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NT1
NT1
NT1 - Net 1 UEPS Technologies, Inc - Net1 Reports Third 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 Third Quarter 2012 Results
- Commenced grant payment process for approximately 9.2 million
beneficiaries nationally on April 2, 2012;
- Revenue of $90.7 million, increased 10% in constant currency;
- Fundamental earnings per share of $0.28, decreased 18% in constant
currency
JOHANNESBURG, May 11, 2012 - Net 1 UEPS Technologies, Inc. (Nasdaq: UEPS; JSE:
NT1) today announced results for the third quarter of fiscal 2012.
Summary Financial Metrics
Three months ended March 31,
2012 2011 % change % change
in USD in ZAR
(All figures in USD `000s except
per share data)
Revenue 90,664 92,758 (2%) 10%
GAAP net income (loss) 7,766 (21,562) nm nm
Fundamental net income (1) 12,450 17,144 (27%) (18%)
GAAP earnings (loss) per share ($) 0.17 (0.47) nm nm
Fundamental earnings per share ($) 0.28 0.38 (27%) (18%)
(1)
Fully-diluted shares outstanding 45,375 45,494 -
(`000`s)
Average period USD/ ZAR exchange 7.85 6.99 12%
rate
Nine months ended March 31,
2012 2011 % change % change
in USD in ZAR
(All figures in USD `000s except
per share data)
Revenue 282,648 246,052 15% 27%
GAAP net income 52,628 (4,185) nm nm
Fundamental net income (1) 51,769 51,176 1% 11%
GAAP earnings per share ($) 1.17 (0.09) nm Nm
Fundamental earnings per share ($) 1.15 1.13 2% 11%
(1)
Fully-diluted shares outstanding 45,140 45,455 (1%)
(`000`s)
Average period USD/ ZAR exchange 7.82 7.09 10%
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 (loss) to fundamental net income and earnings (loss) per share.
Factors impacting comparability of our Q3 2012 and Q3 2011 results
- Unfavorable impact from the strengthening of the US dollar: The US dollar
appreciated by 12% against the ZAR during the third quarter of fiscal
2012 which negatively impacted our reported results;
- SASSA implementation costs and cash bonuses paid as a result of our
recent SASSA tender award: We commenced implementing our new SASSA
contract during the third quarter of fiscal 2012 and incurred additional
implementation and staff costs, of $6.8 million, which includes cash
bonuses of $5.4 million to key executives and employees involved in the
successful tender award;
- Lower effective tax rate due 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 replaced STC with a dividends withholding tax, our
fully distributed tax rate decreased to 28% from 34.55% which positively
impacted our results; and
- Fiscal 2011 intangible asset impairment and transaction-related expenses:
During the third quarter of fiscal 2011, we impaired intangible assets
related to the Net1 UTA acquisition of $41.8 million and incurred
transaction-related expenses of $0.5 million, primarily for the
acquisition of KSNET.
Comments and Outlook
"We are extremely pleased with the progress made thus far on the
implementation of our new SASSA contract. As a result of our efforts, we
successfully commenced social grant payment on schedule as of April 2, 2012,
said Dr. Serge Belamant, Chairman and Chief Executive Officer of Net1. "The
first phase of our implementation process involved issuing 2.5 million
temporary MasterCard branded debit cards to grant recipients and establishing
the payment infrastructure to pay all beneficiaries that we did not pay under
our old contract. I am particularly pleased with the commitment displayed by
our implementation teams during the first phase and the focus over the next
few months will be to replicate the same success through the second phase of
implementation," he concluded.
"Our quarterly performance for the next two to three quarters will be
difficult to predict given the timing and quantum of investments and start up
costs to be incurred to ensure the implementation of our SASSA contract," said
Herman Kotze, Chief Financial Officer of Net1. "However, for fiscal year 2012,
we expect fundamental earnings per share to be at least $1.40, assuming the
constant currency base of ZAR 7/$1 and using our third quarter-ended share
count of 45 million shares. As always, fundamental earnings exclude
amortization of intangibles, stock-based charges and other one-time items," he
concluded.
First phase of our new SASSA contract implementation
We successfully initiated the national grant payment process for approximately
9.2 million beneficiaries on April 2, 2012 having commenced implementation
during Q3 2012. The implementation will be conducted in two phases. The first
phase involved issuing approximately 2.5 million MasterCard-branded debit
cards to beneficiaries that we did not serve under our previous contract in
order to establish the payment process to pay all social grants in the
country. The second phase will commence during June 2012 and will require the
re-registration of all 9.2 million beneficiaries.
During Q3 2012 we incurred direct first phase implementation expenses of
approximately $7 million including bonuses, staff, travel, premises hire for
enrollment, stationery, delivery and advertising costs. We also incurred
implementation related capital expenditures of approximately $7 million during
Q3 2012, primarily for payment vehicles. We anticipate cumulative capital
expenditures of $45 - $50 million tied to the implementation for our new
national contract.
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 Q3 2012, down 2% compared with Q3 2011 in
USD but up 10% on a constant currency basis. In ZAR, the increase in segment
revenue was largely due to higher prepaid airtime sales resulting primarily
from the Eason acquisition and increased transaction volumes in merchant
acquiring and FIHRST. Revenue from our pension and welfare operations was
relatively stable on a year-over-year basis. Segment operating income margin
was 19% and 39%, respectively, and declined primarily due to implementation
costs and cash bonuses paid, and the inclusion of increased low-margin prepaid
airtime sales as well as Eason intangible asset amortization. Excluding
amortization of acquisition-related intangibles, Q3 2012 segment operating
income margin was 23%, compared to 42% during Q3 2011.
International transaction-based activities
KSNET continues to contribute the majority of our revenues in this operating
segment. Revenue was $28.2 million in Q3 2012, up 14% compared with Q3 2011 in
USD and 29% on a constant currency basis. Operating margin for the segment is
lower than most of our South African transaction-based businesses and was
negatively impacted by start-up expenditures related to our XeoHealth launch
in the United States, MVC activities at Net1 UTA and on-going losses at Net1
Virtual Card, but these expenses were partially offset by revenue
contributions from KSNET, and to a lesser extent from XeoHealth and NUETS`
initiative in Iraq. Segment operating income margin remained consistent at 1%.
Excluding the amortization of intangibles but including the start-up costs
referenced above, Q3 2012 operating income margin was 12% compared to 14%
during Q3 2011.
Smart card accounts
Segment revenue was $7.6 million in Q3 2012, down 9% compared with Q3 2011 in
USD but up 3% 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 $2.3 million in Q3 2012, up 5% compared with Q3 2011 in
USD and 19% higher on a constant currency basis, principally due to an
increase in lending activities. Q3 2012 segment operating income margin was
55% compared with 71% during Q3 2011 and decreased primarily due to start-up
expenditures incurred by SmartLife.
Hardware, software and related technology sales
Segment revenue was $6.2 million in Q3 2012, down 40% compared with Q3 2011 in
USD and 33% 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, and
the intangible asset impairment in Q3 2011, segment operating loss margin was
19% compared to and operating income margin of 1% during Q3 2011.
Cash flow and liquidity
At March 31, 2012, we had cash and cash equivalents of $88 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 Q3 2012, we generated net
cash of $22.0 million from operating activities, compared to $28
million in Q3 2011. Excluding the impact of interest paid under our Korean
debt , the decrease in cash provided by operating activities resulted from
timing of receipts of accounts receivable in our South African transaction-
based activities operating segment and the payment of implementation costs and
bonuses related to our recent SASSA award. Capital expenditures for Q3 2012
and 2011 were $14 million and $5.0 million, respectively, and have increased
primarily due to acquisition of payment vehicles for of our new SASSA
contract, payment processing terminals in Korea and POS devices to service our
merchant acquiring system 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 (loss) and
earnings (loss) 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, intangible asset impairments,
amortization of KSNET debt facility fees and transaction-related costs.
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 (loss) 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, the profit on
liquidation of SmartSwitch Nigeria and the impairment of intangible assets.
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 Q3 2012 results on May 11, 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 June 4, 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.
Investor Relations Contact:
Dhruv Chopra
Vice President of Investor Relations
Phone: +1-212-626-6675
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,
2012 2011 2012 2011
(In thousands, except (In thousands, except
per share data) per share data)
REVENUE $ 90,664 $ 92,758 $ 282,648 $ 246,052
EXPENSE
Cost of goods sold, IT 29,302 76,551
processing, servicing and 32,493 99,605
support
Selling, general and 32,618 91,707
administration 36,368 92,297
Depreciation and 11,192 25,188
amortization 9,325 27,194
Impairment of intangibles - 41,771 - 41,771
OPERATING INCOME (LOSS) 12,478 (22,125) 63,552 10,835
INTEREST INCOME 2,164 1,516 5,981 5,950
INTEREST EXPENSE 2,244 2,471 7,215 6,149
INCOME (LOSS) BEFORE INCOME 12,398 (23,080) 62,318 10,636
TAXES
INCOME TAX EXPENSE (BENEFIT) 4,611 (1,603) 9,785 14,440
NET INCOME (LOSS) FROM 7,787 (21,477) 52,533 (3,804)
CONTINUING OPERATIONS BEFORE
(LOSS) EARNINGS FROM EQUITY-
ACCOUNTED INVESTMENTS
(LOSS) EARNINGS FROM EQUITY- (4) (127) 100 (509)
ACCOUNTED INVESTMENTS
NET INCOME (LOSS) 7,783 (21,604) 52,633 (4,313)
LESS (ADD) NET INCOME (LOSS) 17 (42) 5 (128)
ATTRIBUTABLE TO NON-
CONTROLLING INTEREST
NET INCOME (LOSS) $ 7,766 $ (21,562) $ 52,628 $ (4,185)
ATTRIBUTABLE TO NET1
Net income (loss) per share,
in United States dollars
Basic earnings attributable ($0.47) $1.17 ($0.09)
to Net1 shareholders $0.17
Diluted earnings ($0.47) $1.17 ($0.09)
attributable to Net1 $0.17
shareholders
NET 1 UEPS TECHNOLOGIES, INC.
Condensed Consolidated Balance Sheets
Unaudited (A)
March 31, June 30,
2012 2011
(In thousands, except share
data)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 88,250 $ 95,263
Pre-funded social welfare grants 2,741 4,579
receivable
Accounts receivable, net of allowances of 98,159 82,780
- March: $841; June: $728
Finance loans receivable 8,720 8,141
Deferred expenditure on smart cards 115 51
Inventory 6,157 6,725
Deferred income taxes 7,590 15,882
Total current assets before settlement 211,732 213,421
assets
Settlement assets 39,408 186,668
Total current assets 251,140 400,089
PROPERTY, PLANT AND EQUIPMENT, NET OF 44,167 35,807
ACCUMULATED DEPRECIATION OF - March: $77,519;
June: $50,007
EQUITY-ACCOUNTED INVESTMENTS 1,552 1,860
GOODWILL 190,149 209,570
INTANGIBLE ASSETS, NET OF ACCUMULATED 101,172 119,856
AMORTIZATION OF -
March: $48,722; June: $37,118
OTHER LONG-TERM ASSETS, including reinsurance 42,148 14,463
assets
TOTAL ASSETS 630,328 781,645
LIABILITIES
CURRENT LIABILITIES
Accounts payable 11,817 11,360
Other payables 62,145 71,265
Current portion of long-term borrowings 14,316 15,062
Income taxes payable 8,975 6,709
Total current liabilities before 97,253 104,396
settlement obligations
Settlement obligations 39,408 186,668
Total current liabilities 136,661 291,064
DEFERRED INCOME TAXES 24,425 52,785
LONG-TERM BORROWINGS 88,610 110,504
OTHER LONG-TERM LIABILITIES, including 27,024 1,272
insurance policy liabilities
TOTAL LIABILITIES 276,720 455,625
COMMITMENTS AND CONTINGENCIES
EQUITY
NET1 EQUITY:
COMMON STOCK
Authorized: 200,000,000 with $0.001 par
value;
Issued and outstanding shares, net of 59
treasury - March: 45,552,304; June: 59
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 138,289 136,430
TREASURY SHARES, AT COST: March: 13,455,090; (175,823) (174,694)
June: 13,274,434
ACCUMULATED OTHER COMPREHENSIVE LOSS (59,832) (33,779)
RETAINED EARNINGS 447,618 394,990
TOTAL NET1 EQUITY 350,311 323,006
NON-CONTROLLING INTEREST 3,297 3,014
TOTAL EQUITY 353,608 326,020
TOTAL LIABILITIES AND SHAREHOLDERS` EQUITY $ 630,328 $ 781,645
(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,
2012 2011 2012 2011
(In thousands) (In thousands)
Cash flows from
operating activities
Net income (loss) $ 7,783 $ (21,604) $ 52,633 $ (4,313)
Depreciation and 9,325 11,192 27,194 25,188
amortization
Impairment loss - 41,771 - 41,771
Loss (Earnings) from 4 127 (100) 509
equity-accounted
investments
Fair value adjustments (1,211) 417 (1,983) 655
Interest payable 694 1,406 4,469 1,546
Profit on disposal of (23) (2) (57) (10)
property, plant and
equipment
Net loss on sale of 10% - - 81 -
of SmartLife
Profit on liquidation - - (3,994) -
of subsidiary
Realized loss on sale - - 25 -
of SmartLife
investments
Stock-based 843 1,597 1,882 4,593
compensation charge
Facility fee amortized 316 113 515 1,841
Decrease (Increase) in 474 3,896 (15,321) 2,648
accounts and finance
loans receivable, and
pre-funded grants
receivable
Increase in deferred (56) - (70) -
expenditure on smart
cards
Increase in inventory (862) (229) (261) (163)
Increase (Decrease) in 583 (6,060) (1,765) (2,283)
accounts and other
payables
Increase (Decrease) in 5,626 7,140 (5,336) 5,910
taxes payable
Decrease in deferred (1,532) (11,500) (14,928) (24,438)
taxes
Net cash provided by 21,964 28,264 42,984 53,454
operating activities
Cash flows from
investing activities
Capital expenditures (13,879) (4,679) (23,465) (9,458)
Proceeds from disposal 117 10 385 28
of property, plant and
equipment
Acquisition of - - (1,673) -
SmartLife, net of cash
acquired
Acquisition of prepaid - - (4,481) -
business
Settlement from former - - 4,945 (230,225)
shareholders of KSNET
(Acquisition of KSNET,
net of cash acquired)
Advance of loans to - - - (375)
equity-accounted
investment
Repayment of loan by 30 33 93 440
equity-accounted
investment
Acquisition of (948) - (948) -
available for sale
securities
Purchase of investments - - (2,320) -
related to SmartLife
Proceeds from maturity - - 2,321 -
of investments related
to SmartLife
Net change in 95,165 7,397 128,961 (39,788)
settlement assets
Net cash generated from 80,485 2,761 103,818 (279,378)
(used in) investing
activities
Cash flows from
financing activities
Loan portion related to - - - 20
options
Long-term borrowings - - - 116,353
obtained
Repayment of long-term (4,842) - (12,027) -
borrowings
Payment of facility fee - - - (3,088)
Proceeds on sale of 10% - - 107 -
of SmartLife
Acquisition of - - - (594)
remaining 19.9% of Net1
UTA
Acquisition of treasury - - (1,129) -
stock
Repayment of short-term - (7,124) - (6,705)
borrowings
Net change in (95,165) (7,397) (128,961) 39,788
settlement obligations
Net cash (used in) (100,007) (14,521) (142,010) 145,774
generated from
financing activities
- -
Effect of exchange rate 4,944 1,003 (11,805) 15,298
changes on cash
Net increase (decrease) 7,386 17,507 (7,013) (64,852)
in cash and cash
equivalents
Cash and cash 80,864 71,383 95,263 153,742
equivalents - beginning
of period
Cash and cash $ 88,250 $ 88,890 $ 88,250 $ 88,890
equivalents - end of
period
Net 1 UEPS Technologies, Inc.
Attachment A
Operating segment revenue, operating income (loss) and operating margin:
Three months ended March 31, 2012 and 2011 and December 31, 2011
Change - Change -
actual constant
exchange
rate(1)
Key segmental Q3 `12 Q3 `11 Q2 `12 Q3 Q3 `12 Q3 `12 Q3 `12
data, in `000, `12 vs vs vs
except margins vs Q2 `12 Q3 `11 Q2 `12
Q3`11
Revenue:
SA transaction- $46,423 $47,313 $46,448 (2%) (0%) 10% (4%)
based activities
International 28,188 24,627 28,835 14% (2%) 29% (6%)
transaction-based
activities
Smart card 7,558 8,288 7,264 (9%) 4% 3% (0%)
accounts
Financial services 2,289 2,171 1,944 5% 18% 19% 13%
Hardware, software 6,206 10,359 7,567 (40%) (18%) (33%) (21%)
and related
technology sales
Total consolidated $90,664 $92,758 $92,058 (2%) (2%) 10% (5%)
revenue
Consolidated
operating income
(loss):
SA transaction- $8,694 $18,566 $15,766 (53%) (45%) (47%) (47%)
based activities
International 195 274 241 (29%) (19%) (20%) (22%)
transaction-based
activities
Operating income 3,387 3,398 3,369 (-%) 1% 12% (3%)
excluding
amortization
Amortization of (3,192) (3,124) (3,128) 2% 2% 15% (2%)
intangible assets
Smart card 3,435 3,767 3,302 (9%) 4% 3% (-%)
accounts
Financial services 1,248 1,540 1,026 (19%) 22% (9%) 17%
Hardware, software (1,301) (44,086) 909 (97%) nm (97%) nm
and related
technology sales
Corporate/ 207 (2,186) (1,016) nm nm nm nm
Eliminations
Total operating $12,478 $(22,125) $20,228 nm (38%) nm (41%)
income (loss)
Operating income
margin (%)
SA transaction- 19% 39% 34%
based activities
International 1% 1% 1%
transaction-based
activities
International 12% 14% 12%
transaction-based
activities
excluding
amortization
Smart card 45% 45% 45%
accounts
Financial services 55% 71% 53%
Hardware, software (21%) (426%) 12%
and related
technology sales
Overall operating 14% (24%) 22%
margin
(1) - This information shows what the change in these items would have been if
the USD/ ZAR exchange rate that prevailed during Q3 2012 also prevailed during
Q3 2011 and Q2 2012.
Nine months ended March 31, 2012 and 2011
Change - Change -
actual constant
exchange
rate(1)
Key segmental data, in `000, F2012 F2011 F2012 F2012
except margins vs vs
F2011 F2011
Revenue:
SA transaction-based $142,773 $138,939 3% 13%
activities
International transaction- 87,278 42,482 100% 100%
based activities
Smart card accounts 23,074 24,692 (7%) 3%
Financial services 6,344 5,072 25% 38%
Hardware, software and related 23,179 34,867 (34%) (27%)
technology sales
Total consolidated revenue $282,648 $246,052 15% 27%
Consolidated operating income
(loss):
SA transaction-based $44,643 $54,892 (19%) (10%)
activities
International transaction- 1,120 (295) nm nm
based activities
Operating income excluding 10,750 4,861 121% 144%
amortization
Amortization of intangible (9,630) (5,156) 87% 106%
assets
Smart card accounts 10,487 11,221 (7%) 3%
Financial services 3,685 3,365 10% 21%
Hardware, software and related 1,545 (46,474) nm nm
technology sales
Corporate/ Eliminations 2,072 (11,874) nm nm
Total operating income $63,552 $10,835 487% 547%
Operating income margin (%)
SA transaction-based 31% 40%
activities
International transaction- 1% (1%)
based activities
International transaction- 12% 11%
based activities excluding
amortization
Smart card accounts 45% 45%
Financial services 58% 66%
Hardware, software and related 7% (133%)
technology sales
Overall operating margin 22% 4%
(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 (loss) and earnings (loss) per share, basic,
to fundamental net income and earnings per share, basic:
Three months ended March 31, 2012 and 2011
Net income E(L)PS, Net income (loss) E(L)PS,
(loss) basic (ZAR`000) basic
(USD`000) (USD) (ZAR)
2012 2011 20 2011 2012 2011 2012 2011
12
GAAP 7,766 (21,562) 17 (47) 60,979 (150,617) 135 (331)
Intangible 3,751 5,133 29,463 35,857
asset
amortization,
net
Stock-based 843 1,596 6,619 11,149
compensation
charge
Facility fees 90 113 707 789
for KSNET debt
Impairment of - 31,339 - 218,912
intangible
assets, net
Acquisition- - 525 - 3,666
related costs.
Fundamental 12,450 17,144 28 38 97,768 119,756 216 263
Nine months ended March 31, 2012 and 2011
Net income E(L)PS, Net Income E(L)PS,
(loss) basic ( ZAR`000) basic
(USD`000) (USD) (ZAR)
2012 2011 2012 2011 2012 2011 2012 2011
GAAP 52,628 (4,185 117 (9) 411,787 (29,668 913 (65)
) )
Intangible 10,957 12,049 85,733 85,421
asset
amortization,
net
Stock-based 1,883 4,590 14,734 32,539
compensation
charge
Facility fees 301 1,841 2,355 13,053
for KSNET debt
Change in tax (18,315) - (150,373) -
law
Create FTC 8,232 - 67,588 -
valuation
allowance
Profit on (3,994) - (31,251) -
liquidation of
subsidiary
Loss on sale of 77 - 602 -
10% of
SmartLife
Impairment of - 31,339 - 222,165
intangible
assets, net
Acquisition- - 5,656 - 40,095
related costs.
Gain on FEC, - (114) - (808)
net.
Fundamental 51,769 51,176 115 113 401,175 362,797 890 799
Net 1 UEPS Technologies, Inc.
Attachment C
Reconciliation of net income (loss) used to calculate earnings (loss) per
share basic and diluted and headline earnings per share basic and diluted:
Three months ended March 31, 2012 and 2011
2012 2011
Net income (loss) (USD`000) 7,766 (21,562)
Adjustments:
Impairment of intangible assets - 41,771
Profit on sale of property, plant and (23) (2)
equipment
Tax effects on above 6 (10,431)
Net income used to calculate headline earnings 7,749 9,776
(USD`000)
Weighted average number of shares used to 45,268 45,452
calculate net income (loss) per share basic
earnings (loss) and headline earnings per
share basic earnings (`000)
Weighted average number of shares used to 45,375 45,559
calculate net income (loss) per share diluted
earnings (loss) and headline earnings per
share diluted earnings (`000)
Headline earnings per share:
Basic earnings - common stock and linked 17 22
units, in US cents
Diluted earnings - common stock and linked 17 21
units, in US cents
Nine months ended March 31, 2012 and 2011
2012 2011
Net income (loss) (USD`000) 52,628 (4,185)
Adjustments:
Profit on liquidation of subsidiary (3,994) -
Loss on sale of 10% of SmartLife 77 -
Impairment of intangible assets 41,771
Profit on sale of property, plant and (57) (10)
equipment
Tax effects on above 16 (10,429)
Net income used to calculate headline earnings 48,670 27,147
(USD`000)
Weighted average number of shares used to 45,083 45,423
calculate net income (loss) per share basic
earnings (loss) and headline earnings per
share basic earnings (`000)
Weighted average number of shares used to 45,140 45,489
calculate net income (loss) per share diluted
earnings (loss) and headline earnings per
share diluted earnings (`000)
Headline earnings per share:
Basic earnings - common stock and linked 108 60
units, in US cents
Diluted earnings - common stock and linked 108 60
units, in US cents
Johannesburg
11 May 2012
Sponsor to Net1
Deutsche Securities (SA) (Proprietary) Limited
Date: 11/05/2012 07:05:10 Produced by the JSE SENS Department.
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