Form 8-K NET 1 UEPS TECHNOLOGIES For: Nov 06

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 6, 2014

NET 1 UEPS TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)

Florida	000-31203	98-0171860
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)

President Place, 4th Floor, Cnr. Jan Smuts Avenue and Bolton Road
Rosebank, Johannesburg, South Africa
� � � � � � � � � � �(Address of principal executive offices)	(ZIP Code)

Registrant�s telephone number, including area code: 011-27-11-343-2000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[� ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[� ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a -12)

[ �] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d -2(b))

[ �] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e -4(c))

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Item 2.02. Results of Operations and Financial Condition.

The following information is furnished pursuant to Item 2.02, �Results of Operations and Financial Condition�.

On November 6, 2014, we issued a press release setting forth our financial results for the first quarter ended September 30, 2014. A copy of the press release is attached as Exhibit 99.1.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.	Description
�	�
99.1	Press Release, dated November 6, 2014, issued by Net 1 UEPS Technologies, Inc.

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SIGNATURES

�����Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

�	NET 1 UEPS TECHNOLOGIES, INC.
�	�
�	�
Date: November 6, 2014	By: /s/ Serge Belamant
�	� � � �Dr. Serge C.P. Belamant
�	� � � �Chief Executive Officer and Chairman of
�	� � � �the Board

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Net 1 UEPS Technologies, Inc. Reports First Quarter 2015 Results

• Q1 2015 Revenue and FEPS of $156.4 million and $0.60, a constant currency increase of 36% and 74% respectively.
  
• SASSA has issued RFP for five-year contract related to payment of social welfare grants.

JOHANNESBURG, November 6, 2014 � Net 1 UEPS Technologies, Inc. (Nasdaq: UEPS; JSE: NT1) today released results for the first quarter of fiscal 2015.

Summary Financial Metrics

�

�

Three months ended September 30,

�

�

�

�

�

�

�

�

�

% change

�

�

% change

�

�

�

2014

�

�

2013

�

�

in USD

�

�

in ZAR

�

(All figures in USD �000s except per share data)

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�

�

�

�

�

�

�

�

�

�

�

Revenue

�

156,441

�

�

123,494

�

�

27%

�

�

36%

�

GAAP net income

�

24,089

�

�

11,596

�

�

108%

�

�

123%

�

Fundamental net income (1)

�

28,155

�

�

16,823

�

�

67%

�

�

80%

�

GAAP earnings per share ($)

�

0.51

�

�

0.25

�

�

101%

�

�

116%

�

Fundamental earnings per share ($) (1)

�

0.60

�

�

0.37

�

�

62%

�

�

74%

�

Fully-diluted shares outstanding (�000�s)

�

47,335

�

�

45,801

�

�

4%

�

�

�

�

Average period USD/ ZAR exchange rate

�

10.76

�

�

10.00

�

�

8%

�

�

�

�

(1) Fundamental net income and earnings per share are non-GAAP measures and are described below under �Use of Non-GAAP Measures�Fundamental net income and fundamental earnings per share.� See Attachment B for a reconciliation of GAAP net income to fundamental net income and earnings per share.

Factors impacting comparability of our Q1 2015 and Q1 2014 results

• Unfavorable impact from the strengthening of the US dollar against the ZAR: The US dollar appreciated by 7% against the ZAR during Q1 2015, which negatively impacted our reported results;
• Increased contribution by KSNET: Our results were positively impacted by growth in our Korean operations;
• Increase in the number SASSA grants paid: Our revenue and operating income has increased as a result of the higher number of SASSA UEPS/EMV cardholders paid during Q1 2015 compared with Q1 2014; and
• Continued growth in financial inclusion services: We continued to grow our financial inclusion services offerings during Q1 2015, which has result in higher revenues and operating income from more sales of low-margin prepaid airtime and UEPS-based lending.

Comments and Outlook

"Our superb results for Q1 2015, once again reflect our continued focus on growing our existing businesses and implementing carefully selected new initiatives," said Dr. Serge Belamant, Chairman and CEO of Net1. "We achieved these results despite using significant management bandwidth to repel our detractors' attempts to disrupt our business, while at the same time preparing for the new SASSA tender," he concluded.

"We are pleased with the sustained momentum of our quarterly operating results, which underpins our fiscal 2015 targets," said Herman Kotze, Chief Financial Officer of Net1. "For fiscal 2015, we now expect fundamental earnings per share of at least $2.14, assuming a constant currency base of ZAR10.40/$1 and a share count of 46.5 million shares," he concluded.

SASSA issues Request for Proposal for five-year contract relating to the payment of social grants

As ordered by the South African Constitutional Court in its April 2014 ruling, SASSA has initiated a new tender process for a five-year contract relating to the payment of social grants. SASSA issued a request for proposals on October 22, 2014. Bidders are required to submit proposals by December 12, 2014. We cannot predict with certainty what the timing or ultimate outcome of the tender process will be, or if a new tender award will be made at all after the process is complete. We intend to participate in the new tender.

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Results of Operations by Segment and Liquidity

Our operating metrics will be updated and posted on our website (www.net1.com).

South African transaction processing

The South African transaction processing segment consists mainly of pension and welfare benefit distribution services provided to the South African government, and transaction processing for retailers, utilities, medical-related claim service customers and banks.

Segment revenue was $60.3 million in Q1 2015, up 5% compared with Q1 2014 in USD and up 13% on a constant currency basis. In ZAR, the increase in segment revenues was primarily due to more low-margin transaction fees generated from beneficiaries using the South African National Payment System and more intersegment transaction processing activities. In addition, revenue from the distribution of social welfare grants grew modestly during the year and was in-line with the increase in unique welfare cardholder recipients, net of removal of invalid and fraudulent beneficiaries, partially offset by the loss of MediKredit revenue as a result of the sale of that business. Segment operating income margin in Q1 2015 and Q1 2014 was 23% and 11%, respectively, and has increased primarily due to more higher-margin intersegment transaction processing activities, the elimination of MediKredit losses and an increase in the number of beneficiaries paid in fiscal 2015.

International transaction processing

The International transaction processing segment consists mainly of payment processing services for merchants and card issuers in South Korea. The segment also includes transaction processing of UEPS-enabled smartcards in Botswana and transaction processing of medical-related claims in the United States.

KSNET contributes the majority of our revenues and operating income in this segment. Segment revenue was $43.2 million in Q1 2015, up 15% compared with Q1 2014 in USD and 24% on a constant currency basis. Revenue and operating income increased primarily due to higher transaction volume at KSNET during Q1 2015. Segment operating income margin in Q1 2015 and Q1 2014 was 17% and 15%, respectively.

Financial inclusion and applied technologies

The Financial inclusion and applied technologies segment includes our smart card accounts, lending and life insurance businesses. This segment also includes the economics from merchants and card holders using our merchant acquiring system, the sale of prepaid products (electricity and airtime) and the sale of hardware and software.

Segment revenue was $65.2 million in Q1 2015, up 77% compared with Q1 2014 in USD and 91% on a constant currency basis. Revenue and operating income increased primarily due to higher prepaid airtime sales driven by the rollout of our prepaid airtime product, an increase in the number of UEPS-based loans as we rolled out our product nationally and an increase in intersegment revenues, offset by lower ad hoc terminal and smart card sales. Q1 2014 operating income includes expenses related to the national roll-out of our UEPS-based lending offering and the establishment of the allowance for doubtful finance loans in Q1 2014. Smart Life did not contribute to operating income in Q1 2015 and 2014 due to the FSB suspension of its license.

Notwithstanding the national roll-out expenses incurred in fiscal 2014, operating income margin for the Financial inclusion and applied technologies segment decreased to 27% from 35%, primarily as a result of more low-margin prepaid airtime and the sale of competitively priced financial inclusion products to address the needs of the broader market.

Corporate/eliminations

Corporate/eliminations generally includes acquisition-related intangible asset amortization; expenditure related to compliance with the Sarbanes-Oxley Act of 2002; non-employee directors� fees; employee and executive bonuses; stock-based compensation; legal fees; audit fees; directors and officers insurance premiums; telecommunications expenses; property-related expenditures including utilities, rental, security and maintenance; and elimination entries.

The decrease in our corporate expenses was primarily due to lower US government investigations-related and US lawsuit expenses, audit fees and other corporate head office-related expenses, which was partially offset by increases in acquisition-related intangible asset amortization.

Cash flow and liquidity

At September 30, 2014, we had cash and cash equivalents of $81.2 million, up from $58.7 million at June 30, 2014. The increase in our cash balances from June 30, 2014, was primarily due to the expansion of our all of our core businesses during the quarter, and to a lesser extent due to the cash conservation resulting from the sale of loss incurring businesses.

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Excluding the impact of interest received, interest paid under our Korean debt and taxes presented in the table below, the increase in cash from operating activities resulted from improved trading activity during fiscal 2015. Capital expenditures for Q1 2015 and 2014 were $9.4 million and $5.6 million, respectively, and have increased primarily due to the acquisition of more payment processing terminals in South Korea.

Use of Non-GAAP Measures

US securities laws require that when we publish any non-GAAP measures, we disclose the reason for using the non-GAAP measure and provide reconciliation to the directly comparable GAAP measure. The presentation of fundamental net income and fundamental earnings per share and headline earnings per share are non-GAAP measures.

Fundamental net income and fundamental earnings per share

Fundamental net income and earnings per share is GAAP net income and earnings per share adjusted for (1) the amortization of acquisition-related intangible assets (net of deferred taxes), (2) stock-based compensation charges and (3) unusual non-recurring items, including the amortization of KSNET debt facility fees and US government investigations-related and US lawsuit expenses. Management believes that the fundamental net income and earnings per share metric enhances its own evaluation, as well as an investor�s understanding, of our financial performance. Attachment B presents the reconciliation between GAAP and fundamental net income and earnings per share.

Headline earnings per share (�HEPS�)

The inclusion of HEPS in this press release is a requirement of our listing on the JSE. HEPS basic and diluted is calculated using net income which has been determined based on GAAP. Accordingly, this may differ to the headline earnings per share calculation of other companies listed on the JSE as these companies may report their financial results under a different financial reporting framework, including but not limited to, International Financial Reporting Standards.

HEPS basic and diluted is calculated as GAAP net income adjusted for the profit on sale of property, plant and equipment. Attachment C presents the reconciliation between our net income used to calculate earnings per share basic and diluted and HEPS basic and diluted and the calculation of the denominator for headline diluted earnings per share.

Conference Call

To participate in the call, dial 1-855-481-5362 (US and Canada), 0808-162-4061 (U.K. only) or 0-800-200-648 (South Africa only) ten minutes prior to the start of the call. Callers should request �Net1 call� upon dial-in. The call will also be webcast on the Net1 homepage, www.net1.com. Please click on the webcast link at least ten minutes prior to the call. A webcast of the call will be available for replay on the Net1 website through November 30, 2014.

About Net1 (www.net1.com)

Net1 is a leading provider of alternative payment systems that leverage its Universal Electronic Payment System (�UEPS�), to facilitate biometrically secure, real-time electronic transaction processing to unbanked and under-banked populations of developing economies around the world in an online or offline environment. Net1's UEPS/EMV solution is interoperable with global EMV standards that seamlessly permit access to all the UEPS functionality in a traditional EMV environment. In addition to payments, UEPS can be used for banking, healthcare management, payroll, remittances, voting and identification.

Net1 operates market-leading payment processors in South Africa and the Republic of Korea. In addition, Net1's proprietary MVC technology offers secure mobile payments and banking services in developed and emerging countries.

Net1 has a primary listing on NASDAQ and a secondary listing on the Johannesburg Stock Exchange.

Forward-Looking Statements

This announcement contains forward-looking statements that involve known and unknown risks and uncertainties. A discussion of various factors that cause our actual results, levels of activity, performance or achievements to differ materially from those expressed in such forward-looking statements are included in our filings with the Securities and Exchange Commission. We undertake no obligation to revise any of these statements to reflect future events.

Investor Relations Contact:
Dhruv Chopra
Head of Investor Relations
Phone: +1 917-767-6722
Email: [email protected]

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NET 1 UEPS TECHNOLOGIES, INC.
Unaudited Condensed Consolidated Statements of Operations

�	�	Three months ended				�
�	�	September 30,				�
�	�	2014	�	�	2013	�
�	�	(In thousands, except per share data)				�
REVENUE	$	�156,441	�	$	�123,494	�
EXPENSE	�	�	�	�	�	�
� � � � �Cost of goods sold, IT processing, servicing and support	�	74,406	�	�	56,559	�
� � � � �Selling, general and administration	�	38,736	�	�	40,506	�
� � � � �Depreciation and amortization	�	10,174	�	�	10,029	�
OPERATING INCOME	�	33,125	�	�	16,400	�
INTEREST INCOME	�	4,090	�	�	3,319	�
INTEREST EXPENSE	�	1,312	�	�	1,752	�
INCOME BEFORE INCOME TAX EXPENSE	�	35,903	�	�	17,967	�
INCOME TAX EXPENSE	�	11,648	�	�	6,485	�
NET INCOME BEFORE EARNINGS FROM EQUITY-ACCOUNTED	�	�	�	�	�	�
INVESTMENTS	�	24,255	�	�	11,482	�
EARNINGS FROM EQUITY-ACCOUNTED INVESTMENTS	�	92	�	�	103	�
NET INCOME	�	24,347	�	�	11,585	�
LESS (ADD) NET (INCOME) LOSS ATTRIBUTABLE TO NON-	�	�	�	�	�	�
CONTROLLING INTEREST	�	258	�	�	(11	)
NET INCOME ATTRIBUTABLE TO NET1	$	�24,089	�	$	�11,596	�
Net income per share, in United States dollars	�	�	�	�	�	�
� � � � �Basic earnings attributable to Net1 shareholders	$	0.51	�	$	0.25	�
� � � � �Diluted earnings attributable to Net1 shareholders	$	0.51	�	$	0.25	�

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NET 1 UEPS TECHNOLOGIES, INC.
Unaudited Condensed Consolidated Balance Sheets

�	�	Unaudited	�	�	(A)	�
�	�	September 30,	�	�	June 30,	�
�	�	2014	�	�	2014	�
�	�	(In thousands, except share data)				�
ASSETS��						�
CURRENT ASSETS	�	�	�	�	�	�
� � �Cash and cash equivalents	$	�81,185	�	$	�58,672	�
� � �Pre-funded social welfare grants receivable	�	4,863	�	�	4,809	�
� � �Accounts receivable, net of allowances of � September: $2,075; June: $1,313	�	136,701	�	�	148,067	�
� � �Finance loans receivable, net of allowances of � September: $3,136; June: $3,083	�	53,884	�	�	53,124	�
� � �Inventory	�	12,200	�	�	10,785	�
� � �Deferred income taxes	�	7,045	�	�	7,451	�
� � � � � � �Total current assets before settlement assets	�	295,878	�	�	282,908	�
� � � � � � � � � � �Settlement assets	�	724,279	�	�	725,987	�
� � � � � � � � � � � � � � �Total current assets	�	1,020,157	�	�	1,008,895	�
PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of �	�	�	�	�	�	�
September: $92,753; June: $91,422	�	48,739	�	�	47,797	�
EQUITY-ACCOUNTED INVESTMENTS	�	934	�	�	878	�
GOODWILL	�	179,003	�	�	186,576	�
INTANGIBLE ASSETS, net of accumulated amortization of � September: $79,458; June: $78,781		62,148			68,514
OTHER LONG-TERM ASSETS, including reinsurance assets	�	36,533	�	�	38,285	�
� � �TOTAL ASSETS	�	1,347,514	�	�	1,350,945	�
LIABILITIES��						�
CURRENT LIABILITIES	�	�	�	�	�	�
� � �Accounts payable	�	14,941	�	�	17,101	�
� � �Other payables	�	43,346	�	�	42,257	�
� � �Current portion of long-term borrowings	�	14,276	�	�	14,789	�
� � �Income taxes payable	�	13,581	�	�	7,676	�
� � � � � � �Total current liabilities before settlement obligations	�	86,144	�	�	81,823	�
Settlement obligations	�	724,279	�	�	725,987	�
� � � � � � � � � � � � � � �Total current liabilities	�	810,423	�	�	807,810	�
DEFERRED INCOME TAXES	�	14,078	�	�	15,522	�
LONG-TERM BORROWINGS	�	61,288	�	�	62,388	�
OTHER LONG-TERM LIABILITIES, including insurance policy liabilities	�	22,396	�	�	23,477	�
� � �TOTAL LIABILITIES	�	908,185	�	�	909,197	�
COMMITMENTS AND CONTINGENCIES	�	�	�	�	�	�
EQUITY��						�
� � �COMMON STOCK	�	�	�	�	�	�
�����������������Authorized: 200,000,000 with $0.001 par value; Issued and outstanding shares, net of treasury - September: 46,475,623; June: 47,819,299		64			63
� � �PREFERRED STOCK	�	�	�	�	�	�
� � � � � � � � �Authorized shares: 50,000,000 with $0.001 par value;	�	�	�	�	�	�
� � � � � � � � �Issued and outstanding shares, net of treasury: September: -; June: -	�	-	�	�	-	�
� � �ADDITIONAL PAID-IN-CAPITAL	�	210,708	�	�	202,401	�
� � �TREASURY SHARES, AT COST: September: 18,057,228; June: 15,883,212	�	(214,520	)	�	(200,681	)
� � �ACCUMULATED OTHER COMPREHENSIVE LOSS	�	(104,126	)	�	(82,741	)
� � �RETAINED EARNINGS	�	547,222	�	�	522,729	�
� � � � � � �TOTAL NET1 EQUITY	�	439,348	�	�	441,771	�
� � � � � � �NON-CONTROLLING INTEREST	�	(19	)	�	(23	)
� � � � � � � � � � �TOTAL EQUITY	�	439,329	�	�	441,748	�
� � � � � � � � � � � � � � �TOTAL LIABILITIES AND SHAREHOLDERS� EQUITY	$	�1,347,514	�	$	�1,350,945	�

(A) � Derived from audited financial statements

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NET 1 UEPS TECHNOLOGIES, INC.
Unaudited Condensed Consolidated Statements of Cash Flows

�	�	Three months ended				�
�	�	September 30,				�
�	�	2014	�	�	2013	�
�	�	(In thousands)				�
Cash flows from operating activities	�	�	�	�	�	�
Net income	$	�24,347	�	$	�11,585	�
Depreciation and amortization	�	10,174	�	�	10,029	�
Earnings from equity-accounted investments	�	(92	)	�	(103	)
Fair value adjustments	�	413	�	�	(133	)
Interest payable	�	1,159	�	�	972	�
Profit on disposal of plant and equipment	�	(122	)	�	(1	)
Stock-based compensation charge	�	916	�	�	930	�
Facility fee amortized	�	82	�	�	69	�
Decrease (Increase) in accounts receivable, pre-funded social welfare grants receivable	�	�	�	�	�	�
and finance loans receivable	�	9,470	�	�	(23,101	)
(Increase) Decrease in inventory	�	(2,123	)	�	1,011	�
Decrease in accounts payable and other payables	�	(10,933	)	�	(8,668	)
Increase in taxes payable	�	6,611	�	�	6,921	�
Decrease in deferred taxes	�	(390	)	�	(1,187	)
� �Net cash provided by (used in) operating activities	�	39,512	�	�	(1,676	)
Cash flows from investing activities	�	�	�	�	�	�
Capital expenditures	�	(9,378	)	�	(5,616	)
Proceeds from disposal of property, plant and equipment	�	241	�	�	48	�
Proceeds from sale of business	�	1,895	�	�	-	�
Other investing activities, net	�	-	�	�	(1	)
Net change in settlement assets	�	(43,054	)	�	51,773	�
� �Net cash (used in) provided by investing activities	�	(50,296	)	�	46,204	�
Cash flows from financing activities	�	�	�	�	�	�
Acquisition of treasury stock	�	(9,151	)	�	-	�
Sale of equity to non-controlling interest	�	1,407	�	�	-	�
Long-term borrowings utilized	�	1,097	�	�	-	�
Proceeds from issue of common stock	�	989	�	�	-	�
Net change in settlement obligations	�	43,054	�	�	(51,773	)
� �Net cash provided by (used in) financing activities	�	37,396	�	�	(51,773	)
Effect of exchange rate changes on cash	�	(4,099	)	�	1,250	�
Net increase (decrease) in cash and cash equivalents	�	22,513	�	�	(5,995	)
Cash and cash equivalents � beginning of period	�	58,672	�	�	53,665	�
Cash and cash equivalents � end of period	$	�81,185	�	$	�47,670	�

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Net 1 UEPS Technologies, Inc.

Attachment A

Operating segment revenue, operating income and operating margin:

Three months ended September 30, 2014 and 2013 and June 30, 2014

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�

�

�

�

�

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Change � constant

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�

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Change - actual

�

�

exchange rate(1)

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�

�

�

�

�

�

�

�

�

�

Q1 �15

�

�

Q1 �15

�

�

Q1 �15

�

�

Q1 �15

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vs

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vs

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vs

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Key segmental data, in $ �000, Revenue:

�

Q1 �15

�

�

Q1 �14

�

�

Q4 �14

�

�

Q1�14

�

�

Q4 �14

�

�

Q1�14

�

�

Q4 �14

�

South African transaction processing

$

60,252

�

$

57,161

�

$

88,265

�

�

5%

�

�

(32%

)

�

13%

�

�

(30%

)

International transaction processing

�

43,204

�

�

37,541

�

�

42,201

�

�

15%

�

�

2%

�

�

24%

�

�

6%

�

Financial inclusion and applied technologies

�

65,197

�

�

36,796

�

�

64,093

�

�

77%

�

�

2%

�

�

91%

�

�

5%

�

� � � � �Subtotal: Operating segments

�

168,653

�

�

131,498

�

�

194,559

�

�

28%

�

�

(13%

)

�

38%

�

�

(11%

)

� � � � �Intersegment eliminations

�

(12,212

)

�

(8,004

)

�

(11,806

)

�

53%

�

�

3%

�

�

64%

�

�

7%

�

�����������������Consolidated revenue

$

156,441

�

$

123,494

�

$

182,753

�

�

27%

�

�

(14%

)

�

36%

�

�

(12%

)

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Operating income (loss):

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

South African transaction processing

$

13,639

�

$

6,461

�

$

38,675

�

�

111%

�

�

(65%

)

�

127%

�

�

(64%

)

International transaction processing

�

7,349

�

�

5,524

�

�

6,647

�

�

33%

�

�

11%

�

�

43%

�

�

14%

�

Financial inclusion and applied technologies

�

17,607

�

�

12,835

�

�

18,126

�

�

37%

�

�

(3%

)

�

48%

�

�

0%

�

� � � � �Subtotal: Operating segments

�

38,595

�

�

24,820

�

�

63,448

�

�

55%

�

�

(39%

)

�

67%

�

�

(37%

)

� � � � �Corporate/Eliminations

�

(5,470

)

�

(8,420

)

�

(20,801

)

�

(35%

)

�

(74%

)

�

(30%

)

�

(73%

)

� � � � � � � � �Consolidated operating income

$

33,125

�

$

16,400

�

$

42,647

�

�

102%

�

�

(22%

)

�

117%

�

�

(20%

)

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Operating income margin (%)

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

South African transaction processing

�

23%

�

�

11%

�

�

44%

�

�

�

�

�

�

�

�

�

�

�

�

�

International transaction processing

�

17%

�

�

15%

�

�

16%

�

�

�

�

�

�

�

�

�

�

�

�

�

Financial inclusion and applied technologies

�

27%

�

�

35%

�

�

28%

�

�

�

�

�

�

�

�

�

� � � � �Consolidated operating margin

�

21%

�

�

13%

�

�

23%

�

�

�

�

�

�

�

�

�

�

�

�

�

(1) � This information shows what the change in these items would have been if the USD/ ZAR exchange rate that prevailed during the first quarter of fiscal 2015 also prevailed during the first quarter of fiscal 2014 and the fourth quarter of fiscal 2014.

---

Net 1 UEPS Technologies, Inc.

Attachment B

Reconciliation of GAAP net income and earnings per share, basic, to fundamental net income and earnings per share, basic:

Three months ended September 30, 2014 and 2013

�

�

�

�

�

�

�

�

EPS,

�

�

�

�

�

�

�

�

EPS,

�

�

�

Net income

�

�

basic

�

�

Net income

�

�

basic

�

�

�

(USD�000)

�

(USD)

�

�

(ZAR�000)

�

�

(ZAR)

�

�

�

2014

�

�

2013

�

�

2014

�

�

�2013

�

�

2014

�

�

2013

�

�

2014

�

�

2013

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

GAAP

�

24,089

�

�

11,596

�

�

0.51

�

�

0.25��

�

�

258,789

�

�

115,959

�

�

5.48

�

�

2.54

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

� � �Intangible asset amortization, net .

�

2,941

�

�

2,832

�

�

�

�

�

�

�

�

31,601

�

�

28,317

�

�

�

�

�

�

�

� � �Stock-based compensation charge

�

916

�

�

930

�

�

�

�

�

�

�

�

9,854

�

�

9,300

�

�

�

�

�

�

�

��� �Facility fees for KSNET debt

�

82

�

�

69

�

�

�

�

�

�

�

�

882

�

�

690

�

�

�

�

�

�

�

���� US government investigations- related and US lawsuit expenses

�

127

�

�

1,396

�

�

�

�

�

�

�

1,366

�

�

13,960

�

�

�

�

�

� � � � � � � � �Fundamental

�

28,155

�

�

16,823

�

�

0.60

�

�

0.37��

�

�

302,492

�

�

168,226

�

�

6.41

�

�

3.69

�

Net 1 UEPS Technologies, Inc.

Attachment C

Reconciliation of net income used to calculate earnings per share basic and diluted and headline earnings per share basic and diluted:

Three months ended September 30, 2014 and 2013

�	�	2014	�	�	2013	�
�	�	�	�	�	�	�
Net income (USD�000)	�	24,089	�	�	11,596	�
Adjustments:	�	�	�	�	�	�
� � �Profit on sale of property, plant and equipment	�	(122	)	�	(1	)
� � �Tax effects on above	�	34	�	�	-	�
�	�	�	�	�	�	�
Net income used to calculate headline earnings (USD�000)	�	24,001	�	�	11,595	�
Weighted average number of shares used to calculate net income per share basic earnings and headline earnings per share basic earnings (�000)		47,226			45,613
Weighted average number of shares used to calculate net income per share diluted earnings and headline earnings per share diluted earnings (�000)		47,335			45,801
Headline earnings per share:	�	�	�	�	�	�
� � �Basic, in USD	�	0.51	�	�	0.25	�
� � �Diluted, in USD	�	0.51	�	�	0.25	�

Calculation of the denominator for headline diluted earnings per share

�	�	2014	�	�	2013	�
�	�	�	�	�	�	�
Basic weighted-average common shares outstanding and unvested restricted shares expected to vest under GAAP	�	47,226	�	�	45,613	�
� � �Effect of dilutive securities under GAAP	�	109	�	�	188	�
� � � � �Denominator for headline diluted earnings per share	�	47,335	�	�	45,801	�

Weighted average number of shares used to calculate headline earnings per share diluted represent the denominator for basic weighted-average common shares outstanding and unvested restricted shares expected to vest plus the effect of dilutive securities under GAAP. We use this number of fully-diluted shares outstanding to calculate headline earnings per share diluted because we do not use the two-class method to calculate headline earnings per share diluted.

---

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