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Net 1 UEPS Technologies, Inc. Reports Fourth Quarter and Full Year 2015 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”)
Net 1 UEPS Technologies, Inc. Reports Fourth Quarter and Full Year 2015 Results
- Q4 2015 Revenue and FEPS of $164 million and $0.58, a constant currency increase after adjusting for the SASSA
recovery in 2014, of 22% and 30%, respectively;
- Strategic investments in Hong Kong and Nigeria-based businesses and ZAZOO partnerships with Funifi and BitX; and
- Cash and equivalents of $117.6 million as of June 30, 2015, and operating cash flow of $31.8 million in Q4 2015.
JOHANNESBURG, August 20, 2015 – Net1 (Nasdaq: UEPS; JSE: NT1) today released results for the fourth quarter and
full-year fiscal 2015.
Summary Financial Metrics
Three months ended June 30,
% change % change
2015 2014 in USD in ZAR
(All figures in USD ‘000s except per share data)
Revenue 164,286 182,753 (10%) 4%
Revenue excluding SASSA recovery(1)(2) 164,286 156,118 5% 22%
GAAP net income 23,914 28,584 (16%) (3%)
Fundamental net income(1) 27,233 44,362 (39%) (29%)
Fundamental net income excluding SASSA recovery(1) 27,233 25,185 8% 24%
GAAP earnings per share ($) 0.51 0.59 (13%) 1%
Fundamental earnings per share ($)(1) 0.58 0.91 (36%) (26%)
Fundamental earnings per share excluding SASSA recovery (1) 0.58 0.52 12% 30%
Fully-diluted shares outstanding (‘000’s) 46,944 48,855 (4%) (4%)
Average period USD/ ZAR exchange rate 12.04 10.42 16%
Year ended June 30,
% change % change
2015 2014 in USD in ZAR
(All figures in USD ‘000s except per share data)
Revenue 625,979 581,656 8% 18%
Revenue excluding SASSA recovery(1)(2) 625,979 555,021 13% 24%
GAAP net income 94,735 70,111 35% 49%
Fundamental net income(1) 108,205 101,343 7% 17%
Fundamental net income excluding SASSA recovery(1) 108,205 82,166 32% 45%
GAAP earnings per share ($) 2.03 1.51 34% 48%
Fundamental earnings per share ($)(1) 2.32 2.18 6% 17%
Fundamental earnings per share excluding SASSA recovery (1) 2.32 1.77 31% 44%
Fully-diluted shares outstanding (‘000’s) 46,913 46,603 1% 1%
Average period USD/ ZAR exchange rate 11.43 10.40 10%
(1)
Revenue excluding SASSA recovery, Fundamental net income, Fundamental net income excluding SASSA recovery, Fundamental
earnings per share and Fundamental earnings per share excluding SASSA recovery are non-GAAP measures and are 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.
(2)
Revenue excluding SASSA recovery is Revenue earned during 2014 less approximately $26.6 million received from SASSA related to
the recovery of additional implementation costs incurred during the beneficiary re-registration process in fiscal 2012 and
2013
Factors impacting comparability of our Q4 2015 and Q4 2014 results
- Unfavorable impact from the strengthening of the US dollar against the ZAR: The US dollar appreciated by 16%
against the ZAR during Q4 2015, which negatively impacted our reported results;
- Higher revenue resulting from an increase in low-margin prepaid airtime and electricity sales: Our revenue has
increased as a result of the growth of our prepaid electricity and prepaid airtime offering during Q4 2015, with
prepaid airtime having lower margins compared with our other South African businesses;
- Increased contribution by KSNET: Our results were positively impacted by growth in our South Korean operations;
- Growth in financial services: The expansion of our financial services offering resulted in higher year-over-year
revenue and operating income from UEPS-based lending during Q4 2015;
- Ad hoc hardware sales in fiscal 2015: We sold more terminals and cards during Q4 2015 as a result of ad hoc
orders received from our customers;
- $26.6 million recovery of expenses and 2014 implementation costs: In Q4 2014, we received approximately $26.6
million, or approximately $19.1 million, net of tax, from SASSA related to the recovery of additional
implementation costs incurred during the beneficiary re-registration process in fiscal 2012 and 2013; and
- Fair value charge resulting from issue of equity instruments pursuant to BEE transactions: The fair value non-
cash charge of $11.3 million related to our BEE transactions adversely impacted our reported results during Q4
2014.
Comments and Outlook
“I am thrilled with our 2015 performance as we were able to execute on our strategy extremely well. The continued local and
international interest we receive as a result of our proven ability to implement state of the art, functional and robust solutions
that allow for the financial inclusion of all citizens, as well as our card and mobile centric solutions that can be provided
individually or in unison, provides us with a bespoke end-to-end financial technology solution relevant to both developed and
developing world economies,” said Dr. Belamant, Chairman and CEO. “Our ZAZOO initiative is gaining momentum as
demonstrated by its financial performance, and its latest agreements with companies such as Uber, Microsoft, and BitX and
our investment in T24. ZAZOO’s pipeline has numerous other deals and it is well positioned to grow exponentially over a
short period of time. We also believe that our entry into Nigeria via our investment in One Credit provides us the opportunity
to deploy our entire solution in this vast, under-penetrated and profitable economy,” he concluded.
“Our financial and operating performance, including the increased investment in our newer growth and international
initiatives, continues to track the strategic developments in our business,” said Herman Kotzé, Chief Financial Officer of
Net1. “We expect to sustain the momentum in our business and continue our product, client and geographic diversification,
and for fiscal 2016 anticipate our fundamental earnings per share to be at least $2.57, assuming an updated constant currency
base of ZAR11.43/$1 and a share count of 46.7 million shares,” he concluded.
Results of Operations by Segment and Liquidity
Our operating metrics will be updated and posted on our website (www.net1.com).
South African transaction processing
Segment revenue was $59.8 million in Q4 2015, down 32% compared with Q4 2014 in USD and down 22% on a constant
currency basis. In ZAR, revenue increased 12% in fiscal 2015 compared to fiscal 2014 (after excluding the impact of the
recovery in fiscal 2014 of implementation costs related to our SASSA contract). The increase in segment revenues, exclusive
of such recovery, was primarily due to more low-margin transaction fees generated from beneficiaries using the South
African National Payment System and more inter-segment transaction processing activities. In addition, revenue from the
distribution of social welfare grants grew modestly during the year and was in-line with the increase in unique welfare
cardholder recipients, net of removal of invalid and fraudulent beneficiaries, offset by the loss of MediKredit revenue as a
result of the sale of that business.
Segment operating income margin was 19% and 44%, respectively, and decreased primarily due to the recovery of SASSA
implementation costs in 2014. Segment operating income margin excluding the recovery of implementation costs was 20%
for Q4 2014.
International transaction processing
Segment revenue was $42.6 million in Q4 2015, up 1% compared with Q4 2014 in USD and 17% on a constant currency
basis. Revenue increased primarily due to increased transaction processing activities in South Korea during Q4 2015.
Operating income during the year to date fiscal 2015 was higher due to increase in revenue contribution from KSNET, but
partially offset by ZAZOO start-up costs in the UK and India. Segment operating income margin in Q4 2015 and Q4 2014
was 17% and 16%, respectively.
Financial inclusion and applied technologies
Segment revenue was $73.0 million in Q4 2015, up 14% compared with Q4 2014 in USD and 32% on a constant currency
basis. Financial inclusion and applied technologies revenue and operating income increased primarily due to higher prepaid
airtime sales driven by the rollout of our prepaid airtime product, an increase in the number of UEPS-based loans as we rolled
out our product nationally, more ad hoc terminal and card sales and, in ZAR, an increase in intersegment revenues. Smart
Life did not contribute to operating income in fiscal 2015 and 2014 due to the FSB suspension of its license. Smart Life
resumed operating activities in early fiscal 2016, following the upliftment of suspension of its license by the FSB. Segment
operating income margin was 27% and 28%, respectively, and decreased primarily as a result of more low-margin prepaid
airtime and hardware sales.
Corporate/eliminations
The decrease in our corporate expenses in Q4 2015 resulted primarily from the non-cash charge related to the equity
instruments issued pursuant to our BEE transactions in Q4 2014 and lower US government investigation and US lawsuit
expenses, partially offset by increases in general corporate audit fees, executive emoluments and other corporate head office-
related expenses.
Cash flow and liquidity
At June 30, 2015, we had cash and cash equivalents of $117.6 million, up from $58.7 million at June 30, 2014. The increase
in our cash balances from June 30, 2014, was primarily due to the expansion of all of our core businesses, and to a lesser
extent, to the cash conservation resulting from the sale of loss-incurring businesses, offset by provisional tax payments,
investments, capital expenditures and the scheduled Korean debt repayment in October 2014.
Excluding the impact of interest received, interest paid under our Korean debt and taxes, the increase in cash from operating
activities resulted from improved trading activity during fiscal 2015. During fiscal 2015, we paid interest of $3.6 million
under our South Korean debt facility. Capital expenditures for Q4 2015 and 2014 were $11.6 million and $6.6 million,
respectively, and have increased primarily due to the acquisition of more payment processing terminals in South Korea and
ATMs 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 and earnings per share 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 amortization of KSNET debt facility fees and US government investigations-related and US
lawsuit expenses; as well as in fiscal 2015, a refund (net of taxes) related to Korean industry-wide litigation that has now
been finalized and in fiscal 2014, the equity instruments charged related to our December 2014 BEE transactions, transaction-
related costs and the net loss on deconsolidation of subsidiaries and business, net of tax.
Fundamental net income excluding SASSA recovery and fundamental earnings per share excluding SASSA recovery is
Fundamental net income and earnings per share less the recovery received from SASSA in 2014 of $19.2 million, after taxes.
Management believes that the fundamental net income and earnings per share, as well as the fundamental net income and
earnings per share excluding SASSA recovery, metrics enhances its own evaluation, as well as an investor’s understanding,
of our financial performance.
Attachment B presents the reconciliation between GAAP net income and earnings per share, basic, to fundamental net
income and earnings per share, basic and to fundamental net income and earnings per share, basic excluding recovery from
SASSA.
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 profit on sale of property, plant and equipment,
and, in fiscal 2014, the net loss on deconsolidation of subsidiaries and asset group, net of related tax effects. Attachment C
presents the reconciliation between our net income used to calculate earnings per share basic and diluted and HEPS basic and
diluted and the calculation of the denominator for headline diluted earnings per share.
Conference Call
We will host a conference call to review Q4 2015 results on August 21, 2015, at 8:00 Eastern Time. To participate in the call,
dial 1-855-481-5362 (US and Canada), 0808-162-4061 (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 the Net1 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 the Net1 website through September 13, 2015.
Fiscal 2016 earnings call dates
We expect to host quarterly conference calls to review our fiscal 2016 quarterly results in accordance with the schedule
provided in the table below:
Conference call to review quarter ended: Tentative date
September 30, 2015 (Q1, 2016) November 6, 2015
December 31, 2015 (Q2, 2016) February 5, 2016
March 31, 2016 (Q3, 2016) May 6, 2016
June 30, 2016 (Q4, 2016) August 26, 2016
The dates provided above are tentative and we will confirm the final dates and dial-in details closer to the quarterly
conference call date.
About Net1 (www.net1.com)
Net1 is a leading provider of alternative payment systems that leverage its Universal Electronic Payment System (“UEPS”) or
utilize its proprietary mobile technologies. The Company operates market-leading payment processors in South Africa
and the Republic of Korea.
UEPS permits the Company 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. Net1’s UEPS/EMV
solution is interoperable with global EMV standards that seamlessly enable access to all the UEPS functionality in a
traditional EMV environment. In addition to payments, UEPS can be used for banking, healthcare management, payroll,
remittances, voting and identification.
Net1’s mobile technologies include its proprietary mobile payments solution - MVC, which offers secure mobile-based
payments, as well as mobile banking and prepaid value-added services in developed and emerging countries. The Company
intends to deploy its varied mobile solutions through its ZAZOO business unit, which is an aggregation of innovative
technology companies and is based in the United Kingdom.
Net1 has a primary listing on the NASDAQ and a secondary listing on the Johannesburg Stock Exchange.
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
Head of Investor Relations
Phone: +1 917-767-6722
Email: dchopra@net1.com
NET 1 UEPS TECHNOLOGIES, INC.
Consolidated Statements of Operations
Unaudited (A)
Three months ended Year ended
June 30, June 30,
2015 2014 2015 2014
(In thousands, except per share data) (In thousands, except per share data)
REVENUE $ 164,286 $ 182,753 $ 625,979 $ 581,656
EXPENSE
Cost of goods sold, IT processing, servicing
and support 80,582 72,641 297,856 260,232
Selling, general and administration 40,797 46,156 158,919 168,072
Equity instruments issued pursuant to BEE
transactions - 11,268 - 11,268
Depreciation and amortization 10,294 10,041 40,685 40,286
OPERATING INCOME 32,613 42,647 128,519 101,798
INTEREST INCOME 4,467 4,824 16,355 14,817
INTEREST EXPENSE 1,096 1,761 4,456 7,473
INCOME BEFORE INCOME TAX EXPENSE 35,984 45,710 140,418 109,142
INCOME TAX EXPENSE 11,980 17,260 44,136 39,379
NET INCOME BEFORE EARNINGS FROM
EQUITY-ACCOUNTED INVESTMENTS 24,004 28,450 96,282 69,763
EARNINGS FROM EQUITY-ACCOUNTED
INVESTMENTS 219 96 452 298
NET INCOME 24,223 28,546 96,734 70,061
LESS (ADD): NET INCOME (LOSS)
ATTRIBUTABLE TO NON-CONTROLLING
INTEREST 309 (38) 1,999 (50)
NET INCOME ATTRIBUTABLE TO NET1 $ 23,914 $ 28,584 $ 94,735 $ 70,111
Net income per share, in United States dollars
Basic earnings attributable to Net1
shareholders $0.51 $0.59 $2.03 $1.51
Diluted earnings attributable to Net1
shareholders $0.51 $0.59 $2.02 $1.50
(A) – Derived from audited financial statements
NET 1 UEPS TECHNOLOGIES, INC.
Consolidated Balance Sheets
(A) (A)
June 30, June 30,
2015 2014
(In thousands, except share data)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 117,583 $ 58,672
Pre-funded social welfare grants receivable 2,306 4,809
Accounts receivable, net of allowances 148,768 148,067
Finance loans receivable, net of allowances 40,373 53,124
Inventory 12,979 10,785
Deferred income taxes 7,298 7,451
Total current assets before settlement assets 329,307 282,908
Settlement assets 661,916 725,987
Total current assets 991,223 1,008,895
PROPERTY, PLANT AND EQUIPMENT, net 52,320 47,797
EQUITY-ACCOUNTED INVESTMENTS 14,329 878
GOODWILL 166,437 186,576
INTANGIBLE ASSETS, net 47,124 68,514
OTHER LONG-TERM ASSETS, including reinsurance assets 14,997 38,285
TOTAL ASSETS 1,286,430 1,350,945
LIABILITIES 40,570
CURRENT LIABILITIES
Accounts payable 21,453 17,101
Other payables 45,595 42,257
Current portion of long-term borrowings 8,863 14,789
Income taxes payable 6,287 7,676
Total current liabilities before settlement obligations 82,198 81,823
Settlement obligations 661,916 725,987
Total current liabilities 744,114 807,810
DEFERRED INCOME TAXES 10,564 15,522
LONG-TERM BORROWINGS 50,762 62,388
OTHER LONG-TERM LIABILITIES, including insurance policy liabilities 2,205 23,477
TOTAL LIABILITIES 807,645 909,197
COMMITMENTS AND CONTINGENCIES
EQUITY
COMMON STOCK
Authorized: 200,000,000 with $0.001 par value;
Issued and outstanding shares, net of treasury - 2015:46,679,565; 2014:
47,819,299 64 63
PREFERRED STOCK
Authorized shares: 50,000,000 with $0.001 par value;
Issued and outstanding shares, net of treasury: 2015: -; 2014: - - -
ADDITIONAL PAID-IN-CAPITAL 213,896 202,401
TREASURY SHARES, AT COST: 2015: 18,057,228; 2014: 15,883,212 (214,520) (200,681)
ACCUMULATED OTHER COMPREHENSIVE LOSS (139,181) (82,741)
RETAINED EARNINGS 617,868 522,729
TOTAL NET1 EQUITY 478,127 441,771
NON-CONTROLLING INTEREST 658 (23)
TOTAL EQUITY 478,785 441,748
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 1,286,430 $ 1,350,945
(A) – Derived from audited financial statements
NET 1 UEPS TECHNOLOGIES, INC.
Consolidated Statements of Cash Flows
Unaudited A
Three months ended Year ended
June 30, June 30,
2015 2014 2015 2014
(In thousands) (In thousands)
Cash flows from operating activities
Net income $ 24,223 $ 28,546 $ 96,734 $ 70,061
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 10,294 10,041 40,685 40,286
Earnings from equity-accounted investments (219) (96) (452) (298)
Fair value adjustment 518 (104) 248 (55)
Interest payable 7 404 1,283 2,100
Facility fee amortized 38 81 208 738
Profit on disposal of property, plant and equipment (1) (392) (296) (434)
Profit on deconsolidation of subsidiaries and
business - 55 - 55
Stock compensation charge, net of forfeitures 513 898 3,195 3,718
Fair value of BEE equity instruments granted - 11,268 - 11,268
(Increase) Decrease in accounts and finance
loans receivable, and pre-funded grants
receivable (4,135) (33,926) 1,399 (101,447)
(Increase) Decrease in inventory (1,075) (199) (3,846) 780
Increase (Decrease) in accounts payable and
other payables 6,804 23,566 (850) 12,671
(Decrease) Increase in taxes payable (3,507) (3,908) 606 5,523
Decrease in deferred taxes (1,631) (4,802) (3,656) (7,821)
Net cash provided by operating activities 31,829 31,432 135,258 37,145
Cash flows from investing activities
Capital expenditures (11,614) (6,597) (36,436) (23,906)
Proceeds from disposal of property, plant and
equipment 80 866 857 2,990
Net cash outflow from sale of MediKredit - (669) - (669)
Proceeds from sale of business - 186 1,895 186
(Acquisition of equity of)/ capital reduction/
repayment of loan by equity-accounted investment (13,200) 564 (13,200) 539
Other investing activities, net - - (29) 570
Net change in settlement assets (22,853) 20,059 (12,570) (1,350)
Net cash (used in) provided by investing
activities (47,587) 14,409 (59,483) (21,640)
Cash flows from financing activities
Repayment of long-term borrowings - - (14,128) (87,008)
Long-term borrowings obtained 789 1,044 3,765 73,677
Acquisition of treasury stock - - (9,151) -
Sale of equity to non-controlling interest - - 1,407 -
Dividends paid to non-controlling interest - - (1,024) -
Proceeds from issue of common stock 265 110 2,045 198
Payment of facility fee - - - (872)
Proceeds from bank overdraft - - - 24,580
Repayment of bank overdraft - - - (23,335)
Acquisition of interests in KSNET - - - (1,968)
Net change in settlement obligations 22,853 (20,059) 12,570 1,350
Net cash provided by (used in) financing
activities 23,907 (18,905) (4,516) (13,378)
Effect of exchange rate changes on cash (1,568) 861 (12,348) 2,880
Net increase in cash and cash equivalents 6,581 27,797 58,911 5,007
Cash and cash equivalents – beginning of year 111,002 30,875 58,672 53,665
Cash and cash equivalents at end of year $ 117,583 $ 58,672 $ 117,583 $ 58,672
(A) – Derived from audited financial statements
Net 1 UEPS Technologies, Inc.
Attachment A
Operating segment revenue, operating income and operating margin:
Three months ended June 30, 2015 and 2014 and March 31, 2015
Change – constant
Change - actual exchange rate(1)
Q4 ‘15 Q4 ‘15 Q4 ‘15 Q4 ‘15
vs vs vs vs
Key segmental data, in $ ’000, Q4 ‘15 Q4 ‘14 Q3 ‘15 Q4‘14 Q3 ‘15 Q4‘14 Q3 ‘15
Revenue:
South African transaction processing ........... $59,774 $88,265 $57,999 (32%) 3% (22%) 6%
International transaction processing ............. 42,573 42,201 38,311 1% 11% 17% 14%
Financial inclusion and applied
technologies .................................................. 73,042 64,093 66,830 14% 9% 32% 12%
Subtotal: Operating segments .............. 175,389 194,559 163,140 (10%) 8% 4% 10%
Intersegment eliminations .................... (11,103) (11,806) (12,019) (6%) (8%) 9% (5%)
Consolidated revenue ................... $164,286 $182,753 $151,121 (10%) 9% 4% 12%
Operating income (loss):
South African transaction processing ........... $11,268 $38,675 $13,218 (71%) (15%) (66%) (13%)
International transaction processing ............. 7,134 6,647 6,579 7% 8% 24% 11%
Financial inclusion and applied
technologies .................................................. 19,385 18,126 17,906 7% 8% 24% 11%
Subtotal: Operating segments .............. 37,787 63,448 37,703 (40%) 0% (31%) 3%
Corporate/Eliminations ........................ (5,174) (20,801) (5,737) (75%) (10%) (71%) (7%)
Consolidated operating income ... $32,613 $42,647 $31,966 (24%) 2% (12%) 5%
Operating income margin (%)
South African transaction processing ........... 19% 44% 23%
International transaction processing ............. 17% 16% 17%
Financial inclusion and applied
technologies .................................................. 27% 28% 27%
Consolidated operating margin ............ 20% 23% 21%
(1) – This information shows what the change in these items would have been if the USD/ ZAR exchange rate that prevailed during
the fourth quarter of fiscal 2015 also prevailed during the fourth quarter of fiscal 2014 and the third quarter of fiscal 2015.
Year ended June 30, 2015 and 2014
Change –
constant
Change - exchange
actual rate(1)
F2015 F2015
vs vs
Key segmental data, in ’000, except margins F2015 F2014 F2015 F2015
Revenue:
South African transaction processing ............................... 236,452 261,577 (10%) (1%)
International transaction processing ................................. 164,554 152,725 8% 18%
Financial inclusion and applied technologies ................... 272,600 207,595 31% 44%
Subtotal: Operating segments .................................. 673,606 621,897 8% 19%
Intersegment eliminations ........................................ (47,627) (40,241) 18% 30%
Consolidated revenue ....................................... 625,979 581,656 8% 18%
Operating income (loss):
South African transaction processing ............................... 51,008 61,401 (17%) (9%)
International transaction processing ................................. 26,805 21,952 22% 34%
Financial inclusion and applied technologies ................... 72,725 60,685 20% 32%
Subtotal: Operating segments .................................. 150,538 144,038 5% 15%
Corporate/Eliminations ............................................ (22,019) (42,240) (48%) (43%)
Consolidated operating income ....................... 128,519 101,798 26% 39%
Operating income margin (%)
South African transaction processing ............................... 22% 23%
International transaction processing ................................. 16% 14%
Financial inclusion and applied technologies ................... 27% 29%
Overall operating margin ......................................... 21% 18%
(1) – This information shows what the change in these items would have been if the USD/ ZAR exchange rate that
prevailed during fiscal 2015 also prevailed during fiscal 2014.
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 and to fundamental net income and earnings per share, basic excluding recovery from SASSA:
Three months ended June 30, 2015 and 2014
EPS, EPS,
Net income basic Net income basic
(USD’000) (USD) (ZAR’000) (ZAR)
2015 2014 2015 2014 2015 2014 2015 2014
GAAP................................................ 23,914 28,584 0.51 0.59 288,035 297,897 6.18 6.12
Intangible asset amortization, net. 2,751 2,960 33,131 30,842
Stock-based compensation charge 513 898 6,179 9,359
Facility fees for KSNET debt ...... 38 79 458 823
US government investigations-
related and US lawsuit expenses .. 17 53 205 552
BEE equity instruments charge .... - 11,268 - 118,740
Net loss on deconsolidation of
subsidiaries and business, net of
tax ................................................ - 443 - 4,617
Transaction-related costs ............. - 77 - 802
Fundamental ...................... 27,233 44,362 0.58 0.91 328,008 463,632 7.04 9.52
Recovery from SASSA, net of tax . - 19,177 - 199,861
Fundamental excluding
recovery from SASSA, net
of tax ................................... 27,233 25,185 0.58 0.52 328,008 263,771 7.04 5.42
Year ended June 30, 2015 and 2014
EPS,
Net income EPS, basic Net income basic
(USD’000) (USD) (ZAR’000) (ZAR)
2015 2014 2015 2014 2015 2014 2015 2014
GAAP................................................ 94,735 70,111 2.03 1.51 1,082,584 728,916 23.17 15.68
Intangible asset amortization, net. 11,263 12,490 128,708 129,846
Stock-based compensation charge 3,195 3,718 36,511 38,655
Refund for KSNET litigation…….. (1,354) - (15,473) -
Facility fees for KSNET debt ...... 208 657 2,377 6,831
US government investigations-
related and US lawsuit expenses .. 158 2,579 1,806 26,813
BEE equity instruments charge .... - 11,268 - 118,740
Net loss on deconsolidation of
subsidiaries and business, net of
tax ................................................ - 443 - 4,606
Transaction-related costs ............. - 77 - 806
Fundamental ...................... 108,205 101,343 2.32 2.18 1,236,513 1,055,213 26.46 22.70
Recovery from SASSA, net of tax . - 19,177 - 199,861
Fundamental excluding
recovery from SASSA, net
of tax ................................... 108,205 82,166 2.32 1.77 1,236,513 855,352 26.46 18.40
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 June 30, 2015 and 2014
2015 2014
Net income (USD’000).......................................................................................................... 23,914 28,584
Adjustments: ..........................................................................................................................
Profit on sale of property, plant and equipment ............................................................... (1) (392)
Loss on deconsolidation of subsidiaries and business ..................................................... - 55
Tax effects on above ........................................................................................................ - (287)
Net income used to calculate headline earnings (USD’000) ................................................. 23,913 27,960
Weighted average number of shares used to calculate net income per share basic earnings
and headline earnings per share basic earnings (‘000) .......................................................... 46,620 48,695
Weighted average number of shares used to calculate net income per share diluted
earnings and headline earnings per share diluted earnings (‘000) ......................................... 46,944 48,855
Headline earnings per share:..................................................................................................
Basic, in USD .................................................................................................................. 0.51 0.57
Diluted, in USD ............................................................................................................... 0.51 0.57
Year ended June 30, 2015 and 2014
2015 2014
Net income (USD’000).......................................................................................................... 94,735 70,111
Adjustments: ..........................................................................................................................
Profit on sale of property, plant and equipment ............................................................... (296) (434)
Loss on deconsolidation of subsidiaries and business ..................................................... - 55
Tax effects on above ........................................................................................................ 83 (276)
Net income used to calculate headline earnings (USD’000) ................................................. 94,522 69,456
Weighted average number of shares used to calculate net income per share basic earnings
and headline earnings per share basic earnings (‘000) .......................................................... 46,733 46,484
Weighted average number of shares used to calculate net income per share diluted
earnings and headline earnings per share diluted earnings (‘000) ......................................... 46,913 46,603
Headline earnings per share:..................................................................................................
Basic, in USD .................................................................................................................. 2.02 1.49
Diluted, in USD ............................................................................................................... 2.01 1.49
Calculation of the denominator for headline diluted earnings per share
Q4 ‘15 Q4 ‘14 F2015 F2014
Basic weighted-average common shares outstanding and unvested
restricted shares expected to vest under GAAP ............................. 46,620 48,695 46,733 46,484
Effect of dilutive securities under GAAP ................................. 324 160 180 119
Denominator for headline diluted earnings per share ............ 46,944 48,855 46,913 46,603
Weighted average number of shares used to calculate headline earnings per share diluted represent the denominator for basic
weighted-average common shares outstanding and unvested restricted shares expected to vest plus the effect of dilutive
securities under GAAP. We use this number of fully-diluted shares outstanding to calculate headline earnings per share
diluted because we do not use the two-class method to calculate headline earnings per share diluted.
Johannesburg
August 21, 2015
Sponsor:
Deutsche Securities (SA) Proprietary Limited
Date: 21/08/2015 08:48:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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