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EVERTEC Reports Third Quarter 2020 Results

·24 min read

EVERTEC, Inc. (NYSE: EVTC) ("Evertec" or the "Company") today announced results for the third quarter ended September 30, 2020.

Third Quarter 2020 Highlights

  • Revenue increased 15% to $136.5 million

  • GAAP Net Income attributable to common shareholders was $34.5 million or $0.47 per diluted share

  • Adjusted EBITDA increased 26% to $70.0 million

  • Adjusted earnings per common share was $0.65, an increase of 38%

Nine-Month Year-to-Date 2020 Highlights

  • Revenue increased 4% to $376.4 million

  • GAAP Net Income attributable to common shareholders was $72.2 million or $0.99 per diluted share

  • Adjusted EBITDA increased 3% to $176.5 million

  • Adjusted earnings per common share was $1.49, an increase of 1%

Mac Schuessler, President and Chief Executive Officer stated, "In the third quarter, we delivered strong results as we benefited from businesses re-opening in Puerto Rico as well as the implementation of new client contracts. Additionally, we continued to grow our contactless payment solution in Puerto Rico and expanded our gateway product in Latin America to further accelerate the consumer preference for digital solutions."

Third Quarter 2020 Results

Revenue. Total revenue for the quarter ended September 30, 2020 was $136.5 million, an increase of 15% compared with $118.8 million in the prior year. Revenue increase in the quarter reflected sales volume growth and a high average ticket as businesses reopened in Puerto Rico as well as increased growth in our digital solutions. Additionally, increased revenue was driven by a contract with the Puerto Rico Department of Education of approximately $4.4 million in the business solutions segment for computers in support of public education teachers.

Net Income attributable to common shareholders. For the quarter ended September 30, 2020, GAAP Net Income attributable to common shareholders was $34.5 million, or $0.47 per diluted share, an increase of $9.7 million or $0.13 per diluted share as compared to the prior year.

Adjusted EBITDA. For the quarter ended September 30, 2020, Adjusted EBITDA was $70.0 million, an increase of 26% compared to the prior year. Adjusted EBITDA margin (Adjusted EBITDA as a percentage of total revenues) was 51.3%, an increase of approximately 460 basis points from the prior year. The year over year increase in margin primarily reflects the benefit of higher average ticket, the impact of the Department of Education contribution and higher non-operating income, partially offset by increased operating expenses.

Adjusted Net Income. For the quarter ended September 30, 2020, Adjusted Net Income was $47.2 million, an increase of 37% compared with $34.6 million in the prior year. Adjusted earnings per common share was $0.65, an increase of 38% compared to $0.47 in the prior year.

Share Repurchase

During the three months ended September 30, 2020, the Company did not repurchase any shares, with total repurchases year-to-date of 336 thousand shares of its common stock at an average price of $21.73 per share for a total of $7.3 million. As of September 30, 2020, a total of approximately $23 million remained available for future use under the Company’s share repurchase program.

2020 Outlook

Due to the evolving environment and continued uncertainties resulting from the economic impact globally of the COVID-19 pandemic, the Company is not providing guidance for 2020.

Earnings Conference Call and Audio Webcast

The Company will host a conference call to discuss its third quarter 2020 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 10148853. The replay will be available through Thursday, November 5, 2020. 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 processing and business solutions services. The Company manages a system of electronic payment networks that process more than two billion transactions annually and offers a comprehensive suite of services for core bank processing, cash processing and technology outsourcing. In addition, Evertec owns and operates the ATH® network, one of the leading personal identification number ("PIN") debit networks in Latin America. 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 release material 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 interested parties to evaluate companies in the industry. Reconciliations of the non-GAAP measures to the most directly comparable GAAP measure are included in the schedules to this release. These non-GAAP measures include EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings per common share and are defined below.

EBITDA is defined as earnings before interest, taxes, depreciation and amortization.

Adjusted EBITDA is defined as EBITDA further adjusted to exclude unusual items and other adjustments. 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 net income adjusted to exclude unusual items and other adjustments.

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. Further, the Company's presentation of these measures should not be construed as an inference that the Company's future operating results will not be affected by unusual or nonrecurring items.

Forward-Looking Statements

Certain statements in this press release constitute "forward-looking statements" within the meaning of, and subject to the protection of, the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance or achievements of EVERTEC to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Statements preceded by, followed by, or that otherwise include the words "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. Any statements that refer to expectations or other characterizations of future events, circumstances or results are forward-looking statements.

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: the Company’s reliance on its relationship with Popular for a significant portion of revenue and to grow the Company's merchant acquiring business; the Company's ability to renew its client contracts on terms favorable to the Company, including the Company's Master Services Agreement (MSA) with Popular, and any significant concessions the Company may have to grant to Popular with respect to pricing or other key terms in anticipation of the negotiation of the extension of the MSA, both in respect of the current term and any extension of the MSA; a potential government shutdown; a continuation of the Government of Puerto Rico’s fiscal crisis; the effectiveness of the Company’s risk management procedures; dependence on the Company's processing systems, technology infrastructure, security systems and fraudulent-payment-detection systems, and the risk that the Company's systems may experience breakdowns or fail to prevent security breaches, confidential data theft or fraudulent transfers; our ability to develop, install and adopt new technology; impairments to the Company’s amortizable intangible assets and goodwill; a decreased client base due to consolidations in the banking and financial-services industry; the credit risk of the Company’s merchant clients, for which the Company may also be liable; a decline in the market for the Company’s services due to increased competition, changes in consumer spending or payment preferences; the continuing market position of the ATH® network; the Company’s dependence on credit card associations and debit networks; regulatory limitations on the Company’s activities, including the potential need to seek regulatory approval to consummate transactions, due to the Company’s relationship with Popular and the Company’s role as a service provider to financial institutions and the Company’s potential inability to obtain such approval on a timely basis or at all; changes in the regulatory environment and changes in international, legal, tax, political, administrative or economic conditions; the Company’s ability to comply with federal, state, and local regulatory requirements; the geographical concentration of the Company’s business in Puerto Rico; operating an international business in multiple regions with potential political and economic instability; operating an international business in countries and with counterparties that increase the Company’s compliance risks and puts the Company at risk of violating U.S. sanctions laws; the Company’s ability to execute the Company’s expansion and acquisition strategies; the Company’s ability to protect the Company’s intellectual property rights; the Company’s ability to recruit and retain qualified personnel; evolving industry standards; the Company’s high level of indebtedness and restrictions contained in the Company’s debt agreements; the Company’s ability to generate sufficient cash to service the Company’s indebtedness and to generate future profits; the possibility of future catastrophic hurricanes affecting Puerto Rico and/or the Caribbean, as well as other potential natural disasters; uncertainty related to the effect of the discontinuation of the London Interbank Offered Rate at the end of 2021; the nature, timing and amount of any restatement; and the impact of a novel strain of coronavirus ("COVID-19") and measures taken in response to the outbreak on our revenues, net income and liquidity due to current and future disruptions in operations as well as the macroeconomic instability caused by the pandemic.

Consideration should be given to the areas of risk described above, as well as those risks set forth under the headings "Forward-Looking Statements" and "Risk Factors" in the reports the Company files with the SEC from time to time, in connection with considering any forward-looking statements that may be made by the Company and its businesses generally. 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 the Company is required to do so by law.

EVERTEC, Inc.

Schedule 1: Unaudited Condensed Consolidated Statements of Income and Comprehensive Income

Three months ended September 30,

Nine months ended September 30,

2020

2019

2020

2019

(Dollar amounts in thousands, except share data)

Revenues

$

136,507

$

118,804

$

376,386

$

360,188

Operating costs and expenses

Cost of revenues, exclusive of depreciation and amortization

57,854

51,878

168,900

154,498

Selling, general and administrative expenses

16,682

15,152

51,528

45,355

Depreciation and amortization

18,127

16,972

53,761

50,440

Total operating costs and expenses

92,663

84,002

274,189

250,293

Income from operations

43,844

34,802

102,197

109,895

Non-operating (expenses) income

Interest income

429

348

1,165

864

Interest expense

(5,867

)

(7,267

)

(18,829

)

(22,191

)

Earnings of equity method investment

202

371

733

726

Other income (expense)

2,486

252

2,766

(619

)

Total non-operating expenses

(2,750

)

(6,296

)

(14,165

)

(21,220

)

Income before income taxes

41,094

28,506

88,032

88,675

Income tax expense

6,513

3,720

15,551

10,018

Net income

34,581

24,786

72,481

78,657

Less: Net income attributable to non-controlling interest

118

32

323

201

Net income attributable to EVERTEC, Inc.’s common stockholders

34,463

24,754

72,158

78,456

Other comprehensive income (loss), net of tax

Foreign currency translation adjustments

(3,245

)

(576

)

(10,483

)

3,714

Gain (loss) on cash flow hedges

643

(2,922

)

(11,894

)

(13,019

)

Total comprehensive income attributable to EVERTEC, Inc.’s common stockholders

$

31,861

$

21,256

$

49,781

$

69,151

Net income per common share:

Basic

$

0.48

$

0.34

$

1.00

$

1.09

Diluted

$

0.47

$

0.34

$

0.99

$

1.07

Shares used in computing net income per common share:

Basic

71,886,439

71,942,403

71,921,069

72,148,312

Diluted

73,001,780

73,314,704

73,049,817

73,530,865

EVERTEC, Inc.

Schedule 2: Unaudited Condensed Consolidated Balance Sheets

(In thousands)

September 30, 2020

December 31, 2019

Assets

Current Assets:

Cash and cash equivalents

$

144,147

$

111,030

Restricted cash

18,049

20,091

Accounts receivable, net

111,852

106,812

Prepaid expenses and other assets

44,835

38,085

Total current assets

318,883

276,018

Investment in equity investee

12,417

12,288

Property and equipment, net

43,255

43,791

Operating lease right-of-use asset

26,824

29,979

Goodwill

395,048

399,487

Other intangible assets, net

222,085

241,937

Deferred tax asset

3,657

2,131

Net investment in leases

394

722

Other long-term assets

5,511

5,323

Total assets

$

1,028,074

$

1,011,676

Liabilities and stockholders’ equity

Current Liabilities:

Accrued liabilities

$

54,099

$

58,160

Accounts payable

36,057

39,165

Unearned income

19,800

20,668

Income tax payable

7,475

6,298

Current portion of long-term debt

14,250

14,250

Current portion of operating lease liability

5,877

5,773

Total current liabilities

137,558

144,314

Long-term debt

484,306

510,947

Deferred tax liability

2,575

4,261

Unearned income - long term

30,827

28,437

Operating lease liability - long-term

21,380

24,679

Derivative liability

27,370

14,452

Other long-term liabilities

13,850

12,963

Total liabilities

717,866

740,053

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; 71,906,983 shares issued and outstanding as of September 30, 2020 (December 31, 2019 - 72,000,261)

719

720

Additional paid-in capital

6,552

Accumulated earnings

351,252

296,476

Accumulated other comprehensive loss, net of tax

(52,386

)

(30,009

)

Total EVERTEC, Inc. stockholders’ equity

306,137

267,187

Non-controlling interest

4,071

4,436

Total equity

310,208

271,623

Total liabilities and equity

$

1,028,074

$

1,011,676

EVERTEC, Inc.

Schedule 3: Unaudited Condensed Consolidated Statements of Cash Flows

Nine months ended September 30,

2020

2019

Cash flows from operating activities

Net income

$

72,481

$

78,657

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

53,761

50,440

Amortization of debt issue costs and accretion of discount

1,530

1,256

Operating lease amortization

4,377

3,966

Provision for expected credit losses and sundry losses

1,732

3,224

Deferred tax benefit

(2,082

)

(4,197

)

Share-based compensation

10,785

10,168

Loss on disposition of property and equipment and other intangibles

753

691

Earnings of equity method investment

(733

)

(726

)

Dividend received from equity method investment

485

Decrease (increase) in assets:

Accounts receivable, net

(7,096

)

6,475

Prepaid expenses and other assets

(7,138

)

(7,268

)

Other long-term assets

284

(1,450

)

(Decrease) increase in liabilities:

Accrued liabilities and accounts payable

(7,969

)

(6,834

)

Income tax payable

1,548

(2,080

)

Unearned income

2,350

6,718

Operating lease liabilities

(5,720

)

(4,825

)

Other long-term liabilities

2,296

1,467

Total adjustments

48,678

57,510

Net cash provided by operating activities

121,159

136,167

Cash flows from investing activities

Additions to software

(23,521

)

(27,969

)

Property and equipment acquired

(13,402

)

(21,994

)

Proceeds from sales of property and equipment

3

101

Net cash used in investing activities

(36,920

)

(49,862

)

Cash flows from financing activities

Statutory withholding taxes paid on share-based compensation

(3,456

)

(6,304

)

Repayment of short-term borrowings for purchase of equipment and software

(1,553

)

(852

)

Dividends paid

(10,786

)

(10,824

)

Repurchase of common stock

(7,300

)

(28,449

)

Repayment of long-term debt

(27,685

)

(10,688

)

Net cash used in financing activities

(50,780

)

(57,117

)

Effect of foreign exchange rate on cash, cash equivalents and restricted cash

(2,384

)

Net increase in cash, cash equivalents and restricted cash

31,075

29,188

Cash, cash equivalents and restricted cash at beginning of the period

131,121

86,746

Cash, cash equivalents and restricted cash at end of the period

$

162,196

$

115,934

Reconciliation of cash, cash equivalents and restricted cash

Cash and cash equivalents

$

144,147

$

102,535

Restricted cash

18,049

13,399

Cash, cash equivalents and restricted cash

$

162,196

$

115,934

EVERTEC, Inc.

Schedule 4: Unaudited Segment Information

Three months ended September 30, 2020

(In thousands)

Payment

Services -

Puerto Rico &

Caribbean

Payment

Services -

Latin America

Merchant

Acquiring, net

Business

Solutions

Corporate and

Other (1)

Total

Revenues

$

33,284

$

21,241

$

30,646

$

63,018

$

(11,682

)

$

136,507

Operating costs and expenses

19,045

18,284

15,643

35,276

4,415

92,663

Depreciation and amortization

3,349

2,936

477

4,372

6,993

18,127

Non-operating income (expenses)

127

2,959

161

411

(970

)

2,688

EBITDA

17,715

8,852

15,641

32,525

(10,074

)

64,659

Compensation and benefits (2)

258

686

244

466

2,015

3,669

Transaction, refinancing and other fees (3)

500

1,205

1,705

Adjusted EBITDA

$

18,473

$

9,538

$

15,885

$

32,991

$

(6,854

)

$

70,033

______________________

(1)

Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations. Intersegment revenue eliminations predominantly reflect the $10.0 million processing fee from Payments Services - Puerto Rico & Caribbean to Merchant Acquiring and intercompany software sale and developments of $1.6 million from Payment Services - Latin America to Payment Services - Puerto Rico & Caribbean. Corporate and Other was impacted by the intersegment elimination of revenue recognized in the Payment Services -Latin America segment and capitalized in the Payment Services - Puerto Rico & Caribbean segment; excluding this impact, Corporate and Other Adjusted EBITDA would be $5.2 million.

(2)

Primarily represents share-based compensation, other compensation expense and severance payments.

(3)

Primarily represents the elimination of non-cash equity earnings from our 19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A., net of cash dividends received.

Three months ended September 30, 2019

(In thousands)

Payment

Services -

Puerto Rico &

Caribbean

Payment

Services -

Latin America

Merchant

Acquiring, net

Business

Solutions

Corporate and

Other (1)

Total

Revenues

$

30,411

$

20,596

$

26,436

$

52,945

$

(11,584

)

$

118,804

Operating costs and expenses

15,821

11,943

15,978

32,259

8,001

84,002

Depreciation and amortization

3,093

2,650

457

3,780

6,992

16,972

Non-operating income (expenses)

410

(3,824

)

8

67

3,962

623

EBITDA

18,093

7,479

10,923

24,533

(8,631

)

52,397

Compensation and benefits (2)

284

109

285

549

2,228

3,455

Transaction, refinancing and other fees (3)

(372

)

(372

)

Adjusted EBITDA

$

18,377

$

7,588

$

11,208

$

25,082

$

(6,775

)

$

55,480

______________________

(1)

Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations. Intersegment revenue eliminations predominantly reflect the $10.0 million processing fee from Payments Services - Puerto Rico & Caribbean to Merchant Acquiring and intercompany software sale and developments of $1.6 million from Payment Services - Latin America to Payment Services - Puerto Rico & Caribbean. Corporate and Other was impacted by the intersegment elimination of revenue recognized in the Payment Services -Latin America segment and capitalized in the Payment Services - Puerto Rico & Caribbean segment; excluding this impact, Corporate and Other Adjusted EBITDA would be $5.2 million.

(2)

Primarily represents share-based compensation, other compensation expense and severance payments.

(3)

Primarily represents the elimination of non-cash equity earnings from our 19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A., net of cash dividends received.

Nine months ended September 30, 2020

(In thousands)

Payment

Services -

Puerto Rico &

Caribbean

Payment

Services -

Latin America

Merchant

Acquiring, net

Business

Solutions

Corporate and

Other (1)

Total

Revenues

$

90,632

$

62,678

$

80,531

$

174,455

$

(31,910

)

$

376,386

Operating costs and expenses

53,904

53,882

42,579

105,901

17,923

274,189

Depreciation and amortization

9,791

8,508

1,431

13,049

20,982

53,761

Non-operating income (expenses)

62

4,297

473

1,482

(2,815

)

3,499

EBITDA

46,581

21,601

39,856

83,085

(31,666

)

159,457

Compensation and benefits (2)

742

2,263

695

1,374

5,846

10,920

Transaction, refinancing and other fees (3)

500

5,647

6,147

Adjusted EBITDA

$

47,823

$

23,864

$

40,551

$

84,459

$

(20,173

)

$

176,524

______________________

(1)

Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations. Intersegment revenue eliminations predominantly reflect the $25.4 million processing fee from Payments Services - Puerto Rico & Caribbean to Merchant Acquiring and intercompany software developments and transaction processing of $6.5 million from Payment Services - Latin America to Payment Services - Puerto Rico & Caribbean. Corporate and Other was impacted by the intersegment elimination of revenue recognized in the Payment Services - Latin America segment and capitalized in the Payment Services - Puerto Rico & Caribbean segment; excluding this impact, Corporate and Other Adjusted EBITDA would be $13.7 million.

(2)

Primarily represents share-based compensation.

(3)

Primarily represents fees and expenses associated with corporate transactions as defined in the 2018 Credit Agreement, an impairment charge and the elimination of non-cash equity earnings from our 19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A.

Nine months ended September 30, 2019

(In thousands)

Payment

Services -

Puerto Rico &

Caribbean

Payment

Services -

Latin America

Merchant

Acquiring, net

Business

Solutions

Corporate and

Other (1)

Total

Revenues

$

92,910

$

62,533

$

79,203

$

159,492

$

(33,950

)

$

360,188

Operating costs and expenses

43,666

47,170

45,926

101,128

12,403

250,293

Depreciation and amortization

8,476

7,393

1,348

12,113

21,110

50,440

Non-operating income (expenses)

1,461

411

39

287

(2,091

)

107

EBITDA

59,181

23,167

34,664

70,764

(27,334

)

160,442

Compensation and benefits (2)

778

448

760

1,632

6,774

10,392

Transaction, refinancing and other fees (3)

2

37

39

Adjusted EBITDA

$

59,959

$

23,617

$

35,424

$

72,396

$

(20,523

)

$

170,873

______________________

(1)

Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations. Intersegment revenue eliminations predominantly reflect the $29.0 million processing fee from Payments Services - Puerto Rico & Caribbean to Merchant Acquiring and intercompany software sale and developments of $4.9 million from Payment Services - Latin America to the Payment Services - Puerto Rico & Caribbean. Corporate and Other was impacted by the intersegment elimination of revenue recognized in the Payment Services - Latin America segment and capitalized in the Payment Services - Puerto Rico & Caribbean segment; excluding this impact, Corporate and Other Adjusted EBITDA would be $15.6 million.

(2)

Primarily represents share-based compensation, other compensation expense and severance payments.

(3)

Primarily represents fees and expenses associated with corporate transactions as defined in the 2018 Credit Agreement and the elimination of non-cash equity earnings from our 19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A., net of cash dividends received.

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)

2020

2019

2020

2019

Net income

$

34,581

$

24,786

$

72,481

$

78,657

Income tax expense

6,513

3,720

15,551

10,018

Interest expense, net

5,438

6,919

17,664

21,327

Depreciation and amortization

18,127

16,972

53,761

50,440

EBITDA

64,659

52,397

159,457

160,442

Equity income (1)

(202

)

(372

)

(733

)

(241

)

Compensation and benefits (2)

3,669

3,455

10,920

10,392

Transaction, refinancing and other fees (3)

1,907

6,880

280

Adjusted EBITDA

70,033

55,480

176,524

170,873

Operating depreciation and amortization (4)

(9,888

)

(8,673

)

(28,943

)

(25,516

)

Cash interest expense, net (5)

(5,301

)

(6,644

)

(16,917

)

(20,774

)

Income tax expense (6)

(7,472

)

(5,509

)

(21,729

)

(15,454

)

Non-controlling interest (7)

(155

)

(63

)

(412

)

(287

)

Adjusted net income

$

47,217

$

34,591

$

108,523

$

108,842

Net income per common share (GAAP):

Diluted

$

0.47

$

0.34

$

0.99

$

1.07

Adjusted Earnings per common share (Non-GAAP):

Diluted

$

0.65

$

0.47

$

1.49

$

1.48

Shares used in computing adjusted earnings per common share:

Diluted

73,001,780

73,314,704

73,049,817

73,530,865

______________________

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.

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 an impairment charge.

4)

Represents operating depreciation and amortization expense, which excludes amounts generated as a result of merger and acquisition activity.

5)

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.

6)

Represents income tax expense calculated on adjusted pre-tax income using the applicable GAAP tax rate, adjusted for certain discrete items.

7)

Represents the 35% non-controlling equity interest in Evertec Colombia, net of amortization for intangibles created as part of the purchase.

View source version on businesswire.com: https://www.businesswire.com/news/home/20201029006053/en/

Contacts

Investors
Kay Sharpton
(787) 773-5442
IR@evertecinc.com