Last10K.com

Net 1 Ueps Technologies Inc (UEPS) SEC Filing 10-K Annual report for the fiscal year ending Tuesday, June 30, 2020

Net 1 Ueps Technologies Inc

CIK: 1041514 Ticker: UEPS

Exhibit 99.1

Net 1 Reports Fourth Quarter and Year End 2020 Results

JOHANNESBURG, September 10, 2020 - Net 1 UEPS Technologies, Inc. (Nasdaq: UEPS; JSE: NT1) today released results for the fourth fiscal quarter and year ended June 30, 2020.

Q4 2020 Highlights and Recent Developments:

  • At June 30, 2020, had unrestricted cash of $218 million and no debt
  • Revenue of $26.0 million, excluding the impact of the 2019 SASSA implementation fee refund, was down year-over-year reflecting effects of the COVID-19 pandemic on fees and financial services;
  • GAAP EPS of $(0.68) and Fundamental EPS of $(0.22); and
  • Operating loss of $13.2 million and adjusted EBITDA loss of $12.2 million.

Strategic Review:

Following completion of the strategic review, our board has realigned Net1 to focus on, and invest in, its core competencies and portfolio of assets within the South African market. We aim to renew Net1 by building on the unique suite of financial technology products that is the profitable heart of our business in order, to provide an end-to-end value proposition for underserved participants in the economy. We believe that Net1 is extremely well-positioned to be a dynamic, catalyzing and positive force for our customers, empowering individuals and small businesses with credit, insurance and payment services.

"South Africa is, and always has been, the engine room of Net1," said Alex Smith, Net1's chief financial officer. "Following our strategic review, we intend to focus our incremental capital and management resources to scale up our South African businesses, and return Net1 to a sustainable, cash generative business. Efficient capital allocation will drive our strategy during fiscal 2021 and beyond in order to generate the best return for the business and for shareholders."

"Economic activity levels in South Africa remain challenging due to the ongoing effects of COVID-19, particularly its wider impact on the macroeconomic environment. We have, however, begun reinvesting in our South African operations and are pleased with the demand for our transactional and financial services since the relaxation of lockdown restrictions in June," he added.

Investment Company

As previously communicated, we are in the process of more formally determining our status under the Investment Company Act. We currently have an authorisation in place to repurchase up to $100 million of shares, however we will not be able to use the authorisation unless and until we can reliably conclude that we will not be considered to be an investment company. We intend to return excess capital to shareholders once this matter is resolved.

Succession plan for CEO

On August 5, 2020, we announced that, after 22 years with our company, Herman G. Kotzé will be stepping down on September 30, 2020, as Net1's CEO and director. Alex Smith will take over as the interim CEO upon Mr. Kotzé's departure, until the board finalizes the appointment of a permanent CEO. To ensure a smooth transition, Mr. Kotzé has agreed to provide consulting services to Net1 through May 31, 2021.

Summary Financial Metrics

 

 

Q4 2020

 

Q4
2019
(R)

 

Q3
2020

 

Q4 '20 vs
Q4 '19

 

Q4 '20 vs
Q3 '20

 

Q4 '20 vs
Q4 '19

 

Q4 '20 vs
Q3 '20

(All figures in USD '000s except per share data)

USD '000's

(except per share data)

 

% change in USD

 

% change in ZAR

Revenue

25,978

 

17,053

 

36,514

 

52%

 

(29%)

 

86%

 

(20%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP operating loss

(13,180)

 

(52,356)

 

(14,212)

 

(75%)

 

(7%)

 

(69%)

 

4%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA (loss) (1)

(12,184)

 

(72,562)

 

(6,423)

 

(83%)

 

90%

 

(79%)

 

113%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP (loss) earnings per share ($)

(0.68)

 

(3.22)

 

(0.61)

 

(79%)

 

12%

 

(74%)

 

26%

 

Continuing

(0.68)

 

(3.24)

 

(0.85)

 

(79%)

 

(20%)

 

(74%)

 

(10%)

 

Discontinued

(0.00)

 

0.02

 

0.24

 

nm

 

nm

 

nm

 

nm

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fundamental loss per share ($)(1)

(0.22)

 

(3.05)

 

(0.11)

 

(93%)

 

100%

 

(91%)

 

125%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fully-diluted shares outstanding ('000's)

57,119

 

56,804

 

56,568

 

1%

 

1%

 

nm

 

nm

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average period USD/ ZAR exchange rate

17.28

 

14.13

 

15.37

 

22%

 

12%

 

nm

 

nm




 

 

F2020

 

F2019(R)

 

F2020 vs
F2019

 

F2020 vs
F2019

(All figures in USD '000s except per share data)

USD '000's

(except per share data)

% change in USD

 

% change in ZAR

Revenue

150,997

 

166,227

 

(9%)

 

2%

 

 

 

 

 

 

 

 

 

GAAP operating loss

(44,248)

 

(134,932)

 

(67%)

 

(63%)

 

 

 

 

 

 

 

 

 

Adjusted EBITDA (loss)(1)

(30,389)

 

(64,596)

 

(53%)

 

(47%)

 

 

 

 

 

 

 

 

 

GAAP (loss) earnings per share ($)

(1.37)

 

(5.48)

 

(75%)

 

(72%)

 

Continuing

(1.70)

 

(5.49)

 

(69%)

 

(65%)

 

Discontinued

0.33

 

0.01

 

nm

 

nm

 

 

 

 

 

 

 

 

 

Fundamental loss per share ($)(1)

(1.04)

 

(4.53)

 

(77%)

 

(74%)

 

 

 

 

 

 

 

 

 

Fully-diluted shares outstanding ('000's)

56,764

 

56,778

 

(0%)

 

nm

 

 

 

 

 

 

 

 

 

Average period USD/ ZAR exchange rate

15.96

 

14.27

 

12%

 

nm

(R) 2019 restated to correct an error identified related to the loss recorded related to the disposal of discontinued operation and to correct errors identified by our equity method investment - Finbond Group Limited. The financial information for the three months June 30, 2019, has been restated with the effect of decreasing GAAP net loss by $0.6 million and decreasing GAAP loss per share by $0.01, respectively. The financial information for the year ended June 30, 2019, has been restated with the effect of increasing GAAP net loss by $3.4 million and increasing GAAP loss per share by $0.06, respectively

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

Business update related to COVID-19 pandemic

While our business was significantly impacted by the initial lockdown period from March 27 to May 31, we have since been able to reopen all of our operations. While we continue to be affected by the broader macroeconomic conditions that have resulted from the pandemic, we believe that there are opportunities for us in providing financial services and exploiting some of the emerging trends in electronic payment methods and related areas.

The net impact of the lockdown on our results was an EBITDA loss of ZAR 32.0 million during the fourth quarter. We were unable to charge approximately ZAR 27.0 million of withdrawal fees under the pandemic regulations and our micro-lending and insurance businesses were unable to operate during the initial lockdown period. We also saw a 10% reduction in utilisation of our ATMs during this period. The unwinding of the loan book and the resulting impact on revenue reduced EBITDA by a further ZAR 22.0 million and we incurred around ZAR 3.0 million of costs directly related to the pandemic. We were able to partially offset these reductions through access to approximately ZAR 20.0 million of government relief for the businesses that were unable to operate.

In June, we saw some recovery with loan advances picking up strongly and the utilisation of our ATMs returning to pre-COVID-19 levels, which is encouraging and we are now actively looking to expand this customer base.

Factors impacting comparability of our Q4 2020 and Q4 2019 results

 Higher revenue: Our revenues increased 86% in ZAR primarily due to the impact of the 2019 SASSA implementation fee reversal, which was partially offset by lower South African transaction fees, lower ad-hoc technology sales and lower international processing volumes;

 Ongoing operating losses: While operating costs have reduced significantly, we continue to experience operating losses in South Africa and internationally, as a result of depressed revenues and challenging trading conditions during the COVID-19 outbreak; and

 Adverse foreign exchange movements: The U.S. dollar appreciated 22% against the ZAR compared to Q4 2020, which adversely impacted our reported results.

Results of Operations by Segment and Liquidity

South African transaction processing

Segment revenue was $14.2 million in Q4 2020, down 9%, compared with Q4 2019 and also down 20% compared to Q3 2020 on a constant currency basis. The decrease in segment revenue was primarily due to the impact of COVID-19 on our EPE transaction fees and volumes, as well as the disposal of FIHRST, which were partially offset by higher fees from other transacting businesses. Our revenue for Q4 2020 was adversely impacted by ZAR 27.0 million ($1.6 million) as a result of the COVID-19 pandemic as we were unable to charge certain cash withdrawal fees. The higher operating loss in the segment is primarily due to the impact of COVID-19 on our operating activities as discussed above. Our operating loss margin for Q4 2020 and 2019 was (32.1%) and (13.1%), respectively.


International transaction processing

Segment revenue from continuing operations was $1.4 million in Q4 2020, down 12% on a constant currency basis compared with Q4 2019 and down from $1.6 million in Q3 2020. Segment revenue from continuing operations was lower during Q4 2020, primarily due to an ongoing contraction in IPG transaction volumes. Operating loss from continuing operations during Q4 2020 increased compared with fiscal 2019 due to higher operating losses incurred by IPG, reflecting the high fixed costs component of the business. Our operating loss margin for Q4 2020 and 2019 was (289.6%) and (138.1%), respectively.

Financial inclusion and applied technologies

Segment revenue was $12.6 million in Q4 2020, down 13% on a constant currency basis compared with Q4 2020 and also down from $17.7 million in Q3 2020. Prepaid airtime sales were also modestly lower than Q4 2019. Operating loss for this operating segment for Q4 2019 included a goodwill impairment of $6.2 million. Operating loss for Q4 2020 improved compared with fiscal 2019 primarily due to better utilization of our infrastructure, which was partially offset by higher fixed costs incurred and includes a $1.3 million inventory write-down related to Cell C prepaid airtime. The COVID impact on this segment was not significant due to government assistance largely offsetting the revenue impact. Our operating loss margin for the Financial inclusion and applied technologies segment was (19.3%) and (61.2%) during Q4 2020 and 2019, respectively. Our operating loss margin for Q4 2020 excluding the $1.3 inventory write-down was (8.9%) and for Q4 2019 excluding the goodwill impairment was (25.9%), respectively.

Corporate/eliminations

Our corporate expenses decreased primarily due to the inclusion of the impact of the 2019 SASSA implementation fee reversal in Q4 2019 and lower acquired intangible asset amortization expense in Q4 2020 related to intangible assets that were fully amortized during Q4 2019.

Cash flow and liquidity

At June 30, 2020, our cash and cash equivalents were $217.7 million, which comprised U.S. dollar-denominated balances of $171.3 million, ZAR-denominated balances of ZAR 750.9 million ($43.3 million), and other currency deposits, primarily Botswana pula, of $3.0 million, all amounts translated at exchange rates applicable as of June 30, 2020. The increase in our unrestricted cash balances from June 30, 2019, was primarily due to the sale of our Korean operations, FIHRST and the majority of our remaining interest in DNI for cash; and the repayment of a loan outstanding by DNI as of June 30, 2019; which was partially offset by weak trading activities, payment of a termination fee to cancel our Bank Frick option, repayment of our short-term borrowings, capital expenditures, and an additional investment in V2.

Our cash used in operating activities during Q4 2020 was impacted by the cash losses incurred by the majority of our continuing operations, the payment of the $17.5 million option termination fee and the recommencement of lending activities. We were permitted to commence origination of loans in June following the relaxation of the temporary COVID-19 restrictions imposed on our lending activities in March 2020. Capital expenditures for Q4 2020 and 2019 were $1.4 million and $2.1 million, respectively, with Q4 2020 capital expenditures relating primarily to the acquisition of point of sale devices in South Africa to deploy to merchants.

Supplemental presentation for Q4 2020 Results

A supplemental presentation for Q4 2020 will be posted to the Investor Relations page of our website - ir.net1.com prior to our earnings call on Friday, September 11, 2020.

Conference Call

We will host a conference call to review these results on September 11, 2020, at 8:00 a.m. Eastern Time. To participate in the call, dial 1-508-924-4326 (US and Canada), 0333-300-1418 (U.K. only) or 010-201-6800 (South Africa only) ten minutes prior to the start of the call. Callers should request "Net1 call" upon dial-in. The call will also be webcast on the Net1 homepage, www.net1.com. Please click on the webcast link at least ten minutes prior to the call. A webcast of the call will be available for replay on the Net1 website through October 4, 2020.

Participants are now able to pre-register for the September 11, 2020, conference call by navigating to www.diamondpass.net/2820008. Participants utilizing this pre-registration service will receive their dial-in number upon registration.


Use of Non-GAAP Measures

U.S. 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 most directly comparable GAAP measures. The presentation of EBITDA, adjusted 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

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, the accrual of the 2019 SASSA implementation fee reversal and adjustment related to retrenchment costs paid.

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 unusual non-recurring items, including costs related to acquisitions and transactions consummated or ultimately not pursued.

Fundamental net (loss) income and (loss) earnings per share for fiscal 2020 also includes an adjustment for the termination fee paid to cancel the Bank Frick option, impairment losses related to our equity-accounted investments, the gain related to the disposal of Net1 Korea, the gain related to the disposal of FIHRST, the loss related to the deconsolidation of CPS, interest related to SASSA implementation costs refund, and fiscal 2019 also includes gain (loss) related to the disposal of DNI, the accretion of interest related to the DNI contingent consideration, retrenchment costs (net of taxes), the non-controlling interest portion of the amortization of intangible assets (net of deferred taxes), and the amortization of debt facility fees.

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 losses related to our equity-accounted investments, the gain related to the disposal of Net1 Korea, the gain on disposal of FIHRST, the loss related to the deconsolidation of CPS, the loss related to the disposal of DNI, impairment loss and (profit) loss on sale of property, plant and equipment. 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 multinational financial technology company with a presence in Africa, Asia and Europe. Net1 leverages its proprietary banking and payment technology to distribute low-cost financial and value-added services to underserved consumers and small businesses. The Company also provides transaction processing services, including being a leading payment processor and bill payment platform in South Africa. Net1 leverages its strategic investments in banks, telecom and mobile payment technology companies to further expand its product offerings or to enter new markets.

Net1 has a primary listing on NASDAQ (NasdaqGS: 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 may 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@bcw-global.com



NET 1 UEPS TECHNOLOGIES, INC.
Unaudited Condensed Consolidated Statements of Operations


 

 

Unaudited

 

(A)

 

 

Three months ended

 

Year ended

 

 

June 30,

 

June 30,

 

 

2020

 

2019

 

2020

 

2019

 

 

 

 

As
restated
(R)

 

 

 

As
restated
(R)

 

 

(In thousands)

 

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

REVENUE

$

25,978

 

$

17,053

 

$

150,997

 

$

166,227

 

 

 

 

 

 

 

 

 

 

 

 

 

EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of goods sold, IT processing, servicing and support

 

22,400

 

 

26,225

 

 

109,006

 

 

129,696

 

Selling, general and administration

 

15,762

 

 

33,916

 

 

75,256

 

 

144,920

 

Depreciation and amortization

 

996

 

 

3,019

 

 

4,647

 

 

12,103

 

Impairment loss

 

-

 

 

6,249

 

 

6,336

 

 

14,440

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING LOSS

 

(13,180)

 

 

(52,356)

 

 

(44,248)

 

 

(134,932)

 

 

 

 

 

 

 

 

 

 

 

 

 

CHANGE IN FAIR VALUE OF EQUITY SECURITIES

 

-

 

 

(125,360)

 

 

-

 

 

(167,459)

 

 

 

 

 

 

 

 

 

 

 

 

 

GAIN ON DISPOSAL OF FIHRST

 

-

 

 

-

 

 

9,743

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

(LOSS) GAIN ON DISPOSAL OF DNI

 

(1,010)

 

 

177

 

 

(1,010)

 

 

177

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS ON DECONSOLIDATION OF CPS

 

7,148

 

 

-

 

 

7,148

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

TERMINATION FEE PAID TO BANK FRICK

 

17,517

 

 

-

 

 

17,517

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST INCOME

 

790

 

 

988

 

 

2,805

 

 

5,424

 

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST EXPENSE

 

1,279

 

 

1,659

 

 

7,641

 

 

9,860

 

 

 

 

 

 

 

 

 

 

 

 

 

IMPAIRMENT OF CEDAR CELLULAR NOTE

 

-

 

 

7,439

 

 

-

 

 

12,793

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS BEFORE INCOME TAX EXPENSE (BENEFIT)

 

(39,344)

 

 

(185,649)

 

 

(65,016)

 

 

(319,443)

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME TAX EXPENSE (BENEFIT)

 

339

 

 

272

 

 

2,656

 

 

(5,072)

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS BEFORE LOSS FROM EQUITY-ACCOUNTED INVESTMENTS

 

(39,683)

 

 

(185,921)

 

 

(67,672)

 

 

(314,371)

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS FROM EQUITY-ACCOUNTED INVESTMENTS

 

1,082

 

 

1,611

 

 

(29,542)

 

 

1,258

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS FROM CONTINUING OPERATIONS

 

(38,601)

 

 

(184,310)

 

 

(97,214)

 

 

(313,113)

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME FROM DISCONTINUED OPERATIONS

 

-

 

 

1,272

 

 

6,402

 

 

13,630

(LOSS) GAIN FROM DISPOSAL OF DISCONTINUED OPERATION, net of tax

 

(279)

 

 

-

 

 

12,454

 

 

(9,175)

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS

 

(38,880)

 

 

(183,038)

 

 

(78,358)

 

 

(308,658)

 

 

 

 

 

 

 

 

 

 

 

 

 

(ADD) LESS NET (LOSS) INCOME ATTRIBUTABLE TO NON-CONTROLLING INTEREST

 

-

 

 

10

 

 

-

 

 

2,349

 

Continuing

 

-

 

 

10

 

 

-

 

 

(1,352)

 

Discontinued

 

-

 

 

-

 

 

-

 

 

3,701

 

 

 

 

 

 

 

 

 

 

 

 

 

NET (LOSS) INCOME ATTRIBUTABLE TO NET1

 

(38,880)

 

 

(183,048)

 

 

(78,358)

 

 

(311,007)

 

Continuing

 

(38,601)

 

 

(184,320)

 

 

(97,214)

 

 

(311,761)

 

Discontinued

$

(279)

 

$

1,272

 

$

18,856

 

$

754

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) earnings per share, in United States dollars:

 

 

 

 

 

 

 

 

 

 

 

Basic (loss) earnings attributable to Net1 shareholders

$

(0.68)

 

$

(3.22)

 

$

(1.37)

 

$

(5.48)

 

Continuing

$

(0.68)

 

$

(3.24)

 

$

(1.70)

 

$

(5.49)

 

Discontinued

$

(0.00)

 

$

0.02

 

$

0.33

 

$

0.01

Diluted (loss) earnings attributable to Net1 shareholders

$

(0.69)

 

$

(3.27)

 

$

(1.37)

 

$

(5.48)

 

Continuing

$

(0.69)

 

$

(3.29)

 

$

(1.70)

 

$

(5.49)

 

Discontinued

$

(0.00)

 

$

0.02

 

$

0.33

 

$

0.01

(R) Certain amounts have been restated to correct discontinued operations presentation, the loss on disposal of discontinued operation, net of tax, gain on disposal of DNI in 2019 and to correct errors identified by our equity method investment - Finbond Group Limited . Refer to Note 1 to Form 10-K for the annual period ended June 30, 2020.
(A) Derived from audited consolidated financial statements.


NET 1 UEPS TECHNOLOGIES, INC.
Unaudited Consolidated Balance Sheets


        (A)     (A)  
        June 30,     June 30,  
        2020     2019  
              As restated(R)  
        (In thousands, except share data)  
    ASSETS            
CURRENT ASSETS            
  Cash and cash equivalents $ 217,671   $ 20,014  
  Restricted cash   14,814     75,446  
  Accounts receivable, net of allowance of - 2020: $253; 2019: $661 and other receivables   43,068     31,135  
  Finance loans receivable, net of allowance of - 2020: $7,658; 2019: $8,999   15,879     20,981  
  Inventory   19,860     5,709  
    Total current assets before settlement assets   311,292     153,285  
    Settlement assets   8,014     24,523  
    Current assets of discontinued operation   -     117,842  
    Total current assets   319,306     295,650  
PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of - 2020: $29,524; 2019: $55,427   6,656     8,227  
OPERATING LEASE RIGHT-OF-USE   5,395     -  
EQUITY-ACCOUNTED INVESTMENTS   65,836     148,427  
GOODWILL   24,169     37,316  
INTANGIBLE ASSETS, net of accumulated amortization of - 2020: $27,325; 2019: $37,036   612     2,228  
DEFERRED INCOME TAXES   358     234  
OTHER LONG-TERM ASSETS, including reinsurance assets   31,346     28,775  
LONG-TERM ASSETS OF DISCONTINUED OPERATION   -     149,390  
TOTAL ASSETS   453,678     670,247  
                 
    LIABILITIES            
CURRENT LIABILITIES            
  Short-term credit facilities for ATM funding   14,814     75,446  
  Short-term credit facilities   -     9,544  
  Accounts payable   6,287     9,866  
  Other payables   23,779     59,622  
  Operating lease right of use lease liability - current   2,251     -  
  Income taxes payable   16,157     1,330  
    Total current liabilities before settlement obligations   63,288     155,808  
    Settlement obligations   8,015     24,523  
    Settlement obligations   -     57,815  
    Total current liabilities   71,303     238,146  
DEFERRED INCOME TAXES   1,859     1,324  
RIGHT-OF-USE OPERATING LEASE LIABILITY - LONG TERM   3,312     -  
OTHER LONG-TERM LIABILITIES, including insurance policy liabilities   2,012     2,499  
LONG-TERM LIABILTIES OF DISCONTINUED OPERATION   -     3,264  
TOTAL LIABILITIES   78,486     245,233  
COMMITMENTS AND CONTINGENCIES   -     -  
REDEEMABLE COMMON STOCK   84,979     107,672  
                 
    EQUITY            
NET1 EQUITY:            
COMMON STOCK            
  Authorized: 200,000,000 with $0.001 par value;            
  Issued and outstanding shares, net of treasury: 2020: $57,118,925; 2019: $56,568,425   80     80  
                 
PREFERRED STOCK            
  Authorized shares: 50,000,000 with $0.001 par value;            
  Issued and outstanding shares, net of treasury: 2020: -; 2019: -   -     -  
ADDITIONAL PAID-IN-CAPITAL   301,489     276,997  
TREASURY SHARES, AT COST: 2020: $24,891,292; 2019: $24,891,292   (286,951 )   (286,951 )
ACCUMULATED OTHER COMPREHENSIVE LOSS   (169,075 )   (195,812 )
RETAINED EARNINGS   444,670     523,028  
TOTAL NET1 EQUITY   290,213     317,342  
NON-CONTROLLING INTEREST   -     -  
TOTAL EQUITY   290,213     317,342  
                 
TOTAL LIABILITIES, REDEEMABLE COMMON STOCK AND SHAREHOLDERS' EQUITY $ 453,678   $ 670,247  

(R) Certain amounts have been restated to correct the retained earnings and accumulated other comprehensive loss, and to correct errors identified by our equity method investment - Finbond Group Limited . Refer to Note 1 to Form 10-K for the annual period ended June 30, 2020.

(A) Derived from audited consolidated financial statements.



NET 1 UEPS TECHNOLOGIES, INC.
Unaudited Condensed Consolidated Statements of Cash Flows


        Unaudited     (A)  
        Three months ended     Year ended  
        June 30,     June 30,  
        2020     2019     2020     2019  
              As restated(R)           As restated(R)  
        (In thousands)     (In thousands)  
                             
Cash flows from operating activities                        
  Net loss $ (38,880 ) $ (183,038 ) $ (78,358 ) $ (308,658 )
  Depreciation and amortization   996     6,821     13,299     37,349  
  Impairment loss   -     6,249     6,336     19,745  
  Movement in allowance for doubtful accounts receivable   383     8,432     743     32,786  
  Loss from equity-accounted investments   (1,082 )   (1,611 )   29,542     (1,273 )
  Movement in allowance for doubtful loans   316     -     1,035     -  
  Inventory net realizable value adjustment   1,298     -     1,298     -  
  Interest on Cedar Cellular note   -     (447 )   -     (2,397 )
  Impairment of Cedar Cellular note   -     7,439     -     12,793  
  Change in fair value of equity securities   -     125,360     -     167,459  
  Implementation costs to be refunded to SASSA   -     34,039     -     34,039  
  Fair value adjustment related to financial liabilities   413     (18 )   (340 )   73  
  Interest payable   3     (57 )   1,758     237  
  Facility fee amortized   -     115     -     321  
  Loss (Gain) on disposal of Net1 Korea   279     -     (12,454 )   9,175  
  Gain on disposal of FIHRST   -     -     (9,743 )   -  
  Loss on deconsolidation of CPS   7,148     -     7,148     -  
  Loss (Gain) on disposal of DNI   1,010     (177 )   1,010     (177 )
  Loss (Profit) on disposal of property, plant and equipment   (32 )   (73 )   (127 )   (486 )
  Stock-based compensation charge   558     (1,279 )   1,728     393  
  Dividends received from equity accounted investments   1,424     864     3,549     1,318  
  Decrease (Increase) in accounts receivable, pre-funded social welfare grants receivable and finance loans receivable   (4,879 )   (2,154 )   8,818     11,663  
  (Increase) Decrease in inventory   (1,292 )   430     (19,328 )   4,042  
  (Decrease) Increase in accounts payable and other payables   4,521     (3,199 )   (139 )   (14,538 )
  (Decrease) Increase in taxes payable   (340 )   1,286     (1,427 )   3,428  
  Decrease in deferred taxes   225     (529 )   (393 )   (11,752 )
    Net cash used in operating activities   (27,931 )   (1,547 )   (46,045 )   (4,460 )
                             
Cash flows from investing activities                        
Capital expenditures   (1,445 )   (2,136 )   (5,938 )   (9,416 )
Proceeds from disposal of property, plant and equipment   216     264     578     1,045  
Proceeds from disposal of Net1 Korea, net of cash disposed   -     -     192,619     -  
Transaction costs paid related to disposal of Net1 Korea   -     -     (7,458 )   -  
Proceeds from disposal of DNI as equity-accounted investment   42,477     -     42,477     -  
Transaction costs paid related to disposal of DNI as equity-accounted investment   (1,010 )   -     (1,010 )   -  
Proceeds from disposal of subsidiaries, net of cash disposed   -     -     10,895     (2,114 )
Deconsolidation of CPS - cash disposed   (328 )   -     (328 )   -  
Investment in equity-accounted investments   -     -     (2,500 )   (2,989 )
Loan to equity-accounted investment   (519 )   -     (1,230 )   -  
Repayment of loans by equity-accounted investments   -     1,029     4,268     1,029  
Acquisition of intangible assets   -     -     -     (1,384 )
Investment in MobiKwik   -     -     -     (1,056 )
Return on investment   -     -     -     284  
Net change in settlement assets   18     2,198     (9,256 )   79,077  
  Net cash used in investing activities   39,409     1,355     223,117     64,476  
                             
Cash flows from financing activities                        
Proceeds from bank overdraft   104,490     238,229     689,763     822,754  
Repayment of bank overdraft   (142,682 )   (238,146 )   (747,935 )   (740,969 )
Long-term borrowings utilized   -     -     14,798     14,613  
Repayment of long-term borrowings   (3,190 )   (1,047 )   (14,503 )   (37,357 )
Guarantee fee   -     -     (148 )   (394 )
Finance lease capital repayments   -     -     (69 )   -  
Acquisition of non-controlling interests   -     (180 )   -     (180 )
Dividends paid to non-controlling interest   -     (19 )   -     (4,104 )
Net change in settlement obligations   (18 )   (2,198 )   9,256     (79,077 )
  Net cash (used in) provided by financing activities   (41,400 )   (3,361 )   (48,838 )   (24,714 )
                             
Effect of exchange rate changes on cash   1,747     2,126     (17,260 )   (3,845 )
Net increase (decrease) in cash, cash equivalents and restricted cash   (28,175 )   (1,427 )   110,974     31,457  
Cash, cash equivalents and restricted cash - beginning of period   260,660     122,938     121,511     90,054  
Cash, cash equivalents and restricted cash - end of period $ 232,485   $ 121,511   $ 232,485   $ 121,511  

(R) Certain amounts have been restated to correct net loss and loss on disposal of DNI, and to correct errors identified by our equity method investment - Finbond Group Limited . Refer to Note 1 to Form 10-K for the annual period ended June 30, 2020.
(A) Derived from audited consolidated financial statements.


Net 1 UEPS Technologies, Inc.

Attachment A

Operating segment revenue, operating (loss) income and operating (loss) margin:

Three months ended June 30, 2020 and 2019 and March 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change - actual

Change - constant exchange rate(1)

Key segmental data, in '000, except margins

 

 

Q4 '20

 

 

Q4 '19

 

 

Q3 '20

Q4 '20

vs

Q4 '19

Q4 '20

vs

Q3 '20

Q4 '20

vs

Q4 '19

Q4 '20

vs

Q3 '20

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

South African transaction processing

 

$

14,164

 

$

18,945

 

$

19,883

(25%)

(29%)

(9%)

(20%)

 

International transaction processing

 

 

1,428

 

 

36,399

 

 

20,608

(96%)

(93%)

(95%)

(92%)

 

 

Continuing

 

 

1,428

 

 

1,980

 

 

1,564

(28%)

(9%)

(12%)

3%

 

 

Discontinued

 

 

-

 

 

34,419

 

 

19,044

nm

nm

nm

nm

 

Financial inclusion and applied technologies

 

 

12,560

 

 

17,573

 

 

17,651

(29%)

(29%)

(13%)

(20%)

 

 

Continuing

 

 

12,560

 

 

17,573

 

 

17,651

(29%)

(29%)

(13%)

(20%)

 

 

 

Subtotal: Operating segments

 

 

28,152

 

 

72,917

 

 

58,142

(61%)

(52%)

(53%)

(46%)

 

 

 

Intersegment eliminations

 

 

(2,174)

 

 

(21,445)

 

 

(2,584)

(90%)

(16%)

(88%)

(5%)

 

 

 

 

Consolidated revenue

 

 

25,978

 

 

51,472

 

 

55,558

(50%)

(53%)

(38%)

(47%)

 

 

 

 

 

Continuing

 

 

25,978

 

 

17,053

 

 

36,514

52%

(29%)

86%

(20%)

 

 

 

 

 

Discontinued

 

$

-

 

$

34,419

 

$

19,044

nm

nm

nm

nm

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating (loss) income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

South African transaction processing

 

$

(4,541)

 

$

(2,474)

 

$

(8,668)

84%

(48%)

125%

(41%)

 

International transaction processing

 

 

(4,135)

 

 

2,209

 

 

(415)

nm

896%

nm

1,020%

 

 

Continuing

 

 

(4,135)

 

 

(2,734)

 

 

(3,168)

51%

31%

85%

47%

 

 

Discontinued

 

 

-

 

 

4,943

 

 

2,753

nm

nm

nm

nm

 

Financial inclusion and applied technologies

 

 

(2,419)

 

 

(10,749)

 

 

(927)

(77%)

161%

(72%)

193%

 

 

Continuing

 

 

(2,419)

 

 

(10,749)

 

 

(927)

(77%)

161%

(72%)

193%

 

 

 

Subtotal: Operating segments

 

 

(11,095)

 

 

(11,014)

 

 

(10,010)

1%

11%

23%

25%

 

 

 

Corporate/Eliminations

 

 

(2,085)

 

 

(38,632)

 

 

(2,686)

(95%)

(22%)

(93%)

(13%)

 

 

 

 

Continuing

 

 

(2,085)

 

 

(36,399)

 

 

(1,449)

(94%)

44%

(93%)

62%

 

 

 

 

Discontinued

 

 

-

 

 

(2,233)

 

 

(1,237)

nm

nm

nm

nm

 

 

 

 

 

Consolidated operating (loss) income

 

 

(13,180)

 

 

(49,646)

 

 

(12,696)

(73%)

4%

(68%)

17%

 

 

 

 

 

 

Continuing

 

 

(13,180)

 

 

(52,356)

 

 

(14,212)

(75%)

(7%)

(69%)

4%

 

 

 

 

 

 

Discontinued

 

$

-

 

$

2,710

 

$

1,516

nm

nm

nm

nm

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating (loss) income margin (%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

South African transaction processing

 

 

(32.1%)

 

 

(13.1%)

 

 

(43.6%)

 

 

 

 

 

International transaction processing

 

 

(289.6%)

 

 

6.1%

 

 

(2.0%)

 

 

 

 

 

 

Continuing

 

 

(289.6%)

 

 

(138.1%)

 

 

(202.6%)

 

 

 

 

 

 

Discontinued

 

 

nm

 

 

14.4%

 

 

14.5%

 

 

 

 

 

Financial inclusion and applied technologies

 

 

(19.3%)

 

 

(61.2%)

 

 

(5.3%)

 

 

 

 

 

 

Continuing

 

 

(19.3%)

 

 

(61.2%)

 

 

(5.3%)

 

 

 

 

 

 

Discontinued

 

 

nm

 

 

nm

 

 

nm

 

 

 

 

 

 

 

Consolidated operating margin

 

 

(50.7%)

 

 

(96.5%)

 

 

(22.9%)

 

 

 

 

 

 

 

 

Continuing

 

 

(50.7%)

 

 

(307.0%)

 

 

(38.9%)

 

 

 

 

 

 

 

 

Discontinued

 

 

nm

 

 

7.9%

 

 

8.0%

 

 

 

 

(1) - This information shows what the change in these items would have been if the USD/ ZAR exchange rate that prevailed during Q4 2020 also prevailed during Q4 2019 and Q3 2020.


Year ended June 30, 2020 and 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change - actual

Change - constant exchange rate(1)

Key segmental data, in '000, except margins

 

 

F2020

 

 

F2019

 

F2020

vs

F2019

F2020

vs

F2019

Revenue:

 

 

 

 

 

 

 

 

 

 

South African transaction processing

 

$

73,796

 

$

96,038

 

(23%)

(5%)

 

International transaction processing

 

 

90,416

 

 

148,268

 

(39%)

(25%)

 

 

Continuing

 

 

5,041

 

 

9,842

 

(49%)

(37%)

 

 

Discontinued

 

 

85,375

 

 

138,426

 

(38%)

(24%)

 

Financial inclusion and applied technologies

 

 

82,342

 

 

146,184

 

(44%)

(31%)

 

 

Continuing

 

 

82,342

 

 

89,847

 

(8%)

13%

 

 

Discontinued

 

 

-

 

 

56,337

 

nm

nm

 

 

 

Subtotal: Operating segments

 

 

246,554

 

 

390,490

 

(37%)

(22%)

 

 

 

Intersegment eliminations

 

 

(10,182)

 

 

(29,500)

 

(65%)

(58%)

 

 

 

 

Consolidated revenue

 

 

236,372

 

 

360,990

 

(35%)

(19%)

 

 

 

 

 

Continuing

 

 

150,997

 

 

166,227

 

(9%)

12%

 

 

 

 

 

Discontinued

 

$

85,375

 

$

194,763

 

(56%)

(46%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating (loss) income:

 

 

 

 

 

 

 

 

 

 

South African transaction processing

 

$

(19,575)

 

$

(30,771)

 

(36%)

(22%)

 

International transaction processing

 

 

2,051

 

 

2,837

 

(28%)

(11%)

 

 

Continuing

 

 

(12,517)

 

 

(16,502)

 

(24%)

(7%)

 

 

Discontinued

 

 

14,568

 

 

19,339

 

(25%)

(7%)

 

Financial inclusion and applied technologies

 

 

(2,723)

 

 

(14,758)

 

(82%)

(77%)

 

 

Continuing

 

 

(2,723)

 

 

(39,158)

 

(93%)

(91%)

 

 

Discontinued

 

 

-

 

 

24,400

 

nm

nm

 

 

 

Subtotal: Operating segments

 

 

(20,247)

 

 

(42,692)

 

(53%)

(42%)

 

 

 

Corporate/Eliminations

 

 

(15,217)

 

 

(70,816)

 

(79%)

(74%)

 

 

 

 

Continuing

 

 

(9,433)

 

 

(48,501)

 

(81%)

(76%)

 

 

 

 

Discontinued

 

 

(5,784)

 

 

(22,315)

 

(74%)

(68%)

 

 

 

 

 

Consolidated operating (loss) income

 

 

(35,464)

 

 

(113,508)

 

(69%)

(62%)

 

 

 

 

 

 

Continuing

 

 

(44,248)

 

 

(134,932)

 

(67%)

(60%)

 

 

 

 

 

 

Discontinued

 

$

8,784

 

$

21,424

 

(59%)

(50%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating (loss) income margin (%)

 

 

 

 

 

 

 

 

 

 

South African transaction processing

 

 

(26.5%)

 

 

(32.0%)

 

 

 

 

International transaction processing

 

 

2.3%

 

 

1.9%

 

 

 

 

 

Continuing

 

 

(248.3%)

 

 

(167.7%)

 

 

 

 

 

Discontinued

 

 

17.1%

 

 

14.0%

 

 

 

 

Financial inclusion and applied technologies

 

 

(3.3%)

 

 

(10.1%)

 

 

 

 

 

Continuing

 

 

(3.3%)

 

 

(43.6%)

 

 

 

 

 

Discontinued

 

 

nm

 

 

43.3%

 

 

 

 

 

 

Consolidated operating margin

 

 

(15.0%)

 

 

(31.4%)

 

 

 

 

 

 

 

Continuing

 

 

(29.3%)

 

 

(81.2%)

 

 

 

 

 

 

 

Discontinued

 

 

10.3%

 

 

11.0%

 

 

 

(1) - This information shows what the change in these items would have been if the USD/ ZAR exchange rate that prevailed during fiscal 2020 also prevailed during fiscal 2019.


Earnings (Loss) from equity-accounted investments:

The table below presents the relative earnings (loss) from our equity-accounted investments:

 

 

 

Q4 2020

 

 

Q4 2019(R)

 

% change

 

 

F2020

 

 

F2019(R)

 

% change

Bank Frick

$

651

 

$

353

 

84%

 

$

(17,273)

 

$

(1,542)

 

1,020%

 

Share of net income

 

651

 

 

493

 

32%

 

 

1,421

 

 

1,109

 

28%

 

Amortization of intangible assets, net of deferred tax

 

-

 

 

(140)

 

nm

 

 

(433)

 

 

(567)

 

(24%)

 

Impairment

 

-

 

 

-

 

nm

 

 

(18,261)

 

 

-

 

nm

 

Other

 

-

 

 

-

 

nm

 

 

-

 

 

(2,084)

 

nm

DNI(1)

 

-

 

 

865

 

nm

 

 

(9,744)

 

 

865

 

nm

 

Share of net income

 

-

 

 

1,380

 

nm

 

 

4,676

 

 

1,380

 

239%

 

Amortization of intangible assets, net of deferred tax

 

-

 

 

(515)

 

nm

 

 

(1,350)

 

 

(515)

 

162%

 

Impairment

 

-

 

 

-

 

nm

 

 

(13,070)

 

 

-

 

nm

Finbond

 

1,349

 

 

744

 

81%

 

 

1,840

 

 

2,619

 

(30%)

Other

 

(918)

 

 

(351)

 

162%

 

 

(4,365)

 

 

(684)

 

538%

 

Share of net loss

 

(918)

 

 

(351)

 

162%

 

 

(1,865)

 

 

(684)

 

173%

 

Impairment

 

-

 

 

-

 

nm

 

 

(2,500)

 

 

-

 

nm

 

Loss from equity-accounted investments

$

1,082

 

$

1,611

 

(33%)

 

$

(29,542)

 

$

1,258

 

nm

(R) Certain amounts have been restated to correct errors identified by our equity method investment - Finbond Group Limited . Refer to Note 1 to Form 10-K for the annual period ended June 30, 2020.

(1) DNI was included as an equity-accounted investment from August 1, 2017 until June 30, 2018, the date upon which we obtained control and commenced consolidation of DNI, and then again from March 31, 2019 to March 31,2020. While DNI was consolidated it was included in our Financial inclusion and applied technologies operating segment from the acquisition date.


Net 1 UEPS Technologies, Inc.

Attachment B

Reconciliation of GAAP operating loss to EBITDA loss and adjusted EBITDA loss:

Three months and year ended June 30, 2020 and 2019

            Three months ended June 30,     Year ended June 30,  
            2020     2019     2020     2019  
Operating loss - GAAP $ (13,180 ) $ (134,932 ) $ (44,248 ) $ (134,932 )
                                 
  Depreciation and amortization   996     12,103     4,647     12,103  
  Impairment loss   -     14,440     6,336     14,440  
    Negative EBITDA   (12,184 )   (108,389 )   (33,265 )   (108,389 )
      Accrual of implementation costs to be refunded to SASSA   -     34,039     -     34,039  
      Retrenchments costs   -     1,026     -     6,269  
      Transaction costs   -     762     2,876     3,485  
        Adjusted EBITDA (loss) $ (12,184 ) $ (72,562 ) $ (30,389 ) $ (64,596 )

Reconciliation of GAAP net loss and loss per share, basic, to fundamental net loss and loss per share, basic:

Three months ended June 30, 2020 and 2019

    Net (loss) income
(USD '000)
    (L)PS, basic
(USD)
    Net (loss) income
(ZAR '000)
    (L)PS, basic
(ZAR)
 
    2020     2019     2020     2019     2020     2019     2020     2019  
GAAP   (38,880 )   (183,048 )   (0.68 )   (3.22 )   (671,886 )   (2,615,462 )   (11.76 )   (46.04 )
                                                 
Termination fee paid to cancel Bank Frick option   17,517     -                 302,711     -              
Loss on deconsolidation of CPS   7,148     -                 123,525     -              
Loss on disposal of DNI   1,010     (177 )               17,454     (2,529 )            
Impairment loss   -     6,249                 -     89,288              
Intangible asset amortization, net   58     2,785                 990     39,807              
Intangible asset amortization, net related to equity accounted investments   -     655                 -     9,359              
Interest related to SASSA implementation costs refund   298     -                 5,156     -              
Stock-based compensation charge   558     (1,370 )               9,643     (19,575 )            
Transaction costs   -     762                 -     10,888              
Retrenchment costs, net of tax   -     739                 -     10,621              
Facility fees for debt   -     115                 -     1,643              
Fundamental   (12,291 )   (173,290 )   (0.22 )   (3.05 )   (212,407 )   (2,475,960 )   (3.72 )   (43.59 )


Year ended June 30, 2020 and 2019

    Net Income
(USD '000)
    (L) EPS, basic
(USD)
    Net Income
(ZAR '000)
    (L)EPS, basic
(ZAR)
 
    2020     2019     2020     2019     2020     2019     2020     2019  
GAAP   (78,358 )   (311,007 )   (1.38 )   (5.48 )   (1,376,640 )   (4,437,914 )   (24.25 )   (78.19 )
                                                 
Impairment of equity method investments   32,084     -                 563,672     -              
Termination fee paid to cancel Bank Frick option   (17,517 )   -                 (307,749 )   -              
(Gain) Loss on discontinued operation   (12,454 )   9,175                 (218,799 )   130,923              
Gain on disposal of FIHRST   (9,743 )   -                 (171,171 )   -              
Loss on deconsolidation of CPS   7,148     -                 125,580     -              
Impairment loss   6,336     19,745                 111,314     281,751              
Intangible asset amortization, net   3,805     16,290                 66,835     232,452              
Transaction costs   2,876     3,485                 50,527     49,727              
Intangible asset amortization, net related to equity accounted investments   1,783     1,082                 31,325     15,439              
Interest related to SASSA implementation costs refund   1,361     -                 23,909     -              
Stock-based compensation charge   2,607     393                 45,801     5,608              
Loss on disposal of DNI   1,010     (177 )               17,744     (2,526 )            
Retrenchment costs, net of tax   -     4,514                 -     63,708              
Intangible asset amortization, net related to non-controlling interest   -     (2,737 )               -     (39,054 )            
Accreted interest on DNI contingent consideration   -     1,848                 -     26,360              
Facility fees for debt   -     321                 -     4,580              
Fundamental   (59,062 )   (257,068 )   (1.04 )   (4.53 )   (1,037,652 )   (3,668,946 )   (18.28 )   (64.64 )


Net 1 UEPS Technologies, Inc.

Attachment C

Reconciliation of net loss used to calculate loss per share basic and diluted and headline loss per share basic and diluted:

Three months ended June 30, 2020 and 2019

      2020     2019  
               
Net loss (USD'000)   (38,880 )   (183,048 )
Adjustments:            
  Loss (Gain) on sale of DNI   1,010     (177 )
  Loss on deconsolidation of CPS   7,148     -  
  Impairment loss   -     6,249  
  Loss (Profit) on sale of property, plant and equipment   (32 )   (73 )
  Tax effects on above   9     20  
               
Net loss used to calculate headline loss (USD'000)   (30,745 )   (177,029 )
               
Weighted average number of shares used to calculate net loss per share basic loss and headline loss per share basic loss ('000)   57,119     56,804  
               
Weighted average number of shares used to calculate net loss per share diluted loss and headline loss per share diluted loss ('000)   57,119     56,804  
               
Headline loss per share:            
  Basic, in USD   (0.54 )   (3.12 )
  Diluted, in USD   (0.54 )   (3.12 )

Year ended June 30, 2020 and 2019

      2020     2019  
               
Net loss (USD'000)   (78,358 )   (311,007 )
Adjustments:            
  Impairment of equity method investments   33,831     -  
  (Gain) Loss on disposal of discontinued operation   (12,454 )   9,175  
  Gain on disposal of FIHRST   (9,743 )   -  
  Impairment loss   6,336     19,745  
  Loss on deconsolidation of CPS   7,148     -  
  Loss (Gain) on sale of DNI   1,010     (177 )
  Profit on sale of property, plant and equipment   (127 )   (486 )
  Tax effects on above   36     136  
               
Net loss used to calculate headline loss (USD'000)   (52,321 )   (282,614 )
               
Weighted average number of shares used to calculate net loss per share basic loss and headline loss per share basic loss ('000)   56,764     56,760  
               
Weighted average number of shares used to calculate net loss per share diluted loss and headline loss per share diluted loss ('000)   56,764     56,778  
               
Headline loss per share:            
  Basic, in USD   (0.92 )   (4.98 )
  Diluted, in USD   (0.92 )   (4.98 )

Calculation of the denominator for headline diluted loss per share

        Q4 2020     Q4 2019     F2020     F2019  
                             
Basic weighted-average common shares outstanding and unvested restricted shares expected to vest under GAAP   57,119     56,804     56,764     56,760  
  Effect of dilutive securities under GAAP   -     -     -     18  
    Denominator for headline diluted loss per share   57,119     56,804     56,764     56,778  

Weighted average number of shares used to calculate headline diluted loss per share represents the denominator for basic weighted-average common shares outstanding and unvested restricted shares expected to vest plus the effect of dilutive securities under GAAP. We use this number of fully-diluted shares outstanding to calculate headline diluted loss per share because we do not use the two-class method to calculate headline diluted loss per share.



The following information was filed by Net 1 Ueps Technologies Inc (UEPS) on Thursday, September 10, 2020 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Net 1 Ueps Technologies Inc's 10-K Annual Report:

Financial Statements, Disclosures and Schedules

Inside this 10-K Annual Report

Document And Entity Information
Condensed Consolidated Statements Of Cash Flows
Consolidated Balance Sheets
Consolidated Balance Sheets (Parenthetical)
Consolidated Statement Of Changes In Equity
Consolidated Statements Of Comprehensive (Loss) Income
Consolidated Statements Of Operations
(Loss) Earnings Per Share
(Loss) Earnings Per Share (Income From Continuing Operations And Share Data Used In Basic And Diluted Earnings Per Share Computations) (Details)
(Loss) Earnings Per Share (Narrative) (Details)
(Loss) Earnings Per Share (Tables)
Accounts Receivable, Net And Other Receivables And Finance Loans Receivable, Net
Accounts Receivable, Net And Other Receivables And Finance Loans Receivable, Net (Narrative) (Details)
Accounts Receivable, Net And Other Receivables And Finance Loans Receivable, Net (Schedule Of Accounts Receivable, Net And Other Receivables) (Details)
Accounts Receivable, Net And Other Receivables And Finance Loans Receivable, Net (Schedule Of Finance Loans Receivable, Net) (Details)
Accounts Receivable, Net And Other Receivables And Finance Loans Receivable, Net (Tables)
Accumulated Other Comprehensive (Loss) Income
Accumulated Other Comprehensive (Loss) Income (Change In Accumulated Other Comprehensive (Loss) Income Per Component) (Details)
Accumulated Other Comprehensive (Loss) Income (Narrative) (Details)
Accumulated Other Comprehensive (Loss) Income (Tables)
Acquisitions, Dispositions And Discontinued Operations
Acquisitions, Dispositions And Discontinued Operations ((Summary Of Fair Value Of Dni Intangible Assets Acquired And Weighted-Average Amortization Period) (Details)
Acquisitions, Dispositions And Discontinued Operations (Impact Of Deconsolidation And Calculation Of Net Loss Recognized On Deconsolidation) (Details)
Acquisitions, Dispositions And Discontinued Operations (Impact Of Reversal On Condensed Consolidated Statement Of Operation) (Details)
Acquisitions, Dispositions And Discontinued Operations (Narrative) (Details)
Acquisitions, Dispositions And Discontinued Operations (Schedule Of Balances Included On Condensed Consolidated Balance Sheet) (Details)
Acquisitions, Dispositions And Discontinued Operations (Schedule Of Cash Paid Net Of Cash Received Related To Acquisition Of Dni) (Details)
Acquisitions, Dispositions And Discontinued Operations (Schedule Of Major Captions That Have Not Been Separately Presented On Related To Discontinued Operation) (Details)
Acquisitions, Dispositions And Discontinued Operations (Schedule Of Revenues And Expenses After Dni Disposal Transaction) (Details)
Acquisitions, Dispositions And Discontinued Operations (Tables)
Assets And Policyholder Liabilities Under Insurance And Investment Contracts
Assets And Policyholder Liabilities Under Insurance And Investment Contracts (Summary Of Movement In Assets And Policyholder Liabilities Under Investment Contracts) (Details)
Assets And Policyholder Liabilities Under Insurance And Investment Contracts (Summary Of The Movement In Reinsurance Assets And Policyholder Liabilities Under Insurance Contracts) (Details)
Assets And Policyholder Liabilities Under Insurance And Investment Contracts (Tables)
Borrowings
Borrowings (Narrative) (Details)
Borrowings (Summary Of Long-Term Borrowings) (Details)
Borrowings (Summary Of Short-Term Credit Facilities) (Details)
Borrowings (Tables)
Commitments And Contingencies
Commitments And Contingencies (Narrative) (Details)
Common Stock
Common Stock (Narrative) (Details)
Common Stock (Schedule Of Number Of Shares, Net Of Treasury) (Details)
Common Stock (Tables)
Description Of Business And Basis Of Presentation
Description Of Business And Basis Of Presentation (Impact Of Restatement On Balance Sheet) (Details)
Description Of Business And Basis Of Presentation (Impact Of Restatement On Comprehensive (Loss) Income) (Details)
Description Of Business And Basis Of Presentation (Impact Of Restatement On Statement Of Cash Flows) (Details)
Description Of Business And Basis Of Presentation (Impact Of Restatement On Statement Of Changes In Equity) (Details)
Description Of Business And Basis Of Presentation (Impact Of Restatement On Statement Of Operations) (Details)
Description Of Business And Basis Of Presentation (Narrative) (Details)
Description Of Business And Basis Of Presentation (Policy)
Description Of Business And Basis Of Presentation (Tables)
Equity-Accounted Investments And Other Long-Term Assets
Equity-Accounted Investments And Other Long-Term Assets (Carrying Amount Of Equity-Accounted Investments) (Details)
Equity-Accounted Investments And Other Long-Term Assets (Narrative) (Details)
Equity-Accounted Investments And Other Long-Term Assets (Ownership Percentage Of Equity-Accounted Investments) (Details)
Equity-Accounted Investments And Other Long-Term Assets (Schedule Of Calculation Of Expected Gain (Loss) On Disposal Of Dni) (Details)
Equity-Accounted Investments And Other Long-Term Assets (Summary Financial Information Of Equity-Accounted Investments) (Details)
Equity-Accounted Investments And Other Long-Term Assets (Summary Of Components Of Equity Securities Without Readily Determinable Fair Value And Held To Maturity Investments) (Details)
Equity-Accounted Investments And Other Long-Term Assets (Summary Of Movement In Equity-Accounted Investments) (Details)
Equity-Accounted Investments And Other Long-Term Assets (Summary Of Other Long-Term Asset) (Details)
Equity-Accounted Investments And Other Long-Term Assets (Tables)
Fair Value Of Financial Instruments
Fair Value Of Financial Instruments (Carrying Value Of Assets And Liabilities Measured On Recurring Basis) (Details)
Fair Value Of Financial Instruments (Fair Value Of Assets And Liabilities Measured On Recurring Basis) (Details)
Fair Value Of Financial Instruments (Narrative) (Details)
Fair Value Of Financial Instruments (Schedule Of Impact On Carrying Value Of Cell C Investment) (Details)
Fair Value Of Financial Instruments (Schedule Of Key Valuation Inputs Used To Measure Fair Value Of Investment In Cell C) (Details)
Fair Value Of Financial Instruments (Tables)
Goodwill And Intangible Assets, Net
Goodwill And Intangible Assets, Net (Carrying Value And Accumulated Amortization Of Intangible Assets) (Details)
Goodwill And Intangible Assets, Net (Future Estimated Annual Amortization Expense) (Details)
Goodwill And Intangible Assets, Net (Goodwill Allocated To Reportable Segments) (Details)
Goodwill And Intangible Assets, Net (Narrative) (Details)
Goodwill And Intangible Assets, Net (Summary Of Movement In Carrying Value Of Goodwill) (Details)
Goodwill And Intangible Assets, Net (Tables)
Income Tax
Income Taxes (Components Of Income Before Income Taxes) (Details)
Income Taxes (Movement In Valuation Allowance) (Details)
Income Taxes (Narrative) (Details)
Income Taxes (Provisions For Income Taxes By Location Of Taxing Jurisdiction) (Details)
Income Taxes (Reconciliation Of Income Taxes) (Details)
Income Taxes (Schedule Of Deferred Tax Assets And Liabilities) (Details)
Income Taxes (Schedule Of Operating Loss Carryforwards) (Details)
Income Taxes (Tables)
Inventory
Inventory (Narrative) (Details)
Inventory (Schedule Of Inventory) (Details)
Inventory (Tables)
Leases
Leases (Future Minimum Payments Under Operating Leases) (Details)
Leases (Narrative) (Details)
Leases (Supplemental Balance Sheet Disclosure Related To Right-Of-Use Assets And Operating Leases Liabilities) (Alternate) (Details)
Leases (Supplemental Balance Sheet Disclosure Related To Right-Of-Use Assets And Operating Leases Liabilities) (Details)
Leases (Tables)
Operating Segments
Operating Segments (Long-Lived Assets Based On Geographical Location) (Details)
Operating Segments (Narrative) (Details)
Operating Segments (Reconciliation Of Reportable Segments Measure Of Profit Or Loss To Income) (Details)
Operating Segments (Reconciliation Of Reportable Segments Revenue) (Details)
Operating Segments (Summary Of Segment Information) (Details)
Operating Segments (Tables)
Other Payables
Other Payables (Narrative) (Details)
Other Payables (Schedule Of Other Payables) (Details)
Other Payables (Tables)
Pre-Funded Social Welfare Grants Receivable
Property, Plant And Equipment, Net
Property, Plant And Equipment, Net (Schedule Of Property, Plant And Equipment, Net) (Details)
Property, Plant And Equipment, Net (Tables)
Related Party Transactions
Related Party Transactions (Narrative) (Details)
Revenue Recognition
Revenue Recognition (Revenue Disaggregated By Major Revenue Streams) (Details)
Revenue Recognition (Tables)
Significant Accounting Policies
Significant Accounting Policies (Narrative) (Details)
Significant Accounting Policies (Policy)
Significant Accounting Policies (Schedule Of Intangible Assets Useful Lives) (Details)
Significant Accounting Policies (Schedule Of Property, Plant And Equipment Expected Economic Lives) (Details)
Significant Accounting Policies (Tables)
Stock-Based Compensation
Stock-Based Compensation (Narrative) (Details)
Stock-Based Compensation (Range Of Assumptions Used To Value Options Granted) (Details)
Stock-Based Compensation (Recorded Net Stock Compensation Charge) (Details)
Stock-Based Compensation (Restricted Stock Activity) (Details)
Stock-Based Compensation (Summarized Stock Option Activity) (Details)
Stock-Based Compensation (Tables)
Supplemental Cash Flow Information
Supplemental Cash Flow Information (Schedule Of Disaggregation Of Cash, Cash Equivalents And Restricted Cash) (Details)
Supplemental Cash Flow Information (Schedule Of Supplemental Cash Flow Disclosures) (Details)
Supplemental Cash Flow Information (Tables)
Unaudited Quarterly Results
Unaudited Quarterly Results (Schedule Of Unaudited Consolidated Statements Of Operations) (Details)
Unaudited Quarterly Results (Table)
Ticker: UEPS
CIK: 1041514
Form Type: 10-K Annual Report
Accession Number: 0001062993-20-004444
Submitted to the SEC: Thu Sep 10 2020 4:31:30 PM EST
Accepted by the SEC: Thu Sep 10 2020
Period: Tuesday, June 30, 2020
Industry: Functions Related To Depository Banking

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