Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - VERIFONE SYSTEMS, INC. | d8k.htm |
 1
1
Financial Results for the
Quarter Ended April 30, 2011
1
Exhibit 99.1 |
 Forward-Looking Statements
2
2
Today’s discussion may include “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995. Such
statements relate to future events and expectations and involve known
and unknown risks and uncertainties. VeriFone’s actual results or actions
may differ materially from those projected in the forward-looking
statements. For a summary of the specific risk factors that could cause
results to differ materially from those expressed in the forward-looking
statements, please refer to VeriFone’s filings with the Securities and
Exchange Commission, including its annual report on Form 10-K and
quarterly reports on Form 10-Q. VeriFone is under no obligation to, and
expressly disclaims any obligation to, update or alter its forward-looking
statements, whether as a result of new information, future events,
changes in assumptions or otherwise.
|
 Important Information
3
3
www.sec.gov.
In
addition,
you
may
obtain
documents
filed
with
the
SEC by
Hypercom
free
of
charge
at
Hypercom’s
website
(www.hypercom.com)
or
by
In connection with the proposed Hypercom transaction, VeriFone has filed with
the Securities and Exchange Commission (“SEC”) a registration statement on
Form S-4 that includes a proxy statement/prospectus relating to the proposed
transaction. Investors are urged to read the form S-4 and proxy
statement/prospectus (and all amendments and supplements thereto) and any
other relevant documents filed with the SEC because they contain important
information about VeriFone, Hypercom and the proposed transaction. You can
obtain copies of the S-4 and proxy statement/prospectus, as well as VeriFone’s
other filings, free of charge at the website maintained by the SEC at
VeriFone free of charge by visiting our website (www.verifone.com) or by
directing a request in writing to: VeriFone, Attention: Investor Relations, 2099
Gateway Place, Suite 600, San Jose, CA 95110, by phone to (408) 232-7979 or
by e-mail to ir@verifone.com. You may obtain documents filed with the SEC by
directing a request in writing to Hypercom Corporation, Attention: Investor
Relations, 8888 East Raintree Drive, Suite 300, Scottsdale, Arizona 85260, by
phone to (480) 642-5000, or by e-mail to stsujita@hypercom.com. |
 Non-GAAP Financial Measures
With respect to any Non-GAAP financial measures presented in the
information, reconciliations of Non-GAAP to GAAP financial measures
may be found in VeriFone’s quarterly earnings release as filed with the
Securities and Exchange Commission
as well as the Appendix to
these slides. Management uses Non-GAAP financial measures only in
addition to and in conjunction with results presented in accordance
with GAAP. Management believes that these Non-GAAP financial
measures help it to evaluate VeriFone’s performance and to compare
VeriFone’s current results with those for prior periods as well as with
the results of peer companies. These Non-GAAP financial measures
contain limitations and should be considered as a supplement to,
and
not as a substitute for, or superior to, disclosures made in accordance
with GAAP.
4
4 |
 Non-GAAP Profit & Loss Overview *
5
5
*
A
reconciliation
of
our
GAAP
to
Non-GAAP
profit
&
loss
can
be
found
on
slides
16
and
17
($ in thousands, except EPS)
Q210
Q111
Q211
% SEQ
Inc(Dec)
% YoY
Inc(Dec)
Revenue
240,712
283,940
292,776
3.1%
21.6%
Gross Margin
94,257
116,944
127,191
8.8%
34.9%
Gross Margin %
39.2%
41.2%
43.4%
Operating Expense
55,450
63,990
71,034
11.0%
28.1%
Operating Expense %
23.0%
22.5%
24.3%
Operating Profit
38,807
52,954
56,157
6.0%
44.7%
Operating Margin %
16.1%
18.6%
19.2%
Net Interest and Other
(3,707)
(3,529)
(2,527)
-28.4%
-31.8%
Pre-tax Profit
35,100
49,425
53,630
8.5%
52.8%
Taxes
9,828
9,885
10,726
8.5%
9.1%
Net Income
25,272
39,540
42,904
8.5%
69.8%
Net Income %
10.5%
13.9%
14.7%
EPS
0.29
0.43
0.46
7.0%
58.6%
Q211 |
 Non-GAAP Revenue Profile *
Services
19.6%
System
Solutions
80.4%
Q211 Revenue
LAC
19.2%
NA
41.2%
Asia
7.6%
Europe
32.0%
6
6
* A reconciliation of our GAAP to Non-GAAP revenue can be found on slide
18 ($ in thousands)
Q210
Q111
Q211
% SEQ
Ipc(Dec)
% YoY
Ipc(Dec)
North America
105,940
128,479
120,628
-6.1%
13.9%
Europe
66,538
78,707
93,697
19.0%
40.8%
Latin America
50,488
50,131
56,217
12.1%
11.3%
Asia
17,746
26,623
22,234
-16.5%
25.3%
Total
240,712
283,940
292,776
3.1%
21.6%
Q211 |
 PAYMEDIA
•
Launched at ETA & NACStech, May 2011
•
PAYMEDIA for Small / Medium Business:
–
Builds on intelligent gateway services
–
Integrates traditional payment with non-
traditional payment-enabled media partners
–
Allows ISOs to bring new tech to market
sooner
•
PAYMEDIA for SecurePumpPAY:
–
Extends VeriFone Media to the pump
–
New compelling rev share message tied to
SecurePumpPAY
7
7 |
 VeriFone Partners with Google and Leading Retailers
to Power NFC-based Mobile Payments
8
8
•
VeriFone and Google come together to
make phone payments a reality by
enabling several major retailers coast-to-
coast with Google Wallet technology.
•
Trial to go far beyond traditional
transactions to include loyalty, couponing,
social
programs,
gift
cards,
ticketing
–
all
with just a tap from a phone to a VeriFone
device via NFC. |
 Financial Results and
Guidance
9
9 |
 Non-GAAP Gross Margin *
10
10
* A reconciliation of our GAAP to Non-GAAP gross margin can be found on slide
19 Q210
Q111
Q211
System Solutions
39.1%
40.1%
43.2%
Services
39.7%
45.3%
44.5%
Total
39.2%
41.2%
43.4%
% of Revenue |
 Non-GAAP Operating Expenses *
11
11
* A reconciliation of our GAAP to Non-GAAP operating expenses can be found on
slide 20 Q210
Q111
Q211
Research and Development
7.3%
7.3%
8.4%
Sales and Marketing
8.5%
8.8%
9.4%
G&A
7.3%
6.4%
6.5%
Total
23.0%
22.5%
24.3%
% of Revenue |
 Cash
Flow and Balance Sheet 12
($ in thousands, except Days)
$
$
$
Cash Flow from Operations before
Changes in Working Capital
36,024
50,800
46,454
Cash Flow from Operations
21,885
30,409
38,422
Key Balance Sheet Items:
Cash
378,988
479,167
531,542
Accounts Receivables, net
145,649
57
164,830
54
208,373
66
Accounts Receivables Reserves
(4,074)
(5,771)
(5,333)
Inventories, net
110,103
63
112,084
60
106,411
59
Inventories Reserves
(26,113)
(27,294)
(28,270)
Accounts Payable
99,008
61
77,596
42
93,367
51
Deferred Revenue, net
68,478
78,494
82,232
Note: Accounts Receivable Days Sales Outstanding is
calculated based on Gross Accounts Receivable Net of Reserve for Product
Returns. Days in Inventory is calculated as Average Net Inventory divided by
Total Cost of Goods Sold. Days in Accounts Payable is calculated as Accounts
Payable divided by Total Cost of Goods Sold. Q211
Days
Q210
Days
Q111
Days |
 Guidance*
•
For the third quarter ending July 31, 2011, VeriFone expects net
revenues to be between $295 million and $300 million. Non-GAAP
net income per share is projected to be in the range of $0.45 to
$0.46.
•
For the full year of fiscal 2011, VeriFone expects net revenues to be
between $1,170 million and $1,180 million. Non-GAAP net income
per share is projected to be in the range of $1.80 to $1.83 for the
same time period.
* Excluding any impact from the Hypercom acquisition
13
13 |
 Q
& A Session 14
14 |
 Appendix
15
15 |
 Reconciliation of GAAP to Non-GAAP Profit & Loss (page 1)
16
16
($ in thousands, except Share Count and EPS)
Q210
Q111
Q211
GAAP Net Revenue
240,712
283,765
292,446
Amortization of step-down in Deferred revenue on
Acquisition
0
175
330
Non-GAAP Net Revenue
240,712
283,940
292,776
GAAP Gross Margin
89,210
111,491
122,585
Amortization of step-down in Deferred revenue on
Acquisition
0
175
330
Stock-based Compensation
14
398
392
Acquisition Related and Restructuring Costs
0
21
719
Amortization of Purchased Intangible Assets
5,033
4,859
3,165
Non-GAAP Gross Margin
94,257
116,944
127,191
GAAP Operating Expense
63,511
76,280
85,247
Stock-based Compensation
(3,982)
(7,044)
(8,924)
Acquisition Related and Restructuring Costs
0
(2,930)
(3,624)
Amortization of Purchased Intangible Assets
(3,605)
(2,316)
(1,665)
Other Charges
(474)
0
0
Non-GAAP Operating Expense
55,450
63,990
71,034
Non-GAAP Operating Profit
38,807
52,954
56,157 |
 Reconciliation of GAAP to Non-GAAP Profit & Loss (page 2)
17
17
($ in thousands, except Share Count and EPS)
Q210
Q111
Q211
Non-GAAP Operating Profit (from page 1)
38,807
52,954
56,157
GAAP Net Interest and Other
(5,894)
(5,636)
(9,052)
Acquisition Related Costs
(1,297)
(1,712)
2,763
Non-cash Interest Expense
3,484
3,819
3,762
Non-GAAP Net Interest and Other
(3,707)
(3,529)
(2,527)
Non-GAAP Pre-tax Profit
35,100
49,425
53,630
GAAP Provision for (Benefit from) Income Taxes
(420)
(2,456)
3,086
Income Tax Effect of Non-GAAP Exclusions
10,248
12,341
7,640
Non-GAAP Provision for Income Taxes
9,828
9,885
10,726
Non-GAAP Net Income
25,272
39,540
42,904
GAAP Share count
87,535
91,321
93,434
Hedged Shares
0
0
(387)
Non-GAAP Share Count
87,535
91,321
93,047
Non-GAAP EPS
0.29
0.43
0.46 |
 Reconciliation of GAAP to Non-GAAP Revenue
18
18
($ in thousands)
Q210
Q111
Q211
GAAP Net Revenue: North America
105,940
128,304
120,734
Amortization of step-down in Deferred revenue on
Acquisition
0
175
(106)
Non-GAAP Net Revenue: North America
105,940
128,479
120,628
GAAP Net Revenue: Europe
66,538
78,707
93,263
Amortization of step-down in Deferred revenue on
Acquisition
0
0
434
Non-GAAP Net Revenue: Europe
66,538
78,707
93,697
GAAP Net Revenue: Latin America
50,488
50,131
56,217
Non-GAAP Net Revenue: Latin America
50,488
50,131
56,217
GAAP Net Revenue: Asia
17,746
26,623
22,232
Amortization of step-down in Deferred revenue on
Acquisition
0
0
2
Non-GAAP Net Revenue: Asia
17,746
26,623
22,234
GAAP Net Revenue
240,712
283,765
292,446
Amortization of step-down in Deferred revenue on
Acquisition
0
175
330
Non-GAAP Net Revenue
240,712
283,940
292,776 |
 Reconciliation of GAAP to Non-GAAP Gross Margin
19
19
($ in thousands, except Gross Margin Percentage)
Q210
Q111
Q211
GAAP Gross Margin -
System Solutions
73,535
85,567
97,738
Stock-based Compensation
12
351
351
Acquisition Related and Restructuring Costs
0
26
586
Amortization of Purchased Intangible Assets
4,377
4,636
2,937
Non-GAAP Gross Margin -
System Solutions
77,924
90,580
101,612
Non-GAAP Gross Margin % -
System Solutions
39.1%
40.1%
43.2%
GAAP Gross Margin -
Services
15,675
25,924
24,847
Amortization of step-down in Deferred revenue on
Acquisition
0
175
330
Stock-based Compensation
2
47
41
Acquisition Related and Restructuring Costs
0
(5)
133
Amortization of Purchased Intangible Assets
656
223
228
Non-GAAP Gross Margin -
Services
16,333
26,364
25,579
Non-GAAP Gross Margin % -
Services
39.7%
45.3%
44.5%
Total Non-GAAP Gross Margin
94,257
116,944
127,191
Total Non-GAAP Gross Margin %
39.2%
41.2%
43.4% |
 Reconciliation of GAAP to Non-GAAP Operating Expenses
20
20
($ in thousands, except Percentage)
Q210
Q111
Q211
GAAP R&D
17,811
21,642
25,402
Stock-based Compensation
(329)
(876)
(939)
Acquisition Related and Restructuring Costs
0
(4)
(7)
Non-GAAP R&D
17,482
20,762
24,456
Non-GAAP R&D as % of Revenue
7.3%
7.3%
8.4%
GAAP S&M
22,415
28,306
31,139
Stock-based Compensation
(2,017)
(3,030)
(3,550)
Acquisition Related and Restructuring Costs
0
(167)
(93)
Non-GAAP S&M: % of Revenue
20,398
25,109
27,496
Non-GAAP S&M as % of Revenue
8.5%
8.8%
9.4%
GAAP G&A
23,285
26,332
28,706
Stock-based Compensation
(1,636)
(3,138)
(4,435)
Acquisition Related and Restructuring Costs
(474)
(2,759)
(3,524)
Amortization of Purchased Intangible Assets
(3,605)
(2,316)
(1,665)
Non-GAAP G&A
17,570
18,119
19,082
Non-GAAP G&A as % of Revenue
7.3%
6.4%
6.5%
Total Non-GAAP Operating Expenses
55,450
63,990
71,034
Total Non-GAAP Operating Expenses as % of Revenue
23.0%
22.5%
24.3% |
 Financial Results for the
Quarter Ended April 30, 2011
21
21 |