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 report): August 6, 2014 (August 6, 2014)

 

 

EVERTEC, Inc.

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

 

 

 

Puerto Rico   001-35872   66-0783622

(State or other jurisdiction

of incorporation or organization)

   (Commission file number)  

(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)

(Registrant’s telephone number, including area code): (787) 759-9999

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))

 

 

 

Item 2.02 Results of Operations and Financial Condition.

On August 6, 2014, the Company issued a press release announcing its results for the quarter and six-months ended June 30, 2014. 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 7.01 Regulation FD Disclosure.

On August 6, 2014, the Company’s Board of Directors declared a regular quarterly cash dividend of $0.10 per share on the Company’s outstanding shares of common stock. The Board anticipates declaring this dividend in future quarters on a regular basis; however future declarations of dividends are subject to board of director approval and may be adjusted as business needs or market conditions change. The cash dividend of $0.10 per share will be paid on September 5, 2014 to stockholders of record as of the close of business on August 18, 2014.

A copy of the press release announcing the dividend discussed above is attached as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated by reference herein.

Note: The information contained in this Item 7.01 (including Exhibit 99.2) 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: second quarter earnings issued by EVERTEC, Inc. dated August 6, 2014.
99.2    Press Release re: quarterly dividend issued by EVERTEC, Inc. dated August 6, 2014.

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: August 6, 2014   By:  

/s/ Juan J. Román

  Name:   Juan J. Román
  Title:   Chief Financial Officer

EXHIBIT INDEX

 

Number

   

Exhibit

99.1    Press Release re: second quarter earnings issued by EVERTEC, Inc. dated August 6, 2014.
99.2    Press Release re: quarterly dividend issued by EVERTEC, Inc. dated August 6, 2014.
EX-99.1

Exhibit 99.1

 

LOGO

EVERTEC REPORTS SECOND-QUARTER 2014 RESULTS

SAN JUAN, PUERTO RICO – August 6, 2014 – EVERTEC, Inc. (NYSE: EVTC) (“EVERTEC” or the “Company”) today announced results for the second quarter ended June 30, 2014.

Second-Quarter 2014 Highlights

 

  •   Total revenue increased to $91.1 million; Merchant Acquiring and Payment Processing segments revenue each increased 9%.

 

  •   Adjusted EBITDA increased 5% to $45.5 million.

 

  •   Adjusted Net Income increased 11% to $32.2 million and Adjusted Net Income per diluted share increased 17% to $0.41.

Peter Harrington, EVERTEC’s President and Chief Executive Officer, commented on the results: “We delivered solid second quarter results highlighted by the combination of 9% growth in our payments businesses, 50% adjusted EBITDA margin, and 17% EPS growth. Looking forward, we will continue to capitalize on the strong secular growth in the Latin American payments markets by executing our strategy and winning market share.”

Second-Quarter 2014 Results

Revenue. Total revenue for the quarter ended June 30, 2014 was $91.1 million, an increase of 2% compared with $89.2 million in the prior year.

Merchant Acquiring net revenue was $19.8 million, an increase of 9% compared with $18.2 million in the prior year. Revenue growth in the quarter was driven mainly by an increase in transaction volumes.

Payment Processing revenue was $26.4 million, an increase of 9% compared with $24.3 million in the prior year. Revenue growth in the quarter was driven mainly by new customer additions and an increase in accounts on file within the card products business, an increase in ATH and POS network and processing transactions, and fees generated from an annual Department of Education program the Company processes in Puerto Rico.

Business Solutions revenue was $44.9 million, a decrease of 4% compared with $46.7 million in the prior year. The decrease in revenue was due almost entirely to a $2.9 million year-over-year decline in hardware and software sales in the quarter, partially offset by increased revenue from other products and services including network solutions and IT consulting.

Adjusted EBITDA. For the quarter ended June 30, 2014, Adjusted EBITDA was $45.5 million, an increase of 5% compared with $43.4 million in the prior year. The increase in Adjusted EBITDA was due mostly to revenue growth and operating leverage in our Merchant Acquiring and Payment Processing businesses. Adjusted EBITDA margin was 50.0%, an increase of 130 basis points compared with 48.7% in the prior year.

Adjusted Net Income. For the quarter ended June 30, 2014, Adjusted Net Income was $32.2 million, an increase of 11% compared with $28.9 million in the prior year. The increase in Adjusted Net Income was driven mainly by Adjusted EBITDA growth, lower levels of operating depreciation and amortization expense, and lower cash taxes. Adjusted Net Income per diluted share increased 17% to $0.41 compared with $0.35 in the prior year.

Earnings Conference Call and Audio Webcast

The Company has scheduled a conference call to discuss its second-quarter 2014 financial results today at 5:00 PM ET. Hosting the call will be Peter Harrington, President and Chief Executive Officer, and Juan José Román, Executive Vice President and Chief Financial Officer. The conference call can be accessed live over the phone by dialing (877) 718-5101 or (719) 325-4778 for international callers. A replay will be available at 8:00 PM ET and can be accessed by dialing (877) 870-5176 or (858) 384-5517 for international callers; the pin number is 6668719. The replay will be available until Wednesday, August 13, 2014. 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.

About EVERTEC

EVERTEC, Inc. (NYSE: EVTC) is the leading full-service transaction processing business in Latin America, providing a broad range of merchant acquiring, payment processing and business solutions services. The largest merchant acquirer in the Caribbean and Central America—and one of the largest in Latin America—EVERTEC serves 19 countries in the region from its base in Puerto Rico. The Company manages a system of electronic payment networks that process more than 2.1 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. The Company serves a diversified customer base of leading financial institutions, merchants, corporations and government agencies with “mission-critical” technology solutions. For more information, visit http://www.evertecinc.com.

About Non-GAAP Financial Measures

This earnings release presents EBITDA, Adjusted EBITDA, Adjusted Net Income, and Adjusted Net Income per share information. These supplemental measures of the Company’s performance 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 cash flows or as measures of the Company’s liquidity. We present EBITDA and Adjusted EBITDA because we consider them important supplemental measures of the Company’s performance and believe they are frequently used by securities analysts, investors and other interested parties to evaluate companies in our industry. In addition, the Company’s presentation of Adjusted EBITDA is consistent with the equivalent measurements contained in the Credit Agreement in testing EVERTEC Group’s compliance with covenants therein such as the senior secured leverage ratio. We use Adjusted Net Income to measure the Company’s overall profitability because it better reflects the Company’s cash flow

generation by capturing the actual cash taxes paid rather than the Company’s tax expense as calculated under GAAP, and excludes the impact of the non-cash amortization and depreciation resulting from our 2010 merger involving an affiliate of Apollo Global management, LLC (the “Merger”). For more information regarding EBITDA, Adjusted EBITDA, Adjusted Net Income, and Adjusted Net Income per share, including a quantitative reconciliation of EBITDA, Adjusted EBITDA and Adjusted Net Income to the most directly comparable GAAP financial performance measure, which is net income, see Schedule 4: Reconciliation of GAAP to Non-GAAP Operating Results in this earnings release.

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 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; the Company’s dependence on credit card associations; regulatory limitations on our activities 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, 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; 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.

Contacts

Investor Contact

Luis M. Cabrera

Senior Vice President

Head of Investor Relations

(787) 773-5302

IR@evertecinc.com

Media Contact

Wanda Betancourt, APR

Senior Vice President

Communications and Marketing

(787) 773-5302

NewsMedia@evertecinc.com

EVERTEC, Inc.

Schedule 1: Unaudited Consolidated Statements of Income and Comprehensive Income

 

     Quarters ended June 30,     Six months ended June 30,  
(Dollar amounts in thousands, except per share data)    2014     2013     2014     2013  

Revenues

         

Merchant acquiring, net

    $ 19,827      $ 18,165      $ 39,118      $ 35,624   

Payment processing

      26,406        24,285        51,408        48,397   

Business solutions

      44,888        46,725        87,805        92,493   
  

 

 

    

 

 

    

 

 

    

 

 

  

Total revenues

      91,121        89,175        178,331        176,514   
  

 

 

    

 

 

    

 

 

    

 

 

  

Operating costs and expenses

         

Cost of revenues, exclusive of depreciation and amortization shown below

      38,839        41,771        76,484        82,273   

Selling, general and administrative expenses

      10,463        12,624        18,525        21,487   

Depreciation and amortization

      16,390        17,842        33,004        35,417   
  

 

 

    

 

 

    

 

 

    

 

 

  

Total operating costs and expenses

      65,692        72,237        128,013        139,177   
  

 

 

    

 

 

    

 

 

    

 

 

  

Income from operations

      25,429        16,938        50,318        37,337   
  

 

 

    

 

 

    

 

 

    

 

 

  

Non-operating (expenses) income

         

Interest income

      79        49        154        93   

Interest expense

      (6,501 )      (9,747 )      (13,410 )      (25,011 ) 

Earnings of equity method investment

      343        348        664        625   

Other income (expenses):

         

Loss on extinguishment of debt

      —          (58,464 )      —          (58,464 ) 

Termination of consulting agreement

      —          (16,718 )      —          (16,718 ) 

Other income (expenses)

      385        (2,353 )      2,376        (2,286 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Total other income (expenses)

      385        (77,535 )      2,376        (77,468 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Total non-operating expenses

      (5,694 )      (86,885 )      (10,216 )      (101,761 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Income (loss) before income taxes

      19,735        (69,947 )      40,102        (64,424 ) 

Income tax expense (benefit)

      1,962        (5,012 )      4,123        (4,961 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Net income (loss)

      17,773        (64,935 )      35,979        (59,463 ) 

Other comprehensive income (loss), net of tax

         

Foreign currency translation adjustments

      794        (394 )      (6,951 )      1,960   
  

 

 

    

 

 

    

 

 

    

 

 

  

Total comprehensive income (loss)

    $ 18,567      $ (65,329 )    $ 29,028      $ (57,503 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Net income (loss) per common share: (1)

         

Basic

    $ 0.23      $ (0.82 )    $ 0.46      $ (0.78 ) 

Diluted

    $ 0.22      $ (0.82 )    $ 0.45      $ (0.78 ) 

Shares used in computing net income (loss) per common share: (1)

         

Basic

      78,410,554        78,928,780        78,393,042        75,849,551   

Diluted

      79,199,964        78,928,780        79,204,642        75,849,551   

 

(1) Share count was adjusted for the 2:1 stock split that occurred on April 1, 2013.

EVERTEC, Inc.

Schedule 2: Unaudited Consolidated Balance Sheets

 

(Dollar amounts in thousands, except per share data)    June 30,
2014		     December 31,
2013		  

Assets

     

Current Assets:

     

Cash

    $ 27,831      $ 22,485   

Restricted cash

      5,195        5,433   

Accounts receivable, net

      71,479        68,434   

Deferred tax asset

      2,812        2,537   

Prepaid expenses and other assets

      21,846        17,524   
  

 

 

    

 

 

  

Total current assets

      129,163        116,413   

Investment in equity investee

      11,287        10,639   

Property and equipment, net

      29,371        33,240   

Goodwill

      369,203        373,119   

Other intangible assets, net

      347,114        367,780   

Other long-term assets

      13,745        18,162   
  

 

 

    

 

 

  

Total assets

      899,883        919,353   
  

 

 

    

 

 

  

Liabilities and stockholders’ equity

     

Current Liabilities:

     

Accrued liabilities

      29,159        26,571   

Accounts payable

      14,256        18,630   

Unearned income

      8,498        5,595   

Income tax payable

      1,801        259   

Current portion of long-term debt

      19,000        19,000   

Short-term borrowings

      23,000        51,200   

Deferred tax liability, net

      461        543   
  

 

 

    

 

 

  

Total current liabilities

      96,175        121,798   

Long-term debt

      656,626        665,680   

Long-term deferred tax liability, net

      20,702        20,212   

Other long-term liabilities

      251        333   
  

 

 

    

 

 

  

Total liabilities

      773,754        808,023   
  

 

 

    

 

 

  

Commitments and contingencies

     

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; 78,631,847 shares issued and outstanding at June 30, 2014 (December 31, 2013- 78,286,465)

      786        783   

Additional paid-in capital

      82,167        80,718   

Accumulated earnings

      49,701        29,403   

Accumulated other comprehensive (loss) income, net of tax

      (6,525 )      426   
  

 

 

    

 

 

  

Total stockholders’ equity

      126,129        111,330   
  

 

 

    

 

 

  

Total liabilities and stockholders’ equity

      899,883        919,353   
  

 

 

    

 

 

  

EVERTEC, Inc.

Schedule 3: Unaudited Consolidated Statements of Cash Flows

 

     Six months ended June 30,  
     2014     2013  

Cash flows from operating activities

     

Net income (loss)

    $ 35,979      $ (59,463 ) 

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

     

Depreciation and amortization

      33,004        35,417   

Amortization of debt issue costs and premium and accretion of discount

      1,538        2,369   

Write-off of debt issue costs, premium and discount accounted as loss on extinguishment

      —          16,555   

Provision for doubtful accounts and sundry losses

      1,058        826   

Deferred tax benefit

      (430 )      (6,251 ) 

Share-based compensation

      665        5,483   

Unrealized loss (gain) of indemnification assets

      173        (19 ) 

Loss on disposition of property and equipment and other intangibles

      64        32   

Earnings of equity method investment

      (664 )      (625 ) 

Dividend received from equity method investment

      326        500   

(Increase) decrease in assets:

     

Accounts receivable, net

      (2,045 )      492   

Prepaid expenses and other assets

      (4,267 )      (5,417 ) 

Other long-term assets

      1,811        (323 ) 

(Decrease) increase in liabilities:

     

Accounts payable and accrued liabilities

      (4,120 )      (3,347 ) 

Income tax payable

      1,542        (1,867 ) 

Unearned income

      2,903        1,736   
  

 

 

    

 

 

  

Total adjustments

      31,558        45,561   
  

 

 

    

 

 

  

Net cash provided by (used in) operating activities

      67,537        (13,902 ) 
  

 

 

    

 

 

  

Cash flow from investing activities

     

Net decrease (increase) in restricted cash

      238        (44 ) 

Intangible assets acquired

      (5,841 )      (7,927 ) 

Property and equipment acquired

      (3,895 )      (4,384 ) 

Proceeds from sales of property and equipment

      3        11   
  

 

 

    

 

 

  

Net cash used in investing activities

      (9,495 )      (12,344 ) 
  

 

 

    

 

 

  

Cash flows from financing activities

     

Proceeds from initial public offering, net of offering costs of $12,567

      —          112,432   

Proceeds from issuance of long-term debt

      —          700,000   

Statutory minimum withholding taxes paid on cashless exercises of stock options

      (770 )      (16,688 ) 

Debt issuance costs

      —          (12,077 ) 

Net decrease in short-term borrowing

      (27,000 )      (14,000 ) 

Repayment of short-term borrowing for purchase of equipment

      (1,200 )      (4,332 ) 

Dividends paid

      (15,680 )      —     

Tax windfall benefits on exercises of stock options

      1,482        470   

Issuance of common stock, net

      54        28   

Repayment of other financing agreement

      (82 )      (112 ) 

Repayment of long-term debt

      (9,500 )      (745,522 ) 
  

 

 

    

 

 

  

Net cash (used in) provided by financing activities

      (52,696 )      20,199   
  

 

 

    

 

 

  

Net increase (decrease) in cash

      5,346        (6,047 ) 

Cash at beginning of the period

      22,485        25,634   
  

 

 

    

 

 

  

Cash at end of the period

    $ 27,831      $ 19,587   
  

 

 

    

 

 

  

EVERTEC, Inc.

Schedule 4: Reconciliation of GAAP to Non-GAAP Operating Results

 

     Quarters ended June 30,     Six months ended June 30,  
(Dollar amounts in thousands)    2014     2013     2014     2013  

Net income (loss)

    $ 17,773      $ (64,935 )    $ 35,979      $ (59,463 ) 

Income tax expense (benefit)

      1,962        (5,012 )      4,123        (4,961 ) 

Interest expense, net

      6,422        9,698        13,256        24,918   

Depreciation and amortization

      16,390        17,842        33,004        35,417   
  

 

 

    

 

 

    

 

 

    

 

 

  

EBITDA

      42,547        (42,407 )      86,362        (4,089 ) 

Software maintenance reimbursement and other costs(1)

      563        489        1,109        1,091   

Equity income (2)

      (17 )      153        (338 )      (124 ) 

Compensation and benefits (3)

      437        6,218        925        6,549   

Pro forma cost reduction adjustments(4)

      —          75        —          150   

Transaction and other non-recurring fees (5)

      1,999        59,645        2,516        61,515   

Management fees (6)

      —          19,261        —          20,109   

Purchase accounting (7)

      (6 )      (3 )      173        (19 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted EBITDA

      45,523        43,431        90,747        85,182   

Pro forma EBITDA adjustments (8)

      —          (75 )      —          (150 ) 

Operating depreciation and amortization (9)

      (7,281 )      (8,079 )      (14,764 )      (15,894 ) 

Cash interest expense, net (10)

      (5,655 )      (5,434 )      (11,410 )      (11,110 ) 

Cash income taxes (11)

      (402 )      (969 )      (402 )      (1,666 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted Net Income

    $ 32,185      $ 28,874      $ 64,171      $ 56,362   
  

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted Net income per common share: (12)

         

Basic

    $ 0.41      $ 0.37      $ 0.82      $ 0.74   

Diluted

    $ 0.41      $ 0.35      $ 0.81      $ 0.70   

Shares used in computing Adjusted Net Income per common share: (12)

         

Basic

      78,410,554        78,928,780        78,393,042        75,849,551   

Diluted

      79,199,964        82,747,507        79,204,642        80,076,665   

 

(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 CONTADO, net of cash dividends received.
(3) Predominantly represents non-cash equity based compensation expense.
(4) Represents the pro forma effect of the expected net savings mainly in compensation and benefits from the reduction of certain employees. This pro forma amount was calculated using the net amount of actual expenses for the twelve-month period prior to their separation.
(5) Represents fees and expenses associated with non-recurring corporate transactions, including $1.1 million of fees associated with the withdrawn senior secured notes offering in the second quarter of 2014 and refinancing and debt extinguishment of $58.6 million in the second quarter of 2013.
(6) Represents consulting fees paid to Apollo and Popular. In connection with our initial public offering during the second quarter of 2013, our consulting agreements with Apollo and Popular were terminated.
(7) Represents the elimination of the effects of purchase accounting in connection with certain customer service and software-related arrangements whereby EVERTEC receives reimbursements from Popular.
(8) Represents the elimination of the pro forma benefits described in note 4 above.
(9) Represents operating depreciation and amortization expense, which excludes amounts generated as a result of the Merger.
(10) For the three and six months ended June 30, 2013, represents pro forma cash interest expense assuming EVERTEC’s April 2013 refinancing occurred on January 1, 2013, less interest income, as they appear on our consolidated statements of income (loss) and comprehensive income (loss), adjusted to exclude non-cash amortization of the debt issue costs, premium and accretion of discount. For the three and six months ended June 30, 2014, represents interest expense, less interest income, as they appear on our consolidated statements of income (loss) and comprehensive income (loss), adjusted to exclude non-cash amortization of the debt issue costs, premium and accretion of discount.
(11) Represents cash taxes paid for each period presented.
(12) Share count was adjusted for the 2:1 stock split that occurred on April 1, 2013.

Schedule 5: Unaudited Income from Operations by Segment

 

     Quarters ended June 30,     Six months ended June 30,  
(Dollar amounts in thousands)    2014     2013     2014     2013  

Segment income from operations

         

Merchant acquiring, net

    $ 8,777      $ 8,161      $ 17,181      $ 17,395   

Payment processing

      15,314        11,720        30,031        24,480   

Business solutions

      12,113        8,784        23,537        19,318   
  

 

 

    

 

 

    

 

 

    

 

 

  

Total segment income from operations

      36,204        28,665        70,749        61,193   

Merger related depreciation and amortization and other unallocated
expenses (1)

      (10,775 )      (11,727 )      (20,431 )      (23,856 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Income from operations

    $ 25,429      $ 16,938      $ 50,318      $ 37,337   
  

 

 

    

 

 

    

 

 

    

 

 

  

 

(1) Predominantly represents non-operating depreciation and amortization expenses generated as a result of the Merger and certain non-recurring fees and expenses.
EX-99.2

Exhibit 99.2

 

LOGO

EVERTEC DECLARES QUARTERLY DIVIDEND ON COMMON STOCK

SAN JUAN, PUERTO RICO – August 6, 2014 – EVERTEC, Inc. (NYSE: EVTC) (“EVERTEC” or the “Company”) today announced that its Board of Directors has declared a regular quarterly dividend of $0.10 per share to be paid on September 5, 2014 to stockholders of record as of August 18, 2014.

EVERTEC’s Board of Directors anticipates declaring this dividend in future quarters on a regular basis; however, future declarations are subject to Board of Director approval and may be adjusted as business needs or market conditions change.

About EVERTEC

EVERTEC, Inc. (NYSE: EVTC) is the leading full-service transaction processing business in Latin America, providing a broad range of merchant acquiring, payment processing and business solutions services. The largest merchant acquirer in the Caribbean and Central America—and one of the largest in Latin America—EVERTEC serves 19 countries in the region from its base in Puerto Rico. The Company manages a system of electronic payment networks that process more than 2.1 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. The Company 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.

Contact

Luis M. Cabrera

Senior Vice President

Head of Investor Relations

(787) 773-5302

IR@evertecinc.com