UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 7, 2015
NET 1 UEPS TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Florida |
000-31203 |
98-0171860 |
(State or other jurisdiction |
(Commission |
(IRS Employer |
of incorporation) |
File Number) |
Identification No.) |
President Place, 4th Floor, Cnr. Jan
Smuts Avenue and Bolton Road
Rosebank, Johannesburg, South Africa
(Address of principal executive offices) (ZIP Code)
Registrants telephone number, including area code:
011-27-11-343-2000
Check the appropriate box below if the Form 8-K filing is
intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a -12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d -2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e -4(c))
Item 2.02. |
Results of Operations and Financial
Condition. |
The following information is furnished pursuant to Item 2.02,
Results of Operations and Financial Condition.
On May 7, 2015, we issued a press release setting forth our
financial results for the third quarter ended March 31, 2015. A copy of the
press release is attached as Exhibit 99.1.
Item 9.01. |
Financial Statements and Exhibits.
|
SIGNATURES
Pursuant to the requirements of
the Securities Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned hereunto duly authorized.
|
NET 1 UEPS TECHNOLOGIES, INC.
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Date: May 7, 2015 |
By: |
/s/ Serge Belamant |
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Dr. Serge C.P. Belamant |
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Chief Executive Officer and Chairman of |
|
|
the Board |
Exhibit 99.1
Net 1 UEPS Technologies, Inc. Reports Third Quarter 2015
Results
-
Q3 2015 Revenue and FEPS of $151.1 million and $0.57, a constant
currency increase of 18% and 30%, respectively;
-
Cash and equivalents of $111.0 million as of March 31, 2015 and
operating cash flow of $49.3 million in Q3 2015.
JOHANNESBURG, May 7, 2015 Net 1 UEPS Technologies, Inc.
(Nasdaq: UEPS; JSE: NT1) today released results for the third quarter of fiscal
2015.
Summary Financial Metrics
|
|
Three months ended March 31, |
|
|
|
|
|
|
|
|
|
% change |
|
|
% change |
|
|
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2015 |
|
|
2014 |
|
|
in USD |
|
|
in ZAR |
|
(All figures in USD 000s except per share data) |
|
|
|
|
|
|
|
|
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Revenue |
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151,121 |
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138,126 |
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9% |
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18% |
|
GAAP net income |
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24,358 |
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17,182 |
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42% |
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53% |
|
Fundamental net income (1) |
|
26,519 |
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21,688 |
|
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22% |
|
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32% |
|
GAAP earnings per share ($) |
|
0.52 |
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0.38 |
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39% |
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50% |
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Fundamental earnings per share ($) (1) |
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0.57 |
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0.47 |
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21% |
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30% |
|
Fully-diluted shares outstanding (000s) |
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46,739 |
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|
45,954 |
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|
2% |
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2% |
|
Average period USD1:ZAR exchange rate |
|
11.74 |
|
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10.87 |
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8% |
|
|
|
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|
Nine months ended March 31, |
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% change |
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% change |
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2015 |
|
|
2014 |
|
|
in USD |
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|
in ZAR |
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(All figures in USD 000s except per share data) |
|
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|
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|
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|
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Revenue |
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461,693 |
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398,903 |
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16% |
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25% |
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GAAP net income |
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70,821 |
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41,527 |
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71% |
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84% |
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Fundamental net income (1) |
|
80,985 |
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57,009 |
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42% |
|
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54% |
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GAAP earnings per share ($) |
|
1.51 |
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0.91 |
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67% |
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80% |
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Fundamental earnings per share ($) (1) |
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1.73 |
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1.25 |
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38% |
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50% |
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Fully-diluted shares outstanding (000s) |
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46,907 |
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45,997 |
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2% |
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2% |
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Average period USD1:ZAR exchange rate |
|
11.23 |
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10.38 |
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8% |
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(1) Fundamental net income and earnings per share are non-GAAP
measures and are described below under Use of Non-GAAP MeasuresFundamental 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 Q3 2015 and Q3 2014
results
- Unfavorable impact from the strengthening of the USD against the
ZAR: The USD appreciated by 8% against the ZAR during Q3 2015, which
negatively impacted our reported results;
- Increased contribution by KSNET: Our results were positively
impacted by growth in our Korean operations and a refund of $1.7 million that
had been paid several years ago in connection with industry-wide litigation
that has now been finalized;
- Increase in the number of SASSA grants paid: Our revenue and
operating income have 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 Q3 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
I continue to be very positive about the future of our Group
as we continue to diversify our business activities to minimize the risks that
are intrinsic in customer concentration, government contracts and localized
business conditions, said Dr. Serge Belamant, Chairman and CEO of Net1. This
was our overarching strategic objective and it is a testament of our staffs
competence and dedication that we were able to achieve this goal whilst
continuing to grow our revenue and profitability, 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 are increasing our expected
fundamental earnings per share for fiscal 2015 to at least $2.38, assuming a
constant currency base of ZAR10.40/ $1 and a share count of 46.5 million
shares, he concluded.
Update on SASSA tender process
As ordered by the South African Constitutional Court in its
April 2014 ruling, SASSA initiated a new tender process for a five-year contract
relating to the payment of social grants by issuing an initial Request for
Proposal (RFP) in October 2014. Following a detailed analysis of the tender
specifications, we concluded that the tender specifications were not
sufficiently clear regarding a number of critical points and failed to comply
with the RFP requirements specified in the Courts ruling and, in November 2014,
we applied to the Court for an order setting aside the RFP and directing SASSA
to issue a corrected RFP. Although the Court did not set aside the RFP, it did
order SASSA to issue a draft amended RFP. SASSA issued amended RFPs on two
separate occasions (in December 2014 and February 2015). We continued to object
to deficiencies in the amended RFPs and made further applications to the Court
setting forth our objections. In February 2015, SASSA applied to the Court for
an extension of time to address our objections.
In orders dated March 19 and 24, 2015, the Court ordered SASSA
to effect further amendments to the RFP to address our objections. The Court
ordered that, absent further objections (1) SASSA must circulate a further
amended draft RFP by April 17, 2015; (2) all bids must be submitted by May 17,
2015 and (3) SASSA shall award the new tender by October 15, 2015. The Courts
April 2014 ruling does not require SASSA to award a new tender, though we expect
that any decision not to make an award would be subject to judicial review and
scrutiny. On April 17, 2015, SASSA issued and circulated an amended RFP to all
prospective bidders. The amended RFP specifies that bidders must submit their
proposals to SASSA on or before May 18, 2015 and also states that no part of the
contents of the RFP may be used, copied, disclosed or conveyed in whole or in
part to any party in any manner whatsoever other than for the purpose of the
proposal.
We are currently analyzing the RFP to determine whether it is
in the best interest of the Company to participate in the tender process or to
focus on our other financial services businesses without being a contractor to
SASSA. We have not yet made a final determination but expect to do so by the
tender deadline. In any event, we cannot predict what the timing or ultimate
outcome of the tender process will be, or if a new tender award will be made at
all after the process is complete.
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 $58.0 million in Q3 2015, up 1% compared
with Q3 2014 in USD and up 9% 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 Q3 2015 and Q3 2014 was 23% and 16%, 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 Q3 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 Zazoo start-up costs in the UK and India
related to the establishment of payment solutions and transaction processing
operations in these territories, 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 $38.3 million in Q3 2015, up 9%
compared with Q3 2014 in USD and 17% on a constant currency basis. Revenue
increased primarily due to higher transaction volume at KSNET during the third
quarter of fiscal 2015. Operating income during Q3 2015 was higher due to
increase in revenue contribution from KSNET, but partially offset by Zazoo
start-up costs in the UK and India. Operating income and margin for the third
quarter of fiscal 2015, was also positively impacted by a refund of
approximately $1.7 million that had been paid several years ago in connection
with industry-wide litigation that has now been finalized. Operating income
margin for the third quarter of fiscal 2015 and 2014 was 17% and 13%,
respectively, and was higher in fiscal 2015 primarily due to the refund referred
to above.
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 $66.8 million in Q3 2015, up 19% compared
with Q3 2014 in USD and 28% 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. Segment operating
income margin in Q3 2015 and Q3 2014 was 27% and 29%, 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 March 31, 2015, we had cash and cash equivalents of $111.0
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 all of our
core businesses, 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 Q3 2015 and 2014 were $6.3 million and $4.8 million, respectively, and have
increased primarily due to the acquisition of more payment processing terminals
in South Korea and rollout of 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. Management believes that the fundamental net income and earnings
per share metric enhances its own evaluation, as well as an investors
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 Q3 2015 results on May
8, 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 May
31, 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.
Investor Relations Contact: |
Dhruv Chopra |
Head of Investor Relations |
Phone: +1 917-767-6722 |
Email: dchopra@net1.com |
NET 1 UEPS TECHNOLOGIES, INC. |
Unaudited Condensed Consolidated Statements of
Operations |
|
|
Three months ended |
|
|
Nine months ended |
|
|
|
March 31, |
|
|
March 31, |
|
|
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2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
|
|
(In thousands, except per share
data) |
|
|
(In thousands, except per share
data) |
|
REVENUE |
$ |
151,121 |
|
$ |
138,126 |
|
$ |
461,693 |
|
$ |
398,903 |
|
EXPENSE |
|
|
|
|
|
|
|
|
|
|
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Cost of
goods sold, IT processing, servicing |
|
|
|
|
|
|
|
|
|
|
|
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and support |
|
71,094 |
|
|
63,149 |
|
|
217,274 |
|
|
187,591 |
|
Selling,
general and administration |
|
38,001 |
|
|
40,586 |
|
|
118,122 |
|
|
121,916 |
|
Depreciation and
amortization |
|
10,060 |
|
|
10,442 |
|
|
30,391 |
|
|
30,245 |
|
OPERATING INCOME |
|
31,966 |
|
|
23,949 |
|
|
95,906 |
|
|
59,151 |
|
INTEREST INCOME |
|
4,211 |
|
|
3,438 |
|
|
11,888 |
|
|
9,993 |
|
INTEREST EXPENSE |
|
941 |
|
|
1,734 |
|
|
3,360 |
|
|
5,712 |
|
INCOME BEFORE INCOME TAX EXPENSE |
|
35,236 |
|
|
25,653 |
|
|
104,434 |
|
|
63,432 |
|
INCOME TAX EXPENSE |
|
10,305 |
|
|
8,535 |
|
|
32,156 |
|
|
22,119 |
|
NET INCOME BEFORE EARNINGS FROM |
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY-ACCOUNTED INVESTMENTS |
|
24,931 |
|
|
17,118 |
|
|
72,278 |
|
|
41,313 |
|
EARNINGS FROM EQUITY-ACCOUNTED |
|
|
|
|
|
|
|
|
|
|
|
|
INVESTMENTS |
|
65 |
|
|
52 |
|
|
233 |
|
|
202 |
|
NET INCOME |
|
24,996 |
|
|
17,170 |
|
|
72,511 |
|
|
41,515 |
|
LESS (ADD) NET INCOME (LOSS) ATTRIBUTABLE
TO NON-CONTROLLING INTEREST |
|
638 |
|
|
(12 |
) |
|
1,690 |
|
|
(12 |
) |
NET INCOME ATTRIBUTABLE TO NET1 |
$ |
24,358 |
|
$ |
17,182 |
|
$ |
70,821 |
|
$ |
41,527 |
|
Net income per share, in United States
dollars |
|
|
|
|
|
|
|
|
|
|
|
|
Basic
earnings attributable to Net1 shareholders |
$ |
0.52 |
|
$ |
0.38 |
|
$ |
1.51 |
|
$ |
0.91 |
|
Diluted
earnings attributable to Net1 shareholders |
$ |
0.52 |
|
$ |
0.37 |
|
$ |
1.51 |
|
$ |
0.90 |
|
NET 1 UEPS TECHNOLOGIES, INC. |
Unaudited Condensed Consolidated Balance Sheets
|
|
|
Unaudited |
|
|
(A) |
|
|
|
March 31, |
|
|
June 30, |
|
|
|
2015 |
|
|
2014 |
|
|
|
(In thousands, except share data) |
|
ASSETS |
|
CURRENT ASSETS |
|
|
|
|
|
|
Cash and cash
equivalents |
$ |
111,002 |
|
$ |
58,672 |
|
Pre-funded social welfare grants
receivable |
|
2,853 |
|
|
4,809 |
|
Accounts receivable,
net of allowances of March: $2,347; June: $1,313 |
|
136,520 |
|
|
148,067 |
|
Finance loans receivable, net of
allowances of March: $4,707; June: $3,083 |
|
44,935 |
|
|
53,124 |
|
Inventory |
|
12,095 |
|
|
10,785 |
|
Deferred income taxes |
|
6,828 |
|
|
7,451 |
|
Total current assets before settlement assets |
|
314,233 |
|
|
282,908 |
|
Settlement assets |
|
651,615 |
|
|
725,987 |
|
Total
current assets |
|
965,848 |
|
|
1,008,895 |
|
PROPERTY, PLANT AND EQUIPMENT, net of accumulated
depreciation of March: $98,213; June: $91,422 |
|
48,395 |
|
|
47,797 |
|
EQUITY-ACCOUNTED INVESTMENTS |
|
930 |
|
|
878 |
|
GOODWILL |
|
169,433 |
|
|
186,576 |
|
INTANGIBLE ASSETS, net of accumulated
amortization
of March: $82,546; June: $78,781 |
|
51,665 |
|
|
68,514 |
|
OTHER LONG-TERM ASSETS, including reinsurance assets |
|
35,781 |
|
|
38,285 |
|
TOTAL ASSETS |
|
1,272,052 |
|
|
1,350,945 |
|
LIABILITIES |
|
CURRENT LIABILITIES |
|
|
|
|
|
|
Accounts payable |
|
15,341 |
|
|
17,101 |
|
Other payables |
|
41,087 |
|
|
42,257 |
|
Current portion of long-term borrowings
|
|
- |
|
|
14,789 |
|
Income taxes payable
|
|
10,215 |
|
|
7,676 |
|
Total
current liabilities before settlement obligations |
|
66,643 |
|
|
81,823 |
|
Settlement obligations |
|
651,615 |
|
|
725,987 |
|
Total current liabilities
|
|
718,258 |
|
|
807,810 |
|
DEFERRED INCOME TAXES |
|
11,841 |
|
|
15,522 |
|
LONG-TERM BORROWINGS |
|
60,027 |
|
|
62,388 |
|
OTHER LONG-TERM LIABILITIES, including
insurance policy liabilities |
|
20,250 |
|
|
23,477 |
|
TOTAL LIABILITIES |
|
810,376 |
|
|
909,197 |
|
COMMITMENTS AND CONTINGENCIES |
|
|
|
|
|
|
EQUITY |
|
COMMON STOCK |
|
|
|
|
|
|
Authorized: 200,000,000 with $0.001 par value;
Issued and outstanding shares, net of treasury - March: 46,607,153; 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: March: -; June: - |
|
- |
|
|
- |
|
ADDITIONAL
PAID-IN-CAPITAL |
|
213,264 |
|
|
202,401 |
|
TREASURY SHARES, AT COST: March:
18,057,228; June: 15,883,212 |
|
(214,520 |
) |
|
(200,681 |
) |
ACCUMULATED OTHER
COMPREHENSIVE LOSS |
|
(131,415 |
) |
|
(82,741 |
) |
RETAINED EARNINGS |
|
593,954 |
|
|
522,729 |
|
TOTAL NET1 EQUITY |
|
461,347 |
|
|
441,771 |
|
NON-CONTROLLING INTEREST |
|
329 |
|
|
(23 |
) |
TOTAL EQUITY |
|
461,676 |
|
|
441,748 |
|
TOTAL LIABILITIES AND
SHAREHOLDERS EQUITY |
$ |
1,272,052 |
|
$ |
1,350,945 |
|
(A) Derived from audited financial statements
NET 1 UEPS TECHNOLOGIES, INC. |
Unaudited Condensed Consolidated Statements of Cash
Flows |
|
|
Three months ended |
|
|
Nine months ended |
|
|
|
March 31, |
|
|
March 31, |
|
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
|
|
(In thousands) |
|
|
(In thousands) |
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
24,996 |
|
$ |
17,170 |
|
$ |
72,511 |
|
$ |
41,515 |
|
Depreciation and amortization |
|
10,060 |
|
|
10,442 |
|
|
30,391 |
|
|
30,245 |
|
Earnings from equity-accounted investments |
|
(65 |
) |
|
(52 |
) |
|
(233 |
) |
|
(202 |
) |
Fair value adjustments |
|
(449 |
) |
|
110 |
|
|
(270 |
) |
|
49 |
|
Interest payable |
|
(23 |
) |
|
30 |
|
|
1,276 |
|
|
1,696 |
|
Profit on disposal of property, plant and
equipment |
|
(64 |
) |
|
(26 |
) |
|
(295 |
) |
|
(42 |
) |
Stock-based compensation charge |
|
731 |
|
|
922 |
|
|
2,682 |
|
|
2,820 |
|
Facility fee amortized |
|
36 |
|
|
79 |
|
|
170 |
|
|
657 |
|
Decrease (Increase) in accounts receivable, pre- |
|
|
|
|
|
|
|
|
|
|
|
|
funded social welfare grants receivable and
finance |
|
|
|
|
|
|
|
|
|
|
|
|
loans receivable |
|
3,379 |
|
|
(6,443 |
) |
|
5,534 |
|
|
(67,521 |
) |
(Increase) Decrease in inventory |
|
(26 |
) |
|
2,821 |
|
|
(2,771 |
) |
|
979 |
|
Increase (Decrease) in accounts payable and other payables
|
|
4,735 |
|
|
2,656 |
|
|
(7,654 |
) |
|
(10,895 |
) |
Increase in taxes payable |
|
7,465 |
|
|
8,069 |
|
|
4,113 |
|
|
9,431 |
|
Decrease in deferred taxes |
|
(1,467 |
) |
|
(1,141 |
) |
|
(2,025 |
) |
|
(3,019 |
) |
Net cash provided by
operating activities |
|
49,308 |
|
|
34,637 |
|
|
103,429 |
|
|
5,713 |
|
Cash flows from investing activities |
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures |
|
(6,307 |
) |
|
(4,848 |
) |
|
(24,822 |
) |
|
(17,309 |
) |
Proceeds from disposal of property, plant and equipment |
|
163 |
|
|
123 |
|
|
777 |
|
|
2,124 |
|
Proceeds from sale of business |
|
- |
|
|
- |
|
|
1,895 |
|
|
- |
|
(Investment in equity in) Repayment of loan by
equity-accounted investment |
|
- |
|
|
(25 |
) |
|
- |
|
|
(25 |
) |
Other investing activities |
|
- |
|
|
571 |
|
|
(29 |
) |
|
570 |
|
Net change in settlement assets |
|
(188,315 |
) |
|
(277,912 |
) |
|
10,283 |
|
|
(21,409 |
) |
Net cash used in investing
activities |
|
(194,459 |
) |
|
(282,091 |
) |
|
(11,896 |
) |
|
(36,049 |
) |
Cash flows from financing activities |
|
|
|
|
|
|
|
|
|
|
|
|
Repayment of long-term borrowings |
|
- |
|
|
- |
|
|
(14,128 |
) |
|
(87,008 |
) |
Long-term borrowings utilized |
|
798 |
|
|
1,028 |
|
|
2,976 |
|
|
72,633 |
|
Acquisition of treasury stock |
|
- |
|
|
- |
|
|
(9,151 |
) |
|
- |
|
Sale of equity to non-controlling interest |
|
- |
|
|
- |
|
|
1,407 |
|
|
- |
|
Dividends paid to non-controlling interest
|
|
(1,024 |
) |
|
- |
|
|
(1,024 |
) |
|
- |
|
Proceeds from issue of common stock |
|
791 |
|
|
88 |
|
|
1,780 |
|
|
88 |
|
Payment of facility fee |
|
- |
|
|
- |
|
|
- |
|
|
(872 |
) |
Proceeds from bank overdraft |
|
- |
|
|
- |
|
|
- |
|
|
24,580 |
|
Repayment of bank overdraft |
|
- |
|
|
(23,335 |
) |
|
- |
|
|
(23,335 |
) |
Acquisition of interests in KSNET |
|
- |
|
|
- |
|
|
- |
|
|
(1,968 |
) |
Net change in settlement obligations |
|
188,315 |
|
|
277,912 |
|
|
(10,283 |
) |
|
21,409 |
|
Net cash provided (used in) by
financing activities |
|
188,880 |
|
|
255,693 |
|
|
(28,423 |
) |
|
5,527 |
|
Effect of exchange rate changes on cash |
|
(3,708 |
) |
|
274 |
|
|
(10,780 |
) |
|
2,019 |
|
Net increase (decrease) in cash and cash
equivalents |
|
40,021 |
|
|
8,513 |
|
|
52,330 |
|
|
(22,790 |
) |
Cash and cash equivalents beginning of
period |
|
70,981 |
|
|
22,362 |
|
|
58,672 |
|
|
53,665 |
|
Cash and cash equivalents end of period |
$ |
111,002 |
|
$ |
30,875 |
|
$ |
111,002 |
|
$ |
30,875 |
|
Net 1 UEPS Technologies, Inc.
Attachment A
Operating segment revenue, operating income and operating
margin:
Three months ended March 31, 2015 and 2014 and December 31,
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change constant |
|
|
|
|
|
|
|
|
|
|
|
|
Change - actual |
|
|
exchange rate(1) |
|
|
|
|
|
|
|
|
|
|
|
|
Q3 15 |
|
|
Q3 15 |
|
|
Q3 15 |
|
|
Q3 15 |
|
|
|
|
|
|
|
|
|
|
|
|
vs |
|
|
vs |
|
|
vs |
|
|
vs |
|
Key segmental data, in $ 000, |
|
Q3
15 |
|
|
Q3
14 |
|
|
Q2
15 |
|
|
Q314 |
|
|
Q2
15 |
|
|
Q314 |
|
|
Q2
15 |
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South African transaction processing |
$ |
57,999 |
|
$ |
57,397 |
|
$ |
58,427 |
|
|
1% |
|
|
(1% |
) |
|
9% |
|
|
4% |
|
International transaction processing |
|
38,311 |
|
|
35,245 |
|
|
40,466 |
|
|
9% |
|
|
(5% |
) |
|
17% |
|
|
(1% |
) |
Financial inclusion and applied
technologies |
|
66,830 |
|
|
56,226 |
|
|
67,531 |
|
|
19% |
|
|
(1% |
) |
|
28% |
|
|
4% |
|
Subtotal: Operating
segments |
|
163,140 |
|
|
148,868 |
|
|
166,424 |
|
|
10% |
|
|
(2% |
) |
|
18% |
|
|
3% |
|
Intersegment eliminations |
|
(12,019 |
) |
|
(10,742 |
) |
|
(12,293 |
) |
|
12% |
|
|
(2% |
) |
|
21% |
|
|
2% |
|
Consolidated revenue |
$ |
151,121 |
|
$ |
138,126 |
|
$ |
154,131 |
|
|
9% |
|
|
(2% |
) |
|
18% |
|
|
3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South African transaction processing |
$ |
13,218 |
|
$ |
9,137 |
|
$ |
12,883 |
|
|
45% |
|
|
3% |
|
|
56% |
|
|
7% |
|
International transaction processing |
|
6,579 |
|
|
4,642 |
|
|
5,743 |
|
|
42% |
|
|
15% |
|
|
53% |
|
|
20% |
|
Financial inclusion and applied
technologies |
|
17,906 |
|
|
16,459 |
|
|
17,827 |
|
|
9% |
|
|
0% |
|
|
17% |
|
|
5% |
|
Subtotal: Operating
segments |
|
37,703 |
|
|
30,238 |
|
|
36,453 |
|
|
25% |
|
|
3% |
|
|
35% |
|
|
8% |
|
Corporate/Eliminations |
|
(5,737 |
) |
|
(6,289 |
) |
|
(5,638 |
) |
|
(9% |
) |
|
2% |
|
|
(1% |
) |
|
6% |
|
Consolidated operating income |
$ |
31,966 |
|
$ |
23,949 |
|
$ |
30,815 |
|
|
33% |
|
|
4% |
|
|
44% |
|
|
9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income margin (%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South African transaction processing |
|
23% |
|
|
16% |
|
|
22% |
|
|
|
|
|
|
|
|
|
|
|
|
|
International transaction processing |
|
17% |
|
|
13% |
|
|
14% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial inclusion and applied
technologies |
|
27% |
|
|
29% |
|
|
26% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated operating
margin |
|
21% |
|
|
17% |
|
|
20% |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) This information shows what the change in these
items would have been if the USD/ ZAR exchange rate that prevailed during the
third quarter of fiscal 2015 also prevailed during the third quarter of fiscal
2014 and the second quarter of fiscal 2015.
Nine months ended March 31, 2015 and 2014
|
|
|
|
|
|
|
|
|
|
|
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 |
|
176,678 |
|
|
173,312 |
|
|
2% |
|
|
10% |
|
International transaction processing |
|
121,981 |
|
|
110,524 |
|
|
10% |
|
|
19% |
|
Financial inclusion and applied
technologies |
|
199,558 |
|
|
143,502 |
|
|
39% |
|
|
50% |
|
Subtotal: Operating
segments |
|
498,217 |
|
|
427,338 |
|
|
17% |
|
|
26% |
|
Intersegment eliminations |
|
(36,524 |
) |
|
(28,435 |
) |
|
28% |
|
|
39% |
|
Consolidated revenue |
|
461,693 |
|
|
398,903 |
|
|
16% |
|
|
25% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income: |
|
|
|
|
|
|
|
|
|
|
|
|
South African transaction processing |
|
39,740 |
|
|
22,726 |
|
|
75% |
|
|
89% |
|
International transaction processing |
|
19,671 |
|
|
15,305 |
|
|
29% |
|
|
39% |
|
Financial inclusion and applied
technologies |
|
53,340 |
|
|
42,559 |
|
|
25% |
|
|
36% |
|
Subtotal: Operating
segments |
|
112,751 |
|
|
80,590 |
|
|
40% |
|
|
51% |
|
Corporate/Eliminations |
|
(16,845 |
) |
|
(21,439 |
) |
|
(21% |
) |
|
(15% |
) |
Consolidated operating income |
|
95,906 |
|
|
59,151 |
|
|
62% |
|
|
75% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income margin (%) |
|
|
|
|
|
|
|
|
|
|
|
|
South African transaction processing |
|
22% |
|
|
13% |
|
|
|
|
|
|
|
International transaction processing |
|
16% |
|
|
14% |
|
|
|
|
|
|
|
Financial inclusion and applied
technologies |
|
27% |
|
|
30% |
|
|
|
|
|
|
|
Overall operating margin
|
|
21% |
|
|
15% |
|
|
|
|
|
|
|
(1) This information shows what the change in these
items would have been if the USD/ ZAR exchange rate that prevailed during the
year to date fiscal 2015 also prevailed during the year to date 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 March 31, 2015 and 2014
|
|
|
|
|
|
|
|
EPS, |
|
|
|
|
|
|
|
|
EPS, |
|
|
|
Net income |
|
|
basic |
|
|
Net income |
|
|
basic |
|
|
|
(USD000) |
|
|
(USD) |
|
|
(ZAR000) |
|
|
(ZAR) |
|
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
|
24,358 |
|
|
17,182 |
|
|
0.52 |
|
|
0.38 |
|
|
285,520 |
|
|
186,842 |
|
|
6.13 |
|
|
4.08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible asset
amortization, net . |
|
2,743 |
|
|
3,443 |
|
|
|
|
|
|
|
|
32,164 |
|
|
37,431 |
|
|
|
|
|
|
|
Refund related to litigation
finalized
in Korea, net |
|
(1,354 |
) |
|
- |
|
|
|
|
|
|
|
|
(15,899 |
) |
|
- |
|
|
|
|
|
|
|
Stock-based
compensation charge |
|
731 |
|
|
922 |
|
|
|
|
|
|
|
|
8,584 |
|
|
10,026 |
|
|
|
|
|
|
|
Facility fees for KSNET debt |
|
36 |
|
|
79 |
|
|
|
|
|
|
|
|
423 |
|
|
859 |
|
|
|
|
|
|
|
US government
investigations- related and US lawsuit
expenses |
|
5 |
|
|
62 |
|
|
|
|
|
|
|
|
59 |
|
|
674 |
|
|
|
|
|
|
|
Fundamental |
|
26,519 |
|
|
21,688 |
|
|
0.57 |
|
|
0.47 |
|
|
310,851 |
|
|
235,832 |
|
|
6.68 |
|
|
5.15 |
|
Nine months ended March 31, 2015 and 2014
|
|
|
|
|
|
|
|
EPS, |
|
|
|
|
|
|
|
|
EPS, |
|
|
|
Net income |
|
|
basic |
|
|
Net income |
|
|
basic |
|
|
|
(USD000) |
|
|
(USD) |
|
|
(ZAR000) |
|
|
(ZAR) |
|
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
|
70,821 |
|
|
41,527 |
|
|
1.51 |
|
|
0.91 |
|
|
794,973 |
|
|
431,054 |
|
|
17.00 |
|
|
9.42 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible asset amortization, net . |
|
8,525 |
|
|
9,385 |
|
|
|
|
|
|
|
|
95,694 |
|
|
97,414 |
|
|
|
|
|
|
|
Stock-based compensation
charge |
|
2,682 |
|
|
2,914 |
|
|
|
|
|
|
|
|
30,106 |
|
|
30,248 |
|
|
|
|
|
|
|
Refund related to litigation finalized
in Korea, net |
|
(1,354 |
)
|
|
|
|
|
|
|
|
|
|
|
(15,199 |
)
|
|
- |
|
|
|
|
|
|
|
Facility fees for KSNET
debt |
|
170 |
|
|
657 |
|
|
|
|
|
|
|
|
1,908 |
|
|
6,820 |
|
|
|
|
|
|
|
US
government investigations- related and US
lawsuit expenses |
|
141 |
|
|
2,526 |
|
|
|
|
|
|
|
|
1,583 |
|
|
26,220 |
|
|
|
|
|
|
|
Fundamental |
|
80,985 |
|
|
57,009 |
|
|
1.73 |
|
|
1.25 |
|
|
909,065 |
|
|
591,756 |
|
|
19.44 |
|
|
12.94 |
|
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 March 31, 2015 and 2014
|
|
2015 |
|
|
2014 |
|
|
|
|
|
|
|
|
Net income (USD000) |
|
24,358 |
|
|
17,182 |
|
Adjustments: |
|
|
|
|
|
|
Profit on sale of
property, plant and equipment |
|
(64 |
) |
|
(26 |
) |
Tax effects on above |
|
18 |
|
|
7 |
|
|
|
|
|
|
|
|
Net income used to calculate headline earnings (USD000)
|
|
24,312 |
|
|
17,163 |
|
Weighted average number of shares used to
calculate net income per share
basic earnings and headline earnings per
share basic earnings (000) |
|
46,561 |
|
|
45,776 |
|
Weighted average number of shares used to calculate net
income per share
diluted earnings and headline earnings per share diluted
earnings (000) |
|
46,739 |
|
|
45,954 |
|
Headline earnings per share: |
|
|
|
|
|
|
Basic, in USD |
|
0.52 |
|
|
0.37 |
|
Diluted, in USD |
|
0.52 |
|
|
0.37 |
|
Nine months ended March 31, 2015 and 2014
|
|
2015 |
|
|
2014 |
|
|
|
|
|
|
|
|
Net income (USD000) |
|
70,821 |
|
|
41,527 |
|
Adjustments: |
|
|
|
|
|
|
Profit on sale of
property, plant and equipment |
|
(295 |
) |
|
(42 |
) |
Tax effects on above |
|
83 |
|
|
12 |
|
|
|
|
|
|
|
|
Net income used to calculate headline earnings (USD000)
|
|
70,609 |
|
|
41,497 |
|
Weighted average number of shares used to
calculate net income per share
basic earnings and headline earnings per
share basic earnings (000) |
|
46,770 |
|
|
45,742 |
|
Weighted average number of shares used to calculate net
income per share
diluted earnings and headline earnings per share diluted
earnings (000) |
|
46,907 |
|
|
45,997 |
|
Headline earnings per share: |
|
|
|
|
|
|
Basic, in USD |
|
1.51 |
|
|
0.91 |
|
Diluted, in USD |
|
1.51 |
|
|
0.90 |
|
Calculation of the denominator for headline diluted earnings
per share
|
|
Q3 15 |
|
|
Q3 14 |
|
|
F2015 |
|
|
F2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted-average common shares
outstanding and
unvested
restricted shares expected to vest under GAAP |
|
46,561 |
|
|
45,776 |
|
|
46,770 |
|
|
45,742 |
|
Effect of dilutive securities under GAAP
|
|
178 |
|
|
178 |
|
|
137 |
|
|
255 |
|
Denominator for headline diluted earnings per share |
|
46,739 |
|
|
45,954 |
|
|
46,907 |
|
|
45,997 |
|
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.
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