Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Jun. 30, 2014 | Aug. 01, 2014 | |
Document And Entity Information [Abstract] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Jun-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q2 | ' |
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 | ' | 78,657,848 |
Consolidated_Balance_Sheets_Un
Consolidated Balance Sheets (Unaudited) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current Assets: | ' | ' |
Cash | $27,831 | $22,485 |
Restricted cash | 5,195 | 5,433 |
Accounts receivable, net | 71,479 | 68,434 |
Deferred tax asset | 2,812 | 2,537 |
Prepaid expenses and other assets | 21,846 | 17,524 |
Total current assets | 129,163 | 116,413 |
Investment in equity investee | 11,287 | 10,639 |
Property and equipment, net | 29,371 | 33,240 |
Goodwill | 369,203 | 373,119 |
Other intangible assets, net | 347,114 | 367,780 |
Other long-term assets | 13,745 | 18,162 |
Total assets | 899,883 | 919,353 |
Current Liabilities: | ' | ' |
Accrued liabilities | 29,159 | 26,571 |
Accounts payable | 14,256 | 18,630 |
Unearned income | 8,498 | 5,595 |
Income tax payable | 1,801 | 259 |
Current portion of long-term debt | 19,000 | 19,000 |
Short-term borrowings | 23,000 | 51,200 |
Deferred tax liability, net | 461 | 543 |
Total current liabilities | 96,175 | 121,798 |
Long-term debt | 656,626 | 665,680 |
Long-term deferred tax liability, net | 20,702 | 20,212 |
Other long-term liabilities | 251 | 333 |
Total liabilities | 773,754 | 808,023 |
Commitments and contingencies (Note 10) | ' | ' |
Stockholders' equity | ' | ' |
Preferred stock, par value $0.01; 2,000,000 shares authorized; none issued | 0 | 0 |
Common stock, par value $0.01; 206,000,000 shares authorized; 78,631,847 shares issued and outstanding at June 30, 2014 (December 31, 2013- 78,286,465) | 786 | 783 |
Additional paid-in capital | 82,167 | 80,718 |
Accumulated earnings | 49,701 | 29,403 |
Accumulated other comprehensive (loss) income, net of tax | -6,525 | 426 |
Total stockholders' equity | 126,129 | 111,330 |
Total liabilities and stockholders' equity | $899,883 | $919,353 |
Consolidated_Balance_Sheets_Un1
Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
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 | 78,631,847 | 78,286,465 |
Common stock outstanding | 78,631,847 | 78,286,465 |
Consolidated_Statements_of_Inc
Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) (Unaudited) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Revenues | ' | ' | ' | ' |
Merchant acquiring, net | $19,827 | $18,165 | $39,118 | $35,624 |
Payment processing (from affiliates: $7,303, $7,298, $14,407 and $14,508) | 26,406 | 24,285 | 51,408 | 48,397 |
Business solutions (from affiliates: $34,243, $35,051, $67,601 and $69,496) | 44,888 | 46,725 | 87,805 | 92,493 |
Total revenues | 91,121 | 89,175 | 178,331 | 176,514 |
Operating costs and expenses | ' | ' | ' | ' |
Cost of revenues, exclusive of depreciation and amortization shown below | 38,839 | 41,771 | 76,484 | 82,273 |
Selling, general and administrative expenses | 10,463 | 12,624 | 18,525 | 21,487 |
Depreciation and amortization | 16,390 | 17,842 | 33,004 | 35,417 |
Total operating costs and expenses | 65,692 | 72,237 | 128,013 | 139,177 |
Income from operations | 25,429 | 16,938 | 50,318 | 37,337 |
Non-operating (expenses) income | ' | ' | ' | ' |
Interest income | 79 | 49 | 154 | 93 |
Interest expense | -6,501 | -9,747 | -13,410 | -25,011 |
Earnings of equity method investment | 343 | 348 | 664 | 625 |
Other income (expenses): | ' | ' | ' | ' |
Loss on extinguishment of debt | ' | -58,464 | ' | -58,464 |
Termination of consulting agreements | ' | -16,718 | ' | -16,718 |
Other income (expenses) | 385 | -2,353 | 2,376 | -2,286 |
Total other income (expenses) | 385 | -77,535 | 2,376 | -77,468 |
Total non-operating (expenses) income | -5,694 | -86,885 | -10,216 | -101,761 |
Income (loss) before income taxes | 19,735 | -69,947 | 40,102 | -64,424 |
Income tax expense (benefit) | 1,962 | -5,012 | 4,123 | -4,961 |
Net income (loss) | 17,773 | -64,935 | 35,979 | -59,463 |
Other comprehensive income (loss), net of tax of $48, $18, $54 and $18 Foreign currency translation adjustments | 794 | -394 | -6,951 | 1,960 |
Total comprehensive income (loss) | $18,567 | ($65,329) | $29,028 | ($57,503) |
Net income (loss) per common share - basic | $0.23 | ($0.82) | $0.46 | ($0.78) |
Net income (loss) per common share - diluted | $0.22 | ($0.82) | $0.45 | ($0.78) |
Consolidated_Statements_of_Inc1
Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) (Unaudited) (Parenthetical) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Income Statement [Abstract] | ' | ' | ' | ' |
Payment processing revenue from affiliates | $7,303 | $7,298 | $14,407 | $14,508 |
Business solutions revenue from affiliates | 34,243 | 35,051 | 67,601 | 69,496 |
Other comprehensive income, income tax expense | $48 | $18 | $54 | $18 |
Consolidated_Statement_of_Chan
Consolidated Statement of Changes in Stockholders' Equity (Unaudited) (USD $) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | |
In Thousands, except Share data | ||||||
Beginning Balance, Value at Dec. 31, 2013 | $111,330 | $783 | $80,718 | $29,403 | $426 | |
Beginning Balance, Shares at Dec. 31, 2013 | 78,286,465 | 78,286,465 | ' | ' | ' | |
Share-based compensation recognized | 665 | ' | 665 | ' | ' | |
Tax windfall benefit on exercises of stock options | 1,482 | ' | 1,482 | ' | ' | |
Stock options exercised, net of cashless exercise | -716 | 3 | -719 | ' | ' | |
Stock options exercised, net of cashless exercise, Shares | ' | 345,382 | ' | ' | ' | |
Dividend | [1] | 21 | ' | 21 | ' | ' |
Net income | 35,979 | ' | ' | 35,979 | ' | |
Cash dividends declared on common stock | -15,681 | ' | ' | -15,681 | ' | |
Cash dividends paid on common stock, Shares | ' | ' | ' | ' | ' | |
Other comprehensive loss | -6,951 | ' | ' | ' | -6,951 | |
Ending Balance, Value at Jun. 30, 2014 | $126,129 | $786 | $82,167 | $49,701 | ($6,525) | |
Ending Balance, Shares at Jun. 30, 2014 | 78,631,847 | 78,631,847 | ' | ' | ' | |
[1] | Related to dividend declared in 2012 and accrued upon vesting of stock options. Such options were forfeited during the six months ended June 30, 2014. |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (Unaudited) (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Cash flows from operating activities | ' | ' |
Net income (loss) | $35,979 | ($59,463) |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ' | ' |
Depreciation and amortization | 33,004 | 35,417 |
Amortization of debt issue costs and premium and accretion of discount | 1,538 | 2,369 |
Write-off of debt issue costs, premium and discount accounted as loss on extinguishment | ' | 16,555 |
Provision for doubtful accounts and sundry losses | 1,058 | 826 |
Deferred tax benefit | -430 | -6,251 |
Share-based compensation | 665 | 5,483 |
Unrealized loss (gain) of indemnification assets | 173 | -19 |
Loss on disposition of property and equipment and other intangibles | 64 | 32 |
Earnings of equity method investment | -664 | -625 |
Dividend received from equity method investment | 326 | 500 |
(Increase) decrease in assets: | ' | ' |
Accounts receivable, net | -2,045 | 492 |
Prepaid expenses and other assets | -4,267 | -5,417 |
Other long-term assets | 1,811 | -323 |
(Decrease) increase in liabilities: | ' | ' |
Accounts payable and accrued liabilities | -4,120 | -3,347 |
Income tax payable | 1,542 | -1,867 |
Unearned income | 2,903 | 1,736 |
Total adjustments | 31,558 | 45,561 |
Net cash provided by (used in) operating activities | 67,537 | -13,902 |
Cash flows from investing activities | ' | ' |
Net decrease (increase) in restricted cash | 238 | -44 |
Intangible assets acquired | -5,841 | -7,927 |
Property and equipment acquired | -3,895 | -4,384 |
Proceeds from sales of property and equipment | 3 | 11 |
Net cash used in investing activities | -9,495 | -12,344 |
Cash flows from financing activities | ' | ' |
Proceeds from initial public offering, net of offering costs of $12,567 | ' | 112,432 |
Proceeds from issuance of long-term debt | ' | 700,000 |
Statutory minimum withholding taxes paid on cashless exercises of stock options | -770 | -16,688 |
Debt issuance costs | ' | -12,077 |
Net decrease in short-term borrowing | -27,000 | -14,000 |
Repayment of short-term borrowing for purchase of equipment | -1,200 | -4,332 |
Dividends paid | -15,680 | ' |
Tax windfall benefits on exercises of stock options | 1,482 | 470 |
Issuance of common stock, net | 54 | 28 |
Repayment of other financing agreement | -82 | -112 |
Repayment of long-term debt | -9,500 | -745,522 |
Net cash (used in) provided by financing activities | -52,696 | 20,199 |
Net increase (decrease) in cash | 5,346 | -6,047 |
Cash at beginning of the period | 22,485 | 25,634 |
Cash at end of the period | 27,831 | 19,587 |
Supplemental disclosure of non-cash activities: | ' | ' |
Dividend declared not received from equity method investment | 325 | 500 |
Foreign currency translation adjustments | ($6,951) | $2,354 |
Consolidated_Statements_of_Cas1
Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) (USD $) | 6 Months Ended |
In Thousands, unless otherwise specified | Jun. 30, 2013 |
Statement Of Cash Flows [Abstract] | ' |
Proceeds from initial public offering, net of cost of offering | $12,567 |
The_Company_and_Basis_of_Prese
The Company and Basis of Presentation | 6 Months Ended |
Jun. 30, 2014 | |
Accounting Policies [Abstract] | ' |
The Company and Basis of Presentation | ' |
Note 1 – The Company and Basis of Presentation | |
The Company | |
EVERTEC, Inc. (formerly known as Carib Latam Holdings, Inc.) and its subsidiaries (collectively the “Company,” or “EVERTEC”) is the leading full-service transaction processing business in Latin America and the Caribbean. The Company is based in Puerto Rico and provides a broad range of merchant acquiring, payment processing and business process management services across 19 countries in the region. EVERTEC owns and operates the ATH network, one of the leading automated teller machine (“ATM”) and personal identification number (“PIN”) debit networks in Latin America. In addition, EVERTEC provides a comprehensive suite of services for core bank processing, cash processing and technology outsourcing in the regions the Company serves. EVERTEC serves 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 Management believes that the Company’s business is well-positioned to continue to expand across the fast-growing Latin American region. | |
On April 13, 2012, EVERTEC was formed in order to act as the new parent company of EVERTEC Intermediate Holdings, LLC (formerly known as Carib Holdings, LLC and Carib Holdings, Inc., hereinafter “Holdings”) and its subsidiaries, including EVERTEC Group, LLC (formerly known as EVERTEC, LLC and EVERTEC, Inc., hereinafter “EVERTEC Group”). The Company’s subsidiaries include Holdings, EVERTEC Group, EVERTEC Dominicana SAS, EVERTEC Panamá, S.A., EVERTEC Costa Rica, S.A. (“EVERTEC CR”), EVERTEC Guatemala, S.A. and EVERTEC México Servicios de Procesamiento, S.A. de C.V. | |
Basis of Presentation | |
The unaudited consolidated financial statements of EVERTEC have been prepared in accordance with accounting principles generally accepted in the United Stated of America (“GAAP”). The preparation of the accompanying unaudited consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the unaudited consolidated financial statements. Actual results could differ from these estimates. | |
Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted from these statements pursuant to the rules and regulations of the SEC and, accordingly, these financial statements should be read in conjunction with the Audited Consolidated Financial Statements of the Company for the year ended December 31, 2013, included in the Company’s 2013 Form 10-K. In the opinion of management, the accompanying 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. All significant intercompany accounts and transactions have been eliminated in consolidation. | |
Certain reclassifications have been made to the June 30, 2013 unaudited consolidated financial statements and related notes to conform with the presentation in 2014. |
Recent_Accounting_Pronouncemen
Recent Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2014 | |
Accounting Changes And Error Corrections [Abstract] | ' |
Recent Accounting Pronouncements | ' |
Note 2 – Recent Accounting Pronouncements | |
The Financial Accounting Standards Board (“FASB”) has issued the following accounting pronouncements and guidance relevant to the Company’s operations: | |
In May 2014, the FASB issued updated guidance for revenue recognition. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: identify the contract(s) with a customer; identify the performance obligations in the contract; determine the transaction price; allocate the transaction price to the performance obligations in the contract; and recognize revenue when (or as) the entity satisfies a performance obligation. The guidance also specifies the accounting for some costs to obtain or fulfill a contract with a customer. In addition, the updated guidance enhances and expands disclosures regarding revenue recognition. The amendments in this Update are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. The Company is currently evaluating the impact of the adoption of this guidance on its financial statements. |
Property_and_Equipment_net
Property and Equipment, net | 6 Months Ended | ||||||||||
Jun. 30, 2014 | |||||||||||
Property Plant And Equipment [Abstract] | ' | ||||||||||
Property and Equipment, net | ' | ||||||||||
Note 3 – Property and Equipment, net | |||||||||||
Property and equipment, net consists of the following: | |||||||||||
(Dollar amounts in thousands) | Useful life | June 30, 2014 | December 31, 2013 | ||||||||
in years | |||||||||||
Buildings | 30 | $ | 1,590 | $ | 1,726 | ||||||
Data processing equipment | 3 - 5 | 70,243 | 68,273 | ||||||||
Furniture and equipment | 3 - 20 | 7,500 | 6,385 | ||||||||
Leasehold improvements | 5 - 10 | 2,878 | 2,880 | ||||||||
82,211 | 79,264 | ||||||||||
Less - accumulated depreciation and amortization | (54,250 | ) | (47,555 | ) | |||||||
Depreciable assets, net | 27,961 | 31,709 | |||||||||
Land | 1,410 | 1,531 | |||||||||
Property and equipment, net | $ | 29,371 | $ | 33,240 | |||||||
Depreciation and amortization expense related to property and equipment for the three and six months ended June 30, 2014 amounted to $3.8 million and $7.7 million, respectively, compared to $4.1 million and $8.1 million, respectively, for the same periods in 2013. |
Goodwill_and_Other_Intangible_
Goodwill and Other Intangible Assets | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Goodwill And Intangible Assets Disclosure [Abstract] | ' | ||||||||||||||||
Goodwill and Other Intangible Assets | ' | ||||||||||||||||
Note 4 – Goodwill and Other Intangible Assets | |||||||||||||||||
The changes in the carrying amount of goodwill, allocated by reportable segments, were as follows (See Note 12): | |||||||||||||||||
(Dollar amounts in thousands) | Merchant | Payment | Business | Total | |||||||||||||
Acquiring, net | Processing | Solutions | |||||||||||||||
Balance at December 31, 2013 | $ | 138,121 | $ | 187,622 | $ | 47,376 | $ | 373,119 | |||||||||
Foreign currency translation adjustments | — | (2,923 | ) | (993 | ) | (3,916 | ) | ||||||||||
Balance at June 30, 2014 | $ | 138,121 | $ | 184,699 | $ | 46,383 | $ | 369,203 | |||||||||
Goodwill is tested for impairment at least annually, or more often if events or circumstances indicate there may be impairment, 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, the Company completed the qualitative assessment described above and determined that there were no impairment losses to be recognized during the period. There were no triggering events or changes in circumstances that subsequent to the impairment test would have required an additional impairment evaluation. As part of the Company’s qualitative assessment, EVERTEC considered the results for the 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 the Company’s reporting units that occurred subsequent to the 2011 impairment test. | |||||||||||||||||
The carrying amount of other intangible assets for the six months ended June 30, 2014 and the year ended December 31, 2013 consisted of the following: | |||||||||||||||||
(Dollar amounts in thousands) | June 30, 2014 | ||||||||||||||||
Useful life in years | Gross | Accumulated | Net carrying | ||||||||||||||
amount | amortization | amount | |||||||||||||||
Customer relationships | 14 | $ | 312,747 | $ | (84,336 | ) | $ | 228,411 | |||||||||
Trademark | 10 - 15 | 39,950 | (12,990 | ) | 26,960 | ||||||||||||
Software packages | 3 - 10 | 125,508 | (76,169 | ) | 49,339 | ||||||||||||
Non-compete agreement | 15 | 56,539 | (14,135 | ) | 42,404 | ||||||||||||
Other intangible assets, net | $ | 534,744 | $ | (187,630 | ) | $ | 347,114 | ||||||||||
(Dollar amounts in thousands) | 31-Dec-13 | ||||||||||||||||
Useful life in years | Gross | Accumulated | Net carrying | ||||||||||||||
amount | amortization | amount | |||||||||||||||
Customer relationships | 14 | $ | 314,036 | $ | (73,180 | ) | $ | 240,856 | |||||||||
Trademark | 10 -15 | 39,950 | (11,258 | ) | 28,692 | ||||||||||||
Software packages | 3 - 10 | 119,598 | (65,655 | ) | 53,943 | ||||||||||||
Non-compete agreement | 15 | 56,539 | (12,250 | ) | 44,289 | ||||||||||||
Other intangible assets, net | $ | 530,123 | $ | (162,343 | ) | $ | 367,780 | ||||||||||
For the three and six months ended June 30, 2014, the Company recorded amortization expense related to other intangibles of $12.6 million and $25.3 million, respectively, compared to $13.7 million and $27.3 million for the corresponding 2013 periods. | |||||||||||||||||
The estimated amortization expense of the balances outstanding at June 30, 2014 for the next five years is as follows: | |||||||||||||||||
(Dollar amounts in thousands) | |||||||||||||||||
Remaining 2014 | $ | 24,698 | |||||||||||||||
2015 | 45,742 | ||||||||||||||||
2016 | 35,741 | ||||||||||||||||
2017 | 32,988 | ||||||||||||||||
2018 | 31,336 | ||||||||||||||||
2019 | 30,609 |
Debt_and_ShortTerm_Borrowings
Debt and Short-Term Borrowings | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Debt and Short-Term Borrowings | ' | ||||||||
Note 5 – Debt and Short-Term Borrowings | |||||||||
Total debt as of June 30, 2014 and December 31, 2013 was as follows: | |||||||||
(Dollar amounts in thousands) | June 30, 2014 | December 31, 2013 | |||||||
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)(3)) | $ | 284,697 | $ | 292,153 | |||||
Senior Secured Credit Facility (Term B) due on April 17, 2020 paying interest at a variable interest rate (LIBOR plus applicable margin(2)(3)) | 390,929 | 392,527 | |||||||
Senior Secured Revolving Credit Facility expiring on April 17, 2018 paying interest at a variable interest rate | 23,000 | 50,000 | |||||||
Other short-term borrowing | — | 1,200 | |||||||
Total debt | $ | 698,626 | $ | 735,880 | |||||
-1 | Applicable margin of 2.50% at June 30, 2014 and December 31, 2013. | ||||||||
-2 | Subject to a minimum rate (“LIBOR floor”) of 0.75% plus applicable margin of 2.75% at June 30, 2014 and December 31, 2013. | ||||||||
-3 | Includes unamortized discount. | ||||||||
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. | |||||||||
Term A Loan | |||||||||
As of June 30, 2014, the unpaid principal balance of the Term A Loan was $285.0 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 plus an applicable margin ranging from 2.00% to 2.50%, or (b) Base Rate, as defined in the 2013 Credit Agreement, plus an applicable margin ranging from 1.00% to 1.50%. Term A Loan has no LIBOR or Base Rate minimum or floor. | |||||||||
Term B Loan | |||||||||
As of June 30, 2014, the unpaid principal balance of the Term B Loan was $396.0 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 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 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. | |||||||||
The 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 limit 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 June 30, 2014, 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 | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||
Financial Instruments and Fair Value Measurements | ' | ||||||||||||||||
Note 6 – Financial Instruments and Fair Value Measurements | |||||||||||||||||
Recurring Fair Value Measurements | |||||||||||||||||
Fair value measurement provisions establish a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. These provisions describe 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, that 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 mostly 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 June 30, 2014 and December 31, 2013 for assets measured at fair value on a recurring basis: | |||||||||||||||||
(Dollar amounts in thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
June 30, 2014 | |||||||||||||||||
Financial assets: | |||||||||||||||||
Indemnification assets: | |||||||||||||||||
Software cost reimbursement | $ | — | $ | — | $ | 2,114 | $ | 2,114 | |||||||||
December 31, 2013 | |||||||||||||||||
Financial assets: | |||||||||||||||||
Indemnification assets: | |||||||||||||||||
Software cost reimbursement | $ | — | $ | — | $ | 3,586 | $ | 3,586 | |||||||||
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 transaction completed on September 30, 2010 (“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 June 30, 2014, therefore resulting in a net unrealized gain of approximately $6,000 and a net unrealized loss of approximately $0.2 million for the three and six months ended June 30, 2014, respectively, and a net unrealized gain of approximately $3,000 and $19,000 for the three and six months ended June 30, 2013, respectively, which are reflected within the other 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 June 30, 2014 using the discounted cash flow model include the discount rate of 5.33% and the projected cash flows of $2.3 million. | |||||||||||||||||
For indemnification assets a significant increase or decrease in market rates or cash flows could result in a significant change to the fair value. Also, the credit rating and/or the non-performance credit risk of Popular, which is subjective in nature, also could 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 June 30, 2014 and December 31, 2013: | |||||||||||||||||
June 30, 2014 | December 31, 2013 | ||||||||||||||||
(Dollar amounts in thousands) | Carrying | Fair | Carrying | Fair | |||||||||||||
Amount | Value | Amount | Value | ||||||||||||||
Financial assets: | |||||||||||||||||
Indemnification assets: | |||||||||||||||||
Software cost reimbursement | $ | 2,114 | $ | 2,114 | $ | 3,586 | $ | 3,586 | |||||||||
Financial liabilities: | |||||||||||||||||
Senior secured term loan A | $ | 284,697 | $ | 280,905 | $ | 292,153 | $ | 284,091 | |||||||||
Senior secured term loan B | 390,929 | 389,565 | 392,527 | 387,055 | |||||||||||||
The fair value of the senior secured term loans at June 30, 2014 and December 31, 2013 were obtained using prices supplied 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. The pricing inputs also may include the use of an algorithm that could take into account movement in the general high-yield market, among other variants. | |||||||||||||||||
The senior secured term loans, which are not measured at fair value in the balance sheets, if measured, could 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 June 30, | Six months ended June 30, | ||||||||||||||||
(Dollar amounts in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Indemnification assets: | |||||||||||||||||
Beginning balance | $ | 2,947 | $ | 5,558 | $ | 3,586 | $ | 6,099 | |||||||||
Payments received | (839 | ) | (1,021 | ) | (1,299 | ) | (1,578 | ) | |||||||||
Unrealized gain (loss) recognized in other expenses | 6 | 3 | (173 | ) | 19 | ||||||||||||
Ending balance | $ | 2,114 | $ | 4,540 | $ | 2,114 | $ | 4,540 | |||||||||
Sharebased_Compensation
Share-based Compensation | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ' | ||||||||
Share-based Compensation | ' | ||||||||
Note 7 – Share-based Compensation | |||||||||
The following table summarizes stock options activity for the six months ended June 30, 2014: | |||||||||
Shares | Weighted-average | ||||||||
exercise prices | |||||||||
Outstanding at December 31, 2013 | 1,285,536 | $ | 4.77 | ||||||
Granted | 100,000 | 24.01 | |||||||
Forfeited | 31,164 | 1.3 | |||||||
Exercised | 406,999 | 1.95 | |||||||
Outstanding at June 30, 2014 | 947,373 | $ | 8.12 | ||||||
Exercisable at June 30, 2014 | 49,374 | $ | 1.3 | ||||||
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 nonvested restricted shares activity for the six months ended June 30, 2014: | |||||||||
Nonvested restricted shares | Shares | Weighted-average | |||||||
grant date fair value | |||||||||
Nonvested at December 31, 2013 | 9,133 | $ | 24.64 | ||||||
Nonvested at June 30, 2014 | 9,133 | $ | 24.64 | ||||||
For the three and six months ended June 30, 2014 and June 30, 2013, the Company recognized $0.3 million and $0.7 million and $5.2 million and $5.5 million of share-based compensation expense, respectively. As of June 30, 2014, there was $2.2 million of total unrecognized compensation cost related to stock options, which is expected to be recognized over the next 2.3 years. In addition, for the same period, there was approximately $25,000 of total unrecognized compensation cost related to nonvested shares of restricted stock. That cost is expected to be fully recognized during 2014. |
Income_Tax
Income Tax | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||||||||||
Income Tax | ' | ||||||||||||||||
Note 8 – Income Tax | |||||||||||||||||
The components of income tax expense (benefit) for the three and six months ended June 30, 2014 and 2013 consisted of the following: | |||||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||
(Dollar amounts in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Current tax provision | $ | 964 | $ | 1,005 | $ | 4,553 | $ | 1,290 | |||||||||
Deferred tax provision (benefit) | 998 | (6,017 | ) | (430 | ) | (6,251 | ) | ||||||||||
Income tax expense (benefit) | $ | 1,962 | $ | (5,012 | ) | $ | 4,123 | $ | (4,961 | ) | |||||||
The Company conducts operations in Puerto Rico and certain countries in 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 six months ended June 30, 2014 and 2013 and its segregation based on location of operations: | |||||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||
(Dollar amounts in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Current tax provision (benefit) | |||||||||||||||||
Puerto Rico | $ | 423 | $ | (122 | ) | $ | 1,360 | $ | 256 | ||||||||
United States | 217 | 210 | 415 | 429 | |||||||||||||
Foreign countries | 324 | 917 | 2,778 | 605 | |||||||||||||
Total current tax provision (benefit) | $ | 964 | $ | 1,005 | $ | 4,553 | $ | 1,290 | |||||||||
Deferred tax provision (benefit) | |||||||||||||||||
Puerto Rico | $ | 805 | $ | (5,880 | ) | $ | 832 | $ | (5,956 | ) | |||||||
United States | (2 | ) | — | (3 | ) | (2 | ) | ||||||||||
Foreign countries | 195 | (137 | ) | (1,259 | ) | (293 | ) | ||||||||||
Total deferred tax provision (benefit) | $ | 998 | $ | (6,017 | ) | $ | (430 | ) | $ | (6,251 | ) | ||||||
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. | |||||||||||||||||
As of June 30, 2014, the gross deferred tax asset amounted to $11.0 million and the gross deferred tax liability amounted to $29.4 million, compared with $13.5 million and $31.7 million as of December 31, 2013. At June 30, 2014, the recorded value of the Company’s net operating loss (“NOL”) carryforwards was $15.1 million. The recorded value of the NOL carryforwards is approximately $7.0 million lower than the total NOL carryforwards available because of 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 that were in excess of previously recorded compensation expense because the fair value of stock options at the time they were granted differed from their fair value when they were exercised. The total gross NOL carryforwards available, including the windfall benefit, amounted to $58.2 million as of June 30, 2014. | |||||||||||||||||
There are no open uncertain tax positions as of June 30, 2014. |
Net_Income_Loss_Per_Common_Sha
Net Income (Loss) Per Common Share | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||||||
Net Income (Loss) Per Common Share | ' | ||||||||||||||||
Note 9 – 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 June 30, | Six months ended June 30, | ||||||||||||||||
(Dollar amounts in thousands, except per share data) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Net income (loss) | $ | 17,773 | $ | (64,935 | ) | $ | 35,979 | $ | (59,463 | ) | |||||||
Weighted average common shares outstanding | 78,410,554 | 78,928,780 | 78,393,042 | 75,849,551 | |||||||||||||
Weighted average potential dilutive common shares(1)(2) | 789,410 | — | 811,600 | — | |||||||||||||
Weighted average common shares outstanding - assuming dilution | 79,199,964 | 78,928,780 | 79,204,642 | 75,849,551 | |||||||||||||
Net income (loss) per common share - basic | $ | 0.23 | $ | (0.82 | ) | $ | 0.46 | $ | (0.78 | ) | |||||||
Net income (loss) per common share - diluted | $ | 0.22 | $ | (0.82 | ) | $ | 0.45 | $ | (0.78 | ) | |||||||
(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 three and six months ended June 30, 2013, 3,818,727 and 4,227,114 potential common shares, respectively, 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 February 12, 2014, our Board declared a quarterly cash dividend of $0.10 per share of common stock, which was paid on March 14, 2014 to stockholders of record as of February 25, 2014. On May 7, 2014, our Board declared a quarterly cash dividend of $0.10 per share of common stock, which was paid on June 6, 2014 to stockholders of record as of May 19, 2014. |
Commitments_and_Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2014 | |
Commitments And Contingencies Disclosure [Abstract] | ' |
Commitments and Contingencies | ' |
Note 10 – 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 June 30, 2014 and December 31, 2013 amounted to $0.2 million and $0.3 million, respectively, 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 six months ended June 30, 2014 amounted to $2.1 million and $4.1 million, respectively, compared to $2.0 million and $4.0 million for the corresponding 2013 periods. Rent expense for telecommunications and other equipment for the three and six months ended June 30, 2014 amounted to $1.6 million and $3.0 million, respectively, compared to $1.8 million and $3.5 million for the corresponding 2013 periods. | |
In the ordinary course of business, the Company may enter into commercial commitments. As of June 30, 2014, EVERTEC has an outstanding letter of credit of $1.1 million with a maturity of less than three months. | |
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, financial condition, or cash flows 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 regarding which proceedings are in an initial phase, the Company is unable to estimate the range of possible loss but at this time believes that any loss related to such claims will not be material. |
Related_Party_Transactions
Related Party Transactions | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Related Party Transactions [Abstract] | ' | ||||||||||||||||
Related Party Transactions | ' | ||||||||||||||||
Note 11 – Related Party Transactions | |||||||||||||||||
The following table presents the Company’s transactions with related parties for the three and six months ended June 30, 2014 and 2013: | |||||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||
(Dollar amounts in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Total revenues(1)(2) | $ | 41,546 | $ | 42,349 | $ | 82,008 | $ | 84,004 | |||||||||
Cost of revenues | $ | 528 | $ | 2,506 | $ | 619 | $ | 5,110 | |||||||||
Rent and other fees(3)(4) | $ | 2,084 | $ | 27,212 | $ | 4,001 | $ | 30,072 | |||||||||
Interest earned from and charged by affiliate | |||||||||||||||||
Interest income | $ | 50 | $ | 23 | $ | 102 | $ | 42 | |||||||||
Interest expense(5) | $ | — | $ | 577 | $ | — | $ | 2,471 | |||||||||
(1) | Total revenues from Popular as a percentage of revenues were 45%, 47%, 45% and 47% for each of the periods presented above. | ||||||||||||||||
(2) | Includes revenues generated from investee accounted for under the equity method of $0.7 million and $1.4 million for the three and six months ended June 30, 2014, respectively, and $0.8 million and $1.7 million for the corresponding 2013 periods. | ||||||||||||||||
(3) | Includes management fees to equity sponsors amounting to $19.4 million and $20.3 million for the three and six months ended June 30, 2013, respectively. 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 for the three and six months ended June 30, 2013. | ||||||||||||||||
(4) | For the periods presented above, $2.1 million, $4.6 million, $4.0 million and $7.5 million were recorded as selling, general and administrative expenses, and $22.6 million was recorded as non-operating expenses for the three and six months ended June 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. | ||||||||||||||||
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 our initial public offering in April 2013 (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 June 30, 2014 and December 31, 2013, EVERTEC had the following balances arising from transactions with related parties: | |||||||||||||||||
(Dollar amounts in thousands) | June 30, 2014 | December 31, 2013 | |||||||||||||||
Cash and restricted cash deposits in affiliated bank | $ | 14,847 | $ | 13,933 | |||||||||||||
Indemnification assets from Popular reimbursement(1) | |||||||||||||||||
Accounts receivable | $ | 1,941 | $ | 1,900 | |||||||||||||
Other long-term assets | $ | 173 | $ | 1,686 | |||||||||||||
Other due/to from affiliate | |||||||||||||||||
Accounts receivable | $ | 20,078 | $ | 18,799 | |||||||||||||
Prepaid expenses and other assets | $ | 322 | $ | 216 | |||||||||||||
Accounts payable(2) | $ | 4,088 | $ | 8,886 | |||||||||||||
Unearned income | $ | 6,964 | $ | 4,100 | |||||||||||||
Other long-term liabilities(2) | $ | 253 | $ | 333 | |||||||||||||
(1) | Recorded in connection with reimbursements from Popular regarding certain software license fees. | ||||||||||||||||
(2) | Includes an account payable of $0.2 million for both periods and a long-term liability of $0.2 million and $0.3 million for June 30, 2014 and December 31, 2013, 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 June 30, 2014, 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 | 6 Months Ended | ||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||||||
Segment Information | ' | ||||||||||||||||||||
Note 12 – Segment Information | |||||||||||||||||||||
The Company operates in three business segments: Merchant Acquiring, Payment Processing and Business Solutions. | |||||||||||||||||||||
The Merchant Acquiring segment consists of revenue from services that allow merchants to accept electronic methods of payment. In the Merchant Acquiring segment, revenue includes a discount fee (generally a percentage of the transaction value) and membership fees charged to merchants, debit network fees and rental fees from point of sales (“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. | |||||||||||||||||||||
Payment Processing segment revenue comprises income related to providing financial institutions access to the ATH network and other card networks, including related services such as authorization, processing, management and recording of ATM and POS transactions, and ATM management and monitoring. Payment Processing revenue also includes income from card processing services for debit or credit issuers such as credit and debit card processing, authorization and settlement, and fraud monitoring and control services, payment processing services (such as payment and billing products for merchants, businesses and financial institutions) and electronic benefit transfer (“EBT”), which principally consists of services to the government of Puerto Rico for the delivery of benefits to participants. | |||||||||||||||||||||
For ATH network and processing services, revenue is driven mainly by the number of transactions processed. Revenue is derived mainly from network fees, transaction switching and processing fees, and the leasing of POS devices. For card issuer processing, revenue is mostly 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, revenue is derived mainly from the number of beneficiaries on file. | |||||||||||||||||||||
The Business Solutions segment consists of revenue 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. Revenue from other processing services within the Business Solutions segment is generally volume-based and depend on factors such as the number of accounts processed. In addition, EVERTEC is 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 individual financial information to assess performance and to allocate resources. | |||||||||||||||||||||
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 June 30, 2014 | |||||||||||||||||||||
Revenues | 19,827 | 33,040 | 44,888 | (6,634 | )(1) | 91,121 | |||||||||||||||
Income from operations | 8,777 | 15,314 | 12,113 | (10,774 | )(2) | 25,429 | |||||||||||||||
Three months ended June 30, 2013 | |||||||||||||||||||||
Revenues | 18,165 | 30,603 | 46,725 | (6,318 | )(1) | 89,175 | |||||||||||||||
Income from operations | 8,161 | 11,720 | 8,784 | (11,727 | )(2) | 16,938 | |||||||||||||||
(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 | |||||||||||||||||||
Six months ended June 30, 2014 | |||||||||||||||||||||
Revenues | 39,118 | 64,659 | 87,805 | (13,251 | )(1) | 178,331 | |||||||||||||||
Income from operations | 17,181 | 30,031 | 23,537 | (20,431 | )(2) | 50,318 | |||||||||||||||
Six months ended June 30, 2013 | |||||||||||||||||||||
Revenues | 35,624 | 59,826 | 92,493 | (11,429 | )(1) | 176,514 | |||||||||||||||
Income from operations | 17,395 | 24,480 | 19,318 | (23,856 | )(2) | 37,337 | |||||||||||||||
(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 six months ended June 30, 2014 and 2013 is as follows: | |||||||||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||
(Dollar amounts in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||
Segment income from operations | |||||||||||||||||||||
Merchant acquiring | $ | 8,777 | $ | 8,161 | $ | 17,181 | $ | 17,395 | |||||||||||||
Payment processing | 15,314 | 11,720 | 30,031 | 24,480 | |||||||||||||||||
Business solutions | 12,113 | 8,784 | 23,537 | 19,318 | |||||||||||||||||
Total segment income from operations | 36,204 | 28,665 | 70,749 | 61,193 | |||||||||||||||||
Merger related depreciation and amortization and other unallocated expenses(1) | (10,775 | ) | (11,727 | ) | (20,431 | ) | (23,856 | ) | |||||||||||||
Income from operations | $ | 25,429 | $ | 16,938 | $ | 50,318 | $ | 37,337 | |||||||||||||
Interest expense, net | (6,422 | ) | (9,698 | ) | (13,256 | ) | (24,918 | ) | |||||||||||||
Earnings of equity method investment | 343 | 348 | 664 | 625 | |||||||||||||||||
Other income (expenses) | 385 | (77,535 | ) | 2,376 | (77,468 | ) | |||||||||||||||
Income tax (expense) benefit | (1,962 | ) | 5,012 | (4,123 | ) | 4,961 | |||||||||||||||
Net income (loss) | $ | 17,773 | $ | (64,935 | ) | $ | 35,979 | $ | (59,463 | ) | |||||||||||
(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 | 6 Months Ended |
Jun. 30, 2014 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
Note 13 – Subsequent Events | |
On August 6, 2014, the Company’s Board of Directors (the “Board”) declared a regular quarterly cash dividend of $0.10 per share on the Company’s outstanding shares of common stock. The Board anticipates declaring this dividend in future quarters on a regular basis, however future declarations of dividends are subject to Board approval and may be adjusted as business needs or market conditions change. The cash dividend of $0.10 per share will be paid on September 5, 2014 to stockholders of record as of the close of business on August 18, 2014. | |
The Company performed an evaluation of all other events occurring subsequent to June 30, 2014, Management has determined that there are no additional events occurring in this period that require disclosure in or adjustment to the accompanying unaudited financial statements. |
The_Company_and_Basis_of_Prese1
The Company and Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2014 | |
Accounting Policies [Abstract] | ' |
The Company | ' |
The Company | |
EVERTEC, Inc. (formerly known as Carib Latam Holdings, Inc.) and its subsidiaries (collectively the “Company,” or “EVERTEC”) is the leading full-service transaction processing business in Latin America and the Caribbean. The Company is based in Puerto Rico and provides a broad range of merchant acquiring, payment processing and business process management services across 19 countries in the region. EVERTEC owns and operates the ATH network, one of the leading automated teller machine (“ATM”) and personal identification number (“PIN”) debit networks in Latin America. In addition, EVERTEC provides a comprehensive suite of services for core bank processing, cash processing and technology outsourcing in the regions the Company serves. EVERTEC serves 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 Management believes that the Company’s business is well-positioned to continue to expand across the fast-growing Latin American region. | |
On April 13, 2012, EVERTEC was formed in order to act as the new parent company of EVERTEC Intermediate Holdings, LLC (formerly known as Carib Holdings, LLC and Carib Holdings, Inc., hereinafter “Holdings”) and its subsidiaries, including EVERTEC Group, LLC (formerly known as EVERTEC, LLC and EVERTEC, Inc., hereinafter “EVERTEC Group”). The Company’s subsidiaries include Holdings, EVERTEC Group, EVERTEC Dominicana SAS, EVERTEC Panamá, S.A., EVERTEC Costa Rica, S.A. (“EVERTEC CR”), EVERTEC Guatemala, S.A. and EVERTEC México Servicios de Procesamiento, S.A. de C.V. | |
Basis of Presentation | ' |
Basis of Presentation | |
The unaudited consolidated financial statements of EVERTEC have been prepared in accordance with accounting principles generally accepted in the United Stated of America (“GAAP”). The preparation of the accompanying unaudited consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the unaudited consolidated financial statements. Actual results could differ from these estimates. | |
Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted from these statements pursuant to the rules and regulations of the SEC and, accordingly, these financial statements should be read in conjunction with the Audited Consolidated Financial Statements of the Company for the year ended December 31, 2013, included in the Company’s 2013 Form 10-K. In the opinion of management, the accompanying 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. All significant intercompany accounts and transactions have been eliminated in consolidation. | |
Certain reclassifications have been made to the June 30, 2013 unaudited consolidated financial statements and related notes to conform with the presentation in 2014. |
Property_and_Equipment_net_Tab
Property and Equipment, net (Tables) | 6 Months Ended | ||||||||||
Jun. 30, 2014 | |||||||||||
Property Plant And Equipment [Abstract] | ' | ||||||||||
Property and Equipment, Net | ' | ||||||||||
Property and equipment, net consists of the following: | |||||||||||
(Dollar amounts in thousands) | Useful life | June 30, 2014 | December 31, 2013 | ||||||||
in years | |||||||||||
Buildings | 30 | $ | 1,590 | $ | 1,726 | ||||||
Data processing equipment | 3 - 5 | 70,243 | 68,273 | ||||||||
Furniture and equipment | 3 - 20 | 7,500 | 6,385 | ||||||||
Leasehold improvements | 5 - 10 | 2,878 | 2,880 | ||||||||
82,211 | 79,264 | ||||||||||
Less - accumulated depreciation and amortization | (54,250 | ) | (47,555 | ) | |||||||
Depreciable assets, net | 27,961 | 31,709 | |||||||||
Land | 1,410 | 1,531 | |||||||||
Property and equipment, net | $ | 29,371 | $ | 33,240 | |||||||
Goodwill_and_Other_Intangible_1
Goodwill and Other Intangible Assets (Tables) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
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, | |||||||||||||||||
(Dollar amounts in thousands) | Merchant | Payment | Business | Total | |||||||||||||
Acquiring, net | Processing | Solutions | |||||||||||||||
Balance at December 31, 2013 | $ | 138,121 | $ | 187,622 | $ | 47,376 | $ | 373,119 | |||||||||
Foreign currency translation adjustments | — | (2,923 | ) | (993 | ) | (3,916 | ) | ||||||||||
Balance at June 30, 2014 | $ | 138,121 | $ | 184,699 | $ | 46,383 | $ | 369,203 | |||||||||
Carrying Amount of Other Intangible Assets | ' | ||||||||||||||||
The carrying amount of other intangible assets for the six months ended June 30, 2014 and the year ended December 31, 2013 consisted of the following: | |||||||||||||||||
(Dollar amounts in thousands) | June 30, 2014 | ||||||||||||||||
Useful life in years | Gross | Accumulated | Net carrying | ||||||||||||||
amount | amortization | amount | |||||||||||||||
Customer relationships | 14 | $ | 312,747 | $ | (84,336 | ) | $ | 228,411 | |||||||||
Trademark | 10 - 15 | 39,950 | (12,990 | ) | 26,960 | ||||||||||||
Software packages | 3 - 10 | 125,508 | (76,169 | ) | 49,339 | ||||||||||||
Non-compete agreement | 15 | 56,539 | (14,135 | ) | 42,404 | ||||||||||||
Other intangible assets, net | $ | 534,744 | $ | (187,630 | ) | $ | 347,114 | ||||||||||
(Dollar amounts in thousands) | 31-Dec-13 | ||||||||||||||||
Useful life in years | Gross | Accumulated | Net carrying | ||||||||||||||
amount | amortization | amount | |||||||||||||||
Customer relationships | 14 | $ | 314,036 | $ | (73,180 | ) | $ | 240,856 | |||||||||
Trademark | 10 -15 | 39,950 | (11,258 | ) | 28,692 | ||||||||||||
Software packages | 3 - 10 | 119,598 | (65,655 | ) | 53,943 | ||||||||||||
Non-compete agreement | 15 | 56,539 | (12,250 | ) | 44,289 | ||||||||||||
Other intangible assets, net | $ | 530,123 | $ | (162,343 | ) | $ | 367,780 | ||||||||||
Estimated Amortization Expenses | ' | ||||||||||||||||
The estimated amortization expense of the balances outstanding at June 30, 2014 for the next five years is as follows: | |||||||||||||||||
(Dollar amounts in thousands) | |||||||||||||||||
Remaining 2014 | $ | 24,698 | |||||||||||||||
2015 | 45,742 | ||||||||||||||||
2016 | 35,741 | ||||||||||||||||
2017 | 32,988 | ||||||||||||||||
2018 | 31,336 | ||||||||||||||||
2019 | 30,609 |
Debt_and_ShortTerm_Borrowings_
Debt and Short-Term Borrowings (Tables) | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Total Debt | ' | ||||||||
Total debt as of June 30, 2014 and December 31, 2013 was as follows: | |||||||||
(Dollar amounts in thousands) | June 30, 2014 | December 31, 2013 | |||||||
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)(3)) | $ | 284,697 | $ | 292,153 | |||||
Senior Secured Credit Facility (Term B) due on April 17, 2020 paying interest at a variable interest rate (LIBOR plus applicable margin(2)(3)) | 390,929 | 392,527 | |||||||
Senior Secured Revolving Credit Facility expiring on April 17, 2018 paying interest at a variable interest rate | 23,000 | 50,000 | |||||||
Other short-term borrowing | — | 1,200 | |||||||
Total debt | $ | 698,626 | $ | 735,880 | |||||
-1 | Applicable margin of 2.50% at June 30, 2014 and December 31, 2013. | ||||||||
-2 | Subject to a minimum rate (“LIBOR floor”) of 0.75% plus applicable margin of 2.75% at June 30, 2014 and December 31, 2013. | ||||||||
-3 | Includes unamortized discount. |
Financial_Instruments_and_Fair1
Financial Instruments and Fair Value Measurements (Tables) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
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 June 30, 2014 and December 31, 2013 for assets measured at fair value on a recurring basis: | |||||||||||||||||
(Dollar amounts in thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
June 30, 2014 | |||||||||||||||||
Financial assets: | |||||||||||||||||
Indemnification assets: | |||||||||||||||||
Software cost reimbursement | $ | — | $ | — | $ | 2,114 | $ | 2,114 | |||||||||
December 31, 2013 | |||||||||||||||||
Financial assets: | |||||||||||||||||
Indemnification assets: | |||||||||||||||||
Software cost reimbursement | $ | — | $ | — | $ | 3,586 | $ | 3,586 | |||||||||
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 June 30, 2014 and December 31, 2013: | |||||||||||||||||
June 30, 2014 | December 31, 2013 | ||||||||||||||||
(Dollar amounts in thousands) | Carrying | Fair | Carrying | Fair | |||||||||||||
Amount | Value | Amount | Value | ||||||||||||||
Financial assets: | |||||||||||||||||
Indemnification assets: | |||||||||||||||||
Software cost reimbursement | $ | 2,114 | $ | 2,114 | $ | 3,586 | $ | 3,586 | |||||||||
Financial liabilities: | |||||||||||||||||
Senior secured term loan A | $ | 284,697 | $ | 280,905 | $ | 292,153 | $ | 284,091 | |||||||||
Senior secured term loan B | 390,929 | 389,565 | 392,527 | 387,055 | |||||||||||||
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 June 30, | Six months ended June 30, | ||||||||||||||||
(Dollar amounts in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Indemnification assets: | |||||||||||||||||
Beginning balance | $ | 2,947 | $ | 5,558 | $ | 3,586 | $ | 6,099 | |||||||||
Payments received | (839 | ) | (1,021 | ) | (1,299 | ) | (1,578 | ) | |||||||||
Unrealized gain (loss) recognized in other expenses | 6 | 3 | (173 | ) | 19 | ||||||||||||
Ending balance | $ | 2,114 | $ | 4,540 | $ | 2,114 | $ | 4,540 | |||||||||
Sharebased_Compensation_Tables
Share-based Compensation (Tables) | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ' | ||||||||
Summary of Stock Option Activity | ' | ||||||||
The following table summarizes stock options activity for the six months ended June 30, 2014: | |||||||||
Shares | Weighted-average | ||||||||
exercise prices | |||||||||
Outstanding at December 31, 2013 | 1,285,536 | $ | 4.77 | ||||||
Granted | 100,000 | 24.01 | |||||||
Forfeited | 31,164 | 1.3 | |||||||
Exercised | 406,999 | 1.95 | |||||||
Outstanding at June 30, 2014 | 947,373 | $ | 8.12 | ||||||
Exercisable at June 30, 2014 | 49,374 | $ | 1.3 | ||||||
Nonvested Restricted Shares Activity | ' | ||||||||
The following table summarizes nonvested restricted shares activity for the six months ended June 30, 2014: | |||||||||
Nonvested restricted shares | Shares | Weighted-average | |||||||
grant date fair value | |||||||||
Nonvested at December 31, 2013 | 9,133 | $ | 24.64 | ||||||
Nonvested at June 30, 2014 | 9,133 | $ | 24.64 | ||||||
Income_Tax_Tables
Income Tax (Tables) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||||||||||
Components of Income Tax Expense (Benefit) | ' | ||||||||||||||||
The components of income tax expense (benefit) for the three and six months ended June 30, 2014 and 2013 consisted of the following: | |||||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||
(Dollar amounts in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Current tax provision | $ | 964 | $ | 1,005 | $ | 4,553 | $ | 1,290 | |||||||||
Deferred tax provision (benefit) | 998 | (6,017 | ) | (430 | ) | (6,251 | ) | ||||||||||
Income tax expense (benefit) | $ | 1,962 | $ | (5,012 | ) | $ | 4,123 | $ | (4,961 | ) | |||||||
Segregation of Income Tax Expense (Benefit) Based on Location of Operations | ' | ||||||||||||||||
The following table presents the components of income tax expense (benefit) for the three and six months ended June 30, 2014 and 2013 and its segregation based on location of operations: | |||||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||
(Dollar amounts in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Current tax provision (benefit) | |||||||||||||||||
Puerto Rico | $ | 423 | $ | (122 | ) | $ | 1,360 | $ | 256 | ||||||||
United States | 217 | 210 | 415 | 429 | |||||||||||||
Foreign countries | 324 | 917 | 2,778 | 605 | |||||||||||||
Total current tax provision (benefit) | $ | 964 | $ | 1,005 | $ | 4,553 | $ | 1,290 | |||||||||
Deferred tax provision (benefit) | |||||||||||||||||
Puerto Rico | $ | 805 | $ | (5,880 | ) | $ | 832 | $ | (5,956 | ) | |||||||
United States | (2 | ) | — | (3 | ) | (2 | ) | ||||||||||
Foreign countries | 195 | (137 | ) | (1,259 | ) | (293 | ) | ||||||||||
Total deferred tax provision (benefit) | $ | 998 | $ | (6,017 | ) | $ | (430 | ) | $ | (6,251 | ) | ||||||
Net_Income_Loss_Per_Common_Sha1
Net Income (Loss) Per Common Share (Tables) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||||||
Schedule of Reconciliation of Numerator and Denominator of Earnings Per Common Share | ' | ||||||||||||||||
The reconciliation of the numerator and denominator of the income (loss) per common share is as follows: | |||||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||
(Dollar amounts in thousands, except per share data) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Net income (loss) | $ | 17,773 | $ | (64,935 | ) | $ | 35,979 | $ | (59,463 | ) | |||||||
Weighted average common shares outstanding | 78,410,554 | 78,928,780 | 78,393,042 | 75,849,551 | |||||||||||||
Weighted average potential dilutive common shares(1)(2) | 789,410 | — | 811,600 | — | |||||||||||||
Weighted average common shares outstanding - assuming dilution | 79,199,964 | 78,928,780 | 79,204,642 | 75,849,551 | |||||||||||||
Net income (loss) per common share - basic | $ | 0.23 | $ | (0.82 | ) | $ | 0.46 | $ | (0.78 | ) | |||||||
Net income (loss) per common share - diluted | $ | 0.22 | $ | (0.82 | ) | $ | 0.45 | $ | (0.78 | ) | |||||||
(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 three and six months ended June 30, 2013, 3,818,727 and 4,227,114 potential common shares, respectively, 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) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Related Party Transactions [Abstract] | ' | ||||||||||||||||
Transactions with Related Parties | ' | ||||||||||||||||
The following table presents the Company’s transactions with related parties for the three and six months ended June 30, 2014 and 2013: | |||||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||
(Dollar amounts in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Total revenues(1)(2) | $ | 41,546 | $ | 42,349 | $ | 82,008 | $ | 84,004 | |||||||||
Cost of revenues | $ | 528 | $ | 2,506 | $ | 619 | $ | 5,110 | |||||||||
Rent and other fees(3)(4) | $ | 2,084 | $ | 27,212 | $ | 4,001 | $ | 30,072 | |||||||||
Interest earned from and charged by affiliate | |||||||||||||||||
Interest income | $ | 50 | $ | 23 | $ | 102 | $ | 42 | |||||||||
Interest expense(5) | $ | — | $ | 577 | $ | — | $ | 2,471 | |||||||||
(1) | Total revenues from Popular as a percentage of revenues were 45%, 47%, 45% and 47% for each of the periods presented above. | ||||||||||||||||
(2) | Includes revenues generated from investee accounted for under the equity method of $0.7 million and $1.4 million for the three and six months ended June 30, 2014, respectively, and $0.8 million and $1.7 million for the corresponding 2013 periods. | ||||||||||||||||
(3) | Includes management fees to equity sponsors amounting to $19.4 million and $20.3 million for the three and six months ended June 30, 2013, respectively. 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 for the three and six months ended June 30, 2013. | ||||||||||||||||
(4) | For the periods presented above, $2.1 million, $4.6 million, $4.0 million and $7.5 million were recorded as selling, general and administrative expenses, and $22.6 million was recorded as non-operating expenses for the three and six months ended June 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. | ||||||||||||||||
Summary of Balances of Transactions with Related Parties | ' | ||||||||||||||||
At June 30, 2014 and December 31, 2013, EVERTEC had the following balances arising from transactions with related parties: | |||||||||||||||||
(Dollar amounts in thousands) | June 30, 2014 | December 31, 2013 | |||||||||||||||
Cash and restricted cash deposits in affiliated bank | $ | 14,847 | $ | 13,933 | |||||||||||||
Indemnification assets from Popular reimbursement(1) | |||||||||||||||||
Accounts receivable | $ | 1,941 | $ | 1,900 | |||||||||||||
Other long-term assets | $ | 173 | $ | 1,686 | |||||||||||||
Other due/to from affiliate | |||||||||||||||||
Accounts receivable | $ | 20,078 | $ | 18,799 | |||||||||||||
Prepaid expenses and other assets | $ | 322 | $ | 216 | |||||||||||||
Accounts payable(2) | $ | 4,088 | $ | 8,886 | |||||||||||||
Unearned income | $ | 6,964 | $ | 4,100 | |||||||||||||
Other long-term liabilities(2) | $ | 253 | $ | 333 | |||||||||||||
(1) | Recorded in connection with reimbursements from Popular regarding certain software license fees. | ||||||||||||||||
(2) | Includes an account payable of $0.2 million for both periods and a long-term liability of $0.2 million and $0.3 million for June 30, 2014 and December 31, 2013, 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) | 6 Months Ended | ||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||
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 June 30, 2014 | |||||||||||||||||||||
Revenues | 19,827 | 33,040 | 44,888 | (6,634 | )(1) | 91,121 | |||||||||||||||
Income from operations | 8,777 | 15,314 | 12,113 | (10,774 | )(2) | 25,429 | |||||||||||||||
Three months ended June 30, 2013 | |||||||||||||||||||||
Revenues | 18,165 | 30,603 | 46,725 | (6,318 | )(1) | 89,175 | |||||||||||||||
Income from operations | 8,161 | 11,720 | 8,784 | (11,727 | )(2) | 16,938 | |||||||||||||||
(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 | |||||||||||||||||||
Six months ended June 30, 2014 | |||||||||||||||||||||
Revenues | 39,118 | 64,659 | 87,805 | (13,251 | )(1) | 178,331 | |||||||||||||||
Income from operations | 17,181 | 30,031 | 23,537 | (20,431 | )(2) | 50,318 | |||||||||||||||
Six months ended June 30, 2013 | |||||||||||||||||||||
Revenues | 35,624 | 59,826 | 92,493 | (11,429 | )(1) | 176,514 | |||||||||||||||
Income from operations | 17,395 | 24,480 | 19,318 | (23,856 | )(2) | 37,337 | |||||||||||||||
(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 six months ended June 30, 2014 and 2013 is as follows: | |||||||||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||
(Dollar amounts in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||
Segment income from operations | |||||||||||||||||||||
Merchant acquiring | $ | 8,777 | $ | 8,161 | $ | 17,181 | $ | 17,395 | |||||||||||||
Payment processing | 15,314 | 11,720 | 30,031 | 24,480 | |||||||||||||||||
Business solutions | 12,113 | 8,784 | 23,537 | 19,318 | |||||||||||||||||
Total segment income from operations | 36,204 | 28,665 | 70,749 | 61,193 | |||||||||||||||||
Merger related depreciation and amortization and other unallocated expenses(1) | (10,775 | ) | (11,727 | ) | (20,431 | ) | (23,856 | ) | |||||||||||||
Income from operations | $ | 25,429 | $ | 16,938 | $ | 50,318 | $ | 37,337 | |||||||||||||
Interest expense, net | (6,422 | ) | (9,698 | ) | (13,256 | ) | (24,918 | ) | |||||||||||||
Earnings of equity method investment | 343 | 348 | 664 | 625 | |||||||||||||||||
Other income (expenses) | 385 | (77,535 | ) | 2,376 | (77,468 | ) | |||||||||||||||
Income tax (expense) benefit | (1,962 | ) | 5,012 | (4,123 | ) | 4,961 | |||||||||||||||
Net income (loss) | $ | 17,773 | $ | (64,935 | ) | $ | 35,979 | $ | (59,463 | ) | |||||||||||
(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_Basis_of_Prese2
The Company and Basis of Presentation - Additional Information (Detail) | Jun. 30, 2014 |
Country | |
Accounting Policies [Abstract] | ' |
Number of countries where the Company provides a broad range of merchant acquiring, payment processing and business process management services | 19 |
Property_and_Equipment_Net_Det
Property and Equipment, Net (Detail) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 |
In Thousands, unless otherwise specified | Buildings [Member] | Data Processing Equipment [Member] | Data Processing Equipment [Member] | Furniture and Equipment [Member] | Furniture and Equipment [Member] | Leasehold Improvements [Member] | Leasehold Improvements [Member] | ||
Minimum [Member] | Maximum [Member] | Minimum [Member] | Maximum [Member] | Minimum [Member] | Maximum [Member] | ||||
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Property and equipment, useful life | ' | ' | '30 years | '3 years | '5 years | '3 years | '20 years | '5 years | '10 years |
Buildings | $1,590 | $1,726 | ' | ' | ' | ' | ' | ' | ' |
Data processing equipment | 70,243 | 68,273 | ' | ' | ' | ' | ' | ' | ' |
Furniture and equipment | 7,500 | 6,385 | ' | ' | ' | ' | ' | ' | ' |
Leasehold improvements | 2,878 | 2,880 | ' | ' | ' | ' | ' | ' | ' |
Property and equipment | 82,211 | 79,264 | ' | ' | ' | ' | ' | ' | ' |
Less - accumulated depreciation and amortization | -54,250 | -47,555 | ' | ' | ' | ' | ' | ' | ' |
Depreciable assets, net | 27,961 | 31,709 | ' | ' | ' | ' | ' | ' | ' |
Land | 1,410 | 1,531 | ' | ' | ' | ' | ' | ' | ' |
Property and equipment, net | $29,371 | $33,240 | ' | ' | ' | ' | ' | ' | ' |
Property_and_Equipment_Net_Add
Property and Equipment, Net - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Property Plant And Equipment [Abstract] | ' | ' | ' | ' |
Depreciation and amortization expense related to property and equipment | $3.80 | $4.10 | $7.70 | $8.10 |
Changes_in_Carrying_Amount_of_
Changes in Carrying Amount of Goodwill Allocated by Reportable Segments (Detail) (USD $) | 6 Months Ended |
In Thousands, unless otherwise specified | Jun. 30, 2014 |
Goodwill [Line Items] | ' |
Goodwill, Beginning Balance | $373,119 |
Foreign currency translation adjustments | -3,916 |
Goodwill, Ending Balance | 369,203 |
Merchant Acquiring, net [Member] | ' |
Goodwill [Line Items] | ' |
Goodwill, Beginning Balance | 138,121 |
Foreign currency translation adjustments | 0 |
Goodwill, Ending Balance | 138,121 |
Payment Processing [Member] | ' |
Goodwill [Line Items] | ' |
Goodwill, Beginning Balance | 187,622 |
Foreign currency translation adjustments | -2,923 |
Goodwill, Ending Balance | 184,699 |
Business Solutions [Member] | ' |
Goodwill [Line Items] | ' |
Goodwill, Beginning Balance | 47,376 |
Foreign currency translation adjustments | -993 |
Goodwill, Ending Balance | $46,383 |
Goodwill_and_Other_Intangible_2
Goodwill and Other Intangible Assets - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2014 | Sep. 30, 2013 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ' | ' | ' | ' | ' |
Goodwill impairment test fair value in excess of carrying amount percentage | ' | 30.00% | ' | ' | ' |
Impairment losses | ' | $0 | ' | ' | ' |
Amortization expense for intangible assets | $12,600,000 | ' | $13,700,000 | $25,300,000 | $27,300,000 |
Carrying_Amount_of_Other_Intan
Carrying Amount of Other Intangible Assets (Detail) (USD $) | 6 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Dec. 31, 2013 |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross amount | $534,744 | $530,123 |
Accumulated amortization | -187,630 | -162,343 |
Net carrying amount | 347,114 | 367,780 |
Customer relationships [Member] | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Useful life in years | '14 years | '14 years |
Gross amount | 312,747 | 314,036 |
Accumulated amortization | -84,336 | -73,180 |
Net carrying amount | 228,411 | 240,856 |
Trademarks [Member] | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross amount | 39,950 | 39,950 |
Accumulated amortization | -12,990 | -11,258 |
Net carrying amount | 26,960 | 28,692 |
Trademarks [Member] | Minimum [Member] | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Useful life in years | '10 years | '10 years |
Trademarks [Member] | Maximum [Member] | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Useful life in years | '15 years | '15 years |
Software packages [Member] | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross amount | 125,508 | 119,598 |
Accumulated amortization | -76,169 | -65,655 |
Net carrying amount | 49,339 | 53,943 |
Software packages [Member] | Minimum [Member] | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Useful life in years | '3 years | '3 years |
Software packages [Member] | Maximum [Member] | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Useful life in years | '10 years | '10 years |
Non-compete agreement [Member] | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Useful life in years | '15 years | '15 years |
Gross amount | 56,539 | 56,539 |
Accumulated amortization | -14,135 | -12,250 |
Net carrying amount | $42,404 | $44,289 |
Estimated_Amortization_Expense
Estimated Amortization Expenses (Detail) (USD $) | Jun. 30, 2014 |
In Thousands, unless otherwise specified | |
Goodwill And Intangible Assets Disclosure [Abstract] | ' |
Remaining 2014 | $24,698 |
2015 | 45,742 |
2016 | 35,741 |
2017 | 32,988 |
2018 | 31,336 |
2019 | $30,609 |
Total_Debt_Detail
Total Debt (Detail) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
Debt Instrument [Line Items] | ' | ' | ||
Other short-term borrowing | ' | $1,200 | ||
Total debt | 698,626 | 735,880 | ||
Term A due on April 17, 2018 [Member] | Senior Secured Credit Facility [Member] | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Credit facility | 284,697 | [1],[2] | 292,153 | [1],[2] |
Term B due on April 17, 2020 [Member] | Senior Secured Credit Facility [Member] | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Credit facility | 390,929 | [1],[3] | 392,527 | [1],[3] |
Expiring on April 17, 2018 [Member] | Revolving Credit Facility [Member] | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Credit facility | $23,000 | $50,000 | ||
[1] | Subject to a minimum rate ("LIBOR floor") of 0.75% plus applicable margin of 2.75% at June 30, 2014 and December 31, 2013. | |||
[2] | Applicable margin of 2.50% at June 30, 2014 and December 31, 2013. | |||
[3] | Includes unamortized discount. |
Total_Debt_Parenthetical_Detai
Total Debt (Parenthetical) (Detail) | 0 Months Ended | 6 Months Ended | 12 Months Ended |
Apr. 17, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | |
Senior Secured Credit Facility [Member] | Term A due on April 17, 2018 [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Debt, maturity date | 17-Apr-18 | 17-Apr-18 | 17-Apr-18 |
Margin interest rate | ' | 2.50% | ' |
Senior Secured Credit Facility [Member] | Term B due on April 17, 2020 [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Debt, maturity date | 17-Apr-20 | 17-Apr-20 | 17-Apr-20 |
Senior Secured Credit Facility [Member] | Term B due on April 17, 2020 [Member] | LIBOR Floor [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Margin interest rate | ' | 0.75% | 0.75% |
Senior Secured Credit Facility [Member] | Term B due on April 17, 2020 [Member] | Applicable Margin [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Margin interest rate | ' | 2.75% | 2.75% |
Revolving Credit Facility [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Debt, maturity date | ' | 17-Apr-18 | ' |
Revolving Credit Facility [Member] | Expiring on April 17, 2018 [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Debt, maturity date | 17-Apr-18 | 17-Apr-18 | 17-Apr-18 |
Debt_and_ShortTerm_Borrowings_1
Debt and Short-Term Borrowings - Additional Information (Detail) (USD $) | 0 Months Ended | 6 Months Ended | 12 Months Ended |
In Millions, unless otherwise specified | Apr. 17, 2013 | Jun. 30, 2014 | Dec. 31, 2013 |
Debt Instrument [Line Items] | ' | ' | ' |
Maximum secured leverage ratio | ' | 6.6 | ' |
Senior secured term loan A [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Secured credit facilities | ' | 285 | ' |
Debt, maturity date | ' | 17-Apr-18 | ' |
Senior secured term loan A [Member] | Commencing On September 30, 2013 To June 2016 [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Original principal amount | ' | 1.25% | ' |
Senior secured term loan A [Member] | Commencing On September 30, 2016 To June 30, 2017 [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Original principal amount | ' | 1.88% | ' |
Senior secured term loan A [Member] | Commencing On September 30, 2017 To March 31, 2018 [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Original principal amount | ' | 2.50% | ' |
Senior secured term loan A [Member] | LIBOR Floor [Member] | Minimum [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
LIBOR rate and base rate percentage | ' | 2.00% | ' |
Senior secured term loan A [Member] | LIBOR Floor [Member] | Maximum [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
LIBOR rate and base rate percentage | ' | 2.50% | ' |
Senior secured term loan A [Member] | Base Rate [Member] | Minimum [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
LIBOR rate and base rate percentage | ' | 1.00% | ' |
Senior secured term loan A [Member] | Base Rate [Member] | Maximum [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
LIBOR rate and base rate percentage | ' | 1.50% | ' |
Senior secured term loan B [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Secured credit facilities | ' | 396 | ' |
Debt, maturity date | ' | 17-Apr-20 | ' |
Original principal amount | ' | 0.25% | ' |
Debt instrument description | ' | 'The LIBOR and Base Rate are subject to floors of 0.75% and 1.75%, respectively. | ' |
Senior secured term loan B [Member] | Minimum [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
LIBOR rate and base rate percentage | ' | 0.75% | ' |
Senior secured term loan B [Member] | Maximum [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
LIBOR rate and base rate percentage | ' | 1.75% | ' |
Senior secured term loan B [Member] | LIBOR Floor [Member] | Minimum [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
LIBOR rate and base rate percentage | ' | 2.50% | ' |
Senior secured term loan B [Member] | LIBOR Floor [Member] | Maximum [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
LIBOR rate and base rate percentage | ' | 2.75% | ' |
Senior secured term loan B [Member] | Base Rate [Member] | Minimum [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
LIBOR rate and base rate percentage | ' | 1.50% | ' |
Senior secured term loan B [Member] | Base Rate [Member] | Maximum [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
LIBOR rate and base rate percentage | ' | 1.75% | ' |
Revolving Credit Facility [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Secured credit facilities | ' | 100 | ' |
Debt, maturity date | ' | 17-Apr-18 | ' |
Revolving Credit Facility [Member] | Minimum [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Commitment fee for the unused portion | ' | 0.13% | ' |
Revolving Credit Facility [Member] | Maximum [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Commitment fee for the unused portion | ' | 0.38% | ' |
Term A due on April 17, 2018 [Member] | Senior Secured Credit Facility [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Secured credit facilities | 300 | ' | ' |
Debt, maturity date | 17-Apr-18 | 17-Apr-18 | 17-Apr-18 |
LIBOR rate and base rate percentage | ' | 2.50% | ' |
Term B due on April 17, 2020 [Member] | Senior Secured Credit Facility [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Secured credit facilities | 400 | ' | ' |
Debt, maturity date | 17-Apr-20 | 17-Apr-20 | 17-Apr-20 |
Term B due on April 17, 2020 [Member] | Senior Secured Credit Facility [Member] | LIBOR Floor [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
LIBOR rate and base rate percentage | ' | 0.75% | 0.75% |
Expiring on April 17, 2018 [Member] | Revolving Credit Facility [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Secured credit facilities | $100 | ' | ' |
Debt, maturity date | 17-Apr-18 | 17-Apr-18 | 17-Apr-18 |
Fair_Value_Measurements_for_As
Fair Value Measurements for Assets at Fair Value on Recurring Basis (Detail) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Indemnification assets: | ' | ' |
Software cost reimbursement | $2,114 | $3,586 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | ' | ' |
Indemnification assets: | ' | ' |
Software cost reimbursement | $2,114 | $3,586 |
Financial_Instruments_and_Fair2
Financial Instruments and Fair Value Measurements - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Fair Value Disclosures [Abstract] | ' | ' | ' | ' |
Termination dates of contracts end | ' | ' | 30-Sep-15 | ' |
Unrealized gain (loss) recognized in other expenses | $6,000 | $3,000 | ($173,000) | $19,000 |
Merger Transaction completed Date | ' | ' | 30-Sep-10 | ' |
Unobservable inputs related to the Company's indemnification assets, discount rate | ' | ' | 5.33% | ' |
Projected cash flows | ' | ' | $2,300,000 | ' |
Carrying_Value_and_Estimated_F
Carrying Value and Estimated Fair Values for Financial Instruments (Detail) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Indemnification assets: | ' | ' |
Software cost reimbursement, Carrying Amount | $2,114 | $3,586 |
Indemnification assets: | ' | ' |
Software cost reimbursement, Fair Value | 2,114 | 3,586 |
Senior secured term loan A [Member] | ' | ' |
Financial liabilities: | ' | ' |
Senior secured term loan , Carrying Amount | 284,697 | 292,153 |
Financial liabilities: | ' | ' |
Senior secured term loan, Fair Value | 280,905 | 284,091 |
Senior secured term loan B [Member] | ' | ' |
Financial liabilities: | ' | ' |
Senior secured term loan , Carrying Amount | 390,929 | 392,527 |
Financial liabilities: | ' | ' |
Senior secured term loan, Fair Value | $389,565 | $387,055 |
Summary_of_Change_in_Fair_Valu
Summary of Change in Fair Value of Level Three Assets (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ' | ' |
Unrealized gain (loss) recognized in other expenses | ($6) | ($3) | $173 | ($19) |
Indemnification Assets [Member] | ' | ' | ' | ' |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ' | ' |
Beginning balance | 2,947 | 5,558 | 3,586 | 6,099 |
Payments received | -839 | -1,021 | -1,299 | -1,578 |
Unrealized gain (loss) recognized in other expenses | 6 | 3 | -173 | 19 |
Ending balance | $2,114 | $4,540 | $2,114 | $4,540 |
Summary_of_Stock_Option_Activi
Summary of Stock Option Activity (Detail) (USD $) | 6 Months Ended |
Jun. 30, 2014 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ' |
Outstanding shares, Beginning Balance | 1,285,536 |
Outstanding shares, Granted | 100,000 |
Outstanding shares, Forfeitures | 31,164 |
Outstanding shares, Exercised | 406,999 |
Outstanding shares, Ending Balance | 947,373 |
Outstanding shares, Exercisable, Ending Balance | 49,374 |
Outstanding weighted average exercise prices, Beginning Balance | $4.77 |
Outstanding weighted average exercise prices, Granted | $24.01 |
Outstanding weighted average exercise prices, Forfeitures | $1.30 |
Outstanding weighted average exercise prices, Exercised | $1.95 |
Outstanding weighted average exercise prices, Ending Balance | $8.12 |
Outstanding weighted average exercise prices, Exercisable, Ending Balance | $1.30 |
Nonvested_Restricted_Shares_Ac
Nonvested Restricted Shares Activity (Detail) (Restricted Shares [Member], USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Restricted Shares [Member] | ' | ' |
Nonvested restricted shares | ' | ' |
Nonvested shares, Beginning balance | 9,133 | 9,133 |
Nonvested shares, Ending Balance | 9,133 | 9,133 |
Weighted-average grant date fair value | ' | ' |
Weighted-average grant date fair value, beginning balance | $24.64 | $24.64 |
Weighted-average grant date fair value, Ending balance | $24.64 | $24.64 |
Sharebased_Compensation_Additi
Share-based Compensation - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Share based compensation expenses | $300,000 | $5,200,000 | $700,000 | $5,500,000 |
Total unrecognized cost for stock options | 2,200,000 | ' | 2,200,000 | ' |
Unrecognized compensation cost, weighted average period of recognition | '2 years 3 months 18 days | ' | ' | ' |
Restricted Shares [Member] | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Total unrecognized cost for stock options | $25,000 | ' | $25,000 | ' |
Components_of_Income_Tax_Expen
Components of Income Tax Expense (Benefit) (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Income Tax Disclosure [Abstract] | ' | ' | ' | ' |
Current tax provision | $964 | $1,005 | $4,553 | $1,290 |
Deferred tax provision (benefit) | 998 | -6,017 | -430 | -6,251 |
Income tax expense (benefit) | $1,962 | ($5,012) | $4,123 | ($4,961) |
Segregation_of_Income_Tax_Expe
Segregation of Income Tax Expense (Benefit) Based on Location of Operations (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Income Tax Disclosure [Abstract] | ' | ' | ' | ' |
Current tax provision (benefit), Puerto Rico | $423 | ($122) | $1,360 | $256 |
Current tax provision (benefit), United States | 217 | 210 | 415 | 429 |
Current tax provision (benefit), Foreign countries | 324 | 917 | 2,778 | 605 |
Total current tax provision (benefit) | 964 | 1,005 | 4,553 | 1,290 |
Deferred tax provision (benefit) | ' | ' | ' | ' |
Deferred tax provision (benefit), Puerto Rico | 805 | -5,880 | 832 | -5,956 |
Deferred tax provision (benefit) , United States | -2 | ' | -3 | -2 |
Deferred tax provision (benefit), Foreign countries | 195 | -137 | -1,259 | -293 |
Total deferred tax provision (benefit) | $998 | ($6,017) | ($430) | ($6,251) |
Income_Tax_Additional_Informat
Income Tax - Additional Information (Detail) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Income Tax Examination [Line Items] | ' | ' |
Deferred tax asset, gross | $11,000,000 | $13,500,000 |
Deferred tax liability, gross | 29,400,000 | 31,700,000 |
Total available gross net operating loss | 15,100,000 | ' |
Future realized windfall tax benefit | 7,000,000 | ' |
Open tax uncertainty positions | 0 | ' |
Windfall [Member] | ' | ' |
Income Tax Examination [Line Items] | ' | ' |
Total available gross net operating loss | $58,200,000 | ' |
Schedule_of_Reconciliation_of_
Schedule of Reconciliation of Numerator and Denominator of Earnings Per Common Share (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||||
In Thousands, except Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | ||
Earnings Per Share [Abstract] | ' | ' | ' | ' | ||
Net income (loss) | $17,773 | ($64,935) | $35,979 | ($59,463) | ||
Weighted average common shares outstanding | 78,410,554 | 78,928,780 | 78,393,042 | 75,849,551 | ||
Weighted average potential dilutive common shares | 789,410 | [1],[2] | ' | 811,600 | [1],[2] | ' |
Weighted average common shares outstanding - assuming dilution | 79,199,964 | 78,928,780 | 79,204,642 | 75,849,551 | ||
Net income (loss) per common share - basic | $0.23 | ($0.82) | $0.46 | ($0.78) | ||
Net income (loss) per common share - diluted | $0.22 | ($0.82) | $0.45 | ($0.78) | ||
[1] | For the three and six months ended June 30, 2013, 3,818,727 and 4,227,114 potential common shares, respectively, 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. | |||||
[2] | Potential common shares consist of common stock issuable under the assumed exercise of stock options and restricted stock awards using the treasury stock method. |
Schedule_of_Reconciliation_of_1
Schedule of Reconciliation of Numerator and Denominator of Earnings Per Common Share (Parenthetical) (Detail) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2013 | Jun. 30, 2013 | |
Earnings Per Share [Abstract] | ' | ' |
Common shares excluded from the calculation of diluted net income (loss) per share | 3,818,727 | 4,227,114 |
Net_Income_Loss_Per_Common_Sha2
Net Income (Loss) Per Common Share - Additional Information (Detail) (USD $) | 0 Months Ended | 6 Months Ended | |
7-May-14 | Feb. 12, 2014 | Jun. 30, 2014 | |
Earnings Per Share [Abstract] | ' | ' | ' |
Cash dividend paid per common share | ' | ' | $0.10 |
Cash dividend declared per common share | $0.10 | $0.10 | $0.10 |
Commitments_and_Contingencies_
Commitments and Contingencies - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | |||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 |
Commitments and Contingencies [Line Items] | ' | ' | ' | ' | ' |
Total deferred rent obligation | $0.20 | ' | $0.20 | ' | $0.30 |
Rent expense of office facilities and real estate | 2.1 | 2 | 4.1 | 4 | ' |
Rent expense for telecommunications and other equipment | 1.6 | 1.8 | 3 | 3.5 | ' |
Outstanding letter of credit | $1.10 | ' | $1.10 | ' | ' |
Maximum [Member] | ' | ' | ' | ' | ' |
Commitments and Contingencies [Line Items] | ' | ' | ' | ' | ' |
Outstanding letter of credit, maturity term | ' | ' | '3 months | ' | ' |
Transactions_with_Related_Part
Transactions with Related Parties (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||||||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | ||||
Transaction [Abstract] | ' | ' | ' | ' | ||||
Total revenues | $41,546 | [1],[2] | $42,349 | [1],[2] | $82,008 | [1],[2] | $84,004 | [1],[2] |
Cost of revenues | 528 | 2,506 | 619 | 5,110 | ||||
Rent and other fees | 2,084 | [3],[4] | 27,212 | [3],[4] | 4,001 | [3],[4] | 30,072 | [3],[4] |
Interest earned from and charged by affiliate | ' | ' | ' | ' | ||||
Interest income | 50 | 23 | 102 | 42 | ||||
Interest expense | $0 | [5] | $577 | [5] | $0 | [5] | $2,471 | [5] |
[1] | Total revenues from Popular as a percentage of revenues were 45%, 47%, 45% and 47% for each of the periods presented above. | |||||||
[2] | Includes revenues generated from investee accounted for under the equity method of $0.7 million and $1.4 million for the three and six months ended June 30, 2014, respectively, and $0.8 million and $1.7 million for the corresponding 2013 periods. | |||||||
[3] | Includes management fees to equity sponsors amounting to $19.4 million and $20.3 million for the three and six months ended June 30, 2013, respectively. 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 for the three and six months ended June 30, 2013. | |||||||
[4] | For the periods presented above, $2.1 million, $4.6 million, $4.0 million and $7.5 million were recorded as selling, general and administrative expenses, and $22.6 million was recorded as non-operating expenses for the three and six months ended June 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. |
Transactions_with_Related_Part1
Transactions with Related Parties (Parenthetical) (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |||||
Transactions with Third Party [Line Items] | ' | ' | ' | ' | ||||
Revenues generated from investee accounted for under equity method | $700,000 | $800,000 | $1,400,000 | $1,700,000 | ||||
Management fee paid for termination of consulting agreement | ' | 16,718,000 | ' | 16,718,000 | ||||
Rent and other fees | 2,084,000 | [1],[2] | 27,212,000 | [1],[2] | 4,001,000 | [1],[2] | 30,072,000 | [1],[2] |
Selling, general and administrative expense | 10,463,000 | 12,624,000 | 18,525,000 | 21,487,000 | ||||
Non operating expense | -5,694,000 | -86,885,000 | -10,216,000 | -101,761,000 | ||||
Popular [Member] | ' | ' | ' | ' | ||||
Transactions with Third Party [Line Items] | ' | ' | ' | ' | ||||
Total revenues from Popular | 45.00% | 47.00% | 45.00% | 47.00% | ||||
Rent and other fees | ' | 5,900,000 | ' | 5,900,000 | ||||
Related Party Transactions [Member] | ' | ' | ' | ' | ||||
Transactions with Third Party [Line Items] | ' | ' | ' | ' | ||||
Management fees to equity sponsors | ' | 19,400,000 | ' | 20,300,000 | ||||
Selling, general and administrative expense | 2,100,000 | 4,600,000 | 4,000,000 | 7,500,000 | ||||
Non operating expense | ' | $22,600,000 | ' | $22,600,000 | ||||
[1] | Includes management fees to equity sponsors amounting to $19.4 million and $20.3 million for the three and six months ended June 30, 2013, respectively. 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 for the three and six months ended June 30, 2013. | |||||||
[2] | For the periods presented above, $2.1 million, $4.6 million, $4.0 million and $7.5 million were recorded as selling, general and administrative expenses, and $22.6 million was recorded as non-operating expenses for the three and six months ended June 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 $) | 6 Months Ended |
In Millions, unless otherwise specified | Jun. 30, 2014 |
Transactions with Third Party [Line Items] | ' |
Letter of credit issued by Popular | $3.60 |
Apollo Management [Member] | ' |
Transactions with Third Party [Line Items] | ' |
Termination fee | 8.5 |
Popular [Member] | ' |
Transactions with Third Party [Line Items] | ' |
Termination fee | $8.20 |
Summary_of_Balances_of_Transac
Summary of Balances of Transactions with Related Parties (Detail) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
Related Party Transactions [Abstract] | ' | ' | ||
Cash and restricted cash deposits in affiliated bank | $14,847 | $13,933 | ||
Indemnification assets from Popular reimbursement | ' | ' | ||
Accounts receivable | 1,941 | [1] | 1,900 | [1] |
Other long-term assets | 173 | [1] | 1,686 | [1] |
Other due/to from affiliate | ' | ' | ||
Accounts receivable | 20,078 | 18,799 | ||
Prepaid expenses and other assets | 322 | 216 | ||
Accounts payable | 4,088 | [2] | 8,886 | [2] |
Unearned income | 6,964 | 4,100 | ||
Other long-term liabilities | $253 | [2] | $333 | [2] |
[1] | Recorded in connection with reimbursements from Popular regarding certain software license fees. | |||
[2] | Includes an account payable of $0.2 million for both periods and a long-term liability of $0.2 million and $0.3 million for June 30, 2014 and December 31, 2013, 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 $) | Jun. 30, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
Transactions with Third Party [Line Items] | ' | ' | ||
Accounts payable | $4,088 | [1] | $8,886 | [1] |
Other long-term liabilities | 253 | [1] | 333 | [1] |
Unvested Stock Options [Member] | ' | ' | ||
Transactions with Third Party [Line Items] | ' | ' | ||
Accounts payable | 200 | 200 | ||
Other long-term liabilities | $200 | $300 | ||
[1] | Includes an account payable of $0.2 million for both periods and a long-term liability of $0.2 million and $0.3 million for June 30, 2014 and December 31, 2013, 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) | 6 Months Ended |
Jun. 30, 2014 | |
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 | 6 Months Ended | ||||||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ||||
Revenues | $91,121 | $89,175 | $178,331 | $176,514 | ||||
Income from operations | 25,429 | 16,938 | 50,318 | 37,337 | ||||
Operating Segments [Member] | ' | ' | ' | ' | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ||||
Income from operations | 36,204 | 28,665 | 70,749 | 61,193 | ||||
Operating Segments [Member] | Merchant Acquiring, net [Member] | ' | ' | ' | ' | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ||||
Revenues | 19,827 | 18,165 | 39,118 | 35,624 | ||||
Income from operations | 8,777 | 8,161 | 17,181 | 17,395 | ||||
Operating Segments [Member] | Payment Processing [Member] | ' | ' | ' | ' | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ||||
Revenues | 33,040 | 30,603 | 64,659 | 59,826 | ||||
Income from operations | 15,314 | 11,720 | 30,031 | 24,480 | ||||
Operating Segments [Member] | Business Solutions [Member] | ' | ' | ' | ' | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ||||
Revenues | 44,888 | 46,725 | 87,805 | 92,493 | ||||
Income from operations | 12,113 | 8,784 | 23,537 | 19,318 | ||||
Segment Reconciling Items [Member] | ' | ' | ' | ' | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ||||
Income from operations | -10,775 | [1] | -11,727 | [1] | -20,431 | [1] | -23,856 | [1] |
Other [Member] | ' | ' | ' | ' | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ||||
Revenues | ($6,634) | [2] | ($6,318) | [2] | ($13,251) | [2] | ($11,429) | [2] |
[1] | Primarily represents non-operating depreciation and amortization expenses generated as a result of the Merger and certain non-recurring fees and expenses. | |||||||
[2] | Represents the elimination of intersegment revenues for services provided by the Payment Processing segment to the Merchant Acquiring segment, and other miscellaneous intersegment revenues. |
Reconciliation_of_Income_from_
Reconciliation of Income from Operations to Consolidated Net Income (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||||||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | ||||
Segment income from operations | ' | ' | ' | ' | ||||
Income from operations | $25,429 | $16,938 | $50,318 | $37,337 | ||||
Interest expense, net | -6,422 | -9,698 | -13,256 | -24,918 | ||||
Earnings of equity method investment | 343 | 348 | 664 | 625 | ||||
Other income (expenses) | 385 | -77,535 | 2,376 | -77,468 | ||||
Income tax (expense) benefit | -1,962 | 5,012 | -4,123 | 4,961 | ||||
Net income (loss) | 17,773 | -64,935 | 35,979 | -59,463 | ||||
Operating Segments [Member] | ' | ' | ' | ' | ||||
Segment income from operations | ' | ' | ' | ' | ||||
Income from operations | 36,204 | 28,665 | 70,749 | 61,193 | ||||
Operating Segments [Member] | Merchant Acquiring, net [Member] | ' | ' | ' | ' | ||||
Segment income from operations | ' | ' | ' | ' | ||||
Income from operations | 8,777 | 8,161 | 17,181 | 17,395 | ||||
Operating Segments [Member] | Payment Processing [Member] | ' | ' | ' | ' | ||||
Segment income from operations | ' | ' | ' | ' | ||||
Income from operations | 15,314 | 11,720 | 30,031 | 24,480 | ||||
Operating Segments [Member] | Business Solutions [Member] | ' | ' | ' | ' | ||||
Segment income from operations | ' | ' | ' | ' | ||||
Income from operations | 12,113 | 8,784 | 23,537 | 19,318 | ||||
Segment Reconciling Items [Member] | ' | ' | ' | ' | ||||
Segment income from operations | ' | ' | ' | ' | ||||
Income from operations | ($10,775) | [1] | ($11,727) | [1] | ($20,431) | [1] | ($23,856) | [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 $) | 0 Months Ended | 6 Months Ended | |
7-May-14 | Feb. 12, 2014 | Jun. 30, 2014 | |
Subsequent Events [Abstract] | ' | ' | ' |
Cash dividend declared, Common stock | $0.10 | $0.10 | $0.10 |
Common stock dividends payable, date declared | ' | ' | 6-Aug-14 |
Common stock dividends payable, date to be paid | ' | ' | 5-Sep-14 |
Common stock dividends payable, date of record | ' | ' | 18-Aug-14 |