JOHANNESBURG, Nov. 9, 2010 /PRNewswire-FirstCall/ -- Net 1 UEPS
Technologies, Inc. ("Net1" or the "Company") (Nasdaq: UEPS; JSE:
NT1) today announced results for the three months ended
September 30, 2010 ("1Q 2011").
Revenue for 1Q 2011 was $64.3
million, a year over year decrease of 2% in US dollars
("USD") and 7% in constant currency. During 1Q 2011, net
income under US generally accepted accounting principles ("GAAP")
was $7.4 million versus net income of
$17.9 million for the three months
ended September 30, 2009 ("1Q 2010").
GAAP earnings per share for 1Q 2011 was $0.16 versus GAAP earnings per share of
$0.37 a year ago. Fundamental
earnings per share for 1Q 2011 was $0.36 compared to $0.45 for 1Q 2010, representing a decrease of 20%
in USD and 24% in constant currency.
Summary Financial
Metrics
|
|
|
Three months
ended September 30,
|
|
|
2010
|
2009
|
% change in
USD
|
% change in
ZAR
|
|
(All figures in USD '000s except
per share data)
|
|
|
|
|
Revenue
|
64,283
|
65,514
|
(2)%
|
(7)%
|
|
|
|
|
|
|
|
GAAP net income
|
7,429
|
17,941
|
(59)%
|
(61)%
|
|
|
|
|
|
|
|
Fundamental net income
(1)
|
16,527
|
21,804
|
(24)%
|
(28)%
|
|
|
|
|
|
|
|
GAAP earnings per share
($)
|
0.16
|
0.37
|
(57)%
|
(59)%
|
|
|
|
|
|
|
|
Fundamental earnings per share
($) (1)
|
0.36
|
0.45
|
(20)%
|
(24)%
|
|
|
|
|
|
|
|
Fully-diluted shares outstanding
('000's)
|
45,415
|
48,918
|
(7)%
|
|
|
|
|
|
|
|
|
Average period USD/ ZAR exchange
rate
|
7.41
|
7.82
|
(5)%
|
|
|
(1) Fundamental net income and
earnings per share is GAAP net income and earnings per share
excluding the amortization of acquisition-related intangible
assets, net of deferred taxes, and stock-based compensation
charges. In addition, the calculation of fundamental net income and
earnings per share for 1Q 2011 also excludes transaction-related
costs and an unrealized foreign exchange loss
(related to foreign exchange contracts
entered into in order to hedge the fluctuations in the ZAR/ US
dollar related to the anticipated flow of funds from South Africa
to the United States to fund a portion of the KSNET ("KSNET")
purchase price).
|
|
|
|
|
|
|
The following factors had significant impact on the
comparability of our 1Q 2011 and 1Q 2010 results:
- SASSA price and volume reductions: The Company's
new contract with SASSA has reduced its revenue and operating
income as a result of the previously announced price and volume
reductions;
- Favorable impact from the weakness of the US
dollar: The US dollar depreciated by 5% compared to the ZAR
during the first quarter of fiscal 2011 compared to fiscal 2010
which has had a positive impact on the Company's reported
results;
- Increased transaction volumes at EasyPay:
Reported results were favorably impacted by increased transaction
volumes at EasyPay resulting from growth in value-added
services;
- Increased revenue from MediKredit and FIHRST at lower
operating margins than other transaction-based activity
business: The Company's MediKredit and FIHRST acquisitions
positively impacted its revenue during the first quarter of fiscal
2011; however, because MediKredit generated a modest operating loss
and FIHRST's operating margin is lower than the Company's other
transaction-based activity businesses, they negatively impacted its
operating margin. The inclusion of these businesses in the
Company's results has also contributed to the increase in selling,
general and administration expense;
- Increased user adoption in Iraq: Reported results were positively
impacted by increased transaction revenues from the adoption of the
Company's UEPS technology in Iraq;
- Lower revenues and margins from hardware, software and
related technology sales segment: The Company's hardware,
software and related technology sales segment continues to be
adversely impacted by lower revenues generated by card sales and
software maintenance and development activities and fewer ad hoc
sales to Iraq when compared to a
year ago, partially offset by increased hardware sales by Net1
UTA;
- Intangible asset amortization related to
acquisitions: Reported results were adversely impacted by
additional intangible asset amortization of approximately
$0.5 million related to the
acquisitions of MediKredit and FIHRST during the third quarter of
fiscal 2010; and
- Non-recurring items included in selling, general and
administration expense: During the first quarter of fiscal
2011, the Company recognized, in selling, general and
administration expense, an unrealized foreign exchange loss of
$2.6 million and incurred
transaction-related expenses of $3.4
million, primarily for the acquisition of KSNET.
Comments and Outlook
"Our first quarter of fiscal 2011 was negatively impacted by the
reduction in the economics of our contract with SASSA. Following
the recent changes in the South African cabinet, we expect to work
with the new leadership in the ensuing months to define a long-term
solution for the administration of social grants in South Africa," said Dr. Serge Belamant, Chairman and Chief Executive
Officer of Net1. "Our growth initiatives within South Africa and internationally, specifically
in Iraq and Ghana, our new technologies such as Virtual
Card and EasyPay Kiosks and increasing contributions from our
acquisitions of KSNET, MediKredit and FIHRST leave us
well-positioned to drive long-term revenue, earnings and cash
flows. We remain committed to achieving long-term sustainable
growth for the Company and thus for all of our stakeholders.
Finally, I would also like to welcome the KSNET team to the Net1
family and we look forward to a prosperous relationship with them,"
he concluded.
"Our guidance of Fundamental EPS of at least $1.50 on a constant USD/ZAR currency basis for
fiscal 2011 remains dependent on the continuation of our SASSA
contract beyond March 31, 2011, on
similar terms, as well as the incorporation of KSNET's results on a
US GAAP basis with effect from November 2010," said Herman Kotze, Chief Financial Officer of
Net1.
Results of Operations
Net1's frequently asked questions and operating metrics will be
updated and posted on the Company's website (www.net1.com).
Transaction-based activities
Transaction-based activities revenue was $44.9 million, consistent when compared with 1Q
2010 in USD and 5% lower on a constant currency basis. In ZAR, the
decreases in revenue were primarily due to the new SASSA nine month
contract at lower economics, which was partially offset by
increased transaction volumes at EasyPay, increased utilization of
our UEPS system in Iraq and the
inclusion of MediKredit and FIHRST. Operating margin decreased to
40% from 59% during 1Q 2011 primarily due to the lower revenues
generated under our SASSA contract, additional intangible asset
amortization related to the acquisition of MediKredit and FIHRST
and lower margins in our recently-acquired transaction processing
operations compared with legacy transaction-based activities, which
was partially offset by increased transaction fees from the
utilization of our UEPS system in Iraq. Excluding amortization of
acquisition-related intangibles, 1Q 2011 segment operating margin
was 43% compared with 61% during 1Q 2010.
Smart card accounts
Smart card account revenue was $8.0
million, down 1% compared with 1Q 2010 in USD and 6% lower
on a constant currency basis. Operating margin for the segment
remained consistent at 45%.
Financial services
Financial services revenue was $1.2
million, up 58% compared with 1Q 2010 in USD and 49% higher
on a constant currency basis, principally due to an increase in
lending activities. Operating margin for this segment increased to
74% from 67% in 1Q 2010 largely as a result of the increased
lending activities.
Hardware, software and related technology
sales
Hardware, software and related technology sales revenue was
$10.2 million, down 13% compared with
1Q 2010 in USD and 17% lower on a constant currency basis. The
decrease in revenue and operating income for 1Q 2011 was primarily
due to lower revenues generated by card sales and software
maintenance and development, as well as lower ad hoc hardware sales
to Iraq in 2011 as compared with
the prior year, which was offset partially by increased hardware
sales by Net1 UTA. In ZAR, the decrease in operating income was
primarily due to lower sales activity. Excluding amortization of
all intangibles and the impairment of goodwill, segment operating
margin was (3)% compared to 7% during 1Q 2010.
Cash flow and liquidity
At September 30, 2010, the Company
had cash and cash equivalents of $200
million, up from $154 million
at June 30, 2010. For 1Q 2011,
the Company generated operating cash flow of $30.2 million, compared to $37.0 million in 1Q 2010. The decrease in
operating cash flow resulted mainly from the SASSA price and volume
reductions which were effective July 1,
2010. Capital expenditures for 1Q 2011 and 2010 were
$0.8 million and $0.6 million, respectively. During 1Q 2011, the
Company did not repurchase any shares under its $100 million authorization. On October 29, 2010, we used approximately
$124 million of our cash to fund a
portion of the KSNET purchase price.
Use of Non-GAAP Measures
US securities laws require that when the Company publishes any
non-GAAP measures, it discloses the reason for using the non-GAAP
measure and provides a 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
The Company's GAAP net income and earnings per share for 1Q 2011
and 1Q 2010 include amortization of intangible assets and
stock-based compensation. In addition, GAAP net income and earnings
per share for 1Q 2011 includes transaction-related costs and an
unrealized foreign exchange loss described above. The Company
excludes all of the above-mentioned amounts when calculating
fundamental net income and earnings per share, because management
believes that these adjustments enhance its own evaluation, as well
as an investor's understanding, of the Company's 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
the Company's listing on the JSE. HEPS basic and diluted is
calculated using net income which has been determined based on
GAAP. Accordingly, this may differ to the headline earnings per
share calculation of other companies listed on the JSE as these
companies may report their financial results under a different
financial reporting framework, including but not limited to,
International Financial Reporting Standards. HEPS basic and diluted
is calculated as GAAP net income adjusted for the loss (profit) on
sale of property, plant and equipment, net of related tax effects.
Attachment C presents the reconciliation between the Company's net
income used to calculate earnings per share basic and diluted and
HEPS basic and diluted.
Conference Call
Net1 will host a conference call to review first quarter results
on November 10, 2010, at 8:00 a.m. Eastern Time. To participate in the
call, dial 1-800-860-2442 (U.S. only), 1-866-605-3852 (Canada only), 0-800-917-7042 (U.K. only) or
0-800-200-648 (South Africa only)
five 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
10 minutes prior to the call. A webcast of the call will be
available for replay on the Net1 website through December 1, 2010.
About Net1 (www.net1.com)
Net1 provides its universal electronic payment system, or UEPS,
as an alternative payment system for the unbanked and under-banked
populations of developing economies. Net1's market-leading system
enables the estimated four billion people who generally have
limited or no access to a bank account, to enter affordably into
electronic transactions with each other, government agencies,
employers, merchants and other financial service providers. Net1's
universal electronic payment system, or UEPS, uses smart cards that
operate in real-time but offline, unlike traditional payment
systems offered by major banking institutions that require
immediate access through a communications network to a centralized
computer. This offline capability means that users of the Net1
system can enter into transactions at any time with other card
holders even in the most remote areas so long as a portable offline
smart card reader is available. In addition to payments and
purchases, UEPS can be used for banking, healthcare management,
international money transfers, voting and identification.
Net1 also focuses on the development and provision of secure
transaction technology, solutions and services and offers
transaction processing, financial and clinical risk management
solutions to both funders and providers of healthcare. Its
core competencies around secure online transaction processing,
cryptography and integrated circuit card (chip/smartcard)
technologies are principally applied to electronic commerce
transactions in the telecommunications, banking, retail, petroleum
and utilities market sectors.
Net1 recently acquired KSNET, Inc. KSNET services a broad range
of industries in Korea, including credit card, retail and wholesale
merchant, financial institutions, governmental organizations,
utility companies and e-commerce businesses. It offers payment
processing solutions including payment card and banking value added
networks, payment gateways, cash receipt, purchase cards and point
cards. It has a diverse merchant base and processed over 1.4
billion transactions in 2009.
Net1 has a primary listing on the Nasdaq and a secondary listing
on the JSE Limited.
Forward-Looking Statements
This announcement contains forward-looking statements that
involve known and unknown risks and uncertainties. A discussion of
various factors that cause the Company's actual results, levels of
activity, performance or achievements to differ materially from
those expressed in such forward-looking statements are included in
the Company's filings with the Securities and Exchange Commission.
The Company undertakes no obligation to revise any of these
statements to reflect future circumstances or the occurrence of
unanticipated events.
|
|
NET 1 UEPS
TECHNOLOGIES, INC.
|
|
Unaudited
Condensed Consolidated Statements of Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
|
|
|
September
30,
|
|
|
|
|
|
2010
|
|
2009
|
|
|
|
|
(In
thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
REVENUE
|
|
$
|
64,283
|
$
|
65,514
|
|
|
|
|
|
|
|
|
|
EXPENSE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold, IT
processing, servicing and support
|
|
|
18,067
|
|
16,827
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administration
|
|
|
30,326
|
|
17,740
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
4,904
|
|
4,579
|
|
|
|
|
|
|
|
|
|
OPERATING INCOME
|
|
|
10,986
|
|
26,368
|
|
|
|
|
|
|
|
|
|
INTEREST INCOME, net
|
|
|
2,836
|
|
2,371
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE INCOME
TAXES
|
|
|
13,822
|
|
28,739
|
|
|
|
|
|
|
|
|
|
INCOME TAX EXPENSE
|
|
|
6,207
|
|
11,031
|
|
|
|
|
|
|
|
|
|
NET INCOME FROM CONTINUING
OPERATIONS BEFORE LOSS FROM EQUITY-ACCOUNTED INVESTMENTS
|
|
|
7,615
|
|
17,708
|
|
|
|
|
|
|
|
|
|
LOSS FROM EQUITY-ACCOUNTED
INVESTMENTS
|
|
|
(216)
|
|
(111)
|
|
|
|
|
|
|
|
|
|
NET INCOME
|
|
|
7,399
|
|
17,597
|
|
|
|
|
|
|
|
|
|
ADD: NET LOSS ATTRIBUTABLE TO
NON-CONTROLLING INTEREST
|
|
|
(30)
|
|
(344)
|
|
|
|
|
|
|
|
|
|
NET INCOME ATTRIBUTABLE TO
NET1
|
|
$
|
7,429
|
$
|
17,941
|
|
|
|
|
|
|
|
|
|
Net income per share, in United
States dollars
|
|
|
|
|
|
|
Basic earnings
attributable to Net1 shareholders
|
|
|
$0.16
|
|
$0.37
|
|
Diluted earnings
attributable to Net1 shareholders
|
|
|
$0.16
|
|
$0.37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET 1 UEPS
TECHNOLOGIES, INC.
|
|
Condensed
Consolidated Balance Sheets
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited
|
|
(A)
|
|
|
|
September
30,
|
|
June
30,
|
|
|
|
2010
|
|
2010
|
|
|
|
(In
thousands, except share data)
|
|
|
ASSETS
|
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
200,161
|
|
$
|
153,742
|
|
|
Pre-funded social welfare grants
receivable
|
|
4,597
|
|
|
6,660
|
|
|
Accounts receivable, net of
allowances of – September: $885; June: $807
|
|
37,225
|
|
|
41,854
|
|
|
Finance loans receivable, net of
allowances of – September: $-; June: $-
|
|
5,523
|
|
|
4,221
|
|
|
Deferred expenditure on smart
cards
|
|
2
|
|
|
-
|
|
|
Inventory
|
|
6,144
|
|
|
3,622
|
|
|
Deferred income taxes
|
|
18,546
|
|
|
16,330
|
|
|
Total current assets
before settlement assets
|
|
272,198
|
|
|
226,429
|
|
|
Settlement
assets
|
|
107,407
|
|
|
83,661
|
|
|
Total current assets
|
|
379,605
|
|
|
310,090
|
|
OTHER LONG-TERM ASSETS,
including available for sale securities
|
|
8,130
|
|
|
7,423
|
|
PROPERTY, PLANT AND EQUIPMENT,
NET OF ACCUMULATED DEPRECIATION OF – September: $39,683; June:
$35,271
|
|
7,637
|
|
|
7,286
|
|
EQUITY-ACCOUNTED
INVESTMENTS
|
|
2,376
|
|
|
2,598
|
|
GOODWILL
|
|
83,203
|
|
|
76,346
|
|
INTANGIBLE ASSETS, NET OF
ACCUMULATED AMORTIZATION OF –
September: $41,477; June:
$34,226
|
|
71,646
|
|
|
68,347
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
552,597
|
|
|
472,090
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
Accounts payable
|
|
5,175
|
|
|
3,596
|
|
|
Other payables
|
|
58,847
|
|
|
50,855
|
|
|
Income taxes payable
|
|
9,330
|
|
|
3,476
|
|
|
Total current liabilities
before settlement obligations
|
|
73,352
|
|
|
57,927
|
|
|
Settlement
obligations
|
|
107,407
|
|
|
83,661
|
|
|
Total current liabilities
|
|
180,759
|
|
|
141,588
|
|
DEFERRED INCOME TAXES
|
|
43,766
|
|
|
38,858
|
|
OTHER LONG-TERM LIABILITIES,
including non-controlling interest loans
|
|
4,413
|
|
|
4,343
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES
|
|
228,938
|
|
|
184,789
|
|
|
|
|
|
|
|
|
|
COMMITMENTS AND
CONTINGENCIES
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
|
NET1 EQUITY:
|
|
|
|
|
|
|
|
COMMON STOCK
|
|
|
|
|
|
|
|
Authorized: 200,000,000
with $0.001 par value;
|
|
|
|
|
|
|
|
Issued and outstanding
shares, net of treasury - September: 45,392,353; June:
45,378,397
|
|
59
|
|
|
59
|
|
|
PREFERRED STOCK
|
|
|
|
|
|
|
|
Authorized shares:
50,000,000 with $0.001 par value;
|
|
|
|
|
|
|
|
Issued and outstanding
shares, net of treasury: 2010: -; 2009:
-
|
|
-
|
|
|
-
|
|
|
ADDITIONAL
PAID-IN-CAPITAL
|
|
134,841
|
|
|
133,543
|
|
|
TREASURY SHARES, AT COST:
September: 13,149,042; June:
13,149,042
|
|
(173,671)
|
|
|
(173,671)
|
|
|
ACCUMULATED OTHER
COMPREHENSIVE LOSS
|
|
(38,906)
|
|
|
(66,396)
|
|
|
RETAINED
EARNINGS
|
|
399,772
|
|
|
392,343
|
|
TOTAL NET1
EQUITY
|
|
322,095
|
|
|
285,878
|
|
|
NON-CONTROLLING
INTEREST
|
|
1,564
|
|
|
1,423
|
|
|
|
|
|
|
|
|
|
TOTAL EQUITY
|
|
323,659
|
|
|
287,301
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY
|
$
|
552,597
|
|
$
|
472,090
|
|
|
|
|
|
|
|
|
|
|
(A) – Derived from audited
financial statements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET 1 UEPS
TECHNOLOGIES, INC.
|
|
Unaudited
Condensed Consolidated Statements of Cash Flows
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
|
|
|
|
|
September
30,
|
|
|
|
|
|
|
|
|
|
2010
|
|
2009
|
|
|
|
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating
activities
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
|
$
|
7,399
|
$
|
17,597
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
4,904
|
|
4,579
|
|
Loss from equity-accounted
investments
|
|
|
|
|
|
|
216
|
|
111
|
|
Fair value
adjustments
|
|
|
|
|
|
|
(3,106)
|
|
(142)
|
|
Interest payable
|
|
|
|
|
|
|
73
|
|
78
|
|
Profit on disposal of property,
plant and equipment
|
|
|
|
|
|
|
(5)
|
|
(1)
|
|
Stock-based compensation
charge
|
|
|
|
|
|
|
1,438
|
|
1,422
|
|
Decrease in accounts
receivable, pre-funded social welfare grants
receivable and finance loans
receivable
|
|
|
|
|
|
|
10,957
|
|
5,529
|
|
Increase in deferred
expenditure on smart cards
|
|
|
|
|
|
|
(2)
|
|
(30)
|
|
(Increase) Decrease
in inventory
|
|
|
|
|
|
|
(2,102)
|
|
1,015
|
|
Increase in accounts
payable and other payables
|
|
|
|
|
|
|
6,025
|
|
25
|
|
Increase in taxes
payable
|
|
|
|
|
|
|
5,134
|
|
6,211
|
|
(Decrease) Increase
in deferred taxes
|
|
|
|
|
|
|
(773)
|
|
575
|
|
|
Net cash provided by operating
activities
|
|
|
|
|
|
|
30,158
|
|
36,969
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing
activities
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
|
|
|
|
(768)
|
|
(641)
|
|
Proceeds from disposal of
property, plant and equipment
|
|
|
|
|
|
|
7
|
|
49
|
|
Repayment of loan by
equity-accounted investment
|
|
|
|
|
|
|
(375)
|
|
-
|
|
Advance of loans to
equity-accounted investment
|
|
|
|
|
|
|
373
|
|
-
|
|
Net change in settlement
assets
|
|
|
|
|
|
|
(15,544)
|
|
-
|
|
|
Net cash used in investing
activities
|
|
|
|
|
|
|
(16,307)
|
|
(592)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing
activities
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issue of share
capital, net of share issue expenses
|
|
|
|
|
|
|
20
|
|
720
|
|
Treasury stock
acquired
|
|
|
|
|
|
|
-
|
|
(126,304)
|
|
Net change in settlement
obligations
|
|
|
|
|
|
|
15,544
|
|
-
|
|
Proceeds from bank
overdrafts
|
|
|
|
|
|
|
-
|
|
-
|
|
Repayment of loans
|
|
|
|
|
|
|
-
|
|
(137)
|
|
|
Net cash generated from (used
in) financing activities
|
|
|
|
|
|
|
15,564
|
|
(125,721)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes
on cash
|
|
|
|
|
|
|
17,004
|
|
7,870
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash
and cash equivalents
|
|
|
|
|
|
|
46,419
|
|
(81,474)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents –
beginning of period
|
|
|
|
|
|
|
153,742
|
|
220,786
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents – end
of period
|
|
|
|
|
|
$
|
200,161
|
$
|
139,312
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net 1 UEPS
Technologies, Inc.
Attachment
A
Operating
segment revenue, operating income and operating
margin:
Three months
ended September 30, 2010 and 2009
|
|
|
|
|
|
|
|
Change
|
|
|
Key
segmental data, in '000, except margins
|
Q1
'11
|
|
Q1
'10
|
|
|
In
USD
|
|
In Constant
Currency
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
Transaction-based
activities
|
$ 44,892
|
|
$44,978
|
|
|
0%
|
|
(5)%
|
|
|
Smart card accounts
|
7,970
|
|
8,074
|
|
|
(1)%
|
|
(6)%
|
|
|
Financial services
|
1,248
|
|
792
|
|
|
58%
|
|
49%
|
|
|
Hardware,
software and related technology sales
|
10,173
|
|
11,670
|
|
|
(13)%
|
|
(17)%
|
|
|
Total
consolidated revenue
|
$64,283
|
|
$65,514
|
|
|
(2)%
|
|
(7)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
operating income (loss):
|
|
|
|
|
|
|
|
|
|
|
Transaction-based
activities
|
$17,776
|
|
$26,668
|
|
|
(33)%
|
|
(37)%
|
|
|
Smart card accounts
|
3,622
|
|
3,670
|
|
|
(1)%
|
|
(6)%
|
|
|
Financial services
|
929
|
|
531
|
|
|
75%
|
|
66%
|
|
|
Hardware, software and
related technology sales
|
(2,660)
|
|
(1,713)
|
|
|
(55)%
|
|
(47)%
|
|
|
Corporate/
Eliminations
|
(8,681)
|
|
(2,788)
|
|
|
211%
|
|
195%
|
|
|
Total
operating income
|
$10,986
|
|
$26,368
|
|
|
(58)%
|
|
(61)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income margin (%)
|
|
|
|
|
|
|
|
|
|
|
Transaction-based
activities
|
40%
|
|
59%
|
|
|
|
|
|
|
|
Smart card accounts
|
45%
|
|
45%
|
|
|
|
|
|
|
|
Financial services
|
74%
|
|
67%
|
|
|
|
|
|
|
|
Hardware, software and
related technology sales
|
(26)%
|
|
(15)%
|
|
|
|
|
|
|
|
Overall operating
margin
|
17%
|
|
40%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net 1 UEPS
Technologies, Inc.
Attachment
B
Reconciliation of GAAP net
income to fundamental net income:
Three months
ended September 30, 2010 and 2009
|
|
|
|
Net
Income
(USD'000)
|
EPS,
basic
(USD
cents)
|
|
Net
income
(ZAR'000)
|
EPS,
basic (ZAR cents)
|
|
|
2010
|
2009
|
2010
|
2009
|
|
2010
|
2009
|
2010
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
7,429
|
17,941
|
16
|
37
|
|
55,014
|
140,214
|
121
|
287
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible
assets(1)
|
2,608
|
2,441
|
|
|
|
19,313
|
19,073
|
|
|
|
|
Customer
relationships
|
2,553
|
3,237
|
|
|
|
18,901
|
25,299
|
|
|
|
|
Software and unpatented
technology
|
951
|
-
|
|
|
|
7,045
|
-
|
|
|
|
|
Trademarks
|
92
|
87
|
|
|
|
679
|
679
|
|
|
|
|
Database
|
68
|
-
|
|
|
|
507
|
-
|
|
|
|
|
Deferred tax
benefit
|
(1,056)
|
(883)
|
|
|
|
(7,819)
|
(6,905)
|
|
|
|
Stock-based charge(2)
|
1,438
|
1,422
|
|
|
|
10,649
|
11,113
|
|
|
|
Loss on FEC, net of
tax
|
1,685
|
-
|
|
|
|
12,480
|
-
|
|
|
|
Acquisition-related
costs.
|
3,367
|
-
|
|
|
|
24,934
|
-
|
|
|
|
Fundamental
|
16,527
|
21,804
|
36
|
45
|
|
122,390
|
170,400
|
270
|
349
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Amortization
of acquisition-related intangibles, net of deferred tax
benefit.
|
|
(2) Includes
stock-based compensation charges related to options and non-vested
stock awards.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 September 30, 2010 and 2009
|
|
|
2010
|
|
2009
|
|
|
|
|
|
|
Net income (USD'000)
|
7,429
|
|
17,941
|
|
Adjustments:
|
|
|
|
|
Profit on sale of
property, plant and equipment (USD'000)
|
(5)
|
|
(1)
|
|
Tax effects on above
(USD'000)
|
2
|
|
-
|
|
|
|
|
|
|
Net income used to calculate
headline earnings (USD'000)
|
7,426
|
|
17,940
|
|
|
|
|
|
|
Weighted average number of
shares used to calculate net income per share basic earnings and
headline earnings per share basic earnings ('000)
|
45,384
|
|
48,815
|
|
|
|
|
|
|
Weighted average number of
shares used to calculate net income per share diluted earnings and
headline earnings per share diluted earnings ('000)
|
45,415
|
|
48,918
|
|
|
|
|
|
|
Headline earnings per
share:
|
|
|
|
|
Basic earnings – common
stock and linked units, in US cents
|
16
|
|
37
|
|
Diluted earnings – common
stock and linked units, in US cents
|
16
|
|
37
|
|
|
|
|
|
|
|
SOURCE Net 1 UEPS Technologies, Inc.