EX-99.1 2 exhibit99-1.htm EXHIBIT 99.1 Net 1 UEPS Technologies, Inc.: Exhibit 99.1 - Filed by newsfilecorp.com

     Exhibit 99.1

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

  • Q2 2015 Revenue and FEPS of $154.1 million and $0.57, a constant currency increase of 24% and 56% respectively.

JOHANNESBURG, February 5, 2015 – Net 1 UEPS Technologies, Inc. (Nasdaq: UEPS; JSE: NT1) today released results for the second quarter of fiscal 2015.

Summary Financial Metrics

    Three months ended December 31,  
                % change     % change  
    2014     2013     in USD     in ZAR  
(All figures in USD ‘000s except per share data)                        
Revenue   154,131     137,283     12%     24%  
GAAP net income   22,374     12,749     75%     94%  
Fundamental net income (1)   26,400     18,398     43%     58%  
GAAP earnings per share ($)   0.48     0.28     73%     91%  
Fundamental earnings per share ($) (1)   0.57     0.40     43%     56%  
Fully-diluted shares outstanding (‘000’s)   46,644     46,176     2%        
Average period USD/ ZAR exchange rate   11.22     10.16     10%        

    Six months ended December 31,  
                % change     % change  
    2014     2013     in USD     in ZAR  
(All figures in USD ‘000s except per share data)                        
Revenue   310,572     260,777     19%     30%  
GAAP net income   46,463     24,345     91%     108%  
Fundamental net income (1)   54,522     35,174     55%     69%  
GAAP earnings per share ($)   0.99     0.53     86%     102%  
Fundamental earnings per share ($) (1)   1.16     0.77     51%     65%  
Fully-diluted shares outstanding (‘000’s)   46,990     45,919     2%        
Average period USD/ ZAR exchange rate   10.97     10.08     9%        

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

Factors impacting comparability of our Q2 2015 and Q2 2014 results

  • Unfavorable impact from the strengthening of the USD against the ZAR: The USD appreciated by 10% against the ZAR during the second quarter of fiscal 2015, which negatively impacted our reported results;
  • Increased contribution by KSNET: Our results were positively impacted by growth in our Korean operations;
  • Increase in the number of SASSA grants paid: Our revenue and operating income has increased as a result of the higher number of SASSA UEPS/EMV cardholders paid during fiscal 2015 compared with 2014; and
  • Continued growth in financial inclusion services: We continued to grow our financial inclusion services offerings during the second quarter of fiscal 2015, which has resulted in higher revenues and operating income from more sales of low-margin prepaid airtime and UEPS-based lending.

Comments and Outlook

“Our operational and financial performance once again speaks for itself as we continue to deliver meaningful growth in revenue and earnings,” said Dr. Serge Belamant, Chairman and CEO of Net1. “Our prospects and pipeline are extremely exciting, particularly as they reflect opportunities in the mobile space, which is the payment paradigm of the future. We are globalizing, we have the technology, we have the dedicated staff, we have the financial resources and we have the passion. Carpe Diem! I believe that our efforts, innovations and lateral thinking will be noticed and appreciated by the market and enhance shareholder value,” he concluded.

“I am thrilled with the sustained top and bottom line growth generated by our core businesses,” said Herman Kotz, Chief Financial Officer of Net1. “Given our strategic and operational momentum, for fiscal 2015, we now expect fundamental earnings per share of at least $2.28, assuming a constant currency base of ZAR10.40/ $1 and a share count of 46.5 million shares,” he concluded.

Results of Operations by Segment and Liquidity

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

South African transaction processing

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

Segment revenue was $58.4 million in Q2 2015, down 1% compared with Q2 2014 in USD and up 10% on a constant currency basis. In ZAR, the increase in segment revenues was primarily due to more low-margin transaction fees generated from beneficiaries using the South African National Payment System and more intersegment transaction processing activities. In addition, revenue from the distribution of social welfare grants grew modestly during the year and was in-line with the increase in unique welfare cardholder recipients, net of removal of invalid and fraudulent beneficiaries, partially offset by the loss of MediKredit revenue as a result of the sale of that business. Segment operating income margin in Q2 2015 and Q2 2014 was 22% and 12%, respectively, and has increased primarily due to more higher-margin intersegment transaction processing activities, the elimination of MediKredit losses and an increase in the number of beneficiaries paid in Q2 2015.

International transaction processing

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

KSNET contributes the majority of our revenues and operating income in this segment. Segment revenue was $40.5 million in Q2 2015, up 7% compared with Q2 2014 in USD and 18% on a constant currency basis. Revenue and operating income increased primarily due to higher transaction volume at KSNET during Q2 2015. However, operating income for Q2 2015, was adversely impacted by ad hoc incentives provided to staff due to the strong operating performance of KSNET during calendar 2014. Segment operating income margin during each of Q2 2015 and Q2 2014 was 14%, respectively.

Financial inclusion and applied technologies

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

Segment revenue was $67.5 million in Q2 2015, up 34% compared with Q2 2014 in USD and 48% on a constant currency basis. Revenue and operating income increased primarily due to higher prepaid airtime sales driven by the rollout of our prepaid airtime product, an increase in the number of UEPS-based loans as we rolled out our product nationally, and, in ZAR, an increase in intersegment revenues. Smart Life did not contribute to operating income in Q2 2015 and 2014 due to the FSB suspension of its license.

Operating income margin for the Financial inclusion and applied technologies segment was 26% during each of the second quarter of fiscal 2015 and 2014, respectively.

Corporate/eliminations

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

The decrease in our corporate expenses was primarily due to lower US government investigations-related and US lawsuit expenses, audit fees and other corporate head office-related expenses.

Cash flow and liquidity

At December 31, 2014, we had cash and cash equivalents of $71.0 million, up from $58.7 million at June 30, 2014. The increase in our cash balances from June 30, 2014, was primarily due to the expansion of our all of our core businesses during the quarter, and to a lesser extent due to the cash conservation resulting from the sale of loss-incurring businesses, offset by provisional tax payments and the scheduled Korean debt repayment in October 2014.

Excluding the impact of interest received, interest paid under our Korean debt and taxes, the increase in cash from operating activities resulted from improved trading activity during fiscal 2015. Capital expenditures for Q2 2015 and 2014 were $9.1 million and $6.8 million, respectively, and have increased primarily due to the acquisition of more payment processing terminals in South Korea.

Use of Non-GAAP Measures

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

Fundamental net income and fundamental earnings per share

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

Headline earnings per share (“HEPS”)

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

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

Conference Call

We will host a conference call to review Q2 2015 results on February 6, 2015, at 8:00 Eastern Time. To participate in the call, dial 1-855-481-5362 (US and Canada), 0808-162-4061 (U.K. only) or 0-800-200-648 (South Africa only) ten minutes prior to the start of the call. Callers should request “Net1 call” upon dial-in. The call will also be webcast on the Net1 homepage, www.net1.com. Please click on the webcast link at least ten minutes prior to the call. A webcast of the call will be available for replay on the Net1 website through March 1, 2015.

About Net1 (www.net1.com)

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

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

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

Forward-Looking Statements

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

Investor Relations Contact:
Dhruv Chopra
Head of Investor Relations
Phone: +1 917-767-6722
Email: dchopra@net1.com

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

    Three months ended     Six months ended  
    December 31,     December 31,  
    2014     2013     2014     2013  
    (In thousands, except per share data)     (In thousands, except per share data)  
REVENUE $  154,131   $ 137,283   $  310,572   $ 260,777  
EXPENSE                        
         Cost of goods sold, IT processing, servicing 
         and support 		  71,774     67,883     146,180     124,442  
         Selling, general and administration   41,385     40,824     80,121     81,330  
         Depreciation and amortization   10,157     9,774     20,331     19,803  
OPERATING INCOME   30,815     18,802     63,940     35,202  
INTEREST INCOME   3,587     3,236     7,677     6,555  
INTEREST EXPENSE   1,107     2,226     2,419     3,978  
INCOME BEFORE INCOME TAX EXPENSE   33,295     19,812     69,198     37,779  
INCOME TAX EXPENSE   10,203     7,099     21,851     13,584  
NET INCOME BEFORE EARNINGS FROM
EQUITY-ACCOUNTED INVESTMENTS 		23,092 12,713 47,347 24,195
EARNINGS FROM EQUITY-ACCOUNTED
INVESTMENTS 		76 47 168 150
NET INCOME   23,168     12,760     47,515     24,345  
LESS NET INCOME ATTRIBUTABLE TO                        
NON-CONTROLLING INTEREST   794     11     1,052     -  
NET INCOME ATTRIBUTABLE TO NET1 $  22,374   $ 12,749   $  46,463   $ 24,345  
Net income per share, in United States dollars                        
         Basic earnings attributable to Net1
          shareholders 		$ 0.48   $ 0.28   $ 0.99   $ 0.53  
         Diluted earnings attributable to Net1 
         shareholders 		$ 0.48   $ 0.28   $ 0.99   $ 0.53  

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

    Unaudited     (A)  
    December 31,     June 30,  
    2014     2014  
    (In thousands, except share data)  
ASSETS    
CURRENT ASSETS            
     Cash and cash equivalents $  70,981   $  58,672  
     Pre-funded social welfare grants receivable   6,254     4,809  
     Accounts receivable, net of allowances of – December: $2,175; June: $1,313   128,338     148,067  
     Finance loans receivable, net of allowances of – December: $4,403; June: $3,083   60,309     53,124  
     Inventory   12,501     10,785  
     Deferred income taxes   6,286     7,451  
             Total current assets before settlement assets   284,669     282,908  
                     Settlement assets   480,962     725,987  
                             Total current assets   765,631     1,008,895  
PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of –
December: $94,376; June: $91,422 		49,361 47,797
EQUITY-ACCOUNTED INVESTMENTS   954     878  
GOODWILL   172,237     186,576  
INTANGIBLE ASSETS, net of accumulated amortization of – December: $80,189;
June: $78,781 		55,884 68,514  
 
OTHER LONG-TERM ASSETS, including reinsurance assets   35,426     38,285  
     TOTAL ASSETS   1,079,493     1,350,945  
LIABILITIES    
CURRENT LIABILITIES            
     Accounts payable   15,838     17,101  
     Other payables   39,263     42,257  
     Current portion of long-term borrowings   -     14,789  
     Income taxes payable   3,094     7,676  
             Total current liabilities before settlement obligations   58,195     81,823  
                     Settlement obligations   480,962     725,987  
                             Total current liabilities   539,157     807,810  
DEFERRED INCOME TAXES   12,676     15,522  
LONG-TERM BORROWINGS   59,698     62,388  
OTHER LONG-TERM LIABILITIES, including insurance policy liabilities   20,831     23,477  
     TOTAL LIABILITIES   632,362     909,197  
EQUITY    
      COMMON STOCK 
               Authorized: 200,000,000 with $0.001 par value; 
               Issued and outstanding shares, net of treasury - December: 46,547,153; 
               June: 47,819,299 		64 63

      PREFERRED STOCK
               Authorized shares: 50,000,000 with $0.001 par value;  
               Issued and outstanding shares, net of treasury: December: -; June: -

- -
     ADDITIONAL PAID-IN-CAPITAL   211,743     202,401  
     TREASURY SHARES, AT COST: December: 18,057,228; June: 15,883,212   (214,520 )   (200,681 )
     ACCUMULATED OTHER COMPREHENSIVE LOSS   (120,504 )   (82,741 )
     RETAINED EARNINGS   569,596     522,729  
             TOTAL NET1 EQUITY   446,379     441,771  
             NON-CONTROLLING INTEREST   752     (23 )
                     TOTAL EQUITY   447,131     441,748  
                             TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $  1,079,493   $  1,350,945  

(A) – Derived from audited financial statements

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

    Three months ended     Six months ended  
    December 31,     December 31,  
    2014     2013     2014     2013  
    (In thousands)     (In thousands)  
Cash flows from operating activities                        
Net income $  23,168   $  12,760   $  47,515   $  24,345  
Depreciation and amortization   10,157     9,774     20,331     19,803  
Earnings from equity-accounted investments   (76 )   (47 )   (168 )   (150 )
Fair value adjustments   (234 )   72     179     (61 )
Interest payable   140     694     1,299     1,666  
Profit on disposal of property, plant and equipment   (109 )   (15 )   (231 )   (16 )
Stock-based compensation charge   1,035     968     1,951     1,898  
Facility fee amortized   52     509     134     578  
Increase in accounts receivable, pre-funded social
welfare grants receivable and finance loans
receivable 		  (7,315 )   (37,977 )   2,155     (61,078 )
Increase in inventory   (622 )   (2,853 )   (2,745 )   (1,842 )
Decrease in accounts payable and other payables   (1,456 )   (4,883 )   (12,389 )   (13,551 )
(Decrease) increase in taxes payable   (9,963 )   (5,559 )   (3,352 )   1,362  
Decrease in deferred taxes   (168 )   (691 )   (558 )   (1,878 )
    Net cash provided (used in ) by operating
    activities 		  14,609     (27,248 )   54,121     (28,924 )
Cash flows from investing activities                        
Capital expenditures   (9,137 )   (6,845 )   (18,515 )   (12,461 )
Proceeds from disposal of property, plant and
equipment 		  373     1,953     614     2,001  
Proceeds from sale of business   -     -     1,895     -  
Other investing activities   (29 )   -     (29 )   (1 )
Net change in settlement assets   241,652     204,730     198,598     256,503  
    Net cash provided by investing activities   232,859     199,838     182,563     246,042  
Cash flows from financing activities                        
Repayment of long-term borrowings   (14,128 )   (87,008 )   (14,128 )   (87,008 )
Long-term borrowings utilized   1,081     -     2,178     -  
Acquisition of treasury stock   -     -     (9,151 )   -  
Sale of equity to non-controlling interest   -     -     1,407     -  
Proceeds from issue of common stock   -     -     989     -  
Long-term borrowings obtained   -     71,605     -     71,605  
Payment of facility fee   -     (872 )   -     (872 )
Proceeds from bank overdraft   -     24,580     -     24,580  
Acquisition of interests in KSNET   -     (1,968 )   -     (1,968 )
Net change in settlement obligations   (241,652 )   (204,730 )   (198,598 )   (256,503 )
   Net cash used in by financing activities   (254,699 )   (198,393 )   (217,303 )   (250,166 )
Effect of exchange rate changes on cash   (2,973 )   495     (7,072 )   1,745  
Net (decrease) increase in cash and cash
equivalents 		  (10,204 )   (25,308 )   12,309     (31,303 )
Cash and cash equivalents – beginning of period   81,185     47,670     58,672     53,665  
Cash and cash equivalents – end of period $  70,981   $  22,362   $  70,981   $  22,362  

See Notes to Unaudited Condensed Consolidated Financial Statements

Net 1 UEPS Technologies, Inc.

Attachment A

Operating segment revenue, operating income and operating margin:

Three months ended December 31, 2014 and 2013 and June 30, 2014

                                  Change – constant  
                      Change - actual     exchange rate(1)
                      Q2 ‘15     Q2 ‘15     Q2 ‘15     Q2 ‘15  
                      vs     vs     vs     vs  
Key segmental data, in $ ’000,   Q2 ‘15     Q2 ‘14     Q1 ‘15     Q2‘14     Q1 ‘15     Q2‘14     Q1 ‘15  
Revenue:                                          
South African transaction processing $ 58,427   $ 58,754   $ 60,252     (1% )   (3% )   10%     1%  
International transaction processing   40,466     37,738     43,204     7%     (6% )   18%     (2% )
Financial inclusion and applied
technologies 		67,531 50,480 65,197 34% 4% 48% 8%
         Subtotal: Operating segments   166,424     146,972     168,653     13%     (1% )   25%     3%  
         Intersegment eliminations   (12,293 )   (9,689 )   (12,212 )   27%     1%     40%     5%  

                Consolidated revenue

$ 154,131   $ 137,283   $ 156,441     12%     (1% )   24%     3%  
                                           
Operating income:                                          
South African transaction processing $ 12,883   $ 7,128   $ 13,639     81%     (6% )   100%     (1% )
International transaction processing   5,743     5,139     7,349     12%     (22% )   23%     (18% )
Financial inclusion and applied
technologies 		17,827 13,265 17,607 34% 1% 48% 6%
         Subtotal: Operating segments   36,453     25,532     38,595     43%     (6% )   58%     (1% )
         Corporate/Eliminations   (5,638 )   (6,730 )   (5,470 )   (16% )   3%     (7% )   8%  
                 Consolidated operating income $ 30,815   $ 18,802   $ 33,125     64%     (7% )   81%     (3% )
                                           
Operating income margin (%)                                          
South African transaction processing   22%     12%     23%                          
International transaction processing   14%     14%     17%                          
Financial inclusion and applied
technologies 		26% 26% 27%
         Consolidated operating margin   20%     14%     21%                          

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

Six months ended December 31, 2014 and 2013

                      Change –  
                      constant  
                Change -     exchange  
                actual     rate(1)
                F2015     F2015  
                vs     vs  
Key segmental data, in ’000, except margins   F2015     F2014     F2014     F2014  
Revenue:                        
South African transaction processing   118,679     115,915     2%     11%  
International transaction processing   83,670     75,279     11%     21%  
Financial inclusion and applied technologies   132,728     87,276     52%     65%  
         Subtotal: Operating segments   335,077     278,470     20%     31%  
         Intersegment eliminations   (24,505 )   (17,693 )   39%     51%  

                Consolidated revenue

  310,572     260,777     19%     30%  
                         
Operating income:                        
South African transaction processing   26,522     13,589     95%     112%  
International transaction processing   13,092     10,663     23%     34%  
Financial inclusion and applied technologies   35,434     26,100     36%     48%  
         Subtotal: Operating segments   75,048     50,352     49%     62%  
         Corporate/Eliminations   (11,108 )   (15,150 )   (27% )   (20% )
                 Consolidated operating income   63,940     35,202     82%     98%  
                         
Operating income margin (%)                        
South African transaction processing   22%     12%              
International transaction processing   16%     14%              
Financial inclusion and applied technologies   27%     30%              
         Overall operating margin   21%     13%              

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

Net 1 UEPS Technologies, Inc.

Attachment B

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

Three months ended December 31, 2014 and 2013

                EPS,                 EPS,  
    Net income     basic     Net income     basic  
    (USD’000)     (USD)     (ZAR’000)     (ZAR)  
    2014     2013     2014     2013       2014     2013     2014     2013  
                                                 
GAAP   22,374     12,749     0.48     0.28      250,737     129,519     5.39     2.83  
                                                 
     Intangible asset amortization, net .   2,930     3,104                 32,827     31,530              
     Stock-based compensation charge   1,035     968                 11,616     9,834              
     Facility fees for KSNET debt   52     509                 584     5,171              
     US government investigations- 
     related and US lawsuit expenses 		  9     1,068               101     10,850          
                 Fundamental   26,400     18,398     0.57     0.40     295,865     186,904     6.36     4.08  

Six months ended December 31, 2014 and 2013

                EPS,                 EPS,  
    Net income     basic     Net income     basic  
    (USD’000)     (USD)     (ZAR’000)     (ZAR)  
    2014     2013     2014     2013     2014     2013     2014     2013  
                                                 
GAAP   46,463     24,345     0.99     0.53     509,644     245,417     10.87     5.37  
                                                 
     Intangible asset amortization, net .   5,838     5,889                 64,036     59,367              
     Stock-based compensation charge   1,951     1,898                 21,400     19,134              
     Facility fees for KSNET debt   134     578                 1,470     5,827              
     US government investigations-
      related and US lawsuit expenses 		  136     2,464             1,492     24,839          
                 Fundamental   54,522     35,174     1.16     0.77     598,042     354,584     12.76     7.75  

Net 1 UEPS Technologies, Inc.

Attachment C

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

Three months ended December 31, 2014 and 2013

    2014     2013  
             
Net income (USD’000)   22,374     12,749  
Adjustments:            
     Profit on sale of property, plant and equipment   (109 )   (15 )
     Tax effects on above   31     4  
             
Net income used to calculate headline earnings (USD’000)   22,296     12,738  
Weighted average number of shares used to calculate net income per share basic earnings
and headline earnings per share basic earnings (‘000) 		46,519 45,776
Weighted average number of shares used to calculate net income per share diluted
earnings and headline earnings per share diluted earnings (‘000) 		46,644 46,176
Headline earnings per share:            
     Basic, in USD   0.48     0.28  
     Diluted, in USD   0.48     0.28  

Six months ended December 31, 2014 and 2013

    2014     2013  
             
Net income (USD’000)   46,463     24,345  
Adjustments:            
     Profit on sale of property, plant and equipment   (231 )   (16 )
     Tax effects on above   65     4  
             
Net income used to calculate headline earnings (USD’000)   46,297     24,333  
Weighted average number of shares used to calculate net income per share basic earnings
and headline earnings per share basic earnings (‘000) 		46,873 45,725
Weighted average number of shares used to calculate net income per share diluted
earnings and headline earnings per share diluted earnings (‘000) 		46,990 45,919
Headline earnings per share:            
     Basic, in USD   0.99     0.53  
     Diluted, in USD   0.99     0.52  

Calculation of the denominator for headline diluted earnings per share

    Q2 ‘15     Q2 ‘14     F2015     F2014  
                         
Basic weighted-average common shares outstanding and unvested
restricted shares expected to vest under GAAP 		46,519 45,776 46,873 45,725

       Effect of dilutive securities under GAAP

  125     400     117     194  
          Denominator for headline diluted earnings per share   46,644     46,176     46,990     45,919  

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