8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event report): May 6, 2013

EVERTEC, INC.

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

Puerto Rico	001-35872	66-0783622
(State or other jurisdiction of incorporation or organization)	(Commission file number)	(I.R.S. employer identification number)

Cupey Center Building, Road 176 Kilometer 1.3, San Juan, Puerto Rico	00926
( Address of principal executive offices)	(Zip Code)

(787) 759-9999

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

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

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

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

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

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

Item 2.02 Results of Operations and Financial Condition.

On May 6, 2013, EVERTEC, Inc. issued a press release announcing its results for the quarter ended March 31, 2013. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein.

Note: The information contained in this report (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Number	Exhibit
99.1	Press Release issued by EVERTEC, Inc. dated May 6, 2013.

SIGNATURES

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

	EVERTEC, Inc.
	(Registrant)
Date: May 6, 2013	By:	/s/ Juan J. Román
	Name:	Juan J. Román
	Title:	Chief Financial Officer

EXHIBIT INDEX

Number	Exhibit
99.1	Press Release issued by EVERTEC, Inc. dated May 6, 2013

EX-99.1

Exhibit 99.1

EVERTEC REPORTS FIRST QUARTER 2013 RESULTS

Adjusted Net Income Increased 37% to $27.5 Million

Successfully Completed Initial Public Offering and Debt Refinancing in April

SAN JUAN, PUERTO RICO – May 6, 2013 — EVERTEC, Inc. (NYSE: EVTC) (“EVERTEC” or the “Company”) today announced results for the first quarter ended March 31, 2013.

“We are pleased to report another quarter of strong financial results and to begin a new chapter as a publicly traded company. Our successful initial public offering and our continued strong financial results are a testament to the value of our best-in-class technology platform, diversified business model and leading franchise. These qualities have allowed us to provide our customers with differentiated, value-add services, become the leading payments processor and related technology provider in the Latin American region and to continue to penetrate new markets and geographies,” said Peter Harrington, EVERTEC’s President and Chief Executive Officer. “We remain excited by the breadth of opportunities available to us to continue to build long-term shareholder value including our continuing ability to capitalize on the powerful secular trends in the high-growth Latin American payments market.”

First Quarter 2013 Results

Revenues. Total revenues for the quarter ended March 31, 2013 were $87.3 million, representing an increase of 6% as compared to $82.5 million in the prior year.

Merchant Acquiring revenues for the quarter ended March 31, 2013 were $17.5 million, representing a decrease of 1% as compared to $17.7 million in the prior year. The revenue growth comparison in this quarter is impacted by certain effects related to the Durbin Amendment which went into effect in the fourth quarter of 2011. Normalizing for the effects related to the Durbin Amendment, revenues in this segment grew at 8% vs. the prior year.

Payment Processing revenues for the quarter ended March 31, 2013 were $24.1 million, representing an increase of 5% as compared to $22.9 million in the prior year. Revenue growth was primarily driven by an increase in transactions processed and accounts on file.

Business Solutions revenues for the quarter ended March 31, 2013 were $45.8 million, representing an increase of 9% as compared to $41.9 million in the prior year. Revenue growth was primarily driven by an increase in demand for our network and core banking products and services.

Adjusted EBITDA. For the quarter ended March 31, 2013 Adjusted EBITDA was $41.8 million, representing an increase of 8% as compared to $38.5 million in the prior year. The increase in Adjusted EBITDA was primarily driven by the aforementioned growth in revenues and significant operating leverage in our business. Adjusted EBITDA margin (Adjusted EBITDA as a percentage of total revenues) improved by approximately 110 basis points to 47.8% from 46.7% in the prior year.

Adjusted Net Income. For the quarter ended March 31, 2013 Adjusted Net Income was $27.5 million ($0.36 per diluted share), representing an increase of 37% as compared to $20.1 million ($0.26 per diluted share) in the prior year. The increase in Adjusted Net Income was primarily driven by the same factors impacting Adjusted EBITDA and lower pro forma cash interest expense as a result of the refinancing described in greater detail below.

Recent Developments

Initial Public Offering. On April 17, 2013, EVERTEC successfully completed its initial public offering (“IPO”) of 28.8 million shares of common stock at $20.00 per share. The offering included 6.3 million primary shares sold by EVERTEC and 22.5 million secondary shares sold by certain stockholders of the Company. Net proceeds to the Company of approximately $117.4 million from the offering were used to redeem $91.0 million aggregate principal amount of the 11% senior notes due 2018 issued by two of EVERTEC’s subsidiaries and pay transaction related fees and expenses.

Debt Refinancing. Concurrent with its IPO, EVERTEC’s subsidiary entered into $800.0 million of new senior secured credit facilities comprised of a $100 million revolving credit facility (undrawn at close), $300 million term loan A, and $400 million term loan B. Net proceeds from the loans were used to refinance all of the Company’s outstanding indebtedness under its existing senior secured credit facilities and to redeem the portion of the 11% senior notes due 2018 that remained outstanding after the application of net primary IPO proceeds, as described above. Pro forma for the refinancing, EVERTEC will reduce its annual interest expense by approximately 55% or $29.6 million per annum.

Earnings Conference Call and Audio Webcast

The Company will host a conference call to discuss first quarter 2013 financial results today at 5:00 PM EDT. Hosting the call will be Peter Harrington, President and Chief Executive Officer and Juan José Román, Executive Vice President and Chief Financial Officer. The conference call can be accessed live over the phone by dialing (888) 503-8169, or for international callers (719) 325-2393. A replay will be available at 8:00 PM EDT and can be accessed by dialing (877) 870-5176 or (858) 384-5517 for international callers; the pin number is 1905328. The replay will be available until Monday, May 13, 2013. The call will be webcast live from the Company’s website at www.evertecinc.com under the Corporate Investor Relations section or directly at http://ir.evertecinc.com.

About EVERTEC, Inc.

EVERTEC is the leading full-service transaction processing business in Latin America and the Caribbean. Based in Puerto Rico, EVERTEC provides a broad range of merchant acquiring, payment processing and business process management services across 19 countries in the region. EVERTEC processes over 1.8 billion transactions annually, and manages the electronic payment network for over 4,100 automated teller machines (“ATM”) and over 104,000 point-of-sale payment terminals. EVERTEC is the largest merchant acquirer in the Caribbean and Central America and the sixth largest in Latin America. EVERTEC owns and operates the ATH network, one of the leading ATM and personal identification number debit networks in Latin America. In addition, EVERTEC provides a comprehensive suite of services for core bank processing, cash processing and technology outsourcing. EVERTEC serves a broad and diversified customer base of leading financial institutions, merchants, corporations and government agencies with ‘mission critical’ technology solutions and believes its business is well positioned to continue to expand across the fast growing Latin American region. For more information, visit http://www.evertecinc.com.

About Non-GAAP Financial Measures

This earnings release presents EBITDA, Adjusted EBITDA, Adjusted Net Income, and Adjusted Net Income per share information. These are supplemental measures of our performance that are not required by, or presented in accordance with, accounting principles generally accepted in the United States of America (“GAAP”). They are not measurements of our financial performance under GAAP and should not be considered as alternatives to total revenues, net income or any other performance measures derived in accordance with GAAP or as alternatives to cash flows from operating activities, as indicators of cash flows or as measures of our liquidity. We present EBITDA and Adjusted EBITDA because we consider them important supplemental measures of our performance and believe they are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. In addition, our presentation of Adjusted EBITDA is consistent with the equivalent measurements that are contained in the Credit Agreement in testing EVERTEC Group’s compliance with covenants therein such as the senior secured leverage ratio. We use Adjusted Net Income to measure our overall profitability because it better reflects our cash flow generation by capturing the actual cash taxes paid rather than our tax expense as calculated under GAAP and excludes the impact of the non-cash amortization and depreciation that was created as a result of the Merger. For more information regarding EBITDA, Adjusted EBITDA, Adjusted Net Income, and Adjusted Net Income per share, including a quantitative reconciliation of EBITDA, Adjusted EBITDA and Adjusted Net Income to the most directly comparable GAAP financial performance measure, which is net income, see Schedule 4: Reconciliation of GAAP to Non-GAAP Operating Results in this earnings release.

Forward-Looking Statements

Certain statements in this press release constitute “forward-looking statements” within the meaning of, and subject to the protection of, the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance or achievements of EVERTEC to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Statements preceded by, followed by, or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” and “plans” and similar expressions of future or conditional verbs such as “will,” “should,” “would,” “may,” and “could” are generally forward-looking in nature and not historical facts. Any statements that refer to expectations or other characterizations of future events, circumstances or results are forward-looking statements.

Various factors that could cause actual future results and other future events to differ materially from those estimated by management include, but are not limited to: our reliance on our relationship with Popular for a significant portion of our revenues; our ability to renew our client contracts on terms favorable to us; our dependence on our processing systems, technology infrastructure, security systems and fraudulent-payment-detection systems; our ability to develop, install and adopt new technology; a decreased client base due to consolidations in the banking and financial-services industry; the credit risk of our merchant clients, for which we may also be liable; the continuing market position of the ATH^® network; our dependence on credit card associations; changes in the regulatory environment and changes in international, legal, political, administrative or economic conditions; the geographical concentration of our business in Puerto Rico; operating an international business in multiple regions with potential political and economic instability; our ability to execute our expansion and acquisition strategies; our ability to protect our intellectual property rights; our ability to recruit and retain qualified personnel; our ability to comply with federal, state, and local regulatory requirements; evolving industry standards; our high level of indebtedness and restrictions contained in our debt agreements; and our ability to generate sufficient cash to service our indebtedness and to generate future profits.

Consideration should be given to the areas of risk described above, as well as those risks set forth under the headings “Forward-Looking Statements” and “Risk Factors” in the reports the Company files with the SEC from time to time, in connection with considering any forward-looking statements that may be made by us and our businesses generally. We undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events unless we are required to do so by law.

Contacts

Investor Contact

Luis M. Cabrera

Senior Vice President

Head of Investor Relations

(787) 773-5302

IR@evertecinc.com

Media Contact

Wanda Betancourt, APR

Senior Vice President

Communications and Marketing

(787) 773-5302

NewsMedia@evertecinc.com

EVERTEC, Inc.

Schedule 1: Unaudited Consolidated Statements of Income and Comprehensive Income

	Quarters ended March 31,
(Dollar amounts in thousands, except per share data)	2013			2012
Revenues
Merchant acquiring, net	$	17,459		$	17,661
Payment processing		24,112			22,899
Business solutions		45,768			41,928
Total revenues		87,339			82,488
Operating costs and expenses
Cost of revenues, exclusive of depreciation and amortization shown below		40,502			37,741
Selling, general and administrative expenses		8,863			8,987
Depreciation and amortization		17,575			17,922
Total operating costs and expenses		66,940			64,650
Income from operations		20,399			17,838
Non-operating (expenses) income
Interest income		44			122
Interest expense		(15,264	)		(11,176	)
Earnings of equity method investment		277			66
Other income (expenses)		67			(2,260	)
Total non-operating expenses		(14,876	)		(13,248	)
Income before income taxes		5,523			4,590
Income tax expense		51			1,056
Net income		5,472			3,534
Other comprehensive income, net of income tax expense of $0 and $6
Foreign currency translation adjustments		2,354			1,106
Total comprehensive income	$	7,826		$	4,640
Net income per common share: (1)
Basic	$	0.08		$	0.05
Diluted	$	0.07		$	0.05
Shares used in computing net income per common share: (1)
Basic		72,736,107			72,646,074
Diluted		76,879,263			76,317,066

⁽¹⁾  Share count was adjusted for the 2:1 stock split that occurred on April 1, 2013. Share count does not include the 6.3 million primary shares that were issued in connection with our initial public offering.

EVERTEC, Inc.

Schedule 2: Unaudited Consolidated Balance Sheets

(Dollar amounts in thousands, except per share data)	March 31, 2013		December 31, 2012
Assets
Current Assets:
Cash	$	34,128	$	25,634
Restricted cash		4,827		4,939
Accounts receivable, net		74,747		78,621
Deferred tax asset		2,857		1,434
Prepaid expenses and other assets		20,822		19,345
Total current assets		137,381		129,973
Investment in equity investee		11,389		11,080
Property and equipment, net		35,088		36,737
Goodwill		373,718		372,307
Other intangible assets, net		392,269		403,170
Other long-term assets		24,034		24,478
Total assets	$	973,879	$	977,745
Liabilities and stockholders’ equity
Current Liabilities:
Accrued liabilities	$	43,672	$	34,609
Accounts payable		22,817		24,482
Unearned income		1,943		1,166
Income tax payable		1,762		2,959
Current portion of long-term debt		—		6,052
Short-term borrowings		8,663		26,995
Deferred tax liability, net		1,034		632
Total current liabilities		79,891		96,895
Long-term debt		734,718		730,709
Long-term deferred tax liability, net		25,618		24,614
Other long-term liabilities		3,040		3,072
Total liabilities		843,267		855,290
Commitments and contingencies
Stockholders’ equity
Preferred stock, par value $0.01; 2,000,000 shares authorized; none issued		—		—
Common stock, par value $0.01; 206,000,000 shares authorized; 72,846,144 shares issued and outstanding at March 31, 2013 and December 31, 2012		728		728
Additional paid-in capital		52,486		52,155
Accumulated earnings		75,886		70,414
Accumulated other comprehensive income (loss)		1,512		(842	)
Total stockholders’ equity		130,612		122,455
Total liabilities and stockholders’ equity	$	973,879	$	977,745

EVERTEC, Inc.

Schedule 3: Unaudited Consolidated Statements of Cash Flows

	Quarters ended March 31,
	2013			2012
Cash flows from operating activities
Net income	$	5,472		$	3,534
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		17,575			17,922
Amortization of debt issue costs and premium and accretion of discount		1,466			1,170
Provision for doubtful accounts and sundry losses		660			397
Deferred tax benefit		(234	)		(962	)
Share-based compensation		331			260
Unrealized (gain) loss of indemnification assets		(16	)		175
Amortization of a contract liability		—			(703	)
Loss on disposition of property and equipment		11			20
Earnings of equity method investment		(277	)		(66	)
(Increase) decrease in assets:
Accounts receivable, net		4,196			3,930
Prepaid expenses and other assets		(1,449	)		1,934
Other long-term assets		(838	)		—
Increase (decrease) in liabilities:
Accounts payable and accrued liabilities		7,354			4,477
Income tax payable		(1,197	)		(1,380	)
Unearned income		777			15
Total adjustments		28,359			27,189
Net cash provided by operating activities		33,831			30,723
Cash flows from investing activities
Net decrease (increase) in restricted cash		112			(220	)
Intangible assets acquired		(2,197	)		(1,139	)
Property and equipment acquired		(2,257	)		(2,532	)
Proceeds from sales of property and equipment		8			8
Net cash used in investing activities		(4,334	)		(3,883	)
Cash flows from financing activities
Short-term borrowings		(18,332	)		—
Issuance of common stock		—			250
Repayment of long-term debt		(2,671	)		—
Net cash (used in) provided by financing activities		(21,003	)		250
Net increase in cash		8,494			27,090
Cash at beginning of the period		25,634			56,200
Cash at end of the period	$	34,128		$	83,290

EVERTEC, Inc.

Schedule 4: Reconciliation of GAAP to Non-GAAP Operating Results

	Quarters ended March 31,
(Dollar amounts in thousands, except per share data)	2013			2012
Net income	$	5,472		$	3,534
Income tax expense		51			1,056
Interest expense, net		15,220			11,054
Depreciation and amortization		17,575			17,922
EBITDA		38,318			33,566
Software maintenance reimbursement and other costs (1)		602			640
Equity income (2)		(277	)		(66	)
Compensation and benefits (3)		331			2,507
Pro forma cost reduction adjustments (4)		75			—
Transaction and other non-recurring fees (5)		1,870			1,257
Management fees (6)		848			745
Purchase accounting (7)		(16	)		(143	)
Adjusted EBITDA		41,751			38,506
Proforma EBITDA adjustments (8)		(75	)		—
Operating depreciation and amortization (9)		(7,815	)		(7,734	)
Cash interest expense, net (10)		(5,676	)		(9,884	)
Cash income taxes (11)		(697	)		(805	)
Adjusted Net Income	$	27,488		$	20,083
Adjusted Net Income per common share: (12)
Basic	$	0.38		$	0.28
Diluted	$	0.36		$	0.26
Shares used in computing Adjusted Net Income per common share: (12)
Basic		72,736,107			72,646,074
Diluted		76,879,263			76,317,066

1) Primarily represents reimbursements received for certain software maintenance expenses as part of the Merger.

2) Represents the elimination of non-cash equity earnings from our 19.99% equity investment in CONTADO, net of cash dividends received.

3) Mainly represents adjustments related to non-cash equity based compensation.

4) Represents the pro forma effect of the expected net compensation and benefits savings from the reduction of certain employees. This pro forma amount was calculated using the net amount of actual expenses for certain employees for the twelve months period prior to their separation.

5) Represents non-recurring expenses and fees associated with certain one-time corporate transactions.

6) Represents the management fee payable to the equity sponsors. On April 17, 2013, the management services fee agreements with Apollo and Popular were terminated.

7) Represents the elimination of the effects of purchase accounting in connection with certain customer service and software related arrangements where EVERTEC receives reimbursements from Popular.

8) Represents the elimination of EBITDA adjustments to reflect the pro forma benefit related to headcount reduction described in note 4 above.

9) Represents operating depreciation and amortization expense which excludes amounts generated as a result of the Merger.

10) Represents interest expense, less interest income, as they appear on our consolidated statements of income, adjusted to exclude non-cash amortization of debt issue costs, premium and accretion of discount. For the quarter ended March 31, 2013 represents pro forma cash interest expense assuming EVERTEC’s April 2013 refinancing occurred on January 1, 2013. Actual cash interest expense for the quarter ended March 31, 2013 was $13.8 million.

11) Represents cash taxes paid for each period presented.

12) Share count was adjusted for the 2:1 stock split that occurred on April 1, 2013. Share count does not include the 6.3 million primary shares that were issued in connection with our initial public offering.