News

Evertec hosts first earnings call as a public company

May 9, 2013

Following a successful IPO on April 17, 2013, Puerto Rico-based Evertec — now also known by the ticker symbol "NYSE:EVTC" — this week duly announced results for the company's first quarter, which ended on March 31.

"We are pleased to report another quarter of strong financial results and to begin a new chapter as a publicly traded company," said Peter Harrington, Evertec president and CEO. "Our successful initial public offering and our continued strong financial results are a testament to the value of our best-in-class technology platform, diversified business model and leading franchise.

"We remain excited by the breadth of opportunities available to us to continue to build long-term shareholder value including our continuing ability to capitalize on the powerful secular trends in the high-growth Latin American payments market."

Q1 2013 results (compared with Q1 2012 results)

Revenues

• Total revenues were $87.3 million, an increase of 6 percent compared with $82.5 million.
• Merchant acquiring revenues were $17.5 million, a decrease of 1 percent compared with $17.7 million. The comparison reflects certain effects related to the Durbin Amendment. Normalizing for these effects, revenues grew 8 percent vs. the prior year.
• Payment processing revenues were $24.1 million, an increase of 5 percent compared with $22.9 million. Revenue growth was primarily driven by an increase in transactions processed and accounts on file.
• Business solutions revenues were $45.8 million, an increase of 9 percent compared with $41.9 million. Revenue growth was primarily driven by an increase in demand for our network and core banking products and services.

Adjusted EBITDA

Adjusted EBITDA was $41.8 million, an increase of 8 percent compared with $38.5 million. The increase was primarily driven by growth in revenues and significant operating leverage. Adjusted EBITDA margin improved by about 110 basis points to 47.8 percent from 46.7 percent.

Adjusted net income

Adjusted Net Income was $27.5 million (36 cents per diluted share), an increase of 37 percent compared with $20.1 million (26 cents per diluted share). The increase in adjusted net income was primarily driven by the same factors that affected adjusted EBITDA, and lower pro forma cash interest expense as a result of refinancing.

Recent developments

• On April 17, Evertec completed its initial public offering of 28.8 million shares of common stock at $20.00 per share. Net proceeds to the company of approximately $117.4 million from the offering were used to redeem $91.0 million aggregate principal amount of the 11 percent senior notes due 2018 issued by two of Evertec's subsidiaries and pay transaction related fees and expenses.
• Concurrent with its IPO, Evertec's subsidiary entered into $800 million of new senior secured credit facilities comprised of a $100 million revolving credit facility, $300 million term loan A, and $400 million term loan B. Net proceeds from the loans were used to refinance all outstanding indebtedness under its existing senior secured credit facilities and to redeem the portion of the 11 percent senior notes due 2018 that remained outstanding after the application of net primary IPO proceeds. Pro forma for the refinancing, Evertec will reduce its annual interest expense by approximately 55 percent or $29.6 million per annum.

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