ANNOUNCES 2024 OUTLOOK
EVERTEC, Inc. (NYSE: EVTC) (“Evertec” or the “Company”) today
announced results for the fourth quarter and full year ended
December 31, 2023.
Fourth Quarter 2023 Highlights and Recent Highlights
- Revenue increased 20% to $194.6 million
- GAAP Net Income attributable to common shareholders was $11.5
million, or $0.17 per diluted share, a 61% decrease
- Adjusted EBITDA increased to $71.7 million
- Adjusted earnings per common share was $0.62, or a 6%
decrease
- Closed the Sinqia acquisition on November 1
- The Company intends to enter into an accelerated share
repurchase (ASR) agreement for $70 million
Full Year 2023 Highlights
- Revenue grew 12% to $694.7 million
- GAAP Net Income attributable to common shareholders was $79.7
million, or $1.21 per diluted share
- Adjusted EBITDA increased 6% to $292.0 million
- Adjusted earnings per common share was $2.82, or a 11%
increase
- $49 million returned to shareholders through share repurchases
and dividends
Mac Schuessler, President and Chief Executive Officer stated "We
are pleased to deliver another year of strong results as we
continue to execute in our core markets and benefit from strong
organic growth. As we look to 2024 we will continue to focus on
delivering great solutions to our clients that will drive growth
and on integrating our most recent acquisitions as we become the
true provider of Latin America Payments and Solutions.”
Fourth Quarter 2023 Results
Revenue. Total revenue for the quarter ended December 31, 2023
was $194.6 million, an increase of 20.3%, compared with $161.8
million in the prior year. The increase in revenues primarily
reflects growth in our Latin America business as it benefited from
the Sinqia acquisition we closed during the fourth quarter as well
as from strong organic growth and the paySmart acquisition
completed in the first quarter. We also benefited from strong POS
transaction volumes that positively impacted our Payments Puerto
Rico and Caribbean segment.
Net Income attributable to common shareholders. For the quarter
ended December 31, 2023, GAAP Net Income attributable to common
shareholders was $11.5 million or $0.17 per diluted share, a
decrease of $17.2 million, compared with $28.7 million or $0.44 per
diluted share in the prior year. Selling, general and
administrative expenses increased primarily as a result of expenses
incurred as part of closing and integration of Sinqia, as well as
an increase in personnel costs. Cost of revenues increased mainly
due to an increase in personnel costs, which includes the added
headcount from the acquisitions completed throughout the year, and
an increase in professional fees and cloud services. The quarter
results also reflect an increase in interest expense in connection
with financing the Sinqia acquisition.
Adjusted EBITDA and Adjusted EBITDA Margin. For the quarter
ended December 31, 2023, Adjusted EBITDA was $71.7 million, an
increase of $2.5 million compared to the prior year. The increase
in adjusted EBITDA was mainly driven by the contribution from the
Sinqia acquisition. Adjusted EBITDA margin (Adjusted EBITDA as a
percentage of total revenue) decreased approximately 590 basis
points to 36.8% compared with 42.7% in the prior year, partially
driven by the completion of the Sinqia acquisition, which
contributes at a lower margin, as well as the impact from the
increased expenses discussed above.
Adjusted Net Income and Adjusted earnings per common share. For
the quarter ended December 31, 2023, Adjusted Net Income was $40.8
million, a decrease of 6% compared with $43.4 million in the prior
year. Adjusted earnings per common share was $0.62, a decrease of
6% compared with $0.66 in the prior year. The decrease was
primarily driven by higher interest expense resulting from the
increased debt raised to finance the Sinqia acquisition, higher
operating depreciation and amortization, partially offset by a
lower adjusted effective tax rate.
Full Year 2023 Results
Revenue. Total revenue for the year ended December 31, 2023 was
$694.7 million, an increase of 12% compared with $618.4 million in
the prior year, reflecting growth across LATAM Payments and
Solutions, Payment Services - Puerto Rico & Caribbean, and the
Merchant Acquiring segments. Latin America revenues benefited from
strong organic growth throughout the year including the $6.3
million impact from our Getnet Chile contract in the third quarter
and the contribution from the BBR, paySmart and Sinqia
acquisitions. Puerto Rico revenues benefited from strong sales
volume and transaction growth as well as the effect of pricing
initiatives impacting our Merchant Acquiring segment.
Net Income attributable to common shareholders. For the year
ended December 31, 2023, GAAP Net Income attributable to common
shareholders was $79.7 million, or $1.21 per diluted share, a
decrease compared with $239.0 million or $3.45 per diluted share in
the prior year. The decrease was primarily driven by the impact in
the prior year of the $135.6 million gain recognized in connection
with closing the Popular Transaction and the loss on foreign
currency swap of $24.1 million related to the Sinqia acquisition in
2023. Partially offsetting these negative impacts was the increase
in revenues discussed above and a decrease in income tax expense as
the prior year reflected the impact from the gain from the Popular
transaction.
Adjusted EBITDA and Adjusted EBITDA Margin. For the year ended
December 31, 2023, Adjusted EBITDA was $292.0 million, an increase
of 6% compared to the prior year. The increase in Adjusted EBITDA
primarily reflects the increase in revenues discussed above,
partially offset by an increase in operating expenses. Adjusted
EBITDA margin (Adjusted EBITDA as a percentage of total revenues)
decreased 262 basis points to 42.0% compared with 44.7% in the
prior year. The decrease in Adjusted EBITDA margin primarily
reflects the expected impact from the Popular transaction on margin
due to the sale of higher margin assets in the prior year and the
effect of a full year of the Merchant Acquiring sharing agreement,
as well as the effect of the Sinqia acquisition which is
contributing at a lower margin.
Adjusted Net Income and Adjusted earnings per common share. For
the year ended December 31, 2023, Adjusted Net Income was $185.5
million, an increase of 6% compared with $175.1 million in the
prior year. The increase was driven by the higher adjusted EBITDA,
partially offset by higher operating depreciation and amortization
and higher interest expense. Adjusted earnings per common share
were $2.82, an increase of 11% compared with $2.53 in the prior
year. The increase was driven by the increase in adjusted net
income and a lower share count that reflects the impact from the
share repurchases and the shares received as part of the Popular
Transaction.
Stock Repurchase
The Company intends to enter into an ASR agreement for $70
million of the Company’s common stock. The Company expects the ASR
will become effective in the coming weeks and the final settlement
of the ASR is expected to be completed in the third quarter of
2024.
During the quarter, the Company repurchased 344,715 shares of
its common stock at an average price of $36.82 for a total of $12.5
million. For the full year 2023, the Company repurchased 1.0
million shares of its common stock at an average price of $35.75
per share for a total of $36.1 million. At December 31, 2023, the
Company's share repurchase program had approximately $137.5 million
remaining and authorized for future use. The Company may repurchase
shares in the open market, through accelerated share repurchase
programs, 10b5-1 plans, or in privately negotiated transactions,
subject to business opportunities and other factors.
2024 Outlook
The Company's financial outlook for 2024 is as follows:
- Total consolidated revenue between $844 million and $854
million approximately 21.5% to 22.9% growth.
- Adjusted earnings per common share between $2.82 to $2.94 flat
to approximately 4.3% growth as compared to $2.82 in 2023.
- Capital expenditures are anticipated to be approximately $80
million, including Sinqia.
- Effective tax rate of approximately 7% to 8%.
Earnings Conference Call and Audio Webcast
The Company will host a conference call to discuss its fourth
quarter and full year 2023 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
3065281. The replay will be available through Wednesday, March 6,
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 can be found 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
processing business in Puerto Rico, the Caribbean and Latin
America, 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 processes over six billion transactions
annually and manages a system of electronic payment networks in
Puerto Rico and Latin America and offers a comprehensive suite of
services for core banking, cash processing, and fulfillment in
Puerto Rico. Additionally, the Company offers technology
outsourcing and payment transactions fraud monitoring to 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. Effective for the quarter ended March 31, 2023, the
Company modified the manner in which it calculates Adjusted EBITDA,
Adjusted Net Income and Adjusted earnings per common share to
exclude the impact of unrealized gains and losses from foreign
currency remeasurement for assets and liabilities denominated in
non-functional currencies. These non-cash unrealized gains and
losses are non-operational in nature and we believe that excluding
these better presents the overall financial performance of our core
business, and helps facilitate comparison with industry peers. The
Company has recast prior periods to conform with the modified
definition of Adjusted EBITDA, Adjusted Net Income and Adjusted
Earnings per common share.
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;
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 (“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 Transaction; any cost
and other terms of new debt financing incurred in connection with
the Transaction; and 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 or about 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
Consolidated Statements of Income and Comprehensive Income
Quarter ended December
31,
Year ended December
31,
(Dollar amounts in thousands, except share
data)
2023
2022
2023
2022
Revenues
$
194,621
$
161,787
$
694,709
$
618,409
Operating costs and expenses
Cost of revenues, exclusive of
depreciation and amortization shown below
98,607
77,377
336,756
292,621
Selling, general and administrative
expenses
44,338
23,334
128,172
89,770
Depreciation and amortization
29,941
20,186
93,621
78,618
Total operating costs and expenses
172,886
120,897
558,549
461,009
Income from operations
21,735
40,890
136,160
157,400
Non-operating income (expenses)
Interest income
3,350
842
8,512
3,121
Interest expense
(15,329
)
(6,530
)
(32,321
)
(24,772
)
Gain on sale of a business
—
—
—
135,642
(Loss) on foreign currency
remeasurement
(939
)
(787
)
(8,276
)
(7,645
)
Gain (loss) on foreign currency swap
5,160
—
(24,065
)
—
Earnings from equity method investment
1,148
848
4,976
2,968
Other (expenses) income
(2,387
)
(483
)
367
1,138
Total non-operating (expenses) income
(8,997
)
(6,110
)
(50,807
)
110,452
Income before income taxes
12,738
34,780
85,353
267,852
Income tax expense
931
6,072
5,477
28,983
Net income
11,807
28,708
79,876
238,869
Less: Net income (loss) attributable to
non-controlling interest
328
—
154
(140
)
Net income attributable to EVERTEC, Inc.’s
common stockholders
11,479
28,708
79,722
239,009
Other comprehensive income (loss), net of
tax
Foreign currency translation
adjustments
28,902
12,700
38,328
12,490
(Loss) gain on cash flow hedges
(7,357
)
391
(3,618
)
19,215
Unrealized gain (loss) on change in fair
value of debt securities available-for-sale
16
9
(15
)
(68
)
Total comprehensive income attributable
to EVERTEC, Inc.’s common stockholders
$
33,040
$
41,808
$
114,417
$
270,646
Net income per common share:
Basic
$
0.18
$
0.44
$
1.23
$
3.48
Diluted
$
0.17
$
0.44
$
1.21
$
3.45
Shares used in computing net income per
common share:
Basic
65,067,316
65,133,639
64,932,114
68,701,434
Diluted
66,273,215
65,824,242
65,814,317
69,312,717
EVERTEC, Inc.
Schedule 2: Unaudited
Consolidated Balance Sheets
(Dollar amounts in thousands, except share
data)
December 31, 2023
December 31, 2022
Assets
Current Assets:
Cash and cash equivalents
$
295,600
$
185,274
Restricted cash
23,073
18,428
Accounts receivable, net
126,510
111,493
Settlement assets
51,467
31,542
Prepaid expenses and other assets
64,704
42,392
Total current assets
561,354
389,129
Debt securities available-for-sale, at
fair value
2,095
2,203
Equity securities, at fair value
9,413
—
Investment in equity investee
21,145
14,661
Property and equipment, net
62,453
56,387
Operating lease right-of-use asset
14,796
15,918
Goodwill
791,700
423,392
Other intangible assets, net
518,070
200,320
Deferred tax asset
47,847
5,701
Derivative asset
4,385
7,440
Net investment in leases
—
14
Other long-term assets
27,005
16,578
Total assets
$
2,060,263
$
1,131,743
Liabilities and stockholders’
equity
Current Liabilities:
Accrued liabilities
$
129,160
$
80,666
Accounts payable
66,516
29,730
Contract liability
21,055
15,226
Income tax payable
3,402
9,406
Current portion of long-term debt
23,867
20,750
Short-term borrowings
—
20,000
Current portion of operating lease
liability
6,693
5,936
Settlement liabilities
47,620
26,696
Total current liabilities
298,313
208,410
Long-term debt
946,816
389,498
Deferred tax liability
87,916
10,111
Contract liability - long term
41,825
34,068
Operating lease liability - long-term
9,033
10,788
Other long-term liabilities
40,984
4,120
Total liabilities
1,424,887
656,995
Redeemable non-controlling interests
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; 65,450,799 shares issued and outstanding at
December 31, 2023 (December 31, 2022 - 64,847,233)
654
648
Additional paid-in capital
36,527
—
Accumulated earnings
538,903
487,349
Accumulated other comprehensive income
(loss), net of tax
18,209
(16,486
)
Total EVERTEC, Inc. stockholders’
equity
594,293
471,511
Non-controlling interest
4,115
3,237
Total equity
598,408
474,748
Total liabilities and equity
$
2,060,263
$
1,131,743
EVERTEC, Inc.
Schedule 3: Unaudited
Consolidated Statements of Cash Flows
Years ended December
31,
(In thousands)
2023
2022
Cash flows from operating
activities
Net income
$
79,876
$
238,869
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
93,621
78,618
Amortization of debt issue costs and
accretion of discount
2,307
2,238
Operating lease amortization
6,252
6,112
Unrealized loss on change in fair value of
equity securities
769
—
Loss on extinguishment of debt
1,433
1,311
Provision for expected credit losses and
sundry losses
1,040
4,959
Deferred tax benefit
(16,144
)
(435
)
Share-based compensation
25,732
19,956
Gain on sale of a business
—
(135,642
)
Loss on disposition of property and
equipment and impairment of software
969
4,943
Earnings of equity method investment
(4,976
)
(2,968
)
Dividend received from equity method
investment
3,497
2,053
Loss (gain) on foreign currency
remeasurement
8,276
7,645
(Increase) decrease in assets:
Accounts receivable, net
(6,850
)
(15,571
)
Prepaid expenses and other assets
(16,862
)
(4,636
)
Other long-term assets
(5,383
)
(5,202
)
Increase (decrease) in liabilities:
Accrued liabilities and accounts
payable
59,619
26,954
Income tax payable
(6,631
)
1,281
Contract liability
8,074
(1,773
)
Operating lease liabilities
(5,723
)
(3,797
)
Other long-term liabilities
(4,606
)
(1,554
)
Total adjustments
144,414
(15,508
)
Net cash provided by operating
activities
224,290
223,361
Cash flows from investing
activities
Additions to software
(63,524
)
(44,850
)
Acquisition of customer relationship
—
(10,607
)
Acquisitions, net of cash acquired
(417,566
)
(44,369
)
Property and equipment acquired
(21,452
)
(27,073
)
Proceeds from sales of property and
equipment
24
78
Purchase of certificates of deposit
—
(7,264
)
Proceeds from maturities of
available-for-sale debt securities
1,048
1,015
Acquisition of available-for-sale debt
securities
(962
)
(254
)
Investment in equity investee
(5,500
)
—
Net cash used in investing activities
(507,932
)
(133,324
)
Cash flows from financing
activities
Debt issuance costs
(10,481
)
(7,355
)
Proceeds from issuance of long-term
debt
651,000
415,000
Net (decrease) increase in short-term
borrowings
(20,000
)
20,000
Repayments of short-terms borrowings for
purchase of equipment and software
(7,175
)
(949
)
Dividends paid
(13,025
)
(13,773
)
Withholding taxes paid on share-based
compensation
(5,956
)
(5,685
)
Repurchase of common stock
(36,096
)
(96,596
)
Repayment of long-term debt
(154,280
)
(467,410
)
Repayment of other financing agreement
(717
)
—
Net cash provided by (used in) financing
activities
403,270
(156,768
)
Effect of foreign exchange rate on cash,
cash equivalents and restricted cash
8,439
(3,529
)
Net increase (decrease) in cash, cash
equivalents and restricted cash
128,067
(70,260
)
Cash, cash equivalents, restricted
cash, and cash included in settlement assets at beginning of the
period
215,657
285,917
Cash, cash equivalents, restricted
cash, and cash included in settlement assets at end of the
period
$
343,724
$
215,657
EVERTEC, Inc.
Schedule 4: Unaudited Segment
Information
Quarter Ended December 31,
2023
(In thousands)
Payment
Services -
Puerto Rico &
Caribbean
Latin America Payments and
Solutions
Merchant
Acquiring, net
Business
Solutions
Corporate and Other
(1)
Total
Revenues
$
52,408
$
65,955
$
40,214
$
57,772
$
(21,728
)
$
194,621
Operating costs and expenses
29,798
65,461
27,952
43,110
6,565
172,886
Depreciation and amortization
7,000
12,233
1,212
4,236
5,260
29,941
Non-operating income (expenses)
123
(2,558
)
—
137
5,280
2,982
EBITDA
29,733
10,169
13,474
19,035
(17,753
)
54,658
Compensation and benefits (2)
875
1,099
949
981
3,892
7,796
Transaction, refinancing and other fees
(3)
313
5,972
—
—
2,020
8,305
(Gain) loss on foreign currency
remeasurement (4)
$
(70
)
$
1,011
$
—
$
—
$
(2
)
$
939
Adjusted EBITDA
$
30,851
$
18,251
$
14,423
$
20,016
$
(11,843
)
$
71,698
(1)
Corporate and Other consists of
corporate overhead, certain leveraged activities, other
non-operating expenses and intersegment eliminations. Intersegment
revenue eliminations predominantly reflect the $13.0 million
processing fee from Payments Services - Puerto Rico & Caribbean
to Merchant Acquiring, intercompany software developments and
transaction processing of $4.3 million from Latin America Payments
and Solutions to both Payment Services - Puerto Rico &
Caribbean and Business Solutions, and transaction processing and
monitoring fees of $4.4 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 foreign currency swap gain and the
elimination of unrealized equity earnings from our 19.99% equity
investment in Consorcio de Tarjetas Dominicanas S.A., net of
dividends received.
(4)
Represents non-cash unrealized
gains (losses) on foreign currency remeasurement for assets and
liabilities denominated in non-functional currencies.
Quarter Ended December 31,
2022
(In thousands)
Payment
Services -
Puerto Rico &
Caribbean
Latin America Payments and
Solutions
Merchant
Acquiring, net
Business
Solutions
Corporate and Other
(1)
Total
Revenues
$
47,803
$
34,913
$
40,006
$
58,679
$
(19,614
)
$
161,787
Operating costs and expenses
26,853
29,561
26,688
39,168
(1,373
)
120,897
Depreciation and amortization
5,317
4,493
1,056
4,240
5,080
20,186
Non-operating income (expenses)
330
47
392
491
(1,682
)
(422
)
EBITDA
26,597
9,892
14,766
24,242
(14,843
)
60,654
Compensation and benefits (2)
788
840
357
611
2,384
4,980
Transaction, refinancing and other fees
(3)
748
145
—
—
1,842
2,735
(Gain) loss on foreign currency
remeasurement (4)
(147
)
934
—
—
—
787
Adjusted EBITDA
$
27,986
$
11,811
$
15,123
$
24,853
$
(10,617
)
$
69,156
(1)
Corporate and Other consists of
corporate overhead, certain leveraged activities, other
non-operating expenses and intersegment eliminations. Intersegment
revenue eliminations predominantly reflect the $13.0 million
processing fee from Payments Services - Puerto Rico & Caribbean
to Merchant Acquiring, intercompany software developments and
transaction processing of $3.8 million from Latin America Payments
and Solutions to both Payment Services- Puerto Rico & Caribbean
and Business Solutions, and transaction processing and monitoring
fees of $2.8 million from Payment Services - Puerto Rico &
Caribbean to Latin America Payments and Solutions.
(2)
Primarily represents share-based
compensation.
(3)
Primarily represents fees and
expenses associated with corporate transactions as defined in the
2022 Credit Agreement and the elimination of unrealized equity
earnings from our 19.99% equity investment in Consorcio de Tarjetas
Dominicanas S.A.
(4)
Represents non-cash unrealized
gains (losses) on foreign currency remeasurement for assets and
liabilities denominated in non-functional currencies.
Year Ended December 31,
2023
(In thousands)
Payment
Services -
Puerto Rico &
Caribbean
Latin America Payments and
Solutions
Merchant
Acquiring, net
Business
Solutions
Corporate and Other
(1)
Total
Revenues
$
203,232
$
186,503
$
162,366
$
226,960
$
(84,352
)
$
694,709
Operating costs and expenses
114,817
167,047
109,254
161,763
5,668
558,549
Depreciation and amortization
25,178
25,235
4,569
17,672
20,967
93,621
Non-operating income (expenses)
713
(6,201
)
308
804
(22,622
)
(26,998
)
EBITDA
114,306
38,490
57,989
83,673
(91,675
)
202,783
Compensation and benefits (2)
2,908
3,609
3,003
3,207
16,585
29,312
Transaction, refinancing, exit activity
and other fees (3)
1,163
9,676
—
—
40,761
51,600
(Gain) loss on foreign currency
remeasurement (4)
(111
)
8,383
—
—
4
8,276
Adjusted EBITDA
$
118,266
$
60,158
$
60,992
$
86,880
$
(34,325
)
$
291,971
(1)
Corporate and Other consists of
corporate overhead, certain leveraged activities, other
non-operating expenses and intersegment eliminations. Intersegment
revenue eliminations predominantly reflect the $52.9 million
processing fee from Payments Services - Puerto Rico & Caribbean
to Merchant Acquiring, intercompany software developments and
transaction processing of $17.1 million from Latin America Payments
and Solutions to both Payment Services - Puerto Rico &
Caribbean and Business Solutions, and transaction processing and
monitoring fees of $14.3 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, the foreign currency swap loss and the
elimination of unrealized equity earnings from our 19.99% equity
investment in Consorcio de Tarjetas Dominicanas S.A., net of
dividends received.
(4)
Represents non-cash unrealized
gains (losses) on foreign currency remeasurement for assets and
liabilities denominated in non-functional currencies.
Year Ended December 31,
2022
(In thousands)
Payment
Services -
Puerto Rico &
Caribbean
Latin America Payments and
Solutions
Merchant
Acquiring, net
Business
Solutions
Corporate and Other
(1)
Total
Revenues
$
178,481
$
128,221
$
151,085
$
235,299
$
(74,677
)
$
618,409
Operating costs and expenses
103,773
106,693
94,976
156,915
(1,348
)
461,009
Depreciation and amortization
20,379
14,121
4,160
17,027
22,931
78,618
Non-operating income (expenses)
1,258
(3,318
)
1,372
138,033
(5,242
)
132,103
EBITDA
96,345
32,331
61,641
233,444
(55,640
)
368,121
Compensation and benefits (2)
3,357
3,598
1,641
2,114
9,625
20,335
Transaction, refinancing, and other fees
(3)
1,078
145
325
(134,990
)
13,461
(119,981
)
Loss on foreign currency remeasurement
(4)
80
6,533
—
—
1,032
7,645
Adjusted EBITDA
$
100,860
$
42,607
$
63,607
$
100,568
$
(31,522
)
$
276,120
(1)
Corporate and Other consists of
corporate overhead, certain leveraged activities, other
non-operating expenses and intersegment eliminations. Intersegment
revenue eliminations predominantly reflect the $49.5 million
processing fee from Payments Services - Puerto Rico & Caribbean
to Merchant Acquiring, intercompany software developments and
transaction processing of $14.5 million from Latin America Payments
and Solutions to both Payment Services- Puerto Rico & Caribbean
and Business Solutions, and transaction processing and monitoring
fees of $10.7 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
2022 Credit Agreement, the gain from the Popular transaction and
the elimination of unrealized equity earnings from our 19.99%
equity investment in Consorcio de Tarjetas Dominicanas S.A, 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
Quarter ended December
31,
Year ended December
31,
(Dollar amounts in thousands, except share
data)
2023
2022
2023
2022
Net income
$
11,807
$
28,708
$
79,876
$
238,869
Income tax expense
931
6,072
5,477
28,983
Interest expense, net
11,979
5,688
23,809
21,651
Depreciation and amortization
29,941
20,186
93,621
78,618
EBITDA
54,658
60,654
202,783
368,121
Equity income(1)
(1,148
)
(848
)
(1,945
)
(1,121
)
Compensation and benefits (2)
7,796
4,980
29,312
20,335
Transaction, refinancing and other fees
(3)
9,453
3,583
53,545
(118,860
)
Loss on foreign currency remeasurement
(4)
939
787
8,276
7,645
Adjusted EBITDA
71,698
69,156
291,971
276,120
Operating depreciation and amortization
(5)
(14,648
)
(11,262
)
(52,913
)
(44,418
)
Cash interest expense, net (6)
(12,711
)
(5,876
)
(24,286
)
(21,008
)
Income tax expense (7)
(3,183
)
(8,564
)
(29,038
)
(35,631
)
Non-controlling interest (8)
(353
)
(24
)
(257
)
34
Adjusted Net Income
$
40,803
$
43,430
$
185,477
$
175,097
Net income per common share (GAAP):
Diluted
$
0.18
$
0.44
$
1.21
$
3.45
Adjusted earnings per common share
(Non-GAAP):
Diluted
$
0.62
$
0.66
$
2.82
$
2.53
Shares used in computing adjusted earnings
per common share:
Diluted
66,273,215
65,824,242
65,814,317
69,312,717
1)
Represents the elimination of
non-cash equity earnings from our 19.99% equity investment in
Dominican Republic, Consorcio de Tarjetas Dominicanas, S.A.
(“CONTADO”), 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, the gain from the Popular Transaction and the foreign
currency swap.
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 our consolidated statements of
income and comprehensive 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 Share
Outlook 2024
2023
(Dollar amounts in millions, except per
share data)
Low
High
Revenues
$
844
to
$
854
$
695
Earnings per Share (EPS) (GAAP)
$
1.45
to
$
1.61
$
1.21
Per share adjustment
to reconcile GAAP EPS to Non-GAAP Adjusted EPS:
Share-based comp, non-cash equity earnings
and other (1)
0.78
0.78
1.36
Merger and acquisition related
depreciation and amortization (2)
0.71
0.67
0.62
Non-cash interest expense (3)
0.05
0.05
(0.01
)
Tax effect of non-gaap adjustments (4)
(0.11
)
(0.11
)
(0.36
)
Non-controlling interest (5)
(0.06
)
(0.06
)
—
Total adjustments
1.37
1.33
1.61
Adjusted EPS (Non-GAAP)
$
2.82
to
$
2.94
$
2.82
Shares used in computing adjusted earnings
per common share
65.5
65.8
(1)
Represents share-based
compensation, the elimination of non-cash equity earnings from the
Company's 19.99% equity investment in CONTADO, 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 7% to 8%).
(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/20240228902262/en/
Investor Contact Beatriz Brown-Sáenz (787) 773-5442
IR@evertecinc.com
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