Announces completion of accelerated share
repurchase transaction
EVERTEC, Inc. (NYSE: EVTC) (“Evertec”, the “Company”, “we” or
“our”) today announced results for the second quarter ended June
30, 2024.
Second Quarter 2024 Highlights
- Revenue increased 27% to $212.0 million
- GAAP Net Income attributable to common shareholders increased
13% to $31.9 million and increased 14% to $0.49 per diluted
share
- Adjusted EBITDA increased 16% to $86.1 million and Adjusted
earnings per common share increased 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 Puerto Rico continues to perform strongly and our results in
Latin America are encouraging as we continue to work through the
Sinqia integration."
Second Quarter 2024 Results
Revenue. Total revenue for the quarter ended June 30, 2024 was
$212.0 million, an increase of 27% compared with $167.1 million in
the prior year quarter, reflecting the contribution from the Sinqia
acquisition and organic growth across all of the Company's
segments. Merchant acquiring revenue growth was a result of an
improvement in the overall spread and sales volume growth.
Continued growth in ATH Movil Business and increased transaction
volumes drove the revenue increase in Payments Puerto Rico. Latin
America revenue benefited from the contribution from the Sinqia
acquisition as well as continued organic growth across the region.
Business Solutions revenue reflected an increase mainly driven by a
project related one-time revenue impact.
Net Income attributable to common shareholders. For the quarter
ended June 30, 2024, GAAP Net Income attributable to common
shareholders was $31.9 million, or $0.49 per diluted share, an
increase of $3.7 million or $0.06 per diluted share as compared to
the prior year, driven by the increase in revenues and a decrease
in income tax expense, partially offset by increased expenses, an
increase in interest expense resulting from the incremental debt
raised to finance the Sinqia acquisition and an increase in
depreciation and amortization expense. Costs of revenues reflected
an increase in personnel costs, mostly due to Sinqia, and, to a
lesser extent, an increase in cloud services and professional fees.
Selling, general and administrative expenses increased also mainly
due to the addition of Sinqia headcount.
Adjusted EBITDA and Adjusted EBITDA Margin. For the quarter
ended June 30, 2024, Adjusted EBITDA was $86.1 million, an increase
of $11.6 million when compared to the prior year quarter, driven by
the increase in revenues and the contribution from the Sinqia
acquisition. Adjusted EBITDA margin (Adjusted EBITDA as a
percentage of total revenues) was 40.6%, a decrease of
approximately 400 basis points from the prior year. The decrease in
Adjusted EBITDA margin reflects the addition of Sinqia which
contributes at a lower margin.
Adjusted Net Income and Adjusted earnings per common share. For
the quarter ended June 30, 2024, Adjusted Net Income was $53.8
million, an increase of $7.2 million compared to $46.6 million in
the prior year. The increase was driven by the higher Adjusted
EBITDA and a decrease in non-GAAP tax expense, partially offset by
higher operating depreciation and amortization and higher cash
interest expense, due to the incremental debt raised for the Sinqia
acquisition. Adjusted earnings per common share was $0.83, an
increase of $0.12 per diluted share compared to $0.71, in the prior
year driven by the increase in adjusted net income.
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 $846 million and $854
million approximately 22% to 23% growth.
- Adjusted earnings per common share between $2.98 to $3.07
approximately 6% to 9% growth as compared to $2.82 in 2023.
- Capital expenditures are now anticipated to be approximately
$85 million, including Sinqia.
- Effective tax rate of approximately 5% compared to a 6% to 7%
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 Latin America,
Puerto Rico and the Caribbean, providing a broad range of merchant
acquiring, payment services and business process management
services. Evertec owns and operates the ATH® network, one of the
leading personal identification number (“PIN”) debit networks in
Latin America. In addition, the Company manages a system of
electronic payment networks and offers a comprehensive suite of
services for core banking, cash processing and fulfillment in
Puerto Rico, that process approximately six billion transactions
annually. The Company also offers financial technology outsourcing
in all the regions it serves. Based in Puerto Rico, the Company
operates in 26 Latin American countries and serves a diversified
customer base of leading financial institutions, merchants,
corporations and government agencies with “mission-critical”
technology solutions. For more information, visit
www.evertecinc.com.
Use of Non-GAAP Financial Information
The non-GAAP measures referenced in this 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 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 stakeholders to evaluate
companies in our industry. These measures have certain limitations
in that they do not include the impact of certain expenses that are
reflected in our condensed consolidated statements of operations
that are necessary to run our business. Other companies, including
other companies in our industry, may not use these measures or may
calculate these measures differently than as presented herein,
limiting their usefulness as comparative measures.
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 Puerto Rico, including our
business with the government of Puerto Rico and its
instrumentalities, which are facing severe political and fiscal
challenges; additional adverse changes in the general economic
conditions in Puerto Rico, whether as a result of the government’s
debt crisis or otherwise, including the continued migration of
Puerto Ricans to the U.S. mainland, which could negatively affect
our customer base, general consumer spending, our cost of
operations and our ability to hire and retain qualified employees;
operating an international business in Latin America and the
Caribbean, in jurisdictions with potential political and economic
instability; the impact of foreign exchange rates on operations;
our ability to protect our intellectual property rights against
infringement and to defend ourselves against claims of infringement
brought by third parties; our ability to comply with U.S. federal,
state, local and foreign regulatory requirements; evolving industry
standards and adverse changes in global economic, political and
other conditions; our level of indebtedness and the impact of
rising interest rates, restrictions contained in our debt
agreements, including the secured credit facilities, as well as
debt that could be incurred in the future; our ability to prevent a
cybersecurity attack or breach to our information security; the
possibility that we could lose our preferential tax rate in Puerto
Rico; our inability to integrate Sinqia successfully into the
Company or to achieve expected accretion to our earnings per common
share; any loss of personnel or customers in connection with the
Sinqia Transaction; any possibility of future catastrophic
hurricanes, earthquakes and other potential natural disasters
affecting our main markets in Latin America and the Caribbean; and
the other factors set forth under "Part 1, Item 1A. Risk Factors,"
in the Company’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2023 filed with the Securities and Exchange
Commission (the "SEC") on February 29, 2024, as any such factors
may be updated from time to time in the Company’s filings with the
SEC. 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 it is required
to do so by law.
EVERTEC, Inc.
Schedule 1: Unaudited Condensed
Consolidated Statements of Income and Comprehensive (Loss)
Income
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
(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 $0.01;
2,000,000 shares authorized; none issued
—
—
Common stock, par value $0.01; 206,000,000
shares authorized; 64,446,211 shares issued and outstanding as of
June 30, 2024 (December 31, 2023 - 65,450,799)
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
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
Three Months Ended June 30,
2024
(In thousands)
Payment
Services -
Puerto Rico &
Caribbean
Latin America
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 $14.2 million
processing fee from Payments Services - Puerto Rico & Caribbean
to Merchant Acquiring, intercompany software developments and
transaction-processing of $5.2 million from Latin America Payments
and Solutions to both Payment Services- Puerto Rico & Caribbean
and Business Solutions, and transaction-processing and monitoring
fees of $5.2 million from Payment Services - Puerto Rico &
Caribbean to Latin America Payments and Solutions.
(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 -
Puerto Rico &
Caribbean
Latin America
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 $13.4 million
processing fee from Payments Services - Puerto Rico & Caribbean
to Merchant Acquiring, intercompany software developments and
transaction-processing of $4.4 million from Latin America Payments
and Solutions to both Payment Services- Puerto Rico & Caribbean
and Business Solutions, and transaction-processing and monitoring
fees of $3.3 million from Payment Services - Puerto Rico &
Caribbean to Latin America Payments and Solutions.
(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 -
Puerto Rico &
Caribbean
Latin America
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 $28.8 million
processing fee from Payments Services - Puerto Rico & Caribbean
to Merchant Acquiring, intercompany software developments and
transaction processing of $9.2 million from Latin America Payments
and Solutions to both Payment Services- Puerto Rico & Caribbean
and Business Solutions, and transaction processing and monitoring
fees of $9.7 million from Payment Services - Puerto Rico &
Caribbean to Latin America Payments and Solutions.
(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 -
Puerto Rico &
Caribbean
Latin America
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 $26.4 million
processing fee from Payments Services - Puerto Rico & Caribbean
to Merchant Acquiring, intercompany software developments and
transaction processing of $8.4 million from Latin America Payments
and Solutions to both Payment Services- Puerto Rico & Caribbean
and Business Solutions, and transaction processing and monitoring
fees of $6.2 million from Payment Services - Puerto Rico &
Caribbean to Latin America Payments and Solutions.
(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%).
(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
Evertec (NYSE:EVTC)
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