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EVERTEC Reports Second Quarter 2013 Results

Stocks in this article: EVTC

Payment Processing revenues for the quarter ended June 30, 2013 were $24.3 million, representing an increase of 2% as compared to $23.8 million in the prior year. The revenue growth comparison in this quarter is impacted by a non-recurring increase in processing volumes during the quarter ended June 30, 2012 related to certain one-time items. Normalizing for these one-time items, revenues in this segment grew at 6% versus the prior year.

Business Solutions revenues for the quarter ended June 30, 2013 were $46.7 million, representing an increase of 7% as compared to $43.5 million in the prior year. Revenue growth was primarily driven by an increase in our sales and higher demand for our services.

Adjusted EBITDA. For the quarter ended June 30, 2013, Adjusted EBITDA was $43.4 million, representing an increase of 6% as compared to $40.9 million in the prior year. The increase in Adjusted EBITDA was primarily due to revenue growth. Adjusted EBITDA margin (Adjusted EBITDA as a percentage of total revenues) improved by 20 basis points to 48.7% from 48.5% in the prior year as a result of operating leverage.

Adjusted Net Income. For the quarter ended June 30, 2013, Adjusted Net Income was $28.9 million ($0.35 per diluted share), representing an increase of 39% as compared to $20.7 million ($0.27 per diluted share) in the prior year. The increase in Adjusted Net Income was primarily due to the same factors impacting Adjusted EBITDA and lower pro forma cash interest expense as a result of the debt refinancing completed in April 2013, partially offset by slightly higher operating depreciation and amortization and the timing of cash income tax payments.

Recent Developments

Quarterly Dividend Program. EVERTEC announced today under a separate release that its Board of Directors initiated a regular quarterly dividend program. The first quarterly dividend of $0.10 per share is payable on September 6, 2013 to stockholders of record at the closing of business on August 19, 2013. The Board anticipates declaring this dividend in future quarters on a regular basis; however future declarations of dividends are subject to Board of Director approval and may be adjusted as business needs or market conditions change. Please refer to the Company’s website at www.evertecinc.com under the Corporate Investor Relations section or directly at http://ir.evertecinc.com for a complete press release.

Earnings Conference Call and Audio Webcast

The Company will host a conference call to discuss second quarter 2013 financial results today at 5:00 PM EDT. Hosting the call will be Peter Harrington, President and Chief Executive Officer and Juan José Román, Executive Vice President and Chief Financial Officer. The conference call can be accessed live over the phone by dialing (877) 852-6561, or for international callers (719) 325-4895. A replay will be available at 8:00 PM EDT and can be accessed by dialing (877) 870-5176 or (858) 384-5517 for international callers; the pin number is 9915858. The replay will be available until Wednesday, August 14, 2013. The call will be webcast live from the Company’s website at www.evertecinc.com under the Corporate Investor Relations section or directly at http://ir.evertecinc.com.

About EVERTEC

EVERTEC is the leading full-service transaction processing business in Latin America and the Caribbean. Based in Puerto Rico, EVERTEC provides a broad range of merchant acquiring, payment processing and business process management services across 19 countries in the region. EVERTEC processes over 1.8 billion transactions annually, and manages the electronic payment network for over 4,100 automated teller machines (“ATM”) and over 104,000 point-of-sale payment terminals. EVERTEC is the largest merchant acquirer in the Caribbean and Central America and the sixth largest in Latin America. EVERTEC owns and operates the ATH network, one of the leading ATM and personal identification number debit networks in Latin America. In addition, EVERTEC provides a comprehensive suite of services for core bank processing, cash processing and technology outsourcing. EVERTEC serves a broad and diversified customer base of leading financial institutions, merchants, corporations and government agencies with ‘mission critical’ technology solutions and believes its business is well positioned to continue to expand across the fast growing Latin American region. For more information, visit http://www.evertecinc.com.

About Non-GAAP Financial Measures

This earnings release presents EBITDA, Adjusted EBITDA, Adjusted Net Income, and Adjusted Net Income per share information. These are supplemental measures of the Company’s performance that 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 revenues, net income or any other performance measures derived in accordance with GAAP or as alternatives to cash flows from operating activities, as indicators of cash flows or as measures of the Company’s liquidity. We present EBITDA and Adjusted EBITDA because we consider them important supplemental measures of the Company’s performance and believe they are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the Company’s industry. In addition, the Company’s presentation of Adjusted EBITDA is consistent with the equivalent measurements that are contained in the Credit Agreement in testing EVERTEC Group’s compliance with covenants therein such as the senior secured leverage ratio. We use Adjusted Net Income to measure the Company’s overall profitability because it better reflects the Company’s cash flow generation by capturing the actual cash taxes paid rather than the Company’s tax expense as calculated under GAAP and excludes the impact of the non-cash amortization and depreciation that was created as a result of the Merger. For more information regarding EBITDA, Adjusted EBITDA, Adjusted Net Income, and Adjusted Net Income per share, including a quantitative reconciliation of EBITDA, Adjusted EBITDA and Adjusted Net Income to the most directly comparable GAAP financial performance measure, which is net income, see Schedule 4: Reconciliation of GAAP to Non-GAAP Operating Results in this earnings release.

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