Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Jul. 31, 2015 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | EVTC | |
Entity Registrant Name | EVERTEC, Inc. | |
Entity Central Index Key | 1,559,865 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 77,487,933 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Current Assets: | ||
Cash | $ 38,837 | $ 32,114 |
Restricted cash | 6,262 | 5,718 |
Accounts receivable, net | 71,091 | 75,810 |
Deferred tax asset | 2,323 | 399 |
Prepaid expenses and other assets | 21,678 | 20,565 |
Total current assets | 140,191 | 134,606 |
Investment in equity investee | 12,251 | 11,756 |
Property and equipment, net | 31,627 | 29,535 |
Goodwill | 368,911 | 368,837 |
Other intangible assets, net | 317,431 | 334,584 |
Other long-term assets | 9,880 | 10,917 |
Total assets | 880,291 | 890,235 |
Current Liabilities: | ||
Accrued liabilities | 29,275 | 26,052 |
Accounts payable | 19,133 | 22,879 |
Unearned income | 11,734 | 9,825 |
Income tax payable | 81 | 1,956 |
Current portion of long-term debt | 19,000 | 19,000 |
Short-term borrowings | 4,000 | 23,000 |
Deferred tax liability, net | 111 | 1,799 |
Total current liabilities | 83,334 | 104,511 |
Long-term debt | 638,530 | 647,579 |
Long-term deferred tax liability, net | 19,255 | 15,674 |
Other long-term liabilities | 2,856 | 2,898 |
Total liabilities | $ 743,975 | $ 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; 77,487,933 shares issued and outstanding at June 30, 2015 (December 31, 2014 - 77,893,144) | $ 775 | $ 779 |
Additional paid-in capital | 51,914 | 59,740 |
Accumulated earnings | 89,347 | 65,576 |
Accumulated other comprehensive loss, net of tax | (5,720) | (6,522) |
Total stockholders' equity | 136,316 | 119,573 |
Total liabilities and stockholders' equity | $ 880,291 | $ 890,235 |
Consolidated Balance Sheets (U3
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 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 | 77,487,933 | 77,893,144 |
Common stock outstanding | 77,487,933 | 77,893,144 |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Revenues | ||||
Merchant acquiring, net | $ 21,165 | $ 19,827 | $ 41,256 | $ 39,118 |
Payment processing (from affiliates: $7,644, $7,458, $15,016 and $14,706) | 26,759 | 26,618 | 53,136 | 51,843 |
Business solutions (from affiliates: $35,568, $34,243, $69,258 and $67,601) | 45,317 | 44,888 | 90,181 | 87,805 |
Total revenues | 93,241 | 91,333 | 184,573 | 178,766 |
Operating costs and expenses | ||||
Cost of revenues, exclusive of depreciation and amortization shown below | 40,665 | 39,051 | 80,460 | 76,919 |
Selling, general and administrative expenses | 8,948 | 10,463 | 16,651 | 18,525 |
Depreciation and amortization | 16,006 | 16,390 | 32,834 | 33,004 |
Total operating costs and expenses | 65,619 | 65,904 | 129,945 | 128,448 |
Income from operations | 27,622 | 25,429 | 54,628 | 50,318 |
Non-operating income (expenses) | ||||
Interest income | 127 | 79 | 231 | 154 |
Interest expense | (6,210) | (6,501) | (12,411) | (13,410) |
Earnings of equity method investment | 84 | 343 | 199 | 664 |
Other income | 764 | 385 | 1,049 | 2,376 |
Total non-operating expenses | (5,235) | (5,694) | (10,932) | (10,216) |
Income before income taxes | 22,387 | 19,735 | 43,696 | 40,102 |
Income tax expense | 2,120 | 1,962 | 4,366 | 4,123 |
Net income | 20,267 | 17,773 | 39,330 | 35,979 |
Other comprehensive (loss) income, net of tax of $26, $48, $33 and $54 Foreign currency translation adjustments | (87) | 794 | 802 | (6,951) |
Total comprehensive income | $ 20,180 | $ 18,567 | $ 40,132 | $ 29,028 |
Net income per common share-basic | $ 0.26 | $ 0.23 | $ 0.51 | $ 0.46 |
Net income per common share-diluted | $ 0.26 | $ 0.22 | $ 0.51 | $ 0.45 |
Consolidated Statements of Inc5
Consolidated Statements of Income and Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Income Statement [Abstract] | ||||
Payment processing revenue from affiliates | $ 7,644 | $ 7,458 | $ 15,016 | $ 14,706 |
Business solutions revenue from affiliates | 35,568 | 34,243 | 69,258 | 67,601 |
Other comprehensive income, income tax expense | $ 26 | $ 48 | $ 33 | $ 54 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Stockholders' Equity (Unaudited) - 6 months ended Jun. 30, 2015 - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] |
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 | $ 2,191 | 2,191 | |||
Repurchase of common stock | (9,991) | $ (5) | (9,986) | ||
Repurchase of common stock, Shares | (452,175) | ||||
Restricted stock grants and units delivered, net of cashless | (30) | $ 1 | (31) | ||
Restricted stock grants and units delivered, net of cashless, shares | 46,964 | ||||
Net income | 39,330 | 39,330 | |||
Cash dividends declared on common stock | (15,559) | (15,559) | |||
Other comprehensive income | 802 | 802 | |||
Ending Balance, Value at Jun. 30, 2015 | $ 136,316 | $ 775 | $ 51,914 | $ 89,347 | $ (5,720) |
Ending Balance, Shares at Jun. 30, 2015 | 77,487,933 | 77,487,933 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Cash flows from operating activities | ||
Net income | $ 39,330 | $ 35,979 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 32,834 | 33,004 |
Amortization of debt issue costs and premium and accretion of discount | 1,621 | 1,538 |
Provision for doubtful accounts and sundry losses | 684 | 1,058 |
Deferred tax expense (benefit) | 11 | (430) |
Share-based compensation | 2,191 | 665 |
Unrealized (gain) loss of indemnification assets | (12) | 173 |
Loss on disposition of property and equipment and other intangibles | 1 | 64 |
Earnings of equity method investment | (199) | (664) |
Dividend received from equity method investment | 326 | |
Decrease (increase) in assets: | ||
Accounts receivable, net | 4,342 | (2,045) |
Prepaid expenses and other assets | (2,460) | (4,267) |
Other long-term assets | (50) | 1,811 |
(Decrease) increase in liabilities: | ||
Accounts payable and accrued liabilities | (1,602) | (4,120) |
Income tax payable | (1,875) | 1,542 |
Unearned income | 1,909 | 2,903 |
Total adjustments | 37,395 | 31,558 |
Net cash provided by operating activities | 76,725 | 67,537 |
Cash flows from investing activities | ||
Net (increase) decrease in restricted cash | (543) | 238 |
Intangible assets acquired | (6,757) | (5,841) |
Property and equipment acquired | (8,649) | (3,895) |
Proceeds from sales of property and equipment | 11 | 3 |
Net cash used in investing activities | (15,938) | (9,495) |
Cash flows from financing activities | ||
Statutory minimum withholding taxes paid on cashless exercises of stock options and restricted stock | (31) | (770) |
Net decrease in short-term borrowing | (19,000) | (27,000) |
Repayment of short-term borrowing for purchase of equipment and software | (1,200) | |
Dividends paid | (15,542) | (15,680) |
Tax windfall benefits on exercises of stock options | 1,482 | |
Issuance of common stock, net | 54 | |
Repurchase of common stock | (9,991) | |
Repayment of other financing agreement | (82) | |
Repayment of long-term debt | (9,500) | (9,500) |
Net cash used in financing activities | (54,064) | (52,696) |
Net increase in cash | 6,723 | 5,346 |
Cash at beginning of the period | 32,114 | 22,485 |
Cash at end of the period | 38,837 | 27,831 |
Supplemental disclosure of non-cash activities: | ||
Dividend declared not received from equity method investment | 325 | |
Foreign currency translation adjustments | 802 | $ (6,951) |
Payable due to vendor related to software acquired | $ 1,125 |
The Company and Basis of Presen
The Company and Basis of Presentation | 6 Months Ended |
Jun. 30, 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. |
Property and Equipment, net
Property and Equipment, net | 6 Months Ended |
Jun. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Note 2 – Property and Equipment, net Property and equipment, net consists of the following: (Dollar amounts in thousands) Useful life June 30, 2015 December 31, 2014 Buildings 30 $ 1,616 $ 1,602 Data processing equipment 3 - 5 85,698 77,588 Furniture and equipment 3 - 20 8,602 7,540 Leasehold improvements 5 - 10 3,156 2,964 99,072 89,694 Less—accumulated depreciation and amortization (68,878 ) (61,580 ) Depreciable assets, net 30,194 28,114 Land 1,433 1,421 Property and equipment, net $ 31,627 $ 29,535 Depreciation and amortization expense related to property and equipment for the three and six months ended June 30, 2015 amounted to $3.3 million and $7.4 million, respectively, compared to $3.8 million and $7.7 million, respectively, for the same periods in 2014. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 6 Months Ended |
Jun. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Note 3 – Goodwill and Other Intangible Assets The changes in the carrying amount of goodwill, allocated by reportable segments, were as follows (See Note 12): (Dollar amounts in thousands) Merchant Payment Business Total Balance at December 31, 2014 $ 138,121 $ 184,228 $ 46,488 $ 368,837 Foreign currency translation adjustments — (26 ) 100 74 Balance at June 30, 2015 $ 138,121 $ 184,202 $ 46,588 $ 368,911 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 six months ended June 30, 2015 and the year ended December 31, 2014 consisted of the following: June 30, 2015 (Dollar amounts in thousands) Useful life in years Gross Accumulated Net carrying Customer relationships 14 $ 312,795 $ (106,628 ) $ 206,167 Trademark 10 - 15 39,950 (16,454 ) 23,496 Software packages 3 - 10 146,398 (97,265 ) 49,133 Non-compete agreement 15 56,539 (17,904 ) 38,635 Other intangible assets, net $ 555,682 $ (238,251 ) $ 317,431 December 31, 2014 (Dollar amounts in thousands) Useful life in years Gross Accumulated Net carrying Customer relationships 14 $ 312,735 $ (95,482 ) $ 217,253 Trademark 10 - 15 39,950 (14,722 ) 25,228 Software packages 3 - 10 138,188 (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 the three and six months ended June 30, 2015, the Company recorded amortization expense related to other intangibles of $12.7 million and $25.4 million, respectively, compared to $12.6 million and $25.3 million for the corresponding 2014 periods. The estimated amortization expense of the balances outstanding at June 30, 2015 for the next five years is as follows: (Dollar amounts in thousands) Remaining 2015 $ 23,464 2016 39,154 2017 35,942 2018 32,966 2019 31,937 2020 30,017 |
Debt and Short-Term Borrowings
Debt and Short-Term Borrowings | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Debt and Short-Term Borrowings | Note 4 – Debt and Short-Term Borrowings Total debt as of June 30, 2015 and December 31, 2014 was as follows: (Dollar amounts in thousands) June 30, 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) $ 269,781 $ 277,239 Senior Secured Credit Facility (Term B) due on April 17, 2020 paying interest at a variable interest rate (LIBOR Rate plus applicable margin (2)(3) 387,749 389,340 Senior Secured Revolving Credit Facility expiring on April 17, 2018 paying interest at a variable interest rate 4,000 23,000 Note Payable due on October 1, 2017 (3) 3,638 4,333 Note Payable due on July 1, 2017 (3) 1,029 — Total debt $ 666,197 $ 693,912 (1) Applicable margin of 2.50% at June 30, 2015 and December 31, 2014. (2) Subject to a minimum rate (“LIBOR floor”) of 0.75% plus applicable margin of 2.75% at June 30, 2015 and December 31, 2014. (3) Includes unamortized discount. Senior Secured Credit Facilities Term A Loan As of June 30, 2015, the unpaid principal balance of the Term A Loan was $270.0 million. The Term A Loan requires principal payments on the last business day of each quarter equal to (a) 1.250% of the original principal amount commencing on September 30, 2013 through June 30, 2016; (b) 1.875% of the original principal amount from September 30, 2016 through June 30, 2017; (c) 2.50% of the original principal amount from September 30, 2017 through March 31, 2018; and (d) the remaining outstanding principal amount on the maturity of the Term A Loan on April 17, 2018. Interest is based on EVERTEC Group 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, as defined in the 2013 Credit Agreement, plus an applicable margin ranging from 1.00% to 1.50%. Term A Loan has no LIBOR or Base Rate minimum or floor. Term B Loan As of June 30, 2015, the unpaid principal balance of the Term B Loan was $392.0 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 limit the ability of our subsidiaries to pay dividends or make certain payments to us; and (c) places restrictions on our ability and the ability of our subsidiaries to merge or consolidate with any other person or sell, assign, transfer, convey or otherwise dispose of all or substantially all of our assets. Note payable In December 2014 and June 2015, EVERTEC entered into a non-interest bearing $4.6 million and $1.1 million, respectively, financing agreements to purchase software. The notes will be repaid over a 36-month term. As of June 30, 2015 the outstanding principal balance of the notes payable is $5.0 million. The current portion of these notes 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 | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments and Fair Value Measurements | Note 5 – Financial Instruments and Fair Value Measurements Recurring Fair Value Measurements Fair value measurement provisions establish a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. This guidance describes three levels of input that may be used to measure fair value: Level 1 Level 2 Level 3 The Company uses observable inputs when available. Fair value is based upon quoted market prices when available. If market prices are not available, the Company may employ internally-developed models that mostly use market-based inputs including yield curves, interest rates, volatilities, and credit curves, among others. The Company limits valuation adjustments to those deemed necessary to ensure that the financial instrument’s fair value adequately represents the price that would be received or paid in the marketplace. Valuation adjustments may include consideration of counterparty credit quality and liquidity as well as other criteria. The estimated fair value amounts are subjective in nature and may involve uncertainties and matters of significant judgment for certain financial instruments. Changes in the underlying assumptions used in estimating fair value could affect the results. The fair value measurement levels are not indicative of risk of investment. The following table summarizes fair value measurements by level at June 30, 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 June 30, 2015 Financial assets: Indemnification assets: Software cost reimbursement $ — $ — $ 141 $ 141 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”). Management prepared estimates of the expected reimbursements to be received from Popular until the termination of the contracts, discounted the estimated future cash flows and recorded the indemnification assets as of the Merger closing date. Payments received during the quarters reduced the indemnification asset balance. The remaining balance was adjusted to reflect its fair value as of June 30, 2015, therefore resulting in a net unrealized gain of approximately $9,000 and $12,000 for the three and six months ended June 30, 2015, respectively, and a net unrealized gain of approximately $6,000 for the three months ended June 30, 2014 and a net unrealized loss of approximately $0.2 million for the six months ended June 30, 2014, which are reflected within the other expenses caption in the unaudited consolidated statements of income and comprehensive income. The indemnification assets is included within accounts receivable, net in the accompanying unaudited consolidated balance sheets. The unobservable inputs related to the Company’s indemnification assets as of June 30, 2015 using the discounted cash flow model include the discount rate of 5.01% and the projected cash flows of $0.1 million. For indemnification assets a significant increase or decrease in market rates or cash flows could result in a change to the fair value. Also, the credit rating and/or the non-performance credit risk of Popular, which is subjective in nature, also could increase or decrease the sensitivity of the fair value of these assets. The following table presents the carrying value, as applicable, and estimated fair values for financial instruments at June 30, 2015 and December 31, 2014: June 30, 2015 December 31, 2014 (Dollar amounts in thousands) Carrying Fair Value Carrying Fair Value Financial assets: Indemnification assets: Software cost reimbursement $ 141 $ 141 $ 1,428 $ 1,428 Financial liabilities: Senior secured term loan A $ 269,781 $ 264,600 $ 277,239 $ 266,400 Senior secured term loan B 387,749 385,140 389,340 385,462 The fair value of the senior secured term loans at June 30, 2015 and December 31, 2014 were obtained using prices supplied by third party service providers. Their pricing is based on various inputs such as: market quotes, recent trading activity in a non-active market or imputed prices. The pricing inputs also may include the use of an algorithm that could take into account movement in the general high-yield market, among other variants. The senior secured term loans, which are not measured at fair value in the balance sheets, if measured, could be categorized as Level 3 in the fair value hierarchy. The following table provides a summary of the change in fair value of the Company’s Level 3 assets: Three months ended June 30, Six months ended June 30, (Dollar amounts in thousands) 2015 2014 2015 2014 Indemnification assets: Beginning balance $ 971 $ 2,947 $ 1,428 $ 3,586 Payments received (839 ) (839 ) (1,299 ) (1,299 ) Unrealized gain (loss) recognized in other expenses 9 6 12 (173 ) Ending balance $ 141 $ 2,114 $ 141 $ 2,114 |
Share-based Compensation
Share-based Compensation | 6 Months Ended |
Jun. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based Compensation | Note 6 – 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 1 st The following table summarizes the RSU’s granted under the LTIP as of June 30, 2015: Units Weighted-Average Grant Date Fair Value Awards with market conditions 49,763 $ 29.86 Awards with performance condition 67,382 $ 22.05 Awards with service conditions 196,272 $ 22.11 The following table summarizes stock options activity for the six months ended June 30, 2015: Shares Weighted-average exercise prices Outstanding at December 31, 2014 316,000 $ 19.56 Outstanding at June 30, 2015 316,000 $ 19.56 Exercisable at June 30, 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 nonvested restricted shares and RSUs activity for the six months ended June 30, 2015: Nonvested restricted shares and RSUs Shares Weighted-average grant date fair value Nonvested at December 31, 2014 23,252 $ 22.04 Forfeited 6,205 21.04 Vested 19,116 22.56 Granted 553,242 22.57 Nonvested at June 30, 2015 551,173 $ 22.56 For the three and six months ended June 30, 2015 and June 30, 2014, the Company recognized $1.5 million and $2.2 million and $0.3 million and $0.7 million of share-based compensation expense, respectively. As of June 30, 2015, there was $1.0 million of total unrecognized compensation cost related to stock options, which is expected to be recognized over the next 1.51 years. In addition, for the same period, there was approximately $10.8 million of total unrecognized compensation cost related to nonvested shares of restricted stock and RSUs. That cost is expected to be fully recognized over the next 2.4 years. |
Income Tax
Income Tax | 6 Months Ended |
Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Tax | Note 7 – Income Tax The components of income tax expense for the three and six months ended June 30, 2015 and 2014 consisted of the following: Three months ended June 30, Six months ended June 30, (Dollar amounts in thousands) 2015 2014 2015 2014 Current tax provision $ 2,309 $ 964 $ 4,355 $ 4,553 Deferred tax (benefit) provision (189 ) 998 11 (430 ) Income tax expense $ 2,120 $ 1,962 $ 4,366 $ 4,123 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 and six months ended June 30, 2015 and 2014 and its segregation based on location of operations: Three months ended June 30, Six months ended June 30, (Dollar amounts in thousands) 2015 2014 2015 2014 Current tax provision Puerto Rico $ 1,367 $ 423 $ 2,522 $ 1,360 United States 160 217 301 415 Foreign countries 782 324 1,532 2,778 Total currrent tax provision $ 2,309 $ 964 $ 4,355 $ 4,553 Deferred tax (benefit) provision Puerto Rico $ 111 $ 805 $ 410 $ 832 United States (32 ) (2 ) (58 ) (3 ) Foreign countries (268 ) 195 (341 ) (1,259 ) Total deferred tax (benefit) provision $ (189 ) $ 998 $ 11 $ (430 ) Taxes payable to foreign countries by EVERTEC’s subsidiaries will be paid by such subsidiary and the corresponding liability and expense will be presented in EVERTEC’s consolidated financial statements. As of June 30, 2015, the gross deferred tax asset amounted to $8.3 million and the gross deferred tax liability amounted to $25.4 million, compared with $9.7 million and $26.8 million as of December 31, 2014. At June 30, 2015, the recorded value of the Company’s net operating loss (“NOL”) carryforwards was $5.2 million. The recorded value of the NOL carryforwards is approximately $4.2 million lower than the total NOL carryforwards available because of a windfall tax benefit. The windfall tax benefit is available to offset future taxable income and is considered an off-balance sheet item until the deduction reduces taxes payable. This windfall tax benefit results from tax deductions that were in excess of previously recorded compensation expense because the fair value of stock options at the time they were granted differed from their fair value when they were exercised. The total gross NOL carryforwards available, including the windfall benefit, amounted to $24.0 million as of June 30, 2015. There are no open uncertain tax positions as of June 30, 2015. |
Net Income Per Common Share
Net Income Per Common Share | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Net Income Per Common Share | Note 8 – Net Income Per Common Share The reconciliation of the numerator and denominator of the income per common share is as follows: Three months ended June 30, Six months ended June 30, (Dollar amounts in thousands, except per share information) 2015 2014 2015 2014 Net income $ 20,267 $ 17,773 $ 39,330 $ 35,979 Less: non-forfeitable dividends on restricted stock 3 — 3 — Net income available to common shareholders $ 20,264 $ 17,773 $ 39,327 $ 35,979 Weighted average common shares outstanding 77,457,322 78,410,554 77,631,339 78,393,042 Weighted average potential dilutive common shares (1) 240,539 789,410 148,863 811,600 Weighted average common shares outstanding - assuming dilution 77,697,861 79,199,964 77,780,202 79,204,642 Net income per common share - basic $ 0.26 $ 0.23 $ 0.51 $ 0.46 Net income per common share - diluted $ 0.26 $ 0.22 $ 0.51 $ 0.45 (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. 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 March 2, 2015. On May 6, 2015, our Board declared a quarterly cash dividend of $0.10 per share of common stock, which was paid on June 5, 2015 to stockholders of record as of May 18, 2015. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 9 – Commitments and Contingencies Certain lease agreements contain provisions for future rent increases. The total amount of rental payments due over the lease term is being charged to rent expense on the straight-line method over the term of the lease. The difference between rent expense recorded and the amount paid is recorded as a deferred rent obligation. Rent expense of office facilities and real estate for both the three and six months ended June 30, 2015 and 2014 amounted to $2.1 million and $4.1 million, respectively. Rent expense for telecommunications and other equipment for the three and six months ended June 30, 2015 amounted to $1.3 million and $2.6 million, respectively, compared to $1.6 million and $3.0 million for the corresponding 2014 periods. In the ordinary course of business, the Company may enter into commercial commitments. As of June 30, 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 | 6 Months Ended |
Jun. 30, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 10 – Related Party Transactions The following table presents the Company’s transactions with related parties for the three and six months ended June 30, 2015 and 2014: Three months ended June 30, Six months ended June 30, (Dollar amounts in thousands) 2015 2014 2015 2014 Total revenues (1)(2) $ 43,212 $ 41,701 $ 84,274 $ 82,307 Cost of revenues $ 504 $ 595 $ 1,090 $ 756 Rent and other fees $ 1,974 $ 2,084 $ 3,967 $ 4,001 Interest earned from and charged by affiliate Interest income $ 43 $ 50 $ 87 $ 102 (1) Total revenues from Popular as a percentage of revenues were 46%, 45%, 45% and 45% for each of the periods presented above. (2) Includes revenues generated from investee accounted for under the equity method of $0.5 million and $1.1 million for the three and six months ended June 30, 2015, respectively, and $0.7 million and $1.4 million for the corresponding 2014 periods. At June 30, 2015 and December 31, 2014, EVERTEC had the following balances arising from transactions with related parties: (Dollar amounts in thousands) June 30, 2015 December 31, 2014 Cash and restricted cash deposits in affiliated bank $ 17,648 $ 13,566 Indemnification assets from Popular reimbursement (1) Accounts receivable $ 141 $ 1,428 Other due/to from affiliate Accounts receivable $ 21,472 $ 17,006 Prepaid expenses and other assets $ 1,355 $ 1,141 Accounts payable (2) $ 5,010 $ 5,260 Unearned income $ 9,569 $ 8,154 Other long-term liabilities (2) $ 45 $ 45 (1) Recorded in connection with reimbursements 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 June 30, 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 June 30, 2015, EVERTEC Group has a credit facility with Popular for $4.2 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 | 6 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
Segment Information | Note 11 – 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 Processing Business Solutions Other Total Three months ended June 30, 2015 Revenues 21,165 33,702 45,317 (6,943 ) (1) 93,241 Income from operations 9,626 14,511 13,467 (9,982 ) (2) 27,622 Three months ended June 30, 2014 Revenues 19,827 33,252 44,888 (6,634 ) (1) 91,333 Income from operations 8,777 15,314 12,113 (10,775 ) (2) 25,429 (1) Represents the elimination of intersegment revenues for services provided by the Payment Processing segment to the Merchant Acquiring segment, and other miscellaneous intersegment revenues. (2) Primarily represents non-operating depreciation and amortization expenses generated as a result of the Merger and certain non-recurring fees and expenses. (Dollar amounts in thousands) Merchant Acquiring, net Payment Processing Business Solutions Other Total Six months ended June 30, 2015 Revenues 41,256 66,802 90,181 (13,666 ) (1) 184,573 Income from operations 19,017 28,220 27,241 (19,850 ) (2) 54,628 Six months ended June 30, 2014 Revenues 39,118 65,094 87,805 (13,251 ) (1) 178,766 Income from operations 17,181 30,031 23,537 (20,431 ) (2) 50,318 (1) Represents the elimination of intersegment revenues for services provided by the Payment Processing segment to the Merchant Acquiring segment, and other miscellaneous intersegment revenues. (2) Primarily represents non-operating depreciation and amortization expenses generated as a result of the Merger and certain non-recurring fees and expenses. The reconciliation of income from operations to consolidated net income for the three and six months ended June 30, 2015 and 2014 is as follows: Three months ended June 30, Six months ended June 30, (Dollar amounts in thousands) 2015 2014 2015 2014 Segment income from operations Merchant Acquiring $ 9,626 $ 8,777 $ 19,017 $ 17,181 Payment Processing 14,511 15,314 28,220 30,031 Business Solutions 13,467 12,113 27,241 23,537 Total segment income from operations 37,604 36,204 74,478 70,749 Merger related depreciation and amortization and other unallocated expenses (1) (9,982 ) (10,775 ) (19,850 ) (20,431 ) Income from operations $ 27,622 $ 25,429 $ 54,628 $ 50,318 Interest expense, net (6,083 ) (6,422 ) (12,180 ) (13,256 ) Earnings of equity method investment 84 343 199 664 Other income 764 385 1,049 2,376 Income tax expense (2,120 ) (1,962 ) (4,366 ) (4,123 ) Net income $ 20,267 $ 17,773 $ 39,330 $ 35,979 (1) Primarily represents non-operating depreciation and amortization expenses generated as a result of the Merger and certain non-recurring fees and expenses. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 12 – Subsequent Events The Company extended voluntary termination offers to certain employees, which included special termination benefits. These termination benefits will result in one time payments due upon employee’s irrevocable acceptance of the offer. Upon the acceptance of the offers, the Company expects to incur in compensation expense related to these special termination benefits up to approximately $2.8 million during the third quarter of 2015. On August 5, 2015, the Company’s Board of Directors (the “Board”) declared a regular quarterly cash dividend of $0.10 per share on the Company’s outstanding shares of common stock. The Board anticipates declaring this dividend in future quarters on a regular basis, however future declarations of dividends are subject to Board approval and may be adjusted as business needs or market conditions change. The cash dividend of $0.10 per share will be paid on September 3, 2015 to stockholders of record as of the close of business on August 17, 2015. |
The Company and Basis of Pres20
The Company and Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 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. |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and equipment, net consists of the following: (Dollar amounts in thousands) Useful life June 30, 2015 December 31, 2014 Buildings 30 $ 1,616 $ 1,602 Data processing equipment 3 - 5 85,698 77,588 Furniture and equipment 3 - 20 8,602 7,540 Leasehold improvements 5 - 10 3,156 2,964 99,072 89,694 Less—accumulated depreciation and amortization (68,878 ) (61,580 ) Depreciable assets, net 30,194 28,114 Land 1,433 1,421 Property and equipment, net $ 31,627 $ 29,535 |
Goodwill and Other Intangible22
Goodwill and Other Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 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 Balance at December 31, 2014 $ 138,121 $ 184,228 $ 46,488 $ 368,837 Foreign currency translation adjustments — (26 ) 100 74 Balance at June 30, 2015 $ 138,121 $ 184,202 $ 46,588 $ 368,911 |
Carrying Amount of Other Intangible Assets | The carrying amount of other intangible assets for the six months ended June 30, 2015 and the year ended December 31, 2014 consisted of the following: June 30, 2015 (Dollar amounts in thousands) Useful life in years Gross Accumulated Net carrying Customer relationships 14 $ 312,795 $ (106,628 ) $ 206,167 Trademark 10 - 15 39,950 (16,454 ) 23,496 Software packages 3 - 10 146,398 (97,265 ) 49,133 Non-compete agreement 15 56,539 (17,904 ) 38,635 Other intangible assets, net $ 555,682 $ (238,251 ) $ 317,431 December 31, 2014 (Dollar amounts in thousands) Useful life in years Gross Accumulated Net carrying Customer relationships 14 $ 312,735 $ (95,482 ) $ 217,253 Trademark 10 - 15 39,950 (14,722 ) 25,228 Software packages 3 - 10 138,188 (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 June 30, 2015 for the next five years is as follows: (Dollar amounts in thousands) Remaining 2015 $ 23,464 2016 39,154 2017 35,942 2018 32,966 2019 31,937 2020 30,017 |
Debt and Short-Term Borrowings
Debt and Short-Term Borrowings (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Total Debt | Total debt as of June 30, 2015 and December 31, 2014 was as follows: (Dollar amounts in thousands) June 30, 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) $ 269,781 $ 277,239 Senior Secured Credit Facility (Term B) due on April 17, 2020 paying interest at a variable interest rate (LIBOR Rate plus applicable margin (2)(3) 387,749 389,340 Senior Secured Revolving Credit Facility expiring on April 17, 2018 paying interest at a variable interest rate 4,000 23,000 Note Payable due on October 1, 2017 (3) 3,638 4,333 Note Payable due on July 1, 2017 (3) 1,029 — Total debt $ 666,197 $ 693,912 (1) Applicable margin of 2.50% at June 30, 2015 and December 31, 2014. (2) Subject to a minimum rate (“LIBOR floor”) of 0.75% plus applicable margin of 2.75% at June 30, 2015 and December 31, 2014. (3) Includes unamortized discount. |
Financial Instruments and Fai24
Financial Instruments and Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 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 June 30, 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 June 30, 2015 Financial assets: Indemnification assets: Software cost reimbursement $ — $ — $ 141 $ 141 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 June 30, 2015 and December 31, 2014: June 30, 2015 December 31, 2014 (Dollar amounts in thousands) Carrying Fair Value Carrying Fair Value Financial assets: Indemnification assets: Software cost reimbursement $ 141 $ 141 $ 1,428 $ 1,428 Financial liabilities: Senior secured term loan A $ 269,781 $ 264,600 $ 277,239 $ 266,400 Senior secured term loan B 387,749 385,140 389,340 385,462 |
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 June 30, Six months ended June 30, (Dollar amounts in thousands) 2015 2014 2015 2014 Indemnification assets: Beginning balance $ 971 $ 2,947 $ 1,428 $ 3,586 Payments received (839 ) (839 ) (1,299 ) (1,299 ) Unrealized gain (loss) recognized in other expenses 9 6 12 (173 ) Ending balance $ 141 $ 2,114 $ 141 $ 2,114 |
Share-based Compensation (Table
Share-based Compensation (Tables) | 6 Months Ended |
Jun. 30, 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 June 30, 2015: Units Weighted-Average Grant Date Fair Value Awards with market conditions 49,763 $ 29.86 Awards with performance condition 67,382 $ 22.05 Awards with service conditions 196,272 $ 22.11 |
Summary of Stock Option Activity | The following table summarizes stock options activity for the six months ended June 30, 2015: Shares Weighted-average exercise prices Outstanding at December 31, 2014 316,000 $ 19.56 Outstanding at June 30, 2015 316,000 $ 19.56 Exercisable at June 30, 2015 83,333 $ 23.62 |
Nonvested Restricted Stocks and Units Activity | The following table summarizes nonvested restricted shares and RSUs activity for the six months ended June 30, 2015: Nonvested restricted shares and RSUs Shares Weighted-average grant date fair value Nonvested at December 31, 2014 23,252 $ 22.04 Forfeited 6,205 21.04 Vested 19,116 22.56 Granted 553,242 22.57 Nonvested at June 30, 2015 551,173 $ 22.56 |
Income Tax (Tables)
Income Tax (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Components of Income Tax Expense | The components of income tax expense for the three and six months ended June 30, 2015 and 2014 consisted of the following: Three months ended June 30, Six months ended June 30, (Dollar amounts in thousands) 2015 2014 2015 2014 Current tax provision $ 2,309 $ 964 $ 4,355 $ 4,553 Deferred tax (benefit) provision (189 ) 998 11 (430 ) Income tax expense $ 2,120 $ 1,962 $ 4,366 $ 4,123 |
Segregation of Income Tax Expense (Benefit) Based on Location of Operations | The following table presents the components of income tax expense for the three and six months ended June 30, 2015 and 2014 and its segregation based on location of operations: Three months ended June 30, Six months ended June 30, (Dollar amounts in thousands) 2015 2014 2015 2014 Current tax provision Puerto Rico $ 1,367 $ 423 $ 2,522 $ 1,360 United States 160 217 301 415 Foreign countries 782 324 1,532 2,778 Total currrent tax provision $ 2,309 $ 964 $ 4,355 $ 4,553 Deferred tax (benefit) provision Puerto Rico $ 111 $ 805 $ 410 $ 832 United States (32 ) (2 ) (58 ) (3 ) Foreign countries (268 ) 195 (341 ) (1,259 ) Total deferred tax (benefit) provision $ (189 ) $ 998 $ 11 $ (430 ) |
Net Income Per Common Share (Ta
Net Income Per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of Numerator and Denominator of Income Per Common Share | The reconciliation of the numerator and denominator of the income per common share is as follows: Three months ended June 30, Six months ended June 30, (Dollar amounts in thousands, except per share information) 2015 2014 2015 2014 Net income $ 20,267 $ 17,773 $ 39,330 $ 35,979 Less: non-forfeitable dividends on restricted stock 3 — 3 — Net income available to common shareholders $ 20,264 $ 17,773 $ 39,327 $ 35,979 Weighted average common shares outstanding 77,457,322 78,410,554 77,631,339 78,393,042 Weighted average potential dilutive common shares (1) 240,539 789,410 148,863 811,600 Weighted average common shares outstanding - assuming dilution 77,697,861 79,199,964 77,780,202 79,204,642 Net income per common share - basic $ 0.26 $ 0.23 $ 0.51 $ 0.46 Net income per common share - diluted $ 0.26 $ 0.22 $ 0.51 $ 0.45 (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. |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Related Party Transactions [Abstract] | |
Transactions with Related Parties | The following table presents the Company’s transactions with related parties for the three and six months ended June 30, 2015 and 2014: Three months ended June 30, Six months ended June 30, (Dollar amounts in thousands) 2015 2014 2015 2014 Total revenues (1)(2) $ 43,212 $ 41,701 $ 84,274 $ 82,307 Cost of revenues $ 504 $ 595 $ 1,090 $ 756 Rent and other fees $ 1,974 $ 2,084 $ 3,967 $ 4,001 Interest earned from and charged by affiliate Interest income $ 43 $ 50 $ 87 $ 102 (1) Total revenues from Popular as a percentage of revenues were 46%, 45%, 45% and 45% for each of the periods presented above. (2) Includes revenues generated from investee accounted for under the equity method of $0.5 million and $1.1 million for the three and six months ended June 30, 2015, respectively, and $0.7 million and $1.4 million for the corresponding 2014 periods. |
Summary of Balances of Transactions with Related Parties | At June 30, 2015 and December 31, 2014, EVERTEC had the following balances arising from transactions with related parties: (Dollar amounts in thousands) June 30, 2015 December 31, 2014 Cash and restricted cash deposits in affiliated bank $ 17,648 $ 13,566 Indemnification assets from Popular reimbursement (1) Accounts receivable $ 141 $ 1,428 Other due/to from affiliate Accounts receivable $ 21,472 $ 17,006 Prepaid expenses and other assets $ 1,355 $ 1,141 Accounts payable (2) $ 5,010 $ 5,260 Unearned income $ 9,569 $ 8,154 Other long-term liabilities (2) $ 45 $ 45 (1) Recorded in connection with reimbursements 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 June 30, 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) | 6 Months Ended |
Jun. 30, 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 Processing Business Solutions Other Total Three months ended June 30, 2015 Revenues 21,165 33,702 45,317 (6,943 ) (1) 93,241 Income from operations 9,626 14,511 13,467 (9,982 ) (2) 27,622 Three months ended June 30, 2014 Revenues 19,827 33,252 44,888 (6,634 ) (1) 91,333 Income from operations 8,777 15,314 12,113 (10,775 ) (2) 25,429 (1) Represents the elimination of intersegment revenues for services provided by the Payment Processing segment to the Merchant Acquiring segment, and other miscellaneous intersegment revenues. (2) Primarily represents non-operating depreciation and amortization expenses generated as a result of the Merger and certain non-recurring fees and expenses. (Dollar amounts in thousands) Merchant Acquiring, net Payment Processing Business Solutions Other Total Six months ended June 30, 2015 Revenues 41,256 66,802 90,181 (13,666 ) (1) 184,573 Income from operations 19,017 28,220 27,241 (19,850 ) (2) 54,628 Six months ended June 30, 2014 Revenues 39,118 65,094 87,805 (13,251 ) (1) 178,766 Income from operations 17,181 30,031 23,537 (20,431 ) (2) 50,318 (1) Represents the elimination of intersegment revenues for services provided by the Payment Processing segment to the Merchant Acquiring segment, and other miscellaneous intersegment revenues. (2) Primarily represents non-operating depreciation and amortization expenses generated as a result of the Merger and certain non-recurring fees and expenses. |
Reconciliation of Income from Operations to Consolidated Net Income | The reconciliation of income from operations to consolidated net income for the three and six months ended June 30, 2015 and 2014 is as follows: Three months ended June 30, Six months ended June 30, (Dollar amounts in thousands) 2015 2014 2015 2014 Segment income from operations Merchant Acquiring $ 9,626 $ 8,777 $ 19,017 $ 17,181 Payment Processing 14,511 15,314 28,220 30,031 Business Solutions 13,467 12,113 27,241 23,537 Total segment income from operations 37,604 36,204 74,478 70,749 Merger related depreciation and amortization and other unallocated expenses (1) (9,982 ) (10,775 ) (19,850 ) (20,431 ) Income from operations $ 27,622 $ 25,429 $ 54,628 $ 50,318 Interest expense, net (6,083 ) (6,422 ) (12,180 ) (13,256 ) Earnings of equity method investment 84 343 199 664 Other income 764 385 1,049 2,376 Income tax expense (2,120 ) (1,962 ) (4,366 ) (4,123 ) Net income $ 20,267 $ 17,773 $ 39,330 $ 35,979 (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 Pres30
The Company and Basis of Presentation - Additional Information (Detail) | Jun. 30, 2015Country |
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 - P
Property and Equipment, net - Property and Equipment, net (Detail) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Line Items] | ||
Buildings | $ 1,616 | $ 1,602 |
Data processing equipment | 85,698 | 77,588 |
Furniture and equipment | 8,602 | 7,540 |
Leasehold improvements | 3,156 | 2,964 |
Property and equipment | 99,072 | 89,694 |
Less-accumulated depreciation and amortization | (68,878) | (61,580) |
Depreciable assets, net | 30,194 | 28,114 |
Land | 1,433 | 1,421 |
Property and equipment, net | $ 31,627 | $ 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 - A
Property and Equipment, net - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation and amortization expense related to property and equipment | $ 3.3 | $ 3.8 | $ 7.4 | $ 7.7 |
Goodwill and Other Intangible33
Goodwill and Other Intangible Assets - Changes in Carrying Amount of Goodwill Allocated by Reportable Segments (Detail) $ in Thousands | 6 Months Ended |
Jun. 30, 2015USD ($) | |
Goodwill [Line Items] | |
Goodwill, Beginning Balance | $ 368,837 |
Foreign currency translation adjustments | 74 |
Goodwill, Ending Balance | 368,911 |
Merchant Acquiring, net [Member] | |
Goodwill [Line Items] | |
Goodwill, Beginning Balance | 138,121 |
Goodwill, Ending Balance | 138,121 |
Payment Processing [Member] | |
Goodwill [Line Items] | |
Goodwill, Beginning Balance | 184,228 |
Foreign currency translation adjustments | (26) |
Goodwill, Ending Balance | 184,202 |
Business Solutions [Member] | |
Goodwill [Line Items] | |
Goodwill, Beginning Balance | 46,488 |
Foreign currency translation adjustments | 100 |
Goodwill, Ending Balance | $ 46,588 |
Goodwill and Other Intangible34
Goodwill and Other Intangible Assets - Carrying Amount of Other Intangible Assets (Detail) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross amount | $ 555,682 | $ 547,412 |
Accumulated amortization | (238,251) | (212,828) |
Net carrying amount | $ 317,431 | $ 334,584 |
Customer relationships [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life in years | 14 years | 14 years |
Gross amount | $ 312,795 | $ 312,735 |
Accumulated amortization | (106,628) | (95,482) |
Net carrying amount | 206,167 | 217,253 |
Trademarks [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross amount | 39,950 | 39,950 |
Accumulated amortization | (16,454) | (14,722) |
Net carrying amount | $ 23,496 | $ 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 | $ 146,398 | $ 138,188 |
Accumulated amortization | (97,265) | (86,605) |
Net carrying amount | $ 49,133 | $ 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 | (17,904) | (16,019) |
Net carrying amount | $ 38,635 | $ 40,520 |
Goodwill and Other Intangible35
Goodwill and Other Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense for intangible assets | $ 12.7 | $ 12.6 | $ 25.4 | $ 25.3 |
Goodwill and Other Intangible36
Goodwill and Other Intangible Assets - Estimated Amortization Expenses (Detail) $ in Thousands | Jun. 30, 2015USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remaining 2,015 | $ 23,464 |
2,016 | 39,154 |
2,017 | 35,942 |
2,018 | 32,966 |
2,019 | 31,937 |
2,020 | $ 30,017 |
Debt and Short-Term Borrowing37
Debt and Short-Term Borrowings - Total Debt (Detail) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 | |
Debt Instrument [Line Items] | |||
Note payable | $ 5,000 | ||
Total debt | 666,197 | $ 693,912 | |
Term A due on April 17, 2018 [Member] | Senior Secured Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Credit facility | [1],[2] | 269,781 | 277,239 |
Term B due on April 17, 2020 [Member] | Senior Secured Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Credit facility | [2],[3] | 387,749 | 389,340 |
Expiring on April 17, 2018 [Member] | Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Credit facility | 4,000 | 23,000 | |
Note Payable due on October 1, 2017 [Member] | |||
Debt Instrument [Line Items] | |||
Note payable | [2] | 3,638 | $ 4,333 |
Note Payable due on July 1, 2017 [Member] | |||
Debt Instrument [Line Items] | |||
Note payable | [2] | $ 1,029 | |
[1] | Applicable margin of 2.50% at June 30, 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 June 30, 2015 and December 31, 2014. |
Debt and Short-Term Borrowing38
Debt and Short-Term Borrowings - Total Debt (Parenthetical) (Detail) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Note Payable due on October 1, 2017 [Member] | ||
Debt Instrument [Line Items] | ||
Debt, maturity date | Oct. 1, 2017 | Oct. 1, 2017 |
Note Payable due on July 1, 2017 [Member] | ||
Debt Instrument [Line Items] | ||
Debt, maturity date | Jul. 1, 2017 | Jul. 1, 2017 |
Senior Secured Credit Facility [Member] | Term A due on April 17, 2018 [Member] | ||
Debt Instrument [Line Items] | ||
Debt, maturity date | Apr. 17, 2018 | Apr. 17, 2018 |
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 | Apr. 17, 2020 | Apr. 17, 2020 |
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 | Apr. 17, 2018 | |
Revolving Credit Facility [Member] | Expiring on April 17, 2018 [Member] | ||
Debt Instrument [Line Items] | ||
Debt, maturity date | Apr. 17, 2018 | Apr. 17, 2018 |
Debt and Short-Term Borrowing39
Debt and Short-Term Borrowings - Additional Information (Detail) $ in Millions | 6 Months Ended | |
Jun. 30, 2015USD ($) | Dec. 31, 2014USD ($) | |
Debt Instrument [Line Items] | ||
Maximum secured leverage ratio | 6.60 | |
Note payable | $ 5 | |
Non interest bearing financing agreement | $ 1.1 | $ 4.6 |
Note Payable [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, term | 36 months | |
Senior Secured Term Loan A [Member] | ||
Debt Instrument [Line Items] | ||
Secured credit facilities | $ 270 | |
Debt, maturity date | Apr. 17, 2018 | |
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 | 1.875% | |
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] | ||
Margin interest rate | 2.00% | |
Senior Secured Term Loan A [Member] | LIBOR Floor [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Margin interest rate | 2.50% | |
Senior Secured Term Loan A [Member] | Base Rate [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Margin interest rate | 1.00% | |
Senior Secured Term Loan A [Member] | Base Rate [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Margin interest rate | 1.50% | |
Senior Secured Term Loan B [Member] | ||
Debt Instrument [Line Items] | ||
Secured credit facilities | $ 392 | |
Original principal amount | 0.25% | |
Debt, maturity date | Apr. 17, 2020 | |
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] | ||
Margin interest rate | 0.75% | |
Senior Secured Term Loan B [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Margin interest rate | 1.75% | |
Senior Secured Term Loan B [Member] | LIBOR Floor [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Margin interest rate | 2.50% | |
Senior Secured Term Loan B [Member] | LIBOR Floor [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Margin interest rate | 2.75% | |
Senior Secured Term Loan B [Member] | Base Rate [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Margin interest rate | 1.50% | |
Senior Secured Term Loan B [Member] | Base Rate [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Margin interest rate | 1.75% | |
Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Secured credit facilities | $ 100 | |
Debt, maturity date | Apr. 17, 2018 | |
Revolving Credit Facility [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Commitment fee for the unused portion | 0.125% | |
Revolving Credit Facility [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Commitment fee for the unused portion | 0.375% |
Financial Instruments and Fai40
Financial Instruments and Fair Value Measurements - Fair Value Measurements for Assets at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Indemnification assets: | ||
Software cost reimbursement | $ 141 | $ 1,428 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | ||
Indemnification assets: | ||
Software cost reimbursement | $ 141 | $ 1,428 |
Financial Instruments and Fai41
Financial Instruments and Fair Value Measurements - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Fair Value Disclosures [Abstract] | ||||
Unrealized (gain) loss of indemnification assets | $ (9) | $ (6) | $ (12) | $ 173 |
Termination dates of contracts end | Sep. 30, 2015 | |||
Merger transaction completed date | Sep. 30, 2010 | |||
Unobservable inputs related to the Company's indemnification assets, discount rate | 5.01% | |||
Projected cash flows | $ 100 |
Financial Instruments and Fai42
Financial Instruments and Fair Value Measurements - Carrying Value and Estimated Fair Values for Financial Instruments (Detail) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Indemnification assets: | ||
Software cost reimbursement, Carrying Amount | $ 141 | $ 1,428 |
Indemnification assets: | ||
Software cost reimbursement, Fair Value | 141 | 1,428 |
Senior Secured Term Loan A [Member] | ||
Financial liabilities: | ||
Senior secured term loan, Carrying Amount | 269,781 | 277,239 |
Financial liabilities: | ||
Senior secured term loan, Fair Value | 264,600 | 266,400 |
Senior Secured Term Loan B [Member] | ||
Financial liabilities: | ||
Senior secured term loan, Carrying Amount | 387,749 | 389,340 |
Financial liabilities: | ||
Senior secured term loan, Fair Value | $ 385,140 | $ 385,462 |
Financial Instruments and Fai43
Financial Instruments and Fair Value Measurements - Summary of Change in Fair Value of Level Three Assets (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Unrealized gain (loss) recognized in other expenses | $ (9) | $ (6) | $ (12) | $ 173 |
Indemnification Assets [Member] | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Beginning balance | 971 | 2,947 | 1,428 | 3,586 |
Payments received | (839) | (839) | (1,299) | (1,299) |
Unrealized gain (loss) recognized in other expenses | 9 | 6 | 12 | (173) |
Ending balance | $ 141 | $ 2,114 | $ 141 | $ 2,114 |
Share-based Compensation - Addi
Share-based Compensation - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expenses | $ 1.5 | $ 0.3 | $ 2.2 | $ 0.7 |
Stock Option [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total unrecognized cost for stock options | 1 | $ 1 | ||
Unrecognized compensation cost, weighted average period of recognition | 1 year 6 months 4 days | |||
Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total unrecognized cost for stock options | $ 10.8 | $ 10.8 | ||
Unrecognized compensation cost, weighted average period of recognition | 2 years 4 months 24 days | |||
Time Based Awards [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years |
Share-based Compensation - Summ
Share-based Compensation - Summary of RSU's Granted Under LTIP (Detail) - 6 months ended Jun. 30, 2015 - 2015 Long-Term Incentive Program [Member] - $ / shares | Total |
Awards with Market Conditions [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Units | 49,763 |
Weighted-Average Grant Date Fair Value | $ 29.86 |
Awards with Performance Condition [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Units | 67,382 |
Weighted-Average Grant Date Fair Value | $ 22.05 |
Awards with Service Conditions [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Units | 196,272 |
Weighted-Average Grant Date Fair Value | $ 22.11 |
Share-based Compensation - Su46
Share-based Compensation - Summary of Stock Option Activity (Detail) - Jun. 30, 2015 - $ / shares | Total |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Outstanding shares, Exercisable, Ending Balance | 83,333 |
Outstanding weighted average exercise prices, Exercisable, Ending Balance | $ 23.62 |
Share-based Compensation - Nonv
Share-based Compensation - Nonvested Restricted Shares Activity (Detail) - 6 months ended Jun. 30, 2015 - Restricted Stock Units - $ / shares | Total |
Nonvested restricted shares and RSUs | |
Nonvested shares, Beginning balance | 23,252 |
Nonvested shares, Forfeited | 6,205 |
Outstanding shares, Vested | 19,116 |
Outstanding shares, Granted | 553,242 |
Nonvested shares, Ending Balance | 551,173 |
Weighted-average grant date fair value | |
Weighted-average grant date fair value, beginning balance | $ 22.04 |
Weighted-average grant date fair value, Forfeited | 21.04 |
Outstanding weighted average exercise prices, Vested | 22.56 |
Outstanding weighted average exercise prices, Granted | 22.57 |
Weighted-average grant date fair value, Ending balance | $ 22.56 |
Income Tax - Components of Inco
Income Tax - Components of Income Tax Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Income Tax Disclosure [Abstract] | ||||
Current tax provision | $ 2,309 | $ 964 | $ 4,355 | $ 4,553 |
Deferred tax (benefit) provision | (189) | 998 | 11 | (430) |
Income tax expense | $ 2,120 | $ 1,962 | $ 4,366 | $ 4,123 |
Income Tax - Segregation of Inc
Income Tax - Segregation of Income Tax Expense (Benefit) Based on Location of Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Current tax provision | ||||
Current tax provision, Puerto Rico | $ 1,367 | $ 423 | $ 2,522 | $ 1,360 |
Current tax provision, United States | 160 | 217 | 301 | 415 |
Current tax provision, Foreign countries | 782 | 324 | 1,532 | 2,778 |
Total current tax provision | 2,309 | 964 | 4,355 | 4,553 |
Deferred tax (benefit) provision | ||||
Deferred tax (benefit) provision, Puerto Rico | 111 | 805 | 410 | 832 |
Deferred tax (benefit) provision, United States | (32) | (2) | (58) | (3) |
Deferred tax (benefit) provision, Foreign countries | (268) | 195 | (341) | (1,259) |
Total deferred tax (benefit) provision | $ (189) | $ 998 | $ 11 | $ (430) |
Income Tax - Additional Informa
Income Tax - Additional Information (Detail) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
Income Tax Disclosure [Abstract] | ||
Deferred tax asset, gross | $ 8,300,000 | $ 9,700,000 |
Deferred tax liability, gross | 25,400,000 | $ 26,800,000 |
Total available gross net operating loss | 5,200,000 | |
Future realized windfall tax benefit | 4,200,000 | |
Total available gross net operating loss including windfall benefit | 24,000,000 | |
Open tax uncertainty positions | $ 0 |
Net Income Per Common Share - S
Net Income Per Common Share - Schedule of Reconciliation of Numerator and Denominator of Income Per Common Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | ||
Earnings Per Share [Abstract] | |||||
Net income | $ 20,267 | $ 17,773 | $ 39,330 | $ 35,979 | |
Less: non-forfeitable dividends on restricted stock | 3 | 3 | |||
Net income available to common shareholders | $ 20,264 | $ 17,773 | $ 39,327 | $ 35,979 | |
Weighted average common shares outstanding | 77,457,322 | 78,410,554 | 77,631,339 | 78,393,042 | |
Weighted average potential dilutive common shares | [1] | 240,539 | 789,410 | 148,863 | 811,600 |
Weighted average common shares outstanding - assuming dilution | 77,697,861 | 79,199,964 | 77,780,202 | 79,204,642 | |
Net income per common share - basic | $ 0.26 | $ 0.23 | $ 0.51 | $ 0.46 | |
Net income per common share - diluted | $ 0.26 | $ 0.22 | $ 0.51 | $ 0.45 | |
[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. |
Net Income Per Common Share - A
Net Income Per Common Share - Additional Information (Detail) - $ / shares | Jun. 05, 2015 | May. 06, 2015 | Mar. 19, 2015 | Feb. 18, 2015 |
Earnings Per Share [Abstract] | ||||
Cash dividend declared per common share | $ 0.10 | $ 0.10 | ||
Cash dividend paid per common share | $ 0.10 | $ 0.10 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Commitments and Contingencies [Line Items] | ||||
Rent expense of office facilities and real estate | $ 2.1 | $ 2.1 | $ 4.1 | $ 4.1 |
Rent expense for telecommunications and other equipment | 1.3 | $ 1.6 | 2.6 | $ 3 |
Outstanding letter of credit | $ 0.9 | $ 0.9 | ||
Maximum [Member] | ||||
Commitments and Contingencies [Line Items] | ||||
Outstanding letter of credit, maturity term | 3 months |
Related Party Transactions - Tr
Related Party Transactions - Transactions with Related Parties (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | ||
Transaction [Abstract] | |||||
Total revenues | [1],[2] | $ 43,212 | $ 41,701 | $ 84,274 | $ 82,307 |
Cost of revenues | 504 | 595 | 1,090 | 756 | |
Rent and other fees | 1,974 | 2,084 | 3,967 | 4,001 | |
Interest earned from and charged by affiliate | |||||
Interest income | $ 43 | $ 50 | $ 87 | $ 102 | |
[1] | Includes revenues generated from investee accounted for under the equity method of $0.5 million and $1.1 million for the three and six months ended June 30, 2015, respectively, and $0.7 million and $1.4 million for the corresponding 2014 periods. | ||||
[2] | Total revenues from Popular as a percentage of revenues were 46%, 45%, 45% and 45% for each of the periods presented above. |
Related Party Transactions - 55
Related Party Transactions - Transactions with Related Parties (Parenthetical) (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Transactions with Third Party [Line Items] | ||||
Revenues generated from investee accounted for under equity method | $ 0.5 | $ 0.7 | $ 1.1 | $ 1.4 |
Popular [Member] | ||||
Transactions with Third Party [Line Items] | ||||
Total revenues from Popular | 46.00% | 45.00% | 45.00% | 45.00% |
Related Party Transactions - Su
Related Party Transactions - Summary of Balances of Transactions with Related Parties (Detail) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 | |
Related Party Transactions [Abstract] | |||
Cash and restricted cash deposits in affiliated bank | $ 17,648 | $ 13,566 | |
Indemnification assets from Popular reimbursement | |||
Accounts receivable | [1] | 141 | 1,428 |
Other due/to from affiliate | |||
Accounts receivable | 21,472 | 17,006 | |
Prepaid expenses and other assets | 1,355 | 1,141 | |
Accounts payable | [2] | 5,010 | 5,260 |
Unearned income | 9,569 | 8,154 | |
Other long-term liabilities | [2] | $ 45 | $ 45 |
[1] | Recorded in connection with reimbursements from Popular regarding certain software license fees. | ||
[2] | Includes an account payable of $0.2 million and a long-term liability of $45,000 for both June 30, 2015 and December 31, 2014, related to the unvested portion of stock options as a result of the equitable adjustment approved by our Board of Directors on December 18, 2012 that will be payable to executive officers and employees upon vesting of stock options. |
Related Party Transactions - 57
Related Party Transactions - Summary of Balances of Transactions with Related Parties (Parenthetical) (Detail) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 | |
Transactions with Third Party [Line Items] | |||
Accounts payable | [1] | $ 5,010,000 | $ 5,260,000 |
Other long-term liabilities | [1] | 45,000 | 45,000 |
Unvested Stock Options [Member] | |||
Transactions with Third Party [Line Items] | |||
Accounts payable | 200,000 | 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 June 30, 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 - Ad
Related Party Transactions - Additional Information (Detail) $ in Millions | Jun. 30, 2015USD ($) |
Related Party Transactions [Abstract] | |
Letter of credit issued by Popular | $ 4.2 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) | 6 Months Ended |
Jun. 30, 2015Segment | |
Segment Reporting [Abstract] | |
Number of operating business segments | 3 |
Segment Information - Informati
Segment Information - Information about Operations by Business Segments (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | ||
Segment Reporting Information [Line Items] | |||||
Revenues | $ 93,241 | $ 91,333 | $ 184,573 | $ 178,766 | |
Income from operations | 27,622 | 25,429 | 54,628 | 50,318 | |
Operating Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Income from operations | 37,604 | 36,204 | 74,478 | 70,749 | |
Operating Segments [Member] | Merchant Acquiring, net [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 21,165 | 19,827 | 41,256 | 39,118 | |
Income from operations | 9,626 | 8,777 | 19,017 | 17,181 | |
Operating Segments [Member] | Payment Processing [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 33,702 | 33,252 | 66,802 | 65,094 | |
Income from operations | 14,511 | 15,314 | 28,220 | 30,031 | |
Operating Segments [Member] | Business Solutions [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 45,317 | 44,888 | 90,181 | 87,805 | |
Income from operations | 13,467 | 12,113 | 27,241 | 23,537 | |
Segment Reconciling Items [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Income from operations | [1] | (9,982) | (10,775) | (19,850) | (20,431) |
Other [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | [2] | $ (6,943) | $ (6,634) | $ (13,666) | $ (13,251) |
[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 - Reconcili
Segment Information - Reconciliation of Income from Operations to Consolidated Net Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | ||
Segment income from operations | |||||
Income from operations | $ 27,622 | $ 25,429 | $ 54,628 | $ 50,318 | |
Interest expense, net | (6,083) | (6,422) | (12,180) | (13,256) | |
Earnings of equity method investment | 84 | 343 | 199 | 664 | |
Other income | 764 | 385 | 1,049 | 2,376 | |
Income tax expense | (2,120) | (1,962) | (4,366) | (4,123) | |
Net income | 20,267 | 17,773 | 39,330 | 35,979 | |
Operating Segments [Member] | |||||
Segment income from operations | |||||
Income from operations | 37,604 | 36,204 | 74,478 | 70,749 | |
Operating Segments [Member] | Merchant Acquiring, net [Member] | |||||
Segment income from operations | |||||
Income from operations | 9,626 | 8,777 | 19,017 | 17,181 | |
Operating Segments [Member] | Payment Processing [Member] | |||||
Segment income from operations | |||||
Income from operations | 14,511 | 15,314 | 28,220 | 30,031 | |
Operating Segments [Member] | Business Solutions [Member] | |||||
Segment income from operations | |||||
Income from operations | 13,467 | 12,113 | 27,241 | 23,537 | |
Segment Reconciling Items [Member] | |||||
Segment income from operations | |||||
Income from operations | [1] | $ (9,982) | $ (10,775) | $ (19,850) | $ (20,431) |
[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
Subsequent Events - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | May. 06, 2015 | Feb. 18, 2015 | Aug. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 |
Subsequent Event [Line Items] | |||||
Cash dividend declared per common share | $ 0.10 | $ 0.10 | |||
Common stock dividends payable, date declared | Aug. 5, 2015 | ||||
Common stock dividends payable, date to be paid | Sep. 3, 2015 | ||||
Common stock dividends payable, date of record | Aug. 17, 2015 | ||||
Scenario Forecast [Member] | Special Termination Benefits [Member] | |||||
Subsequent Event [Line Items] | |||||
Compensation expense related to special termination benefits | $ 2.8 | ||||
Subsequent Events [Member] | |||||
Subsequent Event [Line Items] | |||||
Cash dividend declared per common share | $ 0.10 |
Uncategorized Items - evtc-2015
Label | Element | Value |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber | 316,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber | 316,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice | $ 19.56 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice | $ 19.56 |