Net 1 UEPS Technologies, Inc. ('Net1' or the 'Company') Announces Fourth Quarter and Annual Results for Fiscal 2005
13 September 2005 - 4:42PM
Business Wire
Net 1 UEPS Technologies Inc. (NASDAQ:UEPS) - Net1 today announced
results for the fourth quarter and fiscal year ended June 30, 2005.
For the fourth quarter, revenue grew by 5% to $41.4 million
compared to $39.6 million in the prior year and for fiscal 2005,
revenue grew by 35% to $176.3 million compared to $131.1 in the
prior year. Fourth quarter and annual net income for 2005 was $10.1
million and $44.6 million, respectively, or $0.185 and $0.814 per
common share and linked unit, compared to a net loss of $5.3
million and net income of $13.3 million, respectively, or ($0.139)
and $0.396 per common share, for the fourth quarter and fiscal
2004. This represents a 235% increase in net income in fiscal 2005.
Net1's net income for fiscal 2005 and the fourth quarter of 2005
include costs of $1.8 million related to the public offering and
Nasdaq listing. Net1's net income for fiscal 2004 and the fourth
quarter of 2004 include taxes and charges of $15.1 million and
$11.8 million, respectively, related to Net1's reorganization
completed on June 7, 2004. Fourth Quarter Highlights The Company
reported: - The continuation of its merchant acquiring project
during the fourth quarter, with an additional 829 Point of Service
("POS") terminals installed during the quarter. Net1 had a total of
3,235 POS terminals at 1,880 locations as of June 30, 2005. The
total transaction value processed through these terminals during
the fourth quarter amounted to $87.6 million, compared to $45.5
million processed during the third quarter of fiscal 2005, a 93%
increase; - 10.0 million payments were effected through
transaction-based activities for the quarter, a 10% increase over
the prior year fourth quarter; - 3.4 million smart card based
accounts were active at June 30, 2005, compared to 3.1 million
active accounts as of June 30, 2004, a 10% increase; - The
commencement of an underwritten public offering of our common stock
by selling shareholders. The offering was completed and we listed
on the Nasdaq National Market in August 2005. Use of Non-GAAP
Financial Information Management evaluates earnings per share on
the basis of all outstanding shares, as opposed to weighted shares,
as of June 30. The Company believes that this measure is useful
because this information will assist investors in comparing the
Company's financial performance between the periods presented. The
result of applying this Non-GAAP measure of 55.3 million shares
when calculating earnings per share for the fourth quarter and
fiscal year ended June 30, 2005, is earnings per share of $0.183
and $0.806, respectively. The result of applying this Non-GAAP
measure of 55.3 million shares when calculating (loss) earnings per
share for the fourth quarter and year ended June 30, 2004 is a loss
per share of $0.096 and earnings per share of $0.240, respectively.
Management also applies a constant exchange rate of 6.6840 South
African rand ("ZAR") to one US dollar for the fourth quarter and
year to date of fiscal 2004 and fiscal 2005. These financial
measures are not in accordance with GAAP. The Company believes that
these measures are useful because this information will assist
investors in comparing the Company's financial performance on a
consistent basis. The result of applying these Non-GAAP measures is
revenue of $39.8 million and $163.8 million, respectively, for the
fourth quarter and year ended June 30, 2005, compared to $39.2
million and $135.7 million, respectively, in the prior year fourth
quarter and year to June. For the fourth quarter and year ended
June 30, 2005, net income on this basis was $9.7 million and $41.4
million, respectively, compared to a net loss of $5.2 million and
net income of $13.8 million, respectively, for the fourth quarter
and year ended June 30, 2004. The following tables provide a
comparison and indicate the reconciliation between the GAAP and
non-GAAP financial information as presented above: For the fourth
quarter of fiscal 2005 and 2004 -0- *T
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Fourth Fourth Fourth Fourth Quarter Quarter Quarter Quarter 2005:
2004: 2005: GAAP 2004: GAAP non-GAAP non-GAAP
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ZAR : US $ exchange rate used for income and expense items
ZAR6.42:US$1 ZAR6.61:US$1 ZAR6.68:US$1 ZAR6.68:US$1
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Revenue $ 41.4 million $ 39.6 million $ 39.8 million $ 39.2 million
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Revenue growth 5% 2%
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Net income (loss) $ 10.1 million $(5.3) million $ 9.7 million
$(5.2) million
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Net income growth n/a n/a
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Number of shares used to calculate earnings (loss) per share 54.8
million 37.9 million 55.3 million 55.3 million
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Earnings (loss) per share $ 0.185 $ (0.139)$ 0.176 $ (0.095)
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Earnings per share growth n/a n/a
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For the year ended June 30, 2005 and 2004
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Year to date Year to date Year to date Year to date 2005: non-
2004: non- 2005: GAAP 2004: GAAP GAAP GAAP
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ZAR : US $ exchange rate used for income and expense items
ZAR6.21:US$1 ZAR6.92:US$1 ZAR6.68:US$1 ZAR6.68:US$1
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Revenue $176.3 million $131.1 million $163.8 million $135.7 million
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Revenue growth 35% 21%
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Net income $ 44.6 million $ 13.3 million $ 41.4 million $ 13.8
million
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Net income growth 235% 201%
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Number of shares used to calculate earnings per share 54.7 million
33.6 million 55.3 million 55.3 million
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Earnings per share $ 0.814 $ 0.396 $ 0.750 $ 0.249
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Earnings per share growth 106% 201%
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*T Comments and Outlook Serge Belamant, Chairman and CEO, stated:
"We are very proud of our achievements during fiscal 2005 - in
twelve months, we have managed to successfully list Net1 on the
NASDAQ, become compliant with Sarbanes-Oxley requirements with no
material weaknesses reported and meet all the requirements of being
an accelerated filer, whilst growing our bottom line on a
normalized basis by 27%. The penetration and momentum of our
merchant acquiring initiative has once again reaffirmed that our
business model is welcomed by all our stakeholders. Now that we are
a true global company as reflected by our structure, NASDAQ listed
status, analyst coverage and our expanded stockholder base of
international investors, we can focus on identifying new
territories in Africa and other continents where our business
models, backed by our unique technology, will provide us with the
growth we require to become the payment system of choice in
developing economies. Fiscal 2006 will be spent structuring and
deploying our international expansion program by targeting certain
acquisitions and partnerships, as well as through the creation of
joint ventures in which we will retain a substantial stake. We will
also continue to grow our South African operations through the
launch of our Cell-C initiative, our HIV/AIDS drug distribution
system, our wage payment system and our sustained efforts to assist
the South African government to provide the most dignified service
delivery to all South African social welfare beneficiaries. The
year ahead augurs well as we forge ahead to optimize returns for
our investors whist uplifting the lives of all our clients. For
fiscal 2006, we are providing annual diluted earnings per share
guidance of $0.93 to $0.98 for growth of 17% to 23% compared to
diluted earnings per share of $0.796 in fiscal 2005, assuming an
exchange rate of ZAR6.5:US$1." Conference call Net1 will host a
conference call to review these results at 10:30 a.m. EST on
Tuesday, September 13, 2005. The conference may be accessed by
dialling 1-800-860-2442 (U.S. only), 1-866-519-5086 (Canada only),
0-800-917-7042 (U.K. only) or 0-800-200-648 (South Africa only)
five minutes prior to the start of the call. The pass code is
"Net1". The call will also be webcast on the Net1 homepage,
www.net1ueps.com. A replay of the call may be accessed through the
Net1 website through September 27, 2005. About Net1
(www.net1ueps.com) Net1 provides its universal electronic payment
system, or UEPS, as an alternative payment system for the unbanked
and under-banked populations of developing economies. The Company
believes that it is the first company worldwide to implement a
system that can enable the estimated four billion people who
generally have limited or no access to a bank account to enter
affordably into electronic transactions with each other, government
agencies, employers, merchants and other financial service
providers. To accomplish this, the Company has developed and
deployed the UEPS. This system uses secure smart cards that operate
in real-time but offline, unlike traditional payment systems
offered by major banking institutions that require immediate access
through a communications network to a centralized computer. This
offline capability means that users of Net1's system can enter into
transactions at any time with other card holders in even the most
remote areas so long as a portable offline smart card reader is
available. In addition to payments and purchases, Net1's system can
be used for banking, health care management, international money
transfers, voting and identification. This announcement may contain
forward-looking statements pursuant to the "safe-harbor" provisions
of the Private Securities Litigation Reform Act of 1995. These
forward looking statements involve known and unknown risks,
uncertainties and other factors that may cause the Company's actual
results, levels of activity, performance or achievements to be
materially different from any future results, levels of activity,
performance or achievements expressed, implied or inferred by these
forward-looking statements, such as product demand, market and
customer acceptance, the effect of economic conditions,
competition, pricing, development difficulties, foreign currency
risks, costs of capital, the ability to consummate and integrate
acquisitions, and other risks detailed in the Company's SEC
filings. The Company undertakes no obligation to revise any of
these statements to reflect future circumstances or the occurrence
of unanticipated events. -0- *T NET 1 U.E.P.S. TECHNOLOGIES INC.
4th Floor, North Wing, President Place, Cnr. Jan Smuts Avenue and
Bolton Road Rosebank, Johannesburg, South Africa Tel:
011-27-11-343-2000 Fax: 011-27-11-880-7080 *T Net 1 UEPS
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