JOHANNESBURG, July 29 /PRNewswire-FirstCall/ -- Net1 UEPS
Technologies, Inc. ("Net1" or the "Company") (NASDAQ:UEPS)(JSE:NT1)
announced today that it has agreed to repurchase all Company shares
held by Brait SA and its investment affiliates ("Brait SA") for ZAR
105.98 ($13.50) per share, for an aggregate repurchase price of ZAR
977 million, or $124.5 million. The repurchase is expected to close
on or before August 4, 2009. The buyback of 9,221,526 shares
represents 16.9% of the Company's outstanding shares. "We are
pleased to repurchase Brait SA's ownership interest in Net1, and
thank them for the leadership and guidance provided over the past
several years. We look forward to the continuing contributions of
Antony Ball as a valued member of our Board of Directors," said Dr.
Serge Belamant, Chairman and Chief Executive Officer of Net1. He
added, "We believe this transaction provides us with an opportunity
to acquire a significant number of our shares at a very attractive
valuation while taking advantage of recent strength of the ZAR. It
should also eliminate the perceived overhang on the stock created
by Brait's large shareholding. Net1 is well-positioned to
capitalize on opportunities in South Africa and internationally.
Our cash position and cash generation profile remains strong, and
more than adequate to fund our existing operations and invest in
new growth initiatives." "The Company will repurchase the Brait
shares on the JSE in South Africa to minimize the currency exposure
and cash tax leakage," said Herman Kotze, Chief Financial Officer
of Net1. "On a preliminary basis, and before giving effect to the
repurchase, we had approximately $220 million in cash and cash
equivalents on our balance sheet as of June 30, 2009. On a
pro-forma basis, and without including any potential deemed
dividend tax adjustments, we expect that the transaction will
result in a 10% increase in 2009 fundamental earnings per share as
the positive effect of the lower share count far outweighs the
after-tax reduction in interest earned. We expect the transaction
to be similarly accretive to 2010 fundamental earnings per share,"
he concluded. Antony Ball, Chief Executive Officer at Brait said,
"We have always been, and continue to remain, believers in Net1. We
made this investment five years ago and we need to be cognizant of
the private equity cycle which require us to monetize our
investments within the timeframe of our fund structure."
Preliminary Unaudited Fourth Quarter 2009 and Full Year 2009
Results Net1 is preliminarily expected to report 4Q 2009 and full
year 2009 revenue of approximately $61 million and $246 million,
respectively. Fundamental earnings per share for 4Q 2009 and full
year 2009 is expected to be $0.38 (which represents a 1% decrease
from 4Q 2008 on a constant currency basis) and $1.47 (which
represents a 16% increase from full year 2008 on a constant
currency basis), respectively. These numbers reflect the actual
number of shares outstanding during the year and do not give effect
to the repurchase of the Brait shares. Cash flow from operating
activities is anticipated to be at least $100 million for full year
2009. The Company will report complete, audited financials for 4Q
2009 and full year 2009 as well as issue guidance for fiscal 2010
during the week of August 24, 2009. The preliminary results for 4Q
2009 and full year 2009 are subject to adjustment in connection
with the audit of the Company's year-end results. Use of Non-GAAP
measures Fundamental earnings per share is a non-GAAP measure. The
Company calculates fundamental earnings per share by excluding from
GAAP earnings per share the amortization of intangibles and
stock-based compensation charges related to stock options and other
stock-based awards, as well as JSE listing costs, a bank facility
fee, an impairment of goodwill, the profit on sale of the Company's
traditional microlending business and a foreign exchange gain, net
of tax, related to a short-term investment and the effect of the
change in the fully distributed tax rate from 35.45% to 34.55% in
July 2008. The Company excludes all of the above-mentioned amounts
when calculating fundamental earnings per share because management
believes that these adjustments enhance its own evaluation, as well
as an investor's understanding, of the Company's financial
performance. Attachment A presents the reconciliation between
preliminary GAAP and fundamental earnings per share. Conference
call Net1 will host a conference call to discuss the Brait
repurchase on July 29, 2009, at 11:00 a.m. Eastern Time. To
participate in the call, dial 1-800-860-2442 (US only),
1-866-519-5086 (Canada only), 0-800-917-7042 (UK only) or
0-800-200-648 (South Africa only) five minutes prior to the start
of the call. Callers should request "Net1 call" upon dial-in. The
call will also be webcast on the Net1 homepage,
http://www.net1ueps.com/. Please click on the webcast link at least
10 minutes prior to the call. A webcast of the call will be
available for replay on the Net1 website through August 19, 2009.
About Net1 (http://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 using UEPS. The system uses 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 the Net1
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, UEPS can be used for banking, health care management,
international money transfers, voting and identification. The
Company also focuses on the development and provision of secure
transaction technology, solutions and services. The Company's core
competencies around secure online transaction processing,
cryptography and integrated circuit card (chip/smart card)
technologies are principally applied to electronic commerce
transactions in the telecommunications, banking, retail, petroleum
and utilities market sectors. Additionally, through BGS Smartcard
Systems AG, a majority-owned subsidiary based in Austria, the
Company develops, implements and integrates smart card-based
offline and online financial transaction systems in cooperation
with banks, enterprises and government authorities, primarily in
Russia and the Commonwealth of Independent States. Forward-Looking
Statements This announcement contains forward-looking statements
that involve known and unknown risks and uncertainties, including
information regarding the Company's 4Q 2009 and full year 2009
results of operations and financial condition. A discussion of
various factors that could cause the Company's actual results,
levels of activity, performance or achievements to differ
materially from those expressed in such forward-looking statements
are included in the Company's filings with the Securities and
Exchange Commission. The Company undertakes no obligation to revise
any of these statements to reflect future circumstances or the
occurrence of unanticipated events. Net 1 UEPS Technologies, Inc.
Attachment A Reconciliation of Preliminary GAAP results to
fundamental results: Three months ended June 30, 2009 and 2008 Net
Income EPS, basic (USD '000) (USD cents) ---------- ---------- 2009
2008 2009 2008 ---- ---- ---- ---- GAAP 18,195 21,482 33 38
Amortization of intangible assets(1) 2,857 830 ----- --- Customer
relationships 3,089 337 Software and unpatented Technology 804 852
Trademarks 82 87 Deferred tax benefit (1,118) (446) ------- ----
Stock-based charge(2) 1,158 1,111 Loss on sale of Moneyline (1,197)
- Change in tax rate(3) (67) - Fundamental 20,946 23,423 38 41
------ ------ Net Income EPS, basic (ZAR '000) (ZAR cents)
---------- ----------- 2009 2008 2009 2008 ---- ---- ---- ---- GAAP
150,251 167,551 274 293 Amortization of intangible assets(1) 23,593
6,476 ------ ----- Customer relationships 25,507 2,630 Software and
unpatented Technology 6,642 6,642 Trademarks 679 679 Deferred tax
benefit (9,235) (3,475) ------ ------- Stock-based charge(2) 9,563
8,665 Loss on sale of Moneyline (9,885) - Change in tax rate(3)
(553) - Fundamental 172,969 182,692 316 319 ------- ------- (1)
Amortization of Prism, EasyPay and BGS intangibles, net of deferred
tax benefit: (2) Includes stock-based compensation charges related
to options and non-vested stock awards. (3) Represents the effect
of the change in our United States tax rate from 34% to 35% during
the fourth quarter of fiscal 2009. Twelve months ended June 30,
2009 and 2008 Net Income EPS, basic (USD'000) (USD cents) ---------
----------- 2009 2008 2009 2008 ---- ---- ---- ---- GAAP 86,580
86,695 155 152 Amortization of intangible assets(1) 8,871 3,552
----- ----- Customer relationships 9,110 1,443 Software and
unpatented technology 2,972 3,644 Trademarks 304 372 Deferred tax
benefit (3,515) (1,907) ------- ------- Stock-based charge(2) 5,026
3,971 JSE listing costs 441 - Facility fee 1,100 - Foreign exchange
gain related to a short-term investment, net of tax of $6,028
(17,447) - Loss on sale of Moneyline (455) - Impairment of goodwill
1,836 - Change in tax rate (3) (3,523) (5,397) Fundamental 82,429
88,821 147 155 ------ ------ Net income EPS, basic (ZAR'000) (ZAR
cents) --------- ----------- 2009 2008 2009 2008 ---- ---- ----
---- GAAP 774,019 632,050 1,383 1,106 Amortization of intangible
assets(1) 79,315 25,902 ------ ------ Customer relationships 81,451
10,520 Software and unpatented technology 26,569 26,569 Trademarks
2,715 2,715 Deferred tax benefit (31,420) (13,902) ------- -------
Stock-based charge(2) 44,932 28,951 JSE listing costs 3,942 -
Facility fee 9,834 - Foreign exchange gain related to a short-term
investment, net of tax of $6,028 (155,974) - Loss on sale of
Moneyline (4,068) - Impairment of goodwill 16,414 - Change in tax
rate (3) (31,494) (38,484) Fundamental 736,920 648,419 1,317 1,134
------- ------- (1) Amortization of Prism, EasyPay and BGS
intangibles, net of deferred tax benefit: (2) Includes stock-based
compensation charges related to options and non-vested stock
awards. (3) Represents the effect of the change in the fully
distributed tax rate from 35.45% to 34.55% in fiscal 2009 and
36.89% to 35.45% during fiscal 2008. DATASOURCE: Net 1 UEPS
Technologies, Inc. CONTACT: Dhruv Chopra, Vice-President-Investor
Relations, +1-212-626-6675, ; or William Espley at Net1 Investor
Relations, +1-604-484-8750, or Toll Free, +1-866-412-NET1 (6381)
Web Site: http://www.net1ueps.com/
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