JOHANNESBURG, SOUTH AFRICA--(Marketwired - February 05, 2015) - Net 1 UEPS Technologies, Inc. (
| Summary Financial Metrics | ||||||||||
| Three months ended December 31, | ||||||||||
| % change | % change | |||||||||
| 2014 | 2013 | in USD | in ZAR | |||||||
| (All figures in USD '000s except per share data) | ||||||||||
| Revenue | 154,131 | 137,283 | 12 | % | 24 | % | ||||
| GAAP net income | 22,374 | 12,749 | 75 | % | 94 | % | ||||
| Fundamental net income (1) | 26,400 | 18,398 | 43 | % | 58 | % | ||||
| GAAP earnings per share ($) | 0.48 | 0.28 | 73 | % | 91 | % | ||||
| Fundamental earnings per share ($) (1) | 0.57 | 0.40 | 43 | % | 56 | % | ||||
| Fully-diluted shares outstanding ('000's) | 46,644 | 46,176 | 2 | % | ||||||
| Average period USD/ ZAR exchange rate | 11.22 | 10.16 | 10 | % | ||||||
| Six months ended December 31, | ||||||||||
| % change | % change | |||||||||
| 2014 | 2013 | in USD | in ZAR | |||||||
| (All figures in USD '000s except per share data) | ||||||||||
| Revenue | 310,572 | 260,777 | 19 | % | 30 | % | ||||
| GAAP net income | 46,463 | 24,345 | 91 | % | 108 | % | ||||
| Fundamental net income (1) | 54,522 | 35,174 | 55 | % | 69 | % | ||||
| GAAP earnings per share ($) | 0.99 | 0.53 | 86 | % | 102 | % | ||||
| Fundamental earnings per share ($) (1) | 1.16 | 0.77 | 51 | % | 65 | % | ||||
| Fully-diluted shares outstanding ('000's) | 46,990 | 45,919 | 2 | % | ||||||
| Average period USD/ ZAR exchange rate | 10.97 | 10.08 | 9 | % | ||||||
(1) Fundamental net income and earnings per share 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.
Factors impacting comparability of our Q2 2015 and Q2 2014 results
- Unfavorable impact from the strengthening of the USD against the ZAR: The USD appreciated by 10% against the ZAR during the second quarter of fiscal 2015, which negatively impacted our reported results;
- Increased contribution by KSNET: Our results were positively impacted by growth in our Korean operations;
- Increase in the number of SASSA grants paid: Our revenue and operating income has increased as a result of the higher number of SASSA UEPS/EMV cardholders paid during fiscal 2015 compared with 2014; and
- Continued growth in financial inclusion services: We continued to grow our financial inclusion services offerings during the second quarter of fiscal 2015, which has resulted in higher revenues and operating income from more sales of low-margin prepaid airtime and UEPS-based lending.
Comments and Outlook
"Our operational and financial performance once again speaks for itself as we continue to deliver meaningful growth in revenue and earnings," said Dr. Serge Belamant, Chairman and CEO of Net1. "Our prospects and pipeline are extremely exciting, particularly as they reflect opportunities in the mobile space, which is the payment paradigm of the future. We are globalizing, we have the technology, we have the dedicated staff, we have the financial resources and we have the passion. Carpe Diem! I believe that our efforts, innovations and lateral thinking will be noticed and appreciated by the market and enhance shareholder value," he concluded.
"I am thrilled with the sustained top and bottom line growth generated by our core businesses," said Herman Kotzé, Chief Financial Officer of Net1. "Given our strategic and operational momentum, for fiscal 2015, we now expect fundamental earnings per share of at least $2.28, assuming a constant currency base of ZAR10.40/$1 and a share count of 46.5 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
The South African transaction processing segment consists mainly of pension and welfare benefit distribution services provided to the South African government, and transaction processing for retailers, utilities, medical-related claim service customers and banks.
Segment revenue was $58.4 million in Q2 2015, down 1% compared with Q2 2014 in USD and up 10% on a constant currency basis. In ZAR, the increase in segment revenues was primarily due to more low-margin transaction fees generated from beneficiaries using the South African National Payment System and more intersegment 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, partially offset by the loss of MediKredit revenue as a result of the sale of that business. Segment operating income margin in Q2 2015 and Q2 2014 was 22% and 12%, respectively, and has increased primarily due to more higher-margin intersegment transaction processing activities, the elimination of MediKredit losses and an increase in the number of beneficiaries paid in Q2 2015.
International transaction processing
The International transaction processing segment consists mainly of payment processing services for merchants and card issuers in South Korea. The segment also includes transaction processing of UEPS-enabled smartcards in Botswana and transaction processing of medical-related claims in the United States.
KSNET contributes the majority of our revenues and operating income in this segment. Segment revenue was $40.5 million in Q2 2015, up 7% compared with Q2 2014 in USD and 18% on a constant currency basis. Revenue and operating income increased primarily due to higher transaction volume at KSNET during Q2 2015. However, operating income for Q2 2015, was adversely impacted by ad hoc incentives provided to staff due to the strong operating performance of KSNET during calendar 2014. Segment operating income margin during each of Q2 2015 and Q2 2014 was 14%, respectively.
Financial inclusion and applied technologies
The Financial inclusion and applied technologies segment includes our smart card accounts, lending and life insurance businesses. This segment also includes the economics from merchants and card holders using our merchant acquiring system, the sale of prepaid products (electricity and airtime) and the sale of hardware and software.
Segment revenue was $67.5 million in Q2 2015, up 34% compared with Q2 2014 in USD and 48% on a constant currency basis. 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, and, in ZAR, an increase in intersegment revenues. Smart Life did not contribute to operating income in Q2 2015 and 2014 due to the FSB suspension of its license.
Operating income margin for the Financial inclusion and applied technologies segment was 26% during each of the second quarter of fiscal 2015 and 2014, respectively.
Corporate/eliminations
Corporate/eliminations generally includes acquisition-related intangible asset amortization; expenditure related to compliance with the Sarbanes-Oxley Act of 2002; non-employee directors' fees; employee and executive bonuses; stock-based compensation; legal fees; audit fees; directors and officers insurance premiums; telecommunications expenses; property- related expenditures including utilities, rental, security and maintenance; and elimination entries.
The decrease in our corporate expenses was primarily due to lower US government investigations-related and US lawsuit expenses, audit fees and other corporate head office-related expenses.
Cash flow and liquidity
At December 31, 2014, we had cash and cash equivalents of $71.0 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 our all of our core businesses during the quarter, and to a lesser extent due to the cash conservation resulting from the sale of loss-incurring businesses, offset by provisional tax payments 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. Capital expenditures for Q2 2015 and 2014 were $9.1 million and $6.8 million, respectively, and have increased primarily due to the acquisition of more payment processing terminals in South Korea.
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. 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 profit on sale of property, plant and equipment. 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 Q2 2015 results on February 6, 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 March 1, 2015.
About Net1 (www.net1.com)
Net1 is a leading provider of alternative payment systems that leverage its Universal Electronic Payment System ("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. Net1's UEPS/EMV solution is interoperable with global EMV standards that seamlessly permit 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 operates market-leading payment processors in South Africa and the Republic of Korea. In addition, Net1's proprietary MVC technology offers secure mobile payments and banking services in developed and emerging countries.
Net1 has a primary listing on 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. | |||||||||||||
| Unaudited Condensed Consolidated Statements of Operations | |||||||||||||
| Three months ended | Six months ended | ||||||||||||
| December 31, | December 31, | ||||||||||||
| 2014 | 2013 | 2014 | 2013 | ||||||||||
| (In thousands, except per share data) | (In thousands, except per share data) | ||||||||||||
| REVENUE | $ | 154,131 | $ | 137,283 | $ | 310,572 | $ | 260,777 | |||||
| EXPENSE | |||||||||||||
| Cost of goods sold, IT processing, servicing and support | 71,774 | 67,883 | 146,180 | 124,442 | |||||||||
| Selling, general and administration | 41,385 | 40,824 | 80,121 | 81,330 | |||||||||
| Depreciation and amortization | 10,157 | 9,774 | 20,331 | 19,803 | |||||||||
| OPERATING INCOME | 30,815 | 18,802 | 63,940 | 35,202 | |||||||||
| INTEREST INCOME | 3,587 | 3,236 | 7,677 | 6,555 | |||||||||
| INTEREST EXPENSE | 1,107 | 2,226 | 2,419 | 3,978 | |||||||||
| INCOME BEFORE INCOME TAX EXPENSE | 33,295 | 19,812 | 69,198 | 37,779 | |||||||||
| INCOME TAX EXPENSE | 10,203 | 7,099 | 21,851 | 13,584 | |||||||||
| NET INCOME BEFORE EARNINGS FROM EQUITY-ACCOUNTED INVESTMENTS | 23,092 | 12,713 | 47,347 | 24,195 | |||||||||
| EARNINGS FROM EQUITY-ACCOUNTED INVESTMENTS | 76 | 47 | 168 | 150 | |||||||||
| NET INCOME | 23,168 | 12,760 | 47,515 | 24,345 | |||||||||
| LESS NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTEREST | 794 | 11 | 1,052 | - | |||||||||
| NET INCOME ATTRIBUTABLE TO NET1 | $ | 22,374 | $ | 12,749 | $ | 46,463 | $ | 24,345 | |||||
| Net income per share, in United States dollars | |||||||||||||
| Basic earnings attributable to Net1 shareholders | $0.48 | $0.28 | $0.99 | $0.53 | |||||||||
| Diluted earnings attributable to Net1 shareholders | $0.48 | $0.28 | $0.99 | $0.53 | |||||||||
| NET 1 UEPS TECHNOLOGIES, INC. | ||||||||||
| Unaudited Condensed Consolidated Balance Sheets | ||||||||||
| Unaudited | (A) | |||||||||
| December 31, | June 30, | |||||||||
| 2014 | 2014 | |||||||||
| (In thousands, except share data) | ||||||||||
| ASSETS | ||||||||||
| CURRENT ASSETS | ||||||||||
| Cash and cash equivalents | $ | 70,981 | $ | 58,672 | ||||||
| Pre-funded social welfare grants receivable | 6,254 | 4,809 | ||||||||
| Accounts receivable, net of allowances of - December: $2,175; June: $1,313 | 128,338 | 148,067 | ||||||||
| Finance loans receivable, net of allowances of - December: $4,403; June: $3,083 | 60,309 | 53,124 | ||||||||
| Inventory | 12,501 | 10,785 | ||||||||
| Deferred income taxes | 6,286 | 7,451 | ||||||||
| Total current assets before settlement assets | 284,669 | 282,908 | ||||||||
| Settlement assets | 480,962 | 725,987 | ||||||||
| Total current assets | 765,631 | 1,008,895 | ||||||||
| PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of - | ||||||||||
| December: $94,376; June: $91,422 | 49,361 | 47,797 | ||||||||
| EQUITY-ACCOUNTED INVESTMENTS | 954 | 878 | ||||||||
| GOODWILL | 172,237 | 186,576 | ||||||||
| INTANGIBLE ASSETS, net of accumulated amortization of - December: $80,189; June: $78,781 | 55,884 | 68,514 | ||||||||
| OTHER LONG-TERM ASSETS, including reinsurance assets | 35,426 | 38,285 | ||||||||
| TOTAL ASSETS | 1,079,493 | 1,350,945 | ||||||||
| LIABILITIES | ||||||||||
| CURRENT LIABILITIES | ||||||||||
| Accounts payable | 15,838 | 17,101 | ||||||||
| Other payables | 39,263 | 42,257 | ||||||||
| Current portion of long-term borrowings | - | 14,789 | ||||||||
| Income taxes payable | 3,094 | 7,676 | ||||||||
| Total current liabilities before settlement obligations | 58,195 | 81,823 | ||||||||
| Settlement obligations | 480,962 | 725,987 | ||||||||
| Total current liabilities | 539,157 | 807,810 | ||||||||
| DEFERRED INCOME TAXES | 12,676 | 15,522 | ||||||||
| LONG-TERM BORROWINGS | 59,698 | 62,388 | ||||||||
| OTHER LONG-TERM LIABILITIES, including insurance policy liabilities | 20,831 | 23,477 | ||||||||
| TOTAL LIABILITIES | 632,362 | 909,197 | ||||||||
| EQUITY | ||||||||||
| COMMON STOCK | ||||||||||
| Authorized: 200,000,000 with $0.001 par value; Issued and outstanding shares, net of treasury - December: 46,547,153; June: 47,819,299 | 64 |
63 |
||||||||
| PREFERRED STOCK | ||||||||||
| Authorized shares: 50,000,000 with $0.001 par value; Issued and outstanding shares, net of treasury: December: -; June: - | - |
- |
||||||||
| ADDITIONAL PAID-IN-CAPITAL | 211,743 | 202,401 | ||||||||
| TREASURY SHARES, AT COST: December: 18,057,228; June: 15,883,212 | (214,520) | (200,681) | ||||||||
| ACCUMULATED OTHER COMPREHENSIVE LOSS | (120,504) | (82,741) | ||||||||
| RETAINED EARNINGS | 569,596 | 522,729 | ||||||||
| TOTAL NET1 EQUITY | 446,379 | 441,771 | ||||||||
| NON-CONTROLLING INTEREST | 752 | (23) | ||||||||
| TOTAL EQUITY | 447,131 | 441,748 | ||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 1,079,493 | $ | 1,350,945 | ||||||
(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, | ||||||||||||
| 2014 | 2013 | 2014 | 2013 | ||||||||||
| (In thousands) | (In thousands) | ||||||||||||
| Cash flows from operating activities | |||||||||||||
| Net income | $ | 23,168 | $ | 12,760 | $ | 47,515 | $ | 24,345 | |||||
| Depreciation and amortization | 10,157 | 9,774 | 20,331 | 19,803 | |||||||||
| Earnings from equity-accounted investments | (76) | (47) | (168) | (150) | |||||||||
| Fair value adjustments | (234) | 72 | 179 | (61) | |||||||||
| Interest payable | 140 | 694 | 1,299 | 1,666 | |||||||||
| Profit on disposal of property, plant and equipment | (109) | (15) | (231) | (16) | |||||||||
| Stock-based compensation charge | 1,035 | 968 | 1,951 | 1,898 | |||||||||
| Facility fee amortized | 52 | 509 | 134 | 578 | |||||||||
| Increase in accounts receivable, pre-funded social welfare grants receivable and finance loans receivable | (7,315) |
(37,977) |
2,155 |
(61,078) |
|||||||||
| Increase in inventory | (622) | (2,853) | (2,745) | (1,842) | |||||||||
| Decrease in accounts payable and other payables | (1,456) | (4,883) | (12,389) | (13,551) | |||||||||
| (Decrease) increase in taxes payable | (9,963) | (5,559) | (3,352) | 1,362 | |||||||||
| Decrease in deferred taxes | (168) | (691) | (558) | (1,878) | |||||||||
| Net cash provided (used in ) by operating activities | 14,609 | (27,248) | 54,121 | (28,924) | |||||||||
| Cash flows from investing activities | |||||||||||||
| Capital expenditures | (9,137) | (6,845) | (18,515) | (12,461) | |||||||||
| Proceeds from disposal of property, plant and equipment | 373 | 1,953 | 614 | 2,001 | |||||||||
| Proceeds from sale of business | - | - | 1,895 | - | |||||||||
| Other investing activities | (29) | - | (29) | (1) | |||||||||
| Net change in settlement assets | 241,652 | 204,730 | 198,598 | 256,503 | |||||||||
| Net cash provided by investing activities | 232,859 | 199,838 | 182,563 | 246,042 | |||||||||
| Cash flows from financing activities | |||||||||||||
| Repayment of long-term borrowings | (14,128) | (87,008) | (14,128) | (87,008) | |||||||||
| Long-term borrowings utilized | 1,081 | - | 2,178 | - | |||||||||
| Acquisition of treasury stock | - | - | (9,151) | - | |||||||||
| Sale of equity to non-controlling interest | - | - | 1,407 | - | |||||||||
| Proceeds from issue of common stock | - | - | 989 | - | |||||||||
| Long-term borrowings obtained | - | 71,605 | - | 71,605 | |||||||||
| Payment of facility fee | - | (872) | - | (872) | |||||||||
| Proceeds from bank overdraft | - | 24,580 | - | 24,580 | |||||||||
| Acquisition of interests in KSNET | - | (1,968) | - | (1,968) | |||||||||
| Net change in settlement obligations | (241,652) | (204,730) | (198,598) | (256,503) | |||||||||
| Net cash used in by financing activities | (254,699) | (198,393) | (217,303) | (250,166) | |||||||||
| Effect of exchange rate changes on cash | (2,973) | 495 | (7,072) | 1,745 | |||||||||
| Net (decrease) increase in cash and cash equivalents | (10,204) | (25,308) | 12,309 | (31,303) | |||||||||
| Cash and cash equivalents - beginning of period | 81,185 | 47,670 | 58,672 | 53,665 | |||||||||
| Cash and cash equivalents - end of period | $ | 70,981 | $ | 22,362 | $ | 70,981 | $ | 22,362 | |||||
| See Notes to Unaudited Condensed Consolidated Financial Statements | |||||||||||||
Net 1 UEPS Technologies, Inc.
Attachment A
Operating segment revenue, operating income and operating margin:
Three months ended December 31, 2014 and 2013 and June 30, 2014
| Change - actual | Change - constant exchange rate(1) | |||||||||||||||
| Key segmental data, in $'000, | Q2 '15 | Q2 '14 | Q1 '15 | Q2 '15 vs Q2 '14 | Q2 '15 vs Q1 '15 | Q2 '15 vs Q2 '14 | Q2 '15 vs Q1 '15 | |||||||||
| Revenue: | ||||||||||||||||
| South African transaction processing | $58,427 | $58,754 | $60,252 | (1%) | (3%) | 10% | 1% | |||||||||
| International transaction processing | 40,466 | 37,738 | 43,204 | 7% | (6%) | 18% | (2%) | |||||||||
| Financial inclusion and applied technologies | 67,531 | 50,480 | 65,197 | 34% | 4% | 48% | 8% | |||||||||
| Subtotal: Operating segments | 166,424 | 146,972 | 168,653 | 13% | (1%) | 25% | 3% | |||||||||
| Intersegment eliminations | (12,293) | (9,689) | (12,212) | 27% | 1% | 40% | 5% | |||||||||
| Consolidated revenue | $154,131 | $137,283 | $156,441 | 12% | (1%) | 24% | 3% | |||||||||
| Operating income: | ||||||||||||||||
| South African transaction processing | $12,883 | $7,128 | $13,639 | 81% | (6%) | 100% | (1%) | |||||||||
| International transaction processing | 5,743 | 5,139 | 7,349 | 12% | (22%) | 23% | (18%) | |||||||||
| Financial inclusion and applied technologies | 17,827 | 13,265 | 17,607 | 34% | 1% | 48% | 6% | |||||||||
| Subtotal: Operating segments | 36,453 | 25,532 | 38,595 | 43% | (6%) | 58% | (1%) | |||||||||
| Corporate/Eliminations | (5,638) | (6,730) | (5,470) | (16%) | 3% | (7%) | 8% | |||||||||
| Consolidated operating income | $30,815 | $18,802 | $33,125 | 64% | (7%) | 81% | (3%) | |||||||||
| Operating income margin (%) | ||||||||||||||||
| South African transaction processing | 22% | 12% | 23% | |||||||||||||
| International transaction processing | 14% | 14% | 17% | |||||||||||||
| Financial inclusion and applied technologies | 26% | 26% | 27% | |||||||||||||
| Consolidated operating margin | 20% | 14% | 21% | |||||||||||||
(1) - This information shows what the change in these items would have been if the USD/ ZAR exchange rate that prevailed during the second quarter of fiscal 2015 also prevailed during the second quarter of fiscal 2014 and the first quarter of fiscal 2015.
| Six months ended December 31, 2014 and 2013 | ||||||||||||||
| Change - | ||||||||||||||
| constant | ||||||||||||||
| Change - | exchange | |||||||||||||
| actual | rate(1) | |||||||||||||
| F2015 | F2015 | |||||||||||||
| vs | vs | |||||||||||||
| Key segmental data, in '000, except margins | F2015 | F2014 | F2014 | F2014 | ||||||||||
| Revenue: | ||||||||||||||
| South African transaction processing | 118,679 | 115,915 | 2 | % | 11 | % | ||||||||
| International transaction processing | 83,670 | 75,279 | 11 | % | 21 | % | ||||||||
| Financial inclusion and applied technologies | 132,728 | 87,276 | 52 | % | 65 | % | ||||||||
| Subtotal: Operating segments | 335,077 | 278,470 | 20 | % | 31 | % | ||||||||
| Intersegment eliminations | (24,505 | ) | (17,693 | ) | 39 | % | 51 | % | ||||||
| Consolidated revenue | 310,572 | 260,777 | 19 | % | 30 | % | ||||||||
| Operating income: | ||||||||||||||
| South African transaction processing | 26,522 | 13,589 | 95 | % | 112 | % | ||||||||
| International transaction processing | 13,092 | 10,663 | 23 | % | 34 | % | ||||||||
| Financial inclusion and applied technologies | 35,434 | 26,100 | 36 | % | 48 | % | ||||||||
| Subtotal: Operating segments | 75,048 | 50,352 | 49 | % | 62 | % | ||||||||
| Corporate/Eliminations | (11,108 | ) | (15,150 | ) | (27 | %) | (20 | %) | ||||||
| Consolidated operating income | 63,940 | 35,202 | 82 | % | 98 | % | ||||||||
| Operating income margin (%) | ||||||||||||||
| South African transaction processing | 22 | % | 12 | % | ||||||||||
| International transaction processing | 16 | % | 14 | % | ||||||||||
| Financial inclusion and applied technologies | 27 | % | 30 | % | ||||||||||
| Overall operating margin | 21 | % | 13 | % | ||||||||||
(1) - This information shows what the change in these items would have been if the USD/ ZAR exchange rate that prevailed during the first half of fiscal 2015 also prevailed during the first half of 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:
Three months ended December 31, 2014 and 2013
| EPS, | EPS, | |||||||||||||||||
| Net income | basic | Net income | basic | |||||||||||||||
| (USD'000) | (USD) | (ZAR'000) | (ZAR) | |||||||||||||||
| 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||
| GAAP | 22,374 | 12,749 | 0.48 | 0.28 | 250,737 | 129,519 | 5.39 | 2.83 | ||||||||||
| Intangible asset amortization, net. | 2,930 | 3,104 | 32,827 | 31,530 | ||||||||||||||
| Stock-based compensation charge | 1,035 | 968 | 11,616 | 9,834 | ||||||||||||||
| Facility fees for KSNET debt | 52 | 509 | 584 | 5,171 | ||||||||||||||
| US government investigations- | ||||||||||||||||||
| related and US lawsuit expenses | 9 | 1,068 | 101 | 10,850 | ||||||||||||||
| Fundamental | 26,400 | 18,398 | 0.57 | 0.40 | 295,865 | 186,904 | 6.36 | 4.08 | ||||||||||
| Six months ended December 31, 2014 and 2013 | ||||||||||||||||||
| EPS, | EPS, | |||||||||||||||||
| Net income | basic | Net income | basic | |||||||||||||||
| (USD'000) | (USD) | (ZAR'000) | (ZAR) | |||||||||||||||
| 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||
| GAAP | 46,463 | 24,345 | 0.99 | 0.53 | 509,644 | 245,417 | 10.87 | 5.37 | ||||||||||
| Intangible asset amortization, net. | 5,838 | 5,889 | 64,036 | 59,367 | ||||||||||||||
| Stock-based compensation charge | 1,951 | 1,898 | 21,400 | 19,134 | ||||||||||||||
| Facility fees for KSNET debt | 134 | 578 | 1,470 | 5,827 | ||||||||||||||
| US government investigations- | ||||||||||||||||||
| related and US lawsuit expenses | 136 | 2,464 | 1,492 | 24,839 | ||||||||||||||
| Fundamental | 54,522 | 35,174 | 1.16 | 0.77 | 598,042 | 354,584 | 12.76 | 7.75 | ||||||||||
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, 2014 and 2013 | |||||
| 2014 | 2013 | ||||
| Net income (USD'000) | 22,374 | 12,749 | |||
| Adjustments: | |||||
| Profit on sale of property, plant and equipment | (109) | (15) | |||
| Tax effects on above | 31 | 4 | |||
| Net income used to calculate headline earnings (USD'000) | 22,296 | 12,738 | |||
| Weighted average number of shares used to calculate net income per share basic earnings and headline earnings per share basic earnings ('000) | 46,519 |
45,776 |
|||
| Weighted average number of shares used to calculate net income per share diluted earnings and headline earnings per share diluted earnings ('000) | 46,644 |
46,176 |
|||
| Headline earnings per share: | |||||
| Basic, in USD | 0.48 | 0.28 | |||
| Diluted, in USD | 0.48 | 0.28 | |||
| Six months ended December 31, 2014 and 2013 | |||||
| 2014 | 2013 | ||||
| Net income (USD'000) | 46,463 | 24,345 | |||
| Adjustments: | |||||
| Profit on sale of property, plant and equipment | (231) | (16) | |||
| Tax effects on above | 65 | 4 | |||
| Net income used to calculate headline earnings (USD'000) | 46,297 | 24,333 | |||
| Weighted average number of shares used to calculate net income per share basic earnings and headline earnings per share basic earnings ('000) | 46,873 |
45,725 |
|||
| Weighted average number of shares used to calculate net income per share diluted earnings and headline earnings per share diluted earnings ('000) | 46,990 |
45,919 |
|||
| Headline earnings per share: | |||||
| Basic, in USD | 0.99 | 0.53 | |||
| Diluted, in USD | 0.99 | 0.52 | |||
| Calculation of the denominator for headline diluted earnings per share | |||||||||||
| Q2 '15 | Q2 '14 | F2015 | F2014 | ||||||||
| Basic weighted-average common shares outstanding and unvested restricted shares expected to vest under GAAP | 46,519 | 45,776 | 46,873 | 45,725 | |||||||
| Effect of dilutive securities under GAAP | 125 | 400 | 117 | 194 | |||||||
| Denominator for headline diluted earnings per share | 46,644 | 46,176 | 46,990 | 45,919 | |||||||
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