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Net 1 UEPS Technologies, Inc. Reports Second Quarter 2016 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 Second Quarter 2016 Results
JOHANNESBURG, February 5, 2016 – Net 1 UEPS Technologies, Inc. (Nasdaq: UEPS; JSE: NT1) today released results
for the second quarter of fiscal 2016.
- Q2 2016 Revenue of $150.3 million, a constant currency increase of 23%;
- Q2 2016 FEPS of $0.42, which includes an adverse impact of $0.09 per share attributable to taxes, and incremental
expenses to expand operations and infrastructure;
- Net loan book increased 40% from Q1 2016, and more than 800,000 EPE accounts opened, 800 ATMs deployed and
110 branches opened by January 2016;
- Repurchase of 749,213 shares of Net1 common stock for approximately $11.2 million.
Summary Financial Metrics
Three months ended December 31,
% change % change
2015 2014 in USD in ZAR
(All figures in USD ‘000s except per share data)
Revenue 150,281 154,131 (2%) 23%
GAAP net income 16,658 22,374 (26%) (6%)
Fundamental net income (1) 19,619 26,400 (26%) (6%)
GAAP earnings per share ($) 0.35 0.48 (26%) (7%)
Fundamental earnings per share ($) (1) 0.42 0.57 (26%) (8%)
Fully-diluted shares outstanding (‘000’s) 47,400 46,644 2%
Average period USD/ ZAR exchange rate 14.12 11.22 26%
Six months ended December 31,
% change % change
2015 2014 in USD in ZAR
(All figures in USD ‘000s except per share data)
Revenue 304,754 310,572 (2%) 21%
GAAP net income 39,678 46,463 (15%) 5%
Fundamental net income (1) 46,031 54,522 (16%) 4%
GAAP earnings per share ($) 0.84 0.99 (15%) 5%
Fundamental earnings per share ($) (1) 0.98 1.16 (16%) 4%
Fully-diluted shares outstanding (‘000’s) 47,394 46,990 1% 1%
Average period USD/ ZAR exchange rate 13.49 10.97 23%
(1) Fundamental net income and earnings per share 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.
Factors impacting comparability of our Q2 2016 and Q2 2015 results
- Unfavorable impact from the strengthening of the U.S. dollar against primary functional currencies: The U.S.
dollar appreciated by 26% against the ZAR and 10% against the KRW during Q2 2016, which negatively impacted
our reported results;
- Continued growth in financial inclusion services: We continued to grow our financial inclusion services offerings
during Q2 2016, which has resulted in higher revenues and operating income, primarily from more sales of low-
margin prepaid airtime and an increase in transaction fees. The significant growth in our lending book during
December 2015 resulted in a substantial increase in the allowance for doubtful finance loans receivable, in
accordance with our policy of providing for doubtful finance loans receivable at the time that a loan is originated;
- Ongoing contributions from EPE and Smart Life and expansion of branch network: Our EPE and Smart Life
offerings contributed to an increase in revenue in ZAR, as well as an associated increase in establishment costs for
our branch network;
- Increased contribution by KSNET: Our results were positively impacted by growth in our Korean operations; and
- Tax impact of dividends from South African subsidiary: Our income tax expense includes approximately $2.4
million related to the tax impact, including withholding taxes, resulting from distributions from our South African
subsidiary during October 2015, which helped reduce the impact of a weakened ZAR on our reported cash balances.
The conversion of a significant portion of our ZAR cash reserves to USD negatively impacted our interest income
due the material difference between ZAR and USD deposit rates.
Comments and Outlook
“We continue to see tangible gains in the execution of our strategic plan, which includes the scaling up of our newer growth
initiatives and the globalization of our business activities,” said Dr. Serge Belamant, Chairman and CEO of Net1. “EasyPay
Everywhere, financial services and ZAZOO all delivered in-line or above our expectations, supported by consistent operating
contributions from our established and recurring mature businesses, despite the ongoing currency and macroeconomic
headwinds. Our pipeline of local and international opportunities for both our card-centric and mobile-centric projects augurs
well for the sustained organic growth of our business,” he concluded.
“Our underlying business fundamentals and momentum remain strong,” said Herman Kotze, Chief Financial Officer of Net1.
“We converted a meaningful portion of our South African cash reserves to USD in order to limit the impact of the sudden and
volatile depreciation of the ZAR during Q2 2016. This resulted in withholding and other tax-related adjustments, as well as
lower tax-effected interest income due to the differential between ZAR and USD deposit rates, of approximately $0.06 to our
basic and diluted EPS. Additionally, the 40% sequential growth in our lending book during Q2 2016, adversely impacted EPS
by $0.02 per share as a result our provisioning policy to provide an allowance on loan origination. We will only recognize the
revenue from these new loans from Q3 2016. Finally, EPS was $0.01 per share lower due to the ongoing incremental costs
incurred to expand our branch network,” he added.
“Therefore for fiscal 2016, we now expect fundamental earnings per share of at least $2.45, which includes a full year impact
of $0.12 per share related to taxes and forgone interest income as a result of the distribution of our South African cash
reserves to our U.S. parent. Our fiscal 2016 guidance once again also assumes a constant currency base of ZAR11.43/$1 and
a share count of 46.7 million shares,” he concluded.
Share buybacks and replenishment of repurchase authorization back to $100 million
During Q2 2016, we acquired 749,213 shares of Net1 common stock for approximately $11.2 million. On February 3, 2016,
our Board of Directors replenished the authorization to repurchase back to up to $100 million of common stock. The
authorization does not have an expiration date. The share repurchase authorization will be used at management’s discretion,
subject to limitations imposed by SEC Rule 10b-18 and other legal requirements and subject to price and other internal
limitations established by our Board of Directors. Repurchases will be funded from our available cash reserves. Share
repurchases may be made through open market purchases, privately negotiated transactions, or both. There can be no
assurance that we will purchase any shares or any particular number of shares. The authorization may be suspended,
terminated or modified at any time for any reason, including market conditions, the cost of repurchasing shares, liquidity and
other factors that management deems appropriate.
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 $52.8 million in Q2 2016, down 10% compared with Q2 2015 in USD, but 14% higher on a
constant currency basis. In ZAR, the increase in segment revenue and operating income was due to higher EPE revenue as a
result of increased ATM transactions, more low-margin transaction fees generated from card holders using the South African
National Payment System and an increase in the number of social welfare grants distributed, offset by fewer inter-segment
transaction processing activities. Our operating income margin for Q2 2016 and 2015 was 23% and 22%, respectively, and
was higher primarily due to higher EPE revenue as a result of increased ATM transactions, an increase in the number of
beneficiaries paid in fiscal 2016 and a modest increase in the margin of transaction fees generated from cardholders using the
South African National Payment System, partially offset by annual salary increases granted to our South African employees.
International transaction processing
Segment revenue was $40.8 million in Q2 2016, up 1% compared with Q2 2015 in USD, and up 27% on a constant currency
basis. Operating income during Q2 2016 was lower due to an increase in depreciation expenses at KSNET and ongoing
ZAZOO start-up costs in the UK and India, but was partially offset by increase in revenue contribution from KSNET and a
positive contribution by XeoHealth. Operating income and margin for Q2 fiscal 2015, was negatively impacted by ad hoc
incentives provided to staff due to the strong operating performance of KSNET during calendar 2014. Operating income
margin for Q2 fiscal 2016 and 2015 was 10% and 14%, respectively.
Financial inclusion and applied technologies
Segment revenue was $65.7 million in Q2 2016, down 3% compared with Q2 2015 in USD and up 22% on a constant
currency basis. Financial inclusion and applied technologies revenue and operating income increased primarily due to higher
prepaid airtime and other value-added services sales, more ad hoc terminal and card sales and, in ZAR, an increase in inter-
segment revenues, offset by lower lending service fees. Operating income for the second quarter of fiscal 2016, was adversely
impacted by an increase in our allowance for doubtful finance loans receivable resulting from a commensurate increase in our
lending book in the last lending cycle of calendar 2015 and establishment costs for Smart Life and expansion of our branch
network.
Driven by our expanded branch and ATM infrastructure, we experienced an increase in our lending book towards the end of
Q2 2016. We expect this growth in our lending book to translate to higher revenue and operating income during the third
quarter of fiscal 2016.
Operating income margin for the Financial inclusion and applied technologies segment was 21% and 26%, respectively,
during Q2 2016 and 2015, and has decreased primarily due to the increase in our allowance for doubtful finance loans
receivable, the sale of more low-margin prepaid airtime and establishment costs for Smart Life, expansion of our branch
network and annual salary increases for our South African employees.
Corporate/eliminations
In USD, our corporate expenses have decreased primarily due to the impact of the stronger USD on goods and services
procured in other currencies, primarily the ZAR, and lower amortization costs, partially offset by modest increases in USD
denominated goods and services purchased from third parties and directors’ fees.
Cash flow and liquidity
At December 31, 2015, we had cash and cash equivalents of $101.4 million, down from $117.6 million at June 30, 2015. The
decrease in our cash balances from June 30, 2015, was primarily due to the strengthening of the U.S. dollar against our
primary functional currencies, repurchase of shares of our common stock, growth in our lending book, provisional tax
payments and capital expenditures, offset by the expansion of all of our core businesses.
Excluding the impact of interest received, interest paid under our Korean debt and taxes, the decrease in cash from operating
activities resulted from the expansion of our lending book, offset by cash inflows from improved trading activity during fiscal
2016. Capital expenditures for Q2 2016 and 2015 were $9.9 million and $9.1 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. Management believes that the fundamental net income and earnings per share metric enhances its own
evaluation, as well as an investor’s understanding, of our financial performance. Attachment B presents the reconciliation
between GAAP and fundamental net income and earnings per share.
Headline earnings per share (“HEPS”)
The inclusion of HEPS in this press release is a requirement of our listing on the JSE. HEPS basic and diluted is calculated
using net income which has been determined based on GAAP. Accordingly, this may differ to the headline earnings per share
calculation of other companies listed on the JSE as these companies may report their financial results under a different
financial reporting framework, including but not limited to, International Financial Reporting Standards.
HEPS basic and diluted is calculated as GAAP net income adjusted for the profit on sale of property, plant and equipment.
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 Q2 2016 results on February 5, 2016, 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 February 28, 2016.
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. Through Transact24, Net1 now offers debit, credit and prepaid processing and issuing services for
Visa, MasterCard and ChinaUnionPay in China and other territories across Asia-Pacific, Europe and Africa, and the United
States.
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.
Unaudited Condensed Consolidated Statements of Operations
Three months ended Six months ended
December 31, December 31,
2015 2014 2015 2014
(In thousands, except per share data) (In thousands, except per share data)
REVENUE $ 150,281 $ 154,131 $ 304,754 $ 310,572
EXPENSE
Cost of goods sold, IT processing, servicing
and support 78,668 71,774 156,050 146,180
Selling, general and administration 36,248 41,385 72,009 80,121
Depreciation and amortization 10,586 10,157 20,701 20,331
OPERATING INCOME 24,779 30,815 55,994 63,940
INTEREST INCOME 3,664 3,587 7,939 7,677
INTEREST EXPENSE 1,054 1,107 2,028 2,419
INCOME BEFORE INCOME TAX EXPENSE 27,389 33,295 61,905 69,198
INCOME TAX EXPENSE 10,593 10,203 21,490 21,851
NET INCOME BEFORE EARNINGS FROM
EQUITY-ACCOUNTED INVESTMENTS 16,796 23,092 40,415 47,347
EARNINGS FROM EQUITY-ACCOUNTED
INVESTMENTS 388 76 576 168
NET INCOME 17,184 23,168 40,991 47,515
LESS NET INCOME ATTRIBUTABLE TO
NON-CONTROLLING INTEREST 526 794 1,313 1,052
NET INCOME ATTRIBUTABLE TO NET1 $ 16,658 $ 22,374 $ 39,678 $ 46,463
Net income per share, in United States dollars
Basic earnings attributable to Net1
shareholders $0.35 $0.48 $0.84 $0.99
Diluted earnings attributable to Net1
shareholders $0.35 $0.48 $0.84 $0.99
NET 1 UEPS TECHNOLOGIES, INC.
Unaudited Condensed Consolidated Balance Sheets
Unaudited (A)
December 31, June 30,
2015 2015
(In thousands, except share data)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 101,417 $ 117,583
Pre-funded social welfare grants receivable 2,503 2,306
Accounts receivable, net of allowances of – December: $3,407; June: $1,956 149,005 148,768
Finance loans receivable, net of allowances of – December: $4,555; June: $4,227 43,036 40,373
Inventory 10,636 12,979
Deferred income taxes 4,937 7,298
Total current assets before settlement assets 311,534 329,307
Settlement assets 321,812 661,916
Total current assets 633,346 991,223
PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of –
December: $95,537; June: $94,014 53,216 52,320
EQUITY-ACCOUNTED INVESTMENTS 14,626 14,329
GOODWILL 152,312 166,437
INTANGIBLE ASSETS, net of accumulated amortization of - December: $83,694;
June: $84,668 38,686 47,124
OTHER LONG-TERM ASSETS, including reinsurance assets 11,286 14,997
TOTAL ASSETS 903,472 1,286,430
LIABILITIES
CURRENT LIABILITIES
Accounts payable 13,541 21,453
Other payables 43,125 45,595
Current portion of long-term borrowings 8,503 8,863
Income taxes payable 3,092 6,287
Total current liabilities before settlement obligations 68,261 82,198
Settlement obligations 321,812 661,916
Total current liabilities 390,073 744,114
DEFERRED INCOME TAXES 8,483 10,564
LONG-TERM BORROWINGS 50,091 50,762
OTHER LONG-TERM LIABILITIES, including insurance policy liabilities 1,321 2,205
TOTAL LIABILITIES 449,968 807,645
COMMITMENTS AND CONTINGENCIES
EQUITY
COMMON STOCK
Authorized: 200,000,000 with $0.001 par value;
Issued and outstanding shares, net of treasury - December: 46,573,489;
June: 46,679,565 64 64
PREFERRED STOCK
Authorized shares: 50,000,000 with $0.001 par value;
Issued and outstanding shares, net of treasury: December: -; June: - - -
ADDITIONAL PAID-IN-CAPITAL 219,416 213,896
TREASURY SHARES, AT COST: December: 18,806,441; June: 18,057,228 (225,706) (214,520)
ACCUMULATED OTHER COMPREHENSIVE LOSS (199,324) (139,181)
RETAINED EARNINGS 657,546 617,868
TOTAL NET1 EQUITY 451,996 478,127
NON-CONTROLLING INTEREST 1,508 658
TOTAL EQUITY 453,504 478,785
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 903,472 $ 1,286,430
(A) – Derived from audited financial statements
NET 1 UEPS TECHNOLOGIES, INC.
Unaudited Condensed Consolidated Statements of Cash Flows
Three months ended Six months ended
December 31, December 31,
2015 2014 2015 2014
(In thousands) (In thousands)
Cash flows from operating activities
Net income $ 17,184 $ 23,168 $ 40,991 $ 47,515
Depreciation and amortization 10,586 10,157 20,701 20,331
Earnings from equity-accounted investments (388) (76) (576) (168)
Fair value adjustments 1,567 (234) 3,000 179
Interest payable 645 140 1,354 1,299
Loss (Profit) on disposal of property, plant and
equipment 11 (109) (84) (231)
Stock-based compensation charge 965 1,035 1,691 1,951
Facility fee amortized 35 52 69 134
(Increase) Decrease in accounts receivable, pre-
funded social welfare grants receivable and finance
loans receivable (13,847) (7,315) (31,125) 2,155
Decrease (Increase) in inventory 776 (622) (155) (2,745)
Decrease in accounts payable and other payables (5,418) (1,456) (2,046) (12,389)
(Decrease) Increase in taxes payable (8,859) (9,963) (1,035) (3,352)
Increase (Decrease) in deferred taxes 789 (168) (637) (558)
Net cash provided by operating activities 4,046 14,609 32,148 54,121
Cash flows from investing activities
Capital expenditures (9,947) (9,137) (20,645) (18,515)
Proceeds from disposal of property, plant and
equipment 269 373 617 614
Proceeds from sale of business - - - 1,895
Other investing activities - (29) - (29)
Net change in settlement assets 264,404 241,652 242,829 198,598
Net cash provided by investing activities 254,726 232,859 222,801 182,563
Cash flows from financing activities
Acquisition of treasury stock (11,186) - (11,186) (9,151)
Proceeds from issue of common stock - - 3,762 989
Long-term borrowings utilized 711 1,081 1,431 2,178
Repayment of long-term borrowings - (14,128) - (14,128)
Sale of equity to non-controlling interest - - - 1,407
Net change in settlement obligations (264,404) (241,652) (242,829) (198,598)
Net cash used in financing activities (274,879) (254,699) (248,822) (217,303)
Effect of exchange rate changes on cash (8,086) (2,973) (22,293) (7,072)
Net (decrease) increase in cash and cash
equivalents (24,193) (10,204) (16,166) 12,309
Cash and cash equivalents – beginning of period 125,610 81,185 117,583 58,672
Cash and cash equivalents – end of period $ 101,417 $ 70,981 $ 101,417 $ 70,981
Net 1 UEPS Technologies, Inc.
Attachment A
Operating segment revenue, operating income and operating margin:
Three months ended December 31, 2015 and 2014 and September 30, 2015
Change – constant
Change - actual exchange rate(1)
Q2 ‘16 Q2 ‘16 Q2 ‘16 Q2 ‘16
vs vs vs vs
Key segmental data, in $ ’000, Q2 ‘16 Q2 ‘15 Q1 ‘16 Q2‘15 Q1 ‘16 Q2‘15 Q1 ‘16
Revenue:
South African transaction processing ........... $52,764 $58,427 $55,639 (10%) (5%) 14% 3%
International transaction processing ............. 40,836 40,466 41,229 1% (1%) 27% 8%
Financial inclusion and applied
technologies .................................................. 65,686 67,531 67,360 (3%) (2%) 22% 6%
Subtotal: Operating segments .............. 159,286 166,424 164,228 (4%) (3%) 20% 6%
Intersegment eliminations .................... (9,005) (12,293) (9,755) (27%) (8%) (8%) 1%
Consolidated revenue ................... $150,281 $154,131 $154,473 (2%) (3%) 23% 6%
Operating income (loss):
South African transaction processing ........... $12,080 $12,883 $13,511 (6%) (11%) 18% (3%)
International transaction processing ............. 4,240 5,743 6,543 (26%) (35%) (7%) (29%)
Financial inclusion and applied
technologies .................................................. 13,519 17,827 16,554 (24%) (18%) (5%) (11%)
Subtotal: Operating segments .............. 29,839 36,453 36,608 (18%) (18%) 3% (11%)
Corporate/Eliminations ........................ (5,060) (5,638) (5,393) (10%) (6%) 13% 2%
Consolidated operating income ... $24,779 $30,815 $31,215 (20%) (21%) 1% (14%)
Operating income margin (%)
South African transaction processing ........... 23% 22% 24%
International transaction processing ............. 10% 14% 16%
Financial inclusion and applied
technologies .................................................. 21% 26% 25%
Consolidated operating margin ............ 16% 20% 20%
(1) – This information shows what the change in these items would have been if the USD/ ZAR exchange rate that prevailed during
the second quarter of fiscal 2016 also prevailed during the second quarter of fiscal 2015 and the first quarter of fiscal 2016.
Six months ended December 31, 2015 and 2014
Change –
constant
Change - exchange
actual rate(1)
F2016 F2016
vs vs
Key segmental data, in ’000, except margins F2016 F2015 F2015 F2015
Revenue:
South African transaction processing ............................... $108,403 118,679 (9%) 12%
International transaction processing ................................. 82,065 83,670 (2%) 21%
Financial inclusion and applied technologies ................... 133,046 132,728 0% 23%
Subtotal: Operating segments .................................. 323,514 335,077 (3%) 19%
Intersegment eliminations ........................................ (18,760) (24,505) (23%) (6%)
Consolidated revenue ....................................... $304,754 310,572 (2%) 21%
Operating income:
South African transaction processing ............................... $25,591 26,522 (4%) 19%
International transaction processing ................................. 10,783 13,092 (18%) 1%
Financial inclusion and applied technologies ................... 30,073 35,434 (15%) 4%
Subtotal: Operating segments .................................. 66,447 75,048 (11%) 9%
Corporate/Eliminations ............................................ (10,453) (11,108) (6%) 16%
Consolidated operating income ....................... $55,994 63,940 (12%) 8%
Operating income margin (%)
South African transaction processing ............................... 24% 22%
International transaction processing ................................. 13% 16%
Financial inclusion and applied technologies ................... 23% 27%
Overall operating margin ......................................... 18% 21%
(1) – This information shows what the change in these items would have been if the USD/ ZAR exchange rate that
prevailed during the first half of fiscal 2016 also prevailed during the first half of fiscal 2015.
Net 1 UEPS Technologies, Inc.
Attachment B
Reconciliation of GAAP net income and earnings per share, basic, to fundamental net income and earnings per share,
basic:
Three months ended December 31, 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................................................ 16,658 22,374 0.35 0.48 235,204 250,737 5.00 5.39
Intangible asset amortization, net. 1,952 2,930 27,572 32,827
Stock-based compensation charge 965 1,035 13,625 11,616
Facility fees for KSNET debt ...... 35 52 494 584
US government investigations-
related and US lawsuit expenses .. 9 9 127 101
Fundamental ...................... 19,619 26,400 0.42 0.57 277,022 295,865 5.88 6.36
Six months ended December 31, 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................................................ 39,678 46,463 0.84 0.99 535,281 509,644 11.39 10.87
Intangible asset amortization, net. 4,460 5,838 60,164 64,036
Stock-based compensation charge 1,691 1,951 22,813 21,400
Facility fees for KSNET debt ...... 69 134 931 1,470
US government investigations-
related and US lawsuit expenses .. 133 136 1,794 1,492
Fundamental ......................
46,031 54,522 0.98 1.16 620,983 598,042 13.21 12.76
Net 1 UEPS Technologies, Inc.
Attachment C
Reconciliation of net income used to calculate earnings per share basic and diluted and headline earnings per share
basic and diluted:
Three months ended December 31, 2015 and 2014
2015 2014
Net income (USD’000).......................................................................................................... 16,658 22,374
Adjustments: ..........................................................................................................................
Loss (Profit) on sale of property, plant and equipment .................................................... 11 (109)
Tax effects on above ........................................................................................................ (3) 31
Net income used to calculate headline earnings (USD’000) ................................................. 16,666 22,296
Weighted average number of shares used to calculate net income per share basic earnings
and headline earnings per share basic earnings (‘000) .......................................................... 47,086 46,519
Weighted average number of shares used to calculate net income per share diluted
earnings and headline earnings per share diluted earnings (‘000) ......................................... 47,400 46,644
Headline earnings per share:..................................................................................................
Basic, in USD .................................................................................................................. 0.35 0.48
Diluted, in USD ............................................................................................................... 0.35 0.48
Six months ended December 31, 2015 and 2014
2015 2014
Net income (USD’000).......................................................................................................... 39,678 46,463
Adjustments: ..........................................................................................................................
Profit on sale of property, plant and equipment ............................................................... (84) (231)
Tax effects on above ........................................................................................................ 24 65
Net income used to calculate headline earnings (USD’000) ................................................. 39,618 46,297
Weighted average number of shares used to calculate net income per share basic earnings
and headline earnings per share basic earnings (‘000) .......................................................... 47,007 46,873
Weighted average number of shares used to calculate net income per share diluted
earnings and headline earnings per share diluted earnings (‘000) ......................................... 47,394 46,990
Headline earnings per share:..................................................................................................
Basic, in USD .................................................................................................................. 0.84 0.99
Diluted, in USD ............................................................................................................... 0.84 0.99
Calculation of the denominator for headline diluted earnings per share
Q2 ‘16 Q2 ‘15 F2016 F2015
Basic weighted-average common shares outstanding and unvested
restricted shares expected to vest under GAAP ............................. 47,086 46,519 47,007 46,873
Effect of dilutive securities under GAAP ................................. 314 125 387 117
Denominator for headline diluted earnings per share ............ 47,400 46,644 47,394 46,990
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
February 5, 2016
Sponsor:
Deutsche Securities (SA) Proprietary Limited
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