| Wed 29 Jul 2009, 16:09 | | NT1 - Net1 - Net1 UEPS Technologies Inc. announces agreement to repurchase |
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NT1
NT1
NT1 - Net1 - Net1 UEPS Technologies, Inc. announces agreement to repurchase
Brait SA`s 9.2 million shares for $13.50 per share
Net 1 UEPS Technologies, Inc.
Registered in the state of Florida, USA
(IRS Employer Identification No. 98-0171860)
Nasdaq share code: UEPS
JSE share code: NT1
ISIN: US64107N2062
("Net1" or "the Company")
Net1 UEPS Technologies, Inc. Announces Agreement to Repurchase Brait SA`s 9.2
million shares for $13.50 per share
JOHANNESBURG, July 29 - Net1 UEPS Technologies, Inc. ("Net1" or the "Company")
(NasdaqGS: UEPS; JSE: NT1) announced today that it has agreed to repurchase
all Company shares held by Brait SA and its investment affiliates ("Brait SA")
for ZAR 105.98 ($13.50) per share, for an aggregate repurchase price of ZAR
977 million, or $124.5 million. The repurchase is expected to close on or
before August 4, 2009. The buyback of 9,221,526 shares represents 16.9% of
the Company`s outstanding shares.
"We are pleased to repurchase Brait SA`s ownership interest in Net1, and thank
them for the leadership and guidance provided over the past several years. We
look forward to the continuing contributions of Antony Ball as a valued member
of our Board of Directors," said Dr. Serge Belamant, Chairman and Chief
Executive Officer of Net1. He added, "We believe this transaction provides us
with an opportunity to acquire a significant number of our shares at a very
attractive valuation while taking advantage of recent strength of the ZAR. It
should also eliminate the perceived overhang on the stock created by Brait`s
large shareholding. Net1 is well-positioned to capitalize on opportunities in
South Africa and internationally. Our cash position and cash generation
profile remains strong, and more than adequate to fund our existing operations
and invest in new growth initiatives."
"The Company will repurchase the Brait shares on the JSE in South Africa to
minimize the currency exposure and cash tax leakage," said Herman Kotze, Chief
Financial Officer of Net1. "On a preliminary basis, and before giving effect
to the repurchase, we had approximately $220 million in cash and cash
equivalents on our balance sheet as of June 30, 2009. On a pro-forma basis,
and without including any potential deemed dividend tax adjustments, we expect
that the transaction will result in a 10% increase in 2009 fundamental
earnings per share as the positive effect of the lower share count far
outweighs the after-tax reduction in interest earned. We expect the
transaction to be similarly accretive to 2010 fundamental earnings per share,"
he concluded.
Antony Ball, Chief Executive Officer at Brait said, "We have always been, and
continue to remain, believers in Net1. We made this investment five years ago
and we need to be cognizant of the private equity cycle which require us to
monetize our investments within the timeframe of our fund structure."
Preliminary Unaudited Fourth Quarter 2009 and Full Year 2009 Results
Net1 is preliminarily expected to report 4Q 2009 and full year 2009 revenue of
approximately $61 million and $246 million, respectively. Fundamental earnings
per share for 4Q 2009 and full year 2009 is expected to be $0.38 (which
represents a 1% decrease from 4Q 2008 on a constant currency basis) and $1.47
(which represents a 16% increase from full year 2008 on a constant currency
basis), respectively. These numbers reflect the actual number of shares
outstanding during the year and do not give effect to the repurchase of the
Brait shares. Cash flow from operating activities is anticipated to be at
least $100 million for full year 2009. The Company will report complete,
audited financials for 4Q 2009 and full year 2009 as well as issue guidance
for fiscal 2010 during the week of August 24, 2009. The preliminary results
for 4Q 2009 and full year 2009 are subject to adjustment in connection with
the audit of the Company`s year-end results.
Use of Non-GAAP measures
Fundamental earnings per share is a non-GAAP measure. The Company calculates
fundamental earnings per share by excluding from GAAP earnings per share the
amortization of intangibles and stock-based compensation charges related to
stock options and other stock-based awards, as well as JSE listing costs, a
bank facility fee, an impairment of goodwill, the profit on sale of the
Company`s traditional microlending business and a foreign exchange gain, net
of tax, related to a short-term investment and the effect of the change in the
fully distributed tax rate from 35.45% to 34.55% in July 2008. The Company
excludes all of the above-mentioned amounts when calculating fundamental
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 A presents the reconciliation between
preliminary GAAP and fundamental earnings per share.
Conference call
Net1 will host a conference call to discuss the Brait repurchase on July 29,
2009, at 11:00 a.m. Eastern Time. To participate in the call, dial 1-800-860-
2442 (US only), 1-866-519-5086 (Canada only), 0-800-917-7042 (UK 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.net1ueps.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 August 19, 2009.
About Net1 (www.net1ueps.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. The Company believes that it is the first company
worldwide to implement a system that can enable 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 using UEPS. The
system 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 in even 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, health care management,
international money transfers, voting and identification.
The Company also focuses on the development and provision of secure
transaction technology, solutions and services. The Company`s core
competencies around secure online transaction processing, cryptography and
integrated circuit card (chip/smart card) technologies are principally applied
to electronic commerce transactions in the telecommunications, banking,
retail, petroleum and utilities market sectors. Additionally, through BGS
Smartcard Systems AG, a majority-owned subsidiary based in Austria, the
Company develops, implements and integrates smart card-based offline and
online financial transaction systems in cooperation with banks, enterprises
and government authorities, primarily in Russia and the Commonwealth of
Independent States.
Forward-Looking Statements
This announcement contains forward-looking statements that involve known and
unknown risks and uncertainties, including information regarding the Company`s
4Q 2009 and full year 2009 results of operations and financial condition. A
discussion of various factors that could 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.
Contact Dhruv Chopra, Vice-President--Investor Relations at:
Telephone: 1-212-626-6675
e-mail: dchopra@net1ueps.co.za
And
Contact William Espley at Net1 Investor Relations at:
Telephone: 1-604-484-8750
Toll Free: 1-866-412-NET1 (6381)
Net 1 UEPS Technologies, Inc.
Attachment A
Reconciliation of Preliminary GAAP results to fundamental results:
Three months ended June 30, 2009 and 2008
Net Income EPS, basic Net Income EPS, basic
(USD `000) (USD cents) (ZAR `000) (ZAR cents)
2009 2008 2009 2008 2009 2008 2009 2008
GAAP 18,195 21,482 33 38 150,251 167,551 274 293
Amortization 2,857 830 23,593 6,476
of intangible
assets(1)
Customer 3,089 337 25,507 2,630
relationship
s
Software and 804 852 6,642 6,642
unpatented
Technology
Trademarks 82 87 679 679
Deferred tax (1,118 (446) (9,235) (3,475)
benefit )
Stock-based 1,158 9,563 8,665
charge(2) 1,111
Loss on sale (1,197 - (9,885) -
of Moneyline )
Change in tax (67) - (553) -
rate (3)
Fundamental 20,946 23,423 38 41 172,969 182,692 316 319
Twelve months ended June 30, 2009 and 2008
Net Income EPS, basic Net income EPS, basic
(USD`000) (USD (ZAR`000) (ZAR cents)
cents)
2009 2008 2009 2008 2009 2008 2009 2008
GAAP 86,580 86,695 155 152 774,019 632,050 1,383 1,106
Amortization 8,871 3,552 79,315 25,902
of intangible
assets(1)
Customer 9,110 1,443 81,451 10,520
relation-
ships
Software 2,972 3,644 26,569 26,569
and
unpatented
technology
Trademarks 304 372 2,715 2,715
Deferred (3,515) (1,907) (31,420) (13,902
tax benefit )
Stock-based 5,026 3,971 44,932 28,951
charge(2)
JSE listing 441 - 3,942 -
costs
Facility fee 1,100 - 9,834 -
Foreign (17,447 - (155,974) -
exchange gain )
related to a
short-term
investment,
net of tax of
$6,028
Loss on sale (455) - (4,068) -
of Moneyline
Impairment of 1,836 - 16,414 -
goodwill
Change in tax (3,523) (5,397) (31,494) (38,484
rate (3) )
Fundamental 82,429 88,821 147 155 736,920 648,419 1,317 1,134
Johannesburg
29 July 2009
Sponsor to Net1
Deutsche Securities (SA) (Proprietary) Limited
Date: 29/07/2009 16:09:02 Produced by the JSE SENS Department.
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