768 | 148,067 | ||||||||||
Finance loans receivable, net of allowances | 40,373 | 53,124 | ||||||||||
Inventory | 12,979 | 10,785 | ||||||||||
Deferred income taxes | 7,298 | 7,451 | ||||||||||
Total current assets before settlement assets | 329,307 | 282,908 | ||||||||||
Settlement assets | 661,916 | 725,987 | ||||||||||
Total current assets | 991,223 | 1,008,895 | ||||||||||
PROPERTY, PLANT AND EQUIPMENT, net | 52,320 | 47,797 | ||||||||||
EQUITY-ACCOUNTED INVESTMENTS | 14,329 | 878 | ||||||||||
GOODWILL | 166,437 | 186,576 | ||||||||||
INTANGIBLE ASSETS, net | 47,124 | 68,514 | ||||||||||
OTHER LONG-TERM ASSETS, including reinsurance assets | 14,997 | 38,285 | ||||||||||
TOTAL ASSETS | 1,286,430 | 1,350,945 | ||||||||||
40,570 | ||||||||||||
LIABILITIES | ||||||||||||
CURRENT LIABILITIES | ||||||||||||
Accounts payable | 21,453 | 17,101 | ||||||||||
Other payables | 45,595 | 42,257 | ||||||||||
Current portion of long-term borrowings | 8,863 | 14,789 | ||||||||||
Income taxes payable | 6,287 | 7,676 | ||||||||||
Total current liabilities before settlement obligations | 82,198 | 81,823 | ||||||||||
Settlement obligations | 661,916 | 725,987 | ||||||||||
Total current liabilities | 744,114 | 807,810 | ||||||||||
DEFERRED INCOME TAXES | 10,564 | 15,522 | ||||||||||
LONG-TERM BORROWINGS | 50,762 | 62,388 | ||||||||||
OTHER LONG-TERM LIABILITIES, including insurance policy liabilities | 2,205 | 23,477 | ||||||||||
TOTAL LIABILITIES | 807,645 | 909,197 | ||||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||
EQUITY | ||||||||||||
COMMON STOCK | ||||||||||||
Authorized: 200,000,000 with $0.001 par value; | ||||||||||||
Issued and outstanding shares, net of treasury - 2015: 46,679,565; 2014: 47,819,299 | 64 | 63 | ||||||||||
PREFERRED STOCK | ||||||||||||
Authorized shares: 50,000,000 with $0.001 par value; | ||||||||||||
Issued and outstanding shares, net of treasury: 2015: -; 2014: - | - | - | ||||||||||
ADDITIONAL PAID-IN-CAPITAL | 213,896 | 202,401 | ||||||||||
TREASURY SHARES, AT COST: 2015: 18,057,228; 2014: 15,883,212 | (214,520 | ) | (200,681 | ) | ||||||||
ACCUMULATED OTHER COMPREHENSIVE LOSS | (139,181 | ) | (82,741 | ) | ||||||||
RETAINED EARNINGS | 617,868 | 522,729 | ||||||||||
TOTAL NET1 EQUITY | 478,127 | 441,771 | ||||||||||
NON-CONTROLLING INTEREST | 658 | (23 | ) | |||||||||
TOTAL EQUITY | 478,785 | 441,748 | ||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 1,286,430 | $ | 1,350,945 | ||||||||
(A) - Derived from audited financial statements | ||||||||||||
NET 1 UEPS TECHNOLOGIES, INC. | ||||||||||||||||||
Consolidated Statements of Cash Flows | ||||||||||||||||||
Unaudited | A | |||||||||||||||||
Three months ended | Year ended | |||||||||||||||||
June 30, | June 30, | |||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||
(In thousands) | (In thousands) | |||||||||||||||||
Cash flows from operating activities | ||||||||||||||||||
Net income | $ | 24,223 | $ | 28,546 | $ | 96,734 | $ | 70,061 | ||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||||
Depreciation and amortization | 10,294 | 10,041 | 40,685 | 40,286 | ||||||||||||||
Earnings from equity-accounted investments | (219 | ) | (96 | ) | (452 | ) | (298 | ) | ||||||||||
Fair value adjustment | 518 | (104 | ) | 248 | (55 | ) | ||||||||||||
Interest payable | 7 | 404 | 1,283 | 2,100 | ||||||||||||||
Facility fee amortized | 38 | 81 | 208 | 738 | ||||||||||||||
Profit on disposal of property, plant and equipment | (1 | ) | (392 | ) | (296 | ) | (434 | ) | ||||||||||
Profit on deconsolidation of subsidiaries and business | - | 55 | - | 55 | ||||||||||||||
Stock compensation charge, net of forfeitures | 513 | 898 | 3,195 | 3,718 | ||||||||||||||
Fair value of BEE equity instruments granted | - | 11,268 | - | 11,268 | ||||||||||||||
(Increase) Decrease in accounts and finance loans receivable, and pre-funded grants receivable | (4,135 | ) | (33,926 | ) | 1,399 | (101,447 | ) | |||||||||||
(Increase) Decrease in inventory | (1,075 | ) | (199 | ) | (3,846 | ) | 780 | |||||||||||
Increase (Decrease) in accounts payable and other payables | 6,804 | 23,566 | (850 | ) | 12,671 | |||||||||||||
(Decrease) Increase in taxes payable | (3,507 | ) | (3,908 | ) | 606 | 5,523 | ||||||||||||
Decrease in deferred taxes | (1,631 | ) | (4,802 | ) | (3,656 | ) | (7,821 | ) | ||||||||||
Net cash provided by operating activities | 31,829 | 31,432 | 135,258 | 37,145 | ||||||||||||||
Cash flows from investing activities | ||||||||||||||||||
Capital expenditures | (11,614 | ) | (6,597 | ) | (36,436 | ) | (23,906 | ) | ||||||||||
Proceeds from disposal of property, plant and equipment | 80 | 866 | 857 | 2,990 | ||||||||||||||
Net cash outflow from sale of MediKredit | - | (669 | ) | - | (669 | ) | ||||||||||||
Proceeds from sale of business | - | 186 | 1,895 | 186 | ||||||||||||||
(Acquisition of equity of)/ capital reduction/ repayment of loan by equity-accounted investment | (13,200 | ) | 564 | (13,200 | ) | 539 | ||||||||||||
Other investing activities, net | - | - | (29 | ) | 570 | |||||||||||||
Net change in settlement assets | (22,853 | ) | 20,059 | (12,570 | ) | (1,350 | ) | |||||||||||
Net cash (used in) provided by investing activities | (47,587 | ) | 14,409 | (59,483 | ) | (21,640 | ) | |||||||||||
Cash flows from financing activities | ||||||||||||||||||
Repayment of long-term borrowings | - | - | (14,128 | ) | (87,008 | ) | ||||||||||||
Long-term borrowings obtained | 789 | 1,044 | 3,765 | 73,677 | ||||||||||||||
Acquisition of treasury stock | - | - | (9,151 | ) | - | |||||||||||||
Sale of equity to non-controlling interest | - | - | 1,407 | - | ||||||||||||||
Dividends paid to non-controlling interest | - | - | (1,024 | ) | - | |||||||||||||
Proceeds from issue of common stock | 265 | 110 | 2,045 | 198 | ||||||||||||||
Payment of facility fee | - | - | - | (872 | ) | |||||||||||||
Proceeds from bank overdraft | - | - | - | 24,580 | ||||||||||||||
Repayment of bank overdraft | - | - | - | (23,335 | ) | |||||||||||||
Acquisition of interests in KSNET | - | - | - | (1,968 | ) | |||||||||||||
Net change in settlement obligations | 22,853 | (20,059 | ) | 12,570 | 1,350 | |||||||||||||
Net cash provided by (used in) financing activities | 23,907 | (18,905 | ) | (4,516 | ) | (13,378 | ) | |||||||||||
Effect of exchange rate changes on cash | (1,568 | ) | 861 | (12,348 | ) | 2,880 | ||||||||||||
Net increase in cash and cash equivalents | 6,581 | 27,797 | 58,911 | 5,007 | ||||||||||||||
Cash and cash equivalents - beginning of year | 111,002 | 30,875 | 58,672 | 53,665 | ||||||||||||||
Cash and cash equivalents at end of year | $ | 117,583 | $ | 58,672 | $ | 117,583 | $ | 58,672 | ||||||||||
(A) - Derived from audited financial statements | ||||||||||||||||||
Net 1 UEPS Technologies, Inc.
Attachment A
Operating segment revenue, operating income and operating margin:
Three months ended June 30, 2015 and 2014 and March 31, 2015
Change - actual | Change - constant exchange rate(1) | ||||||||||||||||||||||
Key segmental data, in $ '000, | Q4 '15 | Q4 '14 | Q3 '15 | Q4'15 vs Q4'14 |
Q4'15 vs Q3'15 |
Q4'15 vs Q4'14 |
Q4'15 vs Q3'15 |
||||||||||||||||
Revenue: | |||||||||||||||||||||||
South African transaction processing | $59,774 | $88,265 | $57,999 | (32% | ) | 3% | (22% | ) | 6% | ||||||||||||||
International transaction processing | 42,573 | 42,201 | 38,311 | 1% | 11% | 17% | 14% | ||||||||||||||||
Financial inclusion and applied technologies | 73,042 | 64,093 | 66,830 | 14% | 9% | 32% | 12% | ||||||||||||||||
Subtotal: Operating segments | 175,389 | 194,559 | 163,140 | (10% | ) | 8% | 4% | 10% | |||||||||||||||
Intersegment eliminations | (11,103 | ) | (11,806 | ) | (12,019 | ) | (6% | ) | (8% | ) | 9% | (5% | ) | ||||||||||
Consolidated revenue | $164,286 | $182,753 | $151,121 | (10% | ) | 9% | 4% | 12% | |||||||||||||||
Operating income (loss): | |||||||||||||||||||||||
South African transaction processing | $11,268 | $38,675 | $13,218 | (71% | ) | (15% | ) | (66% | ) | (13% | ) | ||||||||||||
International transaction processing | 7,134 | 6,647 | 6,579 | 7% | 8% | 24% | 11% | ||||||||||||||||
Financial inclusion and applied technologies | 19,385 | 18,126 | 17,906 | 7% | 8% | 24% | 11% | ||||||||||||||||
Subtotal: Operating segments | 37,787 | 63,448 | 37,703 | (40% | ) | 0% | (31% | ) | 3% | ||||||||||||||
Corporate/Eliminations | (5,174 | ) | (20,801 | ) | (5,737 | ) | (75% | ) | (10% | ) | (71% | ) | (7% | ) | |||||||||
Consolidated operating income | $32,613 | $42,647 | $31,966 | (24% | ) | 2% | (12% | ) | 5% | ||||||||||||||
Operating income margin (%) | |||||||||||||||||||||||
South African transaction processing | 19% | 44% | 23% | ||||||||||||||||||||
International transaction processing | 17% | 16% | 17% | ||||||||||||||||||||
Financial inclusion and applied technologies | 27% | 28% | 27% | ||||||||||||||||||||
Consolidated operating margin | 20% | 23% | 21% |
(1) - This information shows what the change in these items would have been if the USD/ ZAR exchange rate that prevailed during the fourth quarter of fiscal 2015 also prevailed during the fourth quarter of fiscal 2014 and the third quarter of fiscal 2015. |
Year ended June 30, 2015 and 2014 | ||||||||||||||
Change - actual | Change - constant exchange rate(1) | |||||||||||||
Key segmental data, in '000, except margins | F2015 | F2014 | F2015 vs F2015 |
F2015 vs F2015 |
||||||||||
Revenue: | ||||||||||||||
South African transaction processing | 236,452 | 261,577 | (10% | ) | (1% | ) | ||||||||
International transaction processing | 164,554 | 152,725 | 8% | 18% | ||||||||||
Financial inclusion and applied technologies | 272,600 | 207,595 | 31% | 44% | ||||||||||
Subtotal: Operating segments | 673,606 | 621,897 | 8% | 19% | ||||||||||
Intersegment eliminations | (47,627 | ) | (40,241 | ) | 18% | 30% | ||||||||
Consolidated revenue | 625,979 | 581,656 | 8% | 18% | ||||||||||
Operating income (loss): | ||||||||||||||
South African transaction processing | 51,008 | 61,401 | (17% | ) | (9% | ) | ||||||||
International transaction processing | 26,805 | 21,952 | 22% | 34% | ||||||||||
Financial inclusion and applied technologies | 72,725 | 60,685 | 20% | 32% | ||||||||||
Subtotal: Operating segments | 150,538 | 144,038 | 5% | 15% | ||||||||||
Corporate/Eliminations | (22,019 | ) | (42,240 | ) | (48% | ) | (43% | ) | ||||||
Consolidated operating income | 128,519 | 101,798 | 26% | 39% | ||||||||||
Operating income margin (%) | ||||||||||||||
South African transaction processing | 22% | 23% | ||||||||||||
International transaction processing | 16% | 14% | ||||||||||||
Financial inclusion and applied technologies | 27% | 29% | ||||||||||||
Overall operating margin | 21% | 18% | ||||||||||||
(1) - This information shows what the change in these items would have been if the USD/ ZAR exchange rate that prevailed during fiscal 2015 also prevailed during fiscal 2014. |
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 and to fundamental net income and earnings per share, basic excluding recovery from SASSA:
Three months ended June 30, 2015 and 2014 | |||||||||||||||||||
Net income (USD'000) |
EPS, basic (USD) |
Net income (ZAR'000) |
EPS, basic (ZAR) |
||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | ||||||||||||
GAAP | 23,914 | 28,584 | 0.51 | 0.59 | 288,035 | 297,897 | 6.18 | 6.12 | |||||||||||
Intangible asset amortization, net | 2,751 | 2,960 | 33,131 | 30,842 | |||||||||||||||
Stock-based compensation charge | 513 | 898 | 6,179 | 9,359 | |||||||||||||||
Facility fees for KSNET debt | 38 | 79 | 458 | 823 | |||||||||||||||
US government investigations-related and US lawsuit expenses | 17 | 53 | 205 | 552 | |||||||||||||||
BEE equity instruments charge | - | 11,268 | - | 118,740 | |||||||||||||||
Net loss on deconsolidation of subsidiaries and business, net of tax | - | 443 | - | 4,617 | |||||||||||||||
Transaction-related costs | - | 77 | - | 802 | |||||||||||||||
Fundamental | 27,233 | 44,362 | 0.58 | 0.91 | 328,008 | 463,632 | 7.04 | 9.52 | |||||||||||
Recovery from SASSA, net of tax | - | 19,177 | - | 199,861 | |||||||||||||||
Fundamental excluding recovery from SASSA, net of tax | 27,233 | 25,185 | 0.58 | 0.52 | 328,008 | 263,771 | 7.04 | 5.42 | |||||||||||
Year ended June 30, 2015 and 2014 | |||||||||||||||||||
Net income (USD'000) |
EPS, basic (USD) |
Net income (ZAR'000) |
EPS, basic (ZAR) |
||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | ||||||||||||
GAAP | 94,735 | 70,111 | 2.03 | 1.51 | 1,082,584 | 728,916 | 23.17 | 15.68 | |||||||||||
Intangible asset amortization, net | 11,263 | 12,490 | 128,708 | 129,846 | |||||||||||||||
Stock-based compensation charge | 3,195 | 3,718 | 36,511 | 38,655 | |||||||||||||||
Refund for KSNET litigation | (1,354 | ) | - | (15,473 | ) | - | |||||||||||||
Facility fees for KSNET debt | 208 | 657 | 2,377 | 6,831 | |||||||||||||||
US government investigations-related and US lawsuit expenses | 158 | 2,579 | 1,806 | 26,813 | |||||||||||||||
BEE equity instruments charge | - | 11,268 | - | 118,740 | |||||||||||||||
Net loss on deconsolidation of subsidiaries and business, net of tax | - | 443 | - | 4,606 | |||||||||||||||
Transaction-related costs | - | 77 | - | 806 | |||||||||||||||
Fundamental | 108,205 | 101,343 | 2.32 | 2.18 | 1,236,513 | 1,055,213 | 26.46 | 22.70 | |||||||||||
Recovery from SASSA, net of tax | - | 19,177 | - | 199,861 | |||||||||||||||
Fundamental excluding recovery from SASSA, net of tax | 108,205 | 82,166 | 2.32 | 1.77 | 1,236,513 | 855,352 | 26.46 | 18.40 | |||||||||||
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 June 30, 2015 and 2014 | |||||||
2015 | 2014 | ||||||
Net income (USD'000) | 23,914 | 28,584 | |||||
Adjustments: | |||||||
Profit on sale of property, plant and equipment | (1 | ) | (392 | ) | |||
Loss on deconsolidation of subsidiaries and business | - | 55 | |||||
Tax effects on above | - | (287 | ) | ||||
Net income used to calculate headline earnings (USD'000) | 23,913 | 27,960 | |||||
Weighted average number of shares used to calculate net income per share basic earnings and headline earnings per share basic earnings ('000) | 46,620 | 48,695 | |||||
Weighted average number of shares used to calculate net income per share diluted earnings and headline earnings per share diluted earnings ('000) | 46,944 | 48,855 | |||||
Headline earnings per share: | |||||||
Basic, in USD | 0.51 | 0.57 | |||||
Diluted, in USD | 0.51 | 0.57 | |||||
Year ended June 30, 2015 and 2014 | |||||||
2015 | 2014 | ||||||
Net income (USD'000) | 94,735 | 70,111 | |||||
Adjustments: | |||||||
Profit on sale of property, plant and equipment | (296 | ) | (434 | ) | |||
Loss on deconsolidation of subsidiaries and business | - | 55 | |||||
Tax effects on above | 83 | (276 | ) | ||||
Net income used to calculate headline earnings (USD'000) | 94,522 | 69,456 | |||||
Weighted average number of shares used to calculate net income per share basic earnings and headline earnings per share basic earnings ('000) | 46,733 | 46,484 | |||||
Weighted average number of shares used to calculate net income per share diluted earnings and headline earnings per share diluted earnings ('000) | 46,913 | 46,603 | |||||
Headline earnings per share: | |||||||
Basic, in USD | 2.02 | 1.49 | |||||
Diluted, in USD | 2.01 | 1.49 | |||||
Calculation of the denominator for headline diluted earnings per share | ||||||||||
Q4 '15 | Q4 '14 | F2015 | F2014 | |||||||
Basic weighted-average common shares outstanding and unvested restricted shares expected to vest under GAAP | 46,620 | 48,695 | 46,733 | 46,484 | ||||||
Effect of dilutive securities under GAAP | 324 | 160 | 180 | 119 | ||||||
Denominator for headline diluted earnings per share | 46,944 | 48,855 | 46,913 | 46,603 | ||||||
Weighted average number of shares used to calculate headline earnings per share diluted represent the denominator for basic weighted-average common shares outstanding and unvested restricted shares expected to vest plus the effect of dilutive securities under GAAP. We use this number of fully-diluted shares outstanding to calculate headline earnings per share diluted because we do not use the two-class method to calculate headline earnings per share diluted.
Contact Information:
Investor Relations Contact:
Dhruv Chopra
Head of Investor Relations
Phone: +1 917-767-6722
Email: dchopra@net1.com