Announces acquisition of Grandata
EVERTEC, Inc. (NYSE: EVTC) (“Evertec”, the “Company”, “we” or
“our”) today announced results for the third quarter ended
September 30, 2024.
Third Quarter 2024 Highlights
- Revenue increased 22% to $211.8 million
- GAAP Net Income attributable to common shareholders increased
146% to $24.7 million and increased 153% to $0.38 per diluted
share
- Adjusted EBITDA increased 11% to $87.4 million and Adjusted
earnings per common share increased 8% to $0.86
- Share repurchases totaled $12.3 million.
- Closed on acquisition of 100% of Grandata Inc. ("Grandata") on
October 30th
Mac Schuessler, President and Chief Executive Officer stated,
"We are pleased with our third quarter results that demonstrate our
commitment to continue to improve our margin. We are excited to
announce the acquisition of Grandata, which align with our capital
deployment strategy focusing on Latin America and diversifying our
revenue."
Third Quarter 2024 Results
Revenue. Total revenue for the quarter ended September 30, 2024
was $211.8 million, an increase of 22% compared with $173.2 million
in the prior year quarter as a result of organic growth across all
of the Company's segments as well as the contribution from Sinqia.
Merchant acquiring revenue benefited from an improvement in spread
and sales volume growth. Payments Puerto Rico revenue reflected
continued growth in ATH Movil Business and increased transaction
volumes. Latin America revenue benefited from the contribution from
the Sinqia acquisition as well as continued organic growth across
the region. Latin America revenue also benefited from better than
expected volumes in our GetNet Chile relationship which resulted in
the recognition of an incremental $1.8 million in revenue, compared
with $6.3 million recognized in the prior year quarter for the same
concept. Business Solutions revenue reflected increases for
completed projects, primarily for Banco Popular.
Net Income attributable to common shareholders. For the quarter
ended September 30, 2024, GAAP Net Income attributable to common
shareholders was $24.7 million, or $0.38 per diluted share, an
increase of $14.6 million or $0.23 per diluted share as prior year
Net Income was negatively impacted by the $29.2 million loss on the
foreign currency swap to fix the price of the Sinqia acquisition
and the increase in revenues in the quarter. These positive
variances were partially offset by increased operating expenses, as
Cost 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 also increased mainly due to the addition of Sinqia
headcount and an increase in equipment expenses, partially offset
by lower professional fees. Interest expense increased from prior
year due to the incremental debt raised to finance the Sinqia
acquisition, while depreciation and amortization expense increase
is primarily related to the intangibles recorded as part of the
Sinqia acquisition. Income tax expense increased to $1.7 million
compared to an income tax benefit in the prior year quarter of $4.9
million, primarily driven by the foreign currency hedge loss.
Adjusted EBITDA and Adjusted EBITDA Margin. For the quarter
ended September 30, 2024, Adjusted EBITDA was $87.4 million, an
increase of $8.7 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 41.3%, a decrease of
approximately 420 basis points from the prior year. The decrease in
Adjusted EBITDA margin reflects the addition of Sinqia, which
contributes at a lower margin, as well as the impact of the $6.3
million adjustment for GetNet Chile in the prior year, compared
with $1.8 million in the current year, which is 100% accretive to
margin.
Adjusted Net Income and Adjusted earnings per common share. For
the quarter ended September 30, 2024, Adjusted Net Income was $55.4
million, an increase of $3.0 million compared to $52.4 million in
the prior year. The increase was driven by the higher Adjusted
EBITDA, positively impacted by the factors explained above, 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 $0.86, an
increase of $0.06 per diluted share compared to $0.80, in the prior
year driven by the factors explained for Adjusted Net Income and a
lower share count as a result of repurchases completed in 2024.
Share Repurchase
During the three months ended September 30, 2024, the Company
repurchased 374,091 shares of its common stock at an average price
of $32.86 per share for a total of $12.3 million. As of September
30, 2024, a total of approximately $138 million remained available
for future use under the Company's share repurchase program.
Business Acquisition
On October 30, 2024, the Company closed an agreement to acquire
100% of the share capital of Grandata. Grandata is a data analytics
company operating in Mexico that specializes in leveraging
behavioral data to provide credit risk insights, with a focus on
underbanked populations. This transaction enhances our existing
product offering and will enable us to address our customer’s needs
more fully. We plan on leveraging our existing client base to
accelerate the growth of this acquisition similar to what we have
been able to do with other transactions.
2024 Outlook
The Company's financial outlook for 2024 is as follows:
- Total consolidated revenue between $841 million and $847
million approximately 21% to 22% growth.
- Adjusted earnings per common share between $3.08 to $3.15
approximately 9% to 12% 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 third
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 8246402. The replay will
be available through Wednesday, November 13, 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 Income
(Loss)
Three months ended September
30,
Nine months ended September
30,
2024
2023
2024
2023
(Dollar amounts in thousands, except share
data)
Revenues
$
211,795
$
173,198
$
629,091
$
500,088
Operating costs and expenses
Cost of revenues, exclusive of
depreciation and amortization
102,497
81,280
302,426
238,149
Selling, general and administrative
expenses
34,097
30,437
107,910
83,834
Depreciation and amortization
33,660
21,919
101,051
63,680
Total operating costs and expenses
170,254
133,636
511,387
385,663
Income from operations
41,541
39,562
117,704
114,425
Non-operating income (expenses)
Interest income
3,696
1,926
10,274
5,162
Interest expense
(18,704
)
(5,709
)
(57,352
)
(16,992
)
Loss on foreign currency remeasurement
(1,112
)
(2,806
)
(3,164
)
(7,337
)
Loss on foreign currency swap
—
(29,225
)
—
(29,225
)
Earnings of equity method investment
1,099
1,197
3,266
3,828
Other income, net
389
153
6,484
2,754
Total non-operating expenses
(14,632
)
(34,464
)
(40,492
)
(41,810
)
Income before income taxes
26,909
5,098
77,212
72,615
Income tax expense (benefit)
1,707
(4,858
)
3,100
4,546
Net income
25,202
9,956
74,112
68,069
Less: Net income (loss) attributable to
non-controlling interest
524
(80
)
1,554
(174
)
Net income attributable to EVERTEC, Inc.’s
common stockholders
24,678
10,036
72,558
68,243
Other comprehensive income (loss), net of
tax
Foreign currency translation
adjustments
15,354
(11,332
)
(75,473
)
9,426
(Loss) gain on cash flow hedges
(11,937
)
3,468
(8,555
)
3,739
Unrealized loss on change in fair value of
debt securities available-for-sale
(1
)
(11
)
(4
)
(31
)
Other comprehensive income (loss), net of
tax
$
3,416
$
(7,875
)
$
(84,032
)
$
13,134
Total comprehensive income (loss)
attributable to EVERTEC, Inc.’s common stockholders
$
28,094
$
2,161
$
(11,474
)
$
81,377
Net income per common share:
Basic
0.39
$
0.16
$
1.12
$
1.05
Diluted
$
0.38
$
0.15
$
1.11
$
1.04
Shares used in computing net income per
common share:
Basic
63,944,132
64,648,542
64,512,868
64,886,551
Diluted
64,719,129
65,779,259
65,316,948
65,705,596
EVERTEC, Inc. Schedule 2: Unaudited Condensed
Consolidated Balance Sheets
(In thousands)
September 30, 2024
December 31, 2023
Assets
Current Assets:
Cash and cash equivalents
$
275,359
$
295,600
Restricted cash
25,663
23,073
Accounts receivable, net
131,101
126,510
Settlement assets
37,441
51,467
Prepaid expenses and other assets
64,071
64,704
Total current assets
533,635
561,354
Debt securities available-for-sale, at
fair value
1,726
2,095
Equity securities, at fair value
5,287
9,413
Investment in equity investees
28,550
21,145
Property and equipment, net
64,178
62,453
Operating lease right-of-use asset
11,329
14,796
Goodwill
750,542
791,700
Other intangible assets, net
443,444
518,070
Deferred tax asset
32,751
47,847
Derivative asset
749
4,385
Other long-term assets
22,774
27,005
Total assets
$
1,894,965
$
2,060,263
Liabilities and stockholders’
equity
Current Liabilities:
Accrued liabilities
$
119,169
$
129,160
Accounts payable
53,702
66,516
Contract liability
23,034
21,055
Income tax payable
5,674
3,402
Current portion of long-term debt
23,867
23,867
Current portion of operating lease
liability
7,478
6,693
Settlement liabilities
37,500
47,620
Total current liabilities
270,424
298,313
Long-term debt
930,851
946,816
Deferred tax liability
45,116
87,916
Contract liability - long term
56,652
41,825
Operating lease liability - long-term
5,174
9,033
Derivative liability
9,001
900
Other long-term liabilities
31,804
40,084
Total liabilities
1,349,022
1,424,887
Commitments and contingencies
Redeemable non-controlling interests
39,771
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; 63,609,122 shares issued and outstanding as of
September 30, 2024 (December 31, 2023 - 65,450,799)
636
654
Additional paid-in capital
5,079
36,527
Accumulated earnings
562,727
538,903
Accumulated other comprehensive (loss)
income, net of tax
(65,823
)
18,209
Total stockholders’ equity
502,619
594,293
Non-redeemable non-controlling
interest
3,553
4,115
Total equity
506,172
598,408
Total liabilities and equity
$
1,894,965
$
2,060,263
EVERTEC, Inc. Schedule 3: Unaudited Condensed
Consolidated Statements of Cash Flows
Nine months ended September
30,
2024
2023
Cash flows from operating
activities
Net income
74,112
68,069
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
101,051
63,680
Amortization of debt issue costs and
accretion of discount
3,576
1,795
Operating lease amortization
5,340
4,619
Deferred tax benefit
(20,275
)
(16,491
)
Share-based compensation
22,387
18,812
Unrealized loss on foreign currency
hedge
—
29,225
Earnings of equity method investment
(3,266
)
(3,828
)
Dividend received from equity method
investment
3,364
3,497
Gain on sale of equity securities
(2,599
)
—
Loss on foreign currency remeasurement
3,164
7,337
Other, net
(287
)
380
(Increase) decrease in assets:
Accounts receivable, net
(838
)
(4,590
)
Prepaid expenses and other assets
(1,791
)
(11,181
)
Other long-term assets
3,247
(1,013
)
(Decrease) increase in liabilities:
Accrued liabilities and accounts
payable
(12,046
)
12,224
Income tax payable
2,359
(9,108
)
Contract liability
12,038
(1,146
)
Operating lease liabilities
(5,341
)
(3,739
)
Other long-term liabilities
702
(247
)
Total adjustments
110,785
90,226
Net cash provided by operating
activities
184,897
158,295
Cash flows from investing
activities
Additions to software
(48,778
)
(34,193
)
Property and equipment acquired
(21,050
)
(16,406
)
Acquisition of available-for-sale debt
securities
—
(962
)
Purchase of equity securities
(132
)
(26,505
)
Investment in equity investee
(2,000
)
(5,500
)
Proceeds from maturities of
available-for-sale debt securities
370
1,048
Proceeds from sale of equity
securities
6,128
—
Acquisitions, net of cash acquired
—
(22,915
)
Net cash used in investing activities
(65,462
)
(105,433
)
Cash flows from financing
activities
Withholding taxes paid on share-based
compensation
(9,907
)
(5,956
)
Net decrease in short-term borrowings
—
(14,000
)
Dividends paid
(9,692
)
(9,735
)
Repurchase of common stock
(82,293
)
(23,598
)
Repayment of long-term debt
(17,900
)
(15,563
)
Repayment of other financing
agreements
(7,046
)
—
Settlement activity, net
209
5,163
Other financing activities, net
(3,652
)
—
Net cash used in financing activities
(130,281
)
(63,689
)
Effect of foreign exchange rate on cash,
cash equivalents and restricted cash
(6,596
)
10,716
Net decrease in cash, cash equivalents
and restricted cash
(17,442
)
(111
)
Cash, cash equivalents, restricted
cash, and cash included in settlement assets at beginning of the
period
343,724
215,657
Cash, cash equivalents, restricted
cash, and cash included in settlement assets at end of the
period
$
326,282
$
215,546
Reconciliation of cash, cash
equivalents, restricted cash, and cash included in settlement
assets
Cash and cash equivalents
275,359
177,821
Restricted cash
25,663
20,607
Cash and cash equivalents included in
settlement assets
25,260
17,118
Cash, cash equivalents, restricted
cash, and cash included in settlement assets
$
326,282
$
215,546
EVERTEC, Inc. Schedule 4: Unaudited Segment
Information
Three Months Ended September
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
$
52,755
$
76,029
$
45,437
$
61,103
$
(23,529
)
$
211,795
Operating costs and expenses
33,144
70,857
29,231
42,347
(5,325
)
170,254
Depreciation and amortization
7,599
14,152
1,217
5,614
5,078
33,660
Non-operating income (expenses)
149
(482
)
—
166
543
376
EBITDA
27,359
18,842
17,423
24,536
(12,583
)
75,577
Compensation and benefits (2)
758
1,349
775
928
3,785
7,595
Transaction, refinancing and other fees
(3)
296
(627
)
29
40
3,367
3,105
(Gain) loss on foreign currency
remeasurement (4)
(61
)
1,176
—
—
(3
)
1,112
Adjusted EBITDA
$
28,352
$
20,740
$
18,227
$
25,504
$
(5,434
)
$
87,389
___________________________
(1)
Corporate and Other consists of corporate
overhead, certain leveraged activities, other non-operating
expenses and intersegment eliminations. Intersegment revenue
eliminations predominantly reflect the $14.4 million processing fee
from Payments Services - Puerto Rico & Caribbean to Merchant
Acquiring, intercompany software developments and
transaction-processing of $5.5 million from Latin America Payments
and Solutions to both Payment Services- Puerto Rico & Caribbean
and Business Solutions, and transaction-processing and monitoring
fees of $3.7 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 unrealized earnings from equity
investments, net of dividends received.
(4)
Represents non-cash unrealized gains
(losses) on foreign currency remeasurement for assets and
liabilities denominated in non-functional currencies.
Three Months Ended September
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
$
51,600
$
46,155
$
40,557
$
56,522
$
(21,636
)
$
173,198
Operating costs and expenses
28,402
38,608
26,997
40,643
(1,014
)
133,636
Depreciation and amortization
6,203
4,898
1,078
4,478
5,262
21,919
Non-operating income (expenses)
110
(2,148
)
—
69
(28,712
)
(30,681
)
EBITDA
29,511
10,297
14,638
20,426
(44,072
)
30,800
Compensation and benefits (2)
663
859
662
696
4,090
6,970
Transaction, refinancing and other (3)
269
3,451
—
—
34,363
38,083
(Gain) loss on foreign currency
remeasurement (4)
(87
)
2,885
—
—
8
2,806
Adjusted EBITDA
$
30,356
$
17,492
$
15,300
$
21,122
$
(5,611
)
$
78,659
___________________________
(1)
Corporate and Other consists of corporate
overhead, certain leveraged activities, other non-operating
expenses and intersegment eliminations. Intersegment revenue
eliminations predominantly reflect the $13.5 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 $3.7 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 foreign currency swap loss and the elimination of
unrealized earnings from equity investments, net of dividends
received.
(4)
Represents non-cash unrealized gains
(losses) on foreign currency remeasurement for assets and
liabilities denominated in non-functional currencies.
Nine months ended September
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
$
159,985
$
224,914
$
133,855
$
181,567
$
(71,230
)
$
629,091
Operating costs and expenses
95,829
221,241
87,531
120,461
(13,675
)
511,387
Depreciation and amortization
22,357
45,460
3,859
13,802
15,573
101,051
Non-operating income
431
3,627
—
456
2,072
6,586
EBITDA
86,944
52,760
50,183
75,364
(39,910
)
225,341
Compensation and benefits (2)
2,227
4,501
2,269
2,619
11,570
23,186
Transaction, refinancing and other fees
(3)
1,019
(6,015
)
243
329
4,351
(73
)
(Gain) loss on foreign currency
remeasurement (4)
(128
)
3,291
—
—
1
3,164
Adjusted EBITDA
$
90,062
$
54,537
$
52,695
$
78,312
$
(23,988
)
$
251,618
___________________________
(1)
Corporate and Other consists of corporate
overhead, certain leveraged activities, other non-operating
expenses and intersegment eliminations. Intersegment revenue
eliminations predominantly reflect the $43.2 million processing fee
from Payments Services - Puerto Rico & Caribbean to Merchant
Acquiring, intercompany software developments and transaction
processing of $14.7 million from Latin America Payments and
Solutions to both Payment Services- Puerto Rico & Caribbean and
Business Solutions, and transaction processing and monitoring fees
of $13.4 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,
net of dividends received.
(4)
Represents non-cash unrealized gains
(losses) on foreign currency remeasurement for assets and
liabilities denominated in non-functional currencies.
Nine months ended September
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
$
150,824
$
120,548
$
122,152
$
169,188
$
(62,624
)
$
500,088
Operating costs and expenses
85,019
101,586
81,302
118,653
(897
)
385,663
Depreciation and amortization
18,178
13,002
3,357
13,436
15,707
63,680
Non-operating income (expenses)
590
(3,643
)
308
667
(27,902
)
(29,980
)
EBITDA
84,573
28,321
44,515
64,638
(73,922
)
148,125
Compensation and benefits (2)
2,033
2,510
2,054
2,226
12,693
21,516
Transaction, refinancing and other fees
(3)
850
3,704
—
—
38,741
43,295
(Gain) loss on foreign currency
remeasurement (4)
(41
)
7,372
—
—
6
7,337
Adjusted EBITDA
$
87,415
$
41,907
$
46,569
$
66,864
$
(22,482
)
$
220,273
___________________________
(1)
Corporate and Other consists of corporate
overhead, certain leveraged activities, other non-operating
expenses and intersegment eliminations. Intersegment revenue
eliminations predominantly reflect the $39.9 million processing fee
from Payments Services - Puerto Rico & Caribbean to Merchant
Acquiring, intercompany software developments and transaction
processing of $12.8 million from Latin America Payments and
Solutions to both Payment Services- Puerto Rico & Caribbean and
Business Solutions, and transaction processing and monitoring fees
of $9.9 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 foreign currency swap loss and the elimination of
unrealized earnings from equity investments, net of dividends
received.
(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 September
30,
Nine months ended September
30,
(Dollar amounts in thousands, except share
data)
2024
2023
2024
2023
Net income
25,202
9,956
74,112
68,069
Income tax expense
1,707
(4,858
)
3,100
4,546
Interest expense, net
15,008
3,783
47,078
11,830
Depreciation and amortization
33,660
21,919
101,051
63,680
EBITDA
75,577
30,800
225,341
148,125
Equity income (1)
1,929
1,834
(238
)
(797
)
Compensation and benefits (2)
7,595
6,970
23,186
21,516
Transaction, refinancing and other (3)
1,176
36,249
165
44,092
Loss on foreign currency remeasurement
(4)
1,112
2,806
3,164
7,337
Adjusted EBITDA
87,389
78,659
251,618
220,273
Operating depreciation and amortization
(5)
(16,293
)
(13,061
)
(45,732
)
(38,265
)
Cash interest expense, net (6)
(13,908
)
(3,755
)
(43,749
)
(11,575
)
Income tax expense (7)
(1,234
)
(9,447
)
(3,298
)
(25,855
)
Non-controlling interest (8)
(535
)
50
(1,601
)
96
Adjusted net income
$
55,419
$
52,446
$
157,238
$
144,674
Net income per common share
(GAAP):
Diluted
$
0.38
$
0.15
$
1.11
$
1.04
Adjusted Earnings per common share
(Non-GAAP):
Diluted
$
0.86
$
0.80
$
2.41
$
2.20
Shares used in computing adjusted earnings
per common share:
Diluted
64,719,129
65,779,259
65,316,948
65,705,596
___________________________
(1)
Represents the elimination of non-cash
equity earnings from our equity investments, net of dividends
received.
(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,
the elimination of realized gains from the change in fair market
value of equity securities and the foreign currency swap loss.
(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 income (loss), 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
$
840.5
to
$
846.5
$
695
Earnings per Share (EPS) (GAAP)
$
1.64
to
$
1.73
$
1.21
Per share adjustment
to reconcile GAAP EPS to Non-GAAP Adjusted EPS:
Share-based comp, non-cash equity earnings
and other (1)
0.50
0.50
1.36
Merger and acquisition related
depreciation and amortization (2)
1.00
1.00
0.62
Non-cash interest expense (3)
0.05
0.04
(0.01
)
Tax effect of Non-GAAP adjustments (4)
(0.08
)
(0.08
)
(0.36
)
Non-controlling interest (5)
(0.03
)
(0.04
)
—
Total adjustments
1.44
1.42
1.61
Adjusted EPS (Non-GAAP)
$
3.08
to
$
3.15
$
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, net of dividends received.
(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/20241106136199/en/
Investors Beatriz Brown-Sáenz (787) 773-5442
IR@evertecinc.com
Evertec (NYSE:EVTC)
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