Tuesday, September 22, 2020

Evertec reports second-quarter net income of $15.5 million

By on August 4, 2020

CEO ‘encouraged to see transaction volumes improve sequentially’ as businesses re-open in Puerto Rico

SAN JUAN — Puerto Rico-based transaction processing business Evertec Inc. reported net income of $15.5 million for the second-quarter of 2020, which ended June 30.

Evertec, which owns and operates the personal identification number (PIN) debit network ATH, said it had profit of 21 cents per share. Earnings, adjusted for non-recurring costs and stock option expense, were 38 cents per share, a 25% decrease.

Operating in the Caribbean and Latin America, Evertec said its revenue decreased 4%, to $117.9 million.

The company provides merchant acquiring, payment processing and business solutions services. The company manages a system of electronic payment networks and offers services for core bank processing, cash processing and technology outsourcing.

The following was extracted from Evertec’s earnings release:

Second Quarter 2020 Highlights

  • Revenue decreased 4% to $117.9 million
  • GAAP Net Income attributable to common shareholders was $15.5 million or $0.21 per diluted share
  • Adjusted EBITDA decreased 13% to $50.2 million
  • Adjusted earnings per common share was $0.38, a decrease of 25%

Six-Month Year-to-Date 2020 Highlights

  • Revenue decreased 1% to $239.9 million
  • GAAP Net Income attributable to common shareholders was $37.7 million or $0.52 per diluted share
  • Adjusted EBITDA decreased 8% to $106.5 million
  • Adjusted earnings per common share was $0.84, a decrease of 17%

Mac Schuessler, President and Chief Executive Officer stated, “We were encouraged to see transaction volumes improve sequentially throughout the quarter as businesses re-open in Puerto Rico. Additionally, we continued to focus on new innovative solutions such as launching our contactless payment solution and expanding our gateway product in Latin America to further accelerate the consumer preference for digital solutions. Despite the near-term pandemic impact on our results, we produced $87 million in operating cash flow year-to-date, $11 million ahead of prior year. We believe that our resilient business model, strong product set, and dedicated team position us well to build momentum over the longer term as we execute on our strategic plans.”

Second Quarter 2020 Results

Revenue. Total revenue for the quarter ended June 30, 2020 was $117.9 million, a decrease of 4% compared with $122.5 million in the prior year. Revenue decline in the quarter reflected a slowdown in transactions resulting from COVID-19 with sequential monthly recovery as businesses reopened in Puerto Rico partially offset by revenue benefit from new services in the business solutions segment. Additionally, prior year included hardware and software sales and the completion of several projects for approximately $2.5 million which did not recur.

Net Income attributable to common shareholders. For the quarter ended June 30, 2020, GAAP Net Income attributable to common shareholders was $15.5 million, or $0.21 per diluted share, a decrease of $11.6 million or $0.16 per diluted share as compared to the prior year.

Adjusted EBITDA. For the quarter ended June 30, 2020, Adjusted EBITDA was $50.2 million, a decrease of 13% compared to the prior year. Adjusted EBITDA margin (Adjusted EBITDA as a percentage of total revenues) was 42.6%, a decrease of approximately 460 basis points from the prior year. The year over year decrease in margin primarily reflects the impact of lower transactional revenues driven by COVID-19 as well as higher operational expenses.

Adjusted Net Income. For the quarter ended June 30, 2020, Adjusted Net Income was $27.8 million, a decrease of 25% compared with $37.2 million in the prior year. Adjusted earnings per common share was $0.38, a decrease of 25% compared to $0.51 in the prior year.

Share Repurchase

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

2020 Outlook

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

Earnings Conference Call and Audio Webcast

A replay of the company-hosted conference call can be accessed by dialing (877) 344-7529 or (412) 317-0088 for international callers; the pin number is 10146512. The replay will be available through Aug. 11. The call was webcast live from the company’s website at http://ir.evertecinc.com.

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