Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 4-May-15 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | EVTC | |
Entity Registrant Name | EVERTEC, Inc. | |
Entity Central Index Key | 1559865 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 77,443,004 |
Consolidated_Balance_Sheets_Un
Consolidated Balance Sheets (Unaudited) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current Assets: | ||
Cash | $32,430 | $32,114 |
Restricted cash | 6,924 | 5,718 |
Accounts receivable, net | 78,745 | 75,810 |
Deferred tax asset | 2,899 | 399 |
Prepaid expenses and other assets | 21,659 | 20,565 |
Total current assets | 142,657 | 134,606 |
Investment in equity investee | 11,903 | 11,756 |
Property and equipment, net | 28,080 | 29,535 |
Goodwill | 369,171 | 368,837 |
Other intangible assets, net | 323,941 | 334,584 |
Other long-term assets | 10,227 | 10,917 |
Total assets | 885,979 | 890,235 |
Current Liabilities: | ||
Accrued liabilities | 27,650 | 26,052 |
Accounts payable | 19,396 | 22,879 |
Unearned income | 11,118 | 9,825 |
Income tax payable | 712 | 1,956 |
Current portion of long-term debt | 19,000 | 19,000 |
Short-term borrowings | 20,000 | 23,000 |
Deferred tax liability, net | 405 | 1,799 |
Total current liabilities | 98,281 | 104,511 |
Long-term debt | 643,053 | 647,579 |
Long-term deferred tax liability, net | 19,708 | 15,674 |
Other long-term liabilities | 2,552 | 2,898 |
Total liabilities | 763,594 | 770,662 |
Commitments and contingencies (Note 10) | ||
Stockholders' equity | ||
Preferred Stock, par value $0.01; 2,000,000 shares authorized, none issued | ||
Common Stock, par value $0.01; 206,000,000 shares authorized; 77,443,004 shares issued and outstanding at March 31, 2015 (December 31, 2014 - 77,893,144) | 774 | 779 |
Additional paid-in capital | 50,403 | 59,740 |
Accumulated earnings | 76,841 | 65,576 |
Accumulated other comprehensive loss, net of tax | -5,633 | -6,522 |
Total stockholders' equity | 122,385 | 119,573 |
Total liabilities and stockholders' equity | $885,979 | $890,235 |
Consolidated_Balance_Sheets_Un1
Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
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 | 77,443,004 | 77,893,144 |
Common stock outstanding | 77,443,004 | 77,893,144 |
Consolidated_Statements_of_Inc
Consolidated Statements of Income and Comprehensive Income (Unaudited) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Revenues | ||
Merchant Acquiring, net | $20,091 | $19,291 |
Payment Processing (from affiliates: $7,372 and $7,104) | 26,377 | 25,225 |
Business Solutions (from affiliates: $33,691 and $33,358) | 44,864 | 42,917 |
Total revenues | 91,332 | 87,433 |
Operating costs and expenses | ||
Cost of revenues, exclusive of depreciation and amortization shown below | 39,795 | 37,868 |
Selling, general and administrative expenses | 7,703 | 8,062 |
Depreciation and amortization | 16,828 | 16,614 |
Total operating costs and expenses | 64,326 | 62,544 |
Income from operations | 27,006 | 24,889 |
Non-operating expenses | ||
Interest income | 104 | 75 |
Interest expense | -6,201 | -6,909 |
Earnings of equity method investment | 115 | 321 |
Other income | 285 | 1,991 |
Total non-operating expenses | -5,697 | -4,522 |
Income before income taxes | 21,309 | 20,367 |
Income tax expense | 2,246 | 2,161 |
Net income | 19,063 | 18,206 |
Other comprehensive income (loss), net of income tax expense of $7 and $6 Foreign currency translation adjustments | 889 | -7,745 |
Total comprehensive income | $19,952 | $10,461 |
Net income per common share - basic | $0.25 | $0.23 |
Net income per common share - diluted | $0.24 | $0.23 |
Consolidated_Statements_of_Inc1
Consolidated Statements of Income and Comprehensive Income (Unaudited) (Parenthetical) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Income Statement [Abstract] | ||
Payment processing revenue from affiliates | $7,372 | $7,104 |
Business solutions revenue from affiliates | 33,691 | 33,358 |
Other comprehensive income, income tax expense | $7 | $6 |
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, 2014 | $119,573 | $779 | $59,740 | $65,576 | ($6,522) |
Beginning Balance, Shares at Dec. 31, 2014 | 77,893,144 | 77,893,144 | |||
Share-based compensation recognized | 649 | 649 | |||
Repurchase of common stock | -9,991 | -5 | -9,986 | ||
Repurchase of common stock, Shares | -452,175 | ||||
Restricted stock grants | 0 | 0 | 0 | 0 | 0 |
Restricted stock grants, Shares | 2,035 | ||||
Net income | 19,063 | 19,063 | |||
Cash dividends paid on common stock | -7,798 | -7,798 | |||
Other comprehensive income | 889 | 889 | |||
Ending Balance, Value at Mar. 31, 2015 | $122,385 | $774 | $50,403 | $76,841 | ($5,633) |
Ending Balance, Shares at Mar. 31, 2015 | 77,443,004 | 77,443,004 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (Unaudited) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Cash flows from operating activities | ||
Net income | $19,063 | $18,206 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 16,828 | 16,614 |
Amortization of debt issue costs and premium and accretion of discount | 808 | 770 |
Provision for doubtful accounts and sundry losses | 236 | 571 |
Deferred tax expense (benefit) | 200 | -1,428 |
Share-based compensation | 649 | 350 |
Unrealized (gain) loss of indemnification assets | -3 | 179 |
Loss on disposition of property and equipment and other intangibles | 34 | 57 |
Earnings of equity method investment | -115 | -321 |
Decrease (increase) in assets: | ||
Accounts receivable, net | -3,053 | 261 |
Prepaid expenses and other assets | -1,497 | -1,435 |
Other long-term assets | 149 | 1,108 |
(Decrease) increase in liabilities: | ||
Accounts payable and accrued liabilities | -3,704 | -8,039 |
Income tax payable | -1,243 | 1,503 |
Unearned income | 1,293 | 1,618 |
Total adjustments | 10,582 | 11,808 |
Net cash provided by operating activities | 29,645 | 30,014 |
Cash flows from investing activities | ||
Net (increase) decrease in restricted cash | -1,206 | 186 |
Intangible assets acquired | -1,542 | -986 |
Property and equipment acquired | -1,042 | -1,501 |
Proceeds from sales of property and equipment | 1 | |
Net cash used in investing activities | -3,790 | -2,300 |
Cash flows from financing activities | ||
Net decrease in short-term borrowing | -3,000 | -10,000 |
Repayment of short-term borrowing for purchase of equipment | -600 | |
Repayment of long-term debt | -4,750 | -4,750 |
Repayment of other financing agreement | -32 | |
Dividends paid | -7,798 | -7,839 |
Repurchase of common stock | -9,991 | |
Tax windfall benefits on exercise of stock options | 398 | |
Statutory minimum withholding taxes paid on cashless exercise of stock options | -134 | |
Net cash used in financing activities | -25,539 | -22,957 |
Net increase in cash | 316 | 4,757 |
Cash at beginning of the period | 32,114 | 22,485 |
Cash at end of the period | 32,430 | 27,242 |
Supplemental disclosure of non-cash activities: | ||
Foreign currency translation adjustments | $889 | ($7,745) |
The_Company_and_Basis_of_Prese
The Company and Basis of Presentation | 3 Months Ended |
Mar. 31, 2015 | |
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. Management believes that the Company’s business is well-positioned to continue to expand across the fast growing Latin American region. | |
Basis of Presentation | |
The unaudited consolidated financial statements of EVERTEC have been prepared in accordance with accounting principles generally accepted in the United States 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, 2014, included in the Company’s 2014 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 prior period unaudited consolidated financial statements to conform to the presentation in 2015. |
Recent_Accounting_Pronouncemen
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2015 | |
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: | |
On February 18. 2015, the FASB issued ASU 2015-02 – “Amendments to the Consolidation Analysis”. The new guidance applies to entities in all industries and provides a new scope exception to registered money market funds and similar unregistered money market funds. It makes targeted amendments to the current consolidation guidance and ends the deferral granted to investment companies from applying the VIE guidance. Amendments in this Update are effective for public companies for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. The Company does not expect this guidance to have an impact on the financial statements when adopted. | |
On April 7, 2015, the FASB issued ASU 2015-03 – “Simplifying the Presentation of Debt Issuance Costs”. The amendments in this Update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this Update. Amendments in this update are effective for public companies for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption of this guidance on its financial statements. | |
On April 15, 2015, the FASB issued ASU 2015-05 – “Customer’s accounting for Fees Paid in a Cloud Computing Arrangement”. The amendments in this Update provide guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The guidance will not change GAAP for a customer’s accounting for service contracts. For public companies, amendments in this Update will be effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. 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 | 3 Months Ended | ||||||||||
Mar. 31, 2015 | |||||||||||
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 in | March 31, 2015 | December 31, 2014 | ||||||||
years | |||||||||||
Buildings | 30 | $ | 1,620 | $ | 1,602 | ||||||
Data processing equipment | 3 - 5 | 78,863 | 77,588 | ||||||||
Furniture and equipment | 3 - 20 | 8,956 | 7,540 | ||||||||
Leasehold improvements | 5 - 10 | 2,994 | 2,964 | ||||||||
92,433 | 89,694 | ||||||||||
Less - accumulated depreciation and amortization | (65,790 | ) | (61,580 | ) | |||||||
Depreciable assets, net | 26,643 | 28,114 | |||||||||
Land | 1,437 | 1,421 | |||||||||
Property and equipment, net | $ | 28,080 | $ | 29,535 | |||||||
Depreciation and amortization expense related to property and equipment amounted to $4.1 million and $3.9 million for the three months ended March 31, 2015 and 2014, respectively. |
Goodwill_and_Other_Intangible_
Goodwill and Other Intangible Assets | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
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, 2014 | $ | 138,121 | $ | 184,228 | $ | 46,488 | $ | 368,837 | |||||||||
Foreign currency translation adjustments | — | 206 | 128 | 334 | |||||||||||||
Balance at March 31, 2015 | $ | 138,121 | $ | 184,434 | $ | 46,616 | $ | 369,171 | |||||||||
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. There were no triggering events or changes in circumstances that, subsequent to the impairment test, would have required an additional impairment evaluation. | |||||||||||||||||
The carrying amount of other intangible assets for the three months ended March 31, 2015 and the year ended December 31, 2014 consisted of the following: | |||||||||||||||||
(Dollar amounts in thousands) | March 31, 2015 | ||||||||||||||||
Useful life in years | Gross | Accumulated | Net carrying | ||||||||||||||
amount | amortization | amount | |||||||||||||||
Customer relationships | 14 | $ | 312,853 | $ | (101,055 | ) | $ | 211,798 | |||||||||
Trademark | 15-Oct | 39,950 | (15,588 | ) | 24,362 | ||||||||||||
Software packages | 10-Mar | 140,139 | (91,935 | ) | 48,204 | ||||||||||||
Non-compete agreement | 15 | 56,539 | (16,962 | ) | 39,577 | ||||||||||||
Other intangible assets, net | $ | 549,481 | $ | (225,540 | ) | $ | 323,941 | ||||||||||
(Dollar amounts in thousands) | 31-Dec-14 | ||||||||||||||||
Useful life in years | Gross | Accumulated | Net carrying | ||||||||||||||
amount | amortization | amount | |||||||||||||||
Customer relationships | 14 | $ | 312,735 | $ | (95,482 | ) | $ | 217,253 | |||||||||
Trademark | 10 - 15 | 39,950 | (14,722 | ) | 25,228 | ||||||||||||
Software packages | 10-Mar | 138,188 | (86,605 | ) | 51,583 | ||||||||||||
Non-compete agreement | 15 | 56,539 | (16,019 | ) | 40,520 | ||||||||||||
Other intangible assets, net | $ | 547,412 | $ | (212,828 | ) | $ | 334,584 | ||||||||||
For each of the three month periods ended March 31, 2015 and 2014, the Company recorded amortization expense related to other intangibles of $12.7 million. | |||||||||||||||||
The estimated amortization expense of the balances outstanding at March 31, 2015 for the next five years is as follows: | |||||||||||||||||
(Dollar amounts in thousands) | |||||||||||||||||
Remaining | 2015 | $ | 27,593 | ||||||||||||||
2016 | 38,346 | ||||||||||||||||
2017 | 35,168 | ||||||||||||||||
2018 | 32,524 | ||||||||||||||||
2019 | 31,696 | ||||||||||||||||
2020 | 31,690 | ||||||||||||||||
Debt_and_ShortTerm_Borrowings
Debt and Short-Term Borrowings | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Debt Disclosure [Abstract] | |||||||||
Debt and Short-Term Borrowings | Note 5 – Debt and Short-Term Borrowings | ||||||||
Total debt was as follows: | |||||||||
(Dollar amounts in thousands) | March 31, 2015 | December 31, 2014 | |||||||
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)) | $ | 273,510 | $ | 277,239 | |||||
Senior Secured Credit Facility (Term B) due on April 17, 2020 paying interest at a variable interest rate | 388,543 | 389,340 | |||||||
(LIBOR plus applicable margin (2)(3)) | |||||||||
Senior Secured Revolving Credit Facility expiring on April 17, 2018 paying interest at a variable interest rate | 20,000 | 23,000 | |||||||
Note Payable due on October 1, 2017 (3) | 3,987 | 4,333 | |||||||
Total debt | $ | 686,040 | $ | 693,912 | |||||
-1 | Applicable margin of 2.50% at March 31, 2015 and December 31, 2014. | ||||||||
-2 | Subject to a minimum rate (“LIBOR floor”) of 0.75% plus applicable margin of 2.75% at March 31, 2015 and December 31, 2014. | ||||||||
-3 | Includes unamortized discount. | ||||||||
Senior Secured Credit Facilities | |||||||||
Term A Loan | |||||||||
As of March 31, 2015, the outstanding principal amount of the Term A Loan was $273.8 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, LLC’s (EVERTEC Group) first lien secured net leverage ratio and payable at a rate equal to, at the Company’s option, either (a) LIBOR Rate plus an applicable margin ranging from 2.00% to 2.50%, or (b) Base Rate plus an applicable margin ranging from 1.00% to 1.50%. Term A Loan has no LIBOR Rate or Base Rate minimum or floor. | |||||||||
Term B Loan | |||||||||
As of March 31, 2015, the outstanding principal amount of the Term B Loan was $393.0 million. The Term B Loan requires principal payments on the last business day of each quarter equal to 0.250% of the original principal amount commencing on September 30, 2013 and the remaining outstanding principal amount on the maturity of the Term B Loan on April 17, 2020. Interest is based on EVERTEC Group’s first lien secured net leverage ratio and payable at a rate equal to, at the Company’s option, either (a) LIBOR Rate plus an applicable margin ranging from 2.50% to 2.75%, or (b) Base Rate plus an applicable margin ranging from 1.50% to 1.75%. The LIBOR Rate and Base Rate are subject to floors of 0.75% and 1.75%, respectively. | |||||||||
Revolving Credit Facility | |||||||||
The revolving credit facility has an available balance up to $100.0 million, with an interest rate on loans calculated the same as the applicable Term A Loan rate. The facility matures on April 17, 2018 and has a commitment fee payable one business day after the last business day of each quarter calculated based on the daily unused commitment during the preceding quarter. The commitment fee for the unused portion of this facility ranges from 0.125% to 0.375% and is based on EVERTEC Group’s first lien secured net leverage ratio. | |||||||||
All loans may be prepaid without premium or penalty. | |||||||||
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 restrict the ability of our subsidiaries to pay dividends or make certain payments to us; and (c) places restrictions on our ability and the ability of our subsidiaries to merge or consolidate with any other person or sell, assign, transfer, convey or otherwise dispose of all or substantially all of our assets. As of March 31, 2015, the Company was in compliance with the applicable restrictive covenants under the 2013 Credit Agreement. | |||||||||
Note payable | |||||||||
In December 2014, EVERTEC entered into a non-interest bearing $4.6 million financing agreement to purchase software. The note will be repaid over a 36-month term in twelve quarterly installments. As of March 31, 2015 the outstanding principal balance of this note payable is $4.3 million. The current portion of this note is recorded as part of accounts payable and the long-term portion is included in other long-term liabilities. |
Financial_Instruments_and_Fair
Financial Instruments and Fair Value Measurements | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
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 which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. This guidance describes three levels of input that may be used to measure fair value: | |||||||||||||||||
Level 1: Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date. | |||||||||||||||||
Level 2: Inputs, other than quoted prices included in Level 1, which are observable for the asset or liability through corroboration with market data at the measurement date. | |||||||||||||||||
Level 3: Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. | |||||||||||||||||
The Company uses observable inputs when available. Fair value is based upon quoted market prices when available. If market prices are not available, the Company may employ internally-developed models that 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 March 31, 2015 and December 31, 2014 for assets measured at fair value on a recurring basis: | |||||||||||||||||
(Dollar amounts in thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
March 31, 2015 | |||||||||||||||||
Financial assets: | |||||||||||||||||
Indemnification assets: | |||||||||||||||||
Software cost reimbursement | $ | — | $ | — | $ | 971 | $ | 971 | |||||||||
December 31, 2014 | |||||||||||||||||
Financial assets: | |||||||||||||||||
Indemnification assets: | |||||||||||||||||
Software cost reimbursement | $ | — | $ | — | $ | 1,428 | $ | 1,428 | |||||||||
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”), pursuant to which Popular transferred a 51% indirect ownership interest in our wholly owned subsidiary, EVERTEC Group, LLC, to a third party. 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 March 31, 2015, resulting in a net unrealized gain of approximately $3,000 for the three months ended March 31, 2015 and an unrealized loss of $0.2 million for the three months ended March 31, 2014, which are reflected within the other income caption in the unaudited consolidated statements of income and comprehensive income. 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 March 31, 2015 using the discounted cash flow model include the discount rate of 5.25% and the projected cash flows of $1.0 million. | |||||||||||||||||
For indemnification assets a significant increase or decrease in market rates and cash flows could result in a significant impact to the fair value. Also, the credit rating and/or the non-performance credit risk of Popular, which is subjective in nature, 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 March 31, 2015 and December 31, 2014: | |||||||||||||||||
March 31, 2015 | December 31, 2014 | ||||||||||||||||
(Dollar amounts in thousands) | Carrying | Fair | Carrying | Fair | |||||||||||||
Amount | Value | Amount | Value | ||||||||||||||
Financial assets: | |||||||||||||||||
Indemnification assets: | |||||||||||||||||
Software cost reimbursement | $ | 971 | $ | 971 | $ | 1,428 | $ | 1,428 | |||||||||
Financial liabilities: | |||||||||||||||||
Senior secured term A | $ | 273,510 | $ | 269,644 | $ | 277,239 | $ | 266,400 | |||||||||
Senior secured term B | 388,543 | 385,879 | 389,340 | 385,462 | |||||||||||||
The fair value of the senior secured term loan and the senior notes at March 31, 2014 and December 31, 2013 were obtained using the prices provided by third party service providers. Their pricing is based on various inputs such as: market quotes, recent trading activity in a non-active market or imputed prices. Also, the pricing may include the use of an algorithm that could take into account movement in the general high yield market, among other variants. | |||||||||||||||||
The senior secured term loan and senior notes, which are not measured at fair value in the balance sheets, would 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 March 31, | |||||||||||||||||
(Dollar amounts in thousands) | 2015 | 2014 | |||||||||||||||
Indemnification assets: | |||||||||||||||||
Beginning balance | $ | 1,428 | $ | 3,586 | |||||||||||||
Payments received | (460 | ) | (460 | ) | |||||||||||||
Unrealized gain (loss) recognized in other income | 3 | (179 | ) | ||||||||||||||
Ending balance | $ | 971 | $ | 2,947 | |||||||||||||
Sharebased_Compensation
Share-based Compensation | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||
Share-based Compensation | Note 7 – Share-based Compensation | ||||||||
Long-term Incentive Plan | |||||||||
In the first quarter of 2015, the Compensation Committee of the Board of Directors approved grants of restricted stock units (RSUs) to executives and certain employees pursuant to the 2015 Long-Term Incentive Program (“LTIP”) under the terms of our 2013 Equity Incentive Plan. Under the LTIP, the Company granted restricted stock units to eligible participants as time-based awards or performance-based awards. | |||||||||
The vesting of the RSUs is dependent upon market, performance and service conditions as defined in the grants. Employees that received time-based awards with service conditions are entitled to receive a specific number of shares of the Company’s common stock on the vesting date if the employee is providing services to the Company on the vesting date. Time-based awards vest over a period of three years in substantially equal installments commencing on the start of the fiscal year during which the RSUs were granted and ending on January 1st of each year. Employees that received awards with market conditions are entitled to receive a specific number of shares of the Company’s common stock on the vesting date if the Company’s total shareholder return (TSR) target relative to a specified group of industry peer companies is achieved. Employees that received awards with performance conditions are entitled to receive a specific number of shares of the Company’s common stock on the vesting date if the Cumulative Compound Annual Growth Rate (“CAGR”) of Diluted EPS target is achieved. Performance and market-based awards vest at the end of the performance period which commenced on the start of the fiscal year during which the RSUs were granted and ends on January 1, 2018. Awards are forfeited if the employee ceases to be employed by the Company prior to vesting. | |||||||||
The following table summarizes the RSU’s granted under the LTIP as of March 31, 2015: | |||||||||
Units | Fair Value Per | ||||||||
Unit at Grant Date | |||||||||
Awards with market conditions | 32,414 | $ | 30.8 | ||||||
Awards with performance conditions | 44,885 | $ | 22.24 | ||||||
Awards with service conditions | 153,568 | $ | 22.24 | ||||||
The following table summarizes the stock options activity for the three months ended March 31, 2015: | |||||||||
Shares | Weighted-average | ||||||||
exercise prices | |||||||||
Outstanding at December 31, 2014 | 316,000 | $ | 19.56 | ||||||
Outstanding at March 31, 2015 | 316,000 | $ | 19.56 | ||||||
Exercisable at March 31, 2015 | 83,333 | $ | 23.62 | ||||||
Management uses the fair value method of recording stock-based compensation as described in the guidance for stock compensation in ASC Topic 718. | |||||||||
The following table summarizes the nonvested restricted shares and RSUs activity for the three months ended March 31, 2015: | |||||||||
Nonvested restricted shares and RSUs | Awards | Weighted-average | |||||||
grant date fair value | |||||||||
Nonvested at December 31, 2014 | 23,252 | $ | 22.04 | ||||||
Forfeited | 1,411 | 20.34 | |||||||
Granted | 291,537 | 22.83 | |||||||
Nonvested at March 31, 2015 | 313,378 | $ | 22.78 | ||||||
For the three months ended March 31, 2015 and March 31, 2014, the Company recognized $0.6 million and $0.4 million of share-based compensation expense, respectively. As of March 31, 2015, there was $1.2 million of total unrecognized compensation cost related to stock options, which is expected to be recognized over the next 2.5 years. In addition, for the same period, there was $6.5 million of total unrecognized compensation cost related to nonvested shares of restricted stock and RSUs. That cost is expected to be recognized over the next three years. |
Income_Tax
Income Tax | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Income Tax Disclosure [Abstract] | |||||||||
Income Tax | Note 8 – Income Tax | ||||||||
The components of income tax expense for the three months ended March 31, 2015 and 2014 consisted of the following: | |||||||||
Three months ended March 31, | |||||||||
(Dollar amounts in thousands) | 2015 | 2014 | |||||||
Current tax provision | $ | 2,046 | $ | 3,589 | |||||
Deferred tax expense (benefit) | 200 | (1,428 | ) | ||||||
Income tax expense | $ | 2,246 | $ | 2,161 | |||||
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 for the three months ended March 31, 2015 and 2014 and its segregation based on location of operations: | |||||||||
Three months ended March 31, | |||||||||
(Dollar amounts in thousands) | 2015 | 2014 | |||||||
Current tax provision | |||||||||
Puerto Rico | $ | 1,155 | $ | 937 | |||||
United States | 141 | 198 | |||||||
Foreign countries | 750 | 2,454 | |||||||
Total current tax provision | $ | 2,046 | $ | 3,589 | |||||
Deferred tax expense (benefit) | |||||||||
Puerto Rico | $ | 299 | $ | 27 | |||||
United States | (26 | ) | (1 | ) | |||||
Foreign countries | (73 | ) | (1,454 | ) | |||||
Total deferred tax expense (benefit) | $ | 200 | $ | (1,428 | ) | ||||
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 March 31, 2015, the gross deferred tax asset amounted to $8.9 million and the gross deferred tax liability amounted to $26.1 million, compared to $9.7 million and $26.8 million as of December 31, 2014. At March 31, 2015 the recorded value of the Company’s net operating loss (“NOL”) carryforwards was $6.0 million. The recorded value of the NOL carryforwards is approximately $4.2 million lower than the total NOL carryforwards available due to a windfall tax benefit. The windfall tax benefit is available to offset future taxable income and is considered an off-balance sheet item until the deduction reduces taxes payable. This windfall tax benefit results from tax deductions 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, amount to $26.1 million as of March 31, 2015. | |||||||||
There are no open uncertain tax positions as of March 31, 2015. |
Net_Income_Per_Common_Share
Net Income Per Common Share | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Earnings Per Share [Abstract] | |||||||||
Net Income Per Common Share | Note 9 – Net Income Per Common Share | ||||||||
The reconciliation of the numerator and denominator of the earnings per common share is as follows: | |||||||||
Three months ended March 31, | |||||||||
(Dollar amounts in thousands, except share data) | 2015 | 2014 | |||||||
Net income | $ | 19,063 | $ | 18,206 | |||||
Weighted average common shares outstanding | 77,807,289 | 78,375,335 | |||||||
Weighted average potential dilutive common shares (1) | 59,437 | 860,860 | |||||||
Weighted average common shares outstanding - assuming dilution | 77,866,726 | 79,236,195 | |||||||
Net income per common share - basic | $ | 0.25 | $ | 0.23 | |||||
Net income per common share - diluted | $ | 0.24 | $ | 0.23 | |||||
(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. There were no pontential antidilutive shares. | ||||||||
On February 18, 2015, our Board declared a quarterly cash dividend of $0.10 per share of common stock, which was paid on March 19, 2015 to stockholders of record as of the close of business on March 2, 2015. |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2015 | |
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. | |
Rent expense of office facilities and real estate for both the three months ended March 31, 2015 and 2014 amounted to $2.0 million. Also, rent expense for telecommunications and other equipment for the three months ended March 31, 2015 and 2014 amounted to $1.3 million and $1.5 million, respectively. | |
In the ordinary course of business, the Company may enter into commercial commitments. As of March 31, 2015, EVERTEC has an outstanding letter of credit of $0.9 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 | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
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 months ended March 31, 2015 and 2014: | |||||||||
Three months ended March 31, | |||||||||
(Dollar amounts in thousands) | 2015 | 2014 | |||||||
Total revenues (1)(2) | $ | 41,063 | $ | 40,462 | |||||
Cost of Revenues | $ | 586 | $ | 91 | |||||
Selling, general and administrative expenses | |||||||||
Rent and other fees | $ | 1,993 | $ | 1,917 | |||||
Interest earned from and charged by affiliate | |||||||||
Interest income | $ | 44 | $ | 52 | |||||
(1) | Total revenues from Popular as a percentage of revenues were 44% and 46% for the three months ended March 31, 2015 and 2014, respectively. | ||||||||
(2) | Includes revenues generated from investee accounted for under the equity method of $0.5 million and $0.7 million for the three months ended March 31, 2015 and 2014, respectively. | ||||||||
At March 31, 2015 and December 31, 2014, EVERTEC had the following balances arising from transactions with related parties: | |||||||||
(Dollar amounts in thousands) | March 31, 2015 | December 31, 2014 | |||||||
Cash and restricted cash deposits in affiliated bank | $ | 13,312 | $ | 13,566 | |||||
Indemnification assets from Popular reimbursement (1) | |||||||||
Accounts receivable | $ | 971 | $ | 1,428 | |||||
Other due to/from affiliate | |||||||||
Accounts receivable | $ | 18,701 | $ | 17,006 | |||||
Prepaid expenses and other assets | $ | 1,265 | $ | 1,141 | |||||
Accounts payable(2) | $ | 2,852 | $ | 5,260 | |||||
Unearned income | $ | 8,823 | $ | 8,154 | |||||
Other long-term liabilities(2) | $ | 45 | $ | 45 | |||||
(1) | Recorded in connection with reimbursement from Popular regarding certain software license fees. | ||||||||
(2) | Includes an account payable of $0.2 million and a long-term liability of $45,000 for both March 31, 2015 and December 31, 2014, 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 March 31, 2015, EVERTEC Group has a credit facility with Popular for $3.6 million, on behalf of EVERTEC Costa Rica, S.A., under which a letter of credit of a similar amount was issued. |
Segment_Information
Segment Information | 3 Months Ended | ||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||
Segment Information | Note 12 – Segment Information | ||||||||||||||||||||
The Company operates in three business segments: Merchant Acquiring, Payment Processing and Business Solutions. | |||||||||||||||||||||
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 March 31, 2015 | |||||||||||||||||||||
Revenues | $ | 20,091 | $ | 33,105 | $ | 44,864 | $ | (6,728 | )(1) | 91,332 | |||||||||||
Income from operations | 9,264 | 13,545 | 14,066 | (9,869 | )(2) | 27,006 | |||||||||||||||
Three months ended March 31, 2014 | |||||||||||||||||||||
Revenues | 19,291 | 31,842 | 42,917 | (6,617 | )(1) | 87,433 | |||||||||||||||
Income from operations | 8,404 | 14,717 | 11,424 | (9,656 | )(2) | 24,889 | |||||||||||||||
(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 months ended March 31, 2015 and 2014 is as follows: | |||||||||||||||||||||
Three months ended March 31, | |||||||||||||||||||||
(Dollar amounts in thousands) | 2015 | 2014 | |||||||||||||||||||
Segment income from operations | |||||||||||||||||||||
Merchant Acquiring | $ | 9,264 | $ | 8,404 | |||||||||||||||||
Payment Processing | 13,545 | 14,717 | |||||||||||||||||||
Business Solutions | 14,066 | 11,424 | |||||||||||||||||||
Total segment income from operations | 36,875 | 34,545 | |||||||||||||||||||
Merger related depreciation and amortization and other unallocated expenses(1) | (9,869 | ) | (9,656 | ) | |||||||||||||||||
Income from operations | $ | 27,006 | $ | 24,889 | |||||||||||||||||
Interest expense, net | (6,097 | ) | (6,834 | ) | |||||||||||||||||
Earnings of equity method investment | 115 | 321 | |||||||||||||||||||
Other income | 285 | 1,991 | |||||||||||||||||||
Income tax expense | (2,246 | ) | (2,161 | ) | |||||||||||||||||
Net income | $ | 19,063 | $ | 18,206 | |||||||||||||||||
(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 | 3 Months Ended |
Mar. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 13 – Subsequent Events |
On May 6, 2015, the Company’s Board of Directors 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 of director approval and may be adjusted as business needs or market conditions change. The cash dividend of $0.10 per share will be paid on June 5, 2015 to stockholders of record as of the close of business on May 18, 2015. |
The_Company_and_Basis_of_Prese1
The Company and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
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. Management believes that the Company’s business is well-positioned to continue to expand across the fast growing Latin American region. | |
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 States 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, 2014, included in the Company’s 2014 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 prior period unaudited consolidated financial statements to conform to the presentation in 2015. |
Property_and_Equipment_net_Tab
Property and Equipment, net (Tables) | 3 Months Ended | ||||||||||
Mar. 31, 2015 | |||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||
Property and Equipment, Net | Property and equipment, net consists of the following: | ||||||||||
(Dollar amounts in thousands) | Useful life in | March 31, 2015 | December 31, 2014 | ||||||||
years | |||||||||||
Buildings | 30 | $ | 1,620 | $ | 1,602 | ||||||
Data processing equipment | 3 - 5 | 78,863 | 77,588 | ||||||||
Furniture and equipment | 3 - 20 | 8,956 | 7,540 | ||||||||
Leasehold improvements | 5 - 10 | 2,994 | 2,964 | ||||||||
92,433 | 89,694 | ||||||||||
Less - accumulated depreciation and amortization | (65,790 | ) | (61,580 | ) | |||||||
Depreciable assets, net | 26,643 | 28,114 | |||||||||
Land | 1,437 | 1,421 | |||||||||
Property and equipment, net | $ | 28,080 | $ | 29,535 | |||||||
Goodwill_and_Other_Intangible_1
Goodwill and Other Intangible Assets (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||
Changes in Carrying Amount of Goodwill Allocated by Reportable Segments | The changes in the carrying amount of goodwill, allocated by reportable segments, were as follows (See Note 12): | ||||||||||||||||
(Dollar amounts in thousands) | Merchant | Payment | Business | Total | |||||||||||||
Acquiring, net | Processing | Solutions | |||||||||||||||
Balance at December 31, 2014 | $ | 138,121 | $ | 184,228 | $ | 46,488 | $ | 368,837 | |||||||||
Foreign currency translation adjustments | — | 206 | 128 | 334 | |||||||||||||
Balance at March 31, 2015 | $ | 138,121 | $ | 184,434 | $ | 46,616 | $ | 369,171 | |||||||||
Carrying Amount of Other Intangible Assets | The carrying amount of other intangible assets for the three months ended March 31, 2015 and the year ended December 31, 2014 consisted of the following: | ||||||||||||||||
(Dollar amounts in thousands) | March 31, 2015 | ||||||||||||||||
Useful life in years | Gross | Accumulated | Net carrying | ||||||||||||||
amount | amortization | amount | |||||||||||||||
Customer relationships | 14 | $ | 312,853 | $ | (101,055 | ) | $ | 211,798 | |||||||||
Trademark | 15-Oct | 39,950 | (15,588 | ) | 24,362 | ||||||||||||
Software packages | 10-Mar | 140,139 | (91,935 | ) | 48,204 | ||||||||||||
Non-compete agreement | 15 | 56,539 | (16,962 | ) | 39,577 | ||||||||||||
Other intangible assets, net | $ | 549,481 | $ | (225,540 | ) | $ | 323,941 | ||||||||||
(Dollar amounts in thousands) | 31-Dec-14 | ||||||||||||||||
Useful life in years | Gross | Accumulated | Net carrying | ||||||||||||||
amount | amortization | amount | |||||||||||||||
Customer relationships | 14 | $ | 312,735 | $ | (95,482 | ) | $ | 217,253 | |||||||||
Trademark | 10 - 15 | 39,950 | (14,722 | ) | 25,228 | ||||||||||||
Software packages | 10-Mar | 138,188 | (86,605 | ) | 51,583 | ||||||||||||
Non-compete agreement | 15 | 56,539 | (16,019 | ) | 40,520 | ||||||||||||
Other intangible assets, net | $ | 547,412 | $ | (212,828 | ) | $ | 334,584 | ||||||||||
Estimated Amortization Expenses | The estimated amortization expense of the balances outstanding at March 31, 2015 for the next five years is as follows: | ||||||||||||||||
(Dollar amounts in thousands) | |||||||||||||||||
Remaining | 2015 | $ | 27,593 | ||||||||||||||
2016 | 38,346 | ||||||||||||||||
2017 | 35,168 | ||||||||||||||||
2018 | 32,524 | ||||||||||||||||
2019 | 31,696 | ||||||||||||||||
2020 | 31,690 |
Debt_and_ShortTerm_Borrowings_
Debt and Short-Term Borrowings (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Debt Disclosure [Abstract] | |||||||||
Total Debt | Total debt was as follows: | ||||||||
(Dollar amounts in thousands) | March 31, 2015 | December 31, 2014 | |||||||
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)) | $ | 273,510 | $ | 277,239 | |||||
Senior Secured Credit Facility (Term B) due on April 17, 2020 paying interest at a variable interest rate | 388,543 | 389,340 | |||||||
(LIBOR plus applicable margin (2)(3)) | |||||||||
Senior Secured Revolving Credit Facility expiring on April 17, 2018 paying interest at a variable interest rate | 20,000 | 23,000 | |||||||
Note Payable due on October 1, 2017 (3) | 3,987 | 4,333 | |||||||
Total debt | $ | 686,040 | $ | 693,912 | |||||
-1 | Applicable margin of 2.50% at March 31, 2015 and December 31, 2014. | ||||||||
-2 | Subject to a minimum rate (“LIBOR floor”) of 0.75% plus applicable margin of 2.75% at March 31, 2015 and December 31, 2014. | ||||||||
-3 | Includes unamortized discount. |
Financial_Instruments_and_Fair1
Financial Instruments and Fair Value Measurements (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
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 March 31, 2015 and December 31, 2014 for assets measured at fair value on a recurring basis: | ||||||||||||||||
(Dollar amounts in thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
March 31, 2015 | |||||||||||||||||
Financial assets: | |||||||||||||||||
Indemnification assets: | |||||||||||||||||
Software cost reimbursement | $ | — | $ | — | $ | 971 | $ | 971 | |||||||||
December 31, 2014 | |||||||||||||||||
Financial assets: | |||||||||||||||||
Indemnification assets: | |||||||||||||||||
Software cost reimbursement | $ | — | $ | — | $ | 1,428 | $ | 1,428 | |||||||||
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 March 31, 2015 and December 31, 2014: | ||||||||||||||||
March 31, 2015 | December 31, 2014 | ||||||||||||||||
(Dollar amounts in thousands) | Carrying | Fair | Carrying | Fair | |||||||||||||
Amount | Value | Amount | Value | ||||||||||||||
Financial assets: | |||||||||||||||||
Indemnification assets: | |||||||||||||||||
Software cost reimbursement | $ | 971 | $ | 971 | $ | 1,428 | $ | 1,428 | |||||||||
Financial liabilities: | |||||||||||||||||
Senior secured term A | $ | 273,510 | $ | 269,644 | $ | 277,239 | $ | 266,400 | |||||||||
Senior secured term B | 388,543 | 385,879 | 389,340 | 385,462 | |||||||||||||
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 March 31, | |||||||||||||||||
(Dollar amounts in thousands) | 2015 | 2014 | |||||||||||||||
Indemnification assets: | |||||||||||||||||
Beginning balance | $ | 1,428 | $ | 3,586 | |||||||||||||
Payments received | (460 | ) | (460 | ) | |||||||||||||
Unrealized gain (loss) recognized in other income | 3 | (179 | ) | ||||||||||||||
Ending balance | $ | 971 | $ | 2,947 | |||||||||||||
Sharebased_Compensation_Tables
Share-based Compensation (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||
Summary of RSU's Granted Under LTIP | The following table summarizes the RSU’s granted under the LTIP as of March 31, 2015: | ||||||||
Units | Fair Value Per | ||||||||
Unit at Grant Date | |||||||||
Awards with market conditions | 32,414 | $ | 30.8 | ||||||
Awards with performance conditions | 44,885 | $ | 22.24 | ||||||
Awards with service conditions | 153,568 | $ | 22.24 | ||||||
Summary of Stock Option Activity | The following table summarizes the stock options activity for the three months ended March 31, 2015: | ||||||||
Shares | Weighted-average | ||||||||
exercise prices | |||||||||
Outstanding at December 31, 2014 | 316,000 | $ | 19.56 | ||||||
Outstanding at March 31, 2015 | 316,000 | $ | 19.56 | ||||||
Exercisable at March 31, 2015 | 83,333 | $ | 23.62 | ||||||
Nonvested Restricted Stocks and Units Activity | The following table summarizes the nonvested restricted shares and RSUs activity for the three months ended March 31, 2015: | ||||||||
Nonvested restricted shares and RSUs | Awards | Weighted-average | |||||||
grant date fair value | |||||||||
Nonvested at December 31, 2014 | 23,252 | $ | 22.04 | ||||||
Forfeited | 1,411 | 20.34 | |||||||
Granted | 291,537 | 22.83 | |||||||
Nonvested at March 31, 2015 | 313,378 | $ | 22.78 | ||||||
Income_Tax_Tables
Income Tax (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Income Tax Disclosure [Abstract] | |||||||||
Components of Income Tax Expense (Benefit) | The components of income tax expense for the three months ended March 31, 2015 and 2014 consisted of the following: | ||||||||
Three months ended March 31, | |||||||||
(Dollar amounts in thousands) | 2015 | 2014 | |||||||
Current tax provision | $ | 2,046 | $ | 3,589 | |||||
Deferred tax expense (benefit) | 200 | (1,428 | ) | ||||||
Income tax expense | $ | 2,246 | $ | 2,161 | |||||
Segregation of Income Tax Expense (Benefit) Based on Location of Operations | The following table presents the components of income tax expense for the three months ended March 31, 2015 and 2014 and its segregation based on location of operations: | ||||||||
Three months ended March 31, | |||||||||
(Dollar amounts in thousands) | 2015 | 2014 | |||||||
Current tax provision | |||||||||
Puerto Rico | $ | 1,155 | $ | 937 | |||||
United States | 141 | 198 | |||||||
Foreign countries | 750 | 2,454 | |||||||
Total current tax provision | $ | 2,046 | $ | 3,589 | |||||
Deferred tax expense (benefit) | |||||||||
Puerto Rico | $ | 299 | $ | 27 | |||||
United States | (26 | ) | (1 | ) | |||||
Foreign countries | (73 | ) | (1,454 | ) | |||||
Total deferred tax expense (benefit) | $ | 200 | $ | (1,428 | ) | ||||
Net_Income_Per_Common_Share_Ta
Net Income Per Common Share (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
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 earnings per common share is as follows: | ||||||||
Three months ended March 31, | |||||||||
(Dollar amounts in thousands, except share data) | 2015 | 2014 | |||||||
Net income | $ | 19,063 | $ | 18,206 | |||||
Weighted average common shares outstanding | 77,807,289 | 78,375,335 | |||||||
Weighted average potential dilutive common shares (1) | 59,437 | 860,860 | |||||||
Weighted average common shares outstanding - assuming dilution | 77,866,726 | 79,236,195 | |||||||
Net income per common share - basic | $ | 0.25 | $ | 0.23 | |||||
Net income per common share - diluted | $ | 0.24 | $ | 0.23 | |||||
(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. There were no pontential antidilutive shares. |
Related_Party_Transactions_Tab
Related Party Transactions (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Related Party Transactions [Abstract] | |||||||||
Transactions with Related Parties | The following table presents the Company’s transactions with related parties for the three months ended March 31, 2015 and 2014: | ||||||||
Three months ended March 31, | |||||||||
(Dollar amounts in thousands) | 2015 | 2014 | |||||||
Total revenues (1)(2) | $ | 41,063 | $ | 40,462 | |||||
Cost of Revenues | $ | 586 | $ | 91 | |||||
Selling, general and administrative expenses | |||||||||
Rent and other fees | $ | 1,993 | $ | 1,917 | |||||
Interest earned from and charged by affiliate | |||||||||
Interest income | $ | 44 | $ | 52 | |||||
(1) | Total revenues from Popular as a percentage of revenues were 44% and 46% for the three months ended March 31, 2015 and 2014, respectively. | ||||||||
(2) | Includes revenues generated from investee accounted for under the equity method of $0.5 million and $0.7 million for the three months ended March 31, 2015 and 2014, respectively. | ||||||||
Summary of Balances of Transactions with Related Parties | At March 31, 2015 and December 31, 2014, EVERTEC had the following balances arising from transactions with related parties: | ||||||||
(Dollar amounts in thousands) | March 31, 2015 | December 31, 2014 | |||||||
Cash and restricted cash deposits in affiliated bank | $ | 13,312 | $ | 13,566 | |||||
Indemnification assets from Popular reimbursement (1) | |||||||||
Accounts receivable | $ | 971 | $ | 1,428 | |||||
Other due to/from affiliate | |||||||||
Accounts receivable | $ | 18,701 | $ | 17,006 | |||||
Prepaid expenses and other assets | $ | 1,265 | $ | 1,141 | |||||
Accounts payable (2) | $ | 2,852 | $ | 5,260 | |||||
Unearned income | $ | 8,823 | $ | 8,154 | |||||
Other long-term liabilities (2) | $ | 45 | $ | 45 | |||||
(1) | Recorded in connection with reimbursement from Popular regarding certain software license fees. | ||||||||
(2) | Includes an account payable of $0.2 million and a long-term liability of $45,000 for both March 31, 2015 and December 31, 2014, 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) | 3 Months Ended | ||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||
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 March 31, 2015 | |||||||||||||||||||||
Revenues | $ | 20,091 | $ | 33,105 | $ | 44,864 | $ | (6,728 | )(1) | 91,332 | |||||||||||
Income from operations | 9,264 | 13,545 | 14,066 | (9,869 | )(2) | 27,006 | |||||||||||||||
Three months ended March 31, 2014 | |||||||||||||||||||||
Revenues | 19,291 | 31,842 | 42,917 | (6,617 | )(1) | 87,433 | |||||||||||||||
Income from operations | 8,404 | 14,717 | 11,424 | (9,656 | )(2) | 24,889 | |||||||||||||||
(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 months ended March 31, 2015 and 2014 is as follows: | ||||||||||||||||||||
Three months ended March 31, | |||||||||||||||||||||
(Dollar amounts in thousands) | 2015 | 2014 | |||||||||||||||||||
Segment income from operations | |||||||||||||||||||||
Merchant Acquiring | $ | 9,264 | $ | 8,404 | |||||||||||||||||
Payment Processing | 13,545 | 14,717 | |||||||||||||||||||
Business Solutions | 14,066 | 11,424 | |||||||||||||||||||
Total segment income from operations | 36,875 | 34,545 | |||||||||||||||||||
Merger related depreciation and amortization and other unallocated expenses(1) | (9,869 | ) | (9,656 | ) | |||||||||||||||||
Income from operations | $ | 27,006 | $ | 24,889 | |||||||||||||||||
Interest expense, net | (6,097 | ) | (6,834 | ) | |||||||||||||||||
Earnings of equity method investment | 115 | 321 | |||||||||||||||||||
Other income | 285 | 1,991 | |||||||||||||||||||
Income tax expense | (2,246 | ) | (2,161 | ) | |||||||||||||||||
Net income | $ | 19,063 | $ | 18,206 | |||||||||||||||||
(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) | Mar. 31, 2015 |
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_Pro
Property and Equipment, net - Property and Equipment, net (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Property, Plant and Equipment [Line Items] | ||
Buildings | 1,620 | $1,602 |
Data processing equipment | 78,863 | 77,588 |
Furniture and equipment | 8,956 | 7,540 |
Leasehold improvements | 2,994 | 2,964 |
Property and equipment | 92,433 | 89,694 |
Less - accumulated depreciation and amortization | -65,790 | -61,580 |
Depreciable assets, net | 26,643 | 28,114 |
Land | 1,437 | 1,421 |
Property and equipment, net | 28,080 | $29,535 |
Buildings [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful life | 30 years | |
Data Processing Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful life | 3 years | |
Data Processing Equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful life | 5 years | |
Furniture and Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful life | 3 years | |
Furniture and Equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful life | 20 years | |
Leasehold Improvements [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful life | 5 years | |
Leasehold Improvements [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, useful life | 10 years |
Property_and_Equipment_net_Add
Property and Equipment, net - Additional Information (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization expense related to property and equipment | $4.10 | $3.90 |
Goodwill_and_Other_Intangible_2
Goodwill and Other Intangible Assets - Changes in Carrying Amount of Goodwill Allocated by Reportable Segments (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Goodwill [Line Items] | ||
Goodwill, Beginning Balance | $368,837 | |
Foreign currency translation adjustments | 334 | |
Goodwill, Ending Balance | 369,171 | |
Merchant Acquiring, net [Member] | ||
Goodwill [Line Items] | ||
Goodwill, Beginning Balance | 138,121 | |
Goodwill, Ending Balance | 138,121 | 138,121 |
Payment Processing [Member] | ||
Goodwill [Line Items] | ||
Goodwill, Beginning Balance | 184,228 | |
Foreign currency translation adjustments | 206 | |
Goodwill, Ending Balance | 184,434 | |
Business Solutions [Member] | ||
Goodwill [Line Items] | ||
Goodwill, Beginning Balance | 46,488 | |
Foreign currency translation adjustments | 128 | |
Goodwill, Ending Balance | $46,616 |
Goodwill_and_Other_Intangible_3
Goodwill and Other Intangible Assets - Carrying Amount of Other Intangible Assets (Detail) (USD $) | 3 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross amount | $549,481 | $547,412 |
Accumulated amortization | -225,540 | -212,828 |
Net carrying amount | 323,941 | 334,584 |
Customer relationships [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life in years | 14 years | 14 years |
Gross amount | 312,853 | 312,735 |
Accumulated amortization | -101,055 | -95,482 |
Net carrying amount | 211,798 | 217,253 |
Trademarks [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross amount | 39,950 | 39,950 |
Accumulated amortization | -15,588 | -14,722 |
Net carrying amount | 24,362 | 25,228 |
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 | 140,139 | 138,188 |
Accumulated amortization | -91,935 | -86,605 |
Net carrying amount | 48,204 | 51,583 |
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 | -16,962 | -16,019 |
Net carrying amount | $39,577 | $40,520 |
Goodwill_and_Other_Intangible_4
Goodwill and Other Intangible Assets - Additional Information (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense for intangible assets | $12.70 | $12.70 |
Goodwill_and_Other_Intangible_5
Goodwill and Other Intangible Assets - Estimated Amortization Expenses (Detail) (USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remaining 2015 | $27,593 |
2016 | 38,346 |
2017 | 35,168 |
2018 | 32,524 |
2019 | 31,696 |
2020 | $31,690 |
Debt_and_ShortTerm_Borrowings_1
Debt and Short-Term Borrowings - Total Debt (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | ||
In Thousands, unless otherwise specified | ||||
Debt Instrument [Line Items] | ||||
Note payable | $4,300 | |||
Total debt | 686,040 | 693,912 | ||
Term A due on April 17, 2018 [Member] | Senior Secured Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Credit facility | 273,510 | [1],[2] | 277,239 | [1],[2] |
Term B due on April 17, 2020 [Member] | Senior Secured Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Credit facility | 388,543 | [2],[3] | 389,340 | [2],[3] |
Expiring on April 17, 2018 [Member] | Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Credit facility | 20,000 | 23,000 | ||
Note Payable due on October 1, 2017 [Member] | ||||
Debt Instrument [Line Items] | ||||
Note payable | $3,987 | [2] | $4,333 | [2] |
[1] | Applicable margin of 2.50% at March 31, 2015 and December 31, 2014. | |||
[2] | Includes unamortized discount. | |||
[3] | Subject to a minimum rate ("LIBOR floor") of 0.75% plus applicable margin of 2.75% at March 31, 2015 and December 31, 2014. |
Debt_and_ShortTerm_Borrowings_2
Debt and Short-Term Borrowings - Total Debt (Parenthetical) (Detail) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Note Payable due on October 1, 2017 [Member] | ||
Debt Instrument [Line Items] | ||
Debt, maturity date | 1-Oct-17 | |
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 |
Margin interest rate | 2.50% | 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 |
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 |
Debt_and_ShortTerm_Borrowings_3
Debt and Short-Term Borrowings - Additional Information (Detail) (USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Installment | |
Debt Instrument [Line Items] | |
Maximum secured leverage ratio | 6.6 |
Notes payable | 4,300,000 |
Non interest bearing financing agreement | 4,600,000 |
Note Payable [Member] | |
Debt Instrument [Line Items] | |
Debt instrument, term | 36 months |
Other short-term borrowing, number of payments | 12 |
Senior Secured Term Loan A [Member] | |
Debt Instrument [Line Items] | |
Secured credit facilities | 273,800,000 |
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 | 393,000,000 |
Original principal amount | 0.25% |
Debt, maturity date | 17-Apr-20 |
Debt instrument description | The LIBOR Rate 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 | 100,000,000 |
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% |
Financial_Instruments_and_Fair2
Financial Instruments and Fair Value Measurements - Fair Value Measurements for Assets at Fair Value on Recurring Basis (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Indemnification assets: | ||
Software cost reimbursement | $971 | $1,428 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | ||
Indemnification assets: | ||
Software cost reimbursement | $971 | $1,428 |
Financial_Instruments_and_Fair3
Financial Instruments and Fair Value Measurements - Additional Information (Detail) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Fair Value Disclosures [Abstract] | ||
Unrealized (gain) loss of indemnification assets | ($3,000) | $179,000 |
Termination dates of contracts end | 30-Sep-15 | |
Merger transaction completed date | 30-Sep-10 | |
Merger, percentage of interests acquired | 51.00% | |
Unobservable inputs related to the Company's indemnification assets, discount rate | 5.25% | |
Projected cash flows | $1,000,000 |
Financial_Instruments_and_Fair4
Financial Instruments and Fair Value Measurements - Carrying Value and Estimated Fair Values for Financial Instruments (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Indemnification assets: | ||
Software cost reimbursement, Carrying Amount | $971 | $1,428 |
Indemnification assets: | ||
Software cost reimbursement, Fair Value | 971 | 1,428 |
Senior Secured Term Loan A [Member] | ||
Financial liabilities: | ||
Senior secured term loan, Carrying Amount | 273,510 | 277,239 |
Financial liabilities: | ||
Senior secured term loan, Fair Value | 269,644 | 266,400 |
Senior Secured Term Loan B [Member] | ||
Financial liabilities: | ||
Senior secured term loan, Carrying Amount | 388,543 | 389,340 |
Financial liabilities: | ||
Senior secured term loan, Fair Value | $385,879 | $385,462 |
Financial_Instruments_and_Fair5
Financial Instruments and Fair Value Measurements - Summary of Change in Fair Value of Level Three Assets (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Unrealized gain (loss) recognized in other income | ($3) | $179 |
Indemnification Assets [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning balance | 1,428 | 3,586 |
Payments received | -460 | -460 |
Unrealized gain (loss) recognized in other income | 3 | -179 |
Ending balance | $971 | $2,947 |
Sharebased_Compensation_Additi
Share-based Compensation - Additional Information (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expenses | $0.60 | $0.40 |
Stock Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total unrecognized cost for stock options | 1.2 | |
Unrecognized compensation cost, weighted average period of recognition | 2 years 6 months | |
Restricted Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total unrecognized cost for stock options | $6.50 | |
Unrecognized compensation cost, weighted average period of recognition | 3 years | |
Time Based Awards [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years |
Sharebased_Compensation_Summar
Share-based Compensation - Summary of RSU's Granted Under LTIP (Detail) (2015 Long-Term Incentive Program [Member], USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Awards with Market Conditions [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Units | 32,414 |
Fair Value Per Unit at Grant Date | $30.80 |
Awards with Performance Conditions [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Units | 44,885 |
Fair Value Per Unit at Grant Date | $22.24 |
Awards with Service Conditions [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Units | 153,568 |
Fair Value Per Unit at Grant Date | $22.24 |
Sharebased_Compensation_Summar1
Share-based Compensation - Summary of Stock Option Activity (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Outstanding shares, Beginning Balance | 316,000 | 316,000 |
Outstanding shares, Ending Balance | 316,000 | 316,000 |
Outstanding shares, Exercisable, Ending Balance | 83,333 | |
Outstanding weighted average exercise prices, Beginning Balance | $19.56 | $19.56 |
Outstanding weighted average exercise prices, Ending Balance | $19.56 | $19.56 |
Outstanding weighted average exercise prices, Exercisable, Ending Balance | $23.62 |
Sharebased_Compensation_Nonves
Share-based Compensation - Nonvested Restricted Shares Activity (Detail) (Restricted Stock Units, USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Restricted Stock Units | |
Nonvested restricted shares and RSUs | |
Nonvested shares, Beginning balance | 23,252 |
Nonvested shares, Forfeited | 1,411 |
Outstanding shares, Granted | 291,537 |
Nonvested shares, Ending Balance | 313,378 |
Weighted-average grant date fair value | |
Weighted-average grant date fair value, beginning balance | $22.04 |
Weighted-average grant date fair value, Forfeited | $20.34 |
Outstanding weighted average exercise prices, Granted | $22.83 |
Weighted-average grant date fair value, Ending balance | $22.78 |
Income_Tax_Components_of_Incom
Income Tax - Components of Income Tax Expense (Benefit) (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Income Tax Disclosure [Abstract] | ||
Current tax provision | $2,046 | $3,589 |
Deferred tax expense (benefit) | 200 | -1,428 |
Income tax expense | $2,246 | $2,161 |
Income_Tax_Segregation_of_Inco
Income Tax - Segregation of Income Tax Expense (Benefit) Based on Location of Operations (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Current tax provision | ||
Current tax provision (benefit), Puerto Rico | $1,155 | $937 |
Current tax provision (benefit), United States | 141 | 198 |
Current tax provision (benefit), Foreign countries | 750 | 2,454 |
Total current tax provision | 2,046 | 3,589 |
Deferred tax expense (benefit) | ||
Deferred tax provision (benefit), Puerto Rico | 299 | 27 |
Deferred tax provision (benefit) , United States | -26 | -1 |
Deferred tax provision (benefit), Foreign countries | -73 | -1,454 |
Total deferred tax expense (benefit) | $200 | ($1,428) |
Income_Tax_Additional_Informat
Income Tax - Additional Information (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Income Tax Examination [Line Items] | ||
Deferred tax asset, gross | $8,900,000 | $9,700,000 |
Deferred tax liability, gross | 26,100,000 | 26,800,000 |
Total available gross net operating loss | 6,000,000 | |
Future realized windfall tax benefit | 4,200,000 | |
Open tax uncertainty positions | 0 | |
Windfall [Member] | ||
Income Tax Examination [Line Items] | ||
Total available gross net operating loss | $26,100,000 |
Net_Income_Per_Common_Share_Sc
Net Income Per Common Share - Schedule of Reconciliation of Numerator and Denominator of Earnings Per Common Share (Detail) (USD $) | 3 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | ||
Earnings Per Share [Abstract] | ||||
Net income | $19,063 | $18,206 | ||
Weighted average common shares outstanding | 77,807,289 | 78,375,335 | ||
Weighted average potential dilutive common shares | 59,437 | [1] | 860,860 | [1] |
Weighted average common shares outstanding - assuming dilution | 77,866,726 | 79,236,195 | ||
Net income per common share - basic | $0.25 | $0.23 | ||
Net income per common share - diluted | $0.24 | $0.23 | ||
[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. There were no pontential antidilutive shares. |
Net_Income_Per_Common_Share_Sc1
Net Income Per Common Share - Schedule of Reconciliation of Numerator and Denominator of Earnings Per Common Share (Parenthetical) (Detail) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 |
Earnings Per Share [Abstract] | |
Potential antidilutive shares | 0 |
Net_Income_Per_Common_Share_Ad
Net Income Per Common Share - Additional Information (Detail) (USD $) | 0 Months Ended | |
Mar. 19, 2015 | Feb. 18, 2015 | |
Earnings Per Share [Abstract] | ||
Cash dividend declared per common share | $0.10 | |
Cash dividend paid per common share | $0.10 |
Commitments_and_Contingencies_
Commitments and Contingencies - Additional Information (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Commitments and Contingencies [Line Items] | ||
Rent expense of office facilities and real estate | $2 | $2 |
Rent expense for telecommunications and other equipment | 1.3 | 1.5 |
Outstanding letter of credit | $0.90 | |
Maximum [Member] | ||
Commitments and Contingencies [Line Items] | ||
Outstanding letter of credit, maturity term | 3 months |
Related_Party_Transactions_Tra
Related Party Transactions - Transactions with Related Parties (Detail) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | ||
Transaction [Abstract] | ||||
Total revenues | $41,063 | [1],[2] | $40,462 | [1],[2] |
Cost of Revenues | 586 | 91 | ||
Selling, general and administrative expenses | ||||
Rent and other fees | 1,993 | 1,917 | ||
Interest earned from and charged by affiliate | ||||
Interest income | $44 | $52 | ||
[1] | Includes revenues generated from investee accounted for under the equity method of $0.5 million and $0.7 million for the three months ended March 31, 2015 and 2014, respectively. | |||
[2] | Total revenues from Popular as a percentage of revenues were 44% and 46% for the three months ended March 31, 2015 and 2014, respectively. |
Related_Party_Transactions_Tra1
Related Party Transactions - Transactions with Related Parties (Parenthetical) (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Transactions with Third Party [Line Items] | ||
Revenues generated from investee accounted for under equity method | $0.50 | $0.70 |
Popular [Member] | ||
Transactions with Third Party [Line Items] | ||
Total revenues from Popular | 44.00% | 46.00% |
Related_Party_Transactions_Sum
Related Party Transactions - Summary of Balances of Transactions with Related Parties (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | ||
In Thousands, unless otherwise specified | ||||
Related Party Transactions [Abstract] | ||||
Cash and restricted cash deposits in affiliated bank | $13,312 | $13,566 | ||
Indemnification assets from Popular reimbursement | ||||
Accounts receivable | 971 | [1] | 1,428 | [1] |
Other due to/from affiliate | ||||
Accounts receivable | 18,701 | 17,006 | ||
Prepaid expenses and other assets | 1,265 | 1,141 | ||
Accounts payable | 2,852 | [2] | 5,260 | [2] |
Unearned income | 8,823 | 8,154 | ||
Other long-term liabilities | $45 | [2] | $45 | [2] |
[1] | Recorded in connection with reimbursement from Popular regarding certain software license fees. | |||
[2] | Includes an account payable of $0.2 million and a long-term liability of $45,000 for both March 31, 2015 and December 31, 2014, 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. |
Related_Party_Transactions_Sum1
Related Party Transactions - Summary of Balances of Transactions with Related Parties (Parenthetical) (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | ||
Transactions with Third Party [Line Items] | ||||
Accounts payable | $2,852,000 | [1] | $5,260,000 | [1] |
Other long-term liabilities | 45,000 | [1] | 45,000 | [1] |
Unvested Stock Options [Member] | ||||
Transactions with Third Party [Line Items] | ||||
Accounts payable | 200,000 | |||
Other long-term liabilities | $45,000 | $45,000 | ||
[1] | Includes an account payable of $0.2 million and a long-term liability of $45,000 for both March 31, 2015 and December 31, 2014, 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. |
Related_Party_Transactions_Add
Related Party Transactions - Additional Information (Detail) (USD $) | Mar. 31, 2015 |
In Millions, unless otherwise specified | |
Related Party Transactions [Abstract] | |
Letter of credit issued by Popular | $3.60 |
Segment_Information_Additional
Segment Information - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2015 | |
Segment | |
Segment Reporting [Abstract] | |
Number of operating business segments | 3 |
Segment_Information_Informatio
Segment Information - Information about Operations by Business Segments (Detail) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | ||
Segment Reporting Information [Line Items] | ||||
Revenues | $91,332 | $87,433 | ||
Income from operations | 27,006 | 24,889 | ||
Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Income from operations | 36,875 | 34,545 | ||
Operating Segments [Member] | Merchant Acquiring, net [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 20,091 | 19,291 | ||
Income from operations | 9,264 | 8,404 | ||
Operating Segments [Member] | Payment Processing [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 33,105 | 31,842 | ||
Income from operations | 13,545 | 14,717 | ||
Operating Segments [Member] | Business Solutions [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 44,864 | 42,917 | ||
Income from operations | 14,066 | 11,424 | ||
Segment Reconciling Items [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Income from operations | -9,869 | [1] | -9,656 | [1] |
Other [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | ($6,728) | [2] | ($6,617) | [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. |
Segment_Information_Reconcilia
Segment Information - Reconciliation of Income from Operations to Consolidated Net Income (Detail) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | ||
Segment income from operations | ||||
Income from operations | $27,006 | $24,889 | ||
Interest expense, net | -6,097 | -6,834 | ||
Earnings of equity method investment | 115 | 321 | ||
Other income | 285 | 1,991 | ||
Income tax expense | -2,246 | -2,161 | ||
Net income | 19,063 | 18,206 | ||
Operating Segments [Member] | ||||
Segment income from operations | ||||
Income from operations | 36,875 | 34,545 | ||
Operating Segments [Member] | Merchant Acquiring, net [Member] | ||||
Segment income from operations | ||||
Income from operations | 9,264 | 8,404 | ||
Operating Segments [Member] | Payment Processing [Member] | ||||
Segment income from operations | ||||
Income from operations | 13,545 | 14,717 | ||
Operating Segments [Member] | Business Solutions [Member] | ||||
Segment income from operations | ||||
Income from operations | 14,066 | 11,424 | ||
Segment Reconciling Items [Member] | ||||
Segment income from operations | ||||
Income from operations | ($9,869) | [1] | ($9,656) | [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 | 3 Months Ended | 1 Months Ended |
Feb. 18, 2015 | Mar. 31, 2015 | 31-May-15 | |
Subsequent Event [Line Items] | |||
Cash dividend declared, Common stock | $0.10 | ||
Common stock dividends payable, date declared | 6-May-15 | ||
Common stock dividends payable, date to be paid | 5-Jun-15 | ||
Common stock dividends payable, date of record | 18-May-15 | ||
Subsequent Events [Member] | |||
Subsequent Event [Line Items] | |||
Cash dividend declared, Common stock | $0.10 |