Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 25, 2019 | |
Cover page. | ||
Entity Registrant Name | EVERTEC, Inc. | |
Entity Central Index Key | 0001559865 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2019 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Document Transition Report | false | |
Entity File Number | 001-35872 | |
Entity Incorporation, State or Country Code | PR | |
Entity Tax Identification Number | 66-0783622 | |
Entity Address, Address Line One | Cupey Center Building, | |
Entity Address, Address Line Two | Road 176, Kilometer 1.3, | |
Entity Address, City or Town | San Juan, | |
Entity Address, State or Province | PR | |
Entity Address, Postal Zip Code | 00926 | |
City Area Code | 787 | |
Local Phone Number | 759-9999 | |
Title of 12(b) Security | Common Stock, $0.01 par value per share | |
Trading Symbol | EVTC | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 71,925,843 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current Assets: | ||
Cash and cash equivalents | $ 102,535 | $ 69,973 |
Restricted cash | 13,399 | 16,773 |
Accounts receivable, net | 92,195 | 100,323 |
Prepaid expenses and other assets | 36,405 | 29,124 |
Total current assets | 244,534 | 216,193 |
Investment in equity investee | 12,257 | 12,149 |
Property and equipment, net | 43,179 | 36,763 |
Operating lease right-of-use asset | 30,920 | 0 |
Goodwill | 395,848 | 394,644 |
Other intangible assets, net | 244,672 | 259,269 |
Deferred tax asset | 2,020 | 1,917 |
Net investment in lease | 780 | 1,060 |
Other long-term assets | 5,856 | 5,297 |
Total assets | 980,066 | 927,292 |
Current Liabilities: | ||
Accrued liabilities | 64,226 | 57,006 |
Accounts payable | 24,966 | 47,272 |
Unearned income | 14,596 | 11,527 |
Income tax payable | 4,595 | 6,650 |
Current portion of long-term debt | 14,250 | 14,250 |
Current portion of operating lease liability | 5,704 | 0 |
Total current liabilities | 128,337 | 136,705 |
Long-term debt | 514,217 | 524,056 |
Deferred tax liability | 4,565 | 9,950 |
Unearned income - long term | 29,722 | 26,075 |
Operating lease liability - long-term | 25,686 | 0 |
Other long-term liabilities | 28,283 | 14,900 |
Total liabilities | 730,810 | 711,686 |
Commitments and contingencies (Note 12) | ||
Stockholders’ equity | ||
Preferred stock, par value $0.01; 2,000,000 shares authorized; none issued | 0 | 0 |
Common stock, par value $0.01; 206,000,000 shares authorized; 71,947,563 shares issued and outstanding at September 30, 2019 (December 31, 2018 - 72,378,710) | 719 | 723 |
Additional paid-in capital | 3,058 | 5,783 |
Accumulated earnings | 274,518 | 228,742 |
Accumulated other comprehensive loss, net of tax | (33,094) | (23,789) |
Total EVERTEC, Inc. stockholders’ equity | 245,201 | 211,459 |
Non-controlling interest | 4,055 | 4,147 |
Total equity | 249,256 | 215,606 |
Total liabilities and equity | $ 980,066 | $ 927,292 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock authorized (in shares) | 2,000,000 | 2,000,000 |
Preferred stock issued (in shares) | 0 | 0 |
Common stock par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock authorized (in shares) | 206,000,000 | 206,000,000 |
Common stock issued (in shares) | 71,947,563 | 72,378,710 |
Common stock outstanding (in shares) | 71,947,563 | 72,378,710 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Income and Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Revenues | $ 118,804 | $ 112,017 | $ 360,188 | $ 335,638 |
Operating costs and expenses | ||||
Cost of revenues, exclusive of depreciation and amortization shown below | 51,878 | 49,464 | 154,498 | 146,015 |
Selling, general and administrative expenses | 15,152 | 14,404 | 45,355 | 45,684 |
Depreciation and amortization | 16,972 | 15,788 | 50,440 | 47,383 |
Total operating costs and expenses | 84,002 | 79,656 | 250,293 | 239,082 |
Income from operations | 34,802 | 32,361 | 109,895 | 96,556 |
Non-operating income (expenses) | ||||
Interest income | 348 | 205 | 864 | 526 |
Interest expense | (7,267) | (7,557) | (22,191) | (22,901) |
Earnings of equity method investment | 371 | 238 | 726 | 612 |
Other income (expenses) | 252 | 1,130 | (619) | 1,878 |
Total non-operating expenses | (6,296) | (5,984) | (21,220) | (19,885) |
Income before income taxes | 28,506 | 26,377 | 88,675 | 76,671 |
Income tax expense | 3,720 | 3,302 | 10,018 | 10,349 |
Net income | 24,786 | 23,075 | 78,657 | 66,322 |
Less: Net income attributable to non-controlling interest | 32 | 78 | 201 | 251 |
Net income attributable to EVERTEC, Inc.’s common stockholders | 24,754 | 22,997 | 78,456 | 66,071 |
Other comprehensive income (loss), net of tax of $(278), $180, $(1,279) and $348 | ||||
Foreign currency translation adjustments | (576) | (4,325) | 3,714 | (6,225) |
(Loss) gain on cash flow hedges | (2,922) | (13,019) | ||
(Loss) gain on cash flow hedges | 219 | 2,109 | ||
Total comprehensive income attributable to EVERTEC, Inc.’s common stockholders | $ 21,256 | $ 18,891 | $ 69,151 | $ 61,955 |
Net income per common share - basic attributable to EVERTEC, Inc.’s common stockholders (in usd per share) | $ 0.34 | $ 0.32 | $ 1.09 | $ 0.91 |
Net income per common share - diluted attributable to EVERTEC, Inc.’s common stockholders (in usd per share) | $ 0.34 | $ 0.31 | $ 1.07 | $ 0.89 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statements of Income and Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Other comprehensive income, income tax (benefit) expense | $ (278) | $ 180 | $ (1,279) | $ 348 |
Unaudited Condensed Consolida_5
Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Earnings | Accumulated Other Comprehensive Loss | Non-Controlling Interest |
Beginning balance (in shares) at Dec. 31, 2017 | 72,393,933 | |||||
Beginning balance at Dec. 31, 2017 | $ 147,976 | $ 723 | $ 5,350 | $ 148,887 | $ (10,848) | $ 3,864 |
Changes in Stockholders’ Equity | ||||||
Share-based compensation recognized | 3,637 | 3,637 | ||||
Restricted stock units delivered, net of cashless (in shares) | 35,208 | |||||
Restricted stock units delivered, net of cashless | (204) | $ 1 | (205) | |||
Net income | 23,114 | 23,022 | 92 | |||
Other comprehensive loss | 3,910 | 3,910 | ||||
Ending balance (in shares) at Mar. 31, 2018 | 72,429,141 | |||||
Ending balance at Mar. 31, 2018 | 179,275 | $ 724 | 8,782 | 172,767 | (6,938) | 3,940 |
Beginning balance (in shares) at Dec. 31, 2017 | 72,393,933 | |||||
Beginning balance at Dec. 31, 2017 | 147,976 | $ 723 | 5,350 | 148,887 | (10,848) | 3,864 |
Changes in Stockholders’ Equity | ||||||
Net income | 66,322 | |||||
Ending balance (in shares) at Sep. 30, 2018 | 72,740,277 | |||||
Ending balance at Sep. 30, 2018 | 214,952 | $ 727 | 12,910 | 212,180 | (14,964) | 4,099 |
Beginning balance (in shares) at Mar. 31, 2018 | 72,429,141 | |||||
Beginning balance at Mar. 31, 2018 | 179,275 | $ 724 | 8,782 | 172,767 | (6,938) | 3,940 |
Changes in Stockholders’ Equity | ||||||
Share-based compensation recognized | 3,685 | 3,685 | ||||
Restricted stock units delivered, net of cashless (in shares) | 287,997 | |||||
Restricted stock units delivered, net of cashless | (1,810) | $ 3 | (1,813) | |||
Net income | 20,133 | 20,052 | 81 | |||
Other comprehensive loss | (3,920) | (3,920) | ||||
Ending balance (in shares) at Jun. 30, 2018 | 72,717,138 | |||||
Ending balance at Jun. 30, 2018 | 197,363 | $ 727 | 10,654 | 192,819 | (10,858) | 4,021 |
Changes in Stockholders’ Equity | ||||||
Share-based compensation recognized | 2,370 | 2,370 | ||||
Restricted stock units delivered, net of cashless (in shares) | 23,139 | |||||
Restricted stock units delivered, net of cashless | (114) | (114) | ||||
Net income | 23,075 | 22,997 | 78 | |||
Cash dividends declared on common stock, $0.05 per share | (3,636) | (3,636) | ||||
Other comprehensive loss | (4,106) | (4,106) | ||||
Ending balance (in shares) at Sep. 30, 2018 | 72,740,277 | |||||
Ending balance at Sep. 30, 2018 | $ 214,952 | $ 727 | 12,910 | 212,180 | (14,964) | 4,099 |
Beginning balance (in shares) at Dec. 31, 2018 | 72,378,710 | 72,378,710 | ||||
Beginning balance at Dec. 31, 2018 | $ 215,606 | $ 723 | 5,783 | 228,742 | (23,789) | 4,147 |
Changes in Stockholders’ Equity | ||||||
Share-based compensation recognized | 3,279 | 3,279 | ||||
Repurchase of common stock (in shares) | (618,573) | |||||
Repurchase of common stock | (17,486) | $ (6) | (3,129) | (14,351) | ||
Restricted stock units delivered, net of cashless (in shares) | 507,308 | |||||
Restricted stock units delivered, net of cashless | (5,928) | $ 5 | (5,933) | |||
Net income | 26,734 | 26,644 | 90 | |||
Cash dividends declared on common stock, $0.05 per share | (3,617) | (3,617) | ||||
Other comprehensive loss | (2,090) | (2,090) | ||||
Ending balance (in shares) at Mar. 31, 2019 | 72,267,445 | |||||
Ending balance at Mar. 31, 2019 | $ 216,498 | $ 722 | 0 | 237,418 | (25,879) | 4,237 |
Beginning balance (in shares) at Dec. 31, 2018 | 72,378,710 | 72,378,710 | ||||
Beginning balance at Dec. 31, 2018 | $ 215,606 | $ 723 | 5,783 | 228,742 | (23,789) | 4,147 |
Changes in Stockholders’ Equity | ||||||
Net income | $ 78,657 | |||||
Ending balance (in shares) at Sep. 30, 2019 | 71,947,563 | 71,947,563 | ||||
Ending balance at Sep. 30, 2019 | $ 249,256 | $ 719 | 3,058 | 274,518 | (33,094) | 4,055 |
Beginning balance (in shares) at Mar. 31, 2019 | 72,267,445 | |||||
Beginning balance at Mar. 31, 2019 | 216,498 | $ 722 | 0 | 237,418 | (25,879) | 4,237 |
Changes in Stockholders’ Equity | ||||||
Share-based compensation recognized | 3,436 | 3,436 | ||||
Repurchase of common stock (in shares) | (368,293) | |||||
Repurchase of common stock | (10,710) | $ (4) | (3,201) | (7,505) | ||
Restricted stock units delivered, net of cashless (in shares) | 38,364 | |||||
Restricted stock units delivered, net of cashless | (234) | $ 1 | (235) | |||
Net income | 27,137 | 27,058 | 79 | |||
Cash dividends declared on common stock, $0.05 per share | (3,610) | (3,610) | ||||
Other comprehensive loss | (3,717) | (3,717) | ||||
Ending balance (in shares) at Jun. 30, 2019 | 71,937,516 | |||||
Ending balance at Jun. 30, 2019 | 228,800 | $ 719 | 0 | 253,361 | (29,596) | 4,316 |
Changes in Stockholders’ Equity | ||||||
Share-based compensation recognized | 3,453 | 3,453 | ||||
Repurchase of common stock (in shares) | (8,120) | |||||
Repurchase of common stock | (253) | (253) | ||||
Restricted stock units delivered, net of cashless (in shares) | 18,167 | |||||
Restricted stock units delivered, net of cashless | (142) | (142) | ||||
Net income | 24,786 | 24,754 | 32 | |||
Cash dividends declared on common stock, $0.05 per share | (3,597) | (3,597) | ||||
Other comprehensive loss | $ (3,791) | (3,498) | (293) | |||
Ending balance (in shares) at Sep. 30, 2019 | 71,947,563 | 71,947,563 | ||||
Ending balance at Sep. 30, 2019 | $ 249,256 | $ 719 | $ 3,058 | $ 274,518 | $ (33,094) | $ 4,055 |
Unaudited Condensed Consolida_6
Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity (Parenthetical) - $ / shares | Jul. 25, 2019 | Apr. 25, 2019 | Feb. 15, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 |
Statement of Stockholders' Equity [Abstract] | ||||||
Cash dividends declared (in usd per share) | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 |
Unaudited Condensed Consolida_7
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities | ||
Net income | $ 78,657 | $ 66,322 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 50,440 | 47,383 |
Amortization of debt issue costs and accretion of discount | 1,256 | 3,410 |
Operating lease amortization | 3,966 | 0 |
Provision for doubtful accounts and sundry losses | 3,224 | 1,065 |
Deferred tax benefit | (4,197) | (2,734) |
Share-based compensation | 10,168 | 9,692 |
Loss on disposition of property and equipment and other intangibles | 691 | 12 |
Earnings of equity method investment | (726) | (612) |
Dividend received from equity method investment | 485 | 390 |
(Increase) decrease in assets: | ||
Accounts receivable, net | 6,475 | (64) |
Prepaid expenses and other assets | (7,268) | (4,462) |
Other long-term assets | (1,450) | (280) |
Increase (decrease) in liabilities: | ||
Accounts payable and accrued liabilities | (6,834) | (3,674) |
Income tax payable | (2,080) | 4,278 |
Unearned income | 6,718 | 7,655 |
Operating lease liabilities | (4,825) | 0 |
Other long-term liabilities | 1,467 | 62 |
Total adjustments | 57,510 | 62,121 |
Net cash provided by operating activities | 136,167 | 128,443 |
Cash flows from investing activities | ||
Additions to software | (27,969) | (15,385) |
Property and equipment acquired | (21,994) | (9,620) |
Proceeds from sales of property and equipment | 101 | 15 |
Net cash used in investing activities | (49,862) | (24,990) |
Cash flows from financing activities | ||
Statutory withholding taxes paid on share-based compensation | (6,304) | (2,128) |
Net decrease in short-term borrowings | 0 | (12,000) |
Repayment of short-term borrowings for purchase of equipment and software | (852) | (686) |
Dividends paid | (10,824) | (3,636) |
Repurchase of common stock | (28,449) | 0 |
Repayment of long-term debt | (10,688) | (41,374) |
Net cash used in financing activities | (57,117) | (59,824) |
Net increase in cash, cash equivalents and restricted cash | 29,188 | 43,629 |
Cash, cash equivalents and restricted cash at beginning of the period | 86,746 | 60,367 |
Cash, cash equivalents and restricted cash at end of the period | 115,934 | 103,996 |
Reconciliation of cash, cash equivalents and restricted cash | ||
Cash and cash equivalents | 102,535 | 91,310 |
Restricted cash | 13,399 | 12,686 |
Cash, cash equivalents and restricted cash | 86,746 | 60,367 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 21,668 | 19,923 |
Cash paid for income taxes | 12,535 | 7,150 |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | 5,266 | 0 |
Supplemental disclosure of non-cash activities: | ||
Payable due to vendor related to equipment and software acquired | $ 2,707 | $ 330 |
The Company and Basis of Presen
The Company and Basis of Presentation | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
The Company and Basis of Presentation | 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 a 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. The Company provides services across 26 countries in the region. EVERTEC owns and operates the ATH network, one of the leading debit networks in Latin America. In addition, EVERTEC provides a comprehensive suite of services for core bank processing and cash processing in Puerto Rico and technology outsourcing in all the regions the Company serves. EVERTEC serves a broad and diversified customer base of leading financial institutions, merchants, corporations and government agencies with solutions that are essential to their operations, enabling them to issue, process and accept transactions securely. EVERTEC's common stock is listed under the ticker symbol "EVTC" on the New York Stock Exchange. Basis of Presentation The unaudited condensed 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 condensed 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 condensed 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 condensed consolidated financial statements should be read in conjunction with the Audited Consolidated Financial Statements of the Company for the year ended December 31, 2018 , included in the Company’s Annual Report on Form 10-K. In the opinion of management, the accompanying condensed consolidated financial statements, prepared in accordance with GAAP, contain all adjustments necessary for a fair presentation. Intercompany accounts and transactions are eliminated in consolidation. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting pronouncements issued prior to 2019 and not yet adopted In June 2016, November 2018, April 2019 and May 2019, the Financial Accounting Standards Board ("FASB") issued updated guidance for the measurement of credit losses on financial instruments, which replaces the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The main objective of these updates is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The updates affect trade receivables, debt securities, net investment in leases, and most other financial assets that represent a right to receive cash. Additional disclosures about significant estimates and credit quality are also required. In addition, the updated guidance also clarifies that receivables from operating leases are accounted for using the lease guidance and not as financial instruments. The updates provide an option to irrevocably elect to measure certain individual financial assets at fair value instead of amortized cost. The standards will be effective for the Company beginning January 1, 2020. The Company will adopt the updated guidance using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the effective date to align the credit loss methodology with the new standard. The Company is in the process of implementing its new credit loss model and updating its processes and controls in preparation for the adoption of the updated guidance. Based on the initial assessment, the updates are expected to have an impact on trade receivables, and other assets that represent rights to receive cash. However, the Company does not expect this standard to have a material effect on the consolidated financial statements. In August 2018, the FASB issued an updated disclosure framework for fair value measurements. The amendments in the issued update remove, modify and add disclosure requirements on fair value measurements in Topic 820 Fair Value Measurements. The amendments in this update are effective to all entities for the fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Certain amendments in the update should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented. Early adoption is permitted upon issuance of this update. An entity is permitted to early adopt any removed or modified disclosures upon issuance of this update and delay adoption of the additional disclosures until their effective date. Mainly given that the Company does not currently have any assets or liabilities classified as level 3 in the fair value hierarchy, the adoption of this update is not expected to have an impact on the disclosures currently included in the notes to the condensed consolidated financial statements. In August 2018, the FASB issued updated guidance for customer’s accounting for implementation, set-up and other upfront costs incurred in a cloud computing arrangement that is a service contract. The amendments in this update align the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The amendments in this update are effective for public business entities for fiscal years beginning after December 15, 2019, with early adoption permitted, and interim periods within those fiscal years. The amendments in this update should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company will adopt the update effective January 1, 2020 and will apply the guidance in this update to all implementation costs prospectively. In October 2018, the FASB issued updated guidance to improve related party guidance for variable interest entities. The updated guidance requires entities to consider indirect interests held through related parties under common control on a proportional basis rather than as the equivalent of a direct interest in its entirety when determining whether a decision-making fee is a variable interest. The amendments in this update are effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. These amendments should be applied retrospectively with a cumulative-effect adjustment to retained earnings at the beginning of the earliest period presented. The Company will adopt this guidance effective January 1, 2020. The Company does not expect the adoption of this guidance to have an impact on the consolidated financial statements. In November 2018, the FASB issued updated guidance to clarify the interaction between the guidance for collaborative arrangements and the updated revenue recognition guidance. The amendments in this update, among other things, provide guidance on how to assess whether certain collaborative arrangement transactions should be accounted for under Topic 606. The amendments in this update are effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. The Company will adopt this guidance effective January 1, 2020 with no impact on its consolidated financial statements. Future contracts will be evaluated under the updated guidance once effective. |
Property and Equipment, net
Property and Equipment, net | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Property and Equipment, net Property and equipment, net consists of the following: (Dollar amounts in thousands) Useful life September 30, 2019 December 31, 2018 Buildings 30 $ 1,481 $ 1,440 Data processing equipment 3 - 5 119,386 110,673 Furniture and equipment 3 - 20 6,780 7,761 Leasehold improvements 5 -10 2,782 2,625 130,429 122,499 Less - accumulated depreciation and amortization (88,561 ) (86,990 ) Depreciable assets, net 41,868 35,509 Land 1,311 1,254 Property and equipment, net $ 43,179 $ 36,763 Depreciation and amortization expense related to property and equipment for the three and nine months ended September 30, 2019 amounted to $4.1 million and $12.4 million , respectively, compared to $3.7 million and $10.9 million , for the same periods in 2018 , respectively. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The changes in the carrying amount of goodwill, allocated by operating segments, were as follows (See Note 14): (In thousands) Payment Payment Merchant Business Total Balance at December 31, 2018 $ 160,972 $ 49,728 $ 138,121 $ 45,823 $ 394,644 Foreign currency translation adjustments — 1,204 — — 1,204 Balance at September 30, 2019 $ 160,972 $ 50,932 $ 138,121 $ 45,823 $ 395,848 Goodwill is tested for impairment on an annual basis as of August 31, or more often if events or changes in circumstances indicate there may be impairment. The Company may test for goodwill impairment using a qualitative or a quantitative analysis. In the quantitative analysis, the Company compares the estimated fair value of the reporting units to their carrying values, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill of the reporting unit is not considered impaired. If the fair value does not exceed the carrying value, an impairment loss equaling the excess amount is recorded, limited to the recorded balance of goodwill. No impairment losses were recognized as of September 30, 2019. The carrying amount of other intangible assets at September 30, 2019 and December 31, 2018 was as follows: September 30, 2019 (Dollar amounts in thousands) Useful life in years Gross Accumulated Net carrying Customer relationships 8 - 14 $ 343,174 $ (213,989 ) $ 129,185 Trademark 2 - 15 41,596 (31,565 ) 10,031 Software packages 3 - 10 247,650 (164,810 ) 82,840 Non-compete agreement 15 56,539 (33,923 ) 22,616 Other intangible assets, net $ 688,959 $ (444,287 ) $ 244,672 December 31, 2018 (Dollar amounts in thousands) Useful life in years Gross Accumulated Net carrying Customer relationships 8 - 14 $ 342,738 $ (194,570 ) $ 148,168 Trademark 2 - 15 41,357 (28,888 ) 12,469 Software packages 3 - 10 224,855 (151,666 ) 73,189 Non-compete agreement 15 56,539 (31,096 ) 25,443 Other intangible assets, net $ 665,489 $ (406,220 ) $ 259,269 For the three and nine months ended September 30, 2019 , the Company recorded amortization expense related to other intangibles of $12.9 million and $38.0 million , respectively, compared to $11.9 million and $36.4 million for the corresponding 2018 periods. The estimated amortization expense of the balances outstanding at September 30, 2019 for the next five years is as follows: (Dollar amounts in thousands) Remaining 2019 $ 12,688 2020 45,952 2021 40,965 2022 36,224 2023 33,950 |
Debt and Short-Term Borrowings
Debt and Short-Term Borrowings | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt and Short-Term Borrowings | Debt and Short-Term Borrowings Total debt at September 30, 2019 and December 31, 2018 follows: (In thousands) September 30, 2019 December 31, 2018 Secured Credit Facility (2023 Term A) due on November 27, 2023 paying interest at a variable interest rate (LIBOR plus applicable margin (1)(2) ) $ 209,892 $ 217,791 Senior Secured Credit Facility (2024 Term B) due on November 27, 2024 paying interest at a variable interest rate (LIBOR plus applicable margin (2)(3) ) 318,575 320,515 Senior Secured Revolving Credit Facility (1) — — Note Payable due on April 30, 2021 (2) 207 300 Note Payable due on December 28, 2019 2,500 — Total debt $ 531,174 $ 538,606 (1) Applicable margin of 2.00% at September 30, 2019 and 2.25% at December 31, 2018 . (2) Net of unaccreted discount and unamortized debt issue costs, as applicable. (3) Subject to a minimum rate ("LIBOR floor") of 0% plus applicable margin of 3.50% at September 30, 2019 and December 31, 2018 . 2018 Secured Credit Facilities On November 27, 2018, EVERTEC and EVERTEC Group (“Borrower”) entered into a credit agreement governing the secured credit facilities, consisting of a $220.0 million term loan A facility that matures on November 27, 2023 (“2023 Term A”), a $325.0 million term loan B facility that matures on November 27, 2024 (“2024 Term B”) and a $125.0 million revolving credit facility (the “Revolving Facility”) that matures on November 27, 2023, with a syndicate of lenders and Bank of America, N.A. (“Bank of America”), as administrative agent, collateral agent, swingline lender and line of credit issuer (collectively the “2018 Credit Agreement”). The unpaid principal balance at September 30, 2019 of the 2023 Term A Loan and the 2024 Term B Loan was $211.8 million and $322.6 million , respectively. The additional borrowing capacity for the Revolving Facility at September 30, 2019 was $116.9 million . The Company issues letters of credit against the Revolving Facility which reduce the additional borrowing capacity of the Revolving Facility. Notes payable In May 2016, EVERTEC Group entered into a non-interest bearing financing agreement amounting to $0.7 million to purchase software. As of September 30, 2019 and December 31, 2018 , the outstanding principal balance of the note payable was $0.2 million and $0.3 million , respectively. The current portion of this note is recorded as part of accounts payable and the long-term portion is included in other long-term liabilities. In January 2019, EVERTEC Group entered into a non-interest bearing financing agreement amounting to $10.0 million to purchase data processing equipment and maintenance. As of September 30, 2019 , the outstanding principal balance of the note payable was $2.5 million , recorded as part of accounts payable. Interest Rate Swaps At September 30, 2019 , the Company has two interest rate swap agreements, entered in December 2015 and December 2018, which convert a portion of the interest rate payments on the Company's 2024 Term B Loan from variable to fixed: Swap Agreement Effective date Maturity Date Notional Amount Variable Rate Fixed Rate 2015 Swap January 2017 April 2020 $200 million 1-month LIBOR 1.9225% 2018 Swap April 2020 November 2024 $250 million 1-month LIBOR 2.89% The Company has accounted for these transactions as cash flow hedges. At September 30, 2019 and December 31, 2018 , the carrying amount of the derivatives on the Company’s consolidated balance sheets is as follows: (In thousands) September 30, 2019 December 31, 2018 Other long-term assets $ — $ 1,683 Other long-term liabilities $ 16,687 $ 4,059 During the three and nine months ended September 30, 2019 , the Company reclassified gains of $0.2 million and $0.7 million , respectively, from accumulated other comprehensive loss into income through interest expense. Based on current LIBOR rates, the Company expects to reclassify losses of $1.1 million from accumulated other comprehensive loss into income through interest expense over the next 12 months. Refer to Note 6 for tabular disclosure of the fair value of derivatives and to Note 7 for tabular disclosure of losses recorded on cash flow hedging activities. The cash flow hedges are considered highly effective. |
Financial Instruments and Fair
Financial Instruments and Fair Value Measurements | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments and Fair Value Measurements | 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. These provisions describe three levels of input that may be used to measure fair value: Level 1 : Inputs are unadjusted, quoted prices for identical assets or liabilities in an active market at the measurement date. Level 2 : Inputs, other than quoted prices included in Level 1, which are observable for the asset or liability through corroboration with market data at the measurement date. Level 3 : Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The Company uses observable inputs when available. Fair value is based upon quoted market prices when available. If market prices are not available, the Company may employ 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 fair value of financial instruments is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. 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. The following table summarizes the fair value measurement by level at September 30, 2019 and December 31, 2018 for assets and liabilities measured at fair value on a recurring basis: (In thousands) Level 1 Level 2 Level 3 Total September 30, 2019 Financial liability: Interest rate swap $ — $ 16,687 $ — $ 16,687 December 31, 2018 Financial asset: Interest rate swap $ — $ 1,683 $ — $ 1,683 Financial liability: Interest rate swap — 4,059 — 4,059 The following table presents the carrying value, as applicable, and estimated fair values for financial instruments at September 30, 2019 and December 31, 2018 : September 30, 2019 December 31, 2018 (In thousands) Carrying Fair Carrying Fair Financial assets: Interest rate swap $ — $ — $ 1,683 $ 1,683 Financial liabilities: Interest rate swap 16,687 16,687 4,059 4,059 2023 Term A 209,892 209,103 217,791 218,625 2024 Term B 318,575 324,579 320,515 319,517 The fair values of the term loans at September 30, 2019 and December 31, 2018 were obtained using the prices provided by third party service providers. Their pricing is based on various inputs such as: market quotes, recent trading activity in a non-active market or imputed prices. Also, the pricing may include the use of an algorithm that could take into account movement in the general high yield market, among other variants. The secured term loans, which are not measured at fair value in the balance sheets, would be categorized as Level 3 in the fair value hierarchy. |
Equity
Equity | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Equity | Equity Accumulated Other Comprehensive Loss The following table provides a summary of the changes in the balances of accumulated other comprehensive loss for the nine months period ended September 30, 2019 : (In thousands) Foreign Currency Cash Flow Hedges Total Balance - December 31, 2018, net of tax $ (21,626 ) $ (2,163 ) $ (23,789 ) Other comprehensive income (loss) before reclassifications 3,714 (12,305 ) (8,591 ) Effective portion reclassified to Net Income — (714 ) (714 ) Balance - September 30, 2019, net of tax $ (17,912 ) $ (15,182 ) $ (33,094 ) |
Share-based Compensation
Share-based Compensation | 9 Months Ended |
Sep. 30, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based Compensation | Share-based Compensation Long-term Incentive Plan ("LTIP") In the first quarter of 2017, 2018 and 2019, the Compensation Committee of the Company's Board of Directors ("Board") approved grants of restricted stock units (“RSUs”) to executives and certain employees pursuant to the 2017 LTIP, 2018 LTIP and 2019 LTIP, respectively, all under the terms of our 2013 Equity Incentive Plan. Under the LTIPs, the Company granted restricted stock units to eligible participants as time-based awards and/or performance-based awards. The vesting of the RSUs is dependent upon service, market, and/or performance 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 grant date and ending on February 24 of each year for the 2017 LTIP, February 28 of each year for the 2018 LTIP, and February 22 of each year for the 2019 LTIP. For the performance-based awards under the 2017 LTIP, 2018 LTIP, and 2019 LTIP, the Compensation Committee established adjusted earnings before income taxes, depreciation and amortization ("Adjusted EBITDA") as the primary performance measure while maintaining focus on total shareholder return through the use of a market-based total shareholder return ("TSR") performance modifier. The TSR modifier adjusts the shares earned based on the core Adjusted EBITDA performance upwards or downwards (+/- 25% ) based on the Company’s relative TSR at the end of the three-year performance period as compared to the companies in the Russell 2000 Index. The Adjusted EBITDA performance measure will be calculated for the one-year period commencing on January 1 of the year of the grant and ending on December 31 of the same year, relative to the goals set by the Compensation Committee for this same period. The shares earned will be subject to an additional two-year service vesting period. Performance and market-based awards vest at the end of the performance period that commenced on February 24, 2017 for the 2017 LTIP, February 28, 2018 for the 2018 LTIP, and February 22, 2019 for the 2019 LTIP. The periods end on February 24, 2020 for the 2017 LTIP, February 28, 2021 for the 2018 LTIP, and February 22, 2022 for the 2019 LTIP. Unless otherwise specified in the award agreement, or in an employment agreement, awards are forfeited if the employee voluntarily ceases to be employed by the Company prior to vesting. The following table summarizes nonvested restricted shares and RSUs activity for the nine months ended September 30, 2019 : Nonvested restricted shares and RSUs Shares Weighted-average Nonvested at December 31, 2018 2,036,163 $ 15.09 Forfeited (18,775 ) 17.14 Vested (687,198 ) 28.68 Granted 373,286 29.46 Nonvested at September 30, 2019 1,703,476 $ 18.47 For the three and nine months ended September 30, 2019 , the Company recognized $3.5 million and $10.2 million of share based compensation expense, respectively, compared with $2.4 million and $9.7 million , respectively for the same period in 2018 . As of September 30, 2019 , the maximum unrecognized cost for restricted stock and RSUs was $16.7 million . The cost is expected to be recognized over a weighted average period of 1.7 |
Revenues
Revenues | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues Summary of Revenue Recognition Accounting Policy The Company's revenue recognition policy follows the guidance from Accounting Standards Codification ("ASC") 606 Revenue from Contracts with Customers , which provides guidance on the recognition, presentation and disclosure of revenue in consolidated financial statements. Revenue is measured on the consideration specified in a contract with a customer. Once the Company determines a contract's performance obligations and the transaction price, including an estimate of any variable consideration, the Company allocates the transaction price to each performance obligation in the contract using a stand-alone selling price. The Company recognizes revenue when it satisfies a performance obligation by transferring control of a product or service to a customer. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. At contract inception, the Company assesses the goods and service promised in the contract with a customer and identifies a performance obligation for each promise to transfer to the customer a good or service (or bundle of goods or services) that is distinct. To identify the performance obligations, the Company considers all the goods or services promised in the contract regardless of whether they are explicitly stated or implied. Payment for the Company's contracts with customers are typically due in full within 30 days of invoice date. Disaggregation of revenue The Company disaggregates revenue from contracts with customers into primary geographical markets, nature of the products and services, and timing of transfer of goods and services. The Company's operating segments are determined by the nature of the products and services the Company provides and the primary geographical markets in which the Company operates. Revenue disaggregated by segment is discussed in Note 14, Segment Information. In the following tables, revenue is disaggregated by timing of revenue recognition for the periods indicated. Three months ended September 30, 2019 (In thousands) Payment Services - Puerto Rico & Caribbean Payment Services - Latin America Merchant Acquiring, net Business Solutions Total Timing of revenue recognition Products and services transferred at a point in time $ 43 $ 228 $ — $ 2,939 $ 3,210 Products and services transferred over time 20,299 18,853 26,436 50,006 115,594 $ 20,342 $ 19,081 $ 26,436 $ 52,945 $ 118,804 Three months ended September 30, 2018 (In thousands) Payment Services - Puerto Rico & Caribbean Payment Services - Latin America Merchant Acquiring, net Business Solutions Total Timing of revenue recognition Products and services transferred at a point in time $ 114 $ 15 $ — $ 1,652 $ 1,781 Products and services transferred over time 19,679 18,892 24,486 47,179 110,236 $ 19,793 $ 18,907 $ 24,486 $ 48,831 $ 112,017 Nine months ended September 30, 2019 (In thousands) Payment Services - Puerto Rico & Caribbean Payment Services - Latin America Merchant Acquiring, net Business Solutions Total Timing of revenue recognition Products and services transferred at a point in time $ 2,835 $ 419 $ — $ 6,590 $ 9,844 Products and services transferred over time 60,957 57,282 79,203 152,902 350,344 $ 63,792 $ 57,701 $ 79,203 $ 159,492 $ 360,188 Nine months ended September 30, 2018 (In thousands) Payment Services - Puerto Rico & Caribbean Payment Services - Latin America Merchant Acquiring, net Business Solutions Total Timing of revenue recognition Products and services transferred at a point in time $ 307 $ 444 $ — $ 3,861 $ 4,612 Products and services transferred over time 56,983 58,090 73,829 142,124 331,026 $ 57,290 $ 58,534 $ 73,829 $ 145,985 $ 335,638 Contract balances The following table provides information about contract assets from contracts with customers. (In thousands) September 30, 2019 December 31, 2018 $ 996 Services transferred to customers 544 Transfers to accounts receivable (416 ) September 30, 2019 $ 1,124 The current portion of contract assets is recorded as part of prepaid expenses and other assets and the long-term portion is included in other long-term assets. Accounts receivable, net at September 30, 2019 amounted to $92.2 million . Unearned income and Unearned income - Long term, which refer to contract liabilities, at September 30, 2019 amounted to $14.6 million and $29.7 million , respectively, and generally arise when consideration is received or due in advance from customers prior to performance. Unearned income is mainly related to upfront fees for implementation or set up activities, including fees charged in pre-production periods in connection with managed services. During the three and nine months ended September 30, 2019 , the Company recognized revenue of $1.8 million and $13.1 million , respectively, that were included in unearned income at December 31, 2018 . During the three and nine months ended September 30, 2018 , the Company recognized revenue of $1.2 million and $6.9 million , respectively, that were included in unearned income at December 31, 2017 . The estimated aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially satisfied at September 30, 2019 is $261.7 million . This amount primarily consists of professional service fees for implementation or set up activities related to managed services and maintenance services, typically recognized over the life of the contract, which vary from 2 to 5 |
Income Tax
Income Tax | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Tax | Income Tax The components of income tax expense for the three and nine months ended September 30, 2019 and 2018 , respectively, consisted of the following: Three months ended Nine months ended (In thousands) 2019 2018 2019 2018 Current tax provision $ 6,096 $ 4,923 $ 14,215 $ 13,083 Deferred tax benefit (2,376 ) (1,621 ) (4,197 ) (2,734 ) Income tax expense $ 3,720 $ 3,302 $ 10,018 $ 10,349 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 nine months ended September 30, 2019 and 2018 , and its segregation based on location of operations: Three months ended September 30, Nine months ended September 30, (In thousands) 2019 2018 2019 2018 Current tax provision (benefit) Puerto Rico $ 2,117 $ 2,208 $ 5,433 $ 6,063 United States 187 (31 ) 202 142 Foreign countries 3,792 2,746 8,580 6,878 Total current tax provision $ 6,096 $ 4,923 $ 14,215 $ 13,083 Deferred tax benefit Puerto Rico $ (1,583 ) $ (1,026 ) $ (3,178 ) $ (2,059 ) United States (169 ) (11 ) (168 ) (109 ) Foreign countries (624 ) (584 ) (851 ) (566 ) Total deferred tax benefit $ (2,376 ) $ (1,621 ) $ (4,197 ) $ (2,734 ) 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 September 30, 2019 , the Company has $58.5 million of unremitted earnings from foreign subsidiaries. The Company has not recognized a deferred tax liability on undistributed earnings for the Company’s foreign subsidiaries because these earnings are intended to be indefinitely reinvested. As of September 30, 2019 , the gross deferred tax asset amounted to $14.1 million and the gross deferred tax liability amounted to $16.7 million , compared to $10.8 million and $18.8 million , respectively, as of December 31, 2018 . |
Net Income Per Common Share
Net Income Per Common Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Net Income Per Common Share | Net Income Per Common Share The reconciliation of the numerator and denominator of the income per common share is as follows: Three months ended September 30, Nine months ended September 30, (Dollar amounts in thousands, except per share information) 2019 2018 2019 2018 Net income attributable to EVERTEC, Inc.’s common stockholders $ 24,754 $ 22,997 $ 78,456 $ 66,071 Less: non-forfeitable dividends on restricted stock 2 2 2 2 Net income available to EVERTEC, Inc.’s common shareholders $ 24,752 $ 22,995 $ 78,454 $ 66,069 Weighted average common shares outstanding 71,942,403 72,721,414 72,148,312 72,590,679 Weighted average potential dilutive common shares (1) 1,372,301 1,935,686 1,382,553 1,532,752 Weighted average common shares outstanding - assuming dilution 73,314,704 74,657,100 73,530,865 74,123,431 Net income per common share - basic $ 0.34 $ 0.32 $ 1.09 $ 0.91 Net income per common share - diluted $ 0.34 $ 0.31 $ 1.07 $ 0.89 (1) Potential common shares consist of common stock issuable under the assumed release of restricted stock awards using the treasury stock method. On February 15, 2019 , April 25, 2019 and July 25, 2019 , the Board declared a quarterly cash dividends of $0.05 per share of common stock, which were paid on March 22, 2019 , June 7, 2019 and September 6, 2019 , respectively, to stockholders of record as of the close of business on February 26, 2019 , May 6, 2019 and August 5, 2019 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies 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 insignificant. For other claims regarding proceedings that are in an initial phase, the Company is unable to estimate the range of possible loss, if any, but at this time believes that any loss related to such claims will not be material. Leases The Company’s leases accounting policy follows the guidance from Accounting Standards Codification (“ASC”) 842, Leases, which provides guidance on the recognition, presentation and disclosure of leases in condensed consolidated financial statements. The Company determines if an arrangement is or contains a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, operating lease payable, and operating lease liabilities in the condensed consolidated balance sheet. Finance leases are included in property and equipment, accrued liabilities, and other long-term liabilities in the condensed consolidated balance sheet. ROU assets and lease liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date. As most of the Company’s leases do not provide an implicit rate, Management used the Company’s collateralized incremental borrowing rate (“IBR”) based on the information available at commencement date in determining the present value of future payments. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. We monitor events or changes in circumstances that change the timing or amount of future lease payments which results in the remeasurement of a lease liability, with a corresponding adjustment to the ROU asset. The lease payment terms may include fixed payment terms and variable payments. Fixed payment terms and variable payments that depend on an index (i.e., Consumer Price Index or “CPI”) or rate are considered in the determination of the operating lease liabilities. While lease liabilities are not remeasured because of changes to the CPI, changes are treated as variable lease payments and recognized in the period in which the obligation for those payments was incurred. Variable payments that do not depend on an index or rate are not included in the lease liabilities determination. Rather, these payments are recognized as variable lease expense when incurred. Variable lease payments are included within operating costs and expenses in the condensed consolidated statement of income and comprehensive income. For operating leases, lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. For finance leases, lease expense is composed of interest expense and amortization expense. The lease liability of these leases is measured using the interest rate method. The ROU asset from financing leases are amortized on a straight-line basis, as part of Property and Equipment, net. The Company has lease agreements with lease and non-lease components, which are accounted for as a single lease component. The Company elected the practical expedient of not separating lease and related non-lease components for all classes of underlying assets (i.e., building and equipment). The Company also elected as an accounting policy to not recognize lease liabilities and ROU assets for any future short-term leases (i.e., leases with a lease term of 12 months or less). The Company has operating leases for certain office facilities, buildings, telecommunications and other equipment; and finance leases for certain equipment. The Company’s lease contracts have remaining terms ranging from 1 year to 10 years , some of which may include options to extend the leases for up to 5 years , and some which may include the option to terminate the lease within 1 year . At September 30, 2019 , equipment leases classified as finance leases, which are included within Property and Equipment, net, were $0.7 million , net of accumulated depreciation. Total lease cost for the three and nine months ended September 30, 2019 , was as follows: Three months ended Nine months ended September 30, 2019 September 30, 2019 (in thousands) Operating lease cost $ 1,907 $ 5,833 Finance lease cost — — Amortization of right-of-use assets 63 196 Interest on lease liabilities 5 20 Variable lease cost 700 2,117 $ 2,675 $ 8,166 Other information related to leases, at September 30, 2019 , was as follows: (In thousands) Right-of-use assets obtained in exchange for operating lease obligations: $ 273 Weighted average remaining lease term, in years Operating leases 6.0 Finance leases 1.0 Weighted Average Discount Rate Operating leases 4.5 % Finance leases 4.2 % Future minimum lease payments under leases at September 30, 2019 were as follows: (In thousands) Operating Leases Finance Leases Remaining 2019 $ 1,698 $ 99 2020 6,492 311 2021 5,680 32 2022 5,419 — 2023 5,385 — Thereafter 11,184 — Total future minimum lease payments 35,858 442 Less: imputed interest (4,468 ) (25 ) $ 31,390 $ 417 Reported as of September 30, 2019 Accrued liabilities $ — $ 349 Operating lease payable 5,704 — Operating lease liabilities - long term 25,686 — Other long-term liabilities — 68 $ 31,390 $ 417 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The following table presents the Company’s transactions with related parties for the three and nine months ended September 30, 2019 and 2018 : Three months ended September 30, Nine months ended September 30, (Dollar amounts in thousands) 2019 2018 2019 2018 Total revenues (1)(2) $ 52,702 $ 47,216 $ 154,022 $ 139,954 Cost of revenues $ 1,719 $ 840 $ 3,580 $ 2,192 Operating lease cost and other fees $ 1,959 $ 2,016 $ 6,177 $ 5,984 Interest earned from affiliate Interest income $ 43 $ 37 $ 98 $ 101 (1) Popular revenues as a percentage of total revenues were 44% , 42% , 43% , and 41% for each of the periods presented above, respectively. (2) Includes revenues generated from investee accounted for under the equity method of $0.3 million , $0.3 million , $0.8 million and $1.0 million for each the periods presented above, respectively. At September 30, 2019 and December 31, 2018 , EVERTEC had the following balances arising from transactions with related parties: (Dollar amounts in thousands) September 30, 2019 December 31, 2018 Cash and restricted cash deposits in affiliated bank $ 47,442 $ 29,136 Other due/to from affiliate Accounts receivable $ 35,054 $ 25,714 Prepaid expenses and other assets $ 2,504 $ 2,796 Operating lease right-of use assets $ 21,474 $ — Other long-term assets $ 76 $ 166 Accounts payable $ 2,006 $ 6,344 Unearned income $ 32,177 $ 25,401 Operating lease liabilities $ 21,688 $ — |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company operates in four business segments: Payment Services - Puerto Rico & Caribbean, Payment Services - Latin America, Merchant Acquiring, and Business Solutions. The Payment Services - Puerto Rico & Caribbean segment revenues are comprised of revenues related to providing access to the ATH debit network and other card networks to financial institutions, including related services such as authorization, processing, management and recording of ATM and point of sale ("POS") transactions, and ATM management and monitoring. The segment revenues also include revenues from card processing services (such as credit and debit card processing, authorization and settlement and fraud monitoring and control to debit or credit issuers), payment processing services (such as payment and billing products for merchants, businesses and financial institutions) and EBT (which principally consist of services to the government of Puerto Rico for the delivery of benefits to participants). For ATH debit network and processing services, revenues are primarily driven by the number of transactions processed. Revenues are derived primarily from network fees, transaction switching and processing fees, and the leasing of POS devices. For card issuer processing, revenues are primarily dependent upon the number of cardholder accounts on file, transactions and authorizations processed, the number of cards embossed and other processing services. For EBT services, revenues are primarily derived from the number of beneficiaries on file. The Payment Services - Latin America segment revenues consist of revenues related to providing access to the ATH network and other card networks to financial institutions, including related services such as authorization, processing, management and recording of ATM and POS transactions, and ATM management and monitoring. The segment revenues also include revenues from card processing services (such as credit and debit card processing, authorization and settlement and fraud monitoring and control to debit or credit issuers), payment processing services (such as payment and billing products for merchants, businesses and financial institutions), as well as licensed software solutions for risk and fraud management and card payment processing. For ATH debit network and processing services, revenues are primarily driven by the number of transactions processed. Revenues are derived primarily from network fees, transaction switching and processing fees, and the leasing of POS devices. For card issuer processing, revenues are primarily dependent upon the number of cardholder accounts on file, transactions and authorizations processed, the number of cards embossed, and other processing services. The Merchant Acquiring segment consists of revenues from services that allow merchants to accept electronic methods of payment. In the Merchant Acquiring segment, revenues include a discount fee and membership fees charged to merchants, debit network fees and rental fees from POS devices and other equipment, net of credit card interchange and assessment fees charged by credit cards associations (such as VISA or MasterCard) or payment networks. The discount fee is generally a percentage of the transaction value. EVERTEC also charges merchants for other services that are unrelated to the number of transactions or the transaction value. The Business Solutions segment consists of revenues from a full suite of business process management solutions in various product areas such as core bank processing, network managed services, IT professional services, business process outsourcing, item processing, cash processing, and fulfillment. Core bank processing and network services revenues are derived in part from a recurrent fixed fee and from fees based on the number of accounts on file (i.e. savings or checking accounts, loans, etc.) or computer resources utilized. Revenues from other processing services within the Business Solutions segment are generally volume-based and depend on factors such as the number of accounts processed. In addition, EVERTEC is a reseller of hardware and software products and these resale transactions are generally non-recurring. In addition to the four operating segments described above, Management identified certain functional cost areas that operate independently and do not constitute businesses in themselves. These areas could neither be concluded as operating segments nor could they be combined with any other operating segments. Therefore, these areas are aggregated and presented as “Corporate and Other” category in the financial statements alongside the operating segments. The Corporate and other category consists of corporate overhead expenses, intersegment eliminations, certain leveraged activities and other non-operating and miscellaneous expenses that are not included in the operating segments. The overhead and leveraged costs relate to activities such as: • marketing, • corporate finance and accounting, • human resources, • legal, • risk management functions, • internal audit, • corporate debt related costs, • non-operating depreciation and amortization expenses generated as a result of merger and acquisition activity, • intersegment revenues and expenses, and • other non-recurring fees and expenses that are not considered when management evaluates financial performance at a segment level The Chief Operating Decision Maker ("CODM") reviews the operating segments separate financial information to assess performance and to allocate resources. Management evaluates the operating results of each of its operating segments based upon revenues and Adjusted Earnings before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA"). Adjusted EBITDA is defined as EBITDA further adjusted to exclude unusual items and other adjustments. Adjusted EBITDA, as it relates to operating segments, is presented in conformity with Accounting Standards Codification Topic 280, "Segment Reporting" given that it is reported to the CODM for purposes of allocating resources. Segment asset disclosure is not used by the CODM as a measure of segment performance since the segment evaluation is driven by revenues and adjusted EBITDA performance. As such, segment assets are not disclosed in the notes to the accompanying condensed consolidated financial statements. The following tables set forth information about the Company’s operations by its four business segments for the periods indicated: Three months ended September 30, 2019 (In thousands) Payment Payment Merchant Business Corporate and Other (1) Total Revenues $ 30,411 $ 20,596 $ 26,436 $ 52,945 $ (11,584 ) $ 118,804 Operating costs and expenses 15,821 11,943 15,978 32,259 8,001 84,002 Depreciation and amortization 3,093 2,650 457 3,780 6,992 16,972 Non-operating income (expenses) 410 (3,824 ) 8 67 3,962 623 EBITDA 18,093 7,479 10,923 24,533 (8,631 ) 52,397 Compensation and benefits (2) 284 109 285 549 2,228 3,455 Transaction, refinancing and other fees (3) — — — — (372 ) (372 ) Adjusted EBITDA $ 18,377 $ 7,588 $ 11,208 $ 25,082 $ (6,775 ) $ 55,480 (1) Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations. Intersegment revenue eliminations predominantly reflect the $10.0 million processing fee from the Payments Services - Puerto Rico & Caribbean segment to the Merchant Acquiring segment and intercompany software sale and developments of $1.6 million from the Payment Services - Latin America segment charged to the Payment Services - Puerto Rico & Caribbean segment. Corporate and Other was impacted by the intersegment elimination of revenue recognized in the Payment Services - Latin America segment and capitalized in the Payment Services - Puerto Rico & Caribbean segment; excluding this impact, Corporate and Other Adjusted EBITDA would be $5.2 million . (2) Primarily represents share-based compensation. (3) Primarily represents the elimination of non-cash equity earnings from our 19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A., net of cash dividends received. Three months ended September 30, 2018 (In thousands) Payment Payment Merchant Business Corporate and Other (1) Total Revenues $ 28,951 $ 18,907 $ 24,486 $ 48,831 $ (9,158 ) $ 112,017 Operating costs and expenses 13,021 18,890 14,160 30,983 2,602 79,656 Depreciation and amortization 2,505 2,337 427 3,398 7,121 15,788 Non-operating income (expenses) 602 3,834 — 12 (3,080 ) 1,368 EBITDA 19,037 6,188 10,753 21,258 (7,719 ) 49,517 Compensation and benefits (2) 207 363 196 485 1,117 2,368 Transaction, refinancing and other fees (3) — — (1 ) 1 215 215 Adjusted EBITDA $ 19,244 $ 6,551 $ 10,948 $ 21,744 $ (6,387 ) $ 52,100 (1) Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations. Intersegment revenue eliminations predominantly reflect the $9.2 million processing fee from the Payments Services - Puerto Rico & Caribbean segment to the Merchant Acquiring segment. (2) Primarily represents share-based compensation. (3) Primarily the elimination of non-cash equity earnings from our 19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A., net of cash dividends received and fees and expenses associated with corporate transactions as defined in the Credit Agreement. Nine months ended September 30, 2019 (In thousands) Payment Payment Merchant Business Corporate and Other (1) Total Revenues $ 92,910 $ 62,533 $ 79,203 $ 159,492 $ (33,950 ) $ 360,188 Operating costs and expenses 43,666 47,170 45,926 101,128 12,403 250,293 Depreciation and amortization 8,476 7,393 1,348 12,113 21,110 50,440 Non-operating income (expenses) 1,461 411 39 287 (2,091 ) 107 EBITDA 59,181 23,167 34,664 70,764 (27,334 ) 160,442 Compensation and benefits (2) 778 448 760 1,632 6,774 10,392 Transaction, refinancing and other fees (3) — 2 — — 37 39 Adjusted EBITDA $ 59,959 $ 23,617 $ 35,424 $ 72,396 $ (20,523 ) $ 170,873 (1) Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations. Intersegment revenue eliminations predominantly reflect the $29.0 million processing fee from the Payments Services - Puerto Rico & Caribbean segment to the Merchant Acquiring segment, intercompany software sale and developments of $4.9 million from the Payment Services - Latin America segment charged to the Payment Services - Puerto Rico & Caribbean segment. Corporate and Other was impacted by the intersegment elimination of revenue recognized in the Payment Services - Latin America segment and capitalized in the Payment Services - Puerto Rico & Caribbean segment; excluding this impact, Corporate and Other Adjusted EBITDA would be $15.6 million . (2) Primarily represents share-based compensation, other compensation expense and severance payments. (3) Primarily represents the elimination of non-cash equity earnings from our 19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A., net of cash dividends received and fees and expenses associated with corporate transactions as defined in the Credit Agreement. Nine months ended September 30, 2018 (In thousands) Payment Payment Merchant Business Corporate and Other (1) Total Revenues $ 84,162 $ 58,534 $ 73,829 $ 145,985 $ (26,872 ) $ 335,638 Operating costs and expenses 39,084 55,357 41,413 90,349 12,879 239,082 Depreciation and amortization 7,230 7,035 1,268 10,437 21,413 47,383 Non-operating income (expenses) 1,969 7,048 8 378 (6,913 ) 2,490 EBITDA 54,277 17,260 33,692 66,451 (25,251 ) 146,429 Compensation and benefits (2) 885 1,080 746 1,609 6,350 10,670 Transaction, refinancing and other fees (3) (250 ) — — 1 2,986 2,737 Adjusted EBITDA $ 54,912 $ 18,340 $ 34,438 $ 68,061 $ (15,915 ) $ 159,836 (1) Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations. Intersegment revenue eliminations predominantly reflect the $26.9 million processing fee from the Payments Services - Puerto Rico & Caribbean segment to the Merchant Acquiring segment. (2) Primarily represents share-based compensation, other compensation expense and severance payments. (3) Primarily represents fees and expenses associated with corporate transactions as defined in the Credit Agreement and the elimination of non-cash equity earnings from our 19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A., net of cash dividends received. The reconciliation of EBITDA to consolidated net income is as follows: Three months ended September 30, Nine months ended September 30, (In thousands) 2019 2018 2019 2018 Total EBITDA $ 52,397 $ 49,517 $ 160,442 $ 146,429 Less: Income tax expense 3,720 3,302 10,018 10,349 Interest expense, net 6,919 7,352 21,327 22,375 Depreciation and amortization 16,972 15,788 50,440 47,383 Net Income $ 24,786 $ 23,075 $ 78,657 $ 66,322 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On October 23, 2019 , the Board declared a regular quarterly cash dividend of $0.05 per share on the Company’s outstanding shares of common stock. The dividend will be paid on December 6, 2019 to stockholders of record as of the close of business on November 4, 2019 |
The Company and Basis of Pres_2
The Company and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
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 a 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. The Company provides services across 26 countries in the region. EVERTEC owns and operates the ATH network, one of the leading debit networks in Latin America. In addition, EVERTEC provides a comprehensive suite of services for core bank processing and cash processing in Puerto Rico and technology outsourcing in all the regions the Company serves. EVERTEC serves a broad and diversified customer base of leading financial institutions, merchants, corporations and government agencies with solutions that are essential to their operations, enabling them to issue, process and accept transactions securely. EVERTEC's common stock is listed under the ticker symbol "EVTC" on the New York Stock Exchange. |
Basis of Presentation | Basis of Presentation The unaudited condensed 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 condensed 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 condensed 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 condensed consolidated financial statements should be read in conjunction with the Audited Consolidated Financial Statements of the Company for the year ended December 31, 2018 , included in the Company’s Annual Report on Form 10-K. In the opinion of management, the accompanying condensed consolidated financial statements, prepared in accordance with GAAP, contain all adjustments necessary for a fair presentation. Intercompany accounts and transactions are eliminated in consolidation. |
Recent Accounting Pronouncements | Accounting pronouncements issued prior to 2019 and not yet adopted In June 2016, November 2018, April 2019 and May 2019, the Financial Accounting Standards Board ("FASB") issued updated guidance for the measurement of credit losses on financial instruments, which replaces the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The main objective of these updates is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The updates affect trade receivables, debt securities, net investment in leases, and most other financial assets that represent a right to receive cash. Additional disclosures about significant estimates and credit quality are also required. In addition, the updated guidance also clarifies that receivables from operating leases are accounted for using the lease guidance and not as financial instruments. The updates provide an option to irrevocably elect to measure certain individual financial assets at fair value instead of amortized cost. The standards will be effective for the Company beginning January 1, 2020. The Company will adopt the updated guidance using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the effective date to align the credit loss methodology with the new standard. The Company is in the process of implementing its new credit loss model and updating its processes and controls in preparation for the adoption of the updated guidance. Based on the initial assessment, the updates are expected to have an impact on trade receivables, and other assets that represent rights to receive cash. However, the Company does not expect this standard to have a material effect on the consolidated financial statements. In August 2018, the FASB issued an updated disclosure framework for fair value measurements. The amendments in the issued update remove, modify and add disclosure requirements on fair value measurements in Topic 820 Fair Value Measurements. The amendments in this update are effective to all entities for the fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Certain amendments in the update should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented. Early adoption is permitted upon issuance of this update. An entity is permitted to early adopt any removed or modified disclosures upon issuance of this update and delay adoption of the additional disclosures until their effective date. Mainly given that the Company does not currently have any assets or liabilities classified as level 3 in the fair value hierarchy, the adoption of this update is not expected to have an impact on the disclosures currently included in the notes to the condensed consolidated financial statements. In August 2018, the FASB issued updated guidance for customer’s accounting for implementation, set-up and other upfront costs incurred in a cloud computing arrangement that is a service contract. The amendments in this update align the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The amendments in this update are effective for public business entities for fiscal years beginning after December 15, 2019, with early adoption permitted, and interim periods within those fiscal years. The amendments in this update should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company will adopt the update effective January 1, 2020 and will apply the guidance in this update to all implementation costs prospectively. In October 2018, the FASB issued updated guidance to improve related party guidance for variable interest entities. The updated guidance requires entities to consider indirect interests held through related parties under common control on a proportional basis rather than as the equivalent of a direct interest in its entirety when determining whether a decision-making fee is a variable interest. The amendments in this update are effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. These amendments should be applied retrospectively with a cumulative-effect adjustment to retained earnings at the beginning of the earliest period presented. The Company will adopt this guidance effective January 1, 2020. The Company does not expect the adoption of this guidance to have an impact on the consolidated financial statements. In November 2018, the FASB issued updated guidance to clarify the interaction between the guidance for collaborative arrangements and the updated revenue recognition guidance. The amendments in this update, among other things, provide guidance on how to assess whether certain collaborative arrangement transactions should be accounted for under Topic 606. The amendments in this update are effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. The Company will adopt this guidance effective January 1, 2020 with no impact on its consolidated financial statements. Future contracts will be evaluated under the updated guidance once effective. |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Property and equipment, net consists of the following: (Dollar amounts in thousands) Useful life September 30, 2019 December 31, 2018 Buildings 30 $ 1,481 $ 1,440 Data processing equipment 3 - 5 119,386 110,673 Furniture and equipment 3 - 20 6,780 7,761 Leasehold improvements 5 -10 2,782 2,625 130,429 122,499 Less - accumulated depreciation and amortization (88,561 ) (86,990 ) Depreciable assets, net 41,868 35,509 Land 1,311 1,254 Property and equipment, net $ 43,179 $ 36,763 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
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 operating segments, were as follows (See Note 14): (In thousands) Payment Payment Merchant Business Total Balance at December 31, 2018 $ 160,972 $ 49,728 $ 138,121 $ 45,823 $ 394,644 Foreign currency translation adjustments — 1,204 — — 1,204 Balance at September 30, 2019 $ 160,972 $ 50,932 $ 138,121 $ 45,823 $ 395,848 |
Carrying Amount of Other Intangible Assets | The carrying amount of other intangible assets at September 30, 2019 and December 31, 2018 was as follows: September 30, 2019 (Dollar amounts in thousands) Useful life in years Gross Accumulated Net carrying Customer relationships 8 - 14 $ 343,174 $ (213,989 ) $ 129,185 Trademark 2 - 15 41,596 (31,565 ) 10,031 Software packages 3 - 10 247,650 (164,810 ) 82,840 Non-compete agreement 15 56,539 (33,923 ) 22,616 Other intangible assets, net $ 688,959 $ (444,287 ) $ 244,672 December 31, 2018 (Dollar amounts in thousands) Useful life in years Gross Accumulated Net carrying Customer relationships 8 - 14 $ 342,738 $ (194,570 ) $ 148,168 Trademark 2 - 15 41,357 (28,888 ) 12,469 Software packages 3 - 10 224,855 (151,666 ) 73,189 Non-compete agreement 15 56,539 (31,096 ) 25,443 Other intangible assets, net $ 665,489 $ (406,220 ) $ 259,269 |
Estimated Amortization Expenses | The estimated amortization expense of the balances outstanding at September 30, 2019 for the next five years is as follows: (Dollar amounts in thousands) Remaining 2019 $ 12,688 2020 45,952 2021 40,965 2022 36,224 2023 33,950 |
Debt and Short-Term Borrowings
Debt and Short-Term Borrowings (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Total Debt | Total debt at September 30, 2019 and December 31, 2018 follows: (In thousands) September 30, 2019 December 31, 2018 Secured Credit Facility (2023 Term A) due on November 27, 2023 paying interest at a variable interest rate (LIBOR plus applicable margin (1)(2) ) $ 209,892 $ 217,791 Senior Secured Credit Facility (2024 Term B) due on November 27, 2024 paying interest at a variable interest rate (LIBOR plus applicable margin (2)(3) ) 318,575 320,515 Senior Secured Revolving Credit Facility (1) — — Note Payable due on April 30, 2021 (2) 207 300 Note Payable due on December 28, 2019 2,500 — Total debt $ 531,174 $ 538,606 (1) Applicable margin of 2.00% at September 30, 2019 and 2.25% at December 31, 2018 . (2) Net of unaccreted discount and unamortized debt issue costs, as applicable. (3) Subject to a minimum rate ("LIBOR floor") of 0% plus applicable margin of 3.50% at September 30, 2019 and December 31, 2018 . |
Summary of Interest Rate Swap Transaction | At September 30, 2019 , the Company has two interest rate swap agreements, entered in December 2015 and December 2018, which convert a portion of the interest rate payments on the Company's 2024 Term B Loan from variable to fixed: Swap Agreement Effective date Maturity Date Notional Amount Variable Rate Fixed Rate 2015 Swap January 2017 April 2020 $200 million 1-month LIBOR 1.9225% 2018 Swap April 2020 November 2024 $250 million 1-month LIBOR 2.89% |
Carrying Amount of Derivative Instruments on Company's Balance Sheet | At September 30, 2019 and December 31, 2018 , the carrying amount of the derivatives on the Company’s consolidated balance sheets is as follows: (In thousands) September 30, 2019 December 31, 2018 Other long-term assets $ — $ 1,683 Other long-term liabilities $ 16,687 $ 4,059 |
Financial Instruments and Fai_2
Financial Instruments and Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement for Liability at Fair Value on Recurring Basis | The following table summarizes the fair value measurement by level at September 30, 2019 and December 31, 2018 for assets and liabilities measured at fair value on a recurring basis: (In thousands) Level 1 Level 2 Level 3 Total September 30, 2019 Financial liability: Interest rate swap $ — $ 16,687 $ — $ 16,687 December 31, 2018 Financial asset: Interest rate swap $ — $ 1,683 $ — $ 1,683 Financial liability: Interest rate swap — 4,059 — 4,059 |
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 September 30, 2019 and December 31, 2018 : September 30, 2019 December 31, 2018 (In thousands) Carrying Fair Carrying Fair Financial assets: Interest rate swap $ — $ — $ 1,683 $ 1,683 Financial liabilities: Interest rate swap 16,687 16,687 4,059 4,059 2023 Term A 209,892 209,103 217,791 218,625 2024 Term B 318,575 324,579 320,515 319,517 |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Summary of Changes in Balances of Accumulated Other Comprehensive Loss | The following table provides a summary of the changes in the balances of accumulated other comprehensive loss for the nine months period ended September 30, 2019 : (In thousands) Foreign Currency Cash Flow Hedges Total Balance - December 31, 2018, net of tax $ (21,626 ) $ (2,163 ) $ (23,789 ) Other comprehensive income (loss) before reclassifications 3,714 (12,305 ) (8,591 ) Effective portion reclassified to Net Income — (714 ) (714 ) Balance - September 30, 2019, net of tax $ (17,912 ) $ (15,182 ) $ (33,094 ) |
Share-based Compensation (Table
Share-based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Nonvested Restricted Shares and RSUs Activity | The following table summarizes nonvested restricted shares and RSUs activity for the nine months ended September 30, 2019 : Nonvested restricted shares and RSUs Shares Weighted-average Nonvested at December 31, 2018 2,036,163 $ 15.09 Forfeited (18,775 ) 17.14 Vested (687,198 ) 28.68 Granted 373,286 29.46 Nonvested at September 30, 2019 1,703,476 $ 18.47 |
Revenues (Tables)
Revenues (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | In the following tables, revenue is disaggregated by timing of revenue recognition for the periods indicated. Three months ended September 30, 2019 (In thousands) Payment Services - Puerto Rico & Caribbean Payment Services - Latin America Merchant Acquiring, net Business Solutions Total Timing of revenue recognition Products and services transferred at a point in time $ 43 $ 228 $ — $ 2,939 $ 3,210 Products and services transferred over time 20,299 18,853 26,436 50,006 115,594 $ 20,342 $ 19,081 $ 26,436 $ 52,945 $ 118,804 Three months ended September 30, 2018 (In thousands) Payment Services - Puerto Rico & Caribbean Payment Services - Latin America Merchant Acquiring, net Business Solutions Total Timing of revenue recognition Products and services transferred at a point in time $ 114 $ 15 $ — $ 1,652 $ 1,781 Products and services transferred over time 19,679 18,892 24,486 47,179 110,236 $ 19,793 $ 18,907 $ 24,486 $ 48,831 $ 112,017 Nine months ended September 30, 2019 (In thousands) Payment Services - Puerto Rico & Caribbean Payment Services - Latin America Merchant Acquiring, net Business Solutions Total Timing of revenue recognition Products and services transferred at a point in time $ 2,835 $ 419 $ — $ 6,590 $ 9,844 Products and services transferred over time 60,957 57,282 79,203 152,902 350,344 $ 63,792 $ 57,701 $ 79,203 $ 159,492 $ 360,188 Nine months ended September 30, 2018 (In thousands) Payment Services - Puerto Rico & Caribbean Payment Services - Latin America Merchant Acquiring, net Business Solutions Total Timing of revenue recognition Products and services transferred at a point in time $ 307 $ 444 $ — $ 3,861 $ 4,612 Products and services transferred over time 56,983 58,090 73,829 142,124 331,026 $ 57,290 $ 58,534 $ 73,829 $ 145,985 $ 335,638 |
Summary of Contract Balances | The following table provides information about contract assets from contracts with customers. (In thousands) September 30, 2019 December 31, 2018 $ 996 Services transferred to customers 544 Transfers to accounts receivable (416 ) September 30, 2019 $ 1,124 |
Income Tax (Tables)
Income Tax (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Components of Income Tax Expense (Benefit) | The components of income tax expense for the three and nine months ended September 30, 2019 and 2018 , respectively, consisted of the following: Three months ended Nine months ended (In thousands) 2019 2018 2019 2018 Current tax provision $ 6,096 $ 4,923 $ 14,215 $ 13,083 Deferred tax benefit (2,376 ) (1,621 ) (4,197 ) (2,734 ) Income tax expense $ 3,720 $ 3,302 $ 10,018 $ 10,349 |
Segregation of Income Tax Expense Based on Location of Operations | The following table presents the components of income tax expense for the three and nine months ended September 30, 2019 and 2018 , and its segregation based on location of operations: Three months ended September 30, Nine months ended September 30, (In thousands) 2019 2018 2019 2018 Current tax provision (benefit) Puerto Rico $ 2,117 $ 2,208 $ 5,433 $ 6,063 United States 187 (31 ) 202 142 Foreign countries 3,792 2,746 8,580 6,878 Total current tax provision $ 6,096 $ 4,923 $ 14,215 $ 13,083 Deferred tax benefit Puerto Rico $ (1,583 ) $ (1,026 ) $ (3,178 ) $ (2,059 ) United States (169 ) (11 ) (168 ) (109 ) Foreign countries (624 ) (584 ) (851 ) (566 ) Total deferred tax benefit $ (2,376 ) $ (1,621 ) $ (4,197 ) $ (2,734 ) |
Net Income Per Common Share (Ta
Net Income Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
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 September 30, Nine months ended September 30, (Dollar amounts in thousands, except per share information) 2019 2018 2019 2018 Net income attributable to EVERTEC, Inc.’s common stockholders $ 24,754 $ 22,997 $ 78,456 $ 66,071 Less: non-forfeitable dividends on restricted stock 2 2 2 2 Net income available to EVERTEC, Inc.’s common shareholders $ 24,752 $ 22,995 $ 78,454 $ 66,069 Weighted average common shares outstanding 71,942,403 72,721,414 72,148,312 72,590,679 Weighted average potential dilutive common shares (1) 1,372,301 1,935,686 1,382,553 1,532,752 Weighted average common shares outstanding - assuming dilution 73,314,704 74,657,100 73,530,865 74,123,431 Net income per common share - basic $ 0.34 $ 0.32 $ 1.09 $ 0.91 Net income per common share - diluted $ 0.34 $ 0.31 $ 1.07 $ 0.89 (1) Potential common shares consist of common stock issuable under the assumed release of restricted stock awards using the treasury stock method. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Components of Lease Expense | Total lease cost for the three and nine months ended September 30, 2019 , was as follows: Three months ended Nine months ended September 30, 2019 September 30, 2019 (in thousands) Operating lease cost $ 1,907 $ 5,833 Finance lease cost — — Amortization of right-of-use assets 63 196 Interest on lease liabilities 5 20 Variable lease cost 700 2,117 $ 2,675 $ 8,166 Other information related to leases, at September 30, 2019 , was as follows: (In thousands) Right-of-use assets obtained in exchange for operating lease obligations: $ 273 Weighted average remaining lease term, in years Operating leases 6.0 Finance leases 1.0 Weighted Average Discount Rate Operating leases 4.5 % Finance leases 4.2 % |
Maturities of Operating Lease Liabilities | Future minimum lease payments under leases at September 30, 2019 were as follows: (In thousands) Operating Leases Finance Leases Remaining 2019 $ 1,698 $ 99 2020 6,492 311 2021 5,680 32 2022 5,419 — 2023 5,385 — Thereafter 11,184 — Total future minimum lease payments 35,858 442 Less: imputed interest (4,468 ) (25 ) $ 31,390 $ 417 Reported as of September 30, 2019 Accrued liabilities $ — $ 349 Operating lease payable 5,704 — Operating lease liabilities - long term 25,686 — Other long-term liabilities — 68 $ 31,390 $ 417 |
Maturities of Financing Lease Liabilities | Future minimum lease payments under leases at September 30, 2019 were as follows: (In thousands) Operating Leases Finance Leases Remaining 2019 $ 1,698 $ 99 2020 6,492 311 2021 5,680 32 2022 5,419 — 2023 5,385 — Thereafter 11,184 — Total future minimum lease payments 35,858 442 Less: imputed interest (4,468 ) (25 ) $ 31,390 $ 417 Reported as of September 30, 2019 Accrued liabilities $ — $ 349 Operating lease payable 5,704 — Operating lease liabilities - long term 25,686 — Other long-term liabilities — 68 $ 31,390 $ 417 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Transactions with Related Parties | The following table presents the Company’s transactions with related parties for the three and nine months ended September 30, 2019 and 2018 : Three months ended September 30, Nine months ended September 30, (Dollar amounts in thousands) 2019 2018 2019 2018 Total revenues (1)(2) $ 52,702 $ 47,216 $ 154,022 $ 139,954 Cost of revenues $ 1,719 $ 840 $ 3,580 $ 2,192 Operating lease cost and other fees $ 1,959 $ 2,016 $ 6,177 $ 5,984 Interest earned from affiliate Interest income $ 43 $ 37 $ 98 $ 101 (1) Popular revenues as a percentage of total revenues were 44% , 42% , 43% , and 41% for each of the periods presented above, respectively. (2) Includes revenues generated from investee accounted for under the equity method of $0.3 million , $0.3 million , $0.8 million and $1.0 million for each the periods presented above, respectively. |
Summary of Balances of Transactions with Related Parties | At September 30, 2019 and December 31, 2018 , EVERTEC had the following balances arising from transactions with related parties: (Dollar amounts in thousands) September 30, 2019 December 31, 2018 Cash and restricted cash deposits in affiliated bank $ 47,442 $ 29,136 Other due/to from affiliate Accounts receivable $ 35,054 $ 25,714 Prepaid expenses and other assets $ 2,504 $ 2,796 Operating lease right-of use assets $ 21,474 $ — Other long-term assets $ 76 $ 166 Accounts payable $ 2,006 $ 6,344 Unearned income $ 32,177 $ 25,401 Operating lease liabilities $ 21,688 $ — |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Information about Operations by Business Segments | The following tables set forth information about the Company’s operations by its four business segments for the periods indicated: Three months ended September 30, 2019 (In thousands) Payment Payment Merchant Business Corporate and Other (1) Total Revenues $ 30,411 $ 20,596 $ 26,436 $ 52,945 $ (11,584 ) $ 118,804 Operating costs and expenses 15,821 11,943 15,978 32,259 8,001 84,002 Depreciation and amortization 3,093 2,650 457 3,780 6,992 16,972 Non-operating income (expenses) 410 (3,824 ) 8 67 3,962 623 EBITDA 18,093 7,479 10,923 24,533 (8,631 ) 52,397 Compensation and benefits (2) 284 109 285 549 2,228 3,455 Transaction, refinancing and other fees (3) — — — — (372 ) (372 ) Adjusted EBITDA $ 18,377 $ 7,588 $ 11,208 $ 25,082 $ (6,775 ) $ 55,480 (1) Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations. Intersegment revenue eliminations predominantly reflect the $10.0 million processing fee from the Payments Services - Puerto Rico & Caribbean segment to the Merchant Acquiring segment and intercompany software sale and developments of $1.6 million from the Payment Services - Latin America segment charged to the Payment Services - Puerto Rico & Caribbean segment. Corporate and Other was impacted by the intersegment elimination of revenue recognized in the Payment Services - Latin America segment and capitalized in the Payment Services - Puerto Rico & Caribbean segment; excluding this impact, Corporate and Other Adjusted EBITDA would be $5.2 million . (2) Primarily represents share-based compensation. (3) Primarily represents the elimination of non-cash equity earnings from our 19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A., net of cash dividends received. Three months ended September 30, 2018 (In thousands) Payment Payment Merchant Business Corporate and Other (1) Total Revenues $ 28,951 $ 18,907 $ 24,486 $ 48,831 $ (9,158 ) $ 112,017 Operating costs and expenses 13,021 18,890 14,160 30,983 2,602 79,656 Depreciation and amortization 2,505 2,337 427 3,398 7,121 15,788 Non-operating income (expenses) 602 3,834 — 12 (3,080 ) 1,368 EBITDA 19,037 6,188 10,753 21,258 (7,719 ) 49,517 Compensation and benefits (2) 207 363 196 485 1,117 2,368 Transaction, refinancing and other fees (3) — — (1 ) 1 215 215 Adjusted EBITDA $ 19,244 $ 6,551 $ 10,948 $ 21,744 $ (6,387 ) $ 52,100 (1) Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations. Intersegment revenue eliminations predominantly reflect the $9.2 million processing fee from the Payments Services - Puerto Rico & Caribbean segment to the Merchant Acquiring segment. (2) Primarily represents share-based compensation. (3) Primarily the elimination of non-cash equity earnings from our 19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A., net of cash dividends received and fees and expenses associated with corporate transactions as defined in the Credit Agreement. Nine months ended September 30, 2019 (In thousands) Payment Payment Merchant Business Corporate and Other (1) Total Revenues $ 92,910 $ 62,533 $ 79,203 $ 159,492 $ (33,950 ) $ 360,188 Operating costs and expenses 43,666 47,170 45,926 101,128 12,403 250,293 Depreciation and amortization 8,476 7,393 1,348 12,113 21,110 50,440 Non-operating income (expenses) 1,461 411 39 287 (2,091 ) 107 EBITDA 59,181 23,167 34,664 70,764 (27,334 ) 160,442 Compensation and benefits (2) 778 448 760 1,632 6,774 10,392 Transaction, refinancing and other fees (3) — 2 — — 37 39 Adjusted EBITDA $ 59,959 $ 23,617 $ 35,424 $ 72,396 $ (20,523 ) $ 170,873 (1) Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations. Intersegment revenue eliminations predominantly reflect the $29.0 million processing fee from the Payments Services - Puerto Rico & Caribbean segment to the Merchant Acquiring segment, intercompany software sale and developments of $4.9 million from the Payment Services - Latin America segment charged to the Payment Services - Puerto Rico & Caribbean segment. Corporate and Other was impacted by the intersegment elimination of revenue recognized in the Payment Services - Latin America segment and capitalized in the Payment Services - Puerto Rico & Caribbean segment; excluding this impact, Corporate and Other Adjusted EBITDA would be $15.6 million . (2) Primarily represents share-based compensation, other compensation expense and severance payments. (3) Primarily represents the elimination of non-cash equity earnings from our 19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A., net of cash dividends received and fees and expenses associated with corporate transactions as defined in the Credit Agreement. Nine months ended September 30, 2018 (In thousands) Payment Payment Merchant Business Corporate and Other (1) Total Revenues $ 84,162 $ 58,534 $ 73,829 $ 145,985 $ (26,872 ) $ 335,638 Operating costs and expenses 39,084 55,357 41,413 90,349 12,879 239,082 Depreciation and amortization 7,230 7,035 1,268 10,437 21,413 47,383 Non-operating income (expenses) 1,969 7,048 8 378 (6,913 ) 2,490 EBITDA 54,277 17,260 33,692 66,451 (25,251 ) 146,429 Compensation and benefits (2) 885 1,080 746 1,609 6,350 10,670 Transaction, refinancing and other fees (3) (250 ) — — 1 2,986 2,737 Adjusted EBITDA $ 54,912 $ 18,340 $ 34,438 $ 68,061 $ (15,915 ) $ 159,836 (1) Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations. Intersegment revenue eliminations predominantly reflect the $26.9 million processing fee from the Payments Services - Puerto Rico & Caribbean segment to the Merchant Acquiring segment. (2) Primarily represents share-based compensation, other compensation expense and severance payments. (3) Primarily represents fees and expenses associated with corporate transactions as defined in the Credit Agreement and the elimination of non-cash equity earnings from our 19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A., net of cash dividends received. |
Reconciliation of Income from Operations to Consolidated Net Income | The reconciliation of EBITDA to consolidated net income is as follows: Three months ended September 30, Nine months ended September 30, (In thousands) 2019 2018 2019 2018 Total EBITDA $ 52,397 $ 49,517 $ 160,442 $ 146,429 Less: Income tax expense 3,720 3,302 10,018 10,349 Interest expense, net 6,919 7,352 21,327 22,375 Depreciation and amortization 16,972 15,788 50,440 47,383 Net Income $ 24,786 $ 23,075 $ 78,657 $ 66,322 |
The Company and Basis of Pres_3
The Company and Basis of Presentation (Detail) | Sep. 30, 2019country |
Accounting Policies [Abstract] | |
Number of countries where the Company provides a broad range of merchant acquiring, payment processing and business process management services (in country) | 26 |
Property and Equipment, net (De
Property and Equipment, net (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Property and Equipment, net | |||||
Property and equipment, gross | $ 130,429 | $ 130,429 | $ 122,499 | ||
Less - accumulated depreciation and amortization | (88,561) | (88,561) | (86,990) | ||
Depreciable assets, net | 41,868 | 41,868 | 35,509 | ||
Land | 1,311 | 1,311 | 1,254 | ||
Property and equipment, net | 43,179 | 43,179 | 36,763 | ||
Depreciation and amortization expense related to property and equipment | 4,100 | $ 3,700 | $ 12,400 | $ 10,900 | |
Buildings | |||||
Property and Equipment, net | |||||
Useful life in years | 30 years | ||||
Property and equipment, gross | 1,481 | $ 1,481 | 1,440 | ||
Data processing equipment | |||||
Property and Equipment, net | |||||
Property and equipment, gross | 119,386 | $ 119,386 | 110,673 | ||
Data processing equipment | Minimum | |||||
Property and Equipment, net | |||||
Useful life in years | 3 years | ||||
Data processing equipment | Maximum | |||||
Property and Equipment, net | |||||
Useful life in years | 5 years | ||||
Furniture and equipment | |||||
Property and Equipment, net | |||||
Property and equipment, gross | 6,780 | $ 6,780 | 7,761 | ||
Furniture and equipment | Minimum | |||||
Property and Equipment, net | |||||
Useful life in years | 3 years | ||||
Furniture and equipment | Maximum | |||||
Property and Equipment, net | |||||
Useful life in years | 20 years | ||||
Leasehold improvements | |||||
Property and Equipment, net | |||||
Property and equipment, gross | $ 2,782 | $ 2,782 | $ 2,625 | ||
Leasehold improvements | Minimum | |||||
Property and Equipment, net | |||||
Useful life in years | 5 years | ||||
Leasehold improvements | Maximum | |||||
Property and Equipment, net | |||||
Useful life in years | 10 years |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Goodwill by Segments (Detail) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Changes in the Carrying Amount of Goodwill | |
Beginning balance | $ 394,644 |
Foreign currency translation adjustments | 1,204 |
Ending balance | 395,848 |
Payment Services - Puerto Rico & Caribbean | |
Changes in the Carrying Amount of Goodwill | |
Beginning balance | 160,972 |
Foreign currency translation adjustments | 0 |
Ending balance | 160,972 |
Payment Services - Latin America | |
Changes in the Carrying Amount of Goodwill | |
Beginning balance | 49,728 |
Foreign currency translation adjustments | 1,204 |
Ending balance | 50,932 |
Merchant Acquiring, net | |
Changes in the Carrying Amount of Goodwill | |
Beginning balance | 138,121 |
Foreign currency translation adjustments | 0 |
Ending balance | 138,121 |
Business Solutions | |
Changes in the Carrying Amount of Goodwill | |
Beginning balance | 45,823 |
Foreign currency translation adjustments | 0 |
Ending balance | $ 45,823 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Impairment of goodwill | $ 0 | |||
Amortization expense for intangible assets | $ 12,900,000 | $ 11,900,000 | $ 38,000,000 | $ 36,400,000 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Other Intangible Assets (Detail) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross amount | $ 688,959 | $ 665,489 |
Accumulated amortization | (444,287) | (406,220) |
Net carrying amount | 244,672 | 259,269 |
Customer relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross amount | 343,174 | 342,738 |
Accumulated amortization | (213,989) | (194,570) |
Net carrying amount | $ 129,185 | $ 148,168 |
Customer relationships | Minimum | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life in years | 8 years | 8 years |
Customer relationships | Maximum | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life in years | 14 years | 14 years |
Trademark | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross amount | $ 41,596 | $ 41,357 |
Accumulated amortization | (31,565) | (28,888) |
Net carrying amount | $ 10,031 | $ 12,469 |
Trademark | Minimum | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life in years | 2 years | 2 years |
Trademark | Maximum | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life in years | 15 years | 15 years |
Software packages | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross amount | $ 247,650 | $ 224,855 |
Accumulated amortization | (164,810) | (151,666) |
Net carrying amount | $ 82,840 | $ 73,189 |
Software packages | Minimum | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life in years | 3 years | 3 years |
Software packages | Maximum | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life in years | 10 years | 10 years |
Non-compete agreement | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Useful life in years | 15 years | 15 years |
Gross amount | $ 56,539 | $ 56,539 |
Accumulated amortization | (33,923) | (31,096) |
Net carrying amount | $ 22,616 | $ 25,443 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Estimated Amortization Expenses (Detail) $ in Thousands | Sep. 30, 2019USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remaining 2019 | $ 12,688 |
2020 | 45,952 |
2021 | 40,965 |
2022 | 36,224 |
2023 | $ 33,950 |
Debt and Short-Term Borrowing_2
Debt and Short-Term Borrowings - Total Debt (Detail) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | ||
Total debt | $ 531,174 | $ 538,606 |
Note Payable due on April 30, 2021 | Notes Payable | ||
Debt Instrument [Line Items] | ||
Note payable | 207 | 300 |
Note Payable due on December 28, 2019 | Notes Payable | ||
Debt Instrument [Line Items] | ||
Note payable | 2,500 | 0 |
Term A due on November 27,2023 | Credit Facility | ||
Debt Instrument [Line Items] | ||
Credit facility | $ 209,892 | $ 217,791 |
Term A due on November 27,2023 | Credit Facility | LIBOR | ||
Debt Instrument [Line Items] | ||
Margin interest rate | 2.00% | 2.25% |
Term B due on November 27, 2024 | Credit Facility | ||
Debt Instrument [Line Items] | ||
Credit facility | $ 318,575 | $ 320,515 |
Term B due on November 27, 2024 | Credit Facility | LIBOR | ||
Debt Instrument [Line Items] | ||
Minimum variable rate | 0.00% | 3.50% |
Senior Secured Revolving Credit Facility | Credit Facility | ||
Debt Instrument [Line Items] | ||
Credit facility | $ 0 | $ 0 |
Debt and Short-Term Borrowing_3
Debt and Short-Term Borrowings - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019USD ($)agreement | Sep. 30, 2019USD ($)agreement | Jan. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Nov. 27, 2018USD ($) | May 31, 2016USD ($) | |
Debt Instrument [Line Items] | ||||||
Number of interest rate swap agreements | agreement | 2 | 2 | ||||
Gains reclassified from accumulated other comprehensive loss into income | $ (200,000) | $ 700,000 | ||||
Losses expected to be reclassified from accumulated other comprehensive loss into income in the next 12 months | 1,100,000 | 1,100,000 | ||||
Notes Payable | May 2016 Financing Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Non interest bearing financing agreement | $ 700,000 | |||||
Note payable | 200,000 | 200,000 | $ 300,000 | |||
Notes Payable | January 2019 Financing Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Non interest bearing financing agreement | $ 10,000,000 | |||||
Note payable | 2,500,000 | 2,500,000 | ||||
Term A due on November 27,2023 | Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Secured credit facilities | 211,800,000 | 211,800,000 | ||||
Term A due on November 27,2023 | Credit Facility | Credit Agreement 2018 | ||||||
Debt Instrument [Line Items] | ||||||
Maximum amount under credit facilities | $ 220,000,000 | |||||
Term B due on November 27, 2024 | Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Secured credit facilities | 322,600,000 | 322,600,000 | ||||
Term B due on November 27, 2024 | Credit Facility | Credit Agreement 2018 | ||||||
Debt Instrument [Line Items] | ||||||
Maximum amount under credit facilities | 325,000,000 | |||||
Senior Secured Revolving Credit Facility | Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Additional borrowing capacity available under the Revolving Facility | $ 116,900,000 | $ 116,900,000 | ||||
Senior Secured Revolving Credit Facility | Credit Facility | Credit Agreement 2018 | ||||||
Debt Instrument [Line Items] | ||||||
Maximum amount under credit facilities | $ 125,000,000 |
Debt and Short-Term Borrowing_4
Debt and Short-Term Borrowings - Summary of Interest Rate Swap Transaction (Detail) $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($) | |
2015 Interest Rate Swap Agreement | |
Derivative [Line Items] | |
Notional Amount | $ 200 |
2015 Interest Rate Swap Agreement | 1-month LIBOR | |
Derivative [Line Items] | |
Fixed Rate | 1.9225% |
2018 Interest Rate Swap Agreement | |
Derivative [Line Items] | |
Notional Amount | $ 250 |
2018 Interest Rate Swap Agreement | 1-month LIBOR | |
Derivative [Line Items] | |
Fixed Rate | 2.89% |
Debt and Short-Term Borrowing_5
Debt and Short-Term Borrowings - Carrying Amount of Derivative Instruments on Company's Balance Sheet (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Debt Disclosure [Abstract] | ||
Interest rate swap | $ 0 | $ 1,683 |
Interest rate swap | $ 16,687 | 4,059 |
Other long-term assets | 1,683 | |
Other long-term liabilities | $ 4,059 |
Financial Instruments and Fai_3
Financial Instruments and Fair Value Measurements - Recurring Basis (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Financial asset: | ||
Interest rate swap | $ 0 | $ 1,683 |
Financial liability: | ||
Interest rate swap | 16,687 | 4,059 |
Recurring | Level 1 | ||
Financial asset: | ||
Interest rate swap | 0 | |
Financial liability: | ||
Interest rate swap | 0 | 0 |
Recurring | Level 2 | ||
Financial asset: | ||
Interest rate swap | 1,683 | |
Financial liability: | ||
Interest rate swap | 16,687 | 4,059 |
Recurring | Level 3 | ||
Financial asset: | ||
Interest rate swap | 0 | |
Financial liability: | ||
Interest rate swap | $ 0 | $ 0 |
Financial Instruments and Fai_4
Financial Instruments and Fair Value Measurements - Carrying Value and Estimated Fair Values (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Financial assets: | ||
Interest rate swap | $ 0 | $ 1,683 |
Financial liabilities: | ||
Interest rate swap | 16,687 | 4,059 |
Carrying Amount | ||
Financial assets: | ||
Interest rate swap | 0 | 1,683 |
Financial liabilities: | ||
Interest rate swap | 16,687 | 4,059 |
Carrying Amount | Credit Facility | 2023 Term A | ||
Financial liabilities: | ||
Senior secured term loan | 209,892 | 217,791 |
Carrying Amount | Credit Facility | 2024 Term B | ||
Financial liabilities: | ||
Senior secured term loan | 318,575 | 320,515 |
Fair Value | ||
Financial assets: | ||
Interest rate swap | 0 | 1,683 |
Financial liabilities: | ||
Interest rate swap | 16,687 | 4,059 |
Fair Value | Credit Facility | 2023 Term A | ||
Financial liabilities: | ||
Senior secured term loan | 209,103 | 218,625 |
Fair Value | Credit Facility | 2024 Term B | ||
Financial liabilities: | ||
Senior secured term loan | $ 324,579 | $ 319,517 |
Equity (Detail)
Equity (Detail) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Changes in Accumulated Other Comprehensive Income (Loss) | |
Beginning balance | $ 215,606 |
Other comprehensive income (loss) before reclassifications | (8,591) |
Effective portion reclassified to Net Income | (714) |
Ending balance | 249,256 |
Foreign Currency Translation Adjustments | |
Changes in Accumulated Other Comprehensive Income (Loss) | |
Beginning balance | (21,626) |
Other comprehensive income (loss) before reclassifications | 3,714 |
Effective portion reclassified to Net Income | 0 |
Ending balance | (17,912) |
Cash Flow Hedges | |
Changes in Accumulated Other Comprehensive Income (Loss) | |
Beginning balance | (2,163) |
Other comprehensive income (loss) before reclassifications | (12,305) |
Effective portion reclassified to Net Income | (714) |
Ending balance | (15,182) |
Total | |
Changes in Accumulated Other Comprehensive Income (Loss) | |
Beginning balance | (23,789) |
Ending balance | $ (33,094) |
Share-based Compensation - Addi
Share-based Compensation - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expenses | $ 3.5 | $ 2.4 | $ 10.2 | $ 9.7 |
Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Maximum unrecognized cost for stocks and RSU's | $ 16.7 | $ 16.7 | ||
Unrecognized compensation cost, weighted average period of recognition | 1 year 8 months 12 days | |||
Time Based Awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
Awards with Performance Conditions | 2017 LTIP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
Performance adjustment percent | 25.00% | |||
Performance measurement period | 1 year | |||
Requisite service period | 2 years |
Share-based Compensation - Nonv
Share-based Compensation - Nonvested Restricted Shares and RSUs Activity (Detail) - Restricted Shares and RSUs | 9 Months Ended |
Sep. 30, 2019$ / sharesshares | |
Shares | |
Beginning balance (in shares) | shares | 2,036,163 |
Forfeited (in shares) | shares | (18,775) |
Vested (in shares) | shares | (687,198) |
Granted (in shares) | shares | 373,286 |
Ending balance (in shares) | shares | 1,703,476 |
Weighted-average grant date fair value | |
Beginning balance (in usd per share) | $ / shares | $ 15.09 |
Forfeited (in usd per share) | $ / shares | 17.14 |
Vested (in usd per share) | $ / shares | 28.68 |
Granted (in usd per share) | $ / shares | 29.46 |
Ending balance (in usd per share) | $ / shares | $ 18.47 |
Revenues - Disaggregation of Re
Revenues - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 118,804 | $ 112,017 | $ 360,188 | $ 335,638 |
Products and services transferred at a point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 3,210 | 1,781 | 9,844 | 4,612 |
Products and services transferred over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 115,594 | 110,236 | 350,344 | 331,026 |
Payment Services - Puerto Rico & Caribbean | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 20,342 | 19,793 | 63,792 | 57,290 |
Payment Services - Puerto Rico & Caribbean | Products and services transferred at a point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 43 | 114 | 2,835 | 307 |
Payment Services - Puerto Rico & Caribbean | Products and services transferred over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 20,299 | 19,679 | 60,957 | 56,983 |
Payment Services - Latin America | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 19,081 | 18,907 | 57,701 | 58,534 |
Payment Services - Latin America | Products and services transferred at a point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 228 | 15 | 419 | 444 |
Payment Services - Latin America | Products and services transferred over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 18,853 | 18,892 | 57,282 | 58,090 |
Merchant Acquiring, net | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 26,436 | 24,486 | 79,203 | 73,829 |
Merchant Acquiring, net | Products and services transferred at a point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Merchant Acquiring, net | Products and services transferred over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 26,436 | 24,486 | 79,203 | 73,829 |
Business Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 52,945 | 48,831 | 159,492 | 145,985 |
Business Solutions | Products and services transferred at a point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 2,939 | 1,652 | 6,590 | 3,861 |
Business Solutions | Products and services transferred over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 50,006 | $ 47,179 | $ 152,902 | $ 142,124 |
Revenues - Contract Balances (D
Revenues - Contract Balances (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Revenue, Contract Balances [Roll Forward] | |
December 31, 2018 | $ 996 |
Services transferred to customers | 544 |
Transfers to accounts receivable | (416) |
September 30, 2019 | $ 1,124 |
Revenues - Performance Obligati
Revenues - Performance Obligations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Accounts receivable, net | $ 92,195 | $ 92,195 | $ 100,323 | ||
Unearned income | 14,596 | 14,596 | 11,527 | ||
Unearned income - long term | 29,722 | 29,722 | $ 26,075 | ||
Revenue recognized that was included in unearned income | 1,800 | $ 1,200 | 13,100 | $ 6,900 | |
Transaction price allocated to performance obligations that are unsatisfied or partially satisfied | $ 261,700 | $ 261,700 | |||
Professional Services, All Other Contracts | Minimum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-07-01 | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Revenue, remaining performance obligation, period of expected timing of satisfaction | 2 years | 2 years | |||
Professional Services, All Other Contracts | Maximum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-07-01 | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Revenue, remaining performance obligation, period of expected timing of satisfaction | 5 years | 5 years |
Income Tax - Components of Inco
Income Tax - Components of Income Tax Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Current tax provision | $ 6,096 | $ 4,923 | $ 14,215 | $ 13,083 |
Deferred tax benefit | (2,376) | (1,621) | (4,197) | (2,734) |
Income tax expense | $ 3,720 | $ 3,302 | $ 10,018 | $ 10,349 |
Income Tax - Tax Expense Based
Income Tax - Tax Expense Based on Location (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Current tax provision (benefit) | ||||
Puerto Rico | $ 2,117 | $ 2,208 | $ 5,433 | $ 6,063 |
United States | 187 | (31) | 202 | 142 |
Foreign countries | 3,792 | 2,746 | 8,580 | 6,878 |
Total current tax provision | 6,096 | 4,923 | 14,215 | 13,083 |
Deferred tax benefit | ||||
Puerto Rico | (1,583) | (1,026) | (3,178) | (2,059) |
United States | (169) | (11) | (168) | (109) |
Foreign countries | (624) | (584) | (851) | (566) |
Total deferred tax benefit | $ (2,376) | $ (1,621) | $ (4,197) | $ (2,734) |
Income Tax - Additional Informa
Income Tax - Additional Information (Detail) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Income Tax Disclosure [Abstract] | ||
Unremitted earnings from foreign subsidiaries | $ 58.5 | |
Gross deferred tax asset | 14.1 | $ 10.8 |
Gross deferred tax liability | $ 16.7 | $ 18.8 |
Net Income Per Common Share - R
Net Income Per Common Share - Reconciliation of Income Per Common Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | Sep. 06, 2019 | Jul. 25, 2019 | Jun. 07, 2019 | Apr. 25, 2019 | Mar. 22, 2019 | Feb. 15, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 |
Earnings Per Share [Abstract] | ||||||||||||
Net income attributable to EVERTEC, Inc.’s common stockholders | $ 24,754 | $ 22,997 | $ 78,456 | $ 66,071 | ||||||||
Less: non-forfeitable dividends on restricted stock | 2 | 2 | 2 | 2 | ||||||||
Net income available to EVERTEC, Inc.’s common shareholders | $ 24,752 | $ 22,995 | $ 78,454 | $ 66,069 | ||||||||
Weighted average common shares outstanding (in shares) | 71,942,403 | 72,721,414 | 72,148,312 | 72,590,679 | ||||||||
Weighted average potential dilutive common shares (in shares) | 1,372,301 | 1,935,686 | 1,382,553 | 1,532,752 | ||||||||
Weighted average common shares outstanding - assuming dilution (in shares) | 73,314,704 | 74,657,100 | 73,530,865 | 74,123,431 | ||||||||
Net income per common share - basic (in usd per share) | $ 0.34 | $ 0.32 | $ 1.09 | $ 0.91 | ||||||||
Net income per common share - diluted (in usd per share) | 0.34 | $ 0.31 | $ 1.07 | $ 0.89 | ||||||||
Cash dividends declared (in usd per share) | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | ||||||
Common stock dividends paid (in usd per share) | $ 0.05 | $ 0.05 | $ 0.05 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | |
Equipment leases classified as finance leases | $ 0.7 |
Office Facilities, Buildings, Telecommunications, and Other Equipment | |
Lessee, Lease, Description [Line Items] | |
Lease renewal term | 5 years |
Termination period | 1 year |
Minimum | Office Facilities, Buildings, Telecommunications, and Other Equipment | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 1 year |
Maximum | Office Facilities, Buildings, Telecommunications, and Other Equipment | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 10 years |
Commitments and Contingencies_2
Commitments and Contingencies - Components of Lease Expense (Details) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating lease cost | $ 1,907 | $ 5,833 |
Finance lease cost | ||
Amortization of right-of-use assets | 63 | 196 |
Interest on lease liabilities | 5 | 20 |
Variable lease cost | 700 | 2,117 |
Lease, cost | $ 2,675 | 8,166 |
Operating Lease, Assets And Liabilities, Lessee [Abstract] | ||
Right-of-use assets obtained in exchange for operating lease obligations: | $ 273 | |
Weighted average remaining lease term, in years | ||
Operating leases | 6 years | 6 years |
Finance leases | 1 year | 1 year |
Weighted Average Discount Rate | ||
Operating leases | 4.50% | 4.50% |
Finance leases | 4.20% | 4.20% |
Commitments and Contingencies_3
Commitments and Contingencies - Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Operating Leases | ||
Remaining 2019 | $ 1,698 | |
2020 | 6,492 | |
2021 | 5,680 | |
2022 | 5,419 | |
2023 | 5,385 | |
Thereafter | 11,184 | |
Total future minimum lease payments | 35,858 | |
Less: imputed interest | (4,468) | |
Operating lease liabilities | 31,390 | |
Finance Leases | ||
Remaining 2019 | 99 | |
2020 | 311 | |
2021 | 32 | |
2022 | 0 | |
2023 | 0 | |
Thereafter | 0 | |
Total future minimum lease payments | 442 | |
Less: imputed interest | (25) | |
Finance lease liabilities | 417 | |
Accrued liabilities | 349 | |
Operating lease payable | 5,704 | $ 0 |
Operating lease liabilities - long term | 25,686 | $ 0 |
Other long-term liabilities | $ 68 |
Related Party Transactions - Tr
Related Party Transactions - Transactions with Related Parties (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Transactions with Third Party | ||||
Total revenues | $ 52,702 | $ 47,216 | $ 154,022 | $ 139,954 |
Cost of revenues | 1,719 | 840 | 3,580 | 2,192 |
Operating lease cost and other fees | 1,959 | 2,016 | 6,177 | 5,984 |
Interest earned from affiliate | ||||
Interest income | 43 | 37 | 98 | 101 |
Earnings (losses) of equity method investment | 371 | 238 | 726 | 612 |
Popular | ||||
Interest earned from affiliate | ||||
Earnings (losses) of equity method investment | $ 300 | $ 300 | $ 800 | $ 1,000 |
Popular | Customer Concentration Risk | Total Revenue | ||||
Interest earned from affiliate | ||||
Total percentage of revenues from Popular | 44.00% | 42.00% | 43.00% | 41.00% |
Related Party Transactions - Ba
Related Party Transactions - Balances of Transactions (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Related Party Transactions [Abstract] | ||
Cash and restricted cash deposits in affiliated bank | $ 47,442 | $ 29,136 |
Other due/to from affiliate | ||
Accounts receivable | 35,054 | 25,714 |
Prepaid expenses and other assets | 2,504 | 2,796 |
Operating lease right-of use assets | 21,474 | 0 |
Other long-term assets | 76 | 166 |
Accounts payable | 2,006 | 6,344 |
Unearned income | 32,177 | 25,401 |
Operating lease liabilities | $ 21,688 | $ 0 |
Segment Information - Operation
Segment Information - Operations by Segments (Detail) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)segment | Sep. 30, 2018USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of operating business segments (in segment) | segment | 4 | |||
Revenues | $ 118,804 | $ 112,017 | $ 360,188 | $ 335,638 |
Operating costs and expenses | 84,002 | 79,656 | 250,293 | 239,082 |
Depreciation and amortization | 16,972 | 15,788 | 50,440 | 47,383 |
Non-operating income (expenses) | 623 | 1,368 | 107 | 2,490 |
EBITDA | 52,397 | 49,517 | 160,442 | 146,429 |
Compensation and benefits | 3,455 | 2,368 | 10,392 | 10,670 |
Transaction, refinancing and other fees | (372) | 215 | 39 | 2,737 |
Adjusted EBITDA | $ 55,480 | $ 52,100 | $ 170,873 | $ 159,836 |
Consorcio de Tarjetas Dominicanas S.A. | ||||
Segment Reporting Information [Line Items] | ||||
Equity investment | 19.99% | 19.99% | 19.99% | 19.99% |
Payment Services - Puerto Rico & Caribbean | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 20,342 | $ 19,793 | $ 63,792 | $ 57,290 |
Payment Services - Latin America | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 19,081 | 18,907 | 57,701 | 58,534 |
Merchant Acquiring, net | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 26,436 | 24,486 | 79,203 | 73,829 |
Business Solutions | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 52,945 | 48,831 | 159,492 | 145,985 |
Operating Segments | Payment Services - Puerto Rico & Caribbean | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 30,411 | 28,951 | 92,910 | 84,162 |
Operating costs and expenses | 15,821 | 13,021 | 43,666 | 39,084 |
Depreciation and amortization | 3,093 | 2,505 | 8,476 | 7,230 |
Non-operating income (expenses) | 410 | 602 | 1,461 | 1,969 |
EBITDA | 18,093 | 19,037 | 59,181 | 54,277 |
Compensation and benefits | 284 | 207 | 778 | 885 |
Transaction, refinancing and other fees | 0 | 0 | 0 | (250) |
Adjusted EBITDA | 18,377 | 19,244 | 59,959 | 54,912 |
Operating Segments | Payment Services - Latin America | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 20,596 | 18,907 | 62,533 | 58,534 |
Operating costs and expenses | 11,943 | 18,890 | 47,170 | 55,357 |
Depreciation and amortization | 2,650 | 2,337 | 7,393 | 7,035 |
Non-operating income (expenses) | (3,824) | 3,834 | 411 | 7,048 |
EBITDA | 7,479 | 6,188 | 23,167 | 17,260 |
Compensation and benefits | 109 | 363 | 448 | 1,080 |
Transaction, refinancing and other fees | 0 | 0 | 2 | 0 |
Adjusted EBITDA | 7,588 | 6,551 | 23,617 | 18,340 |
Operating Segments | Merchant Acquiring, net | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 26,436 | 24,486 | 79,203 | 73,829 |
Operating costs and expenses | 15,978 | 14,160 | 45,926 | 41,413 |
Depreciation and amortization | 457 | 427 | 1,348 | 1,268 |
Non-operating income (expenses) | 8 | 0 | 39 | 8 |
EBITDA | 10,923 | 10,753 | 34,664 | 33,692 |
Compensation and benefits | 285 | 196 | 760 | 746 |
Transaction, refinancing and other fees | 0 | (1) | 0 | 0 |
Adjusted EBITDA | 11,208 | 10,948 | 35,424 | 34,438 |
Operating Segments | Business Solutions | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 52,945 | 48,831 | 159,492 | 145,985 |
Operating costs and expenses | 32,259 | 30,983 | 101,128 | 90,349 |
Depreciation and amortization | 3,780 | 3,398 | 12,113 | 10,437 |
Non-operating income (expenses) | 67 | 12 | 287 | 378 |
EBITDA | 24,533 | 21,258 | 70,764 | 66,451 |
Compensation and benefits | 549 | 485 | 1,632 | 1,609 |
Transaction, refinancing and other fees | 0 | 1 | 0 | 1 |
Adjusted EBITDA | 25,082 | 21,744 | 72,396 | 68,061 |
Corporate and Other | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | (11,584) | (9,158) | (33,950) | (26,872) |
Operating costs and expenses | 8,001 | 2,602 | 12,403 | 12,879 |
Depreciation and amortization | 6,992 | 7,121 | 21,110 | 21,413 |
Non-operating income (expenses) | 3,962 | (3,080) | (2,091) | (6,913) |
EBITDA | (8,631) | (7,719) | (27,334) | (25,251) |
Compensation and benefits | 2,228 | 1,117 | 6,774 | 6,350 |
Transaction, refinancing and other fees | (372) | 215 | 37 | 2,986 |
Adjusted EBITDA | (6,775) | (6,387) | (20,523) | (15,915) |
Payment Processing | Corporate and Other | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 10,000 | $ 9,200 | 29,000 | $ 26,900 |
Payment Processing | Corporate and Other | Payment Services - Latin America | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 5,200 | 15,600 | ||
Software Sale And Developments | Corporate and Other | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 1,600 | $ 4,900 |
Segment Information - Income fr
Segment Information - Income from Segments to Consolidated Net Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Segment Reporting [Abstract] | ||||||||
Total EBITDA | $ 52,397 | $ 49,517 | $ 160,442 | $ 146,429 | ||||
Less: | ||||||||
Income tax expense | 3,720 | 3,302 | 10,018 | 10,349 | ||||
Interest expense, net | 6,919 | 7,352 | 21,327 | 22,375 | ||||
Depreciation and amortization | 16,972 | 15,788 | 50,440 | 47,383 | ||||
Net income | $ 24,786 | $ 27,137 | $ 26,734 | $ 23,075 | $ 20,133 | $ 23,114 | $ 78,657 | $ 66,322 |
Subsequent Events (Details)
Subsequent Events (Details) - $ / shares | Oct. 23, 2019 | Jul. 25, 2019 | Apr. 25, 2019 | Feb. 15, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 |
Subsequent Event [Line Items] | |||||||
Cash dividends declared (in usd per share) | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | |
Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Cash dividends declared (in usd per share) | $ 0.05 |
Uncategorized Items - evertec10
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 842,000 |
Noncontrolling Interest [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (16,000) |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 858,000 |