Last10K.com

Net 1 Ueps Technologies Inc (UEPS) SEC Filing 10-Q Quarterly report for the period ending Wednesday, September 30, 2020

Net 1 Ueps Technologies Inc

CIK: 1041514 Ticker: UEPS

Exhibit 99.1

Net 1 Reports First Quarter 2021 Results

JOHANNESBURG, November 5, 2020 - Net 1 UEPS Technologies, Inc. (Nasdaq: UEPS; JSE: NT1) today released results for the first fiscal quarter ended September 30, 2020.

Q1 2021 Highlights and Recent Developments:

  • Revenue of $37.1 million, a constant currency decrease of 12% from Q1 2020, but an increase of 39% from Q4 2020;
  • Operating loss of $(10.8) million;
  • GAAP EPS of $(0.51) and Fundamental EPS of $(0.23);
  • Adjusted EBITDA loss of $(9.8) million, a sequential improvement from a loss of $(12.2) million in Q4 2020; and
  • At September 30, 2020, had unrestricted cash of $209 million and no debt

"We are pleased to see some encouraging signs in our operational and financial results this quarter. With the return to full operations, we have seen increased transaction processing volumes, loan originations, and a significant increase in the utilization of our ATM infrastructure over Q4 of FY2020," said Alex Smith, Net1's interim CEO and CFO.

"While we do not yet have a resolution of our Investment Company Act status, we believe we have the right team involved and are working diligently to resolve this issue as soon as possible. In the meantime, the Board has formed a capital allocation plan to return capital to shareholders while also providing adequate funds for internal organic growth as well as strategic acquisitions for the Company," continued Smith.

"Our long-term initiatives remain unchanged - to be the leading financial technology company in South Africa focused on underserviced customers. We believe that we have the capabilities, technology and infrastructure to make this strategic vision a reality. We believe that Net1 is better placed than any other business in the country to service that very large total addressable market and look forward to the journey ahead," concluded Smith.

Summary Financial Metrics

 

 

Q1 2021

 

Q1 2020

 

Q4 2020

 

Q1 '21 vs Q1 '20

 

Q1 '21 vs Q4 '20

 

Q1 '21 vs Q1 '20

 

Q1 '21 vs Q4 '20

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

USD '000's

(except per share data)

 

% change in USD

 

% change in ZAR

Revenue

37,113

 

47,938

 

25,978

 

(23%)

 

43%

 

(12%)

 

39%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP operating loss

(10,775)

 

(6,436)

 

(13,180)

 

67%

 

(18%)

 

90%

 

(21%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA (loss) (1)

(9,822)

 

(4,306)

 

(12,184)

 

128%

 

(19%)

 

159%

 

(22%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP (loss) earnings per share ($)

(0.51)

 

(0.08)

 

(0.68)

 

538%

 

(26%)

 

625%

 

(28%)

 

Continuing

(0.51)

 

(0.13)

 

(0.68)

 

292%

 

(25%)

 

346%

 

(27%)

 

Discontinued

-

 

0.05

 

(0.00)

 

nm

 

nm

 

nm

 

nm

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fundamental loss per share ($)(1)

(0.23)

 

(0.02)

 

(0.22)

 

1,050%

 

5%

 

1,208%

 

1%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fully-diluted shares outstanding ('000's)

57,119

 

56,568

 

57,119

 

1%

 

-

 

nm

 

nm

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average period USD/ ZAR exchange rate

16.77

 

14.75

 

17.28

 

14%

 

(3%)

 

nm

 

nm

(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

The COVID-19 pandemic did not impact the Company's South African operations as severely during Q1 2021, as it did in Q4 2020. Nevertheless, South Africa currently remains under various lockdown restrictions, which continue to affect the broader economy, and these restrictions affect us to the extent they affect economic activity levels in South Africa. The Company does not believe there will be any further significant adverse effects on its liquidity from the pandemic, unless there is a resumption of the higher level of restrictions in South Africa in the event of an increase in the level of infections, as is currently being experienced in Europe and the United States following the second wave of the pandemic there.


Factors impacting comparability of our Q1 2021 and Q1 2020 results

 Lower revenue: Our revenues decreased 12% in ZAR primarily due to fewer prepaid airtime sales and lower account fee revenue, which was partially offset by higher transaction fees;

 Ongoing operating losses: Operating costs are largely in line with the prior period in ZAR due to the largely fixed cost nature of the costs base. As a result, we continue to experience operating losses as a result of depressed revenues; and

 Adverse foreign exchange movements: The U.S. dollar was 14% stronger against the ZAR during Q1 2021, which adversely impacted our reported results.

Results of Operations by Segment and Liquidity

Processing

Segment revenue was $23.3 million in Q1 2021, down 9%, compared with Q1 2020 but increased 34% compared to Q4 2020 on a constant currency basis. Excluding IPG, segment revenue decreased primarily due to fewer prepaid airtime sales, which was partially offset by higher volume-driven transaction fees. Excluding IPG, Processing operating loss has been impacted lower revenue and by an increase in transaction-based costs. IPG incurred an operating loss but is in the process of being closed down. Our operating loss margin for Q1 2021 and 2020 was (29.8%) and (18.3%), respectively. Excluding IPG, our operating loss margin for the Processing segment was (19.5%) and (12.1%) during Q1 2021 and 2020, respectively.

Financial services

Segment revenue from continuing operations was $8.3 million in Q1 2021, down 34% on a constant currency basis compared with Q1 2020 and down from $8.8 million compared to Q4 2020. Segment revenue decreased due to lower account fee revenue whilst lending and insurance revenues were relatively flat compared to the prior period. The segment incurred an operating loss compared with fiscal 2020 primarily due to the reduction in account fee revenue as well as higher employee-related costs and an increase in insurance claims experience. Operating (loss) income margin for Q1 2021 and 2020 was (28.7%) and 2.4%, respectively.

Technology

Segment revenue was $6.2 million in Q1 2021, down 2% on a constant currency basis compared with Q1 2020 but significantly higher than the $1.9 million in Q4 2020. Operating income for Q1 2021 improved compared with fiscal 2020 due to improved margins on the sale of hardware. Operating income margin for the Technology segment was 28.6% and 15.9% during Q1 2021 and 2020, respectively

Corporate/eliminations

Our corporate expenses increased primarily due to foreign exchange losses incurred and higher legal fees, which were partially offset by lower audit and consulting fees.

Cash flow and liquidity

At September 30, 2020, cash and cash equivalents were $209.2 million and comprised of U.S. dollar-denominated balances of $174.0 million, ZAR-denominated balances of ZAR 547.2 million ($32.5 million), and other currency deposits, primarily Botswana pula, of $2.7 million, all amounts translated at exchange rates applicable as of September 30, 2020. The decrease in unrestricted cash balances from June 30, 2020, was primarily due to the payment of Federal income taxes, weak trading activities and an increase in our lending book, which was partially offset by the receipt of the outstanding proceeds related to the sale of our Korean business.

Excluding the impact of income taxes, cash used in operating activities during the first quarter of fiscal 2021 was impacted by the cash losses incurred by the majority of our continuing operations and the growth in our lending book. Net cash used in operating activities during the first quarter of fiscal 2020 includes the contribution from our Korean operations. We paid income taxes of approximately $15.4 million during Q1 2021, compared with $1.9 million during Q1 2020. Capital expenditures for Q1 2021 and 2020 were $0.3 million and $2.6 million, respectively.

Conference Call

We will host a conference call to review these results on November 6, 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 November 29, 2020.

Participants are now able to pre-register for the November 6, 2020, conference call by navigating to https://www.diamondpass.net/4251389. 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. Adjusted EBITDA is EBITDA adjusted for costs related to acquisitions and transactions consummated or ultimately not pursued.

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), 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 2021 also includes impairment losses related to our equity-accounted investment and the deferred tax liability reversal related to the impairment of the equity-accounted investment, and fiscal 2020 also includes the amortization of intangible assets (net of deferred taxes) related to equity-accounted investments.

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 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 South African-focused financial technology company with a presence in Africa, Asia and Europe. Net1 utilizes 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 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:
Dara Dierks

Managing Director - ICR

Email: net1IR@icrinc.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

 

 

 

 

 

 

 

 

Three months ended

 

 

 

 

 

 

 

 

September 30,

 

 

 

 

 

 

 

 

2020

 

2019

 

 

 

 

 

 

 

 

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

REVENUE

 

$

37,113

 

$

47,938

 

 

 

 

 

 

 

 

 

 

 

 

 

EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of goods sold, IT processing, servicing and support

 

 

28,437

 

 

32,428

 

Selling, general and administration

 

 

18,528

 

 

20,622

 

Depreciation and amortization

 

 

923

 

 

1,324

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING LOSS

 

 

(10,775)

 

 

(6,436)

 

 

 

 

 

 

 

INTEREST INCOME

 

 

611

 

 

363

 

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST EXPENSE

 

 

747

 

 

1,347

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS BEFORE INCOME TAX (BENEFIT) EXPENSE

 

 

(10,911)

 

 

(7,420)

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME TAX (BENEFIT) EXPENSE

 

 

(1,090)

 

 

970

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS BEFORE (LOSS) EARNINGS FROM EQUITY-ACCOUNTED INVESTMENTS

 

 

(9,821)

 

 

(8,390)

 

 

 

 

 

 

 

 

 

 

 

 

 

(LOSS) EARNINGS FROM EQUITY-ACCOUNTED INVESTMENTS

 

 

(19,137)

 

 

1,063

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS FROM CONTINUING OPERATIONS

 

 

(28,958)

 

 

(7,327)

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME FROM DISCONTINUED OPERATIONS

 

 

-

 

 

2,935

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS

 

 

(28,958)

 

 

(4,392)

 

 

 

 

 

 

 

 

 

 

 

 

 

NET (LOSS) INCOME ATTRIBUTABLE TO NET1

 

 

(28,958)

 

 

(4,392)

 

Continuing

 

 

(28,958)

 

 

(7,327)

 

Discontinued

 

$

-

 

$

2,935

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

Basic (loss) earnings attributable to Net1 shareholders

 

$

(0.51)

 

$

(0.08)

 

Continuing

 

$

(0.51)

 

$

(0.13)

 

Discontinued

 

$

-

 

$

0.05

Diluted (loss) earnings attributable to Net1 shareholders

 

$

(0.51)

 

$

(0.08)

 

Continuing

 

$

(0.51)

 

$

(0.13)

 

Discontinued

 

$

-

 

$

0.05




NET 1 UEPS TECHNOLOGIES, INC.

Unaudited Consolidated Balance Sheets

 

 

 

 

 

 

Unaudited

 

(A)

 

 

 

 

 

 

September 30,

 

June 30,

 

 

 

 

 

 

2020

 

2020

 

 

 

 

 

 

(In thousands, except share data)

 

 

 

 

 

ASSETS

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

Cash and cash equivalents

$

209,185

 

$

217,671

 

Restricted cash

 

6,726

 

 

14,814

 

Accounts receivable, net of allowance of - September: $286; June: $253 and other receivables

 

28,314

 

 

43,068

 

Finance loans receivable, net of allowance of - September: $8,077; June: $7,658

 

20,508

 

 

15,879

 

Inventory

 

18,084

 

 

19,860

 

 

Total current assets before settlement assets

 

282,817

 

 

311,292

 

 

 

Settlement assets

 

3,993

 

 

8,014

 

 

 

 

Total current assets

 

286,810

 

 

319,306

PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of - September: $31,182; June: $29,524

 

6,286

 

 

6,656

OPERATING LEASE RIGHT-OF-USE

 

4,848

 

 

5,395

EQUITY-ACCOUNTED INVESTMENTS

 

50,367

 

 

65,836

GOODWILL

 

24,865

 

 

24,169

INTANGIBLE ASSETS, net of accumulated amortization of - September: $27,798; June: $27,325

 

548

 

 

612

DEFERRED INCOME TAXES

 

288

 

 

358

OTHER LONG-TERM ASSETS, including reinsurance assets

 

30,172

 

 

31,346

TOTAL ASSETS

 

404,184

 

 

453,678

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

Short-term credit facilities for ATM funding

 

6,726

 

 

14,814

 

Accounts payable

 

5,213

 

 

6,287

 

Other payables

 

25,242

 

 

23,779

 

Operating lease right of use lease liability - current

 

1,921

 

 

2,251

 

Income taxes payable

 

1,298

 

 

16,157

 

 

Total current liabilities before settlement obligations

 

40,400

 

 

63,288

 

 

 

Settlement obligations

 

3,993

 

 

8,015

 

 

 

 

Total current liabilities

 

44,393

 

 

71,303

DEFERRED INCOME TAXES

 

91

 

 

1,859

RIGHT-OF-USE OPERATING LEASE LIABILITY - LONG TERM

 

3,105

 

 

3,312

OTHER LONG-TERM LIABILITIES, including insurance policy liabilities

 

2,074

 

 

2,012

TOTAL LIABILITIES

 

49,663

 

 

78,486

COMMITMENTS AND CONTINGENCIES

 

-

 

 

-

REDEEMABLE COMMON STOCK

 

84,979

 

 

84,979

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EQUITY

 

 

 

 

 

NET1 EQUITY:

 

 

 

 

 

COMMON STOCK

 

 

 

 

 

 

Authorized: 200,000,000 with $0.001 par value;

 

 

 

 

 

 

Issued and outstanding shares, net of treasury: September: $56,638,725; June: $57,118,925

 

80

 

 

80

 

 

 

 

 

 

 

 

 

 

 

PREFERRED STOCK

 

 

 

 

 

 

Authorized shares: 50,000,000 with $0.001 par value;

 

 

 

 

 

 

Issued and outstanding shares, net of treasury: September: -; June: -

 

-

 

 

-

ADDITIONAL PAID-IN-CAPITAL

 

301,946

 

 

301,489

TREASURY SHARES, AT COST: September: $24,891,292; June: $24,891,292

 

(286,951)

 

 

(286,951)

ACCUMULATED OTHER COMPREHENSIVE LOSS

 

(161,245)

 

 

(169,075)

RETAINED EARNINGS

 

415,712

 

 

444,670

TOTAL NET1 EQUITY

 

269,542

 

 

290,213

NON-CONTROLLING INTEREST

 

-

 

 

-

TOTAL EQUITY

 

269,542

 

 

290,213

 

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES, REDEEMABLE COMMON STOCK AND SHAREHOLDERS' EQUITY

$

404,184

 

$

453,678

(A) Derived from audited consolidated financial statements.



NET 1 UEPS TECHNOLOGIES, INC.

Unaudited Condensed Consolidated Statements of Cash Flows

 

 

 

Unaudited

 

 

 

Three months ended

 

 

 

September 30,

 

 

 

2020

 

2019

 

 

 

(In thousands)

 

 

 

 

 

 

 

 

Cash flows from operating activities

 

 

 

 

 

 

Net loss

$

(28,958)

 

$

(4,392)

 

Depreciation and amortization

 

923

 

 

4,765

 

Movement in allowance for doubtful accounts receivable

 

514

 

 

512

 

Loss (Earnings) from equity-accounted investments

 

19,137

 

 

(1,063)

 

Movement in allowance for doubtful loans

 

78

 

 

-

 

Fair value adjustment related to financial liabilities

 

886

 

 

87

 

Interest payable

 

(63)

 

 

632

 

Loss (Profit) on disposal of property, plant and equipment

 

(10)

 

 

(154)

 

Stock-based compensation charge

 

399

 

 

387

 

Dividends received from equity accounted investments

 

57

 

 

1,068

 

Decrease (Increase) in accounts receivable, pre-funded social welfare grants receivable and finance loans receivable

 

(8,115)

 

 

(5,666)

 

(Increase) Decrease in inventory

 

2,359

 

 

(12,313)

 

(Decrease) Increase in accounts payable and other payables

 

(415)

 

 

(3,396)

 

(Decrease) Increase in taxes payable

 

(14,917)

 

 

1,288

 

Decrease in deferred taxes

 

(1,755)

 

 

(88)

 

 

Net cash used in operating activities

 

(29,880)

 

 

(18,333)

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

Capital expenditures

 

(275)

 

 

(2,624)

Proceeds from disposal of property, plant and equipment

 

16

 

 

213

Proceeds from disposal of Net1 Korea, net of cash disposed

 

20,114

 

 

-

Proceeds from disposal of DNI as equity-accounted investment

 

329

 

 

-

Investment in equity-accounted investments

 

-

 

 

(1,250)

Loan to equity-accounted investment

 

(78)

 

 

-

Repayment of loans by equity-accounted investments

 

-

 

 

4,268

Net change in settlement assets

 

4,068

 

 

(13,509)

 

Net cash provided by (used in) investing activities

 

24,174

 

 

(12,902)

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

Proceeds from bank overdraft

 

69,146

 

 

183,674

Repayment of bank overdraft

 

(76,850)

 

 

(184,829)

Proceeds from disgorgement of shareholders' short-swing profits

 

98

 

 

-

Long-term borrowings utilized

 

-

 

 

14,798

Guarantee fee

 

-

 

 

(148)

Finance lease capital repayments

 

-

 

 

(26)

Net change in settlement obligations

 

(4,068)

 

 

13,509

 

Net cash (used in) provided by financing activities

 

(11,674)

 

 

26,978

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash

 

806

 

 

(6,455)

Net decrease in cash, cash equivalents and restricted cash

 

(16,574)

 

 

(10,712)

Cash, cash equivalents and restricted cash - beginning of period

 

232,485

 

 

121,511

Cash, cash equivalents and restricted cash - end of period

$

215,911

 

$

110,799



Net 1 UEPS Technologies, Inc.

Attachment A

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

Three months ended September 30, 2020 and 2019 and June 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change - actual

Change - constant exchange rate(1)

Key segmental data, in '000, except margins

 

 

Q1 '21

 

 

Q1 '20

 

 

Q4 '20

Q1 '21

vs

Q1 '20

Q1 '21

vs

Q4 '20

Q1 '21

vs

Q1 '20

Q1 '21

vs

Q4 '20

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Processing

 

$

24,483

 

$

30,017

 

$

17,818

(18%)

37%

(7%)

33%

 

 

IPG

 

 

1,209

 

 

793

 

 

921

52%

31%

73%

27%

 

 

All Other

 

 

23,274

 

 

29,224

 

 

16,897

(20%)

38%

(9%)

34%

 

Financial services

 

 

8,265

 

 

14,168

 

 

8,751

(42%)

(6%)

(34%)

(8%)

 

Technology

 

 

6,211

 

 

7,209

 

 

1,932

(14%)

221%

(2%)

212%

 

 

 

Subtotal: Operating segments

 

 

38,959

 

 

51,394

 

 

28,501

(24%)

37%

(14%)

33%

 

 

 

Intersegment eliminations

 

 

(1,846)

 

 

(3,456)

 

 

(2,523)

(47%)

(27%)

(39%)

(29%)

 

 

 

 

Consolidated revenue

 

$

37,113

 

$

47,938

 

$

25,978

(23%)

43%

(12%)

39%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating (loss) income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Processing

 

$

(7,301)

 

$

(5,505)

 

$

(10,089)

33%

(28%)

51%

(30%)

 

 

IPG

 

 

(2,772)

 

 

(1,973)

 

 

(4,280)

40%

(35%)

60%

(37%)

 

 

All Other

 

 

(4,529)

 

 

(3,532)

 

 

(5,809)

28%

(22%)

46%

(24%)

 

Financial services

 

 

(2,372)

 

 

345

 

 

(1,016)

nm

133%

nm

127%

 

Technology

 

 

1,775

 

 

1,145

 

 

136

55%

1,205%

76%

1,167%

 

 

 

Subtotal: Operating segments

 

 

(7,898)

 

 

(4,015)

 

 

(10,969)

97%

(28%)

124%

(30%)

 

 

 

Corporate/Eliminations

 

 

(2,877)

 

 

(2,421)

 

 

(2,211)

19%

30%

35%

26%

 

 

 

 

 

Consolidated operating (loss) income

 

$

(10,775)

 

$

(6,436)

 

$

(13,180)

67%

(18%)

90%

(21%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating (loss) income margin (%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Processing

 

 

(29.8%)

 

 

(18.3%)

 

 

(56.6%)

 

 

 

 

 

 

IPG

 

 

(229.3%)

 

 

(248.8%)

 

 

(464.7%)

 

 

 

 

 

 

All Other

 

 

(19.5%)

 

 

(12.1%)

 

 

(34.4%)

 

 

 

 

 

Financial services

 

 

(28.7%)

 

 

2.4%

 

 

(11.6%)

 

 

 

 

 

Technology

 

 

28.6%

 

 

15.9%

 

 

7.0%

 

 

 

 

 

 

 

Consolidated operating margin

 

 

(29.0%)

 

 

(13.4%)

 

 

(50.7%)

 

 

 

 

(1) - This information shows what the change in these items would have been if the USD/ ZAR exchange rate that prevailed during Q1 2021 also prevailed during Q1 2020 and Q4 2020.


(Loss) Earnings from equity-accounted investments:

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

 

 

 

Q1 2021

 

 

Q1 2020

 

% change

Bank Frick

 

481

 

 

(25)

 

nm

 

Share of net income

 

481

 

 

119

 

304%

 

Amortization of intangible assets, net of deferred tax

 

-

 

 

(144)

 

nm

DNI

$

-

 

$

728

 

nm

 

Share of net income

 

-

 

 

1,463

 

nm

 

Amortization of intangible assets, net of deferred tax

 

-

 

 

(466)

 

nm

 

Impairment

 

-

 

 

(269)

 

nm

Finbond

 

(19,461)

 

 

491

 

nm

 

Share of net (loss) income

 

(2,617)

 

 

491

 

nm

 

Impairment

 

(16,844)

 

 

-

 

nm

Other

 

(157)

 

 

(131)

 

20%

 

(Loss) earnings from equity-accounted investments

$

(19,137)

 

$

1,063

 

nm



Net 1 UEPS Technologies, Inc.

Attachment B

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

Three months and year ended September 30, 2020 and 2019

 

 

 

 

 

Three months ended September 30,

 

 

 

 

 

2020

 

2019

Operating loss - GAAP

(10,775)

 

(6,436)

 

 

 

 

 

 

 

 

 

Depreciation and amortization

923

 

1,324

 

 

Negative EBITDA

(9,852)

 

(5,112)

 

 

 

Transaction costs

30

 

806

 

 

 

 

Adjusted EBITDA (loss)

(9,822)

 

(4,306)

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

Three months ended September 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

(28,958)

 

(4,392)

 

(0.51)

 

(0.08)

 

(485,735)

 

(64,791)

 

(8.50)

 

(1.14)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impairment of equity method investment

16,844

 

-

 

 

 

 

 

281,729

 

-

 

 

 

 

Reversal of deferred taxes related to impairment of equity method investment

(1,353)

 

-

 

 

 

 

 

(22,633)

 

-

 

 

 

 

Stock-based compensation charge

399

 

387

 

 

 

 

 

6,693

 

5,709

 

 

 

 

Intangible asset amortization, net

59

 

1,413

 

 

 

 

 

990

 

20,835

 

 

 

 

Transaction costs

30

 

806

 

 

 

 

 

503

 

11,890

 

 

 

 

Intangible asset amortization, net related to equity accounted investments

-

 

610

 

 

 

 

 

-

 

8,999

 

 

 

 

Fundamental

(12,979)

 

(1,176)

 

(0.23)

 

(0.02)

 

(218,453)

 

(17,358)

 

(3.82)

 

(0.31)



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 September 30, 2020 and 2019

 

 

2020

 

2019

 

 

 

 

 

 

 

Net loss (USD'000)

(28,958)

 

(4,392)

 

Adjustments:

 

 

 

 

 

Impairment of equity method investments

16,844

 

-

 

 

Profit on sale of property, plant and equipment

(10)

 

(154)

 

 

Tax effects on above

(1,350)

 

43

 

 

 

 

 

 

 

Net loss used to calculate headline loss (USD'000)

(13,474)

 

(4,503)

 

 

 

 

 

 

 

Weighted average number of shares used to calculate net loss per share basic loss and headline loss per share basic loss ('000)

57,119

 

56,568

 

 

 

 

 

 

 

Weighted average number of shares used to calculate net loss per share diluted loss and headline loss per share diluted loss ('000)

57,119

 

56,568

 

 

 

 

 

 

 

Headline loss per share:

 

 

 

 

 

Basic, in USD

(0.24)

 

(0.08)

 

 

Diluted, in USD

(0.24)

 

(0.08)

 

Calculation of the denominator for headline diluted loss per share

 

 

 

Q1 2021

 

Q1 2020

 

 

 

 

 

 

Basic weighted-average common shares outstanding and unvested restricted shares expected to vest under GAAP

57,119

 

56,568

 

 

Denominator for headline diluted loss per share

57,119

 

56,568

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, November 5, 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-Q Quarterly 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-Q Quarterly Report:

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Document And Entity Information
Condensed Consolidated Balance Sheets
Condensed Consolidated Balance Sheets (Parenthetical)
Condensed Consolidated Statement Of Changes In Equity
Condensed Consolidated Statements Of Cash Flows
Condensed Consolidated Statements Of Comprehensive (Loss) Income
Condensed 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
Accumulated Other Comprehensive Loss (Change In Accumulated Other Comprehensive (Loss) Income Per Component) (Details)
Accumulated Other Comprehensive Loss (Narrative) (Details)
Accumulated Other Comprehensive Loss (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) (Details)
Assets And Policyholder Liabilities Under Insurance And Investment Contracts (Tables)
Basis Of Presentation And Summary Of Significant Accounting Policies
Basis Of Presentation And Summary Of Significant Accounting Policies (Policy)
Borrowings
Borrowings (Summary Of Short-Term Credit Facilities) (Details)
Borrowings (Tables)
Capital Structure
Capital Structure (Schedule Of Number Of Shares, Net Of Treasury) (Details)
Capital Structure (Tables)
Commitments And Contingencies
Commitments And Contingencies (Narrative) (Details)
Discontinued Operations
Discontinued Operations (Narrative) (Details)
Discontinued Operations (Schedule Of Major Captions That Have Not Been Separately Presented On Related To Discontinued Operation) (Details)
Discontinued Operations (Schedule Of Revenues And Expenses After Dni Disposal Transaction) (Details)
Discontinued Operations (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 (Summary Of Contractual Maturity Of Investment) (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 (Summary Of Unrealized Gain (Loss) On Investments) (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 (Summary Of Movement In Carrying Value Of Goodwill) (Details)
Goodwill And Intangible Assets, Net (Tables)
Income Tax
Income Tax (Narrative) (Details)
Inventory
Inventory (Schedule Of Inventory) (Details)
Inventory (Tables)
Leases
Leases (Maturities Of Operating Lease Liability) (Alternate) (Details)
Leases (Maturities Of Operating Lease Liability) (Details)
Leases (Narrative) (Details)
Leases (Supplemental Balance Sheet Disclosure Related To Right-Of-Use Assets And Operating Leases Liabilities) (Details)
Leases (Tables)
Operating Segments
Operating Segments (Reconciliation Of Reportable Segments Measure Of Profit Or Loss To Loss Before Income Tax (Benefit) Expense) (Details)
Operating Segments (Reconciliation Of Reportable Segments Revenue) (Details)
Operating Segments (Summary Of Segment Information) (Details)
Operating Segments (Tables)
Other Payables
Other Payables (Schedule Of Other Payables) (Details)
Other Payables (Tables)
Related Party Transactions
Related Party Transactions (Narrative) (Details)
Revenue Recognition
Revenue Recognition (Revenue Disaggregated By Major Revenue Streams) (Details)
Revenue Recognition (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)
Subsequent Events
Subsequent Events (Narrative) (Details)
Supplemental Cash Flow Information
Supplemental Cash Flow Information (Schedule Of Supplemental Cash Flow Disclosures) (Details)
Supplemental Cash Flow Information (Supplemental Cash Flow Disclosure Related To Leases) (Details)
Supplemental Cash Flow Information (Tables)

Material Contracts, Statements, Certifications & more

Net 1 Ueps Technologies Inc provided additional information to their SEC Filing as exhibits

Ticker: UEPS
CIK: 1041514
Form Type: 10-Q Quarterly Report
Accession Number: 0001562762-20-000391
Submitted to the SEC: Thu Nov 05 2020 4:17:51 PM EST
Accepted by the SEC: Thu Nov 05 2020
Period: Wednesday, September 30, 2020
Industry: Functions Related To Depository Banking

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