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NT1
NT1
NT1 - Net 1 UEPS Technologies, Inc. - Net1 Reports Second Quarter 2012
Results
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 Reports Second Quarter 2012 Results
Revenue of $92.1 million, an increase of 3% in US dollars and 22% in
constant currency
GAAP earnings per share of $0.56, an increase of 154% in US dollars and 199%
in constant currency
Fundamental earnings per share of $0.39, an increase of 2% in US dollars and
20% in constant currency
JOHANNESBURG, February 9, 2012 - Net 1 UEPS Technologies, Inc. (Nasdaq:
UEPS; JSE: NT1) today announced results for the second quarter of fiscal
2012.
Summary Financial Metrics
Three months ended December
31,
2011 2010 % %
change change
in USD in ZAR
(All figures in USD `000s
except per share data)
Revenue 92,058 89,011 3% 22%
GAAP net income 25,094 9,948 152% 197%
Fundamental net income (1) 17,67 17,51 1% 19%
7 1
GAAP earnings per share ($) 0.56 0.22 154% 199%
Fundamental earnings per 0.39 0.39 2% 20%
share ($) (1)
Fully-diluted shares 44,96 45,49 (1)%
outstanding (`000`s) 7 4
Average period USD/ ZAR 8.18 6.94 18%
exchange rate
Six months ended December 31,
2011 2010 % %
change change
in USD in ZAR
(All figures in USD `000s
except per share data)
Revenue 191,98 153,29 25% 37%
4 4
GAAP net income 44,862 17,377 158% 183%
Fundamental net income (1) 39,309 34,034 15% 25%
GAAP earnings per share ($) 1.00 0.38 162% 186%
Fundamental earnings per 0.87 0.75 16% 26%
share ($) (1)
Fully-diluted shares 45,026 45,455 (1)%
outstanding (`000`s)
Average period USD/ ZAR 7.82 7.14 10%
exchange rate
(1) Fundamental net income and earnings per share is a non-GAAP measure and
is 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 2Q 2012 and 2Q 2011 results
Unfavorable impact from the strengthening of the US dollar: The US dollar
appreciated by 18% against the ZAR during 2Q2012 which negatively impacted
our reported results;
Net taxation benefit related to the replacement of STC with a dividends
withholding tax in South Africa: As a result of a recent change in South
African tax law that will replace STC with a dividends withholding tax, our
tax expense decreased by $11.8 million, as we recorded a $20.0 million
deferred tax benefit which was offset by an $8.2 million foreign tax credit
valuation allowance;
Inclusion of revenue contribution from KSNET at lower operating margin
(before acquired intangible asset amortization) than our legacy business:
The inclusion of KSNET for a full fiscal quarter contributed to an increase
in revenues for the 2Q 2012; however, because KSNET has an operating margin
(before acquired intangible asset amortization) that is lower than our
legacy businesses, it reduced our overall operating margin. KSNET also
contributed to the increase in selling, general and administration and
depreciation and amortization expenses;
Lower revenues from hardware, software and related technology sales segment:
Hardware, software and related technology sales were adversely impacted by
lower revenues from all major segment contributors;
Lower intangible asset amortization related to acquisition: Additional
intangible asset amortization related to the acquisitions of KSNET and Eason
was more than offset by the full impairment of Net1 UTA`s intangibles in
2011;
Lower interest income and increased interest expense resulting from KSNET
acquisition: We paid the KSNET purchase price with a combination of cash and
long-term debt, which reduced interest income and increased interest
expense; and
Fiscal 2011 unrealized foreign exchange gain and transaction-related
expenses: During the 2Q2011, we recognized, in selling, general and
administration expense, an unrealized foreign exchange gain of $2.7 million
and incurred transaction-related expenses of $1.8 million, primarily for the
acquisition of KSNET.
Comments and Outlook
"Our 2Q 2012 results continued the strong momentum of our businesses from
the previous quarter," said Dr. Serge Belamant, Chairman and Chief Executive
Officer of Net1. "I am particularly pleased with SASSA`s decision to award
the social grants tender on a national basis to Net1, as well as the
conclusion of our BEE transaction, both of which put us in a strong
strategic position to drive long-term growth. We are honored and privileged
to provide the highest levels of service and convenience at the lowest cost
to the South African government as well as its citizens. Our focus over the
next several months will be to execute on the expectations laid upon us by
providing a comprehensive, seamless and superior service to this important
constituency," he concluded.
"The next twelve months will require substantial investment in capital
equipment and establishment costs as we implement the new SASSA contract,"
said Herman Kotze, Chief Financial Officer of Net1. "The substantial
increase in the beneficiaries, although at a lower price, should increase
our monthly pension and welfare revenue by approximately 45% in ZAR and once
we are fully phased in, at the very least maintain our operating income that
we generate from our current contract. We currently expect to be fully
phased-in by the second quarter of fiscal 2013. We anticipate capital
expenditure of $45-$50 million during the next twelve months. The next three
quarters are difficult for us to predict at this time, given the timing and
magnitude of investments required in any given quarter, however we
anticipate still being profitable on a fundamental earnings basis for the
second half of fiscal 2012," he concluded.
Results of Operations by Segment and Liquidity
Our frequently asked questions and operating metrics will be updated and
posted on our website (www.net1.com).
South African transaction-based activities
Segment revenue was $46.4 million in 2Q 2012, down 1% compared with 2Q 2011
in USD and up 17% on a constant currency basis. In ZAR, the increase in
segment revenue was primarily due to modest growth in our pension and
welfare business, the acquisition of Eason`s prepaid airtime and electricity
business and increased transaction volumes in rural merchant acquiring and
MediKredit. Segment operating income margin was 34% compared to 40% a year
ago and has declined due to the inclusion of increased low-margin prepaid
airtime sales and Eason intangible asset amortization. Excluding
amortization of acquisition-related intangibles, 2Q 2012 segment operating
income margin was 38%, compared to 43% during 2Q 2011.
International transaction-based activities
KSNET continues to be the largest contributor to this segment. XeoHealth
generated additional implementation revenue during 2Q 2012 and since
December 2011, has begun to generate recurring transaction-based revenues.
Revenue was $28.8 million in 2Q 2012, up 66% in USD compared with 2Q 2011and
95% higher on a constant currency basis, primarily as a result of the
inclusion of KSNET for a full quarter as well as contributions from
XeoHealth. Segment operating income margin remained consistent at 1%.
Excluding the amortization of intangibles but including the start-up costs
related to Net1 Virtual Card and XeoHealth in the United States and MVC
activities at Net1 UTA, operating income margin was unchanged at 12%.
Smart card accounts
Segment revenue was $7.3 million in 2Q 2012, down 14% compared with 2Q 2011
in USD and up 1% on a constant currency basis. Operating income margin
remained consistent at 45%.
Financial services
UEPS-based lending contributes the majority of the revenue and operating
income in this operating segment. We continue to incur start-up expenditures
related to our SmartLife business and other financial services offerings.
Segment revenue was $1.9 million in 2Q 2012, up 18% compared with 2Q 2011 in
USD and 39% higher on a constant currency basis, principally due to an
increase in lending activities. 2Q 2012 segment operating income margin was
53% compared with 62% during 2Q 2011 and decreased primarily due to start-up
expenditures incurred by SmartLife.
Hardware, software and related technology sales
Segment revenue was $7.6 million in 2Q 2012, down 49% compared with 2Q 2011
in USD and 40% lower on a constant currency basis. The decrease in revenue
and operating income was due to a lower contribution from all contributors
to hardware and software sales. Excluding amortization of all intangibles,
segment operating margin was 13% compared to 16% during 2Q 2011.
Cash flow and liquidity
At December 31, 2011, we had cash and cash equivalents of $81 million, down
from $95 million at June 30, 2011. The decrease in cash was due to a
strengthening in the USD against the ZAR, the repayment of principal under
our KSNET debt and the acquisition of SmartLife and the Eason prepaid
electricity and airtime business, offset by cash generated from operations
and a net settlement received from the former shareholders of KSNET. For 2Q
2012, we utilized net cash of $6.2 million for operating activities,
compared to cash flow of $5.0 million in 2Q 2011. Excluding the impact of
interest paid under our Korean debt, the decrease in cash provided by
operating activities resulted from the timing of receipts of accounts
receivable in our South African transaction-based activities operating
segment offset by increased profitability. Capital expenditures for 2Q 2012
and 2011 were $5.1 million and $4.0 million, respectively.
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 to 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
effects of a change in South African tax law and the creation of a valuation
allowance related to foreign tax credits, amortization of KSNET debt
facility fees, transaction-related costs and an unrealized foreign exchange
movements. 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
loss (profit) on sale of property, plant and equipment, net of related tax
effects, the loss attributable to the sale of 10% of SmartLife and the
profit on liquidation of SmartSwitch Nigeria. Attachment C presents the
reconciliation between our net income used to calculate earnings per share
basic and diluted and HEPS basic and diluted.
Conference Call
We will host a conference call to review 2Q 2012 results on February 10,
2012, at 8:00 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) ten minutes prior to the start of the call.
Callers should request "Net1 call" upon dial-in. The call will also be
webcast on our 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 our website through March 2, 2012.
About Net1 (www.net1.com)
Net1 is a leading provider of alternative payment systems that leverage its
Universal Electronic Payment System, or 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. 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, Republic of
Korea, Ghana and Iraq. In addition, Net1`s proprietary Mobile Virtual Card
technology offers secure mobile payments and banking services in developed
and emerging countries while its MediKredit and XeoHealth subsidiaries
provide its proprietary 5010 and ICD-10 compliant real-time claims
adjudication system.
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
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,
2011 2010 2011 2010
(In thousands, (In thousands,
except per share except per share
data) data)
REVENUE $ 92,058 $ 89,011 $ 191,984 $ 153,294
EXPENSE
Cost of goods sold, IT 34,168 29,182 67,112 47,249
processing, servicing and
support
Selling, general and 28,872 28,763 55,929 59,089
administration
Depreciation and 8,790 9,092 17,869 13,996
amortization
OPERATING INCOME 20,228 21,974 51,074 32,960
INTEREST INCOME 1,820 1,350 3,817 4,434
INTEREST EXPENSE 2,355 3,430 4,971 3,678
INCOME BEFORE INCOME TAXES 19,693 19,894 49,920 33,716
INCOME TAX EXPENSE (5,378) 9,836 5,174 16,043
NET INCOME FROM CONTINUING 25,071 10,058 44,746 17,673
OPERATIONS BEFORE EARNINGS
(LOSS) FROM EQUITY-ACCOUNTED
INVESTMENTS
EARNINGS (LOSS) FROM EQUITY- 19 (166) 104 (382)
ACCOUNTED INVESTMENTS
NET INCOME 25,090 9,892 44,850 17,291
ADD NET LOSS ATTRIBUTABLE TO (4) (56) (12) (86)
NON-CONTROLLING INTEREST
NET INCOME ATTRIBUTABLE TO $25,094 $ 9,948 $ 44,862 $ 17,377
NET1
Net income per share, in
United States dollars
Basic earnings attributable $0.56 $0.22 $1.00 $0.38
to Net1 shareholders
Diluted earnings $0.56 $0.22 $1.00 $0. 38
attributable to Net1
shareholders
NET 1 UEPS TECHNOLOGIES, INC.
Condensed Consolidated Balance Sheets
Unaudited (A)
December 31, June 30,
2011 2011
(In thousands, except share data)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 80,864 $ 95,263
Pre-funded social welfare grants 3,532 4,579
receivable
Accounts receivable, net of 93,197 82,780
allowances of - December: $798;
June: $728
Finance loans receivable 9,474 8,141
Deferred expenditure on smart 56 51
cards
Inventory 5,082 6,725
Deferred income taxes 6,610 15,882
Total current assets before 198,815 213,421
settlement assets
Settlement assets 125,582 186,668
Total current assets 324,397 400,08
9
33,776 35,807
PROPERTY, PLANT AND EQUIPMENT, NET OF
ACCUMULATED DEPRECIATION OF -
December: $70,892; June: $50,007
EQUITY-ACCOUNTED INVESTMENTS 1,545 1,860
GOODWILL 183,827 209,570
INTANGIBLE ASSETS, NET OF ACCUMULATED 103,408 119,856
AMORTIZATION OF -
December: $42,017; June: $37,118
OTHER LONG-TERM ASSETS, including 38,288 14,463
reinsurance assets
TOTAL ASSETS 685,241 781,645
LIABILITIES
CURRENT LIABILITIES
Accounts payable 9,535 11,360
Other payables 60,311 71,265
Current portion of long-term 18,791 15,062
borrowings
Income taxes payable 3,067 6,709
Total current liabilities 91,704
before settlement obligations 104,396
Settlement obligations 125,582 186,668
Total current 217,286 291,064
liabilities
DEFERRED INCOME TAXES 24,748 52,785
LONG-TERM BORROWINGS 86,708 110,504
OTHER LONG-TERM LIABILITIES, including 25,519 1,272
insurance policy liabilities
TOTAL LIABILITIES 354,261 455,625
5
2
,
7
8
5
COMMITMENTS AND CONTINGENCIES
EQUITY
NET1 EQUITY:
COMMON STOCK
Authorized: 200,000,000 with
$0.001 par value;
Issued and outstanding shares, 59 59
net of treasury - December:
45,002,304; June: 45,152,805
PREFERRED STOCK
Authorized shares: 50,000,000
with $0.001 par value;
Issued and outstanding shares, - -
net of treasury: 2011: -; 2010:
-
ADDITIONAL PAID-IN-CAPITAL 137,446 136,430
TREASURY SHARES, AT COST: December: (175,823) (174,694)
13,455,090; June: 13,274,434
ACCUMULATED OTHER COMPREHENSIVE LOSS (73,834) (33,779)
RETAINED EARNINGS 439,852 394,990
TOTAL NET1 EQUITY 327,700 323,006
NON-CONTROLLING INTEREST 3,280 3,014
TOTAL EQUITY 330,980 326,020
TOTAL LIABILITIES AND SHAREHOLDERS` $ 685,241 $ 781,645
EQUITY
(A) - Derived from audited
financial statements
NET 1 UEPS TECHNOLOGIES, INC.
Unaudited Condensed Consolidated Statements of Cash Flows
Three months Six months ended
ended
December 31, December 31,
2011 2010 2011 2010
(In thousands) (In thousands)
Cash flows from operating
activities
Net income $ 25,90 $ 9,89 $ 44,850 $ 17,291
2
Depreciation and 8,790 9,09 17,869 13,996
amortization 2
(Earnings) Loss from (19) 166 (104) 382
equity-accounted
investments
Fair value adjustments (551) 3,34 (772) 238
4
Interest payable 2,113 67 3,775 140
Profit on disposal of (26) (3) (34) (8)
property, plant and
equipment
Net loss on sale of 10% 81 - 81 -
of SmartLife
Profit on liquidation of - - (3,994) -
subsidiary
Realized loss on sale of - - 25 -
SmartLife investments
Stock-based compensation 543 1,55 1,039 2,996
charge 8
Facility fee amortized 83 1,72 199 1,728
8
(Increase) Decrease in (19,044) (12,203) (15, (1,248)
accounts receivable, pre- 795)
funded social welfare
grants receivable and
finance loans receivable
Increase in deferred (58) - (14) -
expenditure on smart
cards
Decrease in inventory 920 2,16 601 66
8
Decrease in accounts (2,679 (2,2 (2,348) 3,777
payable and other ) 48)
payables
Decrease in taxes payable (7,355 (6,3 (10,962) (1,230)
) 64)
Decrease in deferred (14,08 (12, (13,396) (12,938)
taxes 8) 165)
Net cash (used in) (6,200 (4,9 21,020 25,190
provided by operating ) 68)
activities
Cash flows from investing
activities
Capital expenditures (5,120 (4,0 (9,586) (4,779)
) 11)
Proceeds from disposal of 174 11 268 18
property, plant and
equipment
Acquisition of SmartLife, - - (1,673) -
net of cash acquired
Acquisition of prepaid (4,481) - (4,481) -
business
Settlement from former 4,945 (230 4,945 (230,225)
shareholders of KSNET ,225
(Acquisition of KSNET, )
net of cash acquired)
Advance of loans to - - - (375)
equity-accounted
investment
Repayment of loan by 30 34 63 407
equity-accounted
investment
Purchase of investments - - (2,320) -
related to SmartLife
Proceeds from maturity of - - 2,321 -
investments related to
SmartLife
Net change in settlement 30,349 (31, 33,796 (47,185)
assets 641)
Net cash generated from 25,897 (265 23,333 (282,139)
(used in) investing ,832
activities )
Cash flows from financing
activities
Loan portion related to - - - 20
options
Long-term borrowings - 116, - 116,353
obtained 353
Repayment of long-term (7,185 - (7,185) -
borrowings )
Payment of facility fee - (3,0 - (3,08
88) 8)
Utilization of short-term - 419 - 419
borrowings
Proceeds on sale of 10% 107 - 107 -
of SmartLife
Acquisition of remaining - (594 - (594)
19.9% of Net1 UTA )
Acquisition of treasury - - (1,129) -
stock
Net change in settlement (30,34 31,6 (33,796) 47,18
obligations 9) 41 5
Net cash (used in) (37,427) 144, (42,003) 160,295
generated from financing 731
activities
- -
Effect of exchange rate (3,389 (2,7 (16,749) 14,29
changes on cash ) 09) 5
Net decrease in cash and (21,11 (128 (14,399) (82,3
cash equivalents 9) ,778 59
)
Cash and cash equivalents 101,98 200, 95,263 153,7
- beginning of period 3 161 42
Cash and cash equivalents $ 80,864 $ 71,3 $ 80,864 $ 71,38
- end of period 83 3
Net 1 UEPS Technologies, Inc.
Attachment A
Operating segment revenue, operating income (loss) and operating margin:
Three months ended December 31, 2011 and 2010 and September 30, 2011
Change - Change -
actual constant
exchange
rate(1)
Key segmental data, Q2 `12 Q2 `11 Q1 `12 Q2 Q2 Q2 Q2
in `000, except `12 `12 `12 `12
margins vs vs vs vs
Q2`11 Q1 Q2 Q1
`12 `11 `12
Revenue:
SA transaction-based (1)% (7)% 17% 7%
activities $46,448 $46,737 $49,902
International 66% (5)% 95% 10%
transaction-based
activities 28,835 17,385 30,255
Smart card accounts 7,264 (14)% (12)% 1% 1%
8,434 8,252
Financial 18% (8)% 39% 6%
services 1,944 1,651 2,111
Hardware, software (49)% (20)% (40) (7)%
and related 7,567 14,804 %
technology sales 9,406
Total consolidated $92,058 3% (8)% 22% 6%
revenue $89,011 $99,926
Consolidated
operating income
(loss):
SA transaction-based $15,766 (15)% (22)% 0% (10)
activities $18,578 $20,183 %
International 73% (65)% 104% (59)
transaction-based 241 139 %
activities 684
Operating income 55% (16)% 83% (3)%
excluding 3,369 2,171
amortization 3,991
Amortization of (3,128) 54% (5)% 81% 9%
intangible assets (2,032) (3,307)
Smart card accounts 3,302 (14)% (12)% 2% 1%
3,832 3,750
Financial services 1,026 0% (27)% 18% (16)
1,028 1,411 %
Hardware, software nm (53)% nm (46)
and related 909 (49) 1,937 %
technology sales
Corporate/ (1,016) (35)% (135) (23) (141
Eliminations (1,554) 2,881 % % )%
Total operating $20,228 (8)% (34)% 8% (24)
income $21,974 $30,846 %
Operating income
margin (%)
SA transaction-based 34% 40% 40%
activities
International 1% 1% 2%
transaction-based
activities
International 12% 12% 13%
transaction-based
activities excluding
amortization
Smart card accounts 45% 45% 45%
Financial services 53% 62% 67%
Hardware, software 12% 0% 21%
and related
technology sales
Overall operating 22% 25% 31%
margin
(1) - This information shows what the change in these items would have been
if the USD/ ZAR exchange rate that prevailed during 2Q 2012 also prevailed
during 2Q 2011 and 1Q 2012.
Six months ended December 31, 2012 and 2011
Change Change -
- constant
actual exchange
rate(1)
Key segmental data, in F2012 F2011 F2012 F2012
`000, except margins vs vs
F2011 F2011
Revenue:
SA transaction-based $96,350 $91,626 5% 15%
activities
International 100% 100%
transaction-based 59,090 17,855
activities
Smart card accounts 15,516 16,404 (5)% 4%
Financial services 4,055 2,901 40% 53%
Hardware, software and (31)% (24)%
related technology sales 16,973 24,508
Total consolidated $191,984 $153,294 25% 37%
revenue
Consolidated operating
income (loss):
SA transaction-based $35,949 $36,326 (1)% 8%
activities
International (263)% (278)%
transaction-based 925 (569)
activities
Operating income 403% 451%
excluding amortization 7,355 1,463
Amortization of (6,430) (2,032) 216% 247%
intangible assets
Smart card accounts 7,052 7,454 (5)% 4%
Financial services 2,437 1,825 34% 46%
Hardware, software and (219)% (231)%
related technology sales 2,846 (2,388)
Corporate/ Eliminations 1,865 (9,688) (119)% (121)%
Total operating income $51,074 $32,960 55% 70%
Operating income margin
(%)
SA transaction-based 37% 40%
activities
International
transaction-based 2% (3)%
activities
International
transaction-based 12% 8%
activities excluding
amortization
Smart card accounts 45% 45%
Financial services 60% 63%
Hardware, software and
related technology sales 17% (10)%
Overall operating margin 27% 22%
(1) - This information shows what the change in these items
would have been if the USD/ ZAR exchange rate that prevailed
during year to date fiscal 2012 also prevailed during year to
date fiscal 2011.
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, 2011 and 2010
Net EPS, Net EPS
Income basic Income ,
(USD`000) (USD) (ZAR`000)
bas
ic
(ZA
R)
2011 2010 2011 2010 2011 201 2011 2010
0
GAAP 25,094 9,948 56 22 205,148 69,0 4 152
40 5
7
Amortization of 3,656 4,302 29,893 29,8
intangible 57
assets, net of
tax
Stock-based 1,558 10,8
compensation 543 4,439 13
charge
Facility fees 110 1,728 899 11,9
for KSNET debt 93
Change in tax (20,031 - (163,760) -
law )
Create FTC 8,232 - 67,298 -
valuation
allowance
Loss on sale of 73 - 597 -
10% of Smartlife
Gain on FEC, net - (1,799 - (12,
of tax ) 485)
Acquisition- - 1,774 - 12,3
related costs. 13
Fundamental 17,677 17,511 39 39 144,514 121, 3 267
531 2
2
Six months ended December 31, 2011 and 2010
Net EPS, Net EPS,
Income basic Income basic
(USD`000) (USD) (ZAR`000) (ZAR)
2011 2010 20 201 2011 2010 2011 2
11 0 0
1
0
GAAP 44,862 17,377 100 38 350,80 124,088 7 2
8 8 7
0 3
Amortizatio 7,196 6,916 56,268 49,393
n of
intangible
assets, net
of tax
Stock-based
compensatio 1,040 2,99 8,132 21,39
n charge 6 4
Change in (18,315) - (150,373) -
tax law
Create FTC 8,232 - 67,588 -
valuation
allowance
Profit on - -
liquidation (3,994) (31,232)
of
subsidiary
Loss on 77 - 602 -
sale of 10%
of
Smartlife
Facility 211 1,728 1,650 12,34
fees for 0
KSNET debt
Gain on - (114) - (813)
FEC, net of
tax
Acquisition- - 5,131 - 36,64
related 0
costs.
Fundamental 39,309 34,034 87 75 303,443 243,042 67 535
4
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, 2011 and 2010
2011 2010
Net income (USD`000) 25,094 9,948
Adjustments:
Loss on sale of 10% of Smartlife 73 -
(USD`000)
Profit on sale of property, plant and (26) (3)
equipment (USD`000)
Tax effects on above (USD`000) 7 1
Net income used to calculate headline 25,148 9,946
earnings (USD`000)
Weighted average number of shares used to 44,935 45,433
calculate net income per share basic
earnings and headline earnings per share
basic earnings (`000)
Weighted average number of shares used to 44,967 45,494
calculate net income per share diluted
earnings and headline earnings per share
diluted earnings (`000)
Headline earnings per share:
Basic earnings - common stock and linked 56 22
units, in US cents
Diluted earnings - common stock and 56 22
linked units, in US cents
Six months ended December 31, 2011 and 2010
2011 2010
Net income (USD`000)
44,862 17,377
Adjustments:
Profit on liquidation of subsidiary -
(USD`000) (3,994)
Loss on sale of 10% of Smartlife -
(USD`000) 77
Profit on sale of property, plant and
equipment (USD`000) (34) (8)
Tax effects on above (USD`000)
10 3
Net income used to calculate headline
earnings (USD`000) 40,921 17,372
Weighted average number of shares used to
calculate net income per share basic 44,995 45,409
earnings and headline earnings per share
basic earnings (`000)
Weighted average number of shares used to
calculate net income per share diluted 45,026 45,455
earnings and headline earnings per share
diluted earnings (`000)
Headline earnings per share:
Basic earnings - common stock and linked
units, in US cents 91 38
Diluted earnings - common stock and
linked units, in US cents 91 38
Investor Relations Contact:
Dhruv Chopra
Vice President of Investor Relations
Phone: +1-212-626-6675
Email: dchopra@net1.com
Johannesburg
10 February 2012
Sponsor to Net1
Deutsche Securities (SA) (Proprietary) Limited
Date: 10/02/2012 08:53:20 Produced by the JSE SENS Department.
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