SAN JUAN, Puerto Rico--(BUSINESS WIRE)--EVERTEC, Inc. (NYSE: EVTC) (“Evertec” or the “Company”) today announced results for the first quarter ended March 31, 2019.
First Quarter 2019 Highlights
- Revenue grew 8% to $118.8 million
- GAAP Net Income attributable to common shareholders was $26.6 million or $0.36 per diluted share
- Adjusted EBITDA increased 7% to $57.6 million
- Adjusted earnings per common share was $0.50, an increase of 6%
- Repurchased 0.6 million shares for $17.5 million
Mac Schuessler, President and Chief Executive Officer stated, “We are pleased with our financial performance during the quarter as well as the execution against our share repurchase program. We remain focused on our expansion into Latin America and supporting our clients in Puerto Rico."
First Quarter 2019 Results
Revenue. Total revenue for the quarter ended March 31, 2019 was $118.8 million an increase of 8% compared with $110.3 million in the prior year. Revenue increase in the quarter reflected growth from elevated sales volumes in Puerto Rico and increased core banking transactions in part due to last year’s hurricane impacted results. Additionally, revenue growth was as a result of an increase in network services related to new managed services projects as well as one-time revenue related to an electronic benefits service contract of approximately $2.7 million.
Net Income attributable to common shareholders. For the quarter ended March 31, 2019, GAAP Net Income attributable to common shareholders was $26.6 million, or $0.36 per diluted share, an increase of $3.6 million or $0.05 per diluted share as compared to the prior year.
Adjusted EBITDA. For the quarter ended March 31, 2019, Adjusted EBITDA was $57.6 million, an increase of 7% compared to the prior year. Adjusted EBITDA margin (Adjusted EBITDA as a percentage of total revenues) decreased (40) basis points to 48.5% compared with 48.9% in the prior year. The decrease in Adjusted EBITDA margin was primarily driven by lower corporate expense in the prior year quarter due to timing of projects.
Adjusted Net Income. For the quarter ended March 31, 2019, Adjusted Net Income was $37.1 million, an increase of 7% compared with $34.6 million in the prior year. Adjusted earnings per common share was $0.50, an increase of 6% as compared to $0.47 in the prior year.
Share Repurchase
During the three months ended March 31, 2019, the Company repurchased a total of 0.6 million shares of common stock at an average price of $28.27 per share for a total of $17.5 million. As of March 31, 2019, a total of approximately $44.9 million remained available for future use under the Company’s share repurchase program.
2019 Outlook
The Company is adjusting its financial outlook for 2019 as follows:
- Total consolidated revenue is now expected to be between $469 million and $476 million representing growth of 3% to 5%, compared with $464 million and $476 million previously
- Adjusted earnings per common share is now expected to be between $1.84 and $1.92 representing growth of 0% to 4% from $1.84 in 2018, compared with $1.80 to $1.90 previously
- Capital expenditures continue to range between $40 million and $45 million
- Non-GAAP effective tax rate of approximately 13%.
Earnings Conference Call and Audio Webcast
The Company will host a conference call to discuss its first quarter 2019 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 10130502. The replay will be available through Wednesday, May 8, 2019. 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 Latin America, providing a broad range of merchant acquiring, payment processing and business solutions services. The Company manages a system of electronic payment networks that process more than two billion transactions annually and offers a comprehensive suite of services for core bank processing, cash processing and technology outsourcing. In addition, Evertec owns and operates the ATH® network, one of the leading personal identification number (“PIN”) debit networks in Latin America. 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 senior secured credit facilities in testing EVERTEC Group’s compliance with covenants therein such as the senior 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 for a significant portion of revenue and to grow the Company's merchant acquiring business; the Company's ability to renew its client contracts on terms favorable to the Company, including the Company's Master Services Agreement (MSA) with Popular, and any significant concessions the Company may have to grant to Popular with respect to pricing or other key terms in anticipation of the negotiation of the extension of the MSA, both in respect of the current term and any extension of the MSA; a potential government shutdown; a continuation of the Government of Puerto Rico’s fiscal crisis; the effectiveness of the Company’s risk management procedures; dependence on the Company's processing systems, technology infrastructure, security systems and fraudulent-payment-detection systems, and the risk that the Company's systems may experience breakdowns or fail to prevent security breaches, confidential data theft or fraudulent transfers; our ability to develop, install and adopt new technology; impairments to the Company’s amortizable intangible assets and goodwill; a decreased client base due to consolidations in the banking and financial-services industry; the credit risk of the Company’s merchant clients, for which the Company may also be liable; a decline in the market for the Company’s services due to increased competition, changes in consumer spending or payment preferences; the continuing market position of the ATH® network; the Company’s dependence on credit card associations and debit networks; regulatory limitations on the Company’s activities, including the potential need to seek regulatory approval to consummate transactions, due to the Company’s relationship with Popular and the Company’s role as a service provider to financial institutions and the Company’s potential inability to obtain such approval on a timely basis or at all; changes in the regulatory environment and changes in international, legal, tax, political, administrative or economic conditions; the Company’s ability to comply with federal, state, and local regulatory requirements; the geographical concentration of the Company’s business in Puerto Rico; operating an international business in multiple regions with potential political and economic instability; operating an international business in countries and with counterparties that increase the Company’s compliance risks and puts the Company at risk of violating U.S. sanctions laws; the Company’s ability to execute the Company’s expansion and acquisition strategies; the Company’s ability to protect the Company’s intellectual property rights; the Company’s ability to recruit and retain qualified personnel; evolving industry standards; the Company’s high level of indebtedness and restrictions contained in the Company’s debt agreements; the Company’s ability to generate sufficient cash to service the Company’s indebtedness and to generate future profits and the impact of natural disasters or catastrophic events in the countries in which the Company operates.
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 the Company files with the SEC from time to time, in connection with considering any forward-looking statements that may be made by the Company and its businesses generally. The Company undertakes no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events unless the Company is required to do so by law.
|
EVERTEC, Inc. Schedule 1: Unaudited Consolidated Condensed Statements of Income and Comprehensive Income |
||||||||
| Three months ended March 31, | ||||||||
| 2019 | 2018 | |||||||
| (Dollar amounts in thousands, except share data) | ||||||||
| Revenues | $ | 118,836 | $ | 110,274 | ||||
| Operating costs and expenses | ||||||||
| Cost of revenues, exclusive of depreciation and amortization shown below | 50,019 | 47,420 | ||||||
| Selling, general and administrative expenses | 15,139 | 13,432 | ||||||
| Depreciation and amortization | 16,273 | 15,867 | ||||||
| Total operating costs and expenses | 81,431 | 76,719 | ||||||
| Income from operations | 37,405 | 33,555 | ||||||
| Non-operating income (expenses) | ||||||||
| Interest income | 259 | 157 | ||||||
| Interest expense | (7,551 | ) | (7,679 | ) | ||||
| Earnings of equity method investment | 222 | 199 | ||||||
| Other income, net | 208 | 817 | ||||||
| Total non-operating expenses | (6,862 | ) | (6,506 | ) | ||||
| Income before income taxes | 30,543 | 27,049 | ||||||
| Income tax expense | 3,809 | 3,935 | ||||||
| Net income | 26,734 | 23,114 | ||||||
| Less: Net income attributable to non-controlling interest | 90 | 92 | ||||||
| Net income attributable to EVERTEC, Inc.’s common stockholders | 26,644 | 23,022 | ||||||
| Other comprehensive income (loss), net of tax | ||||||||
| Foreign currency translation adjustments | 1,965 | 2,407 | ||||||
| (Loss) gain on cash flow hedges | (4,055 | ) | 1,503 | |||||
| Total comprehensive income attributable to EVERTEC, Inc.’s common stockholders | $ | 24,554 | $ | 26,932 | ||||
| Net income per common share: | ||||||||
| Basic | $ | 0.37 | $ | 0.32 | ||||
| Diluted | $ | 0.36 | $ | 0.31 | ||||
| Shares used in computing net income per common share: | ||||||||
| Basic | 72,378,532 | 72,409,462 | ||||||
| Diluted | 73,770,066 | 73,372,835 | ||||||
|
EVERTEC, Inc. Schedule 2: Unaudited Consolidated Condensed Balance Sheets |
||||||||
| (Dollar amounts in thousands, except for share information) | March 31, 2019 | December 31, 2018 | ||||||
| Assets | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 73,183 | $ | 69,973 | ||||
| Restricted cash | 13,318 | 16,773 | ||||||
| Accounts receivable, net | 96,307 | 100,323 | ||||||
| Prepaid expenses and other assets | 34,451 | 29,124 | ||||||
| Total current assets | 217,259 | 216,193 | ||||||
| Investment in equity investee | 12,337 | 12,149 | ||||||
| Property and equipment, net | 45,778 | 36,763 | ||||||
| Operating lease right-of-use asset | 34,743 | — | ||||||
| Goodwill | 395,723 | 394,644 | ||||||
| Other intangible assets, net | 252,592 | 259,269 | ||||||
| Deferred tax asset | 2,167 | 1,917 | ||||||
| Net investment in lease | 982 | 1,060 | ||||||
| Other long-term assets | 7,195 | 5,297 | ||||||
| Total assets | $ | 968,776 | $ | 927,292 | ||||
| Liabilities and stockholders’ equity | ||||||||
| Current Liabilities: | ||||||||
| Accrued liabilities | $ | 44,353 | $ | 57,006 | ||||
| Accounts payable | 45,995 | 47,272 | ||||||
| Unearned income | 12,156 | 11,527 | ||||||
| Income tax payable | 6,841 | 6,650 | ||||||
| Current portion of long-term debt | 14,250 | 14,250 | ||||||
| Short-term borrowings | 15,000 | — | ||||||
| Current portion of operating lease liability | 9,458 | — | ||||||
| Total current liabilities | 148,053 | 136,705 | ||||||
| Long-term debt | 520,771 | 524,056 | ||||||
| Deferred tax liability | 9,041 | 9,950 | ||||||
| Unearned income - long term | 30,199 | 26,075 | ||||||
| Operating lease liability | 25,475 | — | ||||||
| Other long-term liabilities | 18,739 | 14,900 | ||||||
| Total liabilities | 752,278 | 711,686 | ||||||
| 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; 72,267,445 shares issued and outstanding at March 31, 2019 (December 31, 2018 - 72,378,710) | 722 | 723 | ||||||
| Additional paid-in capital | — | 5,783 | ||||||
| Accumulated earnings | 237,418 | 228,742 | ||||||
| Accumulated other comprehensive loss, net of tax | (25,879 | ) | (23,789 | ) | ||||
| Total EVERTEC, Inc. stockholders’ equity | 212,261 | 211,459 | ||||||
| Non-controlling interest | 4,237 | 4,147 | ||||||
| Total equity | 216,498 | 215,606 | ||||||
| Total liabilities and equity | $ | 968,776 | $ | 927,292 | ||||
|
EVERTEC, Inc. Schedule 3: Unaudited Consolidated Condensed Statements of Cash Flows |
||||||||
| Three months ended March 31, | ||||||||
| 2019 | 2018 | |||||||
| Cash flows from operating activities | ||||||||
| Net income | $ | 26,734 | $ | 23,114 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 16,273 | 15,867 | ||||||
| Amortization of debt issue costs and accretion of discount | 415 | 1,270 | ||||||
| Operating lease expense | 1,472 | — | ||||||
| Provision for doubtful accounts and sundry losses | 815 | 221 | ||||||
| Deferred tax benefit | (882 | ) | (1,152 | ) | ||||
| Share-based compensation | 3,279 | 3,637 | ||||||
| Loss on disposition of property and equipment and other intangibles | 22 | 11 | ||||||
| Earnings of equity method investment | (222 | ) | (199 | ) | ||||
| (Increase) decrease in assets: | ||||||||
| Accounts receivable, net | 3,961 | (6,815 | ) | |||||
| Prepaid expenses and other assets | (5,326 | ) | (5,108 | ) | ||||
| Other long-term assets | (2,558 | ) | (1,117 | ) | ||||
| Increase (decrease) in liabilities: | ||||||||
| Accounts payable and accrued liabilities | (18,339 | ) | (4,905 | ) | ||||
| Income tax payable | 191 | 2,716 | ||||||
| Unearned income | 4,754 | 2,645 | ||||||
| Operating lease liabilities | (1,281 | ) | — | |||||
| Other long-term liabilities | 31 | 183 | ||||||
| Total adjustments | 2,605 | 7,254 | ||||||
| Net cash provided by operating activities | 29,339 | 30,368 | ||||||
| Cash flows from investing activities | ||||||||
| Additions to software | (8,917 | ) | (5,208 | ) | ||||
| Property and equipment acquired | (5,071 | ) | (4,157 | ) | ||||
| Proceeds from sales of property and equipment | 32 | — | ||||||
| Net cash used in investing activities | (13,956 | ) | (9,365 | ) | ||||
| Cash flows from financing activities | ||||||||
| Statutory withholding taxes paid on share-based compensation | (5,928 | ) | (204 | ) | ||||
| Net increase (decrease) in short-term borrowings | 15,000 | (12,000 | ) | |||||
| Repayment of short-term borrowings for purchase of equipment and software | (34 | ) | (114 | ) | ||||
| Dividends paid | (3,617 | ) | — | |||||
| Repurchase of common stock | (17,486 | ) | — | |||||
| Repayment of long-term debt | (3,563 | ) | (5,041 | ) | ||||
| Net cash used in financing activities | (15,628 | ) | (17,359 | ) | ||||
| Net (decrease) increase in cash, cash equivalents and restricted cash | (245 | ) | 3,644 | |||||
| Cash, cash equivalents and restricted cash at beginning of the period | 86,746 | 60,367 | ||||||
| Cash, cash equivalents and restricted cash at end of the period | $ | 86,501 | $ | 64,011 | ||||
| Reconciliation of cash, cash equivalents and restricted cash | ||||||||
| Cash and cash equivalents | $ | 73,183 | $ | 53,471 | ||||
| Restricted cash | 13,318 | 10,540 | ||||||
| Cash, cash equivalents and restricted cash | $ | 86,501 | $ | 64,011 | ||||
|
EVERTEC, Inc. Schedule 4: Unaudited Segment Information |
|||||||||||||||||||||||
| Three months ended March 31, 2019 | |||||||||||||||||||||||
| (In thousands) |
Payment |
Payment |
Merchant Acquiring, net |
Business Solutions |
Corporate and Other (1) | Total | |||||||||||||||||
| Revenues | $ | 32,017 | $ | 20,831 | $ | 25,974 | $ | 51,364 | $ | (11,350 | ) | $ | 118,836 | ||||||||||
| Operating costs and expenses | 14,215 | 17,573 | 14,718 | 32,910 | 2,015 | 81,431 | |||||||||||||||||
| Depreciation and amortization | 2,643 | 2,196 | 468 | 3,854 | 7,112 | 16,273 | |||||||||||||||||
| Non-operating income (expenses) | 581 | 2,634 | 21 | 186 | (2,992 | ) | 430 | ||||||||||||||||
| EBITDA | 21,026 | 8,088 | 11,745 | 22,494 | (9,245 | ) | 54,108 | ||||||||||||||||
| Compensation and benefits (2) | 237 | 166 | 220 | 554 | 2,262 | 3,439 | |||||||||||||||||
| Transaction, refinancing and other fees (3) | — | 2 | — | — | 47 | 49 | |||||||||||||||||
| Adjusted EBITDA | $ | 21,263 | $ | 8,256 | $ | 11,965 | $ | 23,048 | $ | (6,936 | ) | $ | 57,596 | ||||||||||
(1) Corporate and Other consists of corporate overhead, certain
leveraged activities, other non-operating expenses and intersegment
eliminations. Intersegment revenue eliminations predominantly reflect
$9.2 million processing fee from the Payments Services - Puerto Rico &
Caribbean segment to the Merchant Acquiring segment and intercompany
software license and development revenues of $2.1 million from the
Payment Services - Latin America segment charged to the Payment Services
- Puerto Rico & Caribbean segment. Corporate and Other was impacted by
the intersegment elimination of revenue recognized in the Payment
Services - Latin America segment and capitalized in the Payment Services
- Puerto Rico & Caribbean segment; excluding this impact, Corporate and
Other Adjusted EBITDA would be $4.8 million.
(2) Primarily
represents share-based compensation, other compensation expense and
severance payments.
(3) Primarily represents fees and expenses
associated with corporate transactions as defined in the Credit
Agreement and the elimination of non-cash equity earnings from our
19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A., net
of cash dividends received.
| Three months ended March 31, 2018 | ||||||||||||||||||||||||
| (In thousands) |
Payment |
Payment |
Merchant Acquiring, net |
Business Solutions |
Corporate and Other (1) | Total | ||||||||||||||||||
| Revenues | $ | 27,168 | $ | 20,391 | $ | 23,379 | $ | 47,921 | $ | (8,585 | ) | $ | 110,274 | |||||||||||
| Operating costs and expenses | 12,933 | 18,060 | 13,141 | 29,015 | 3,570 | 76,719 | ||||||||||||||||||
| Depreciation and amortization | 2,316 | 2,449 | 420 | 3,519 | 7,163 | 15,867 | ||||||||||||||||||
| Non-operating income (expenses) | 816 | 1,813 | 4 | 300 | (1,917 | ) | 1,016 | |||||||||||||||||
| EBITDA | 17,367 | 6,593 | 10,662 | 22,725 | (6,909 | ) | 50,438 | |||||||||||||||||
| Compensation and benefits (2) | 193 | 400 | 190 | 440 | 2,606 | 3,829 | ||||||||||||||||||
| Transaction, refinancing and other fees (3) | (250 | ) | — | — | — | (49 | ) | (299 | ) | |||||||||||||||
| Adjusted EBITDA | $ | 17,310 | $ | 6,993 | $ | 10,852 | $ | 23,165 | $ | (4,352 | ) | $ | 53,968 | |||||||||||
(1) Corporate and Other consists of corporate overhead, certain
leveraged activities, other non-operating expenses and intersegment
eliminations. Intersegment revenue eliminations predominantly reflect
$8.6 million processing fee from the Payments Services - Puerto Rico and
Caribbean segment to the Merchant Acquiring segment.
(2) Primarily
represents share-based compensation, other compensation expense and
severance payments.
(3) Primarily represents fees and expenses
associated with corporate transactions as defined in the Credit
Agreement and the elimination of non-cash equity earnings from our
19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A., net
of cash dividends received.
|
EVERTEC, Inc. Schedule 5: Reconciliation of GAAP to Non-GAAP Operating Results |
||||||||
| Three months ended March 31, | ||||||||
| (Dollar amounts in thousands, except share data) | 2019 | 2018 | ||||||
| Net income | $ | 26,734 | $ | 23,114 | ||||
| Income tax expense | 3,809 | 3,935 | ||||||
| Interest expense, net | 7,292 | 7,522 | ||||||
| Depreciation and amortization | 16,273 | 15,867 | ||||||
| EBITDA | 54,108 | 50,438 | ||||||
| Equity income (1) | (222 | ) | (199 | ) | ||||
| Compensation and benefits (2) | 3,439 | 3,829 | ||||||
| Transaction, refinancing and other fees (3) | 271 | (100 | ) | |||||
| Adjusted EBITDA | 57,596 | 53,968 | ||||||
| Operating depreciation and amortization (4) | (7,965 | ) | (7,321 | ) | ||||
| Cash interest expense, net (5) | (7,132 | ) | (6,368 | ) | ||||
| Income tax expense (6) | (5,300 | ) | (5,567 | ) | ||||
| Non-controlling interest (7) | (112 | ) | (138 | ) | ||||
| Adjusted net income | $ | 37,087 | $ | 34,574 | ||||
| Net income per common share (GAAP): | ||||||||
| Diluted | $ | 0.36 | $ | 0.31 | ||||
| Adjusted Earnings per common share (Non-GAAP): | ||||||||
| Diluted | $ | 0.50 | $ | 0.47 | ||||
| Shares used in computing adjusted earnings per common share: | ||||||||
| Diluted | 73,770,066 | 73,372,835 | ||||||
1) Represents the elimination of non-cash equity earnings from our
19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A., net
of cash dividends received.
2) Primarily represents share-based
compensation and other compensation expense of $3.3 million and $3.6
million for the quarters ended March 31, 2019 and 2018, respectively and
severance payments of $0.2 million for both quarters ended March 31,
2019 and 2018.
3) Represents fees and expenses associated with
corporate transactions as defined in the Credit Agreement, recorded as
part of selling, general and administrative expenses and cost of
revenues.
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 our 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 discreet 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 |
||||||||||||
| 2019 Outlook | 2018 Actual | |||||||||||
| (Dollar amounts in millions, except per share data) | ||||||||||||
| Revenues | $ | 469 | to | $ | 476 | $ | 454 | |||||
| Earnings per Share (EPS) - Diluted (GAAP) | $ | 1.30 | to | $ | 1.38 | $ | 1.16 | |||||
|
Per share adjustment to reconcile GAAP EPS to Non-GAAP Adjusted EPS: |
||||||||||||
| Share-based comp, non-cash equity earnings and other (1) | $ | 0.19 | $ | 0.19 | $ | 0.29 | ||||||
| Merger & acquisition related depreciation and amortization (2) | $ | 0.42 | $ | 0.42 | $ | 0.45 | ||||||
| Non-cash interest expense (3) | $ | 0.02 | $ | 0.02 | $ | 0.05 | ||||||
| Tax effect of non-GAAP adjustments (4) | $ | (0.08 | ) | $ | (0.08 | ) | $ | (0.10 | ) | |||
| Non-controlling interest (5) | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.01 | ) | |||
| Total adjustments | $ | 0.54 | $ | 0.54 | 0.68 | |||||||
| Adjusted Earnings per common share (Non-GAAP) | $ | 1.84 | to | $ | 1.92 | $ | 1.84 | |||||
| Shares used in computing adjusted earnings per share (in millions) | 74.0 | 74.4 | ||||||||||
1) Represents share based compensation, the elimination of non-cash
equity earnings from our 19.99% equity investment in Consorcio de
Tarjetas Dominicanas S.A., and other adjustments to reconcile GAAP EPS
to Non-GAAP EPS.
2) Represents depreciation and amortization
expenses and intangibles generated as a result of merger and acquisition
activity.
3) Represents non-cash amortization of the debt issue
costs, premium and accretion of discount.
4) Represents income tax
expense calculated on adjusted pre-tax income using the applicable GAAP
tax rate, adjusted for certain discreet items of approximately 13% .
5)
Represents the 35% non-controlling equity interest in Evertec Colombia,
net of amortization of intangibles created as part of the purchase.
