Attached files
| file | filename |
|---|---|
| EX-99.1 - PRESS RELEASE - Higher One Holdings, Inc. | q3pressrelease.htm |
| 8-K - FORM 8-K FOR THIRD QUARTER 2011 PRESS RELEASE - Higher One Holdings, Inc. | q3-8k.htm |
Exhibit 99.2
Higher One Holdings, Inc.
Q3’11 Earnings Results
November 1, 2011
Q3’11 Earnings Results
November 1, 2011
®
©2011 Higher One Holdings, Inc. Higher One and CASHNet are registered trademarks
of Higher One, Inc. All other marks are owned by their respective owners.
of Higher One, Inc. All other marks are owned by their respective owners.
2
Forward-Looking Statements
This presentation includes forward-looking statements, as defined by the Securities and Exchange
Commission. Management’s projections and expectations are subject to a number of risks and
uncertainties that could cause actual performance to differ materially from that predicted or implied.
These statements speak only as of the date they are made, and the company does not intend to update or
otherwise revise the forward-looking information to reflect actual results of operations, changes in
financial condition, changes in estimates, expectations or assumptions, changes in general economic or
industry conditions or other circumstances arising and/or existing since the preparation of this
presentation or to reflect the occurrence of any unanticipated events. The forward-looking statements in
this presentation do not include the potential impact of any acquisitions or divestitures that may be
announced and/or completed after the date hereof. Information about the factors that could affect future
performance can be found in our recent SEC filings, available on our website at http://ir.higherone.com/.
Commission. Management’s projections and expectations are subject to a number of risks and
uncertainties that could cause actual performance to differ materially from that predicted or implied.
These statements speak only as of the date they are made, and the company does not intend to update or
otherwise revise the forward-looking information to reflect actual results of operations, changes in
financial condition, changes in estimates, expectations or assumptions, changes in general economic or
industry conditions or other circumstances arising and/or existing since the preparation of this
presentation or to reflect the occurrence of any unanticipated events. The forward-looking statements in
this presentation do not include the potential impact of any acquisitions or divestitures that may be
announced and/or completed after the date hereof. Information about the factors that could affect future
performance can be found in our recent SEC filings, available on our website at http://ir.higherone.com/.
This presentation includes certain metrics presented on a non-GAAP basis, including non-GAAP adjusted
EBITDA, non-GAAP adjusted EBITDA margin, non-GAAP adjusted net income, non-GAAP adjusted diluted
EPS, and non-GAAP Free Cash Flow. We believe that these non-GAAP measures, which exclude
amortization of intangibles, stock-based compensation, and certain non-recurring or non-cash impacts to
our results, all net of taxes, provide useful information regarding normalized trends relating to the
company’s financial condition and results of operations. Reconciliations of these non-GAAP measures to
their closest comparable GAAP measure are included in the appendix of this presentation.
EBITDA, non-GAAP adjusted EBITDA margin, non-GAAP adjusted net income, non-GAAP adjusted diluted
EPS, and non-GAAP Free Cash Flow. We believe that these non-GAAP measures, which exclude
amortization of intangibles, stock-based compensation, and certain non-recurring or non-cash impacts to
our results, all net of taxes, provide useful information regarding normalized trends relating to the
company’s financial condition and results of operations. Reconciliations of these non-GAAP measures to
their closest comparable GAAP measure are included in the appendix of this presentation.
®
©2011 Higher One Holdings, Inc. Higher One and CASHNet are registered trademarks
of Higher One, Inc. All other marks are owned by their respective owners.
of Higher One, Inc. All other marks are owned by their respective owners.
3
Q3’11 Highlights
• Revenue and EPS in line with expectations
• Strong growth in OneDisburse® SSE and
number of OneAccounts
number of OneAccounts
• Progress in bank partner search
• Well positioned for the future
o Ended quarter with over 2 million OneAccounts
®
©2011 Higher One Holdings, Inc. Higher One and CASHNet are registered trademarks
of Higher One, Inc. All other marks are owned by their respective owners.
of Higher One, Inc. All other marks are owned by their respective owners.
4
*Calculation of organic revenue growth is included in the appendix of this presentation
Revenue
(in $ millions)
Revenue in-line with our expectations
®
©2011 Higher One Holdings, Inc. Higher One and CASHNet are registered trademarks
of Higher One, Inc. All other marks are owned by their respective owners.
of Higher One, Inc. All other marks are owned by their respective owners.
5
GAAP Net Income
Net Income
(in $ millions)
®
©2011 Higher One Holdings, Inc. Higher One and CASHNet are registered trademarks
of Higher One, Inc. All other marks are owned by their respective owners.
of Higher One, Inc. All other marks are owned by their respective owners.
6
Strong Adj. EBITDA impacted by slightly lower margin
*Calculation of Adj. EBITDA and Adj. EBITDA Margin is included in the appendix of this presentation
Adj. EBITDA*
(in $ millions)
®
©2011 Higher One Holdings, Inc. Higher One and CASHNet are registered trademarks
of Higher One, Inc. All other marks are owned by their respective owners.
of Higher One, Inc. All other marks are owned by their respective owners.
7
GAAP Diluted EPS
GAAP Diluted EPS
(in $)
®
©2011 Higher One Holdings, Inc. Higher One and CASHNet are registered trademarks
of Higher One, Inc. All other marks are owned by their respective owners.
of Higher One, Inc. All other marks are owned by their respective owners.
8
Adj. EPS in-line with expectations
*Calculation of Adj. EPS and Adj. Net Income Margin is included in the appendix of this presentation
Adjusted Diluted EPS
(in $)
®
©2011 Higher One Holdings, Inc. Higher One and CASHNet are registered trademarks
of Higher One, Inc. All other marks are owned by their respective owners.
of Higher One, Inc. All other marks are owned by their respective owners.
9
Operating Cash Flow
Operating Cash Flow
(in $ millions)
®
©2011 Higher One Holdings, Inc. Higher One and CASHNet are registered trademarks
of Higher One, Inc. All other marks are owned by their respective owners.
of Higher One, Inc. All other marks are owned by their respective owners.
10
Increase in CapEx impacting Free Cash Flow
*Calculation of Free Cash Flow is included in the appendix of this presentation
Free Cash Flow
(in $ millions)
©2011 Higher One Holdings, Inc. Higher One and CASHNet are registered trademarks
of Higher One, Inc. All other marks are owned by their respective owners.
of Higher One, Inc. All other marks are owned by their respective owners.
11
257**
Sales, enrollment increases help SSE growth
*SSE stands for Signed School Enrollment, and is recorded each quarter as the total student enrollment at all schools that are contracted at
quarter-end for either our OneDisburse or at least one of our CASHNet® payment suite of products, as of the date the contract is signed (using
the most up-to-date IPEDS data at that point in time).
quarter-end for either our OneDisburse or at least one of our CASHNet® payment suite of products, as of the date the contract is signed (using
the most up-to-date IPEDS data at that point in time).
**Numbers reflect the change in SSE from the update of the government IPEDS database and other updates
OneDisburse SSE*
CASHNet Suite SSE*
+23%
+5%
(in thousands)
(in thousands)
115**
80**
1**
®
©2011 Higher One Holdings, Inc. Higher One and CASHNet are registered trademarks
of Higher One, Inc. All other marks are owned by their respective owners.
of Higher One, Inc. All other marks are owned by their respective owners.
12
Adoption increases drive OneAccount growth
OneAccount Growth
+31%
(in thousands)
®
©2011 Higher One Holdings, Inc. Higher One and CASHNet are registered trademarks
of Higher One, Inc. All other marks are owned by their respective owners.
of Higher One, Inc. All other marks are owned by their respective owners.
13
Continued growth in major revenue streams
As a % of total
revenue
revenue
Account
(in $ thousands)
Payment Trxn
(in $ thousands)
Higher Ed. Institution
(in $ thousands)
Other
(in $ thousands)
73%
74%
14%
14%
9%
10%
3%
2%
+27%
+20%
+30%
-14%
14
Carefully managing expenses as we scale revenue
• Continue to gain leverage from
scale
scale
• Continue to make the right
investments to grow the business…
ramping up tech team
investments to grow the business…
ramping up tech team
• Excluding stock-based and other
customer acquisition expense, S&M
expense as a percent of revenue was
4.9% in Q3’11 (compared to 5.7% in
Q3’10)
customer acquisition expense, S&M
expense as a percent of revenue was
4.9% in Q3’11 (compared to 5.7% in
Q3’10)
G&A
(as a % of rev)
PD
(as a % of rev)
Adj. S&M*
(as a % of rev)
11.3%
9.8%
Stock-based and
other M&A
related expense
other M&A
related expense
*The Adjusted Sales and Marketing Expense graph shows both total Sales & Marketing as a percent of revenue as well as Sales & Marketing as a percent of revenue
excluding stock-based and other acquisition expense, which is related to the vesting of certain shares issued in connection with the acquisition of EduCard and CASHNET.
Stock-based and other acquisition expense is recognized in the quarter as a function of sales and average share price.
excluding stock-based and other acquisition expense, which is related to the vesting of certain shares issued in connection with the acquisition of EduCard and CASHNET.
Stock-based and other acquisition expense is recognized in the quarter as a function of sales and average share price.
®
©2011 Higher One Holdings, Inc. Higher One and CASHNet are registered trademarks
of Higher One, Inc. All other marks are owned by their respective owners.
of Higher One, Inc. All other marks are owned by their respective owners.
15
Using available cash to invest in the business
• ($5.5M) in FCF
• Increased CapEx on building project
• Increase in NWC
• Fully liquid assets total $51.3M
• ($14.2) million on stock buyback
• Repurchased 943,549 shares
• Average price of $15.10
• $50M available under new credit
facility**
facility**
• Building project to impact FCF
through Q2’12
through Q2’12
*Other primarily includes proceeds and tax benefits from options exercises
**Subject to certain standard affirmative, negative and financial covenants, outlined in our SEC filings
Cash & Investment Balance/Flows
(in millions)
FCF/Other Movements
$67.4
FCF
Cash and cash equivalents
Investments in available for sale securities
$51.3
®
©2011 Higher One Holdings, Inc. Higher One and CASHNet are registered trademarks
of Higher One, Inc. All other marks are owned by their respective owners.
of Higher One, Inc. All other marks are owned by their respective owners.
16
GAAP Guidance Update
FY’12
FY’11
• Still cautious about regulatory environment
• Have fully lapped Reg E impact
• Potential for some additional compliance costs from
implementing multi-bank strategy
implementing multi-bank strategy
®
©2011 Higher One Holdings, Inc. Higher One and CASHNet are registered trademarks
of Higher One, Inc. All other marks are owned by their respective owners.
of Higher One, Inc. All other marks are owned by their respective owners.
17
Non-GAAP Guidance Update
*Implied y/y growth rates for 2012 based on mid-point of 2011 guidance
**Calculation of Adjusted Diluted EPS is included in the appendix of this presentation
FY’12*
FY’11
• Still cautious about regulatory environment
• Have fully lapped Reg E impact
• Potential for some additional compliance costs from
implementing multi-bank strategy
implementing multi-bank strategy
®
©2011 Higher One Holdings, Inc. Higher One and CASHNet are registered trademarks
of Higher One, Inc. All other marks are owned by their respective owners.
of Higher One, Inc. All other marks are owned by their respective owners.
18
Q3’11 Summary
• Revenue and EPS in-line with our expectations
• Strong growth in OneDisburse SSE and
OneAccounts
OneAccounts
• Capital allocation strategy… creating shareholder
value through:
value through:
o Capital investments that lower costs, improve offering
o Strategic M&A, but only when it makes sense
o Return cash to shareholders… stock buyback both
opportunistic and to manage dilution
opportunistic and to manage dilution
• Great progress in bank partner search
o Ended Q3 with over 2 million OneAccounts
®
©2011 Higher One Holdings, Inc. Higher One and CASHNet are registered trademarks
of Higher One, Inc. All other marks are owned by their respective owners.
of Higher One, Inc. All other marks are owned by their respective owners.
19
Q & A
®
©2011 Higher One Holdings, Inc. Higher One and CASHNet are registered trademarks
of Higher One, Inc. All other marks are owned by their respective owners.
of Higher One, Inc. All other marks are owned by their respective owners.
20
Appendix
®
©2011 Higher One Holdings, Inc. Higher One and CASHNet are registered trademarks
of Higher One, Inc. All other marks are owned by their respective owners.
of Higher One, Inc. All other marks are owned by their respective owners.
21
Calculation of Organic Revenue*
*Organic revenue calculation excludes the entire revenue impact from the current and prior year quarter for all acquisitions made within 15
months of a given quarter’s end
months of a given quarter’s end
®
©2011 Higher One Holdings, Inc. Higher One and CASHNet are registered trademarks
of Higher One, Inc. All other marks are owned by their respective owners.
of Higher One, Inc. All other marks are owned by their respective owners.
22
Calculation of Free Cash Flow
23
Calculation of Adjusted EBITDA
24
Calculation of Adjusted Diluted EPS
®
©2011 Higher One Holdings, Inc. Higher One and CASHNet are registered trademarks
of Higher One, Inc. All other marks are owned by their respective owners.
of Higher One, Inc. All other marks are owned by their respective owners.
25
Reconciliation of GAAP to non-GAAP Guidance