EVTC - EVERTEC Reports First Quarter 2022 Results
Increases Annual Guidance
EVERTEC, Inc. (NYSE: EVTC) (“Evertec” or the “Company”) today announced results for the first quarter ended March 31, 2022.
First Quarter 2022 Highlights
- Revenue increased 8% to $150.2 million
- GAAP Net Income attributable to common shareholders was $38.9 million or $0.53 per diluted share
- Adjusted EBITDA increased 9% to $75.4 million
- Adjusted earnings per common share was $0.70, an increase of 13%
- Share repurchases totaled $21.2 million
Mac Schuessler, President and Chief Executive Officer stated, “We have started the year with another quarter of strong results as we continue to execute on our growth strategies across all our segments. The team continues to focus on closing the Popular transaction and receiving regulatory approval for our BBR acquisition."
First Quarter 2022 Results
Revenue. Total revenue for the quarter ended March 31, 2022 was $150.2 million, an increase of 8% compared with $139.5 million in the prior year reflecting increases across all of the Company's segments. Revenue in Puerto Rico benefited from sales volume growth, driven by a full quarter of revenue contribution from the FirstBank expanded relationship, a higher average ticket and slightly higher spread, as well as, growth in POS transactions processed and the continued growth of our digital solutions, ATH Movil and ATH Business. We benefited from the year over year CPI impact on the current Popular MSA and revenue generated from the printing contract entered into in the prior year. Latin America revenue reflected organic growth that includes revenue generated from new client contracts.
Net Income attributable to common shareholders. For the quarter ended March 31, 2022, GAAP Net Income attributable to common shareholders was $38.9 million, or $0.53 per diluted share, an increase of $3.4 million or $0.04 per diluted share as compared to the prior year.
Adjusted EBITDA . For the quarter ended March 31, 2022, Adjusted EBITDA was $75.4 million, an increase of 9% compared to the prior year. Adjusted EBITDA margin (Adjusted EBITDA as a percentage of total revenues) was 50.2%, an increase of approximately 80 basis points from the prior year. The year over year increase in margin primarily reflects a year-over-year benefit from foreign currency remeasurement of $3.1 million for assets and liabilities denominated in US dollars and the impact from increased revenues across all our segments.
Adjusted Net Income . For the quarter ended March 31, 2022, Adjusted Net Income was $50.8 million, an increase of 13% compared with $45.0 million in the prior year. Adjusted earnings per common share was $0.70, an increase of 13% compared to $0.62 in the prior year.
Share Repurchase
During the three months ended March 31, 2022, the Company repurchased 521,643 shares of its common stock at an average price of $40.60 per share for a total of $21.2 million. As of March 31, 2022, a total of approximately $129 million remained available for future use under the Company’s share repurchase program.
2022 Outlook
The Company's financial outlook for 2022 assumes that the Popular transaction closes mid-year 2022. The outlook is as follows:
- Total consolidated revenue between $597 million and $605 million representing growth of approximately 1% to 3%.
- Adjusted earnings per common share between $2.52 to $2.60 representing a decline of 8% to 5% as compared to $2.74 in 2021. This excludes the gain on sale from the Popular transaction and one-time adjustments.
- Capital expenditures are anticipated to be approximately $60 million.
- Effective tax rate of approximately 13% to 14%.
Earnings Conference Call and Audio Webcast
The Company will host a conference call to discuss its first quarter 2022 financial results today at 4:30 p.m. ET. Hosting the call will be Mac Schuessler, President and Chief Executive Officer, and Joaquin Castrillo, Chief Financial Officer. The conference call can be accessed live over the phone by dialing (888) 338-7153 or for international callers by dialing (412) 317-5117. A replay will be available one hour after the end of the conference call and can be accessed by dialing (877) 344-7529 or (412) 317-0088 for international callers; the pin number is 7052957. The replay will be available through Thursday, May 5, 2022. The call will be webcast live from the Company’s website at www.evertecinc.com under the Investor Relations section or directly at http://ir.evertecinc.com . A supplemental slide presentation that accompanies this call and webcast can be found on the investor relations website at ir.evertecinc.com and will remain available after the call.
About Evertec
EVERTEC, Inc. (NYSE: EVTC) is a leading full-service transaction processing business in Puerto Rico, the Caribbean and Latin America, providing a broad range of merchant acquiring, payment services and business process management services. Evertec owns and operates the ATH® network, one of the leading personal identification number (“PIN”) debit networks in Latin America. In addition, the Company manages a system of electronic payment networks and offers a comprehensive suite of services for core banking, cash processing and fulfillment in Puerto Rico, that process over three billion transactions annually. The Company also offers technology outsourcing in all the regions it serves. Based in Puerto Rico, the Company operates in 26 Latin American countries and serves a diversified customer base of leading financial institutions, merchants, corporations and government agencies with “mission-critical” technology solutions. For more information, visit www.evertecinc.com .
Use of Non-GAAP Financial Information
The non-GAAP measures referenced in this release material are supplemental measures of the Company’s performance and are not required by, or presented in accordance with, accounting principles generally accepted in the United States of America (“GAAP”). They are not measurements of the Company’s financial performance under GAAP and should not be considered as alternatives to total revenue, net income or any other performance measures derived in accordance with GAAP or as alternatives to cash flows from operating activities, as indicators of operating performance or as measures of the Company’s liquidity. In addition to GAAP measures, management uses these non-GAAP measures to focus on the factors the Company believes are pertinent to the daily management of the Company’s operations and believes that they are also frequently used by analysts, investors and other interested parties to evaluate companies in the industry. Reconciliations of the non-GAAP measures to the most directly comparable GAAP measure are included in the schedules to this release. These non-GAAP measures include EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings per common share and are defined below.
EBITDA is defined as earnings before interest, taxes, depreciation and amortization.
Adjusted EBITDA is defined as EBITDA further adjusted to exclude unusual items and other adjustments. This measure is reported to the chief operating decision maker for purposes of making decisions about allocating resources to the segments and assessing their performance. For this reason, Adjusted EBITDA, as it relates to the Company's segments, is presented in conformity with Accounting Standards Codification 280, Segment Reporting, and is excluded from the definition of non-GAAP financial measures under the Securities and Exchange Commission's Regulation G and Item 10(e) of Regulation S-K. The Company's presentation of Adjusted EBITDA is substantially consistent with the equivalent measurements that are contained in the secured credit facilities in testing EVERTEC Group’s compliance with covenants therein such as the secured leverage ratio.
Adjusted Net Income is defined as net income adjusted to exclude unusual items and other adjustments.
Adjusted Earnings per common share is defined as Adjusted Net Income divided by diluted shares outstanding.
The Company uses Adjusted Net Income to measure the Company's overall profitability because the Company believes it better reflects the comparable operating performance by excluding the impact of the non-cash amortization and depreciation that was created as a result of merger and acquisition activity. In addition, in evaluating EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings per common share, you should be aware that in the future the Company may incur expenses such as those excluded in calculating them. Further, the Company's presentation of these measures should not be construed as an inference that the Company's future operating results will not be affected by unusual or nonrecurring items.
Forward-Looking Statements
Certain statements in this press release constitute “forward-looking statements” within the meaning of, and subject to the protection of, the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance or achievements of EVERTEC to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Statements preceded by, followed by, or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” and “plans” and similar expressions of future or conditional verbs such as “will,” “should,” “would,” “may,” and “could” are generally forward-looking in nature and not historical facts. Any statements that refer to expectations or other characterizations of future events, circumstances or results are forward-looking statements.
Various factors that could cause actual future results and other future events to differ materially from those estimated by management include, but are not limited to: the Company’s reliance on its relationship with Popular, Inc. (“Popular”) for a significant portion of its revenues pursuant to the Company’s Master Services Agreement ("MSA") with them, and to grow the Company’s merchant acquiring business; as a regulated institution, the likelihood that the Company will be required to obtain regulatory approval before engaging in certain new activities or businesses, whether organically or by acquisition, and its potential inability to obtain such approval on a timely basis or at all, which may make transactions more expensive or impossible to complete, or make us less attractive to potential sellers; the Company’s ability to renew its client contracts on terms favorable to the Company, including the contract with Popular, and any significant concessions the Company may grant to Popular with respect to pricing or other key terms arising out of any disputes or in anticipation of the negotiation of the extension of the MSA, both in respect of the current term and any extension of the MSA; the Company’s dependence on its processing systems, technology infrastructure, security systems and fraudulent payment detection systems, as well as on the Company’s personnel and certain third parties with whom it does business, and the risks to the Company’s business if its systems are hacked or otherwise compromised; the Company’s ability to develop, install and adopt new software, technology and computing systems; a decreased client base due to consolidations and failures in the financial services industry; the credit risk of the Company’s merchant clients, for which it may also be liable; the continuing market position of the ATH network; a reduction in consumer confidence, whether as a result of a global economic downturn or otherwise, which leads to a decrease in consumer spending; the Company’s dependence on credit card associations, including any adverse changes in credit card association or network rules or fees; changes in the regulatory environment and changes in international, legal, tax, political, administrative or economic conditions; the geographical concentration of the Company’s business in Puerto Rico, including its business with the government of Puerto Rico and its instrumentalities, which are facing severe political and fiscal challenges; additional adverse changes in the general economic conditions in Puerto Rico, whether as a result of the government’s debt crisis or otherwise, including the continued migration of Puerto Ricans to the U.S. mainland, which could negatively affect the Company’s customer base, general consumer spending, the Company’s cost of operations and the Company’s ability to hire and retain qualified employees; operating an international business in Latin America and the Caribbean, in jurisdictions with potential political and economic instability; the Company’s ability to protect its intellectual property rights against infringement and to defend itself against claims of infringement brought by third parties; the Company’s ability to comply with U.S. federal, state, local and foreign regulatory requirements; evolving industry standards and adverse changes in global economic, political and other conditions; the Company’s level of indebtedness and restrictions contained in the Company’s debt agreements, including the secured credit facilities, as well as debt that could be incurred in the future; the Company’s ability to prevent a cybersecurity attack or breach to its information security; the possibility that the Company could lose its preferential tax rate in Puerto Rico; the possibility of future catastrophic hurricanes, earthquakes and other potential natural disasters affecting the Company’s main markets in Latin America and the Caribbean; uncertainty related to the effect of the discontinuation of the London Interbank Offered Rate at the end of 2021; and the continued impact of the COVID-19 pandemic and measures taken in response to the outbreak, on the Company’s resources, net income and liquidity due to current and future disruptions in operations as well as the macroeconomic instability caused by the pandemic.
Consideration should be given to the areas of risk described above, as well as those risks set forth under the headings “Forward-Looking Statements” and “Risk Factors” in the reports we file with the SEC from time to time, in connection with considering any forward-looking statements that may be made by us and our businesses generally. We undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events unless we are required to do so by law.
| EVERTEC, Inc. |
| Schedule 1: Unaudited Condensed Consolidated Statements of Income and Comprehensive Income |
|
|
|
|
| Three months ended March 31, |
|
|
|
|
| 2022 |
|
|
| 2021 |
| (Dollar amounts in thousands, except share data) |
|
|
|
|
|
|
|
|
| Revenues |
|
|
| $ |
| 150,248 |
|
|
|
|
| $ |
| 139,528 |
|
|
|
|
|
|
|
|
|
|
|
|
| Operating costs and expenses |
|
|
|
|
|
|
|
|
| Cost of revenues, exclusive of depreciation and amortization |
|
|
|
|
| 64,659 |
|
|
|
|
|
|
| 59,804 |
|
|
| Selling, general and administrative expenses |
|
|
|
|
| 20,384 |
|
|
|
|
|
|
| 16,102 |
|
|
| Depreciation and amortization |
|
|
|
|
| 19,160 |
|
|
|
|
|
|
| 18,623 |
|
|
| Total operating costs and expenses |
|
|
|
|
| 104,203 |
|
|
|
|
|
|
| 94,529 |
|
|
| Income from operations |
|
|
|
|
| 46,045 |
|
|
|
|
|
|
| 44,999 |
|
|
| Non-operating income (expenses) |
|
|
|
|
|
|
|
|
| Interest income |
|
|
|
|
| 667 |
|
|
|
|
|
|
| 389 |
|
|
| Interest expense |
|
|
|
|
| (5,547 |
| ) |
|
|
|
|
| (5,906 |
| ) |
| Earnings of equity method investment |
|
|
|
|
| 570 |
|
|
|
|
|
|
| 502 |
|
|
| Other income, net |
|
|
|
|
| 3,306 |
|
|
|
|
|
|
| 328 |
|
|
| Total non-operating expenses |
|
|
|
|
| (1,004 |
| ) |
|
|
|
|
| (4,687 |
| ) |
| Income before income taxes |
|
|
|
|
| 45,041 |
|
|
|
|
|
|
| 40,312 |
|
|
| Income tax expense |
|
|
|
|
| 6,175 |
|
|
|
|
|
|
| 4,708 |
|
|
| Net income |
|
|
|
|
| 38,866 |
|
|
|
|
|
|
| 35,604 |
|
|
| Less: Net (loss) income attributable to non-controlling interest |
|
|
|
|
| (32 |
| ) |
|
|
|
|
| 101 |
|
|
| Net income attributable to EVERTEC, Inc.’s common stockholders |
|
|
|
|
| 38,898 |
|
|
|
|
|
|
| 35,503 |
|
|
| Other comprehensive (loss) income, net of tax |
|
|
|
|
|
|
|
|
| Foreign currency translation adjustments |
|
|
|
|
| 2,214 |
|
|
|
|
|
|
| (2,613 |
| ) |
| Gain on cash flow hedges |
|
|
|
|
| 9,725 |
|
|
|
|
|
|
| 4,189 |
|
|
| Unrealized loss on change in fair value of debt securities available-for-sale |
|
|
|
|
| (27 |
| ) |
|
|
|
|
| — |
|
|
| Total comprehensive income attributable to EVERTEC, Inc.’s common stockholders |
|
|
| $ |
| 50,810 |
|
|
|
|
| $ |
| 37,079 |
|
|
| Net income per common share: |
|
|
|
|
|
|
|
|
| Basic |
|
|
| $ |
| 0.54 |
|
|
|
|
| $ |
| 0.49 |
|
|
| Diluted |
|
|
| $ |
| 0.53 |
|
|
|
|
| $ |
| 0.49 |
|
|
| Shares used in computing net income per common share: |
|
|
|
|
|
|
|
|
| Basic |
|
|
|
|
| 71,965,664 |
|
|
|
|
|
|
| 72,150,529 |
|
|
| Diluted |
|
|
|
|
| 72,853,216 |
|
|
|
|
|
|
| 72,949,401 |
|
|
| EVERTEC, Inc. |
| Schedule 2: Unaudited Condensed Consolidated Balance Sheets |
| (In thousands) |
|
|
| March 31, 2022 |
|
|
| December 31, 2021 |
| Assets |
|
|
|
|
|
|
|
|
| Current Assets: |
|
|
|
|
|
|
|
|
| Cash and cash equivalents |
|
|
| $ |
| 283,610 |
|
|
|
|
| $ |
| 266,351 |
|
|
| Restricted cash |
|
|
|
|
| 20,295 |
|
|
|
|
|
|
| 19,566 |
|
|
| Accounts receivable, net |
|
|
|
|
| 105,132 |
|
|
|
|
|
|
| 113,285 |
|
|
| Prepaid expenses and other assets |
|
|
|
|
| 41,533 |
|
|
|
|
|
|
| 37,148 |
|
|
| Assets held-for-sale |
|
|
|
|
| 23,007 |
|
|
|
|
|
|
| — |
|
|
| Total current assets |
|
|
|
|
| 473,577 |
|
|
|
|
|
|
| 436,350 |
|
|
| Debt securities available-for-sale, at fair value |
|
|
|
|
| 3,005 |
|
|
|
|
|
|
| 3,041 |
|
|
| Investment in equity investee |
|
|
|
|
| 14,365 |
|
|
|
|
|
|
| 12,054 |
|
|
| Property and equipment, net |
|
|
|
|
| 49,509 |
|
|
|
|
|
|
| 48,533 |
|
|
| Operating lease right-of-use asset |
|
|
|
|
| 21,562 |
|
|
|
|
|
|
| 21,229 |
|
|
| Goodwill |
|
|
|
|
| 389,027 |
|
|
|
|
|
|
| 393,318 |
|
|
| Other intangible assets, net |
|
|
|
|
| 191,164 |
|
|
|
|
|
|
| 213,288 |
|
|
| Deferred tax asset |
|
|
|
|
| 7,113 |
|
|
|
|
|
|
| 6,910 |
|
|
| Net investment in leases |
|
|
|
|
| 54 |
|
|
|
|
|
|
| 107 |
|
|
| Other long-term assets |
|
|
|
|
| 12,193 |
|
|
|
|
|
|
| 9,926 |
|
|
| Total assets |
|
|
| $ |
| 1,161,569 |
|
|
|
|
| $ |
| 1,144,756 |
|
|
| Liabilities and stockholders’ equity |
|
|
|
|
|
|
|
|
| Current Liabilities: |
|
|
|
|
|
|
|
|
| Accrued liabilities |
|
|
| $ |
| 71,304 |
|
|
|
|
| $ |
| 74,540 |
|
|
| Accounts payable |
|
|
|
|
| 30,470 |
|
|
|
|
|
|
| 28,484 |
|
|
| Contract liability |
|
|
|
|
| 21,360 |
|
|
|
|
|
|
| 17,398 |
|
|
| Income tax payable |
|
|
|
|
| 10,135 |
|
|
|
|
|
|
| 7,132 |
|
|
| Current portion of long-term debt |
|
|
|
|
| 21,125 |
|
|
|
|
|
|
| 19,750 |
|
|
| Current portion of operating lease liability |
|
|
|
|
| 6,119 |
|
|
|
|
|
|
| 5,580 |
|
|
| Total current liabilities |
|
|
|
|
| 160,513 |
|
|
|
|
|
|
| 152,884 |
|
|
| Long-term debt |
|
|
|
|
| 438,754 |
|
|
|
|
|
|
| 444,785 |
|
|
| Deferred tax liability |
|
|
|
|
| 2,347 |
|
|
|
|
|
|
| 2,369 |
|
|
| Contract liability - long term |
|
|
|
|
| 36,726 |
|
|
|
|
|
|
| 36,258 |
|
|
| Operating lease liability - long-term |
|
|
|
|
| 16,660 |
|
|
|
|
|
|
| 16,456 |
|
|
| Derivative liability |
|
|
|
|
| 2,848 |
|
|
|
|
|
|
| 13,392 |
|
|
| Other long-term liabilities |
|
|
|
|
| 8,573 |
|
|
|
|
|
|
| 8,344 |
|
|
| Total liabilities |
|
|
|
|
| 666,421 |
|
|
|
|
|
|
| 674,488 |
|
|
| Stockholders’ equity |
|
|
|
|
|
|
|
|
| Preferred stock, par value $0.01; 2,000,000 shares authorized; none issued |
|
|
|
|
| — |
|
|
|
|
|
|
| — |
|
|
| Common stock, par value $0.01; 206,000,000 shares authorized; 71,699,298 shares issued and outstanding as of March 31, 2022 (December 31, 2021 - 71,969,856) |
|
|
|
|
| 717 |
|
|
|
|
|
|
| 719 |
|
|
| Additional paid-in capital |
|
|
|
|
| — |
|
|
|
|
|
|
| 7,565 |
|
|
| Accumulated earnings |
|
|
|
|
| 526,370 |
|
|
|
|
|
|
| 506,051 |
|
|
| Accumulated other comprehensive loss, net of tax |
|
|
|
|
| (36,211 |
| ) |
|
|
|
|
| (48,123 |
| ) |
| Total EVERTEC, Inc. stockholders’ equity |
|
|
|
|
| 490,876 |
|
|
|
|
|
|
| 466,212 |
|
|
| Non-controlling interest |
|
|
|
|
| 4,272 |
|
|
|
|
|
|
| 4,056 |
|
|
| Total equity |
|
|
|
|
| 495,148 |
|
|
|
|
|
|
| 470,268 |
|
|
| Total liabilities and equity |
|
|
| $ |
| 1,161,569 |
|
|
|
|
| $ |
| 1,144,756 |
|
|
| EVERTEC, Inc. |
| Schedule 3: Unaudited Condensed Consolidated Statements of Cash Flows |
|
|
|
|
| Three months ended March 31, |
|
|
|
|
| 2022 |
|
|
| 2021 |
| Cash flows from operating activities |
|
|
|
|
|
|
|
|
| Net income |
|
|
| $ |
| 38,866 |
|
|
|
|
| $ |
| 35,604 |
|
|
| Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
| Depreciation and amortization |
|
|
|
|
| 19,160 |
|
|
|
|
|
|
| 18,623 |
|
|
| Amortization of debt issue costs and accretion of discount |
|
|
|
|
| 404 |
|
|
|
|
|
|
| 569 |
|
|
| Operating lease amortization |
|
|
|
|
| 1,450 |
|
|
|
|
|
|
| 1,492 |
|
|
| (Release) provision for expected credit losses and sundry losses |
|
|
|
|
| 59 |
|
|
|
|
|
|
| (184 |
| ) |
| Deferred tax benefit |
|
|
|
|
| (702 |
| ) |
|
|
|
|
| (890 |
| ) |
| Share-based compensation |
|
|
|
|
| 4,279 |
|
|
|
|
|
|
| 3,380 |
|
|
| Loss on disposition of property and equipment and impairment of intangible |
|
|
|
|
| 91 |
|
|
|
|
|
|
| 1,042 |
|
|
| Earnings of equity method investment |
|
|
|
|
| (570 |
| ) |
|
|
|
|
| (502 |
| ) |
| Decrease (increase) in assets: |
|
|
|
|
|
|
|
|
| Accounts receivable, net |
|
|
|
|
| 7,060 |
|
|
|
|
|
|
| (4,048 |
| ) |
| Prepaid expenses and other assets |
|
|
|
|
| (5,573 |
| ) |
|
|
|
|
| (2,539 |
| ) |
| Other long-term assets |
|
|
|
|
| (3,319 |
| ) |
|
|
|
|
| 833 |
|
|
| (Decrease) increase in liabilities: |
|
|
|
|
|
|
|
|
| Accrued liabilities and accounts payable |
|
|
|
|
| 1,773 |
|
|
|
|
|
|
| (18,457 |
| ) |
| Income tax payable |
|
|
|
|
| 2,248 |
|
|
|
|
|
|
| 82 |
|
|
| Contract liability |
|
|
|
|
| 4,387 |
|
|
|
|
|
|
| 1,185 |
|
|
| Operating lease liabilities |
|
|
|
|
| 23 |
|
|
|
|
|
|
| (1,611 |
| ) |
| Other long-term liabilities |
|
|
|
|
| 714 |
|
|
|
|
|
|
| 167 |
|
|
| Total adjustments |
|
|
|
|
| 31,484 |
|
|
|
|
|
|
| (858 |
| ) |
| Net cash provided by operating activities |
|
|
|
|
| 70,350 |
|
|
|
|
|
|
| 34,746 |
|
|
| Cash flows from investing activities |
|
|
|
|
|
|
|
|
| Additions to software |
|
|
|
|
| (8,669 |
| ) |
|
|
|
|
| (11,971 |
| ) |
| Acquisition of customer relationship |
|
|
|
|
| — |
|
|
|
|
|
|
| (14,750 |
| ) |
| Property and equipment acquired |
|
|
|
|
| (5,627 |
| ) |
|
|
|
|
| (4,724 |
| ) |
| Proceeds from sales of property and equipment |
|
|
|
|
| 6 |
|
|
|
|
|
|
| — |
|
|
| Acquisition of available-for-sale debt securities |
|
|
|
|
| — |
|
|
|
|
|
|
| (2,968 |
| ) |
| Net cash used in investing activities |
|
|
|
|
| (14,290 |
| ) |
|
|
|
|
| (34,413 |
| ) |
| Cash flows from financing activities |
|
|
|
|
|
|
|
|
| Statutory withholding taxes paid on share-based compensation |
|
|
|
|
| (5,648 |
| ) |
|
|
|
|
| (8,728 |
| ) |
| Repayment of short-term borrowings for purchase of equipment and software |
|
|
|
|
| (806 |
| ) |
|
|
|
|
| (758 |
| ) |
| Dividends paid |
|
|
|
|
| (3,598 |
| ) |
|
|
|
|
| (3,605 |
| ) |
| Repurchase of common stock |
|
|
|
|
| (21,179 |
| ) |
|
|
|
|
| (14,268 |
| ) |
| Repayment of long-term debt |
|
|
|
|
| (4,938 |
| ) |
|
|
|
|
| (21,357 |
| ) |
| Net cash used in financing activities |
|
|
|
|
| (36,169 |
| ) |
|
|
|
|
| (48,716 |
| ) |
| Effect of foreign exchange rate on cash, cash equivalents and restricted cash |
|
|
|
|
| (1,903 |
| ) |
|
|
|
|
| 2,700 |
|
|
| Net increase (decrease) in cash, cash equivalents and restricted cash |
|
|
|
|
| 17,988 |
|
|
|
|
|
|
| (45,683 |
| ) |
| Cash, cash equivalents and restricted cash at beginning of the period |
|
|
|
|
| 285,917 |
|
|
|
|
|
|
| 221,105 |
|
|
| Cash, cash equivalents and restricted cash at end of the period |
|
|
| $ |
| 303,905 |
|
|
|
|
| $ |
| 175,422 |
|
|
| Reconciliation of cash, cash equivalents and restricted cash |
|
|
|
|
|
|
|
|
| Cash and cash equivalents |
|
|
| $ |
| 283,610 |
|
|
|
|
| $ |
| 156,363 |
|
|
| Restricted cash |
|
|
|
|
| 20,295 |
|
|
|
|
|
|
| 19,059 |
|
|
| Cash, cash equivalents and restricted cash |
|
|
| $ |
| 303,905 |
|
|
|
|
| $ |
| 175,422 |
|
|
| EVERTEC, Inc. |
| Schedule 4: Unaudited Segment Information |
|
|
| Three months ended March 31, 2022 |
| (In thousands) |
| Payment Services - Puerto Rico & Caribbean |
|
|
| Payment Services - Latin America |
|
|
| Merchant Acquiring, net |
|
|
| Business Solutions |
|
|
| Corporate and Other (1) |
|
|
| Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenues |
| $ |
| 40,008 |
|
|
| $ |
| 28,783 |
|
|
| $ |
| 35,629 |
|
|
| $ |
| 62,624 |
|
|
| $ |
| (16,796 |
| ) |
|
|
| $ |
| 150,248 |
| Operating costs and expenses |
|
|
| 21,280 |
|
|
|
|
| 23,587 |
|
|
|
|
| 20,204 |
|
|
|
|
| 38,928 |
|
|
|
|
| 204 |
|
|
|
|
|
|
| 104,203 |
| Depreciation and amortization |
|
|
| 4,480 |
|
|
|
|
| 2,812 |
|
|
|
|
| 1,019 |
|
|
|
|
| 4,763 |
|
|
|
|
| 6,086 |
|
|
|
|
|
|
| 19,160 |
| Non-operating income (expenses) |
|
|
| 236 |
|
|
|
|
| 3,606 |
|
|
|
|
| 300 |
|
|
|
|
| 700 |
|
|
|
|
| (966 |
| ) |
|
|
|
|
| 3,876 |
| EBITDA |
|
|
| 23,444 |
|
|
|
|
| 11,614 |
|
|
|
|
| 16,744 |
|
|
|
|
| 29,159 |
|
|
|
|
| (11,880 |
| ) |
|
|
|
|
| 69,081 |
| Compensation and benefits (2) |
|
|
| 337 |
|
|
|
|
| 813 |
|
|
|
|
| 340 |
|
|
|
|
| 445 |
|
|
|
|
| 2,344 |
|
|
|
|
|
|
| 4,279 |
| Transaction, refinancing and other fees (3) |
|
|
| — |
|
|
|
|
| — |
|
|
|
|
| — |
|
|
|
|
| — |
|
|
|
|
| 2,025 |
|
|
|
|
|
|
| 2,025 |
| Adjusted EBITDA |
| $ |
| 23,781 |
|
|
| $ |
| 12,427 |
|
|
| $ |
| 17,084 |
|
|
| $ |
| 29,604 |
|
|
| $ |
| (7,511 |
| ) |
|
|
| $ |
| 75,385 |
| _______________________ |
| (1) |
| Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations. Intersegment revenue eliminations predominantly reflect the $10.9 million processing fee from Payments Services - Puerto Rico & Caribbean to Merchant Acquiring, intercompany software developments and transaction processing of $3.3 million from Payment Services- Latin America to both Payment Services- Puerto Rico & Caribbean and Business Solutions, and transaction processing and monitoring fees of $2.6 million from Payment Services - Puerto Rico & Caribbean to Payment Services - Latin America. |
| (2) |
| Primarily represents share-based compensation. |
| (3) |
| Primarily represents fees and expenses associated with corporate transactions as defined in the 2018 Credit Agreement, and the elimination of non-cash equity earnings from our 19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A. |
|
|
| Three months ended March 31, 2021 |
| (In thousands) |
| Payment Services - Puerto Rico & Caribbean |
|
|
| Payment Services - Latin America |
|
|
| Merchant Acquiring, net |
|
|
| Business Solutions |
|
|
| Corporate and Other (1) |
|
|
| Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenues |
| $ |
| 36,264 |
|
|
| $ |
| 25,014 |
|
|
| $ |
| 30,867 |
|
|
| $ |
| 60,611 |
|
|
| $ |
| (13,228 |
| ) |
|
|
| $ |
| 139,528 |
| Operating costs and expenses |
|
|
| 20,489 |
|
|
|
|
| 19,846 |
|
|
|
|
| 16,466 |
|
|
|
|
| 36,689 |
|
|
|
|
| 1,039 |
|
|
|
|
|
|
| 94,529 |
| Depreciation and amortization |
|
|
| 3,942 |
|
|
|
|
| 2,934 |
|
|
|
|
| 654 |
|
|
|
|
| 4,794 |
|
|
|
|
| 6,299 |
|
|
|
|
|
|
| 18,623 |
| Non-operating income (expenses) |
|
|
| 185 |
|
|
|
|
| 1,108 |
|
|
|
|
| 231 |
|
|
|
|
| 553 |
|
|
|
|
| (1,247 |
| ) |
|
|
|
|
| 830 |
| EBITDA |
|
|
| 19,902 |
|
|
|
|
| 9,210 |
|
|
|
|
| 15,286 |
|
|
|
|
| 29,269 |
|
|
|
|
| (9,215 |
| ) |
|
|
|
|
| 64,452 |
| Compensation and benefits (2) |
|
|
| 241 |
|
|
|
|
| 809 |
|
|
|
|
| 231 |
|
|
|
|
| 363 |
|
|
|
|
| 1,860 |
|
|
|
|
|
|
| 3,504 |
| Transaction, refinancing and other fees (3) |
|
|
| 660 |
|
|
|
|
| — |
|
|
|
|
| — |
|
|
|
|
| — |
|
|
|
|
| 273 |
|
|
|
|
|
|
| 933 |
| Adjusted EBITDA |
| $ |
| 20,803 |
|
|
| $ |
| 10,019 |
|
|
| $ |
| 15,517 |
|
|
| $ |
| 29,632 |
|
|
| $ |
| (7,082 |
| ) |
|
|
| $ |
| 68,889 |
| _______________________ |
| (1) |
| Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations. Intersegment revenue eliminations predominantly reflect the $9.7 million processing fee from Payments Services - Puerto Rico & Caribbean to Merchant Acquiring and intercompany software developments and transaction processing of $2.3 million from Payment Services - Latin America to Payment Services - Puerto Rico & Caribbean and transaction processing and monitoring fees of $1.2 million from Payment Services - Puerto Rico & Caribbean to Payment Services - Latin America. |
| (2) |
| Primarily represents share-based compensation. |
| (3) |
| Primarily represents fees and expenses associated with corporate transactions as defined in the 2018 Credit Agreement and the elimination of non-cash equity earnings from our 19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A. and a software impairment charge. |
| EVERTEC, Inc. |
| Schedule 5: Reconciliation of GAAP to Non-GAAP Operating Results |
|
|
|
|
| Three months ended March 31, |
| (Dollar amounts in thousands, except share data) |
|
|
| 2022 |
|
|
| 2021 |
| Net income |
|
|
| $ |
| 38,866 |
|
|
|
|
| $ |
| 35,604 |
|
|
| Income tax expense |
|
|
|
|
| 6,175 |
|
|
|
|
|
|
| 4,708 |
|
|
| Interest expense, net |
|
|
|
|
| 4,880 |
|
|
|
|
|
|
| 5,517 |
|
|
| Depreciation and amortization |
|
|
|
|
| 19,160 |
|
|
|
|
|
|
| 18,623 |
|
|
| EBITDA |
|
|
|
|
| 69,081 |
|
|
|
|
|
|
| 64,452 |
|
|
| Equity income (1) |
|
|
|
|
| (570 |
| ) |
|
|
|
|
| (502 |
| ) |
| Compensation and benefits (2) |
|
|
|
|
| 4,279 |
|
|
|
|
|
|
| 3,504 |
|
|
| Transaction, refinancing and other fees (3) |
|
|
|
|
| 2,595 |
|
|
|
|
|
|
| 1,435 |
|
|
| Adjusted EBITDA |
|
|
|
|
| 75,385 |
|
|
|
|
|
|
| 68,889 |
|
|
| Operating depreciation and amortization (4) |
|
|
|
|
| (11,252 |
| ) |
|
|
|
|
| (10,882 |
| ) |
| Cash interest expense, net (5) |
|
|
|
|
| (4,629 |
| ) |
|
|
|
|
| (5,076 |
| ) |
| Income tax expense (6) |
|
|
|
|
| (8,677 |
| ) |
|
|
|
|
| (7,756 |
| ) |
| Non-controlling interest (7) |
|
|
|
|
| 10 |
|
|
|
|
|
|
| (143 |
| ) |
| Adjusted net income |
|
|
| $ |
| 50,837 |
|
|
|
|
| $ |
| 45,032 |
|
|
| Net income per common share (GAAP): |
|
|
|
|
|
|
|
|
| Diluted |
|
|
| $ |
| 0.53 |
|
|
|
|
| $ |
| 0.49 |
|
|
| Adjusted Earnings per common share (Non-GAAP): |
|
|
|
|
|
|
|
|
| Diluted |
|
|
| $ |
| 0.70 |
|
|
|
|
| $ |
| 0.62 |
|
|
| Shares used in computing adjusted earnings per common share: |
|
|
|
|
|
|
|
|
| Diluted |
|
|
|
|
| 72,853,216 |
|
|
|
|
|
|
| 72,949,401 |
|
|
| _______________________ |
| 1) |
| Represents the elimination of non-cash equity earnings from our 19.99% equity investment in Dominican Republic, Consorcio de Tarjetas Dominicanas S.A. ("CONTADO"). |
| 2) |
| Primarily represents share-based compensation. |
| 3) |
| Represents fees and expenses associated with corporate transactions as defined in the 2018 Credit Agreement, recorded as part of selling, general and administrative expenses and a software impairment charge. |
| 4) |
| Represents operating depreciation and amortization expense, which excludes amounts generated as a result of merger and acquisition activity. |
| 5) |
| Represents interest expense, less interest income, as they appear on the condensed consolidated statements of income and comprehensive income, adjusted to exclude non-cash amortization of the debt issue costs, premium and accretion of discount. |
| 6) |
| Represents income tax expense calculated on adjusted pre-tax income using the applicable GAAP tax rate, adjusted for certain discrete items. |
| 7) |
| Represents the 35% non-controlling equity interest in Evertec Colombia, net of amortization for intangibles created as part of the purchase. |
| EVERTEC, Inc. |
| Schedule 6: Outlook Summary and Reconciliation to Non-GAAP Adjusted Earnings per Share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2022 Outlook (1) |
|
|
| 2021 |
| (Dollar amounts in millions, except per share data) |
|
|
| Low |
|
|
|
|
|
|
| High |
|
|
|
|
| Revenues |
|
|
| $ |
| 597 |
|
|
|
|
| to |
|
|
| $ |
| 605 |
|
|
|
|
| $ |
| 590 |
|
|
| Earnings per Share (EPS) (GAAP) |
|
|
| $ |
| 1.87 |
|
|
|
|
| to |
|
|
| $ |
| 1.95 |
|
|
|
|
| $ |
| 2.21 |
|
|
| Per share adjustment to reconcile GAAP EPS to Non-GAAP Adjusted EPS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Share-based comp, non-cash equity earnings and other (2) |
|
|
|
|
| 0.29 |
|
|
|
|
|
|
|
|
|
|
| 0.29 |
|
|
|
|
|
|
| 0.23 |
|
|
| Merger and acquisition related depreciation and amortization (3) |
|
|
|
|
| 0.44 |
|
|
|
|
|
|
|
|
|
|
| 0.44 |
|
|
|
|
|
|
| 0.43 |
|
|
| Non-cash interest expense (4) |
|
|
|
|
| 0.02 |
|
|
|
|
|
|
|
|
|
|
| 0.02 |
|
|
|
|
|
|
| 0.02 |
|
|
| Tax effect of Non-GAAP adjustments (5) |
|
|
|
|
| (0.10 |
| ) |
|
|
|
|
|
|
|
|
| (0.10 |
| ) |
|
|
|
|
| (0.15 |
| ) |
| Total adjustments |
|
|
|
|
| 0.65 |
|
|
|
|
|
|
|
|
|
|
| 0.65 |
|
|
|
|
|
|
| 0.53 |
|
|
| Adjusted EPS (Non-GAAP) |
|
|
| $ |
| 2.52 |
|
|
|
|
| to |
|
|
| $ |
| 2.60 |
|
|
|
|
| $ |
| 2.74 |
|
|
| Shares used in computing adjusted earnings per common share |
|
|
|
|
|
|
|
|
|
|
|
|
| 70.5 |
|
|
|
|
|
|
| 72.9 |
|
|
| _______________________ |
| (1) |
| Assumes the Popular transaction closes mid-year 2022 and excludes potential one-time effects from the transaction. |
| (2) |
| Represents share-based compensation, the elimination of non-cash equity earnings from the Company's 19.99% equity investment in CONTADO, severance and other adjustments to reconcile GAAP EPS to Non-GAAP EPS. |
| (3) |
| Represents depreciation and amortization expenses amounts generated as a result of the Merger and intangibles related to acquisitions. |
| (4) |
| Represents non-cash amortization of the debt issue costs, premium and accretion of discount. |
| (5) |
| Represents income tax expense on non-GAAP adjustments using the applicable GAAP tax rate (anticipated at approximately 13% to 14%). |
View source version on businesswire.com: https://www.businesswire.com/news/home/20220428006045/en/
Investor
(787) 773-5442
IR@evertecinc.com