Evertec reports $27.5M in 1Q13 adjusted net income
Transaction processing firm Evertec Inc. announced $27.5 million in adjusted net income, or a 37 percent year-over-year increase, for the first quarter ended March 31, during which it completed two key transactions: an initial public offering and debt refinancing in April.
“We are pleased to report another quarter of strong financial results and to begin a new chapter as a publicly traded company. 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,” said Everted CEO Peter Harrington.
The increase in adjusted net income, which compared to the $20.1 million for the same quarter last year, was primarily driven by the same factors impacting adjusted EBITDA and lower pro forma cash interest expense as a result of the refinancing.
On April 17, 2013, Evertec successfully completed its IPO of 28.8 million shares of common stock at $20 per share. The offering included 6.3 million primary shares sold by Evertec and 22.5 million secondary shares sold by certain company stockholders. Net proceeds of about $117.4 million were used to redeem $91 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, the company said.
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 of the company’s 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. Evertec will reduce its annual interest expense by approximately 55 percent, or $29.6 million annually.
Meanwhile, total revenues for the quarter ended March 31 were $87.3 million, representing an increase of 6 percent as compared to $82.5 million in the prior year.
“These qualities have allowed us to provide our customers with differentiated, value-add services, become the leading payments processor and related technology provider in the Latin American region and to continue to penetrate new markets and geographies,” said Harrington. “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.”
Meanwhile, the results show that Evertec’s merchant acquiring revenues for the quarter ended reached $17.5 million, a 1 percent decrease to the $17.7 million reported the prior year. The revenue growth comparison in this quarter is impacted by certain effects related to the Durbin Amendment, which went into effect in the fourth quarter of 2011.
The company reported payment-processing revenues of$24.1 million for the quarter, representing an 5 percent increase versus the $22.9 million in the prior year. The growth was primarily driven by an increase in transactions processed and accounts on file, Evertec said.
Finally, business solutions revenues for the quarter were $45.8 million, representing an increase of 9 percent, when compared to $41.9 million in the prior year. Revenue growth was primarily driven by an increase in demand for Evertec’s network and core banking products and services.