NetSpend Holdings, Inc. Reports Fourth Quarter Financial Results
Fiscal Fourth Quarter 2012 Results
Revenues were $89.7 million for the quarter ended December 31, 2012, an increase of approximately 17% over the $76.8 million of revenues recorded in the same quarter of 2011. This increase was substantially driven by the increase in direct deposit accounts, and to a lesser extent, the expansion of product features across NetSpend’s direct deposit customer base. Interchange revenue represented approximately 22% of total revenue during the three months ended December 31, 2012.
Net income was $10.1 million for the quarter ended December 31, 2012, an increase of 5% over the net income of $9.6 million recorded in the quarter ended December 31, 2011. NetSpend’s net income for the quarter ended December 31, 2012 includes an aggregate of $10.8 million of net interest expense, income tax expense, depreciation and amortization and settlement gains and other losses. Net income for the quarter ended December 31, 2012 also includes approximately $3.0 million in stock-based compensation expense. For the quarter ended December 31, 2011, the comparable amount of net interest expense, income tax expense, depreciation and amortization and settlement gains and other losses was $11.2 million. Net income for the quarter ended December 31, 2011 also includes approximately $2.4 million in stock-based compensation expense.
2013 OutlookNetSpend reported that it expects full year 2013 revenue to be between $414 and $424 million, its adjusted EBITDA to fall between $119 and $125 million and its adjusted net income per fully diluted share to be between $0.76 and $0.81. The foregoing expectations reflect the following assumptions:
- An effective tax rate of approximately 40%;
- Non-cash equity compensation of between approximately $14 and $16 million;
- Cash outlays for capital expenditures for the full year of between approximately $10 and $12 million;
- An effective cost of debt capital of approximately 3.0%; and
- Fully diluted shares outstanding for the full year of approximately 84 million.
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