EVERTEC Reports Second Quarter 2024 Results
Announces completion of accelerated share repurchase transaction
Second Quarter 2024 Highlights
-
Revenue increased
27% to$212.0 million -
GAAP Net Income attributable to common shareholders increased
13% to and increased$31.9 million 14% to per diluted share$0.49 -
Adjusted EBITDA increased
16% to and Adjusted earnings per common share increased$86.1 million 17% to$0.83 - Completed the outstanding accelerated share repurchase on July 9, 2024.
Mac Schuessler, President and Chief Executive Officer stated, "Our second quarter results exceeded our expectations, our business in
Second Quarter 2024 Results
Revenue. Total revenue for the quarter ended June 30, 2024 was
Net Income attributable to common shareholders. For the quarter ended June 30, 2024, GAAP Net Income attributable to common shareholders was
Adjusted EBITDA and Adjusted EBITDA Margin. For the quarter ended June 30, 2024, Adjusted EBITDA was
Adjusted Net Income and Adjusted earnings per common share. For the quarter ended June 30, 2024, Adjusted Net Income was
Share Repurchase
On July 9, 2024, the Company completed the previously announced accelerated share repurchase ("ASR") transaction. The Company received an additional 467,362 shares, in addition to the 1,516,793 shares received in March. All of the shares received as part of the ASR were retired.
2024 Outlook
The Company's financial outlook for 2024 is as follows:
-
Total consolidated revenue between
and$846 million approximately$854 million 22% to23% growth. -
Adjusted earnings per common share between
to$2.98 approximately$3.07 6% to9% growth as compared to in 2023.$2.82 -
Capital expenditures are now anticipated to be approximately
, including Sinqia.$85 million -
Effective tax rate of approximately
5% compared to a6% to7% in 2023.
Earnings Conference Call and Audio Webcast
The Company will host a conference call to discuss its second quarter 2024 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 6294553. The replay will be available through Wednesday, August 7, 2024. 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 will be available prior to the call 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 processor and financial technology provider in
Use of Non-GAAP Financial Information
The non-GAAP measures referenced in this earnings release are supplemental measures of the Company’s performance and are not required by, or presented in accordance with, accounting principles generally accepted in
Reconciliations of the non-GAAP measures to the most directly comparable GAAP measure are included at the end of this earnings release. These non-GAAP measures include EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings per common share, each as defined below.
EBITDA is defined as earnings before interest, taxes, depreciation and amortization.
Adjusted EBITDA is defined as EBITDA further adjusted to exclude certain non-cash items and unusual expenses such as: share-based compensation, restructuring related expenses, fees and expenses from corporate transactions such as M&A activity and financing, equity investment income net of dividends received, and the impact from unrealized gains and losses on foreign currency remeasurement for assets and liabilities in non-functional currency. This measure is reported to the chief operating decision maker for purposes of making decisions about allocating resources to the segments and assessing their performance. For this reason, Adjusted EBITDA, as it relates to the Company's segments, is presented in conformity with Accounting Standards Codification 280, Segment Reporting, and is excluded from the definition of non-GAAP financial measures under the Securities and Exchange Commission's Regulation G and Item 10(e) of Regulation S-K. The Company's presentation of Adjusted EBITDA is substantially consistent with the equivalent measurements that are contained in the secured credit facilities in testing EVERTEC Group’s compliance with covenants therein such as the secured leverage ratio.
Adjusted Net Income is defined as Adjusted EBITDA less: operating depreciation and amortization expense, defined as GAAP Depreciation and amortization less amortization of intangibles related to acquisitions such as customer relationships, trademarks, non-compete agreements, among others; cash interest expense defined as GAAP interest expense, less GAAP interest income adjusted to exclude non-cash amortization of debt issue costs, premium and accretion of discount; income tax expense which is calculated on adjusted pre-tax income using the applicable GAAP tax rate, adjusted for uncertain tax position releases, tax true-ups, windfall from share-based compensation, unrealized gains and losses from foreign currency remeasurement, among others; and non-controlling interests, net of amortization for intangibles created as part of the purchase.
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.
Forward-Looking Statements
Certain statements in this earnings release constitute “forward-looking statements” within the meaning of, and subject to the protection of, the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements contained in this press release other than statements of historical facts, including, without limitation, statements regarding our ability to meet our guidance expectations for revenue, earnings per share, Adjusted earnings per common share, capital expenditures and effective tax rate, including for fiscal year 2023, are forward looking statements. Words such as “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.
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: our reliance on our relationship with Popular, Inc. (“Popular”) for a significant portion of our revenues pursuant to our second Amended and Restated Master Services Agreement (“A&R MSA”) with them, and as it may impact our ability to grow our business; our ability to renew our client contracts on terms favorable to us, including but not limited to the current term and any extension of the MSA with Popular; our dependence on our processing systems, technology infrastructure, security systems and fraudulent payment detection systems, as well as on our personnel and certain third parties with whom we do business, and the risks to our business if our systems are hacked or otherwise compromised; our ability to develop, install and adopt new software, technology and computing systems; a decreased client base due to consolidations and/or failures in the financial services industry; the credit risk of our merchant clients, for which we may also be liable; the continuing market position of the ATH network; a reduction in consumer confidence, whether as a result of a global economic downturn or otherwise, which leads to a decrease in consumer spending; our dependence on credit card associations, including any adverse changes in credit card association or network rules or fees; changes in the regulatory environment and changes in macroeconomic, market, international, legal, tax, political, or administrative conditions, including inflation or the risk of recession; the geographical concentration of our business in
EVERTEC, Inc. Schedule 1: Unaudited Condensed Consolidated Statements of Income and Comprehensive (Loss) Income |
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|
Three months ended June 30, |
|
Six months ended June 30, |
||||||||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
(Dollar amounts in thousands, except share data) |
|
|
|
|
|
|
|
|
||||||||
Revenues |
|
$ |
211,978 |
|
|
$ |
167,076 |
|
|
$ |
417,296 |
|
|
$ |
326,890 |
|
|
|
|
|
|
|
|
|
|
||||||||
Operating costs and expenses |
|
|
|
|
|
|
|
|
||||||||
Cost of revenues, exclusive of depreciation and amortization |
|
|
97,481 |
|
|
|
80,452 |
|
|
|
199,929 |
|
|
|
156,869 |
|
Selling, general and administrative expenses |
|
|
38,187 |
|
|
|
29,522 |
|
|
|
73,813 |
|
|
|
53,397 |
|
Depreciation and amortization |
|
|
32,950 |
|
|
|
22,329 |
|
|
|
67,391 |
|
|
|
41,761 |
|
Total operating costs and expenses |
|
|
168,618 |
|
|
|
132,303 |
|
|
|
341,133 |
|
|
|
252,027 |
|
Income from operations |
|
|
43,360 |
|
|
|
34,773 |
|
|
|
76,163 |
|
|
|
74,863 |
|
Non-operating income (expenses) |
|
|
|
|
|
|
|
|
||||||||
Interest income |
|
|
3,218 |
|
|
|
2,103 |
|
|
|
6,578 |
|
|
|
3,236 |
|
Interest expense |
|
|
(18,709 |
) |
|
|
(5,640 |
) |
|
|
(38,648 |
) |
|
|
(11,283 |
) |
Gain (loss) on foreign currency remeasurement |
|
|
2,404 |
|
|
|
333 |
|
|
|
(2,052 |
) |
|
|
(4,531 |
) |
Earnings of equity method investment |
|
|
1,096 |
|
|
|
1,476 |
|
|
|
2,167 |
|
|
|
2,631 |
|
Other income, net |
|
|
2,255 |
|
|
|
1,591 |
|
|
|
6,095 |
|
|
|
2,601 |
|
Total non-operating expenses |
|
|
(9,736 |
) |
|
|
(137 |
) |
|
|
(25,860 |
) |
|
|
(7,346 |
) |
Income before income taxes |
|
|
33,624 |
|
|
|
34,636 |
|
|
|
50,303 |
|
|
|
67,517 |
|
Income tax expense |
|
|
1,101 |
|
|
|
6,586 |
|
|
|
1,393 |
|
|
|
9,404 |
|
Net income |
|
|
32,523 |
|
|
|
28,050 |
|
|
|
48,910 |
|
|
|
58,113 |
|
Less: Net income (loss) attributable to non-controlling interest |
|
|
622 |
|
|
|
(105 |
) |
|
|
1,030 |
|
|
|
(94 |
) |
Net income attributable to EVERTEC, Inc.’s common stockholders |
|
|
31,901 |
|
|
|
28,155 |
|
|
|
47,880 |
|
|
|
58,207 |
|
Other comprehensive (loss) income, net of tax |
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments |
|
|
(64,351 |
) |
|
|
3,153 |
|
|
|
(90,827 |
) |
|
|
20,758 |
|
Gain on cash flow hedges |
|
|
1,034 |
|
|
|
1,816 |
|
|
|
3,382 |
|
|
|
271 |
|
Unrealized loss on change in fair value of debt securities available-for-sale |
|
|
— |
|
|
|
— |
|
|
|
(3 |
) |
|
|
(20 |
) |
Other comprehensive (loss) income, net of tax |
|
$ |
(63,317 |
) |
|
$ |
4,969 |
|
|
$ |
(87,448 |
) |
|
$ |
21,009 |
|
Total comprehensive (loss) income attributable to EVERTEC, Inc.’s common stockholders |
|
$ |
(31,416 |
) |
|
$ |
33,124 |
|
|
$ |
(39,568 |
) |
|
$ |
79,216 |
|
Net income per common share: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
|
0.50 |
|
|
$ |
0.43 |
|
|
$ |
0.74 |
|
|
$ |
0.90 |
|
Diluted |
|
$ |
0.49 |
|
|
$ |
0.43 |
|
|
$ |
0.73 |
|
|
$ |
0.89 |
|
Shares used in computing net income per common share: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
|
64,420,756 |
|
|
|
65,046,328 |
|
|
|
64,800,361 |
|
|
|
65,007,528 |
|
Diluted |
|
|
65,150,744 |
|
|
|
65,510,091 |
|
|
|
65,699,385 |
|
|
|
65,571,453 |
|
EVERTEC, Inc. Schedule 2: Unaudited Condensed Consolidated Balance Sheets |
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|
|
|
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|
|||
(In thousands) |
|
June 30, 2024 |
|
December 31, 2023 |
|||
Assets |
|
|
|
|
|||
Current Assets: |
|
|
|
|
|||
Cash and cash equivalents |
|
$ |
257,699 |
|
|
$ |
295,600 |
Restricted cash |
|
|
24,434 |
|
|
|
23,073 |
Accounts receivable, net |
|
|
122,278 |
|
|
|
126,510 |
Settlement assets |
|
|
64,922 |
|
|
|
51,467 |
Prepaid expenses and other assets |
|
|
61,444 |
|
|
|
64,704 |
Total current assets |
|
|
530,777 |
|
|
|
561,354 |
Debt securities available-for-sale, at fair value |
|
|
1,725 |
|
|
|
2,095 |
Equity securities, at fair value |
|
|
4,960 |
|
|
|
9,413 |
Investment in equity investees |
|
|
22,860 |
|
|
|
21,145 |
Property and equipment, net |
|
|
65,769 |
|
|
|
62,453 |
Operating lease right-of-use asset |
|
|
12,756 |
|
|
|
14,796 |
Goodwill |
|
|
741,645 |
|
|
|
791,700 |
Other intangible assets, net |
|
|
451,637 |
|
|
|
518,070 |
Deferred tax asset |
|
|
23,851 |
|
|
|
47,847 |
Derivative asset |
|
|
7,241 |
|
|
|
4,385 |
Other long-term assets |
|
|
26,700 |
|
|
|
27,005 |
Total assets |
|
$ |
1,889,921 |
|
|
$ |
2,060,263 |
Liabilities and stockholders’ equity |
|
|
|
|
|||
Current Liabilities: |
|
|
|
|
|||
Accrued liabilities |
|
$ |
114,417 |
|
|
$ |
129,160 |
Accounts payable |
|
|
60,122 |
|
|
|
66,516 |
Contract liability |
|
|
18,894 |
|
|
|
21,055 |
Income tax payable |
|
|
4,222 |
|
|
|
3,402 |
Current portion of long-term debt |
|
|
23,867 |
|
|
|
23,867 |
Current portion of operating lease liability |
|
|
7,408 |
|
|
|
6,693 |
Settlement liabilities |
|
|
62,041 |
|
|
|
47,620 |
Total current liabilities |
|
|
290,971 |
|
|
|
298,313 |
Long-term debt |
|
|
936,001 |
|
|
|
946,816 |
Deferred tax liability |
|
|
46,148 |
|
|
|
87,916 |
Contract liability - long term |
|
|
54,136 |
|
|
|
41,825 |
Operating lease liability - long-term |
|
|
6,697 |
|
|
|
9,033 |
Other long-term liabilities |
|
|
30,438 |
|
|
|
40,984 |
Total liabilities |
|
|
1,364,391 |
|
|
|
1,424,887 |
Commitments and contingencies |
|
|
|
|
|||
Redeemable non-controlling interests |
|
|
38,455 |
|
|
|
36,968 |
Stockholders’ equity |
|
|
|
|
|||
Preferred stock, par value |
|
|
— |
|
|
|
— |
Common stock, par value |
|
|
644 |
|
|
|
654 |
Additional paid-in capital |
|
|
10,777 |
|
|
|
36,527 |
Accumulated earnings |
|
|
541,248 |
|
|
|
538,903 |
Accumulated other comprehensive (loss) income, net of tax |
|
|
(69,239 |
) |
|
|
18,209 |
Total stockholders’ equity |
|
|
483,430 |
|
|
|
594,293 |
Non-redeemable non-controlling interest |
|
|
3,645 |
|
|
|
4,115 |
Total equity |
|
|
487,075 |
|
|
|
598,408 |
Total liabilities and equity |
|
$ |
1,889,921 |
|
|
$ |
2,060,263 |
EVERTEC, Inc. Schedule 3: Unaudited Condensed Consolidated Statements of Cash Flows |
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|
|
|
||||||
|
|
Six months ended June 30, |
||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
||||
Cash flows from operating activities |
|
|
|
|
||||
Net income |
|
|
48,910 |
|
|
$ |
58,113 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
||||
Depreciation and amortization |
|
|
67,391 |
|
|
|
41,761 |
|
Amortization of debt issue costs and accretion of discount |
|
|
2,361 |
|
|
|
791 |
|
Operating lease amortization |
|
|
3,565 |
|
|
|
3,103 |
|
Deferred tax benefit |
|
|
(13,324 |
) |
|
|
(3,467 |
) |
Share-based compensation |
|
|
15,009 |
|
|
|
12,056 |
|
Earnings of equity method investment |
|
|
(2,167 |
) |
|
|
(2,631 |
) |
Gain on sale of equity securities |
|
|
(2,599 |
) |
|
|
— |
|
Loss on foreign currency remeasurement |
|
|
2,052 |
|
|
|
4,531 |
|
Other, net |
|
|
(1,666 |
) |
|
|
4,124 |
|
(Increase) decrease in assets: |
|
|
|
|
||||
Accounts receivable, net |
|
|
1,329 |
|
|
|
1,261 |
|
Prepaid expenses and other assets |
|
|
(431 |
) |
|
|
(628 |
) |
Other long-term assets |
|
|
(734 |
) |
|
|
(2,282 |
) |
Increase (decrease) in liabilities: |
|
|
|
|
||||
Accrued liabilities and accounts payable |
|
|
3,101 |
|
|
|
16,392 |
|
Income tax payable |
|
|
1,103 |
|
|
|
(10,027 |
) |
Contract liability |
|
|
11,561 |
|
|
|
1,181 |
|
Operating lease liabilities |
|
|
(1,672 |
) |
|
|
(3,035 |
) |
Other long-term liabilities |
|
|
(2,449 |
) |
|
|
(592 |
) |
Total adjustments |
|
|
82,430 |
|
|
|
62,538 |
|
Net cash provided by operating activities |
|
|
131,340 |
|
|
|
120,651 |
|
Cash flows from investing activities |
|
|
|
|
||||
Additions to software |
|
|
(39,106 |
) |
|
|
(24,151 |
) |
Property and equipment acquired |
|
|
(17,226 |
) |
|
|
(11,305 |
) |
Purchase of equity securities |
|
|
(111 |
) |
|
|
— |
|
Proceeds from maturities of available-for-sale debt securities |
|
|
370 |
|
|
|
— |
|
Proceeds from sale of equity securities |
|
|
5,906 |
|
|
|
— |
|
Acquisitions, net of cash acquired |
|
|
— |
|
|
|
(22,915 |
) |
Net cash used in investing activities |
|
|
(50,167 |
) |
|
|
(58,371 |
) |
Cash flows from financing activities |
|
|
|
|
||||
Withholding taxes paid on share-based compensation |
|
|
(9,825 |
) |
|
|
(5,955 |
) |
Net decrease in short-term borrowings |
|
|
— |
|
|
|
(20,000 |
) |
Dividends paid |
|
|
(6,493 |
) |
|
|
(6,503 |
) |
Repurchase of common stock |
|
|
(70,000 |
) |
|
|
(15,790 |
) |
Repayment of long-term debt |
|
|
(11,933 |
) |
|
|
(10,375 |
) |
Repayment of other financing agreements |
|
|
(7,046 |
) |
|
|
— |
|
Settlement activity, net |
|
|
21,703 |
|
|
|
5,587 |
|
Other financing activities, net |
|
|
(2,182 |
) |
|
|
— |
|
Net cash used in financing activities |
|
|
(85,776 |
) |
|
|
(53,036 |
) |
Effect of foreign exchange rate on cash, cash equivalents and restricted cash |
|
|
(10,234 |
) |
|
|
(1,841 |
) |
Net increase in cash, cash equivalents and restricted cash |
|
|
(14,837 |
) |
|
|
7,403 |
|
Cash, cash equivalents, restricted cash and cash included in settlement assets at beginning of the period |
|
|
343,724 |
|
|
|
221,244 |
|
Cash, cash equivalents, restricted cash, and cash included in settlement assets at end of the period |
|
$ |
328,887 |
|
|
$ |
228,647 |
|
Reconciliation of cash, cash equivalents, restricted cash, and cash included in settlement assets |
|
|
|
|
||||
Cash and cash equivalents |
|
|
257,699 |
|
|
|
191,620 |
|
Restricted cash |
|
|
24,434 |
|
|
|
19,485 |
|
Cash and cash equivalents included in settlement assets |
|
|
46,754 |
|
|
|
17,542 |
|
Cash, cash equivalents, restricted cash, and cash included in settlement assets |
|
$ |
328,887 |
|
|
$ |
228,647 |
|
EVERTEC, Inc. Schedule 4: Unaudited Segment Information |
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|
|
|
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|
|
Three Months Ended June 30, 2024 |
|||||||||||||||||||
(In thousands) |
|
Payment Services -
|
|
Payments and Solutions |
|
Merchant Acquiring, net |
|
Business Solutions |
|
Corporate and Other (1) |
|
Total |
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues |
$ |
54,199 |
|
$ |
74,669 |
|
|
$ |
45,319 |
|
$ |
62,336 |
|
$ |
(24,545 |
) |
|
$ |
211,978 |
|
|
Operating costs and expenses |
|
31,733 |
|
|
74,353 |
|
|
|
29,481 |
|
|
37,663 |
|
|
(4,612 |
) |
|
|
168,618 |
|
|
Depreciation and amortization |
|
7,496 |
|
|
15,051 |
|
|
|
1,409 |
|
|
3,750 |
|
|
5,244 |
|
|
|
32,950 |
|
|
Non-operating income |
|
134 |
|
|
5,274 |
|
|
|
— |
|
|
151 |
|
|
196 |
|
|
|
5,755 |
|
|
EBITDA |
|
30,096 |
|
|
20,641 |
|
|
|
17,247 |
|
|
28,574 |
|
|
(14,493 |
) |
|
|
82,065 |
|
|
Compensation and benefits (2) |
|
771 |
|
|
1,654 |
|
|
|
787 |
|
|
906 |
|
|
3,483 |
|
|
|
7,601 |
|
|
Transaction, refinancing and other fees (3) |
|
456 |
|
|
(2,359 |
) |
|
|
214 |
|
|
289 |
|
|
190 |
|
|
|
(1,210 |
) |
|
Loss (gain) on foreign currency remeasurement (4) |
|
35 |
|
|
(2,436 |
) |
|
|
— |
|
|
— |
|
|
(3 |
) |
|
|
(2,404 |
) |
|
Adjusted EBITDA |
$ |
31,358 |
|
$ |
17,500 |
|
|
$ |
18,248 |
|
$ |
29,769 |
|
$ |
(10,823 |
) |
|
$ |
86,052 |
|
____________________ |
||
(1) |
|
Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations. Intersegment revenue eliminations predominantly reflect the |
(2) |
|
Primarily represents share-based compensation and severance payments. |
(3) |
|
Primarily represents fees and expenses associated with corporate transactions as defined in the Credit Agreement, the elimination of realized gains from equity securities and the elimination of unrealized earnings from equity investments. |
(4) |
|
Represents non-cash unrealized gains (losses) on foreign currency remeasurement for assets and liabilities denominated in non-functional currencies. |
|
Three Months Ended June 30, 2023 |
|||||||||||||||||||||
(In thousands) |
Payment Services -
|
|
Payments and Solutions |
|
Merchant Acquiring, net |
|
Business Solutions |
|
Corporate and Other (1) |
|
Total |
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Revenues |
$ |
50,795 |
|
|
$ |
39,076 |
|
|
$ |
41,248 |
|
$ |
56,971 |
|
$ |
(21,014 |
) |
|
$ |
167,076 |
|
|
Operating costs and expenses |
|
28,895 |
|
|
|
33,666 |
|
|
|
27,616 |
|
|
39,097 |
|
|
3,029 |
|
|
|
132,303 |
|
|
Depreciation and amortization |
|
6,087 |
|
|
|
5,393 |
|
|
|
1,150 |
|
|
4,469 |
|
|
5,230 |
|
|
|
22,329 |
|
|
Non-operating income |
|
115 |
|
|
|
2,290 |
|
|
|
1 |
|
|
66 |
|
|
928 |
|
|
|
3,400 |
|
|
EBITDA |
|
28,102 |
|
|
|
13,093 |
|
|
|
14,783 |
|
|
22,409 |
|
|
(17,885 |
) |
|
|
60,502 |
|
|
Compensation and benefits (2) |
|
842 |
|
|
|
999 |
|
|
|
860 |
|
|
965 |
|
|
5,035 |
|
|
|
8,701 |
|
|
Transaction, refinancing and other (3) |
|
288 |
|
|
|
253 |
|
|
|
— |
|
|
— |
|
|
5,068 |
|
|
|
5,609 |
|
|
(Gain) loss on foreign currency remeasurement (4) |
|
(49 |
) |
|
|
(285 |
) |
|
|
— |
|
|
— |
|
|
1 |
|
|
|
(333 |
) |
|
Adjusted EBITDA |
$ |
29,183 |
|
|
$ |
14,060 |
|
|
$ |
15,643 |
|
$ |
23,374 |
|
$ |
(7,781 |
) |
|
$ |
74,479 |
|
____________________ |
||
(1) |
|
Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations. Intersegment revenue eliminations predominantly reflect the |
(2) |
|
Primarily represents share-based compensation and severance payments. |
(3) |
|
Primarily represents fees and expenses associated with corporate transactions as defined in the Credit Agreement, and the elimination of unrealized earnings from equity investments. |
(4) |
|
Represents non-cash unrealized gains (losses) on foreign currency remeasurement for assets and liabilities denominated in non-functional currencies. |
|
Six months ended June 30, 2024 |
|||||||||||||||||||||
(In thousands) |
Payment Services -
|
|
Payments and Solutions |
|
Merchant Acquiring, net |
|
Business Solutions |
|
Corporate and Other (1) |
|
Total |
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Revenues |
$ |
107,230 |
|
|
$ |
148,885 |
|
|
$ |
88,418 |
|
$ |
120,464 |
|
$ |
(47,701 |
) |
|
$ |
417,296 |
|
|
Operating costs and expenses |
|
62,685 |
|
|
|
150,384 |
|
|
|
58,300 |
|
|
78,114 |
|
|
(8,350 |
) |
|
|
341,133 |
|
|
Depreciation and amortization |
|
14,758 |
|
|
|
31,308 |
|
|
|
2,642 |
|
|
8,188 |
|
|
10,495 |
|
|
|
67,391 |
|
|
Non-operating income |
|
282 |
|
|
|
4,109 |
|
|
|
— |
|
|
290 |
|
|
1,529 |
|
|
|
6,210 |
|
|
EBITDA |
|
59,585 |
|
|
|
33,918 |
|
|
|
32,760 |
|
|
50,828 |
|
|
(27,327 |
) |
|
|
149,764 |
|
|
Compensation and benefits (2) |
|
1,469 |
|
|
|
3,152 |
|
|
|
1,494 |
|
|
1,691 |
|
|
7,785 |
|
|
|
15,591 |
|
|
Transaction, refinancing and other fees (3) |
|
723 |
|
|
|
(5,388 |
) |
|
|
214 |
|
|
289 |
|
|
984 |
|
|
|
(3,178 |
) |
|
(Gain) loss on foreign currency remeasurement (4) |
|
(67 |
) |
|
|
2,115 |
|
|
|
— |
|
|
— |
|
|
4 |
|
|
|
2,052 |
|
|
Adjusted EBITDA |
$ |
61,710 |
|
|
$ |
33,797 |
|
|
$ |
34,468 |
|
$ |
52,808 |
|
$ |
(18,554 |
) |
|
$ |
164,229 |
|
(1) |
|
Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations. Intersegment revenue eliminations predominantly reflect the |
(2) |
|
Primarily represents share-based compensation and severance payments. |
(3) |
|
Primarily represents fees and expenses associated with corporate transactions as defined in the Credit Agreement, the elimination of realized gains from equity securities and the elimination of unrealized earnings from equity investments. |
(4) |
|
Represents non-cash unrealized gains (losses) on foreign currency remeasurement for assets and liabilities denominated in non-functional currencies. |
|
Six months ended June 30, 2023 |
|||||||||||||||||||
(In thousands) |
Payment Services -
|
|
Payments and Solutions |
|
Merchant Acquiring, net |
|
Business Solutions |
|
Corporate and Other (1) |
|
Total |
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Revenues |
$ |
99,224 |
|
$ |
74,393 |
|
|
$ |
81,595 |
|
$ |
112,666 |
|
$ |
(40,988 |
) |
|
$ |
326,890 |
|
Operating costs and expenses |
|
56,617 |
|
|
62,978 |
|
|
|
54,305 |
|
|
78,010 |
|
|
117 |
|
|
|
252,027 |
|
Depreciation and amortization |
|
11,975 |
|
|
8,104 |
|
|
|
2,279 |
|
|
8,957 |
|
|
10,446 |
|
|
|
41,761 |
|
Non-operating income (expenses) |
|
480 |
|
|
(1,495 |
) |
|
|
308 |
|
|
598 |
|
|
810 |
|
|
|
701 |
|
EBITDA |
|
55,062 |
|
|
18,024 |
|
|
|
29,877 |
|
|
44,211 |
|
|
(29,849 |
) |
|
|
117,325 |
|
Compensation and benefits (2) |
|
1,370 |
|
|
1,651 |
|
|
|
1,392 |
|
|
1,530 |
|
|
8,603 |
|
|
|
14,546 |
|
Transaction, refinancing and other fees (3) |
|
580 |
|
|
253 |
|
|
|
— |
|
|
— |
|
|
4,379 |
|
|
|
5,212 |
|
Loss (gain) on foreign currency remeasurement (4) |
|
46 |
|
|
4,487 |
|
|
|
— |
|
|
— |
|
|
(2 |
) |
|
|
4,531 |
|
Adjusted EBITDA |
$ |
57,058 |
|
$ |
24,415 |
|
|
$ |
31,269 |
|
$ |
45,741 |
|
$ |
(16,869 |
) |
|
$ |
141,614 |
(1) |
|
Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations. Intersegment revenue eliminations predominantly reflect the |
(2) |
|
Primarily represents share-based compensation and severance payments. |
(3) |
|
Primarily represents fees and expenses associated with corporate transactions as defined in the Credit Agreement, and the elimination of unrealized earnings from equity investments. |
(4) |
|
Represents non-cash unrealized gains (losses) on foreign currency remeasurement for assets and liabilities denominated in non-functional currencies. |
EVERTEC, Inc. Schedule 5: Reconciliation of GAAP to Non-GAAP Operating Results |
||||||||||||||||
|
|
|
|
|
||||||||||||
|
|
Three months ended June 30, |
|
Six months ended June 30, |
||||||||||||
(Dollar amounts in thousands, except share data) |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net income |
|
|
32,523 |
|
|
|
28,050 |
|
|
|
48,910 |
|
|
|
58,113 |
|
Income tax expense |
|
|
1,101 |
|
|
|
6,586 |
|
|
|
1,393 |
|
|
|
9,404 |
|
Interest expense, net |
|
|
15,491 |
|
|
|
3,537 |
|
|
|
32,070 |
|
|
|
8,047 |
|
Depreciation and amortization |
|
|
32,950 |
|
|
|
22,329 |
|
|
|
67,391 |
|
|
|
41,761 |
|
EBITDA |
|
|
82,065 |
|
|
|
60,502 |
|
|
|
149,764 |
|
|
|
117,325 |
|
Equity income (1) |
|
|
(1,096 |
) |
|
|
(1,476 |
) |
|
|
(2,167 |
) |
|
|
(2,631 |
) |
Compensation and benefits (2) |
|
|
7,601 |
|
|
|
8,701 |
|
|
|
15,591 |
|
|
|
14,546 |
|
Transaction, refinancing and other (3) |
|
|
(114 |
) |
|
|
7,085 |
|
|
|
(1,011 |
) |
|
|
7,843 |
|
(Gain) loss on foreign currency remeasurement (4) |
|
|
(2,404 |
) |
|
|
(333 |
) |
|
|
2,052 |
|
|
|
4,531 |
|
Adjusted EBITDA |
|
|
86,052 |
|
|
|
74,479 |
|
|
|
164,229 |
|
|
|
141,614 |
|
Operating depreciation and amortization (5) |
|
|
(14,644 |
) |
|
|
(12,835 |
) |
|
|
(29,439 |
) |
|
|
(25,204 |
) |
Cash interest expense, net (6) |
|
|
(14,422 |
) |
|
|
(3,457 |
) |
|
|
(29,841 |
) |
|
|
(7,820 |
) |
Income tax expense (7) |
|
|
(2,526 |
) |
|
|
(11,626 |
) |
|
|
(2,064 |
) |
|
|
(16,408 |
) |
Non-controlling interest (8) |
|
|
(645 |
) |
|
|
80 |
|
|
|
(1,066 |
) |
|
|
46 |
|
Adjusted net income |
|
$ |
53,815 |
|
|
$ |
46,641 |
|
|
$ |
101,819 |
|
|
$ |
92,228 |
|
Net income per common share (GAAP): |
|
|
|
|
|
|
|
|
||||||||
Diluted |
|
$ |
0.49 |
|
|
$ |
0.43 |
|
|
$ |
0.73 |
|
|
$ |
0.89 |
|
Adjusted Earnings per common share (Non-GAAP): |
|
|
|
|
|
|
|
|
||||||||
Diluted |
|
$ |
0.83 |
|
|
$ |
0.71 |
|
|
$ |
1.55 |
|
|
$ |
1.41 |
|
Shares used in computing adjusted earnings per common share: |
|
|
|
|
|
|
|
|
||||||||
Diluted |
|
|
65,150,744 |
|
|
|
65,510,091 |
|
|
|
65,699,385 |
|
|
|
65,571,453 |
|
____________________ |
||
1) |
|
Represents the elimination of non-cash equity earnings from our equity investments. |
2) |
|
Primarily represents share-based compensation and severance payments. |
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 the elimination of unrealized gains from the change in fair market value of equity securities. |
4) |
|
Represents non-cash unrealized gains (losses) on foreign currency remeasurement for assets and liabilities denominated in non-functional currencies. |
5) |
|
Represents operating depreciation and amortization expense, which excludes amounts generated as a result of merger and acquisition activity. |
6) |
|
Represents interest expense, less interest income, as they appear on the condensed consolidated statements of income and comprehensive (loss) income, adjusted to exclude non-cash amortization of the debt issue costs, premium and accretion of discount. |
7) |
|
Represents income tax expense calculated on adjusted pre-tax income using the applicable GAAP tax rate, adjusted for certain discrete items. |
8) |
|
Represents the non-controlling equity interests, 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 Common Share |
||||||||||||||
|
|
|
|
|
|
|
|
|
||||||
|
|
Outlook 2024 |
|
|
2023 |
|
||||||||
(Dollar amounts in millions, except per share data) |
|
Low |
|
|
|
High |
|
|
||||||
Revenues |
|
$ |
846 |
|
|
to |
|
$ |
854 |
|
|
$ |
695 |
|
Earnings per Share (EPS) (GAAP) |
|
$ |
1.59 |
|
|
to |
|
$ |
1.70 |
|
|
$ |
1.21 |
|
Per share adjustment to reconcile GAAP EPS to Non-GAAP Adjusted EPS: |
|
|
|
|
|
|
|
|
||||||
Share-based comp, non-cash equity earnings and other (1) |
|
|
0.51 |
|
|
|
|
|
0.51 |
|
|
|
1.36 |
|
Merger and acquisition related depreciation and amortization (2) |
|
|
0.94 |
|
|
|
|
|
0.92 |
|
|
|
0.62 |
|
Non-cash interest expense (3) |
|
|
0.05 |
|
|
|
|
|
0.05 |
|
|
|
(0.01 |
) |
Tax effect of non-gaap adjustments (4) |
|
|
(0.08 |
) |
|
|
|
|
(0.07 |
) |
|
|
(0.36 |
) |
Non-controlling interest (5) |
|
|
(0.03 |
) |
|
|
|
|
(0.04 |
) |
|
|
— |
|
Total adjustments |
|
|
1.39 |
|
|
|
|
|
1.37 |
|
|
|
1.61 |
|
Adjusted EPS (Non-GAAP) |
|
$ |
2.98 |
|
|
to |
|
$ |
3.07 |
|
|
$ |
2.82 |
|
Shares used in computing adjusted earnings per common share |
|
|
|
|
|
|
65.2 |
|
|
|
65.8 |
|
____________________ |
||
(1) |
|
Represents share-based compensation, the elimination of non-cash equity earnings from equity investees, non-cash unrealized gains (losses) on foreign currency remeasurement for assets and liabilities denominated in non-functional currencies, severance and other adjustments to reconcile GAAP EPS to Non-GAAP EPS. |
(2) |
|
Represents depreciation and amortization expenses amounts generated as a result of M&A activity. |
(3) |
|
Represents non-cash amortization of the debt issue costs, premium and accretion of discount. |
(4) |
|
Represents income tax expense on non-GAAP adjustments using the applicable GAAP tax rate (anticipated at approximately |
(5) |
|
Represents the non-controlling equity interests, net of amortization for intangibles created as part of the purchase. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240731310925/en/
Investor Contact
Beatriz Brown-Sáenz
(787) 773-5442
IR@evertecinc.com
Source: EVERTEC