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Net 1 files 2019 Form 10-K with SEC and cures Nasdaq delinquency

JOHANNESBURG, South Africa, Oct. 25, 2019 (GLOBE NEWSWIRE) -- Net 1 UEPS Technologies, Inc. (Nasdaq: UEPS; JSE: NT1) today announced that it has filed its Annual Report on Form 10-K with the United States Securities and Exchange Commission for the year ended June 30, 2019. Filing of the Form 10-K cures the Nasdaq delinquency reported on October 3, 2019. We do not need to file a plan of compliance with Nasdaq and believe that we are now in compliance with Nasdaq’s continued listing requirements.

Final results amended as a result of September 30, 2019 Supreme Court ruling:

Our preliminary results released on September 26, 2019, have been updated for the impact of the Supreme Court ruling on September 30, 2019. The Supreme Court ruling declined our subsidiary, Cash Paymaster Services (Pty) Ltd’s (“CPS”), appeal of the refund of ZAR 317.0 million plus interest to the South Africa Social Security Agency (“SASSA”) related to the recovery of additional implementation costs incurred by CPS during the beneficiary re-registration process in fiscal 2012 and 2013. CPS is liable to repay SASSA ZAR 317.0 million, plus interest from June 2014 to date of payment. As a result, we recorded the liability at June 30, 2019, of $34.0 million (ZAR 479.4 million, translated at exchange rates applicable as of June 30, 2019, comprising a revenue refund of $19.7 million (ZAR 277.6 million), accrued interest of $11.4 million (ZAR 161.0 million), unclaimed indirect taxes of $2.8 million (ZAR 39.4 million) and estimated costs of $0.1 million (ZAR 1.4 million)).  

Below is a summary of the changes to our audited consolidated financial statements for Q4 2019 and full year 2019, as a result of the liability recorded compared with our preliminary results (“Prelim”) reported on September 26, 2019:

  Q4 2019   F2019
  Final
  Prelim
  Mvt
  Final
   Prelim
  Mvt
(All figures in USD ‘000s except per share data)                                  
Revenue 51,472     71,181     (19,709 )   360,990     380,699     (19,709 )
GAAP operating (loss) income (49,646 )   (15,607 )   (34,039 )   (113,508 )   (79,469 )   (34,039 )
Adjusted (negative) EBITDA(1) (749 )   (749 )   -     (12,621 )   (12,621 )   -  
GAAP net (loss) income (183,694 )   (149,655 )   (34,039 )   (307,618 )   (273,579 )   (34,039 )
Fundamental (loss) earnings (1) (173,128 )   (139,089 )   (34,039 )   (256,906 )   (222,867 )   (34,039 )
GAAP (loss) earnings per share ($) (3.23 )   (2.63 )   (0.60 )   (5.42 )   (4.82 )   (0.60 )
Fundamental (loss) earnings per share ($)(1) (3.05 )   (2.45 )   (0.60 )   (4.53 )   (3.93 )   (0.60 )
Headline (loss) earnings per share ($)(1) (3.11 )   (2.51 )   (0.60 )   (4.98 )   (4.38 )   (0.60 )
                                   

(1) Adjusted negative EBITDA and fundamental (loss) earnings per share are non-GAAP measures and are described below under “Use of Non-GAAP Measures”. See Attachment B for a reconciliation of GAAP operating (loss) income to negative EBITDA and Adjusted negative EBITDA, and GAAP net (loss) income to fundamental net (loss) income and (loss) earnings per share. See Attachment C for a reconciliation of net (loss) income used to calculate (loss) earnings per share basic and diluted and headline (loss) earnings per share basic and diluted.

We reiterate our fiscal 2020 guidance for adjusted EBITDA of at least $16 million using a constant currency base of ZAR 14.27/$1, driven by growth in South Korea and South Africa, and reduced losses from our IPG business.

Summary Financial Metrics

  Three months ended June 30,
  2019   2018
As
restated
(1)
  % change
in USD

  % change
in ZAR
(All figures in USD ‘000s except per share data)                      
Revenue 51,472     149,194     (65 %)   (57 %)
GAAP operating (loss) income (49,646 )   10,072     nm     nm  
Adjusted (negative) EBITDA(2) (749 )   24,301     nm     nm  
GAAP (loss) earnings per share ($) (3.23 )   0.05     nm     nm  
Continuing (3.23 )   0.10     nm     nm  
Discontinued -     (0.05 )   nm     nm  
Fundamental (loss) earnings per share ($)(2) (3.05 )   0.22     nm     nm  
Fully-diluted shares outstanding (‘000’s) 56,804     56,816     (0 %)    
Average period USD/ ZAR exchange rate 14.29     11.45     25 %    
Non-cash adjustments included (before tax impact): 140,827     12,834     997 %    
Allowance for doubtful finance loans receivables 1,148     1,798     (36 %)    
Change in fair value of equity securities 125,360     5,370     2,234 %    
Loss on disposal of DNI 631     -     nm      
Loss on acquisition of DNI -     4,614     nm      
Impairment loss 6,249     1,052     494 %    
Impairment of Cedar Cell note 7,439     -     nm      
                     


   
  Fiscal year ended June 30,
  2019   2018
As
restated
(1)
  % change
in USD

  % change
in ZAR
(All figures in USD ‘000s except per share data)                      
Revenue 360,990     612,889     (41 %)   (34 %)
GAAP operating (loss) income (113,508 )   58,949     nm     nm  
Adjusted (negative) EBITDA(2) (12,621 )   127,155     nm     nm  
GAAP (loss) earnings per share ($) (5.42 )   1.13     nm     nm  
Continuing (5.40 )   1.09     nm     nm  
Discontinued (0.02 )   0.04     nm     nm  
Fundamental (loss) earnings per share ($)(2) (4.53 )   2.00     nm     nm  
Fully-diluted shares outstanding (‘000’s) 56,778     56,858     (0 %)    
Average period USD/ ZAR exchange rate 14.27     12.70     12 %    
Non-cash adjustments included (before tax impact): 238,554     6,416     3,618 %    
Allowance for doubtful finance loans receivables 32,786     13,358     145 %    
Change in fair value of equity securities 167,459     (32,473 )   nm      
Loss on disposal of DNI 5,771     -     nm      
Loss on acquisition of DNI -     4,614     nm      
Impairment loss 19,745     20,917     (6 %)    
Impairment of Cedar Cell note 12,793     -     nm      
                     

(1) 2018 restated to correct an error identified by its equity method investment – Finbond Group Limited. The financial information for the three months and year ended June 30, 2018, have been restated with the effect of decreasing GAAP net (loss) income by $0.1 million, respectively. GAAP (loss) earnings per share were unaffected.

(2) Adjusted negative EBITDA, fundamental loss (earnings), fundamental (loss) earnings per share and headline (loss) earnings per share are non-GAAP measures and are described below under “Use of Non-GAAP Measures—negative EBITDA and Adjusted negative EBITDA, and —Fundamental net (loss) income and fundamental (loss) earnings per share.” See Attachment B for a reconciliation of GAAP operating (loss) income to negative EBITDA and Adjusted negative EBITDA, and GAAP net (loss) income to fundamental net (loss) income and (loss) earnings per share.

Factors impacting comparability of our Q4 2019 and Q4 2018 results

  • Decline in revenue: Our revenues declined 57% in ZAR primarily due to the expiration of our SASSA contract, the reversal of revenue of $19.7 million (ZAR 277.6 million) following the September 2019 Supreme Court ruling, the significant decline in EPE account numbers driven by SASSA’s auto-migration of accounts to SAPO, and a reduction in EPE-related financial and value-added services and transaction fees due to a smaller customer base;
  • Increase in operating losses: Lower revenue, coupled with a high-fixed cost infrastructure, additional costs recorded related to the September 2019 Supreme Court ruling of $14.3 million (ZAR 201.8 million), ongoing IPG operating losses, and a goodwill impairment resulted in an operating loss. We also incurred $1.0 million in retrenchment costs during Q4 2019;
  • Non-cash losses, impairments and fair-value adjustments: We incurred a $0.6 million non-cash loss on disposal of an 8% interest in DNI, a goodwill impairment loss of $6.2 million, a fair value adjustment loss of $125.4 million for Cell C and a $7.4 million impairment of our Cedar Cell note;
  • Implementation costs to be refunded to SASSA of $34.0 million: We recorded an accrual of $34.0 million related to the September 2019 Supreme Court ruling comprising a revenue refund of $19.7 million (ZAR 277.6 million), accrued interest of $11.4 million (ZAR 161.0 million), unclaimed indirect taxes of $2.8 million (ZAR 39.4 million) and estimated costs of $0.1 million (ZAR 1.4 million); and
  • Adverse foreign exchange movements: The U.S. dollar appreciated 23% against the ZAR and 10% against the KRW during Q4 2019, which adversely impacted our reported results.

Results of Operations by Segment and Liquidity

South African transaction processing

Segment revenue was $18.9 million in Q4 2019, down 63% on a constant currency basis compared with Q4 2018 but up from $17.4 million in Q3 2019. The year-over-year decrease in segment revenue and operating income was primarily due to the substantial decrease in the number of SASSA grant recipients paid under our SASSA contract as the contract ended at the end of Q1 2019. Our revenue and operating income were also adversely impacted by the significant reduction in the number of SASSA grant recipients with SASSA-branded Grindrod cards linked to Grindrod bank accounts as well as a lower number of EPE accounts in Q2 2019. These decreases in revenue and operating income were partially offset by higher transaction revenue as a result of increased usage of our ATMs. Operating income for this operating segment for Q4 2019 included retrenchment costs of $1.0 million (ZAR 14.3 million). Our operating (loss) income margin for Q4 2019 and 2018 was (13.1%) and 6.7%, respectively. Excluding restructuring costs, the operating loss margin for Q4 2019 and Q3 2019 was (7.5%) and (57.5%) respectively.

International transaction processing

Segment revenue was $36.4 million in Q4 2019, down 16% compared with Q4 2018 but up from $34.4 million in Q3 2019. Segment revenue was lower during Q4 2019, primarily due to a contraction in IPG transactions processed, specifically meaningfully lower crypto-exchange and China processing activity, and modestly lower KSNET revenue as a result of lower transaction values processed. Operating income during Q4 2019 was higher compared to fiscal 2018 due to an improved contribution from KSNET, primarily as a result of a lower depreciation expense, and partially offset by the decrease in IPG revenues. Operating income margin for Q4 2019 and 2018, and Q3 2019 was 6.1%, 4.8%, and 5.6% respectively.

Financial inclusion and applied technologies

Segment revenue was $17.4 million in Q4 2019, down 59% compared with Q4 2018 in constant currency and Q3 2019 revenue (excluding DNI) of $18.8 million. Segment revenue decreased primarily due to fewer prepaid airtime and value-added services sales, lower lending and insurance revenue, and a decrease in inter-segment revenues. Operating income was significantly lower than Q4 2018, primarily due to lower revenue generation and higher expenses incurred to maintain and expand our financial service infrastructure. Operating (loss) income for this operating segment for Q4 2019 includes a goodwill impairment of $6.2 million. Operating (loss) income margin for Q4 2019 and 2018 was (61.2%) and 25.5%, respectively. Excluding the goodwill impairment, segment operating loss and margin for Q4 2019 were ($4.5) million and (26.0%), respectively, and excluding DNI and retrenchment costs, segment operating loss and margin for Q3, 2019 were ($3.3) million and (17.8%), respectively.

Corporate/eliminations

Our corporate expenses increased primarily due to the accrual of $14.3 million related to the September 2019 Supreme Court ruling, higher non-employee director expenses, transaction-related expenditures and external service provider fees, partially offset by a reversal of stock compensation charge of $1.8 million related to stock options and restricted stock forfeited.

Cash flow, liquidity and consideration of going concern

At June 30, 2019, our cash and cash equivalents were $46.1 million and comprised of KRW-denominated balances of KRW 30.1 billion ($26.1 million), ZAR-denominated balances of ZAR 184.3 million ($13.1 million), U.S. dollar-denominated balances of $2.4 million, and other currency deposits, primarily Botswana pula, of $4.5 million, all amounts translated at exchange rates applicable as of June 30, 2019. The decrease in our unrestricted cash balances from June 30, 2018, was primarily due to significantly weaker trading activities, scheduled debt repayments, dividend payments to non-controlling interests and capital expenditures, which was partially offset by cash dividends received from DNI and a decrease in our South African lending book.

Excluding the impact of interest received, interest paid under our South Africa debt and taxes, the decrease in cash provided is primarily due to significantly weaker trading activity during fiscal 2019 compared to 2018. Capital expenditures for Q4 2019 and 2018 were $2.1 million and $1.8 million, respectively, and primarily relate to the acquisition of additional ATMs in South Africa. We made an unscheduled South African debt facility payment of $1.0 million (ZAR 15 million) and settled our outstanding South African long-term borrowings in full.

Use of Non-GAAP Measures

US securities laws require that when we publish any non-GAAP measures, we disclose the reason for using these non-GAAP measures and provide reconciliations to the directly comparable GAAP measures. The presentation of negative EBITDA, adjusted negative EBITDA, fundamental net (loss) income and fundamental (loss) earnings per share and headline (loss) earnings per share are non-GAAP measures.

EBITDA and adjusted EBITDA

(Loss) Earnings before interest, tax, depreciation and amortization (“EBITDA”) is GAAP operating (loss) income adjusted for depreciation and amortization and, if applicable, impairment losses. Adjusted EBITDA is EBITDA adjusted for costs related to acquisitions and transactions consummated or ultimately not pursued, retrenchment costs incurred, and in fiscal 2019, the accrual of $34.0 million related to the September 2019 Supreme Court ruling, and in fiscal 2018, the non-cash re-measurement loss related to the acquisition of DNI, an allowance for doubtful Mastertrading working capital finance loans receivable, a refund of indirect taxes in Korea, and (loss) profits realized on the sale of a business.

Fundamental net (loss) income and fundamental (loss) earnings per share

Fundamental net (loss) income and (loss) earnings per share is GAAP net (loss) income and (loss) earnings per share adjusted for the amortization of acquisition-related intangible assets (net of deferred taxes), the amortization of intangible assets (net of deferred taxes) related to equity-accounted investments, stock-based compensation charges and reversals, the amortization of South African and South Korean debt facility fees and unusual non-recurring items, including impairment losses, costs related to acquisitions and transactions consummated or ultimately not pursued.

Fundamental net (loss) income and (loss) earnings per share for fiscal 2019 also includes an adjustment for the loss incurred on the disposal of DNI, retrenchment costs incurred, accretion of interest related to the DNI contingent consideration, and for the non-controlling interest portion of the amortization of intangible assets (net of deferred taxes). Fundamental net income and earnings per share for fiscal 2018 also includes adjustments for an allowance for doubtful working capital finance receivables, the non-cash re-measurement loss related to the acquisition of DNI, refund of indirect taxes in Korea, the impact of changes in tax laws in the U.S and a gain realized on the sale of XeoHealth.

We provide earnings guidance only on a non-GAAP basis and do not provide a reconciliation of forward-looking fundamental (loss) earnings per share guidance to the most directly comparable GAAP financial measures because of the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation, the amounts of which, based on past experience, could be material.

Management believes that the EBITDA, adjusted EBITDA, fundamental net (loss) income and (loss) earnings per share metric enhances its own evaluation, as well as an investor’s understanding, of our financial performance. Attachment B presents the reconciliation between GAAP operating income and EBITDA and adjusted EBITDA; and GAAP net (loss) income and (loss) earnings per share and fundamental net (loss) income and (loss) earnings per share.

Headline (loss) earnings per share (“H(L)EPS”)

The inclusion of H(L)EPS in this press release is a requirement of our listing on the JSE. H(L)EPS basic and diluted is calculated using net (loss) income which has been determined based on GAAP. Accordingly, this may differ to the headline (loss) earnings per share calculation of other companies listed on the JSE as these companies may report their financial results under a different financial reporting framework, including but not limited to, International Financial Reporting Standards.

H(L)EPS basic and diluted is calculated as GAAP net (loss) income adjusted for the impairment loss and (profit) loss on sale of property, plant and equipment and the re-measurement loss on the acquisition of DNI. Attachment C presents the reconciliation between our net (loss) income used to calculate (loss) earnings per share basic and diluted and HE(L)PS basic and diluted and the calculation of the denominator for headline diluted (loss) earnings per share.

About Net1

Net1 is a leading provider of transaction processing services, financial inclusion products and services and secure payment technology. Net1 operates market-leading payment processors in South Africa and the Republic of Korea. Net1 offers debit, credit and prepaid processing and issuing services for all major payment networks. In South Africa, Net1 provides innovative low-cost financial inclusion products, including banking, lending and insurance and through DNI is a leading distributor of mobile subscriber starter packs for Cell C, a South African mobile network operator. Net1 leverages its strategic equity investments in Finbond and Bank Frick (both regulated banks), and Cell C to introduce products to new customers and geographies.

Net1 has a primary listing on NASDAQ (UEPS) and a secondary listing on the Johannesburg Stock Exchange (JSE:NT1). Visit www.net1.com for additional information about Net1.

Forward-Looking Statements

This announcement contains forward-looking statements that involve known and unknown risks and uncertainties. A discussion of various factors that cause our actual results, levels of activity, performance or achievements to differ materially from those expressed in such forward-looking statements are included in our filings with the Securities and Exchange Commission. We undertake no obligation to revise any of these statements to reflect future events.

Investor Relations Contact:
Dhruv Chopra
Group Vice President, Investor Relations
Phone: +1 917-767-6722
Email: dchopra@net1.com

Media Relations Contact:
Bridget von Holdt
Business Director – BCW
Phone: +27-82-610-0650
Email: bridget.vonholdt@bm-africa.com

 
NET 1 UEPS TECHNOLOGIES, INC.
Consolidated Statements of Operations
       
  Unaudited   (1)
  Three months ended   Year ended
    June 30,     June 30,
    2019     2018
(As
restated)
(R)
    2019       2018
(As
restated)
(R)
                         
  (In thousands, except per share data)   (In thousands, except per share data)
                     
REVENUE $ 51,472   $ 149,194     $ 360,990     $ 612,889  
                     
EXPENSE                    
                     
Cost of goods sold, IT processing, servicing and support   41,668     78,030       215,348       304,536  
                     
Selling, general and administration   46,380     51,586       202,056       193,003  
                     
Depreciation and amortization   6,821     8,454       37,349       35,484  
                     
Impairment loss   6,249     1,052       19,745       20,917  
                     
OPERATING (LOSS) INCOME   (49,646 )   10,072       (113,508 )     58,949  
                     
CHANGE IN FAIR VALUE OF EQUITY SECURITIES   (125,360 )   (5,370 )     (167,459 )     32,473  
                     
LOSS ON DISPOSAL OF DNI   631     -       5,771       -  
                     
INTEREST INCOME   1,289     2,982       7,229       17,885  
                     
INTEREST EXPENSE   1,694     2,069       10,724       8,941  
                     
IMPAIRMENT OF CEDAR CELLULAR NOTE   7,439     -       12,793       -  
                     
(LOSS) INCOME BEFORE INCOME TAX (BENEFIT) EXPENSE   (183,481 )   5,615       (303,026 )     100,366  
                     
INCOME TAX (BENEFIT) EXPENSE   2,023     8,840       3,725       48,597  
                     
NET (LOSS) INCOME BEFORE EARNINGS FROM EQUITY-ACCOUNTED INVESTMENTS   (185,504 )   (3,225 )     (306,751 )     51,769  
                     
EARNINGS FROM EQUITY-ACCOUNTED INVESTMENTS   1,820     4,208       1,482       11,597  
                     
NET (LOSS) INCOME   (183,684 )   983       (305,269 )     63,366  
Continuing   (183,684 )   3,794       (307,959 )     60,975  
Discontinued   -     (2,811 )     2,690       2,391  
                     
LESS (ADD) NET INCOME (LOSS) ATTRIBUTABLE TO NON-CONTROLLING INTEREST   10     (1,783 )     2,349       (880 )
Continuing   10     (1,783 )     (1,352 )     (880 )
Discontinued   -     -       3,701       -  
                     
NET (LOSS) INCOME ATTRIBUTABLE TO NET1 $ (183,694 )   2,766       (307,618 )     64,246  
Continuing   (183,694 )   5,577       (306,607 )     61,855  
Discontinued   -   $ (2,811 )   $ (1,011 )   $ 2,391  
                     
Net (loss) income per share, in U.S. dollars                    
Basic (loss) earnings attributable to Net1 shareholders   (3.23 )   0.05       (5.42 )     1.13  
Continuing   (3.23 )   0.10       (5.40 )     1.09  
Discontinued   -     (0.05 )     (0.02 )     0.04  
Diluted (loss) earnings attributable to Net1 shareholders   (3.23 )   0.05       (5.42 )     1.13  
Continuing   (3.23 )   0.10       (5.40 )     1.09  
Discontinued   -     (0.05 )     (0.02 )     0.04  
                     
(R) Certain amounts have been restated to correct an insignificant misstatement.
(1) Derived from audited consolidated financial statements.
 


 
NET 1 UEPS TECHNOLOGIES, INC.
Consolidated Balance Sheets
  (A)   (A) (R)
  June 30,   June 30,
  2019
  2018
       
  (In thousands, except share data)
ASSETS
CURRENT ASSETS          
Cash and cash equivalents $ 46,065     $ 87,075  
Restricted cash   75,446       -  
Pre-funded social welfare grants receivable   -       2,965  
Accounts receivable, net of allowance of – 2019: $1,241; 2018: $1,101 and other receivables   72,494       93,448  
Finance loans receivable, net of allowance of – 2019: $9,291; 2018: $16,403   30,631       61,463  
Inventory   7,535       10,361  
Current assets of discontinued operation   -       22,482  
Total current assets before settlement assets   232,171       277,794  
Settlement assets   63,479       149,047  
Total current assets   295,650       426,841  
PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of – 2019: $117,866; 2018: $126,026   18,554       25,737  
EQUITY-ACCOUNTED INVESTMENTS   151,116       86,016  
GOODWILL   149,387       169,079  
INTANGIBLE ASSETS, net of accumulated amortization of – 2019: $127,100; 2018: $121,466   11,889       27,129  
DEFERRED INCOME TAXES   2,151       4,776  
OTHER LONG-TERM ASSETS, including reinsurance assets   44,189       235,032  
LONG-TERM ASSETS OF DISCONTINUED OPERATION   -       242,704  
TOTAL ASSETS   672,936       1,217,314  
           
LIABILITIES
CURRENT LIABILITIES          
Short-term credit facilities for ATM funding   75,446       -  
Short-term credit facilities   9,544       -  
Accounts payable   17,005       21,106  
Other payables   66,449       41,645  
Current portion of long-term borrowings   -       44,079  
Income taxes payable   6,223       5,742  
Current liabilities of discontinued operation   -       20,914  
Total current liabilities before settlement obligations   174,667       133,486  
Settlement obligations   63,479       149,047  
Total current liabilities   238,146       282,533  
DEFERRED INCOME TAXES   4,682       16,067  
LONG-TERM BORROWINGS   -       5,469  
OTHER LONG-TERM LIABILITIES, including insurance policy liabilities   3,007       30,289  
LONG-TERM LIABILITIES OF DISCONTINUED OPERATION   -       38,387  
TOTAL LIABILITIES   245,835       372,745  
COMMITMENTS AND CONTINGENCIES          
           
REDEEMABLE COMMON STOCK   107,672       107,672  
           
EQUITY
COMMON STOCK          
Authorized: 200,000,000 with $0.001 par value;          
Issued and outstanding shares, net of treasury - 2019: 56,568,425; 2018: 56,685,925   80       80  
PREFERRED STOCK          
Authorized shares: 50,000,000 with $0.001 par value;          
Issued and outstanding shares, net of treasury: June: -; June: -   -       -  
ADDITIONAL PAID-IN-CAPITAL   276,997       276,201  
TREASURY SHARES, AT COST: 2019: 24,891,292; 2018: 24,891,292   (286,951 )     (286,951 )
ACCUMULATED OTHER COMPREHENSIVE LOSS   (199,273 )     (184,538 )
RETAINED EARNINGS   528,576       836,194  
TOTAL NET1 EQUITY   319,429       640,986  
NON-CONTROLLING INTEREST   -       95,911  
TOTAL EQUITY   319,429       736,897  
           
TOTAL LIABILITIES, REDEEMABLE COMMON STOCK AND SHAREHOLDERS’ EQUITY $ 672,936     $ 1,217,314  
           
(R) Certain amounts have been restated to correct an insignificant misstatement.
(A) Derived from audited consolidated financial statements.
 



 
NET 1 UEPS TECHNOLOGIES, INC.
Condensed Consolidated Statements of Cash Flows
                   
  Unaudited   (A)
  Three months ended   Year ended
    June 30,     June 30,
    2019     2018(R)
(as restated)
    2019       2018(R)
(as restated)
                       
  (In thousands)   (In thousands)
                   
Cash flows from operating activities                  
Net (loss) income $ (183,684 ) $ 983     $ (305,269 ) $ 63,366  
Depreciation and amortization   6,821     8,454       37,349     35,484  
Impairment loss   6,249     1,052       19,745     20,917  
Allowance for doubtful accounts receivable charged   1,148     1,798       32,786     13,358  
Earnings from equity-accounted investments   (1,820 )   (4,208 )     (1,482 )   (11,597 )
Interest on Cedar Cellular note   (447 )   (626 )     (2,397 )   (1,395 )
Impairment of Cedar Cellular note   7,439     -       12,793     -  
Change in fair value of equity securities   125,360     5,370       167,459     (32,473 )
SASSA implementation costs to be refunded   34,039     -       34,039     -  
Fair value adjustments and foreign currency re-measurements   (18 )   623       73     414  
Interest payable   (57 )   118       237     (146 )
Facility fee amortized   115     122       321     589  
Loss (Profit) on disposal of business   631     -       5,771     (463 )
Loss on fair value of DNI   -     4,614       -     4,614  
(Profit) Loss on disposal of property, plant and equipment   (73 )   (31 )     (486 )   40  
Stock compensation charge, net of forfeitures   (1,279 )   597       393     2,607  
Dividends received from equity accounted investments   864     -       1,318     4,111  
Decrease (Increase) in accounts and finance loans receivable, and pre-funded grants receivable   5,130     20,170       11,663     17,732  
Decrease (Increase) in inventory   430     255       4,042     (2,521 )
(Decrease) Increase in accounts payable and other payables   (3,199 )   4,820       (14,538 )   10,595  
Increase (Decrease) in taxes payable   1,286     (6,954 )     3,428     1,137  
(Decrease) Increase in deferred taxes   (482 )   (2,316 )     (11,705 )   5,936  
Net cash (used in) provided by operating activities   (1,547 )   34,841       (4,460 )   132,305  
                   
Cash flows from investing activities                  
Capital expenditures   (2,136 )   (1,848 )     (9,416 )   (9,649 )
Proceeds from disposal of property, plant and equipment   264     83       1,045     658  
Acquisition of intangible assets   -     -       (1,384 )   -  
Investment in equity of equity-accounted investments   -     (1,000 )     (2,989 )   (133,335 )
Disposal of DNI   -     -       (2,114 )   -  
Investment in MobiKwik   -     -       (1,056 )   -  
Repayment of loans by equity-accounted investments   1,029     9,180       1,029     9,180  
Proceeds on return of investment   -     -       284     -  
Investment in Cell C   -     -       -     (151,003 )
Loans to equity-accounted investments   -     -       -     (10,635 )
Acquisition of held to maturity investment   -     -       -     (9,000 )
Acquisitions, net of cash acquired       (6,202 )     -     (6,202 )
Other investing activities, net   -     (207 )     -     (61 )
Net change in settlement assets   2,198     210,405       79,077     490,795  
Net cash provided by investing activities   1,355     210,411       64,476     180,748  
                   
Cash flows from financing activities                  
Proceeds from bank overdraft   238,229     2,528       822,754     44,900  
Repayment of bank overdraft   (238,146 )   (5,932 )     (740,969 )   (62,925 )
Repayment of long-term borrowings   (1,047 )   (16,095 )     (37,357 )   (77,062 )
Long-term borrowings utilized   -     -       14,613     113,157  
Dividends paid to non-controlling interest   (19 )   -       (4,104 )   -  
Payment of guarantee fee   -     -       (394 )   (754 )
Acquisition of non-controlling interests   (180 )   -       (180 )   -  
Net change in settlement obligations   (2,198 )   (210,405 )     (79,077 )   (490,795 )
Net cash used in financing activities   (3,361 )   (229,904 )     (24,714 )   (473,479 )
                   
Effect of exchange rate changes on cash   2,126     (12,466 )     (3,845 )   (7,977 )
Net (decrease) increase in cash, cash equivalents and restricted cash   (1,427 )   2,882       31,457     (168,403 )
Cash, cash equivalents and restricted cash – beginning   122,938     87,172       90,054     258,457  
Cash, cash equivalents and restricted cash – end of period (1) $ 121,511   $ 90,054     $ 121,511   $ 90,054  
                   
Cash, cash equivalents and restricted cash – end of year for the year ended June 30, 2018, includes $2,979 related to DNI.
(R) Certain amounts have been restated to correct an insignificant misstatement.
(A) Derived from audited consolidated financial statements.
(1) Cash, cash equivalents and restricted cash as of June 30, 2019, includes restricted cash of approximately $75.4 million related to cash withdrawn from our various debt facilities to fund ATMs. This cash may only be used to fund ATMs and is considered restricted as to use and therefore is classified as restricted cash.
 

Net 1 UEPS Technologies, Inc.

Attachment A

Operating segment revenue, operating income and operating margin:

Three months ended June 30, 2019 and 2018 and March 31, 2019

...
            Change - actual
  Change –
constant
exchange rate
(1)
Key segmental data, in ’000, except margins Q4 ‘19   Q4 ‘18   Q3 ‘19
  Q4 ‘19
vs
Q4‘18
  Q4 ‘19
vs
Q3 ‘19
  Q4 ‘19
vs
Q4‘18
  Q4 ‘19
vs
Q3 ‘19
Revenue:                                              
South African transaction processing $18,945     $63,954     $17,374     (70 %)   9 %   (63 %)   10 %
International transaction processing   36,399