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Section 1: 8-K (8-K)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549 

 
FORM 8-K
 
 
 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): February 21, 2018
 
EVERTEC, Inc.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
  
Puerto Rico
 
66-0783622
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. employer
identification number)
 
 
Cupey Center Building, Road 176, Kilometer 1.3,
San Juan, Puerto Rico
 
00926
(Address of principal executive offices)
 
(Zip Code)
(787) 759-9999
(Registrant’s telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year, if changed since last report)
 
 
   
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐





Item 2.02 Results of Operations and Financial Condition.
On February 21, 2018 the Company issued a press release announcing its results for the fourth quarter and year ended December 31, 2017. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein.
Note: The information contained in this Item 2.02 (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
 
(d)
Exhibits.
Number
  
Exhibit
99.1
  
Press Release re: Fourth quarter earnings issued by EVERTEC, Inc. dated February 21, 2018.






SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. 

 
EVERTEC, Inc.
 
(Registrant)
 
 
 
Date: February 21, 2018
By:
/s/ Peter J.S. Smith
 
 
Name: Peter J.S. Smith
 
 
Title:   Chief Financial Officer






EXHIBIT INDEX
 
Number
  
Exhibit
99.1
  



(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit


Exhibit 99.1
 392282809_g350595ex991pg01.jpg
EVERTEC REPORTS FOURTH QUARTER AND FULL YEAR 2017 RESULTS
ANNOUNCES 2018 OUTLOOK


SAN JUAN, PUERTO RICO – February 21, 2018 – EVERTEC, Inc. (NYSE: EVTC) (“EVERTEC” or the “Company”) today announced results for the fourth quarter and full year ended December 31, 2017.
Fourth Quarter 2017
 
Revenue decreased 2% to $99.6 million
GAAP Net Income attributable to common shareholders was $5.8 million, or $0.08 per diluted share
Adjusted EBITDA decreased 22% to $37.0 million
Adjusted earnings per common share was $0.24, or a 44% decline
Full Year 2017 Highlights
 
Revenue grew 5% to $407.1 million
GAAP Net Income attributable to common shareholders was $55.1 million, or $0.76 per diluted share
Adjusted EBITDA decreased 5% to $178.0 million
Adjusted earnings per common share was $1.47, or a 12% decline
$29 million returned to shareholders in share repurchases and dividends

Mac Schuessler, President and Chief Executive Officer, stated “We executed well in the fourth quarter and exceeded the high end of our full year 2017 revenue guidance range, as fourth quarter transaction volume was stronger than previously expected in Puerto Rico. Reflecting on 2017, we made significant progress on our core growth initiatives, including advancing our Latin American expansion strategy through acquisitions and recent customer wins.”

Schuessler continued, "Looking to 2018, while the post-hurricane economy in Puerto Rico has improved, many uncertainties still remain and are reflected in our 2018 financial outlook. We will continue to work to restore our customers' operations in Puerto Rico and remain committed to supporting our community as the Island rebuilds. At the same time, we are focused on capitalizing on our expanded opportunities in Latin America.”
Fourth Quarter 2017 Results
Revenue. Total revenue for the quarter ended December 31, 2017 was $99.6 million, a decrease of 2% compared with $101.9 million in the prior year. The decrease in the quarter was driven primarily by the impact of reduced volumes caused by the significant hurricanes in the third quarter of 2017 partially offset by the acquisition of PayGroup.
Net Income attributable to common shareholders. For the quarter ended December 31, 2017, GAAP Net Income attributable to common shareholders was $5.8 million, or $0.08 per diluted share, compared with $16.0 million or $0.22 per diluted share in the prior year. The decline was primarily caused by the impact of the hurricanes.
Adjusted EBITDA. For the quarter ended December 31, 2017, Adjusted EBITDA was $37.0 million, a decrease of 22% compared to the prior year. The decrease in Adjusted EBITDA was primarily driven by reduced high margin revenues due to the hurricanes and a $5.0 million impairment charge on a multi-year software development project that was impacted by delays caused by the hurricane and projected increased costs with a third party vendor.
Adjusted Net Income. For the quarter ended December 31, 2017, Adjusted Net Income was $17.7 million, a decrease of 43% compared with $31.3 million in the prior year. Adjusted earnings per common share was $0.24, a decrease of 44% compared with $0.43 in the prior year. The results included the impact of an increased tax rate in our Latin American region and a higher than anticipated proportion of Puerto Rico taxable income outside our preferential tax decree. 

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Full Year 2017 Results
Revenue. Total revenue for the year ended December 31, 2017 was $407.1 million, an increase of 5% compared with $389.5 million in the prior year. The increase in revenues was driven by increases in ATH debit network transaction volumes and card processing volumes, revenue generated from the PayGroup acquisition, increased revenue from the Accuprint acquisition and an increase in core banking revenue. Revenues in 2017 were negatively impacted by the two hurricanes that made landfall in Puerto Rico and the Caribbean in September of 2017.
Net Income attributable to common shareholders. For the year ended December 31, 2017, GAAP Net Income attributable to common shareholders was $55.1 million , or $0.76 per diluted share, compared with $75.0 million or $1.01 per diluted share in the prior year. The decline was caused by the impact of the hurricanes, charges taken in connection with an exit activity for a third party software solution that is no longer commercially viable, an impairment loss related to a software asset under development, expenses attributable to the PayGroup acquisition, increased depreciation expense, and higher interest expense.
Adjusted EBITDA. For the year ended December 31, 2017, Adjusted EBITDA was $178.0 million, a decrease of 5% compared to the prior year. The decrease in Adjusted EBITDA was primarily driven by reduced high margin revenues due to the hurricanes and an impairment loss related to a software asset under development.
Adjusted Net Income. For the year ended December 31, 2017, Adjusted Net Income was $107.1 million, a decrease of 14% compared with $124.7 million in the prior year. Adjusted earnings per common share was $1.47, a decrease of 12% compared with $1.67 in the prior year. The decline was primarily caused by the impact of the hurricanes, increased depreciation, higher interest expense and an increased tax rate.
Segment Reporting Change
The Company realigned its operating segments in the quarter ended December 31, 2017. The Company's operating segments are as follows: 1) Merchant Services 2) Payment Services (Puerto Rico and Caribbean) 3) Payment Services (Latin America) 4) Business Solutions. Additionally, the Corporate and Other category is presented and it consists of corporate overhead expenses, intersegment eliminations, certain leveraged activities and other non-operating and miscellaneous expenses that are not included in the operating segments. Historical results for the new operating segments for reported full-year 2015 through 2017 and quarterly periods for 2016 and 2017 are provided in a supplemental schedule attached to this release.
Share Repurchase
For the full year 2017, the Company repurchased a total of 0.5 million shares of common stock at an average price of $16.48 per share for a total of $7.7 million. As of December 31, 2017, a total of approximately $72.3 million remained available for future use under the Company’s share repurchase program.
2018 Outlook
The Company financial outlook for 2018 is as follows:
 
Total consolidated revenue between $411 million and $425 million representing growth of 1 to 5%
Adjusted earnings per common share guidance of $1.25 to $1.41 representing a range of -15 to -4% as compared to $1.47 in 2017
Capital expenditures ranging between $35 and $40 million
Effective tax rate ranging between 11 to 13%
Earnings Conference Call and Audio Webcast
The Company will host a conference call to discuss its Fourth quarter 2017 financial results today at 4:30 p.m. ET. Hosting the call will be Mac Schuessler, President and Chief Executive Officer, and Peter Smith, Executive Vice President and Chief Financial Officer. The conference call can be accessed live over the phone by dialing (888) 338-7153 or for international callers by dialing (412) 317-5117. A replay will be available one hour after the end of the conference call and can be accessed by dialing (877) 344-7529 or (412) 317-0088 for international callers; the pin number is 10098091. The replay will be available through Wednesday, March 1, 2018. The call will be webcast live from the Company’s website at www.evertecinc.com under the Investor Relations section or directly at http://ir.evertecinc.com. A supplemental slide presentation that accompanies this call and webcast can be found on the investor relations website at ir.evertecinc.com and will remain available after the call.

About EVERTEC

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EVERTEC, Inc. (NYSE: EVTC) is a leading full-service transaction processing business in Latin America, providing a broad range of merchant acquiring, payment processing and business solutions services. The Company manages a system of electronic payment networks that process approximately two billion transactions annually, and offers a comprehensive suite of services for core bank processing, cash processing and technology outsourcing. In addition, EVERTEC owns and operates the ATH® network, one of the leading personal identification number (“PIN”) debit networks in Latin America. Based in Puerto Rico, the Company operates in 26 Latin American countries and serves a diversified customer base of leading financial institutions, merchants, corporations and government agencies with “mission-critical” technology solutions. For more information, visit www.evertecinc.com.

Use of Non-GAAP Financial Information

The non-GAAP measures referenced in this release material are supplemental measures of the Company’s performance and are not required by, or presented in accordance with, accounting principles generally accepted in the United States of America (“GAAP”). They are not measurements of the Company’s financial performance under GAAP and should not be considered as alternatives to total revenue, net income or any other performance measures derived in accordance with GAAP or as alternatives to cash flows from operating activities, as indicators of operating performance or as measures of the Company’s liquidity. In addition to GAAP measures, management uses these non-GAAP measures to focus on the factors the Company believes are pertinent to the daily management of the Company’s operations and believes that they are also frequently used by analysts, investors and other interested parties to evaluate companies in the industry. Reconciliations of the non-GAAP measures to the most directly comparable GAAP measure are included in the schedules to this release. These non-GAAP measures include EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings per common share and are defined below.

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

Adjusted EBITDA is defined as EBITDA further adjusted to exclude unusual items and other adjustments. This measure is reported to the chief operating decision maker for purposes of making decisions about allocating resources to the segments and assessing their performance. For this reason, Adjusted EBITDA, as it relates to our segments, is presented in conformity with Accounting Standards Codification 280, Segment Reporting, and is excluded from the definition of non-GAAP financial measures under the Securities and Exchange Commission's Regulation G and Item 10(e) of Regulation S-K.

Adjusted Net Income is defined as net income adjusted to exclude unusual items and other adjustments

Adjusted Earnings per common share is defined as Adjusted Net Income divided by diluted shares outstanding

In addition, our presentation of Adjusted EBITDA is substantially consistent with the equivalent measurements that are contained in the senior secured credit facilities in testing EVERTEC Group’s compliance with covenants therein such as the senior secured leverage ratio. We use Adjusted Net Income to measure our overall profitability because we believe better reflects our comparable operating performance by excluding the impact of the non-cash amortization and depreciation that was created as a result of Apollo Global Management LLC’s acquisition of a 51% indirect ownership in EVERTEC Group. In addition, in evaluating EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings per common share, you should be aware that in the future we may incur expenses such as those excluded in calculating them. Further, our presentation of these measures should not be construed as an inference that our future operating results will not be affected by unusual or nonrecurring items.


Forward-Looking Statements

Certain statements in this press release constitute “forward-looking statements” within the meaning of, and subject to the protection of, the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance or achievements of EVERTEC to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Statements preceded by, followed by, or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” and “plans” and similar expressions of future or conditional verbs such as “will,” “should,” “would,” “may,” and “could” are generally forward-looking in nature and not historical facts. Any statements that refer to expectations or other characterizations of future events, circumstances or results are forward-looking statements.
Various factors that could cause actual future results and other future events to differ materially from those estimated by management include, but are not limited to: the Company’s reliance on its relationship with Popular for a significant portion of

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revenue; our ability to renew our client contracts on terms favorable to us; the effectiveness of our risk management procedures; our dependence on our processing systems, technology infrastructure, security systems and fraudulent-payment-detection systems, and the risk that our systems may experience breakdowns or fail to prevent security breaches or fraudulent transfers; our ability to develop, install and adopt new technology; a decreased client base due to consolidations in the banking and financial-services industry; the credit risk of our merchant clients, for which we may also be liable; the continuing market position of the ATH® network; reduction in consumer confidence leading to decreased consumer spending; the Company’s dependence on credit card associations; regulatory limitations on our activities, including the potential need to seek regulatory approval to consummate transactions, due to our relationship with Popular and our role as a service provider to financial institutions; changes in the regulatory environment and changes in international, legal, tax, political, administrative or economic conditions; the geographical concentration of the Company’s business in Puerto Rico; operating an international business in multiple regions with potential political and economic instability; increased compliance risks associated with operating an international business; operating in countries and counterparties that put us at risk of violating U.S. sanctions laws; our ability to execute our expansion and acquisition strategies; our ability to protect our intellectual property rights; our ability to recruit and retain qualified personnel; our ability to comply with federal, state, and local regulatory requirements; evolving industry standards; the Company’s high level of indebtedness and restrictions contained in the Company’s debt agreements; and the Company’s ability to generate sufficient cash to service the Company’s indebtedness and to generate future profits.
Consideration should be given to the areas of risk described above, as well as those risks set forth under the headings “Forward-Looking Statements” and “Risk Factors” in the reports the Company files with the SEC from time to time, in connection with considering any forward-looking statements that may be made by the Company and its businesses generally. We undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events unless we are required to do so by law.
Investor Contact
Kay Sharpton
(787) 773-5442
IR@evertecinc.com

4



EVERTEC, Inc.
Schedule 1: Unaudited Consolidated Statements of Income and Comprehensive Income
 
 
 
Quarter ended December 31,
 
Year ended December 31,
(Dollar amounts in thousands, except per share data)
 
2017
 
2016
 
2017
 
2016
Revenues
 
$
99,628

 
$
101,889

 
$
407,144

 
$
389,507

Operating costs and expenses
 
 
 
 
 
 
 
 
Cost of revenues, exclusive of depreciation and amortization shown below
 
50,748

 
48,682

 
200,650

 
175,809

Selling, general and administrative expenses
 
16,130

 
12,760

 
56,161

 
46,986

Depreciation and amortization
 
16,061

 
15,067

 
64,250

 
59,567

Total operating costs and expenses
 
82,939

 
76,509

 
321,061

 
282,362

Income from operations
 
16,689

 
25,380

 
86,083

 
107,145

Non-operating income (expenses)
 
 
 
 
 
 
 
 
Interest income
 
156

 
111

 
716

 
377

Interest expense
 
(7,407
)
 
(6,325
)
 
(29,861
)
 
(24,617
)
Earnings (losses) of equity method investment
 
191

 
6

 
604

 
(52
)
Other income (expense), net
 
(172
)
 
(1,203
)
 
2,657

 
544

Total non-operating expenses
 
(7,232
)
 
(7,411
)
 
(25,884
)
 
(23,748
)
Income before income taxes
 
9,457

 
17,969

 
60,199

 
83,397

Income tax expense
 
3,532

 
1,955

 
4,780

 
8,271

Net income
 
5,925

 
16,014

 
55,419

 
75,126

Less: Net income attributable to non-controlling interest
 
91

 
41

 
365

 
90

Net income attributable to EVERTEC, Inc.’s common stockholders
 
5,834

 
15,973

 
55,054

 
75,036

Other comprehensive income (loss), net of tax
 
 
 
 
 

 

Foreign currency translation adjustments
 
(117
)
 
(740
)
 
(635
)
 
(3,360
)
Gain (loss) on cash flow hedge
 
1,421

 
3,015

 
2,178

 
(1,449
)
Total comprehensive income
 
$
7,138

 
$
18,248

 
$
56,597

 
$
70,227

Net income per common share:
 
 
 
 
 
 
 
 
Basic
 
$
0.08

 
$
0.22

 
$
0.76

 
$
1.01

Diluted
 
$
0.08

 
$
0.22

 
$
0.76

 
$
1.01

Shares used in computing net income per common share:
 
 
 
 
 
 
 
 
Basic
 
72,390,977

 
73,020,599

 
72,479,807

 
74,132,863

Diluted
 
72,857,756

 
73,563,167

 
72,872,188

 
74,473,369

                                                                                                                                

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EVERTEC, Inc.
Schedule 2: Unaudited Consolidated Balance Sheets
 
(Dollar amounts in thousands)
 
December 31, 2017
 
December 31, 2016
Assets
 
 
 
 
Current Assets:
 
 
 
 
Cash and cash equivalents
 
$
50,423

 
$
51,920

Restricted cash
 
9,944

 
8,112

Accounts receivable, net
 
83,328

 
77,803

Prepaid expenses and other assets
 
25,011

 
20,430

Total current assets
 
168,706

 
158,265

Investment in equity investee
 
13,073

 
12,252

Property and equipment, net
 
37,924

 
38,930

Goodwill
 
398,575

 
370,986

Other intangible assets, net
 
279,961

 
299,119

Other long-term assets
 
4,549

 
6,110

Total assets
 
$
902,788

 
$
885,662

Liabilities and stockholders’ equity
 
 
 
 
Current Liabilities:
 
 
 
 
Accrued liabilities
 
$
38,451

 
$
34,243

Accounts payable
 
41,135

 
40,845

Unearned income
 
7,737

 
4,531

Income tax payable
 
1,406

 
1,755

Current portion of long-term debt
 
46,487

 
19,789

Short-term borrowings
 
12,000

 
28,000

Total current liabilities
 
147,216

 
129,163

Long-term debt
 
557,251

 
599,667

Deferred tax liability
 
13,820

 
14,978

Unearned income—long-term
 
23,486

 
17,303

Other long-term liabilities
 
13,039

 
16,376

Total liabilities
 
754,812

 
777,487

Stockholders’ equity
 
 
 
 
Preferred stock, par value $0.01; 2,000,000 shares authorized; none issued
 

 

Common stock, par value $0.01; 206,000,000 shares authorized; 72,393,933 shares issued and outstanding at December 31, 2017 (December 31, 2016 - 72,635,032)
 
723

 
726

Additional paid-in capital
 
5,350

 

Accumulated earnings
 
148,887

 
116,341

Accumulated other comprehensive loss, net of tax
 
(10,848
)
 
(12,391
)
Total EVERTEC, Inc. stockholders’ equity
 
144,112

 
104,676

Non-controlling interest
 
3,864

 
3,499

Total equity
 
147,976

 
108,175

Total liabilities and equity
 
$
902,788

 
$
885,662


6



EVERTEC, Inc.
Schedule 3: Unaudited Consolidated Statements of Cash Flows
 
 
 
Years ended December 31,
(Dollar amounts in thousands)
 
2017
 
2016
Cash flows from operating activities
 
 
 
 
Net income
 
$
55,419

 
$
75,126

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

 

Depreciation and amortization
 
64,250

 
59,567

Amortization of debt issue costs and accretion of discount
 
5,128

 
4,334

Loss on extinguishment of debt
 

 
1,476

Provision for doubtful accounts and sundry losses
 
843

 
1,990

Deferred tax benefit
 
(4,306
)
 
(4,594
)
Share-based compensation
 
9,642

 
6,408

Loss on impairment of software
 
11,441

 
2,277

Loss on disposition of property and equipment and other intangibles
 
430

 
453

(Earnings) losses of equity method investment
 
(604
)
 
52

(Increase) decrease in assets:
 


 


Accounts receivable
 
(2,099
)
 
(2,583
)
Prepaid expenses and other assets
 
(4,048
)
 
(1,426
)
Other long-term assets
 
1,654

 
(1,790
)
Increase (decrease) in liabilities:
 

 

Accounts payable and accrued liabilities
 
(870
)
 
14,594

Income tax payable
 
(349
)
 
405

Unearned income
 
8,444

 
8,018

Other long-term liabilities
 
811

 
3,747

Total adjustments
 
90,367

 
92,928

Net cash provided by operating activities
 
145,786

 
168,054

Cash flows from investing activities
 
 
 
 
Net (increase) decrease in restricted cash
 
(1,832
)
 
3,705

Additions to software and purchase of customer relationship
 
(22,174
)
 
(23,819
)
Acquisitions, net of cash acquired
 
(42,836
)
 
(15,600
)
Property and equipment acquired
 
(11,290
)
 
(18,450
)
Proceeds from sales of property and equipment
 
32

 
81

Net cash used in investing activities
 
(78,100
)
 
(54,083
)
Cash flows from financing activities
 
 
 
 
Proceeds from issuance of long-term debt
 

 
75,763

Debt issuance costs
 

 
(4,830
)
Net (decrease) increase in short-term borrowings
 
(16,000
)
 
11,000

Repayments of borrowings for purchase of equipment and software
 
(2,373
)
 
(2,213
)
Dividends paid
 
(21,762
)
 
(29,696
)
Withholding taxes paid on share-based compensation
 
(1,588
)
 
(548
)
Repurchase of common stock
 
(7,671
)
 
(39,946
)
Repayment of long-term debt
 
(19,789
)
 
(96,741
)
Credit amendment fees
 

 
(3,587
)
Net cash used in financing activities
 
(69,183
)
 
(90,798
)
Net (decrease) increase in cash and cash equivalents
 
(1,497
)
 
23,173

Cash and cash equivalents at beginning of the period
 
51,920

 
28,747

Cash and cash equivalents at end of the period
 
$
50,423

 
$
51,920


7



EVERTEC, Inc.
Schedule 4: Unaudited Segment Information

 
Quarter Ended December 31, 2017
(In thousands)
Payment
Services -
Puerto Rico & Caribbean
 
Payment
Services -
Latin America
 
Merchant
Acquiring, net
 
Business
Solutions
 
Corporate and Other (1)
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
$
22,866

 
$
19,336

 
$
18,232

 
$
46,133

 
$
(6,939
)
 
$
99,628

Operating costs and expenses
17,759

 
19,520

 
11,028

 
28,776

 
5,856

 
82,939

Depreciation and amortization
2,317

 
2,553

 
441

 
3,653

 
7,097

 
16,061

Non-operating income (expenses)
553

 
1,539

 

 
10

 
(2,083
)
 
19

EBITDA
7,977

 
3,908

 
7,645

 
21,020

 
(7,781
)
 
32,769

Compensation and benefits (1)
159

 
371

 
141

 
394

 
2,139

 
3,204

Transaction, refinancing and other fees (2)

 

 

 

 
1,055

 
1,055

Adjusted EBITDA
$
8,136

 
$
4,279

 
$
7,786

 
$
21,414

 
$
(4,587
)
 
$
37,028

 
 

(1)
Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations.  Intersegment eliminations predominantly reflect the $6.9 million processing fee from Payments Services - Puerto Rico and Caribbean to Merchant Acquiring and cost transfer fees from Corporate and Other to Payment Services Latin America for leveraged services and management fees.
(2)
Primarily represents share-based compensation and severance payments.
(3)
Primarily represents fees and expenses associated with corporate transactions as defined in the Credit Agreement.

 
Quarter Ended December 31, 2016
(In thousands)
Payment
Services -
Puerto Rico & Caribbean
 
Payment
Services -
Latin America
 
Merchant
Acquiring, net
 
Business
Solutions
 
Corporate and Other (1)
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
$
25,680

 
$
12,438

 
$
23,111

 
$
49,439

 
$
(8,779
)
 
$
101,889

Operating costs and expenses
14,053

 
11,986

 
13,717

 
31,152

 
5,601

 
76,509

Depreciation and amortization
2,027

 
1,894

 
594

 
3,486

 
7,066

 
15,067

Non-operating income (expenses)
563

 
1,155

 

 
10

 
(2,925
)
 
(1,197
)
EBITDA
14,217

 
3,501

 
9,988

 
21,783

 
(10,239
)
 
39,250

Compensation and benefits (2)
59

 
8

 
63

 
146

 
2,173

 
2,449

Transaction, refinancing and other fees (3)
2,062

 

 

 
2,167

 
1,647

 
5,876

Adjusted EBITDA
$
16,338

 
$
3,509

 
$
10,051

 
$
24,096

 
$
(6,419
)
 
$
47,575

 
 

(1)
Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations. Intersegment eliminations predominantly reflect the $8.8 million processing fee from Payments Services - Puerto Rico and Caribbean to Merchant Acquiring and cost transfer fees from Corporate and Other to Payment Services Latin America for leveraged services and management fees.
(2)
Primarily represents share-based compensation, other compensation expense and severance payments.
(3)
Primarily represents fees and expenses associated with corporate transactions as defined in the Credit Agreement and consulting, audit and legal expenses incurred as part of the prior year restatement of financial results, certain fees paid to resolve a software maintenance contract mater, fees paid in connection with the debt refinancing and a software impairment charge.

8




 
Year Ended December 31, 2017
(In thousands)
Payment
Services -
Puerto Rico & Caribbean
 
Payment
Services -
Latin America
 
Merchant
Acquiring, net
 
Business
Solutions
 
Corporate and Other (1)
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
$
101,687

 
$
62,702

 
$
85,778

 
$
189,077

 
$
(32,100
)
 
$
407,144

Operating costs and expenses
57,463

 
66,786

 
57,574

 
119,761

 
19,477

 
321,061

Depreciation and amortization
8,993

 
8,880

 
2,254

 
15,774

 
28,349

 
64,250

Non-operating income (expenses)
2,229

 
8,726

 
1

 
13

 
(7,708
)
 
3,261

EBITDA
55,446

 
13,522

 
30,459

 
85,103

 
(30,936
)
 
153,594

Compensation and benefits (2)
589

 
816

 
573

 
1,687

 
6,090

 
9,755

Transaction, refinancing, exit activity and other fees (3)
2,499

 
3,220

 
6,465

 

 
2,495

 
14,679

Adjusted EBITDA
$
58,534

 
$
17,558

 
$
37,497

 
$
86,790

 
$
(22,351
)
 
$
178,028

 
 

(1)
Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations.  Intersegment eliminations predominantly reflect the $32.1 million processing fee from Payments Services - Puerto Rico and Caribbean to Merchant Acquiring and cost transfer fees from Corporate and Other to Payment Services Latin America for leveraged services and management fees.
(2)
Primarily represents share-based compensation, other compensation expense and severance payments.
(3)
Primarily represents fees and expenses associated with corporate transactions as defined in the Credit Agreement and an impairment charge and contractual fee accrual for a third party software solution that was determined to be commercially unviable.
 
Year Ended December 31, 2016
(In thousands)
Payment
Services -
Puerto Rico & Caribbean
 
Payment
Services -
Latin America
 
Merchant
Acquiring, net
 
Business
Solutions
 
Corporate and Other (1)
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
$
99,680

 
$
47,162

 
$
91,248

 
$
184,276

 
$
(32,859
)
 
$
389,507

Operating costs and expenses
49,128

 
45,304

 
52,771

 
113,082

 
22,077

 
282,362

Depreciation and amortization
7,597

 
7,285

 
2,672

 
13,783

 
28,230

 
59,567

Non-operating income (expenses)
2,238

 
5,584

 

 
24

 
(7,354
)
 
492

EBITDA
60,387

 
14,727

 
41,149

 
85,001

 
(34,060
)
 
167,204

Compensation and benefits (2)
637

 
627

 
480

 
1,961

 
6,777

 
10,482

Transaction, refinancing, and other fees (3)
2,062

 

 

 
2,277

 
5,650

 
9,989

Adjusted EBITDA
$
63,086

 
$
15,354

 
$
41,629

 
$
89,239

 
$
(21,633
)
 
$
187,675

 
 

(1)
Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations.  Intersegment eliminations predominantly reflect the $32.9 million processing fee from Payments Services - Puerto Rico and Caribbean to Merchant Acquiring and cost transfer fees from Corporate and Other to Payment Services Latin America for leveraged services and management fees.
(2)
Primarily represents share-based compensation, other compensation expense and severance payments.
(3)
Primarily represents fees and expenses associated with corporate transactions as defined in the Credit Agreement and consulting, audit and legal expenses incurred as part of the prior year restatement of financial results, certain fees paid to resolve a software maintenance contract mater, fees paid in connection with the debt refinancing and a software impairment charge.

9



EVERTEC, Inc.
Schedule 5: Reconciliation of GAAP to Non-GAAP Operating Results
 
 
 
Quarter ended December 31,
 
Year ended December 31,
(Dollar amounts in thousands, except share data)
 
2017
 
2016
 
2017
 
2016
Net income
 
$
5,925

 
$
16,014

 
$
55,419

 
$
75,126

Income tax expense
 
3,532

 
1,955

 
4,780

 
8,271

Interest expense, net
 
7,251

 
6,214

 
29,145

 
24,240

Depreciation and amortization
 
16,061

 
15,067

 
64,250

 
59,567

EBITDA
 
32,769

 
39,250

 
153,594

 
167,204

Software maintenance reimbursement and other costs(1)
 

 

 


 
521

Equity (income) loss(2)
 
(191
)
 
(6
)
 
(604
)
 
52

Compensation and benefits (3)
 
3,204

 
2,449

 
9,755

 
10,482

Transaction, refinancing and other fees (4)
 
1,246

 
5,882

 
2,500

 
7,579

Exit activity (5)
 

 

 
12,783

 

Restatement related expenses (6)
 

 

 

 
1,837

Adjusted EBITDA
 
37,028

 
47,575

 
178,028

 
187,675

Operating depreciation and amortization (7)
 
(7,459
)
 
(7,302
)
 
(30,585
)
 
(28,468
)
Cash interest expense, net (8)
 
(6,422
)
 
(5,137
)
 
(24,660
)
 
(20,468
)
Income tax expense (9)
 
(5,264
)
 
(3,748
)
 
(15,100
)
 
(13,752
)
Non-controlling interest (10)
 
(150
)
 
(89
)
 
(581
)
 
(258
)
Adjusted Net Income
 
$
17,733

 
$
31,299

 
$
107,102

 
$
124,729

Net income per common share (GAAP):
 
 
 
 
 
 
 
 
Diluted
 
$
0.08

 
$
0.22

 
$
0.76

 
$
1.01

Adjusted earnings per common share (Non-GAAP):
 
 
 
 
 
 
 
 
Diluted
 
$
0.24

 
$
0.43

 
$
1.47

 
$
1.67

Shares used in computing adjusted earnings per common share:
 
 
 
 
 
 
 
 
Diluted
 
72,857,786

 
73,563,167

 
72,872,188

 
74,473,369

 
 
(1)
Predominantly represents reimbursements received for certain software maintenance expenses as part of the Merger.
(2)
Represents the elimination of non-cash equity earnings from our 19.99% equity investment in Dominican Republic, Consorcio de Tarjetas Dominicanas, S.A. (“CONTADO”).
(3)
Primarily represents share-based compensation and other compensation expense of $3.1 million and $1.8 million for the quarters ended December 31, 2017 and 2016 and severance payments $0.6 million for the quarter ended December 31, 2016. For the year ended December 31, 2017 and 2016 primarily represents share-based compensation and other compensation expense of $9.6 million and $6.7 million, respectively, and severance payments of $4.1 million for the year ended December 31, 2016.
(4)
Primarily represents fees and expenses associated with corporate transactions as defined in the Credit Agreement, recorded as part of selling, general and administrative expense and cost of revenues, as well as relief contributions related to the Hurricanes.
(5)
Impairment charge and contractual fees accrual for a third party software solution that was determined to be commercially unviable.
(6)
Represents consulting, audit and legal expenses incurred as part of the restatement.
(7)
Represents operating depreciation and amortization expense, which excludes amounts generated as a result of the Merger and other from purchase accounting intangibles generated from acquisitions.
(8)
Represents interest expense, less interest income, as they appear on our consolidated statements of income and comprehensive income, adjusted to exclude non-cash amortization of the debt issue costs, premium and accretion of discount.
(9)
Represents income tax expense calculated on adjusted pre-tax income using the applicable GAAP tax rate.
(10)
Represents the 35% non-controlling equity interest in Processa, net of amortization for intangibles created as part of the purchase.

10



EVERTEC, Inc.
Schedule 6: Outlook Summary and Reconciliation to Non-GAAP Adjusted Earnings per Share
 
 
 
 
 
 
 
 
 
2017
 
 
2018 Outlook
 
Actual
(Dollar amounts in millions, except per share data)
 
 
 
 
 
 
 
 
Revenues
 
$
411

 
to
 
$
425

 
$
407

Earnings per Share (EPS) (GAAP)
 
$
0.60

 
to
 
$
0.76

 
$
0.76

Per share adjustment to reconcile GAAP EPS to Non-GAAP Adjusted EPS:
 
 
 
 
 
 
 
 
Share-based comp, non-cash equity earnings and other (1)
 
0.21

 
 
 
0.21

 
0.33

Merger and acquisition related depreciation and amortization (2)
 
0.47

 
 
 
0.47

 
0.42

Non-cash interest expense (3)
 
0.06

 
 
 
0.06

 
0.07

Tax effect of non-gaap adjustments (4)
 
(0.08
)
 
 
 
(0.08
)
 
(0.10
)
Non-controlling interest (5)
 
(0.01
)
 
 
 
(0.01
)
 
(0.01
)
Total adjustments
 
0.65

 
 
 
0.65

 
0.71

Adjusted EPS (Non-GAAP)
 
$
1.25

 
to
 
$
1.41

 
$
1.47

Shares used in computing adjusted earnings per common share
 
 
 
 
 
73.5

 
72.9


 
 
(1)
Represents share based compensation, the elimination of non-cash equity earnings from our 19.99% equity investment in CONTADO, severance and other adjustments to reconcile GAAP EPS to Non-GAAP EPS.
(2)
Represents depreciation and amortization expenses amounts generated as a result of the Merger and intangibles related to acquisitions.
(3)
Represents non-cash amortization of the debt issue costs, premium and accretion of discount.
(4)
Represents income tax expense on non-GAAP adjustments using the applicable GAAP tax rate (in an anticipated range of 11 to 13%).
(5)
Represents the 35% non-controlling equity interest in Processa, net of amortization for intangibles created as part of the purchase.


11



EVERTEC, Inc.
Schedule 7: Supplemental Segment Information
 
 
Quarter Ended March 31, 2017
(In thousands)
Payment
Services -
Puerto Rico & Caribbean
 
Payment
Services -
Latin America
 
Merchant
Acquiring, net
 
Business
Solutions
 
Corporate and Other (1)
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
$
26,452

 
$
12,964

 
$
22,485

 
$
47,997

 
$
(8,618
)
 
$
101,280

Operating costs and expenses
11,802

 
12,266

 
13,413

 
29,765

 
3,442

 
70,688

Depreciation and amortization
2,149

 
1,871

 
599

 
4,014

 
7,051

 
15,684

Non-operating income (expenses)
553

 
2,731

 
1

 

 
(1,868
)
 
1,417

EBITDA
17,352

 
5,300

 
9,672

 
22,246

 
(6,877
)
 
47,693

Compensation and benefits (2)
99

 
151

 
95

 
226

 
1,505

 
2,076

Transaction, refinancing and other fees (3)
(660
)
 
 
 

 

 
50

 
(610
)
Adjusted EBITDA
$
16,791

 
$
5,451

 
$
9,767

 
$
22,472

 
$
(5,322
)
 
$
49,159


 
(1)
Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations.  Intersegment eliminations predominantly reflect the $8.6 million processing fee from Payments Services - Puerto Rico and Caribbean to Merchant Acquiring and cost transfer fees from Corporate and Other to Payment Services Latin America for leveraged services and management fees.
(2)
Primarily represents share-based compensation, other compensation expense and severance payments.
(3)
Primarily represents fees and expenses associated with corporate transactions as defined in the Credit Agreement.



 
Quarter Ended June 30, 2017
(In thousands)
Payment
Services -
Puerto Rico & Caribbean
 
Payment
Services -
Latin America
 
Merchant
Acquiring, net
 
Business
Solutions
 
Corporate and Other (1)
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
$
27,144

 
$
12,973

 
$
23,506

 
$
48,672

 
$
(8,784
)
 
$
103,511

Operating costs and expenses
11,682

 
13,603

 
13,688

 
29,600

 
4,944

 
73,517

Depreciation and amortization
2,269

 
1,848

 
596

 
4,082

 
7,104

 
15,899

Non-operating income (expenses)
556

 
2,724

 

 
3

 
(1,805
)
 
1,478

EBITDA
18,287

 
3,942

 
10,414

 
23,157

 
(8,429
)
 
47,371

Compensation and benefits (2)
125

 
156

 
121

 
286

 
1,439

 
2,127

Transaction, refinancing and other fees (3)

 
 
 
 
 

 
632

 
632

Adjusted EBITDA
$
18,412

 
$
4,098

 
$
10,535

 
$
23,443

 
$
(6,358
)
 
$
50,130


 
(1)
Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations.  Intersegment eliminations predominantly reflect the $8.8 million processing fee from Payments Services - Puerto Rico and Caribbean to Merchant Acquiring and cost transfer fees from Corporate and Other to Payment Services Latin America for leveraged services and management fees.
(2)
Primarily represents share-based compensation, other compensation expense and severance payments.
(3)
Primarily represents fees and expenses associated with corporate transactions as defined in the Credit Agreement.



12



 
Quarter Ended September 30, 2017
(In thousands)
Payment
Services -
Puerto Rico & Caribbean
 
Payment
Services -
Latin America
 
Merchant
Acquiring, net
 
Business
Solutions
 
Corporate and Other (1)
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
$
25,225

 
$
17,432

 
$
21,555

 
$
46,275

 
$
(7,762
)
 
$
102,725

Operating costs and expenses
16,219

 
21,396

 
19,444

 
31,620

 
5,238

 
93,917

Depreciation and amortization
2,259

 
2,608

 
618

 
4,024

 
7,097

 
16,606

Non-operating income (expenses)
567

 
1,732

 

 

 
(1,952
)
 
347

EBITDA
11,832

 
376

 
2,729

 
18,679

 
(7,855
)
 
25,761

Compensation and benefits (2)
205

 
139

 
216

 
781

 
1,007

 
2,348

Transaction, refinancing, exit activity and other fees (3)
3,160

 
3,221

 
6,464

 

 
757

 
13,602

Adjusted EBITDA
$
15,197

 
$
3,736

 
$
9,409

 
$
19,460

 
$
(6,091
)
 
$
41,711


 
(1)
Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations.  Intersegment eliminations predominantly reflect the $7.8 million processing fee from Payments Services - Puerto Rico and Caribbean to Merchant Acquiring and cost transfer fees from Corporate and Other to Payment Services Latin America for leveraged services and management fees.
(2)
Primarily represents share-based compensation, other compensation expense and severance payments.
(3)
Primarily represents fees and expenses associated with corporate transactions as defined in the Credit Agreement and an impairment charge and contractual fee accrual for a third party software solution that was determined to be commercially unviable.



 
Quarter Ended December 31, 2017
(In thousands)
Payment
Services -
Puerto Rico & Caribbean
 
Payment
Services -
Latin America
 
Merchant
Acquiring, net
 
Business
Solutions
 
Corporate and Other (1)
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
$
22,866

 
$
19,336

 
$
18,232

 
$
46,133

 
$
(6,939
)
 
$
99,628

Operating costs and expenses
17,759

 
19,520

 
11,028

 
28,776

 
5,856

 
82,939

Depreciation and amortization
2,317

 
2,553

 
441

 
3,653

 
7,097

 
16,061

Non-operating income (expenses)
553

 
1,539

 

 
10

 
(2,083
)
 
19

EBITDA
7,977

 
3,908

 
7,645

 
21,020

 
(7,781
)
 
32,769

Compensation and benefits (1)
159

 
371

 
141

 
394

 
2,139

 
3,204

Transaction, refinancing and other fees (2)

 

 

 

 
1,055

 
1,055

Adjusted EBITDA
$
8,136

 
$
4,279

 
$
7,786

 
$
21,414

 
$
(4,587
)
 
$
37,028

 
 

(1)
Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations.  Intersegment eliminations predominantly reflect the $6.9 million processing fee from Payments Services - Puerto Rico and Caribbean to Merchant Acquiring and cost transfer fees from Corporate and Other to Payment Services Latin America for leveraged services and management fees.
(2)
Primarily represents share-based compensation and severance payments.
(3)
Primarily represents fees and expenses associated with corporate transactions as defined in the Credit Agreement.



13



 
Year Ended December 31, 2017
(In thousands)
Payment
Services -
Puerto Rico & Caribbean
 
Payment
Services -
Latin America
 
Merchant
Acquiring, net
 
Business
Solutions
 
Corporate and Other (1)
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
$
101,687

 
$
62,702

 
$
85,778

 
$
189,077

 
$
(32,100
)
 
$
407,144

Operating costs and expenses
57,463

 
66,786

 
57,574

 
119,761

 
19,477

 
321,061

Depreciation and amortization
8,993

 
8,880

 
2,254

 
15,774

 
28,349

 
64,250

Non-operating income (expenses)
2,229

 
8,726

 
1

 
13

 
(7,708
)
 
3,261

EBITDA
55,446

 
13,522

 
30,459

 
85,103

 
(30,936
)
 
153,594

Compensation and benefits (2)
589

 
816

 
573

 
1,687

 
6,090

 
9,755

Transaction, refinancing, exit activity and other fees (3)
2,499

 
3,220

 
6,465

 

 
2,495

 
14,679

Adjusted EBITDA
$
58,534

 
$
17,558

 
$
37,497

 
$
86,790

 
$
(22,351
)
 
$
178,028


 
 

(1)
Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations.  Intersegment eliminations predominantly reflect the $32.1 million processing fee from Payments Services - Puerto Rico and Caribbean to Merchant Acquiring and cost transfer fees from Corporate and Other to Payment Services Latin America for leveraged services and management fees.
(2)
Primarily represents share-based compensation, other compensation expense and severance payments.
(3)
Primarily represents fees and expenses associated with corporate transactions as defined in the Credit Agreement and an impairment charge and contractual fee accrual for a third party software solution that was determined to be commercially unviable.

 
Quarter Ended March 31, 2016
(In thousands)
Payment
Services -
Puerto Rico & Caribbean

 
Payment Services - Latin America
 
Merchant
Acquiring, net
 
Business
Solutions
 
Corporate and Other (1)
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
$
24,828

 
$
10,171

 
$
22,890

 
$
45,154

 
$
(7,564
)
 
$
95,479

Operating costs and expenses
12,001

 
10,664

 
12,616

 
28,299

 
5,333

 
68,913

Depreciation and amortization
1,879

 
1,621

 
689

 
3,375

 
7,106

 
14,670

Non-operating income (expenses)
581

 
1,186

 

 
(3
)
 
(1,496
)
 
268

EBITDA
15,287

 
2,314

 
10,963

 
20,227

 
(7,287
)
 
41,504

Compensation and benefits (2)
369

 
400

 
238

 
1,103

 
1,571

 
3,681

Transaction, refinancing, exit activity and other fees (3)

 

 

 
110

 
750

 
860

Adjusted EBITDA
$
15,656

 
$
2,714

 
$
11,201

 
$
21,440

 
$
(4,966
)
 
$
46,045

 
(1)
Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations.  Intersegment eliminations predominantly reflect the $7.6 million processing fee from Payments Services - Puerto Rico and Caribbean to Merchant Acquiring and cost transfer fees from Corporate and Other to Payment Services Latin America for leveraged services and management fees.
(2)
Primarily represents share-based compensation, other compensation expense and severance payments.
(3)
Primarily represents fees and expenses associated with corporate transactions as defined in the Credit Agreement and consulting, audit and legal expenses incurred as part of the prior year restatement of financial results.




14



 
Quarter Ended June 30, 2016
(In thousands)
Payment
Services -
Puerto Rico & Caribbean

 
Payment Services - Latin America
 
Merchant
Acquiring, net
 
Business
Solutions
 
Corporate and Other (1)
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
$
25,182

 
$
11,608

 
$
23,277

 
$
45,737

 
$
(8,132
)
 
$
97,672

Operating costs and expenses
11,577

 
10,705

 
12,934

 
27,845

 
6,419

 
69,480

Depreciation and amortization
1,912

 
1,881

 
704

 
3,502

 
6,942

 
14,941

Non-operating income (expenses)
529

 
1,848

 

 
5

 
(1,493
)
 
889

EBITDA
16,046

 
4,632

 
11,047

 
21,399

 
(9,102
)
 
44,022

Compensation and benefits (2)
154

 
144

 
121

 
489

 
1,351

 
2,259

Transaction, refinancing and other fees (3)

 

 

 

 
2,558

 
2,558

Adjusted EBITDA
$
16,200

 
$
4,776

 
$
11,168

 
$
21,888

 
$
(5,193
)
 
$
48,839

 
(1)
Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations.  Intersegment eliminations predominantly reflect the $8.1 million processing fee from Payments Services - Puerto Rico and Caribbean to Merchant Acquiring and cost transfer fees from Corporate and Other to Payment Services Latin America for leveraged services and management fees.
(2)
Primarily represents share-based compensation, other compensation expense and severance payments.
(3)
Primarily represents fees and expenses associated with corporate transactions as defined in the Credit Agreement and consulting, audit and legal expenses incurred as part of the prior year restatement of financial results..


 
Quarter Ended September 30, 2016
(In thousands)
Payment
Processing -
Puerto Rico & Caribbean
 
Payment Services - Latin America
 
Merchant
Acquiring, net
 
Business
Solutions
 
Corporate and Other (1)
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
$
23,990

 
$
12,944

 
$
21,970

 
$
43,947

 
$
(8,384
)
 
$
94,467

Operating costs and expenses
11,497

 
11,951

 
13,504

 
25,786

 
4,722

 
67,460

Depreciation and amortization
1,779

 
1,889

 
685

 
3,420

 
7,116

 
14,889

Non-operating income (expenses)
565

 
1,396

 

 
13

 
(1,442
)
 
532

EBITDA
14,837

 
4,278

 
9,151

 
21,594

 
(7,432
)
 
42,428

Compensation and benefits (2)
57

 
74

 
58

 
223

 
1,591

 
2,003

Transaction, refinancing and other fees (3)

 

 

 

 
714

 
714

Adjusted EBITDA
$
14,894

 
$
4,352

 
$
9,209

 
$
21,817

 
$
(5,127
)
 
$
45,145

 
(1)
Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations.  Intersegment eliminations predominantly reflect the $8.4 million processing fee from Payments Services - Puerto Rico and Caribbean to Merchant Acquiring and cost transfer fees from Corporate and Other to Payment Services Latin America for leveraged services and management fees.
(2)
Primarily represents share-based compensation, other compensation expense and severance payments.
(3)
Primarily represents fees and expenses associated with corporate transactions as defined in the Credit Agreement and consulting, audit and legal expenses incurred as part of the prior year restatement of financial results.



15



 
Quarter Ended December 31, 2016
(In thousands)
Payment
Services -
Puerto Rico & Caribbean
 
Payment
Services -
Latin America
 
Merchant
Acquiring, net
 
Business
Solutions
 
Corporate and Other (1)
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
$
25,680

 
$
12,438

 
$
23,111

 
$
49,439

 
$
(8,779
)
 
$
101,889

Operating costs and expenses
14,053

 
11,986

 
13,717

 
31,152

 
5,601

 
76,509

Depreciation and amortization
2,027

 
1,894

 
594

 
3,486

 
7,066

 
15,067

Non-operating income (expenses)
563

 
1,155

 

 
10

 
(2,925
)
 
(1,197
)
EBITDA
14,217

 
3,501

 
9,988

 
21,783

 
(10,239
)
 
39,250

Compensation and benefits (2)
59

 
8

 
63

 
146

 
2,173

 
2,449

Transaction, refinancing and other fees (3)
2,062

 

 

 
2,167

 
1,647

 
5,876

Adjusted EBITDA
$
16,338

 
$
3,509

 
$
10,051

 
$
24,096

 
$
(6,419
)
 
$
47,575

 
 

(1)
Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations. Intersegment eliminations predominantly reflect the $8.8 million processing fee from Payments Services - Puerto Rico and Caribbean to Merchant Acquiring and cost transfer fees from Corporate and Other to Payment Services Latin America for leveraged services and management fees.
(2)
Primarily represents share-based compensation, other compensation expense and severance payments.
(3)
Primarily represents fees and expenses associated with corporate transactions as defined in the Credit Agreement and consulting, audit and legal expenses incurred as part of the prior year restatement of financial results, certain fees paid to resolve a software maintenance contract mater, fees paid in connection with the debt refinancing and a software impairment charge.
 
Year Ended December 31, 2016
(In thousands)
Payment
Services -
Puerto Rico & Caribbean
 
Payment
Services -
Latin America
 
Merchant
Acquiring, net
 
Business
Solutions
 
Corporate and Other (1)
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
$
99,680

 
$
47,162

 
$
91,248

 
$
184,276

 
$
(32,859
)
 
$
389,507

Operating costs and expenses
49,128

 
45,304

 
52,771

 
113,082