Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 01, 2013 | |
Document And Entity Information [Abstract] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-13 | ' |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Trading Symbol | 'EVTC | ' |
Entity Registrant Name | 'EVERTEC, Inc. | ' |
Entity Central Index Key | '0001559865 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Non-accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 81,938,299 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current Assets: | ' | ' |
Cash | $27,960 | $25,634 |
Restricted cash | 5,096 | 4,939 |
Accounts receivable, net | 69,249 | 78,621 |
Deferred tax asset | 383 | 1,434 |
Prepaid expenses and other assets | 21,800 | 19,345 |
Total current assets | 124,488 | 129,973 |
Investment in equity investee | 10,827 | 11,080 |
Property and equipment, net | 31,992 | 36,737 |
Goodwill | 373,223 | 372,307 |
Other intangible assets, net | 375,292 | 403,170 |
Other long-term assets | 19,657 | 24,478 |
Total assets | 935,479 | 977,745 |
Current Liabilities: | ' | ' |
Accrued liabilities | 28,778 | 34,609 |
Accounts payable | 14,912 | 24,482 |
Unearned income | 3,791 | 1,166 |
Income tax payable | 246 | 2,959 |
Current portion of long-term debt | 19,000 | 6,052 |
Short-term borrowings | 6,132 | 26,995 |
Deferred tax liability, net | 658 | 632 |
Total current liabilities | 73,517 | 96,895 |
Long-term debt | 670,209 | 730,709 |
Long-term deferred tax liability, net | 16,965 | 24,614 |
Other long-term liabilities | 333 | 3,072 |
Total liabilities | 761,024 | 855,290 |
Commitments and contingencies (Note 9) | ' | ' |
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; 81,909,582 and 72,846,144 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively | 819 | 728 |
Additional paid-in capital | 155,166 | 52,155 |
Accumulated earnings | 17,562 | 70,414 |
Accumulated other comprehensive income (loss) | 908 | -842 |
Total stockholders' equity | 174,455 | 122,455 |
Total liabilities and stockholders' equity | $935,479 | $977,745 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Statement Of Financial Position [Abstract] | ' | ' |
Preferred stock par value | $0.01 | $0.01 |
Preferred stock authorized | 2,000,000 | 2,000,000 |
Preferred stock issued | 0 | 0 |
Common stock par value | $0.01 | $0.01 |
Common stock authorized | 206,000,000 | 206,000,000 |
Common stock issued | 81,909,582 | 72,846,144 |
Common stock outstanding | 81,909,582 | 72,846,144 |
Consolidated_Statements_of_Los
Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Revenues | ' | ' | ' | ' |
Merchant acquiring, net | $18,211 | $16,810 | $53,835 | $51,499 |
Payment processing (from affiliates: $7,338, $7,203, $21,846 and $22,005) | 24,731 | 23,284 | 73,128 | 69,986 |
Business solutions (from affiliates: $33,500, $29,822, $102,996 and $90,866) | 44,472 | 43,745 | 136,965 | 129,214 |
Total revenues | 87,414 | 83,839 | 263,928 | 250,699 |
Operating costs and expenses | ' | ' | ' | ' |
Cost of revenues, exclusive of depreciation and amortization shown below | 39,114 | 40,897 | 121,873 | 118,469 |
Selling, general and administrative expenses | 8,779 | 7,295 | 29,780 | 24,759 |
Depreciation and amortization | 17,657 | 17,765 | 53,074 | 53,517 |
Total operating costs and expenses | 65,550 | 65,957 | 204,727 | 196,745 |
Income from operations | 21,864 | 17,882 | 59,201 | 53,954 |
Non-operating (expenses) income | ' | ' | ' | ' |
Interest income | 54 | 38 | 147 | 237 |
Interest expense | -6,403 | -14,784 | -31,414 | -39,214 |
Earnings (losses) of equity method investment | 198 | -472 | 823 | 103 |
Other income (expenses): | ' | ' | ' | ' |
Loss on extinguishment of debt | ' | ' | -58,464 | ' |
Termination of consulting agreements | ' | ' | -16,718 | ' |
Other income (expenses) | 448 | 855 | -1,838 | -9,802 |
Total other income (expenses) | 448 | 855 | -77,020 | -9,802 |
Total non-operating (expenses) income | -5,703 | -14,363 | -107,464 | -48,676 |
Income (loss) before income taxes | 16,161 | 3,519 | -48,263 | 5,278 |
Income tax expense (benefit) | 1,358 | 1,243 | -3,603 | 1,501 |
Net income (loss) | 14,803 | 2,276 | -44,660 | 3,777 |
Other comprehensive (loss) income, net of tax of $11, $0, $29 and $13 Foreign currency translation adjustments | -210 | 215 | 1,750 | 2,551 |
Total comprehensive income (loss) | $14,593 | $2,491 | ($42,910) | $6,328 |
Net income (loss) per common share - basic | $0.18 | $0.03 | ($0.57) | $0.05 |
Net income (loss) per common share - diluted | $0.18 | $0.03 | ($0.57) | $0.05 |
Consolidated_Statements_of_Los1
Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income (Parenthetical) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Income Statement [Abstract] | ' | ' | ' | ' |
Payment processing revenue from affiliates | $7,338 | $7,203 | $21,846 | $22,005 |
Business solutions revenue from affiliates | 33,500 | 29,822 | 102,996 | 90,866 |
Other comprehensive income, income tax expense | $11 | $0 | $29 | $13 |
Consolidated_Statement_of_Chan
Consolidated Statement of Changes in Stockholders' Equity (USD $) | Total | Common Stock | Additional Paid-in Capital | Accumulated Earnings | Accumulated Other Comprehensive (Loss) Income |
In Thousands, except Share data | |||||
Beginning Balance, Value at Dec. 31, 2012 | $122,455 | $728 | $52,155 | $70,414 | ($842) |
Beginning Balance, Shares at Dec. 31, 2012 | 72,846,144 | 72,846,144 | ' | ' | ' |
Issuance of common stock upon initial public offering, net of offering costs | 112,432 | 63 | 112,369 | ' | ' |
Issuance of common stock upon initial public offering, net of offering costs, Shares | ' | 6,250,000 | ' | ' | ' |
Share-based compensation recognized | 5,719 | ' | 5,719 | ' | ' |
Tax windfall benefit on exercises of stock options and vesting of restricted stocks | 1,627 | ' | 1,627 | ' | ' |
Stock options exercised, net of cashless exercise | -16,676 | 28 | -16,704 | ' | ' |
Stock options exercised, net of cashless exercised, Shares | ' | 2,813,438 | ' | ' | ' |
Net loss | -44,660 | ' | ' | -44,660 | ' |
Cash dividends paid on common stock | -8,192 | ' | ' | -8,192 | ' |
Other comprehensive income | 1,750 | ' | ' | ' | 1,750 |
Ending Balance, Value at Sep. 30, 2013 | $174,455 | $819 | $155,166 | $17,562 | $908 |
Ending Balance, Shares at Sep. 30, 2013 | 81,909,582 | 81,909,582 | ' | ' | ' |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Cash flows from operating activities | ' | ' |
Net (loss) income | ($44,660) | $3,777 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 53,074 | 53,517 |
Amortization of debt issue costs and premium and accretion of discount | 3,136 | 3,748 |
Write-off of debt issue costs, premium and discount accounted as loss on extinguishment | 16,555 | ' |
Provision for doubtful accounts and sundry losses | 954 | 1,291 |
Deferred tax benefit | -6,723 | -4,662 |
Share-based compensation | 5,719 | 889 |
Unrealized gain of indemnification assets | -21 | -334 |
Amortization of a contract liability | ' | -703 |
Loss on disposition of property and equipment | 30 | 62 |
Earnings from equity method investment | -823 | -103 |
Dividend received from equity method investment | 500 | 728 |
Premium on issuance of long-term debt | ' | 2,000 |
(Increase) decrease in assets: | ' | ' |
Accounts receivable, net | 9,035 | -3,831 |
Prepaid expenses and other assets | -2,591 | 2,414 |
Other long-term assets | -1,928 | ' |
Increase (decrease) in liabilities: | ' | ' |
Accounts payable and accrued liabilities | -18,485 | 11,476 |
Income tax payable | -2,713 | -1,201 |
Unearned income | 2,625 | 35 |
Total adjustments | 58,344 | 65,326 |
Net cash provided by operating activities | 13,684 | 69,103 |
Cash flows from investing activities | ' | ' |
Net (increase) decrease in restricted cash | -157 | 582 |
Intangible assets acquired | -9,591 | -5,430 |
Property and equipment acquired | -7,380 | -7,540 |
Proceeds from sales of property and equipment | 16 | 80 |
Net cash used in investing activities | -17,112 | -12,308 |
Cash flows from financing activities | ' | ' |
Proceeds from initial public offering, net of offering costs of $12,567 | 112,369 | ' |
Proceeds from issuance of debt | 700,000 | 208,725 |
Statutory minimum withholding taxes paid on cashless exercises of stock options | -16,704 | ' |
Debt issuance costs | -12,077 | -2,174 |
Repayment of short-term borrowings, net | -22,663 | ' |
Proceeds from new short-term borrowing for purchase of equipment | 1,800 | ' |
Dividends paid | -8,192 | -269,772 |
Tax windfall benefits on exercises of stock options and vesting of restricted stocks | 1,627 | ' |
Issuance of common stock | 91 | 450 |
Repayment of other financing agreement | -224 | -112 |
Repayment of long-term debt | -750,273 | ' |
Net cash provided by (used in) financing activities | 5,754 | -62,883 |
Net increase (decrease) in cash | 2,326 | -6,088 |
Cash at beginning of the period | 25,634 | 56,200 |
Cash at end of the period | 27,960 | 50,112 |
Supplemental disclosure of non-cash activities: | ' | ' |
Dividend declared not received from equity method investment | 500 | 1,457 |
Trade payable due to vendor related to software acquired | $2,903 | ' |
Consolidated_Statements_of_Cas1
Consolidated Statements of Cash Flows (Parenthetical) (USD $) | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 |
Statement Of Cash Flows [Abstract] | ' |
Proceeds from initial public offering, net of cost of offering | $12,567 |
The_Company_and_Summary_of_Sig
The Company and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2013 | |
Accounting Policies [Abstract] | ' |
The Company and Summary of Significant Accounting Policies | ' |
Note 1 – The Company and Summary of Significant Accounting Policies | |
The Company | |
EVERTEC, Inc. (formerly known as Carib Latam Holdings, Inc.) and its subsidiaries (collectively the “Company,” “EVERTEC,” “we,” “us,” or “our”) is the leading full-service transaction processing business in Latin America and the Caribbean. We are based in Puerto Rico and provide a broad range of merchant acquiring, payment processing and business process management services across 19 countries in the region. We process over 1.8 billion transactions annually, and manage the electronic payment network for over 4,100 automated teller machines (“ATM”) and over 104,000 point-of-sale (“POS”) payment terminals. According to the July 2013 Nilson Report, we are the largest merchant acquirer in the Caribbean and Central America and the seventh largest in Latin America based on total number of transactions. We own and operate the ATH network, one of the leading ATM and personal identification number debit networks in Latin America. In addition, we provide a comprehensive suite of services for core bank processing, cash processing and technology outsourcing in the regions we serve. We serve a broad and diversified customer base of leading financial institutions, merchants, corporations and government agencies with ‘mission critical’ technology solutions that are essential to their operations, enabling them to issue, process and accept transactions securely, and we believe that our business is well positioned to continue to expand across the fast growing Latin American region. | |
Our subsidiaries include EVERTEC Intermediate Holdings, LLC (“Holdings,” formerly known as Carib Holdings, Inc.), EVERTEC Group, LLC (“EVERTEC Group”), EVERTEC Dominicana SAS., EVERTEC Panamá, S.A., EVERTEC Latinoamérica, S.A., EVERTEC Costa Rica, S.A. (“EVERTEC CR”), Tarjetas Inteligentes Internacionales, S.A., EVERTEC Guatemala, S.A. and EVERTEC México Servicios de Procesamiento, S.A. de C.V. | |
Initial Public Offering | |
On April 17, 2013, the Company completed its initial public offering (“Initial Public Offering”) of 28,789,943 shares of common stock at a price to the public of $20.00 per share. A total of 6,250,000 shares were offered by the Company and a total of 22,539,943 shares were offered by selling stockholders of the Company, of which 13,739,284 shares were sold by an affiliate of Apollo Global Management, LLC (“Apollo”) and 8,800,659 shares were sold by Popular. The Company used net proceeds of approximately $117.4 million from its sale of shares in the Initial Public Offering and proceeds from borrowings under the 2013 Credit Agreement (as defined in Note 4), together with available cash on hand, to redeem its senior notes (as defined in Note 4) and to refinance its previous senior secured credit facilities. | |
Public Offering by Selling Stockholders | |
On September 18, 2013, the Company completed a public offering of 23,000,000 shares of its common stock by Apollo, Popular, and certain officers and current and former employees of the Company at a price to the public of $22.50 per share. The Company did not receive any proceeds from this offering. After completion of this offering, Apollo owned approximately 9.2 million shares of our common stock, or 11.2% and Popular owned approximately 17.5 million shares of our common stock, or 21.3%. | |
Basis of Presentation | |
The accompanying unaudited consolidated financial statements include the accounts of EVERTEC, Inc. and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The preparation of the accompanying unaudited consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited consolidated financial statements. Actual results could differ from these estimates. | |
In the opinion of management, the accompanying unaudited consolidated financial statements, prepared in accordance with GAAP, contain all adjustments, all of which are normal and recurring in nature, necessary for a fair presentation. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted from the unaudited consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). As these unaudited consolidated financial statements are prepared using the same accounting principles and policies used to prepare the annual financial statements, they should be read in conjunction with the audited consolidated financial statements for the fiscal year ended December 31, 2012, included in the Company’s Registration Statement on Form S-1 (File No. 333-186487) (as amended, the “Registration Statement”), which was declared effective by the SEC on April 11, 2013. The results of operations for the three and nine months ended September 30, 2013 are not necessarily indicative of the results of operations for the full year or any future period. | |
On April 1, 2013, EVERTEC’s Board of Directors declared a two for one stock split of our outstanding Class A and Class B common stock. Accordingly, all shares of outstanding common stock or restricted stock, or shares of common stock underlying outstanding options, and all per share amounts for all periods presented in these consolidated financial statements and notes thereto, have been adjusted retroactively, where applicable, to reflect this stock split, except for the par value of the common stock, which was not adjusted by the stock split and the impact was recorded as additional paid-in capital. Under the certificate of incorporation, as amended by the certificate of amendment, which became effective on April 1, 2013, EVERTEC’s authorized capital consists of 206,000,000 shares of common stock and 2,000,000 shares of preferred stock. | |
The Consolidated Balance Sheet as of December 31, 2012 was derived from the audited consolidated financial statements for the fiscal year ended December 31, 2012 included in the Registration Statement. | |
Certain reclassifications have been made to certain prior period notes to the unaudited consolidated financial statements to conform with the presentation in 2013. | |
Summary of Significant Accounting Policies | |
Share-based Compensation | |
Management uses the fair value method of recording stock-based compensation as described in the guidance for stock compensation in ASC topic 718. The fair value of the stock options granted during 2011 and 2012 was estimated using the Black-Scholes-Merton (“BSM”) option pricing model for Tranche A options granted under the EVERTEC, Inc. Amended and Restated 2010 Equity Incentive Plan (the “Equity Incentive Plan”) and the Monte Carlo simulation analysis for Tranche B and Tranche C options. | |
Upon option exercise, participants may elect to “net share settle”. Rather than requiring the participant to deliver cash to satisfy the exercise price and statutory minimum tax withholdings, the Company withholds a sufficient number of shares to cover these amounts and delivers the net shares to the participant. The Company recognizes the associated tax withholding obligation as a reduction of additional paid-in capital. | |
As compensation expense is recognized, a deferred tax asset is established. At the time stock options are exercised, a current tax deduction arises based on the value at the time of exercise. This deduction may exceed the associated deferred tax asset, resulting in a “windfall tax benefit”. The windfall is recognized in the unaudited consolidated balance sheet as an increase to additional paid-in capital, and is included in the unaudited consolidated statement of cash flows as a financing inflow. | |
Net Income (Loss) Per Common Share | |
Basic net income (loss) per common share is determined by dividing net income (loss) by the weighted-average number of common shares outstanding during the period. | |
Diluted net income (loss) per common share assumes the issuance of all potentially dilutive share equivalents using the treasury stock method. |
Property_and_Equipment_net
Property and Equipment, net | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Property Plant And Equipment [Abstract] | ' | ||||||||||
Property and Equipment, net | ' | ||||||||||
Note 2 – Property and Equipment, net | |||||||||||
Property and equipment, net consists of the following: | |||||||||||
(Dollar amounts in thousands) | Useful life | September 30, | December 31, | ||||||||
in years | 2013 | 2012 | |||||||||
Buildings | 30 | $ | 1,731 | $ | 2,096 | ||||||
Data processing equipment | 5-Mar | 63,399 | 59,901 | ||||||||
Furniture and equipment | 20-Mar | 6,639 | 6,183 | ||||||||
Leasehold improvements | 10-May | 2,860 | 2,380 | ||||||||
74,629 | 70,560 | ||||||||||
Less - accumulated depreciation and amortization | (44,172 | ) | (35,331 | ) | |||||||
Depreciable assets, net | 30,457 | 35,229 | |||||||||
Land | 1,535 | 1,508 | |||||||||
Property and equipment, net | $ | 31,992 | $ | 36,737 | |||||||
Depreciation and amortization expense related to property and equipment was $4.1 million and $12.2 million for the three and nine months ended September 30, 2013, respectively, and $4.0 million and $12.1 million for the corresponding 2012 periods. |
Goodwill_and_Other_Intangible_
Goodwill and Other Intangible Assets | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Goodwill And Intangible Assets Disclosure [Abstract] | ' | ||||||||||||||||
Goodwill and Other Intangible Assets | ' | ||||||||||||||||
Note 3 – Goodwill and Other Intangible Assets | |||||||||||||||||
The changes in the carrying amount of goodwill, allocated by reportable segments, were as follows (See Note 11): | |||||||||||||||||
(Dollar amounts in thousands) | Merchant | Payment | Business | Total | |||||||||||||
acquiring, net | processing | solutions | |||||||||||||||
Balance at December 31, 2012 | $ | 138,121 | $ | 187,028 | $ | 47,158 | $ | 372,307 | |||||||||
Foreign currency translation adjustments | — | 666 | 250 | 916 | |||||||||||||
Balance at September 30, 2013 | $ | 138,121 | $ | 187,694 | $ | 47,408 | $ | 373,223 | |||||||||
Goodwill is tested for impairment at least annually using the qualitative assessment option or step zero process. Using this process, the Company first assesses whether it is “more likely than not” that the fair value of a reporting unit is less than its carrying amount. | |||||||||||||||||
During the third quarter of 2013, we conducted a qualitative assessment of each reporting unit’s fair value as of August 31, 2013. As part of our qualitative assessment, we considered the results of our 2011 impairment test (which indicated that the fair value of each reporting unit was in excess of 30% of its carrying amount) as well as current market conditions and changes in the carrying amount of our reporting units that occurred subsequent to the 2011 impairment test. Based on the results of this qualitative assessment, we believe the fair value of goodwill for each of our reporting units continues to exceed their respective carrying amounts and concluded that it was not necessary to conduct the two-step goodwill impairment test. Accordingly, no impairment losses for the period were recognized. | |||||||||||||||||
The carrying amount of other intangible assets for the nine months ended September 30, 2013 and the year ended December 31, 2012 consisted of the following: | |||||||||||||||||
(Dollar amounts in thousands) | 30-Sep-13 | ||||||||||||||||
Useful life in years | Gross | Accumulated | Net carrying | ||||||||||||||
amount | amortization | amount | |||||||||||||||
Customer relationships | 14 | $ | 314,070 | $ | (67,577 | ) | $ | 246,493 | |||||||||
Trademark | 15-Oct | 39,950 | (10,392 | ) | 29,558 | ||||||||||||
Software packages | 5-Mar | 113,866 | (59,856 | ) | 54,010 | ||||||||||||
Non-compete agreement | 15 | 56,539 | (11,308 | ) | 45,231 | ||||||||||||
Other intangible assets, net | $ | 524,425 | $ | (149,133 | ) | $ | 375,292 | ||||||||||
(Dollar amounts in thousands) | 31-Dec-12 | ||||||||||||||||
Useful life in years | Gross | Accumulated | Net carrying | ||||||||||||||
amount | amortization | amount | |||||||||||||||
Customer relationships | 14 | $ | 313,726 | $ | (50,769 | ) | $ | 262,957 | |||||||||
Trademark | 15-Oct | 39,950 | (7,794 | ) | 32,156 | ||||||||||||
Software packages | 5-Mar | 110,478 | (50,479 | ) | 59,999 | ||||||||||||
Non-compete agreement | 15 | 56,539 | (8,481 | ) | 48,058 | ||||||||||||
Other intangible assets, net | $ | 520,693 | $ | (117,523 | ) | $ | 403,170 | ||||||||||
For the three and nine months ended September 30, 2013, the Company recorded amortization expense related to other intangibles of $13.6 million and $40.9 million, respectively, compared to $13.8 million and $41.4 million for the corresponding 2012 periods. | |||||||||||||||||
The estimated amortization expense of the balances outstanding at September 30, 2013 for the next five years is as follows: | |||||||||||||||||
(Dollar amounts in thousands) | |||||||||||||||||
Remaining 2013 | $ | 13,054 | |||||||||||||||
2014 | 49,162 | ||||||||||||||||
2015 | 44,780 | ||||||||||||||||
2016 | 35,193 | ||||||||||||||||
2017 | 32,008 | ||||||||||||||||
2018 | 30,129 |
Debt_and_ShortTerm_Borrowings
Debt and Short-Term Borrowings | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Debt and Short-Term Borrowings | ' | ||||||||
Note 4 – Debt and Short-Term Borrowings | |||||||||
Total debt as of September 30, 2013 and December 31, 2012 was as follows: | |||||||||
(Dollar amounts in thousands) | September 30, | December 31, | |||||||
2013 | 2012 | ||||||||
Senior Secured Credit Facility (Term A) due on April 17, 2018 paying interest at a variable interest rate (London InterBank Offered Rate (“LIBOR”) plus applicable margin(1)) | $ | 295,881 | $ | — | |||||
Senior Secured Credit Facility (Term B) due on April 17, 2020 paying interest at a variable interest rate (LIBOR plus applicable margin(2)) | 393,328 | — | |||||||
Senior Secured Credit Facility due on September 30, 2016 paying interest at a variable interest rate (LIBOR plus applicable margin(3)) | — | 484,414 | |||||||
Senior Secured Revolving Credit Facility paying interest at a variable interest rate | — | 14,000 | |||||||
Senior Notes due on October 1, 2018, paying interest semi-annually at a rate of 11% per annum | — | 252,347 | |||||||
Other short-term borrowing | 6,132 | 12,995 | |||||||
Total debt | $ | 695,341 | $ | 763,756 | |||||
-1 | Applicable margin of 2.50% at September 30, 2013. | ||||||||
-2 | Subject to a minimum rate (“LIBOR floor”) of 0.75% plus applicable margin of 2.75% at September 30, 2013. | ||||||||
-3 | Subject to a minimum rate (“LIBOR floor”) of 1.50% plus applicable margin of 4.00% at December 31, 2012. | ||||||||
Senior Secured Credit Facilities | |||||||||
On April 17, 2013, EVERTEC Group entered into a credit agreement (the “2013 Credit Agreement”) governing the senior secured credit facilities, consisting of a $300.0 million term loan A facility (the “Term A Loan”) which matures on April 17, 2018, a $400.0 million term loan B facility (the “Term B Loan”) which matures on April 17, 2020 and a $100.0 million revolving credit facility which matures on April 17, 2018. The net proceeds received by EVERTEC Group from the new senior secured credit facilities, together with other cash available to EVERTEC Group, were used to, among other things, refinance EVERTEC Group’s previous senior secured credit facilities and redeem a portion of EVERTEC’s 11% Senior Notes due 2018 (the “senior notes”), as further described below. | |||||||||
As a result of the debt refinancing, EVERTEC Group’s previous senior secured credit facilities were evaluated under ASC 470-50, Debtor’s Accounting for a Modification or Exchange of Debt Instruments (“ASC 470-50”). Accordingly, a portion of the unamortized discount and debt issue costs amounting to $6.4 million and $5.9 million, respectively, were treated as a modification and will be amortized over the term of the new debt using the interest method. The remaining unamortized discount and debt issue costs of $3.4 million and $3.0 million, respectively, were considered to be related to the portion of the debt that was extinguished and written-off. | |||||||||
Senior Notes | |||||||||
On March 29, 2013, EVERTEC Group provided notice to Wilmington Trust, National Association (the “Trustee”) pursuant to the Indenture, dated as of September 30, 2010 (as supplemented by Supplemental Indenture No. 1, dated as of April 17, 2012, Supplemental Indenture No. 2, dated as of May 7, 2012 and Supplemental Indenture No. 3, dated as of May 7, 2012) between EVERTEC Group and EVERTEC Finance Corp. (together, the “Co-Issuers”), the Guarantors named therein and the Trustee (the “Indenture”), that the Co-Issuers had elected to (i) redeem $91.0 million principal amount of their outstanding senior notes, at a redemption price of 111.0%, plus accrued and unpaid interest, on April 29, 2013 (the “Partial Redemption”) and (ii) redeem all of their outstanding senior notes (after giving effect to the redemption of $91.0 million principal amount of the senior notes described in clause (i)) at a redemption price of 100.0% plus a make-whole premium and accrued and unpaid interest, on April 30, 2013 (the “Full Redemption”). On April 17, 2013, the Co-Issuers and the Trustee entered into a Satisfaction and Discharge Agreement whereby EVERTEC Group caused to be irrevocably deposited with the Trustee, to satisfy and to discharge the Co-Issuers’ obligations under the Indenture (a) a portion of the net cash proceeds received by the Company in the Initial Public Offering to Holdings, which contributed such proceeds to EVERTEC Group, in an amount sufficient to effect the Partial Redemption on April 29, 2013 and (b) proceeds from the 2013 Credit Agreement described above in an amount sufficient to effect the Full Redemption on April 30, 2013. On April 29, 2013, the Partial Redemption was effected and on April 30, 2013, the Full Redemption was effected. | |||||||||
Based on accounting guidance, the senior notes were considered extinguished. Accordingly, the outstanding premium of $1.8 million and unamortized debt issuance costs of $7.0 million were written-off and presented as a loss on extinguishment of debt. In addition, the redemption premium payments totaling $41.9 million were accounted for as a loss on extinguishment of debt. | |||||||||
New Senior Secured Credit Facilities | |||||||||
Term A Loan | |||||||||
As of September 30, 2013, the outstanding principal amount of the Term A Loan was $296.3 million. The Term A Loan requires principal payments on the last business day of each quarter equal to (a) 1.250% of the original principal amount commencing on September 30, 2013 through June 30, 2016; (b) 1.875% of the original principal amount from September 30, 2016 through June 30, 2017; (c) 2.50% of the original principal amount from September 30, 2017 through March 31, 2018; and (d) the remaining outstanding principal amount on the maturity of the Term A Loan on April 17, 2018. Interest is based on EVERTEC Group’s first lien secured net leverage ratio and payable at a rate equal to, at the Company’s option, either (a) LIBOR Rate plus an applicable margin ranging from 2.00% to 2.50%, or (b) Base Rate plus an applicable margin ranging from 1.00% to 1.50%. Term A Loan has no LIBOR Rate or Base Rate minimum or floor. | |||||||||
Term B Loan | |||||||||
As of September 30, 2013, the outstanding principal amount of the Term B Loan was $399.0 million. The Term B Loan requires principal payments on the last business day of each quarter equal to 0.250% of the original principal amount commencing on September 30, 2013 and the remaining outstanding principal amount on the maturity of the Term B Loan on April 17, 2020. Interest is based on EVERTEC Group’s first lien secured net leverage ratio and payable at a rate equal to, at the Company’s option, either (a) LIBOR Rate plus an applicable margin ranging from 2.50% to 2.75%, or (b) Base Rate plus an applicable margin ranging from 1.50% to 1.75%. The LIBOR Rate and Base Rate are subject to floors of 0.75% and 1.75%, respectively. | |||||||||
Revolving Credit Facility | |||||||||
The revolving credit facility has an available balance up to $100.0 million, with an interest rate on loans calculated the same as the applicable Term A Loan rate. The facility matures on April 17, 2018 and has a “commitment fee” payable one business day after the last business day of each quarter calculated based on the daily unused commitment during the preceding quarter. The commitment fee for the unused portion of this facility ranges from 0.125% to 0.375% and is based on EVERTEC Group’s first lien secured net leverage ratio. As of September 30, 2013, the revolving credit facility was undrawn. | |||||||||
All loans may be prepaid without premium or penalty, except for a 1% premium payable if any of the Term B Loans are refinanced or repriced with syndicated secured term loans having a lower effective interest rate on or prior to April 17, 2014. | |||||||||
The new senior secured credit facilities were evaluated under accounting guidance and accordingly, $7.2 million of debt issue costs were capitalized and are being amortized over the term of the new debt using the interest method and $4.9 million of debt issue costs were expensed and are presented in our second quarter 2013 financials as a loss on the extinguishment of debt. | |||||||||
The new senior secured credit facilities contain various restrictive covenants. The Term A Loan and the revolving credit facility (subject to certain exceptions) require us to maintain on a quarterly basis a specified maximum senior secured leverage ratio of up to 6.60 to 1.00 as defined in the 2013 Credit Agreement (total first lien secured debt to adjusted EBITDA). In addition, the 2013 Credit Agreement, among other things: (a) limits our ability and the ability of our subsidiaries to incur additional indebtedness, incur liens, pay dividends or make certain other restricted payments and enter into certain transactions with affiliates; (b) restricts our ability to enter into agreements that would restrict the ability of our subsidiaries to pay dividends or make certain payments to us; and (c) places restrictions on our ability and the ability of our subsidiaries to merge or consolidate with any other person or sell, assign, transfer, convey or otherwise dispose of all or substantially all of our assets. As of September 30, 2013, the Company was in compliance with the applicable restrictive covenants under the 2013 Credit Agreement. |
Financial_Instruments_and_Fair
Financial Instruments and Fair Value Measurements | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||
Financial Instruments and Fair Value Measurements | ' | ||||||||||||||||
Note 5 – Financial Instruments and Fair Value Measurements | |||||||||||||||||
Recurring Fair Value Measurements | |||||||||||||||||
Fair value measurement provisions establish a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. This guidance describes three levels of input that may be used to measure fair value: | |||||||||||||||||
Level 1: Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date. | |||||||||||||||||
Level 2: Inputs, other than quoted prices included in Level 1, which are observable for the asset or liability through corroboration with market data at the measurement date. | |||||||||||||||||
Level 3: Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. | |||||||||||||||||
The Company uses observable inputs when available. Fair value is based upon quoted market prices when available. If market prices are not available, the Company may employ internally-developed models that primarily use market-based inputs including yield curves, interest rates, volatilities, and credit curves, among others. The Company limits valuation adjustments to those deemed necessary to ensure that the financial instrument’s fair value adequately represents the price that would be received or paid in the marketplace. Valuation adjustments may include consideration of counterparty credit quality and liquidity as well as other criteria. The estimated fair value amounts are subjective in nature and may involve uncertainties and matters of significant judgment for certain financial instruments. Changes in the underlying assumptions used in estimating fair value could affect the results. The fair value measurement levels are not indicative of risk of investment. | |||||||||||||||||
The following table summarizes fair value measurements by level at September 30, 2013 and December 31, 2012 for assets measured at fair value on a recurring basis: | |||||||||||||||||
(Dollar amounts in thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
September 30, 2013 | |||||||||||||||||
Financial assets: | |||||||||||||||||
Indemnification assets: | |||||||||||||||||
Software cost reimbursement | $ | — | $ | — | $ | 4,173 | $ | 4,173 | |||||||||
December 31, 2012 | |||||||||||||||||
Financial assets: | |||||||||||||||||
Indemnification assets: | |||||||||||||||||
Software cost reimbursement | $ | — | $ | — | $ | 6,099 | $ | 6,099 | |||||||||
The fair value of financial instruments is the amount at which an asset or obligation could be exchanged in a current transaction between willing parties, other than in a forced liquidation sale. Fair value estimates are made at a specific point in time based on the type of financial instrument and relevant market information. Many of these estimates involve various assumptions and may vary significantly from amounts that could be realized in actual transactions. | |||||||||||||||||
For those financial instruments with no quoted market prices available, fair values have been estimated using present value calculations or other valuation techniques, as well as management’s best judgment with respect to current economic conditions, including discount rates and estimates of future cash flows. | |||||||||||||||||
Indemnification assets include the present value of the expected future cash flows of certain expense reimbursement agreements with Popular. These contracts have termination dates up to September 2015 and were entered into in connection with the Merger. Management prepared estimates of the expected reimbursements to be received from Popular until the termination of the contracts, discounted the estimated future cash flows and recorded the indemnification assets as of the Merger closing date. Payments received during the quarters reduced the indemnification asset balance. The remaining balance was adjusted to reflect its fair value as of September 30, 2013, therefore resulting in a net unrealized gain of approximately $2,000 and $21,000 for the three and nine months ended September 30, 2013, respectively, and $0.6 million and $0.3 million for the corresponding 2012 periods, which are reflected within the other income (expenses) caption in the unaudited consolidated statements of income (loss) and comprehensive income (loss). The current portion of the indemnification assets is included within accounts receivable, net, and the other long-term portion is included within other long-term assets in the accompanying unaudited consolidated balance sheets. | |||||||||||||||||
The unobservable inputs related to the Company’s indemnification assets as of September 30, 2013 using the discounted cash flow model include the discount rate of 5.42% and the projected cash flows of $4.2 million. | |||||||||||||||||
For indemnification assets a significant increase or decrease in market rates and cash flows could result in a significant impact to the fair value. Also, the credit rating and/or the non-performance credit risk of Popular, which is subjective in nature, could also increase or decrease the sensitivity of the fair value of these assets. | |||||||||||||||||
The following table presents the carrying value, as applicable, and estimated fair values for financial instruments at September 30, 2013 and December 31, 2012: | |||||||||||||||||
September 30, 2013 | December 31, 2012 | ||||||||||||||||
(Dollar amounts in thousands) | Carrying | Fair | Carrying | Fair | |||||||||||||
Amount | Value | Amount | Value | ||||||||||||||
Financial assets: | |||||||||||||||||
Indemnification assets: | |||||||||||||||||
Software cost reimbursement | $ | 4,173 | $ | 4,173 | $ | 6,099 | $ | 6,099 | |||||||||
Financial liabilities: | |||||||||||||||||
New senior secured term loans: | |||||||||||||||||
Senior secured term loan A | $ | 295,881 | $ | 292,695 | $ | — | $ | — | |||||||||
Senior secured term loan B | 393,328 | 384,038 | — | — | |||||||||||||
Senior secured term loan | — | — | 484,414 | 497,498 | |||||||||||||
Senior notes | — | — | 252,347 | 275,550 | |||||||||||||
The fair value of the new senior secured term loans at September 30, 2013, as well as the previous senior secured term loan and the senior notes at December 31, 2012 were obtained using the prices provided by third party service providers. Their pricing is based on various inputs such as: market quotes, recent trading activity in a non-active market or imputed prices. Also, the pricing may include the use of an algorithm that could take into account movement in the general high yield market, among other variants. | |||||||||||||||||
The previous senior secured term loan and senior notes as well as the new senior secured term loans, which are not measured at fair value in the balance sheets, if measured at fair value it will be categorized as Level 3 in the fair value hierarchy. | |||||||||||||||||
The following table provides a summary of the change in fair value of the Company’s Level 3 assets: | |||||||||||||||||
Three months ended | Nine months ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
(Dollar amounts in thousands) | 2013 | 2012 | 2013 | 2012 | |||||||||||||
Indemnification assets: | |||||||||||||||||
Beginning balance | $ | 4,540 | $ | 6,120 | $ | 6,099 | $ | 7,464 | |||||||||
Payments received | (369 | ) | (1,017 | ) | (1,947 | ) | (2,145 | ) | |||||||||
Unrealized gain recognized in other income (expenses) | 2 | 550 | 21 | 334 | |||||||||||||
Ending balance | $ | 4,173 | $ | 5,653 | $ | 4,173 | $ | 5,653 | |||||||||
Sharebased_Compensation
Share-based Compensation | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ' | ||||||||||||||||
Share-based Compensation | ' | ||||||||||||||||
Note 6 – Share-based Compensation | |||||||||||||||||
The following table summarizes the nonvested stock options activity for the nine months ended September 30, 2013: | |||||||||||||||||
Nonvested stock options | Shares | Weighted-average | |||||||||||||||
exercise prices | |||||||||||||||||
Nonvested at December 31, 2012 | 4,571,258 | $ | 2.16 | ||||||||||||||
Vested | (3,757,099 | ) | 2.07 | ||||||||||||||
Nonvested at September 30, 2013 | 814,159 | $ | 2.57 | ||||||||||||||
Management uses the fair value method of recording stock-based compensation as described in the guidance for stock compensation in ASC topic 718. | |||||||||||||||||
The following table summarizes the nonvested restricted shares activity for the nine months ended September 30, 2013: | |||||||||||||||||
Nonvested restricted shares | Shares | Weighted-average | |||||||||||||||
grant date fair | |||||||||||||||||
value | |||||||||||||||||
Nonvested at December 31, 2012 | 115,420 | $ | 5.9 | ||||||||||||||
Vested | (115,420 | ) | 5.9 | ||||||||||||||
Granted | 9,133 | 24.64 | |||||||||||||||
Nonvested at September 30, 2013 | 9,133 | $ | 24.64 | ||||||||||||||
During the third quarter of 2013, the Company granted to three of its directors restricted stock units under the EVERTEC, Inc. 2013 Equity Incentive Plan. | |||||||||||||||||
Share-based compensation recognized was as follows: | |||||||||||||||||
Three months ended | Nine months ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
(Dollar amounts in thousands) | 2013 | 2012 | 2013 | 2012 | |||||||||||||
Share-based compensation recognized | |||||||||||||||||
Stock options | $ | 204 | $ | 151 | $ | 5,416 | $ | 442 | |||||||||
Restricted shares | 32 | 181 | 303 | 447 | |||||||||||||
Pursuant to the terms of the Equity Incentive Plan, Tranche B options granted to employees and certain directors would vest at such time as the Investor Internal Rate of Return (“IRR”) equals or exceeds 25%, except for one grant that vests upon a 20% IRR, based on cash proceeds received by Apollo Investment Fund VII, L.P. (the “Investor”), and Tranche C options would vest at such time as the IRR equals or exceeds 30% based on cash proceeds received by the Investor. | |||||||||||||||||
As a result of the Initial Public Offering, the IRR required by the Tranche B and C options was achieved and accordingly, all Tranche B and C options became vested. As a result, the Company recognized a share-based compensation expense of $4.9 million in April 2013. | |||||||||||||||||
The maximum unrecognized cost for stock options was $1.3 million as of September 30, 2013 related to Tranche A time vesting options. The maximum unrecognized cost for restricted stock units was $0.2 million as of September 30, 2013. |
Income_Tax
Income Tax | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||||||||||
Income Tax | ' | ||||||||||||||||
Note 7 – Income Tax | |||||||||||||||||
The components of income tax expense (benefit) for the three and nine months ended September 30, 2013 and 2012 consisted of the following: | |||||||||||||||||
Three months ended | Nine months ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
(Dollar amounts in thousands) | 2013 | 2012 | 2013 | 2012 | |||||||||||||
Current tax provision | $ | 1,830 | $ | 693 | $ | 3,120 | $ | 6,163 | |||||||||
Deferred tax (benefit) expense | (472 | ) | 550 | (6,723 | ) | (4,662 | ) | ||||||||||
Income tax expense (benefit) | $ | 1,358 | $ | 1,243 | $ | (3,603 | ) | $ | 1,501 | ||||||||
The Company conducts operations in Puerto Rico and certain countries throughout the Caribbean and Latin America. As a result, the income tax expense includes the effect of taxes paid to the Puerto Rico government as well as foreign jurisdictions. The following table presents the components of income tax expense (benefit) for the three and nine months ended September 30, 2013 and 2012 and its segregation based on location of operations: | |||||||||||||||||
Three months ended | Nine months ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
(Dollar amounts in thousands) | 2013 | 2012 | 2013 | 2012 | |||||||||||||
Current tax provision | |||||||||||||||||
Puerto Rico | $ | 1,456 | $ | (1 | ) | $ | 1,712 | $ | 4,949 | ||||||||
United States | 24 | 138 | 453 | 481 | |||||||||||||
Foreign countries | 350 | 556 | 955 | 733 | |||||||||||||
Total current tax provision | $ | 1,830 | $ | 693 | $ | 3,120 | $ | 6,163 | |||||||||
Deferred tax (benefit) expense | |||||||||||||||||
Puerto Rico | $ | (422 | ) | $ | 739 | $ | (6,378 | ) | $ | (4,166 | ) | ||||||
United States | (1 | ) | (34 | ) | (3 | ) | (34 | ) | |||||||||
Foreign countries | (49 | ) | (155 | ) | (342 | ) | (462 | ) | |||||||||
Total deferred tax (benefit) expense | $ | (472 | ) | $ | 550 | $ | (6,723 | ) | $ | (4,662 | ) | ||||||
Taxes payable to foreign countries by EVERTEC’s subsidiaries will be paid by such subsidiary and the corresponding liability and expense will be presented in EVERTEC’s consolidated financial statements. | |||||||||||||||||
On June 30, 2013, the Governor of Puerto Rico signed into law Act 40, effective as of January 1, 2013, which increased the maximum corporate income tax rate from 30% to 39%. This rate increase is only applicable to the fully taxable operations of EVERTEC in Puerto Rico. As a result of this tax rate increase, the deferred taxes were revalued resulting in the Company recognizing additional non-cash income tax expense of $1.4 million for the first half of 2013. In addition, Act 40 established a national gross receipts tax based on gross revenues that is included as part of the alternative minimum tax calculation. | |||||||||||||||||
The income tax (benefit) expense differs from the amount computed by applying the Puerto Rico statutory income tax rate to the income before income taxes as a result of the following: | |||||||||||||||||
Three months ended | Nine months ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
(Dollar amounts in thousands) | 2013 | 2012 | 2013 | 2012 | |||||||||||||
Computed income tax at statutory rates | $ | 6,302 | $ | 1,057 | $ | (18,823 | ) | $ | 1,583 | ||||||||
Benefit of net tax-exempt interest income | (26 | ) | (4 | ) | (120 | ) | (8 | ) | |||||||||
Adjustment to deferred taxes due to changes in enacted tax rate | — | — | 1,441 | — | |||||||||||||
Differences in tax rates due to multiple jurisdictions | (287 | ) | 29 | 329 | 280 | ||||||||||||
Effect of income subject to tax-exemption grant | (4,924 | ) | 475 | 14,058 | (130 | ) | |||||||||||
Reversal of tax uncertainties reserve | — | — | (846 | ) | (640 | ) | |||||||||||
Fair value adjustment of indemnification assets | — | (98 | ) | — | 266 | ||||||||||||
Tax benefit CONTADO dividend | — | (123 | ) | — | (123 | ) | |||||||||||
Tax expense due to change in estimate | 191 | — | 191 | — | |||||||||||||
Effect of net operating losses in foreign entities | 162 | — | 162 | 278 | |||||||||||||
Other | (60 | ) | (93 | ) | 5 | (5 | ) | ||||||||||
Income tax expense (benefit) | $ | 1,358 | $ | 1,243 | $ | (3,603 | ) | $ | 1,501 | ||||||||
At September 30, 2013 the recorded value of our net operating loss (“NOL”) carryforwards was $12.4 million. The recorded value of our NOL carryforwards is approximately $7.3 million lower than the total NOL carryforwards available to us due to a windfall tax benefit. The windfall tax benefit is available to offset future taxable income and is considered an off-balance sheet item until the deduction reduces taxes payable. This windfall tax benefit results from tax deductions in excess of previously recorded compensation expense due to the difference in fair value of stock options at the time of the grant as compared to when they were exercised. The total gross NOL carryforwards available to us, including the windfall benefit, was $97.9 million as of September 30, 2013. Our NOL carryforwards have expiration dates up to 2023. | |||||||||||||||||
There are no open uncertain tax positions as of September 30, 2013. |
Net_Income_Loss_Per_Common_Sha
Net Income (Loss) Per Common Share | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||||||
Net Income (Loss) Per Common Share | ' | ||||||||||||||||
Note 8 – Net Income (Loss) Per Common Share | |||||||||||||||||
The reconciliation of the numerator and denominator of the income (loss) per common share is as follows: | |||||||||||||||||
Three months ended | Nine months ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
(Dollar amounts in thousands, except per share data) | 2013 | 2012 | 2013 | 2012 | |||||||||||||
Net income (loss) | $ | 14,803 | $ | 2,276 | $ | (44,660 | ) | $ | 3,777 | ||||||||
Weighted average common shares outstanding | 81,905,566 | 72,704,839 | 77,890,406 | 72,674,699 | |||||||||||||
Weighted average potential dilutive common shares (1)(2) | 956,972 | 3,540,566 | — | 4,043,383 | |||||||||||||
Weighted average common shares outstanding - assuming dilution | 82,862,538 | 76,245,405 | 77,890,406 | 76,718,082 | |||||||||||||
Net income (loss) per common share - basic | $ | 0.18 | $ | 0.03 | $ | (0.57 | ) | $ | 0.05 | ||||||||
Net income (loss) per common share - diluted | $ | 0.18 | $ | 0.03 | $ | (0.57 | ) | $ | 0.05 | ||||||||
-1 | Potential common shares consist of common stock issuable under the assumed exercise of stock options and restricted stock awards using the treasury stock method. | ||||||||||||||||
-2 | For the nine months ended September 30, 2013, 2,784,779 potential common shares consisting of common stock under the assumed exercise of stock options and restricted stock awards using the treasury stock method were not included in the computation of the diluted net income (loss) per share since their inclusion would have an antidilutive effect. | ||||||||||||||||
On August 7, 2013, the Company’s Board of Directors approved a regular quarterly cash dividend of $0.10 per common share. The first quarterly dividend was paid on September 6, 2013 to stockholders of record at the close of business on August 19, 2013. Cash payments related to this dividend were approximately $8.2 million. |
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2013 | |
Commitments And Contingencies Disclosure [Abstract] | ' |
Commitments and Contingencies | ' |
Note 9 – Commitments and Contingencies | |
Certain lease agreements contain provisions for future rent increases. The total amount of rental payments due over the lease term is being charged to rent expense on the straight-line method over the term of the lease. The difference between rent expense recorded and the amount paid is recorded as a deferred rent obligation. Total deferred rent obligation as of September 30, 2013 and December 31, 2012 amounted to $0.3 million and is included within the accounts receivable, net caption in the accompanying unaudited consolidated balance sheets. | |
Rent expense of office facilities and real estate for the three and nine months ended September 30, 2013 amounted to $1.7 million and $5.7 million, respectively, compared to $1.9 million and $5.8 million for the corresponding 2012 periods. Also, rent expense for telecommunications and other equipment for the three and nine months ended September 30, 2013 amounted to $1.8 million and $5.3 million, respectively, compared to $1.7 million and $5.4 million for the corresponding 2012 periods. | |
EVERTEC is a defendant in a number of legal proceedings arising in the ordinary course of business. Based on the opinion of legal counsel and other factors, management believes that the final disposition of these matters will not have a material adverse effect on the business, results of operations or financial condition of the Company. The Company has identified certain claims as a result of which a loss may be incurred, but in the aggregate the loss would be minimal. For other claims, where the proceedings are in an initial phase, the Company is unable to estimate the range of possible loss for such legal proceedings. However, the Company at this time believes that any loss related to these latter claims will not be material. |
Related_Party_Transactions
Related Party Transactions | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Related Party Transactions [Abstract] | ' | ||||||||||||||||
Related Party Transactions | ' | ||||||||||||||||
Note 10 – Related Party Transactions | |||||||||||||||||
The following table presents the Company’s transactions with related parties for the three and nine months ended September 30, 2013 and 2012: | |||||||||||||||||
Three months ended | Nine months ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
(Dollar amounts in thousands) | 2013 | 2012 | 2013 | 2012 | |||||||||||||
Total revenues (1)(2) | $ | 40,838 | $ | 37,025 | $ | 124,842 | $ | 112,871 | |||||||||
Cost of revenues | $ | 1,570 | $ | 98 | $ | 6,680 | $ | 319 | |||||||||
Rent and other fees(3)(4) | $ | 1,636 | $ | 2,725 | $ | 31,708 | $ | 8,547 | |||||||||
Interest earned from and charged by affiliate | |||||||||||||||||
Interest income | $ | 25 | $ | 22 | $ | 67 | $ | 179 | |||||||||
Interest expense(5) | $ | — | $ | 1,857 | $ | 2,471 | $ | 5,600 | |||||||||
-1 | Total revenues from Popular as a percentage of revenues were 46%, 43%, 46% and 44% for each of the periods presented above. | ||||||||||||||||
-2 | Includes revenues generated from investee accounted for under the equity method of $0.6 million and $2.3 million for the three and nine months ended September 30, 2013, respectively, and $0.9 million and $2.6 million for the corresponding 2012 periods. | ||||||||||||||||
-3 | Includes management fees to equity sponsors amounting to $20.2 million for the nine months ended September 30, 2013, compared to $0.9 million and $2.9 million for the three and nine months ended September 30, 2012. Management fees paid during 2013 includes $16.7 million resulting from the termination of the consulting agreements as explained below. Rent and other fees also includes $5.9 million paid to Popular in connection with the redemption premium on the senior notes during the first half of 2013. | ||||||||||||||||
-4 | Includes $1.6 million, $2.7 million, $9.1 million and $8.5 million recorded as selling, general and administrative expenses for each of the periods presented above, and $22.6 million recorded as non-operating expenses for the nine months ended September 30, 2013 in the unaudited consolidated statement of income (loss) and comprehensive income (loss). | ||||||||||||||||
-5 | Interest expense relates to interest accrued on the senior secured term loan and senior notes held by Popular. As a result of the debt refinancing and the redemption of the senior notes in April 2013, Popular’s participation in such debt was extinguished. See Note 4 for additional information related to the extinguishment of this debt. | ||||||||||||||||
On April 17, 2013, EVERTEC entered into a termination agreement with Holdings, EVERTEC Group and Popular and a termination agreement with Holdings, EVERTEC Group and Apollo Management VII, L.P. in connection with the Initial Public Offering (the “Termination Agreements”). The Termination Agreements terminated the consulting agreements (the “Consulting Agreements”), each dated September 30, 2010, entered into by Holdings and EVERTEC Group with each of Popular and Apollo Management, pursuant to which Holdings and EVERTEC Group received certain advisory services from each of Popular and Apollo Management. The Consulting Agreements were terminated in their entirety upon payment of termination fees of approximately $8.5 million to Apollo Management and $8.2 million to Popular, in each case, plus any unreimbursed expenses payable in accordance with the terms of the Termination Agreements. | |||||||||||||||||
At September 30, 2013 and December 31, 2012, EVERTEC had the following balances arising from transactions with related parties: | |||||||||||||||||
(Dollar amounts in thousands) | September 30, | December 31, | |||||||||||||||
2013 | 2012 | ||||||||||||||||
Cash and restricted cash deposits in affiliated bank | $ | 23,581 | $ | 19,438 | |||||||||||||
Indemnification assets from Popular reimbursement (1) | |||||||||||||||||
Accounts receivable | $ | 2,086 | $ | 2,157 | |||||||||||||
Other long-term assets | $ | 2,087 | $ | 3,942 | |||||||||||||
Other due/to from affiliate | |||||||||||||||||
Accounts receivable | $ | 18,273 | $ | 19,252 | |||||||||||||
Prepaid expenses and other assets | $ | 1,151 | $ | — | |||||||||||||
Accounts payable(2) | $ | 5,723 | $ | 3,845 | |||||||||||||
Unearned income | $ | 2,293 | $ | — | |||||||||||||
Other long-term liabilities(2) | $ | 333 | $ | 2,847 | |||||||||||||
Long-term debt | $ | — | $ | 90,186 | |||||||||||||
-1 | Recorded in connection with reimbursements from Popular regarding certain software license fees. | ||||||||||||||||
-2 | Includes an account payable of $0.2 million and $0.4 million and a long-term liability of $0.3 million and $2.8 million for September 30, 2013 and December 31, 2012, respectively, related to the unvested portion of stock options as a result of the equitable adjustment approved by our Board of Directors on December 18, 2012 that will be payable to executive officers and employees upon vesting of stock options. | ||||||||||||||||
At September 30, 2013, EVERTEC Group has a credit facility with Popular for $3.6 million, on behalf of EVERTEC CR, under which a letter of credit of a similar amount was issued. |
Segment_Information
Segment Information | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||||||
Segment Information | ' | ||||||||||||||||||||
Note 11 – Segment Information | |||||||||||||||||||||
The Company operates in three business segments: merchant acquiring, payment processing and business solutions. | |||||||||||||||||||||
The merchant acquiring segment consists of revenues from services that allow merchants to accept electronic methods of payment. In the merchant acquiring segment, revenues include a discount fee and membership fees charged to merchants, debit network fees and rental fees from POS devices and other equipment, net of credit card interchange and assessment fees charged by credit cards associations (such as VISA or MasterCard) or payment networks. The discount fee is generally a percentage of the transaction value. We also charge merchants for other services that are unrelated to the number of transactions or the transaction value. | |||||||||||||||||||||
The payment processing segment revenues are comprised of revenues related to providing access to the ATH network and other card networks to financial institutions, including related services such as authorization, processing, management and recording of ATM and POS transactions, and ATM management and monitoring. Payment processing revenues also include revenues from card processing services (such as credit and debit card processing, authorization and settlement and fraud monitoring and control to debit or credit issuers), payment processing services (such as payment and billing products for merchants, businesses and financial institutions) and electronic benefit transfer (“EBT”) (which principally consist of services to the government of Puerto Rico for the delivery of benefits to participants). | |||||||||||||||||||||
For ATH network and processing services, revenues are primarily driven by the number of transactions processed. Revenues are derived primarily from network fees, transaction switching and processing fees, and the leasing POS devices. For card issuer processing, revenues are primarily dependent upon the number of cardholder accounts on file, transactions and authorizations processed, the number of cards embossed and other processing services. For EBT services, revenues are primarily derived from the number of beneficiaries on file. | |||||||||||||||||||||
The business solutions segment consist of revenues from a full suite of business process management solutions in various product areas such as core bank processing, network hosting and management, IT professional services, business process outsourcing, item processing, cash processing, and fulfillment. Core bank processing and network services revenues are derived in part from a recurrent fee and from fees based on the number of accounts on file (i.e. savings or checking accounts, loans, etc) or computer resources utilized. Revenues from other processing services within the business solutions segment are generally volume-based and depend on factors such as the number of accounts processed. In addition, we are a reseller of hardware and software products and these resale transactions are generally one-time transactions. | |||||||||||||||||||||
The Company’s business segments are organized based on the nature of products and services. The Chief Operating Decision Maker (“CODM”) reviews their separate financial information to assess performance and to allocate resources. | |||||||||||||||||||||
Management evaluates the operating results of each of its reportable segments based upon revenues and operating income. Segment asset disclosure is not used by the CODM as a measure of segment performance since the segment evaluation is driven by earnings. As such, segment assets are not disclosed in the notes to the accompanying unaudited consolidated financial statements. | |||||||||||||||||||||
The following tables set forth information about the Company’s operations by its three business segments for the periods indicated: | |||||||||||||||||||||
(Dollar amounts in thousands) | Merchant | Payment | Business | Other | Total | ||||||||||||||||
acquiring, net | processing | solutions | |||||||||||||||||||
Three months ended September 30, 2013 | |||||||||||||||||||||
Revenues | $ | 18,211 | $ | 32,342 | $ | 44,472 | $ | (7,611 | )(1) | $ | 87,414 | ||||||||||
Income from operations | 8,568 | 14,056 | 11,282 | (12,042 | )(2) | 21,864 | |||||||||||||||
Three months ended September 30, 2012 | |||||||||||||||||||||
Revenues | 16,810 | 28,463 | 43,745 | (5,179 | )(1) | 83,839 | |||||||||||||||
Income from operations | 8,225 | 13,587 | 7,801 | (11,731 | )(2) | 17,882 | |||||||||||||||
-1 | Represents the elimination of intersegment revenues for services provided by the payment processing segment to the merchant acquiring segment, and other miscellaneous intersegment revenues. | ||||||||||||||||||||
-2 | Primarily represents non-operating depreciation and amortization expenses generated as a result of the Merger and certain non-recurring fees and expenses. | ||||||||||||||||||||
(Dollar amounts in thousands) | Merchant | Payment | Business | Other | Total | ||||||||||||||||
acquiring, net | processing | solutions | |||||||||||||||||||
Nine months ended September 30, 2013 | |||||||||||||||||||||
Revenues | $ | 53,835 | $ | 92,168 | $ | 136,965 | $ | (19,040 | )(1) | $ | 263,928 | ||||||||||
Income from operations | 25,963 | 38,536 | 30,600 | (35,898 | )(2) | 59,201 | |||||||||||||||
Nine months ended September 30, 2012 | |||||||||||||||||||||
Revenues | 51,499 | 85,711 | 129,214 | (15,725 | )(1) | 250,699 | |||||||||||||||
Income from operations | 24,736 | 38,652 | 25,751 | (35,185 | )(2) | 53,954 | |||||||||||||||
-1 | Represents the elimination of intersegment revenues for services provided by the payment processing segment to the merchant acquiring segment, and other miscellaneous intersegment revenues. | ||||||||||||||||||||
-2 | Primarily represents non-operating depreciation and amortization expenses generated as a result of the Merger and certain non-recurring fees and expenses. | ||||||||||||||||||||
The reconciliation of income from operations to consolidated net income for the three and nine months ended September 30, 2013 and 2012 is as follows: | |||||||||||||||||||||
Three months ended | Nine months ended | ||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||
(Dollar amounts in thousands) | 2013 | 2012 | 2013 | 2012 | |||||||||||||||||
Segment income from operations | |||||||||||||||||||||
Merchant acquiring | $ | 8,568 | $ | 8,225 | $ | 25,963 | $ | 24,736 | |||||||||||||
Payment processing | 14,056 | 13,587 | 38,536 | 38,652 | |||||||||||||||||
Business solutions | 11,282 | 7,801 | 30,600 | 25,751 | |||||||||||||||||
Total segment income from operations | 33,906 | 29,613 | 95,099 | 89,139 | |||||||||||||||||
Merger related depreciation and amortization and other unallocated expenses(1) | (12,042 | ) | (11,731 | ) | (35,898 | ) | (35,185 | ) | |||||||||||||
Income from operations | $ | 21,864 | $ | 17,882 | $ | 59,201 | $ | 53,954 | |||||||||||||
Interest expense, net | (6,349 | ) | (14,746 | ) | (31,267 | ) | (38,977 | ) | |||||||||||||
Earnings of equity method investment | 198 | (472 | ) | 823 | 103 | ||||||||||||||||
Other income (expenses) | 448 | 855 | (77,020 | ) | (9,802 | ) | |||||||||||||||
Income tax (expense) benefit | (1,358 | ) | (1,243 | ) | 3,603 | (1,501 | ) | ||||||||||||||
Net income (loss) | $ | 14,803 | $ | 2,276 | $ | (44,660 | ) | $ | 3,777 | ||||||||||||
-1 | Primarily represents non-operating depreciation and amortization expenses generated as a result of the Merger and certain non-recurring fees and expenses. |
Subsequent_Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2013 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
Note 12 – Subsequent Events | |
The Company evaluated subsequent events through the date that these unaudited consolidated financial statements were issued. There were no subsequent events requiring disclosure other than those below. | |
Quarterly Dividend. On November 6, 2013, the Company announced that its Board of Directors declared a regular quarterly dividend of $0.10 per share to be paid on December 6, 2013 to stockholders of record at the close of business on November 18, 2013. Cash payments related to this dividend are expected to total approximately $8.2 million. |
The_Company_and_Summary_of_Sig1
The Company and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Accounting Policies [Abstract] | ' |
The Company | ' |
Note 1 – The Company and Summary of Significant Accounting Policies | |
The Company | |
EVERTEC, Inc. (formerly known as Carib Latam Holdings, Inc.) and its subsidiaries (collectively the “Company,” “EVERTEC,” “we,” “us,” or “our”) is the leading full-service transaction processing business in Latin America and the Caribbean. We are based in Puerto Rico and provide a broad range of merchant acquiring, payment processing and business process management services across 19 countries in the region. We process over 1.8 billion transactions annually, and manage the electronic payment network for over 4,100 automated teller machines (“ATM”) and over 104,000 point-of-sale (“POS”) payment terminals. According to the July 2013 Nilson Report, we are the largest merchant acquirer in the Caribbean and Central America and the seventh largest in Latin America based on total number of transactions. We own and operate the ATH network, one of the leading ATM and personal identification number debit networks in Latin America. In addition, we provide a comprehensive suite of services for core bank processing, cash processing and technology outsourcing in the regions we serve. We serve a broad and diversified customer base of leading financial institutions, merchants, corporations and government agencies with ‘mission critical’ technology solutions that are essential to their operations, enabling them to issue, process and accept transactions securely, and we believe that our business is well positioned to continue to expand across the fast growing Latin American region. | |
Our subsidiaries include EVERTEC Intermediate Holdings, LLC (“Holdings,” formerly known as Carib Holdings, Inc.), EVERTEC Group, LLC (“EVERTEC Group”), EVERTEC Dominicana SAS., EVERTEC Panamá, S.A., EVERTEC Latinoamérica, S.A., EVERTEC Costa Rica, S.A. (“EVERTEC CR”), Tarjetas Inteligentes Internacionales, S.A., EVERTEC Guatemala, S.A. and EVERTEC México Servicios de Procesamiento, S.A. de C.V. | |
Initial Public Offering | ' |
Initial Public Offering | |
On April 17, 2013, the Company completed its initial public offering (“Initial Public Offering”) of 28,789,943 shares of common stock at a price to the public of $20.00 per share. A total of 6,250,000 shares were offered by the Company and a total of 22,539,943 shares were offered by selling stockholders of the Company, of which 13,739,284 shares were sold by an affiliate of Apollo Global Management, LLC (“Apollo”) and 8,800,659 shares were sold by Popular. The Company used net proceeds of approximately $117.4 million from its sale of shares in the Initial Public Offering and proceeds from borrowings under the 2013 Credit Agreement (as defined in Note 4), together with available cash on hand, to redeem its senior notes (as defined in Note 4) and to refinance its previous senior secured credit facilities. | |
Public Offering by Selling Stockholders | ' |
Public Offering by Selling Stockholders | |
On September 18, 2013, the Company completed a public offering of 23,000,000 shares of its common stock by Apollo, Popular, and certain officers and current and former employees of the Company at a price to the public of $22.50 per share. The Company did not receive any proceeds from this offering. After completion of this offering, Apollo owned approximately 9.2 million shares of our common stock, or 11.2% and Popular owned approximately 17.5 million shares of our common stock, or 21.3%. | |
Basis of Presentation | ' |
Basis of Presentation | |
The accompanying unaudited consolidated financial statements include the accounts of EVERTEC, Inc. and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The preparation of the accompanying unaudited consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited consolidated financial statements. Actual results could differ from these estimates. | |
In the opinion of management, the accompanying unaudited consolidated financial statements, prepared in accordance with GAAP, contain all adjustments, all of which are normal and recurring in nature, necessary for a fair presentation. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted from the unaudited consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). As these unaudited consolidated financial statements are prepared using the same accounting principles and policies used to prepare the annual financial statements, they should be read in conjunction with the audited consolidated financial statements for the fiscal year ended December 31, 2012, included in the Company’s Registration Statement on Form S-1 (File No. 333-186487) (as amended, the “Registration Statement”), which was declared effective by the SEC on April 11, 2013. The results of operations for the three and nine months ended September 30, 2013 are not necessarily indicative of the results of operations for the full year or any future period. | |
On April 1, 2013, EVERTEC’s Board of Directors declared a two for one stock split of our outstanding Class A and Class B common stock. Accordingly, all shares of outstanding common stock or restricted stock, or shares of common stock underlying outstanding options, and all per share amounts for all periods presented in these consolidated financial statements and notes thereto, have been adjusted retroactively, where applicable, to reflect this stock split, except for the par value of the common stock, which was not adjusted by the stock split and the impact was recorded as additional paid-in capital. Under the certificate of incorporation, as amended by the certificate of amendment, which became effective on April 1, 2013, EVERTEC’s authorized capital consists of 206,000,000 shares of common stock and 2,000,000 shares of preferred stock. | |
The Consolidated Balance Sheet as of December 31, 2012 was derived from the audited consolidated financial statements for the fiscal year ended December 31, 2012 included in the Registration Statement. | |
Certain reclassifications have been made to certain prior period notes to the unaudited consolidated financial statements to conform with the presentation in 2013. | |
Share-based Compensation | ' |
Share-based Compensation | |
Management uses the fair value method of recording stock-based compensation as described in the guidance for stock compensation in ASC topic 718. The fair value of the stock options granted during 2011 and 2012 was estimated using the Black-Scholes-Merton (“BSM”) option pricing model for Tranche A options granted under the EVERTEC, Inc. Amended and Restated 2010 Equity Incentive Plan (the “Equity Incentive Plan”) and the Monte Carlo simulation analysis for Tranche B and Tranche C options. | |
Upon option exercise, participants may elect to “net share settle”. Rather than requiring the participant to deliver cash to satisfy the exercise price and statutory minimum tax withholdings, the Company withholds a sufficient number of shares to cover these amounts and delivers the net shares to the participant. The Company recognizes the associated tax withholding obligation as a reduction of additional paid-in capital. | |
As compensation expense is recognized, a deferred tax asset is established. At the time stock options are exercised, a current tax deduction arises based on the value at the time of exercise. This deduction may exceed the associated deferred tax asset, resulting in a “windfall tax benefit”. The windfall is recognized in the unaudited consolidated balance sheet as an increase to additional paid-in capital, and is included in the unaudited consolidated statement of cash flows as a financing inflow. | |
Net Income (Loss) Per Common Share | ' |
Net Income (Loss) Per Common Share | |
Basic net income (loss) per common share is determined by dividing net income (loss) by the weighted-average number of common shares outstanding during the period. | |
Diluted net income (loss) per common share assumes the issuance of all potentially dilutive share equivalents using the treasury stock method. |
Property_and_Equipment_net_Tab
Property and Equipment, net (Tables) | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Property Plant And Equipment [Abstract] | ' | ||||||||||
Property and Equipment, Net | ' | ||||||||||
Property and equipment, net consists of the following: | |||||||||||
(Dollar amounts in thousands) | Useful life | September 30, | December 31, | ||||||||
in years | 2013 | 2012 | |||||||||
Buildings | 30 | $ | 1,731 | $ | 2,096 | ||||||
Data processing equipment | 5-Mar | 63,399 | 59,901 | ||||||||
Furniture and equipment | 20-Mar | 6,639 | 6,183 | ||||||||
Leasehold improvements | 10-May | 2,860 | 2,380 | ||||||||
74,629 | 70,560 | ||||||||||
Less - accumulated depreciation and amortization | (44,172 | ) | (35,331 | ) | |||||||
Depreciable assets, net | 30,457 | 35,229 | |||||||||
Land | 1,535 | 1,508 | |||||||||
Property and equipment, net | $ | 31,992 | $ | 36,737 | |||||||
Goodwill_and_Other_Intangible_1
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Goodwill And Intangible Assets Disclosure [Abstract] | ' | ||||||||||||||||
Changes in Carrying Amount of Goodwill Allocated by Reportable Segments | ' | ||||||||||||||||
The changes in the carrying amount of goodwill, allocated by reportable segments, were as follows (See Note 11): | |||||||||||||||||
(Dollar amounts in thousands) | Merchant | Payment | Business | Total | |||||||||||||
acquiring, net | processing | solutions | |||||||||||||||
Balance at December 31, 2012 | $ | 138,121 | $ | 187,028 | $ | 47,158 | $ | 372,307 | |||||||||
Foreign currency translation adjustments | — | 666 | 250 | 916 | |||||||||||||
Balance at September 30, 2013 | $ | 138,121 | $ | 187,694 | $ | 47,408 | $ | 373,223 | |||||||||
Carrying Amount of Other Intangible Assets | ' | ||||||||||||||||
The carrying amount of other intangible assets for the nine months ended September 30, 2013 and the year ended December 31, 2012 consisted of the following: | |||||||||||||||||
(Dollar amounts in thousands) | September 30, 2013 | ||||||||||||||||
Useful life | Gross | Accumulated | Net carrying | ||||||||||||||
in years | amount | amortization | amount | ||||||||||||||
Customer relationships | 14 | $ | 314,070 | $ | (67,577 | ) | $ | 246,493 | |||||||||
Trademark | 10 - 15 | 39,950 | (10,392 | ) | 29,558 | ||||||||||||
Software packages | 5-Mar | 113,866 | (59,856 | ) | 54,010 | ||||||||||||
Non-compete agreement | 15 | 56,539 | (11,308 | ) | 45,231 | ||||||||||||
Other intangible assets, net | $ | 524,425 | $ | (149,133 | ) | $ | 375,292 | ||||||||||
(Dollar amounts in thousands) | 31-Dec-12 | ||||||||||||||||
Useful life | Gross | Accumulated | Net carrying | ||||||||||||||
in years | amount | amortization | amount | ||||||||||||||
Customer relationships | 14 | $ | 313,726 | $ | (50,769 | ) | $ | 262,957 | |||||||||
Trademark | 15-Oct | 39,950 | (7,794 | ) | 32,156 | ||||||||||||
Software packages | 5-Mar | 110,478 | (50,479 | ) | 59,999 | ||||||||||||
Non-compete agreement | 15 | 56,539 | (8,481 | ) | 48,058 | ||||||||||||
Other intangible assets, net | $ | 520,693 | $ | (117,523 | ) | $ | 403,170 | ||||||||||
Schedule of Estimated Amortization Expense | ' | ||||||||||||||||
The estimated amortization expense of the balances outstanding at September 30, 2013 for the next five years is as follows: | |||||||||||||||||
(Dollar amounts in thousands) | |||||||||||||||||
Remaining 2013 | $ | 13,054 | |||||||||||||||
2014 | 49,162 | ||||||||||||||||
2015 | 44,780 | ||||||||||||||||
2016 | 35,193 | ||||||||||||||||
2017 | 32,008 | ||||||||||||||||
2018 | 30,129 |
Debt_and_ShortTerm_Borrowings_
Debt and Short-Term Borrowings (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Total Debt | ' | ||||||||
Total debt as of September 30, 2013 and December 31, 2012 was as follows: | |||||||||
(Dollar amounts in thousands) | September 30, | December 31, | |||||||
2013 | 2012 | ||||||||
Senior Secured Credit Facility (Term A) due on April 17, 2018 paying interest at a variable interest rate (London InterBank Offered Rate (“LIBOR”) plus applicable margin(1)) | $ | 295,881 | $ | — | |||||
Senior Secured Credit Facility (Term B) due on April 17, 2020 paying interest at a variable interest rate (LIBOR plus applicable margin(2)) | 393,328 | — | |||||||
Senior Secured Credit Facility due on September 30, 2016 paying interest at a variable interest rate (LIBOR plus applicable margin(3)) | — | 484,414 | |||||||
Senior Secured Revolving Credit Facility paying interest at a variable interest rate | — | 14,000 | |||||||
Senior Notes due on October 1, 2018, paying interest semi-annually at a rate of 11% per annum | — | 252,347 | |||||||
Other short-term borrowing | 6,132 | 12,995 | |||||||
Total debt | $ | 695,341 | $ | 763,756 | |||||
-1 | Applicable margin of 2.50% at September 30, 2013. | ||||||||
-2 | Subject to a minimum rate (“LIBOR floor”) of 0.75% plus applicable margin of 2.75% at September 30, 2013. | ||||||||
-3 | Subject to a minimum rate (“LIBOR floor”) of 1.50% plus applicable margin of 4.00% at December 31, 2012. |
Financial_Instruments_and_Fair1
Financial Instruments and Fair Value Measurements (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||
Fair Value Measurements for Assets at Fair Value on Recurring Basis | ' | ||||||||||||||||
The following table summarizes fair value measurements by level at September 30, 2013 and December 31, 2012 for assets measured at fair value on a recurring basis: | |||||||||||||||||
(Dollar amounts in thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
30-Sep-13 | |||||||||||||||||
Financial assets: | |||||||||||||||||
Indemnification assets: | |||||||||||||||||
Software cost reimbursement | $ | — | $ | — | $ | 4,173 | $ | 4,173 | |||||||||
31-Dec-12 | |||||||||||||||||
Financial assets: | |||||||||||||||||
Indemnification assets: | |||||||||||||||||
Software cost reimbursement | $ | — | $ | — | $ | 6,099 | $ | 6,099 | |||||||||
Carrying Value and Estimated Fair Values for Financial Instruments | ' | ||||||||||||||||
The following table presents the carrying value, as applicable, and estimated fair values for financial instruments at September 30, 2013 and December 31, 2012: | |||||||||||||||||
30-Sep-13 | 31-Dec-12 | ||||||||||||||||
(Dollar amounts in thousands) | Carrying | Fair | Carrying | Fair | |||||||||||||
Amount | Value | Amount | Value | ||||||||||||||
Financial assets: | |||||||||||||||||
Indemnification assets: | |||||||||||||||||
Software cost reimbursement | $ | 4,173 | $ | 4,173 | $ | 6,099 | $ | 6,099 | |||||||||
Financial liabilities: | |||||||||||||||||
New senior secured term loans: | |||||||||||||||||
Senior secured term loan A | $ | 295,881 | $ | 292,695 | $ | — | $ | — | |||||||||
Senior secured term loan B | 393,328 | 384,038 | — | — | |||||||||||||
Senior secured term loan | — | — | 484,414 | 497,498 | |||||||||||||
Senior notes | — | — | 252,347 | 275,550 | |||||||||||||
Summary of Change in Fair Value of Level Three Assets | ' | ||||||||||||||||
The following table provides a summary of the change in fair value of the Company’s Level 3 assets: | |||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||
(Dollar amounts in thousands) | 2013 | 2012 | 2013 | 2012 | |||||||||||||
Indemnification assets: | |||||||||||||||||
Beginning balance | $ | 4,540 | $ | 6,120 | $ | 6,099 | $ | 7,464 | |||||||||
Payments received | (369 | ) | (1,017 | ) | (1,947 | ) | (2,145 | ) | |||||||||
Unrealized gain recognized in other income (expenses) | 2 | 550 | 21 | 334 | |||||||||||||
Ending balance | $ | 4,173 | $ | 5,653 | $ | 4,173 | $ | 5,653 | |||||||||
Sharebased_Compensation_Tables
Share-based Compensation (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ' | ||||||||||||||||
Summary of Non Vested Stock Option Activity | ' | ||||||||||||||||
The following table summarizes the nonvested stock options activity for the nine months ended September 30, 2013: | |||||||||||||||||
Nonvested stock options | Shares | Weighted-average | |||||||||||||||
exercise prices | |||||||||||||||||
Nonvested at December 31, 2012 | 4,571,258 | $ | 2.16 | ||||||||||||||
Vested | (3,757,099 | ) | 2.07 | ||||||||||||||
Nonvested at September 30, 2013 | 814,159 | $ | 2.57 | ||||||||||||||
Nonvested Restricted Shares Activity | ' | ||||||||||||||||
The following table summarizes the nonvested restricted shares activity for the nine months ended September 30, 2013: | |||||||||||||||||
Nonvested restricted shares | Shares | Weighted-average | |||||||||||||||
grant date fair | |||||||||||||||||
value | |||||||||||||||||
Nonvested at December 31, 2012 | 115,420 | $ | 5.9 | ||||||||||||||
Vested | (115,420 | ) | 5.9 | ||||||||||||||
Granted | 9,133 | 24.64 | |||||||||||||||
Nonvested at September 30, 2013 | 9,133 | $ | 24.64 | ||||||||||||||
Share-Based Compensation Recognized | ' | ||||||||||||||||
Share-based compensation recognized was as follows: | |||||||||||||||||
Three months ended | Nine months ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
(Dollar amounts in thousands) | 2013 | 2012 | 2013 | 2012 | |||||||||||||
Share-based compensation recognized | |||||||||||||||||
Stock options | $ | 204 | $ | 151 | $ | 5,416 | $ | 442 | |||||||||
Restricted shares | 32 | 181 | 303 | 447 |
Income_Tax_Tables
Income Tax (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||||||||||
Components of Income Tax Expense (Benefit) | ' | ||||||||||||||||
The components of income tax expense (benefit) for the three and nine months ended September 30, 2013 and 2012 consisted of the following: | |||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||
(Dollar amounts in thousands) | 2013 | 2012 | 2013 | 2012 | |||||||||||||
Current tax provision | $ | 1,830 | $ | 693 | $ | 3,120 | $ | 6,163 | |||||||||
Deferred tax (benefit) expense | (472 | ) | 550 | (6,723 | ) | (4,662 | ) | ||||||||||
Income tax expense (benefit) | $ | 1,358 | $ | 1,243 | $ | (3,603 | ) | $ | 1,501 | ||||||||
Segregation Income Tax Expense (Benefit) Based on Location of Operations | ' | ||||||||||||||||
The following table presents the components of income tax expense (benefit) for the three and nine months ended September 30, 2013 and 2012 and its segregation based on location of operations: | |||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||
(Dollar amounts in thousands) | 2013 | 2012 | 2013 | 2012 | |||||||||||||
Current tax provision | |||||||||||||||||
Puerto Rico | $ | 1,456 | $ | (1 | ) | $ | 1,712 | $ | 4,949 | ||||||||
United States | 24 | 138 | 453 | 481 | |||||||||||||
Foreign countries | 350 | 556 | 955 | 733 | |||||||||||||
Total current tax provision | $ | 1,830 | $ | 693 | $ | 3,120 | $ | 6,163 | |||||||||
Deferred tax (benefit) expense | |||||||||||||||||
Puerto Rico | $ | (422 | ) | $ | 739 | $ | (6,378 | ) | $ | (4,166 | ) | ||||||
United States | (1 | ) | (34 | ) | (3 | ) | (34 | ) | |||||||||
Foreign countries | (49 | ) | (155 | ) | (342 | ) | (462 | ) | |||||||||
Total deferred tax (benefit) expense | $ | (472 | ) | $ | 550 | $ | (6,723 | ) | $ | (4,662 | ) | ||||||
Income Tax Expense (benefit) Differs from Computed Income Tax at Statutory Rates | ' | ||||||||||||||||
The income tax (benefit) expense differs from the amount computed by applying the Puerto Rico statutory income tax rate to the income before income taxes as a result of the following: | |||||||||||||||||
Three months ended | Nine months ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
(Dollar amounts in thousands) | 2013 | 2012 | 2013 | 2012 | |||||||||||||
Computed income tax at statutory rates | $ | 6,302 | $ | 1,057 | $ | (18,823 | ) | $ | 1,583 | ||||||||
Benefit of net tax-exempt interest income | (26 | ) | (4 | ) | (120 | ) | (8 | ) | |||||||||
Adjustment to deferred taxes due to changes in enacted tax rate | — | — | 1,441 | — | |||||||||||||
Differences in tax rates due to multiple jurisdictions | (287 | ) | 29 | 329 | 280 | ||||||||||||
Effect of income subject to tax-exemption grant | (4,924 | ) | 475 | 14,058 | (130 | ) | |||||||||||
Reversal of tax uncertainties reserve | — | — | (846 | ) | (640 | ) | |||||||||||
Fair value adjustment of indemnification assets | — | (98 | ) | — | 266 | ||||||||||||
Tax benefit CONTADO dividend | — | (123 | ) | — | (123 | ) | |||||||||||
Tax expense due to change in estimate | 191 | — | 191 | — | |||||||||||||
Effect of net operating losses in foreign entities | 162 | — | 162 | 278 | |||||||||||||
Other | (60 | ) | (93 | ) | 5 | (5 | ) | ||||||||||
Income tax expense (benefit) | $ | 1,358 | $ | 1,243 | $ | (3,603 | ) | $ | 1,501 | ||||||||
Net_Income_Loss_Per_Common_Sha1
Net Income (Loss) Per Common Share (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||||||
Schedule of Reconciliation of Numerator and Denominator of Earning Per Common Share | ' | ||||||||||||||||
The reconciliation of the numerator and denominator of the income (loss) per common share is as follows: | |||||||||||||||||
Three months ended | Nine months ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
(Dollar amounts in thousands, except per share data) | 2013 | 2012 | 2013 | 2012 | |||||||||||||
Net income (loss) | $ | 14,803 | $ | 2,276 | $ | (44,660 | ) | $ | 3,777 | ||||||||
Weighted average common shares outstanding | 81,905,566 | 72,704,839 | 77,890,406 | 72,674,699 | |||||||||||||
Weighted average potential dilutive common shares (1)(2) | 956,972 | 3,540,566 | — | 4,043,383 | |||||||||||||
Weighted average common shares outstanding - assuming dilution | 82,862,538 | 76,245,405 | 77,890,406 | 76,718,082 | |||||||||||||
Net income (loss) per common share - basic | $ | 0.18 | $ | 0.03 | $ | (0.57 | ) | $ | 0.05 | ||||||||
Net income (loss) per common share - diluted | $ | 0.18 | $ | 0.03 | $ | (0.57 | ) | $ | 0.05 | ||||||||
-1 | Potential common shares consist of common stock issuable under the assumed exercise of stock options and restricted stock awards using the treasury stock method. | ||||||||||||||||
-2 | For the nine months ended September 30, 2013, 2,784,779 potential common shares consisting of common stock under the assumed exercise of stock options and restricted stock awards using the treasury stock method were not included in the computation of the diluted net income (loss) per share since their inclusion would have an antidilutive effect. |
Related_Party_Transactions_Tab
Related Party Transactions (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Related Party Transactions [Abstract] | ' | ||||||||||||||||
Transactions with Related Parties | ' | ||||||||||||||||
The following table presents the Company’s transactions with related parties for the three and nine months ended September 30, 2013 and 2012: | |||||||||||||||||
Three months ended | Nine months ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
(Dollar amounts in thousands) | 2013 | 2012 | 2013 | 2012 | |||||||||||||
Total revenues (1)(2) | $ | 40,838 | $ | 37,025 | $ | 124,842 | $ | 112,871 | |||||||||
Cost of revenues | $ | 1,570 | $ | 98 | $ | 6,680 | $ | 319 | |||||||||
Rent and other fees(3)(4) | $ | 1,636 | $ | 2,725 | $ | 31,708 | $ | 8,547 | |||||||||
Interest earned from and charged by affiliate | |||||||||||||||||
Interest income | $ | 25 | $ | 22 | $ | 67 | $ | 179 | |||||||||
Interest expense(5) | $ | — | $ | 1,857 | $ | 2,471 | $ | 5,600 | |||||||||
-1 | Total revenues from Popular as a percentage of revenues were 46%, 43%, 46% and 44% for each of the periods presented above. | ||||||||||||||||
-2 | Includes revenues generated from investee accounted for under the equity method of $0.6 million and $2.3 million for the three and nine months ended September 30, 2013, respectively, and $0.9 million and $2.6 million for the corresponding 2012 periods. | ||||||||||||||||
-3 | Includes management fees to equity sponsors amounting to $20.2 million for the nine months ended September 30, 2013, compared to $0.9 million and $2.9 million for the three and nine months ended September 30, 2012. Management fees paid during 2013 includes $16.7 million resulting from the termination of the consulting agreements as explained below. Rent and other fees also includes $5.9 million paid to Popular in connection with the redemption premium on the senior notes during the first half of 2013. | ||||||||||||||||
-4 | Includes $1.6 million, $2.7 million, $9.1 million and $8.5 million recorded as selling, general and administrative expenses for each of the periods presented above, and $22.6 million recorded as non-operating expenses for the nine months ended September 30, 2013 in the unaudited consolidated statement of income (loss) and comprehensive income (loss). | ||||||||||||||||
-5 | Interest expense relates to interest accrued on the senior secured term loan and senior notes held by Popular. As a result of the debt refinancing and the redemption of the senior notes in April 2013, Popular’s participation in such debt was extinguished. See Note 4 for additional information related to the extinguishment of this debt. | ||||||||||||||||
Summary of Balances of Transactions with Related Parties | ' | ||||||||||||||||
At September 30, 2013 and December 31, 2012, EVERTEC had the following balances arising from transactions with related parties: | |||||||||||||||||
(Dollar amounts in thousands) | September 30, | December 31, | |||||||||||||||
2013 | 2012 | ||||||||||||||||
Cash and restricted cash deposits in affiliated bank | $ | 23,581 | $ | 19,438 | |||||||||||||
Indemnification assets from Popular reimbursement (1) | |||||||||||||||||
Accounts receivable | $ | 2,086 | $ | 2,157 | |||||||||||||
Other long-term assets | $ | 2,087 | $ | 3,942 | |||||||||||||
Other due/to from affiliate | |||||||||||||||||
Accounts receivable | $ | 18,273 | $ | 19,252 | |||||||||||||
Prepaid expenses and other assets | $ | 1,151 | $ | — | |||||||||||||
Accounts payable(2) | $ | 5,723 | $ | 3,845 | |||||||||||||
Unearned income | $ | 2,293 | $ | — | |||||||||||||
Other long-term liabilities(2) | $ | 333 | $ | 2,847 | |||||||||||||
Long-term debt | $ | — | $ | 90,186 | |||||||||||||
-1 | Recorded in connection with reimbursements from Popular regarding certain software license fees. | ||||||||||||||||
-2 | Includes an account payable of $0.2 million and $0.4 million and a long-term liability of $0.3 million and $2.8 million for September 30, 2013 and December 31, 2012, respectively, related to the unvested portion of stock options as a result of the equitable adjustment approved by our Board of Directors on December 18, 2012 that will be payable to executive officers and employees upon vesting of stock options. |
Segment_Information_Tables
Segment Information (Tables) | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||||||
Information about Operations by Business Segments | ' | ||||||||||||||||||||
The following tables set forth information about the Company’s operations by its three business segments for the periods indicated: | |||||||||||||||||||||
(Dollar amounts in thousands) | Merchant | Payment | Business | Other | Total | ||||||||||||||||
acquiring, net | processing | solutions | |||||||||||||||||||
Three months ended September 30, 2013 | |||||||||||||||||||||
Revenues | $ | 18,211 | $ | 32,342 | $ | 44,472 | $ | (7,611 | )(1) | $ | 87,414 | ||||||||||
Income from operations | 8,568 | 14,056 | 11,282 | (12,042 | )(2) | 21,864 | |||||||||||||||
Three months ended September 30, 2012 | |||||||||||||||||||||
Revenues | 16,810 | 28,463 | 43,745 | (5,179 | )(1) | 83,839 | |||||||||||||||
Income from operations | 8,225 | 13,587 | 7,801 | (11,731 | )(2) | 17,882 | |||||||||||||||
-1 | Represents the elimination of intersegment revenues for services provided by the payment processing segment to the merchant acquiring segment, and other miscellaneous intersegment revenues. | ||||||||||||||||||||
-2 | Primarily represents non-operating depreciation and amortization expenses generated as a result of the Merger and certain non-recurring fees and expenses. | ||||||||||||||||||||
(Dollar amounts in thousands) | Merchant | Payment | Business | Other | Total | ||||||||||||||||
acquiring, net | processing | solutions | |||||||||||||||||||
Nine months ended September 30, 2013 | |||||||||||||||||||||
Revenues | $ | 53,835 | $ | 92,168 | $ | 136,965 | $ | (19,040 | )(1) | $ | 263,928 | ||||||||||
Income from operations | 25,963 | 38,536 | 30,600 | (35,898 | )(2) | 59,201 | |||||||||||||||
Nine months ended September 30, 2012 | |||||||||||||||||||||
Revenues | 51,499 | 85,711 | 129,214 | (15,725 | )(1) | 250,699 | |||||||||||||||
Income from operations | 24,736 | 38,652 | 25,751 | (35,185 | )(2) | 53,954 | |||||||||||||||
-1 | Represents the elimination of intersegment revenues for services provided by the payment processing segment to the merchant acquiring segment, and other miscellaneous intersegment revenues. | ||||||||||||||||||||
-2 | Primarily represents non-operating depreciation and amortization expenses generated as a result of the Merger and certain non-recurring fees and expenses. | ||||||||||||||||||||
Reconciliation of Income from Operations to Consolidated Net Income | ' | ||||||||||||||||||||
The reconciliation of income from operations to consolidated net income for the three and nine months ended September 30, 2013 and 2012 is as follows: | |||||||||||||||||||||
Three months ended | Nine months ended | ||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||
(Dollar amounts in thousands) | 2013 | 2012 | 2013 | 2012 | |||||||||||||||||
Segment income from operations | |||||||||||||||||||||
Merchant acquiring | $ | 8,568 | $ | 8,225 | $ | 25,963 | $ | 24,736 | |||||||||||||
Payment processing | 14,056 | 13,587 | 38,536 | 38,652 | |||||||||||||||||
Business solutions | 11,282 | 7,801 | 30,600 | 25,751 | |||||||||||||||||
Total segment income from operations | 33,906 | 29,613 | 95,099 | 89,139 | |||||||||||||||||
Merger related depreciation and amortization and other unallocated expenses(1) | (12,042 | ) | (11,731 | ) | (35,898 | ) | (35,185 | ) | |||||||||||||
Income from operations | $ | 21,864 | $ | 17,882 | $ | 59,201 | $ | 53,954 | |||||||||||||
Interest expense, net | (6,349 | ) | (14,746 | ) | (31,267 | ) | (38,977 | ) | |||||||||||||
Earnings of equity method investment | 198 | (472 | ) | 823 | 103 | ||||||||||||||||
Other income (expenses) | 448 | 855 | (77,020 | ) | (9,802 | ) | |||||||||||||||
Income tax (expense) benefit | (1,358 | ) | (1,243 | ) | 3,603 | (1,501 | ) | ||||||||||||||
Net income (loss) | $ | 14,803 | $ | 2,276 | $ | (44,660 | ) | $ | 3,777 | ||||||||||||
-1 | Primarily represents non-operating depreciation and amortization expenses generated as a result of the Merger and certain non-recurring fees and expenses. |
The_Company_and_Summary_of_Sig2
The Company and Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) | 9 Months Ended | 1 Months Ended | ||||||||||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Apr. 17, 2013 | Sep. 18, 2013 | Apr. 17, 2013 | Apr. 17, 2013 | Sep. 18, 2013 | Apr. 17, 2013 | Sep. 18, 2013 | Apr. 17, 2013 | Apr. 17, 2013 |
Facility | EVERTEC | Selling Stockholders | Selling Stockholders | Apollo | Popular | Popular | Apollo Global Management Llc | IPO | IPO | |||
Transactions | Common Stock | Common Stock | Common Stock | Common Stock | Common Stock | 2013 Credit Agreement | ||||||
Country | ||||||||||||
Company And Summary Of Significant Accounting Policies [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of countries where the Company provides a broad range of merchant acquiring, payment processing and business process management services | 19 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of transactions processed annually | 1,800,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of ATM's | 4,100 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of point-of-sale terminals | 104,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued under Initial and Other Public Offerings | ' | ' | ' | 6,250,000 | 23,000,000 | 22,539,943 | 13,739,284 | 17,500,000 | 8,800,659 | 9,200,000 | 28,789,943 | ' |
Offering price per share | ' | ' | ' | ' | $22.50 | ' | ' | ' | ' | ' | $20 | ' |
Net proceeds from Initial Public Offering | $91 | $450 | ' | ' | ' | ' | ' | ' | ' | ' | ' | $117,400 |
Percentage of equity interest owned | ' | ' | ' | ' | ' | ' | ' | 21.30% | ' | 11.20% | ' | ' |
Authorized common stock to issue | 206,000,000 | ' | 206,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Authorized preferred stock to issue | 2,000,000 | ' | 2,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Property_and_Equipment_Net_Det
Property and Equipment, Net (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | Buildings | Data Processing Equipment | Data Processing Equipment | Furniture and Equipment | Furniture and Equipment | Leasehold Improvements | Leasehold Improvements | ||
Minimum | Maximum | Minimum | Maximum | Minimum | Maximum | ||||
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Useful life in years | ' | ' | '30 years | '3 years | '5 years | '3 years | '20 years | '5 years | '10 years |
Buildings | $1,731 | $2,096 | ' | ' | ' | ' | ' | ' | ' |
Data processing equipment | 63,399 | 59,901 | ' | ' | ' | ' | ' | ' | ' |
Furniture and equipment | 6,639 | 6,183 | ' | ' | ' | ' | ' | ' | ' |
Leasehold improvements | 2,860 | 2,380 | ' | ' | ' | ' | ' | ' | ' |
Property and equipment | 74,629 | 70,560 | ' | ' | ' | ' | ' | ' | ' |
Less - accumulated depreciation and amortization | -44,172 | -35,331 | ' | ' | ' | ' | ' | ' | ' |
Depreciable assets, net | 30,457 | 35,229 | ' | ' | ' | ' | ' | ' | ' |
Land | 1,535 | 1,508 | ' | ' | ' | ' | ' | ' | ' |
Property and equipment, net | $31,992 | $36,737 | ' | ' | ' | ' | ' | ' | ' |
Property_and_Equipment_Net_Add
Property and Equipment, Net - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Property Plant And Equipment [Abstract] | ' | ' | ' | ' |
Depreciation and amortization expense related to property and equipment | $4.10 | $4 | $12.20 | $12.10 |
Changes_in_Carrying_Amount_of_
Changes in Carrying Amount of Goodwill Allocated by Reportable Segments (Detail) (USD $) | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 |
Goodwill [Line Items] | ' |
Goodwill, Beginning Balance | $372,307 |
Foreign currency translation adjustments | 916 |
Goodwill, Ending Balance | 373,223 |
Merchant acquiring | ' |
Goodwill [Line Items] | ' |
Goodwill, Beginning Balance | 138,121 |
Foreign currency translation adjustments | ' |
Goodwill, Ending Balance | 138,121 |
Payment processing | ' |
Goodwill [Line Items] | ' |
Goodwill, Beginning Balance | 187,028 |
Foreign currency translation adjustments | 666 |
Goodwill, Ending Balance | 187,694 |
Business solutions | ' |
Goodwill [Line Items] | ' |
Goodwill, Beginning Balance | 47,158 |
Foreign currency translation adjustments | 250 |
Goodwill, Ending Balance | $47,408 |
Goodwill_and_Other_Intangible_2
Goodwill and Other Intangible Assets - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Goodwill [Line Items] | ' | ' | ' | ' |
Fair value of each reporting unit in excess of carrying amount, Percentage | 30.00% | ' | 30.00% | ' |
Impairment losses | $0 | ' | $0 | ' |
Other Intangible Assets | ' | ' | ' | ' |
Goodwill [Line Items] | ' | ' | ' | ' |
Amortization expense for intangible assets | $13.60 | $13.80 | $40.90 | $41.40 |
Carrying_Amount_of_Other_Intan
Carrying Amount of Other Intangible Assets (Detail) (USD $) | 9 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2012 |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross amount | $524,425 | $520,693 |
Accumulated amortization | -149,133 | -117,523 |
Net carrying amount | 375,292 | 403,170 |
Customer relationships | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Useful life in years | '14 years | '14 years |
Gross amount | 314,070 | 313,726 |
Accumulated amortization | -67,577 | -50,769 |
Net carrying amount | 246,493 | 262,957 |
Trademarks | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross amount | 39,950 | 39,950 |
Accumulated amortization | -10,392 | -7,794 |
Net carrying amount | 29,558 | 32,156 |
Trademarks | Minimum | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Useful life in years | '10 years | '10 years |
Trademarks | Maximum | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Useful life in years | '15 years | '15 years |
Software packages | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross amount | 113,866 | 110,478 |
Accumulated amortization | -59,856 | -50,479 |
Net carrying amount | 54,010 | 59,999 |
Software packages | Minimum | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Useful life in years | '3 years | '3 years |
Software packages | Maximum | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Useful life in years | '5 years | '5 years |
Non-compete agreement | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Useful life in years | '15 years | '15 years |
Gross amount | 56,539 | 56,539 |
Accumulated amortization | -11,308 | -8,481 |
Net carrying amount | $45,231 | $48,058 |
Schedule_of_Estimated_Amortiza
Schedule of Estimated Amortization Expense (Detail) (USD $) | Sep. 30, 2013 |
In Thousands, unless otherwise specified | |
Goodwill And Intangible Assets Disclosure [Abstract] | ' |
Remaining 2013 | $13,054 |
2014 | 49,162 |
2015 | 44,780 |
2016 | 35,193 |
2017 | 32,008 |
2018 | $30,129 |
Debt_and_ShortTerm_Borrowings_1
Debt and Short-Term Borrowings (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | ||||
Debt Instrument [Line Items] | ' | ' | ||
Senior Notes due on October 1, 2018, paying interest semi-annually at a rate of 11% per annum | ' | $252,347 | ||
Other short-term borrowing | 6,132 | 12,995 | ||
Total debt | 695,341 | 763,756 | ||
Senior Secured Credit Facility | Term A due on April 17, 2018 | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Credit facility | 295,881 | [1] | ' | |
Senior Secured Credit Facility | Term B due on April 17, 2020 | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Credit facility | 393,328 | [2] | ' | |
Senior Secured Credit Facility due on September 30, 2016 paying interest at a variable interest rate (LIBOR plus margin) | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Credit facility | ' | 484,414 | [3] | |
Senior Secured Revolving Credit Facility paying interest at a variable interest rate | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Credit facility | ' | $14,000 | ||
[1] | Applicable margin of 2.50% at September 30, 2013. | |||
[2] | Subject to a minimum rate ("LIBOR floor") of 0.75% plus applicable margin of 2.75% at September 30, 2013. | |||
[3] | Subject to a minimum rate ("LIBOR floor") of 1.50% plus applicable margin of 4.00% at December 31, 2012. |
Debt_and_ShortTerm_Borrowings_2
Debt and Short-Term Borrowings (Parenthetical) (Detail) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Dec. 31, 2012 | |
LIBOR Floor | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Margin interest rate | ' | 1.50% |
Alternate Base Rate | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Margin interest rate | ' | 4.00% |
Senior Notes | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Debt, maturity date | 1-Oct-18 | 1-Oct-18 |
Debt, interest rate | 11.00% | 11.00% |
Debt, interest payment term | 'Semi-annually | 'Semi-annually |
Senior Secured Credit Facility | Term A due on April 17, 2018 | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Debt, maturity date | 17-Apr-18 | 17-Apr-18 |
Margin interest rate | 2.50% | ' |
Senior Secured Credit Facility | Term B due on April 17, 2020 | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Debt, maturity date | 17-Apr-20 | 17-Apr-20 |
Senior Secured Credit Facility | Term B due on April 17, 2020 | LIBOR Floor | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Margin interest rate | 0.75% | ' |
Senior Secured Credit Facility | Term B due on April 17, 2020 | Applicable Margin | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Margin interest rate | 2.75% | ' |
Senior Secured Credit Facility due on September 30, 2016 paying interest at a variable interest rate (LIBOR plus margin) | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Debt, maturity date | 30-Sep-16 | 30-Sep-16 |
Debt_and_ShortTerm_Borrowings_3
Debt and Short-Term Borrowings - Additional Information (Detail) (USD $) | 9 Months Ended | 1 Months Ended | 9 Months Ended | 3 Months Ended | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||
In Millions, unless otherwise specified | Sep. 30, 2013 | Apr. 17, 2013 | Apr. 17, 2013 | Apr. 17, 2013 | Apr. 17, 2013 | Apr. 17, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Apr. 29, 2013 | Apr. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 |
Secured Term Loan A | Secured Term Loan B | Revolving Credit Facility due on April 18, 2018 paying interest at a variable interest rate | Revolving Credit Facility due on April 18, 2018 paying interest at a variable interest rate | Revolving Credit Facility due on April 18, 2018 paying interest at a variable interest rate | Senior Secured Credit Facilities | New senior secured term loan A | New senior secured term loan A | New senior secured term loan A | New senior secured term loan A | New senior secured term loan A | New senior secured term loan A | New senior secured term loan A | New senior secured term loan A | New senior secured term loan B | New senior secured term loan B | New senior secured term loan B | New senior secured term loan B | New senior secured term loan B | New senior secured term loan B | New senior secured term loan B | New senior secured credit facilities | Senior Notes | Senior Notes | Senior Notes | Senior Notes | ||
Minimum | Maximum | Commencing On September 30, 2013 To June 2016 | Commencing On September 30, 2016 To June 30, 2017 | Commencing On September 30, 2017 To March 31, 2018 | LIBOR Floor | LIBOR Floor | Base Rate | Base Rate | Minimum | Maximum | LIBOR Floor | LIBOR Floor | Base Rate | Base Rate | |||||||||||||
Minimum | Maximum | Minimum | Maximum | Minimum | Maximum | Minimum | Maximum | ||||||||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Secured credit facilities | ' | $300 | $400 | $100 | ' | ' | ' | $296.30 | ' | ' | ' | ' | ' | ' | ' | $399 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unamortized discount | ' | ' | ' | ' | ' | ' | 6.4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt issuance cost | ' | ' | ' | ' | ' | ' | 5.9 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7.2 | ' | ' | ' | ' |
Unamortized discount written off | ' | ' | ' | ' | ' | ' | 3.4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt issuance cost written off | ' | ' | ' | ' | ' | ' | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4.9 | ' | ' | 7 | ' |
Satisfaction and Discharge of Indenture description | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '(i)) at a redemption price of 100% plus a make-whole premium, of 20%, plus accrued and unpaid interest, on April 30, 2013 (the bFull Redemptionb). On April 17, 2013, the Co-Issuers and the Trustee entered into a Satisfaction and Discharge Agreement whereby EVERTEC Group caused to be irrevocably deposited with the Trustee, to satisfy and to discharge the Co-Issuersb obligations under the Indenture (a) a portion of the net cash proceeds received by the Company in the Initial Public Offering to Holdings, which contributed such proceeds to EVERTEC Group, in an amount sufficient to effect the Partial Redemption on April 29, 2013 and (b) proceeds from the 2013 Credit Agreement described above in an amount sufficient to effect the Full Redemption on April 30, 2013. On April 29, 2013, the Partial Redemption was effected and on April 30, 2013, the Full Redemption was effected. | ' |
Principal amount of outstanding, redemption value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 91 | ' |
Percentage of redemption price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 111.00% | 100.00% | ' | ' |
Debt instrument premium | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.8 | ' |
Debt redemption premium | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $41.90 | ' |
Original principal amount | ' | ' | ' | ' | ' | ' | ' | ' | 1.25% | 1.88% | 2.50% | ' | ' | ' | ' | 0.25% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maturity Date | ' | ' | ' | 17-Apr-18 | ' | ' | ' | 17-Apr-18 | ' | ' | ' | ' | ' | ' | ' | 17-Apr-20 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1-Oct-18 | 1-Oct-18 |
LIBOR rate and base rate percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.00% | 2.50% | 1.00% | 1.50% | ' | 0.75% | 1.75% | 2.50% | 2.75% | 1.50% | 1.75% | ' | ' | ' | ' | ' |
Debt instrument description | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'LIBOR Rate and Base Rate are subject to floors at 0.75% and 1.75%, respectively | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Commitment fee for the unused portion | ' | ' | ' | ' | 0.13% | 0.38% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Premium Payable on loans | 1.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum secured leverage ratio | 6.6 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair_Value_Measurements_for_As
Fair Value Measurements for Assets at Fair Value on Recurring Basis (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Indemnification assets: | ' | ' |
Software cost reimbursement | $4,173 | $6,099 |
Fair Value, Measurements, Recurring | Level 1 | ' | ' |
Indemnification assets: | ' | ' |
Software cost reimbursement | ' | ' |
Fair Value, Measurements, Recurring | Level 2 | ' | ' |
Indemnification assets: | ' | ' |
Software cost reimbursement | ' | ' |
Fair Value, Measurements, Recurring | Level 3 | ' | ' |
Indemnification assets: | ' | ' |
Software cost reimbursement | $4,173 | $6,099 |
Financial_Instruments_and_Fair2
Financial Instruments and Fair Value Measurements - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Fair Value Disclosures [Abstract] | ' | ' | ' | ' |
Termination dates of contracts end | ' | ' | 30-Sep-15 | ' |
Unrealized gain recognized in other expenses | $2,000 | $600,000 | $21,000 | $300,000 |
Unobservable inputs related to the Company's indemnification assets, discount rate | ' | ' | 5.42% | ' |
Projected cash flows | ' | ' | $4,200,000 | ' |
Carrying_Value_and_Estimated_F
Carrying Value and Estimated Fair Values for Financial Instruments (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Indemnification assets: | ' | ' |
Software costs reimbursement, Carrying Amount | $4,173 | $6,099 |
Financial liabilities: | ' | ' |
Senior secured term loan, Carrying Amount | ' | 484,414 |
Senior notes, Carrying Amount | ' | 252,347 |
Indemnification assets: | ' | ' |
Software cost reimbursement, Fair Value | 4,173 | 6,099 |
Financial liabilities: | ' | ' |
Senior secured term loan, Fair Value | ' | 497,498 |
Senior notes, Fair Value | ' | 275,550 |
New senior secured term loan A | ' | ' |
Financial liabilities: | ' | ' |
Senior secured term loan, Carrying Amount | 295,881 | ' |
Financial liabilities: | ' | ' |
Senior secured term loan, Fair Value | 292,695 | ' |
New senior secured term loan B | ' | ' |
Financial liabilities: | ' | ' |
Senior secured term loan, Carrying Amount | 393,328 | ' |
Financial liabilities: | ' | ' |
Senior secured term loan, Fair Value | $384,038 | ' |
Summary_of_Change_in_Fair_Valu
Summary of Change in Fair Value of Level Three Assets (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Indemnification assets: | ' | ' | ' | ' |
Unrealized gain recognized in other income (expenses) | ($2) | ($600) | ($21) | ($300) |
Certain indemnification assets | ' | ' | ' | ' |
Indemnification assets: | ' | ' | ' | ' |
Beginning balance | 4,540 | 6,120 | 6,099 | 7,464 |
Payments received | -369 | -1,017 | -1,947 | -2,145 |
Unrealized gain recognized in other income (expenses) | 2 | 550 | 21 | 334 |
Ending balance | $4,173 | $5,653 | $4,173 | $5,653 |
Summary_of_Non_Vested_Stock_Op
Summary of Non Vested Stock Option Activity (Detail) (Stock Options, USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Stock Options | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Non vested shares, Beginning Balance | 4,571,258 |
Non vested shares, Vested | -3,757,099 |
Non vested shares, Ending Balance | 814,159 |
Non vested weighted average exercise prices, Beginning Balance | $2.16 |
Non vested weighted average exercise prices, Vested | $2.07 |
Non vested weighted average exercise prices, Ending Balance | $2.57 |
Nonvested_Restricted_Shares_Ac
Nonvested Restricted Shares Activity (Detail) (Restricted Shares, USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Restricted Shares | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Beginning balance | 115,420 |
Vested | -115,420 |
Granted | 9,133 |
Ending balance | 9,133 |
Weighted-average grant date fair value, beginning balance | $5.90 |
Vested | $5.90 |
Granted | $24.64 |
Ending balance | $24.64 |
Sharebased_Compensation_Additi
Share-based Compensation - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Number of directors granted restricted units | 3 | ' | 3 | ' |
Share based compensation expenses | ' | ' | $4,900,000 | ' |
Restricted Stock | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Share based compensation expenses | 32,000 | 181,000 | 303,000 | 447,000 |
Maximum unrecognized cost for stock options | 200,000 | ' | 200,000 | ' |
Tranche A | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Maximum unrecognized cost for stock options | $1,300,000 | ' | $1,300,000 | ' |
Tranche B | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Investor internal rate of return, percentage | ' | ' | 25.00% | ' |
Tranche C | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Investor internal rate of return, percentage | ' | ' | 30.00% | ' |
Tranche B and C | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Option vesting condition | ' | ' | 'Pursuant to the terms of the Equity Incentive Plan, Tranche B options granted to employees and certain directors would vest at such time as the Investor Internal Rate of Return (bIRRb) equals or exceeds 25%, except for one grant that vests upon a 20% IRR, based on cash proceeds received by Apollo Investment Fund VII, L.P. (the bInvestorb), and Tranche C options would vest at such time as the IRR equals or exceeds 30% based on cash proceeds received by the Investor. | ' |
One Grant | Tranche B | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Investor internal rate of return, percentage | ' | ' | 20.00% | ' |
Sharebased_Compensation_Recogn
Share-based Compensation Recognized (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Share-based compensation recognized, net | ' | ' | $4,900 | ' |
Stock Option | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Share-based compensation recognized, net | 204 | 151 | 5,416 | 442 |
Restricted Stock | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Share-based compensation recognized, net | $32 | $181 | $303 | $447 |
Components_of_Income_Tax_Expen
Components of Income Tax Expense (Benefit) (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Income Tax Disclosure [Abstract] | ' | ' | ' | ' |
Current tax provision | $1,830 | $693 | $3,120 | $6,163 |
Deferred tax (benefit) expense | -472 | 550 | -6,723 | -4,662 |
Income tax expense (benefit) | $1,358 | $1,243 | ($3,603) | $1,501 |
Segregation_of_Income_Tax_Expe
Segregation of Income Tax Expense (Benefit) Based on Location of Operations (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Current tax provision | ' | ' | ' | ' |
Current tax provision, Puerto Rico | $1,456 | ($1) | $1,712 | $4,949 |
Current tax provision, United States | 24 | 138 | 453 | 481 |
Current tax provision, Foreign countries | 350 | 556 | 955 | 733 |
Total current tax provision | 1,830 | 693 | 3,120 | 6,163 |
Deferred tax (benefit) expense | ' | ' | ' | ' |
Deferred tax benefit, Puerto Rico | -422 | 739 | -6,378 | -4,166 |
Deferred tax benefit, United States | -1 | -34 | -3 | -34 |
Deferred tax benefit, Foreign countries | -49 | -155 | -342 | -462 |
Total deferred tax (benefit) expense | ($472) | $550 | ($6,723) | ($4,662) |
Income_Tax_Additional_Informat
Income Tax - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended |
Sep. 30, 2013 | Jun. 30, 2013 | Sep. 30, 2013 | |
Income Tax Disclosure [Line Items] | ' | ' | ' |
Adjustment to deferred taxes due to changes in enacted tax rate | ' | $1,400,000 | $1,441,000 |
Total available gross net operating loss | 12,400,000 | ' | 12,400,000 |
Future realized windfall tax benefit | 7,300,000 | ' | 7,300,000 |
Net operating loss carried forward expires | ' | ' | 31-Dec-23 |
Open tax uncertainty positions | 0 | ' | 0 |
Windfall | ' | ' | ' |
Income Tax Disclosure [Line Items] | ' | ' | ' |
Total available gross net operating loss | $97,900,000 | ' | $97,900,000 |
Minimum | ' | ' | ' |
Income Tax Disclosure [Line Items] | ' | ' | ' |
Corporate income tax | ' | 30.00% | ' |
Maximum | ' | ' | ' |
Income Tax Disclosure [Line Items] | ' | ' | ' |
Corporate income tax | ' | 39.00% | ' |
Income_Tax_Expense_benefit_Dif
Income Tax Expense (benefit) Differs from Computed Income Tax at Statutory Rates (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Jun. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 |
Income Tax Disclosure [Abstract] | ' | ' | ' | ' | ' |
Computed income tax at statutory rates | $6,302 | $1,057 | ' | ($18,823) | $1,583 |
Benefit of net tax-exempt interest income | -26 | -4 | ' | -120 | -8 |
Adjustment to deferred taxes due to changes in enacted tax rate | ' | ' | 1,400 | 1,441 | ' |
Differences in tax rates due to multiple jurisdictions | -287 | 29 | ' | 329 | 280 |
Effect of income subject to tax-exemption grant | -4,924 | 475 | ' | 14,058 | -130 |
Reversal of tax uncertainties reserve | ' | ' | ' | -846 | -640 |
Fair value adjustment of indemnification assets | ' | -98 | ' | ' | 266 |
Tax benefit CONTADO dividend | ' | -123 | ' | ' | -123 |
Tax expense due to change in estimate | 191 | ' | ' | 191 | ' |
Effect of net operating losses in foreign entities | 162 | ' | ' | 162 | 278 |
Other | -60 | -93 | ' | 5 | -5 |
Income tax expense (benefit) | $1,358 | $1,243 | ' | ($3,603) | $1,501 |
Reconciliation_of_Numerator_an
Reconciliation of Numerator and Denominator of Earnings Per Common Share (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | ||||
Earnings Per Share [Abstract] | ' | ' | ' | ' | ||||
Net income (loss) | $14,803 | $2,276 | ($44,660) | $3,777 | ||||
Weighted average common shares outstanding | 81,905,566 | 72,704,839 | 77,890,406 | 72,674,699 | ||||
Weighted average potential dilutive common shares | 956,972 | [1],[2] | 3,540,566 | [1],[2] | ' | [1],[2] | 4,043,383 | [1],[2] |
Weighted average common shares outstanding - assuming dilution | 82,862,538 | 76,245,405 | 77,890,406 | 76,718,082 | ||||
Net income (loss) per common share - basic | $0.18 | $0.03 | ($0.57) | $0.05 | ||||
Net income (loss) per common share - diluted | $0.18 | $0.03 | ($0.57) | $0.05 | ||||
[1] | Potential common shares consist of common stock issuable under the assumed exercise of stock options and restricted stock awards using the treasury stock method. | |||||||
[2] | For the nine months ended September 30, 2013, 2,784,779 potential common shares consisting of common stock under the assumed exercise of stock options and restricted stock awards using the treasury stock method were not included in the computation of the diluted net income (loss) per share since their inclusion would have an antidilutive effect. |
Reconciliation_of_Numerator_an1
Reconciliation of Numerator and Denominator of Earnings Per Common Share (Parenthetical) (Detail) | 9 Months Ended |
Sep. 30, 2013 | |
Earnings Per Share [Abstract] | ' |
Common shares excluded from the calculation of diluted net (loss) income per share | 2,784,779 |
Net_Income_Loss_Per_Common_Sha2
Net Income (Loss) Per Common Share - Additional Information (Detail) (USD $) | 9 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Earnings Per Share [Abstract] | ' | ' |
Cash dividend paid per common share | $0.10 | ' |
Payments of cash dividend | $8,192 | $269,772 |
Commitments_and_Contingencies_
Commitments and Contingencies - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
Commitments And Contingencies Disclosure [Abstract] | ' | ' | ' | ' | ' |
Total deferred rent obligation | $0.30 | ' | $0.30 | ' | $0.30 |
Rent expense of office facilities and real estate | 1.7 | 1.9 | 5.7 | 5.8 | ' |
Rent expense for telecommunications and other equipment | $1.80 | $1.70 | $5.30 | $5.40 | ' |
Transactions_with_Related_Part
Transactions with Related Parties (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | ||||
Transaction [Abstract] | ' | ' | ' | ' | ||||
Total revenues | $40,838 | [1],[2] | $37,025 | [1],[2] | $124,842 | [1],[2] | $112,871 | [1],[2] |
Cost of revenues | 1,570 | 98 | 6,680 | 319 | ||||
Rent and other fees | 1,636 | [3],[4] | 2,725 | [3],[4] | 31,708 | [3],[4] | 8,547 | [3],[4] |
Interest earned from and charged by affiliate | ' | ' | ' | ' | ||||
Interest income | 25 | 22 | 67 | 179 | ||||
Interest expense | ' | [5] | $1,857 | [5] | $2,471 | [5] | $5,600 | [5] |
[1] | Total revenues from Popular as a percentage of revenues were 46%, 43%, 46% and 44% for each of the periods presented above. | |||||||
[2] | Includes revenues generated from investee accounted for under the equity method of $0.6 million and $2.3 million for the three and nine months ended September 30, 2013, respectively, and $0.9 million and $2.6 million for the corresponding 2012 periods. | |||||||
[3] | Includes management fees to equity sponsors amounting to $20.2 million for the nine months ended September 30, 2013, compared to $0.9 million and $2.9 million for the three and nine months ended September 30, 2012. Management fees paid during 2013 includes $16.7 million resulting from the termination of the consulting agreements as explained below. Rent and other fees also includes $5.9 million paid to Popular in connection with the redemption premium on the senior notes during the first half of 2013. | |||||||
[4] | Includes $1.6 million, $2.7 million, $9.1 million and $8.5 million recorded as selling, general and administrative expenses for each of the periods presented above, and $22.6 million recorded as non-operating expenses for the nine months ended September 30, 2013 in the unaudited consolidated statement of income (loss) and comprehensive income (loss). | |||||||
[5] | Interest expense relates to interest accrued on the senior secured term loan and senior notes held by Popular. As a result of the debt refinancing and the redemption of the senior notes in April 2013, Popular's participation in such debt was extinguished. See Note 4 for additional information related to the extinguishment of this debt. |
Transactions_with_Related_Part1
Transactions with Related Parties (Parenthetical) (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2013 | Sep. 30, 2012 | Jun. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | |||||
TransactionsWithThirdPartyLineItems | ' | ' | ' | ' | ' | ||||
Management fee paid for termination of consulting agreement | ' | ' | ' | -16,718,000 | ' | ||||
Rent and other fees | 1,636,000 | [1],[2] | 2,725,000 | [1],[2] | ' | 31,708,000 | [1],[2] | 8,547,000 | [1],[2] |
Selling general and administrative expense | 8,779,000 | 7,295,000 | ' | 29,780,000 | 24,759,000 | ||||
Non operating expense | -5,703,000 | -14,363,000 | ' | -107,464,000 | -48,676,000 | ||||
Popular | ' | ' | ' | ' | ' | ||||
TransactionsWithThirdPartyLineItems | ' | ' | ' | ' | ' | ||||
Total revenues from Popular | 46.00% | 43.00% | ' | 46.00% | 44.00% | ||||
Rent and other fees | ' | ' | 5,900,000 | ' | ' | ||||
Related Party Transactions | ' | ' | ' | ' | ' | ||||
TransactionsWithThirdPartyLineItems | ' | ' | ' | ' | ' | ||||
Revenues generated from investees accounted for under equity method | 600,000 | 900,000 | ' | 2,300,000 | 2,600,000 | ||||
Management fees to equity sponsors | ' | 900,000 | ' | 20,200,000 | 2,900,000 | ||||
Selling general and administrative expense | 1,600,000 | 2,700,000 | ' | 9,100,000 | 8,500,000 | ||||
Non operating expense | ' | ' | ' | 22,600,000 | ' | ||||
[1] | Includes management fees to equity sponsors amounting to $20.2 million for the nine months ended September 30, 2013, compared to $0.9 million and $2.9 million for the three and nine months ended September 30, 2012. Management fees paid during 2013 includes $16.7 million resulting from the termination of the consulting agreements as explained below. Rent and other fees also includes $5.9 million paid to Popular in connection with the redemption premium on the senior notes during the first half of 2013. | ||||||||
[2] | Includes $1.6 million, $2.7 million, $9.1 million and $8.5 million recorded as selling, general and administrative expenses for each of the periods presented above, and $22.6 million recorded as non-operating expenses for the nine months ended September 30, 2013 in the unaudited consolidated statement of income (loss) and comprehensive income (loss). |
Related_Party_Transactions_Add
Related Party Transactions - Additional Information (Detail) (USD $) | 9 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2013 |
TransactionsWithThirdPartyLineItems | ' |
Letter of credit issued by Popular | $3.60 |
Apollo | ' |
TransactionsWithThirdPartyLineItems | ' |
Termination fee | 8.5 |
Popular | ' |
TransactionsWithThirdPartyLineItems | ' |
Termination fee | $8.20 |
Summary_of_Balances_of_Transac
Summary of Balances of Transactions with Related Parties (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | ||||
Related Party Transactions [Abstract] | ' | ' | ||
Cash and restricted cash deposits in affiliated bank | $23,581 | $19,438 | ||
Indemnification assets from Popular reimbursement | ' | ' | ||
Accounts receivable | 2,086 | [1] | 2,157 | [1] |
Other long-term assets | 2,087 | [1] | 3,942 | [1] |
Other due/to from affiliate | ' | ' | ||
Accounts receivable | 18,273 | 19,252 | ||
Prepaid expenses and other assets | 1,151 | ' | ||
Accounts payable | 5,723 | [2] | 3,845 | [2] |
Unearned income | 2,293 | ' | ||
Other long-term liabilities | 333 | [2] | 2,847 | [2] |
Long-term debt | ' | $90,186 | ||
[1] | Recorded in connection with reimbursements from Popular regarding certain software license fees. | |||
[2] | Includes an account payable of $0.2 million and $0.4 million and a long-term liability of $0.3 million and $2.8 million for September 30, 2013 and December 31, 2012, respectively, related to the unvested portion of stock options as a result of the equitable adjustment approved by our Board of Directors on December 18, 2012 that will be payable to executive officers and employees upon vesting of stock options. |
Summary_of_Balances_of_Transac1
Summary of Balances of Transactions with Related Parties (Parenthetical) (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | ||||
TransactionsWithThirdPartyLineItems | ' | ' | ||
Accounts payable | $5,723 | [1] | $3,845 | [1] |
Other long-term liabilities | 333 | [1] | 2,847 | [1] |
Unvested Stock Options | ' | ' | ||
TransactionsWithThirdPartyLineItems | ' | ' | ||
Accounts payable | 200 | 400 | ||
Other long-term liabilities | $300 | $2,800 | ||
[1] | Includes an account payable of $0.2 million and $0.4 million and a long-term liability of $0.3 million and $2.8 million for September 30, 2013 and December 31, 2012, respectively, related to the unvested portion of stock options as a result of the equitable adjustment approved by our Board of Directors on December 18, 2012 that will be payable to executive officers and employees upon vesting of stock options. |
Segment_Information_Additional
Segment Information - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2013 | |
Segment | |
Segment Reporting [Abstract] | ' |
Number of operating business segments | 3 |
Information_about_Operations_b
Information about Operations by Business Segments (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ||||
Revenues | $87,414 | $83,839 | $263,928 | $250,699 | ||||
Income from operations | 21,864 | 17,882 | 59,201 | 53,954 | ||||
Operating Segments | ' | ' | ' | ' | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ||||
Income from operations | 21,864 | 17,882 | 59,201 | 53,954 | ||||
Operating Segments | Merchant acquiring | ' | ' | ' | ' | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ||||
Revenues | 18,211 | 16,810 | 53,835 | 51,499 | ||||
Income from operations | 8,568 | 8,225 | 25,963 | 24,736 | ||||
Operating Segments | Payment processing | ' | ' | ' | ' | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ||||
Revenues | 32,342 | 28,463 | 92,168 | 85,711 | ||||
Income from operations | 14,056 | 13,587 | 38,536 | 38,652 | ||||
Operating Segments | Business solutions | ' | ' | ' | ' | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ||||
Revenues | 44,472 | 43,745 | 136,965 | 129,214 | ||||
Income from operations | 11,282 | 7,801 | 30,600 | 25,751 | ||||
Operating Segments | Other | ' | ' | ' | ' | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ||||
Revenues | -7,611 | [1] | -5,179 | [1] | -19,040 | [1] | -15,725 | [1] |
Income from operations | ($12,042) | [2] | ($11,731) | [2] | ($35,898) | [2] | ($35,185) | [2] |
[1] | Represents the elimination of intersegment revenues for services provided by the payment processing segment to the merchant acquiring segment, and other miscellaneous intersegment revenues. | |||||||
[2] | Primarily represents non-operating depreciation and amortization expenses generated as a result of the Merger and certain non-recurring fees and expenses. |
Reconciliation_of_Income_from_
Reconciliation of Income from Operations to Consolidated Net Income (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | ||||
Segment income from operations | ' | ' | ' | ' | ||||
Income from operations | $21,864 | $17,882 | $59,201 | $53,954 | ||||
Interest expense, net | -6,349 | -14,746 | -31,267 | -38,977 | ||||
Earnings of equity method investment | 198 | -472 | 823 | 103 | ||||
Other income (expenses) | 448 | 855 | -77,020 | -9,802 | ||||
Income tax (expense) benefit | -1,358 | -1,243 | 3,603 | -1,501 | ||||
Net income (loss) | 14,803 | 2,276 | -44,660 | 3,777 | ||||
Operating Segments | ' | ' | ' | ' | ||||
Segment income from operations | ' | ' | ' | ' | ||||
Income from operations | 21,864 | 17,882 | 59,201 | 53,954 | ||||
Operating Segments | Merchant acquiring | ' | ' | ' | ' | ||||
Segment income from operations | ' | ' | ' | ' | ||||
Income from operations | 8,568 | 8,225 | 25,963 | 24,736 | ||||
Operating Segments | Payment processing | ' | ' | ' | ' | ||||
Segment income from operations | ' | ' | ' | ' | ||||
Income from operations | 14,056 | 13,587 | 38,536 | 38,652 | ||||
Operating Segments | Business solutions | ' | ' | ' | ' | ||||
Segment income from operations | ' | ' | ' | ' | ||||
Income from operations | 11,282 | 7,801 | 30,600 | 25,751 | ||||
Operating Segments | Total segment income from operations | ' | ' | ' | ' | ||||
Segment income from operations | ' | ' | ' | ' | ||||
Income from operations | 33,906 | 29,613 | 95,099 | 89,139 | ||||
Operating Segments | Other | ' | ' | ' | ' | ||||
Segment income from operations | ' | ' | ' | ' | ||||
Income from operations | ($12,042) | [1] | ($11,731) | [1] | ($35,898) | [1] | ($35,185) | [1] |
[1] | Primarily represents non-operating depreciation and amortization expenses generated as a result of the Merger and certain non-recurring fees and expenses. |
Subsequent_Events_Additional_I
Subsequent Events - Additional Information (Detail) (USD $) | 9 Months Ended | 1 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Nov. 06, 2013 |
Subsequent Events | |||
Subsequent Event [Line Items] | ' | ' | ' |
Dividend declared per share | ' | ' | $0.10 |
Dividends payable date declared | ' | ' | 6-Nov-13 |
Dividends payable date | ' | ' | 6-Dec-13 |
Dividends payable date of record | ' | ' | 18-Nov-13 |
Payment of cash dividend | $8,192 | $269,772 | $8,200 |