Attached files
| file | filename |
|---|---|
| 8-K - 8-K - EVERTEC, Inc. | d623652d8k.htm |
| EX-99.2 - EX-99.2 - EVERTEC, Inc. | d623652dex992.htm |
| EX-99.3 - EX-99.3 - EVERTEC, Inc. | d623652dex993.htm |
| EX-99.1 - EX-99.1 - EVERTEC, Inc. | d623652dex991.htm |
 Third Quarter 2013
Supplemental Materials
November 6, 2013
Exhibit 99.4 |
 Disclaimer
2
Forward Looking Statements:
Certain
statements
in
this
presentation
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 which 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: our reliance on our relationship with Popular for a significant
portion of our revenues; our ability to renew our client contracts on terms
favorable to us; our dependence on our processing systems, technology
infrastructure, security systems and fraudulent-payment-detection systems;
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;
our
dependence
on
credit
card associations; changes in the regulatory environment and changes in
international, legal, political, administrative or economic conditions; the
geographical concentration of our business in Puerto Rico; operating an
international business in multiple regions with potential political and economic
instability; 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; our high level of
indebtedness and restrictions contained in our debt agreements; and our ability to
generate sufficient cash to service our 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 Company’s Registration Statement on Form S-1 (File No.
333-190883) and 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 us and our 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.
Use of Non-GAAP Measures:
This presentation presents EBITDA, Adjusted EBITDA and Adjusted Net Income
information. These are supplemental measures of our performance that 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
our
financial
performance
under
GAAP
and
should
not
be
considered
as
alternatives
to
total
revenues,
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 our liquidity. We present EBITDA and Adjusted EBITDA because we
consider them important supplemental measures of our performance and believe
they are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our
industry. In addition, our presentation of Adjusted EBITDA is consistent with the
equivalent measurements that are 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
our overall profitability because it better reflects our cash flow generation by
capturing the actual cash taxes paid rather than our tax expense as
calculated under GAAP and excludes the impact of the non-cash amortization and
depreciation that was created as a result of the Merger. For more
information regarding EBITDA, Adjusted EBITDA and Adjusted Net Income, 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 slide titled “Non-GAAP
Reconciliation Summary”
on page 4 of this presentation. |
 Update
on Puerto Rico Economy Source: Government Development Bank; Bureau of Labor
Statistics. Note:
Data
as
of
the
most
recent
period
available.
Unemployment
rate
seasonally
adjusted.
3
Real GNP Growth
Retail Sales Growth
Stabilized,
and
better
today
than
over
last
5
years
Steady
growth
of
2-3%
over
last
2+
years
(1.2)%
(2.9)%
(3.8)%
(3.6)%
(1.6)%
0.1%
2007
2008
2009
2010
2011
2012
0.0%
1.0%
(2.0)%
(0.2)%
2.7%
2.2%
2.4%
2007
2008
2009
2010
2011
2012
Latest
Avail. Data
(May-13)
Long-term
PR
average
of
13%
vs.
6%
in
US
Consistent strong performance in weak economic environment driven
by secular payments growth and execution of growth strategy
Measurable improvement since
2010 |
 4
Non-GAAP Reconciliation Summary
($ in
thousands)
Nine months ended September 30,
2013
2012
Net income (loss)
$ (44,660)
$ 3,777
Income tax (benefit) expense
(3,603)
1,501
Interest
expense,
net
31,267
38,977
Depreciation and
amortization
53,074
53,517
EBITDA
$ 36,078
$ 97,772
Software
maintenance
reimbursement
and
other
costs
(1)
1,679
1,922
Equity
income
(2)
(322)
625
Compensation
and
benefits
(3)
6,873
3,480
Pro
forma
cost
reduction
adjustments
(4)
175
—
Transaction
and
other
non-recurring
fees
(5)
64,030
12,071
Management
fees
(6)
20,109
2,237
Purchase
accounting
(7)
(21)
(652)
Adjusted EBITDA
$ 128,601
$ 117,455
Pro
forma
EBITDA
adjustments
(8)
(175)
—
Operating
depreciation
and
amortization
(9)
(23,790)
(23,386)
Cash
interest
expense,
net
(10)
(16,692)
(35,229)
Cash
income
taxes
(11)
(2,039)
(2,129)
Adjusted Net Income
$ 85,905
$ 56,711
1.
Primarily 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.
Primarily represents non-cash equity based compensation expense.
4.
Represents the pro forma effect of the expected net savings primarily in compensation and benefits from
the reduction of certain employees, temporary employees and professional services. This pro forma
amount was calculated using the net amount of actual expenses for temporary employees and professional
services for the twelve month period prior to their replacement, separation and/or elimination net of the
incremental cost of the new full-time employees that were hired.
5.
Represents fees and expenses associated with non-recurring corporate transactions, including costs
associated with the 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 where 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 nine months ended September 30, 2013 represents pro forma cash interest expense assuming
EVERTEC’s April 2013 refinancing occurred on January 1, 2013. For the twelve months period,
includes the pro forma cash interest expense mentioned above for the 2013 period and for the 2012
period, as well as for the three months ended September 30, 2013, 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. |