Green Dot Reports First Quarter 2013 Non-GAAP Revenue Growth of 8%, Non-GAAP diluted EPS of $0.42, U
Green Dot Reports First Quarter 2013 Non-GAAP Revenue Growth of 8%, Non-GAAP diluted EPS of $0.42, Updates Revenue Outlook for 2013
PASADENA, Calif.--(BUSINESS WIRE)-- Green Dot Corporation (NYS: GDOT) , today reported financial results for the first quarter ended March 31, 2013.
For the first quarter of 2013, Green Dot reported an 8% year-over-year increase in non-GAAP total operating revenues1 to $155.8 million and non-GAAP diluted earnings per share1 of $0.42. GAAP results for the first quarter were $154.1 million in total operating revenues and $0.35 in diluted earnings per share.
Net cash provided by operating activities totaled $24.5 million for the first quarter.
"Our first quarter results were better than our internal forecast. The solid gains in our key usage metrics, particularly in average spend, reloads, and revenue per card, helped us deliver non-GAAP revenue growth of 8% year-over-year. Our Q1 results demonstrate that, despite increased direct competition and new, more stringent risk controls, Green Dot remains a strong and growing leader in the prepaid market. While we are generally pleased with how things played out in Q1, we believe there is still a lack of certainty for the remainder of the year," said Steve Streit, Green Dot's Chairman and Chief Executive Officer.
GAAP financial results for the first quarter of 2013 compared to the first quarter of 2012:
Total operating revenues on a generally accepted accounting principles (GAAP) basis increased 9% to $154.1 million for the first quarter of 2013 from $141.2 million for the first quarter of 2012
GAAP net income was $15.6 million for the first quarter of 2013 versus $16.4 million for the first quarter of 2012
GAAP basic and diluted earnings per common share were $0.36 and $0.35, respectively, for the first quarter of 2013 versus $0.39 and $0.37, respectively, for the first quarter of 2012
Non-GAAP financial results for the first quarter of 2013 compared to the first quarter of 2012:1
Non-GAAP total operatingrevenues1 increased 8% to $155.8 million for the first quarter of 2013 from $144.4 million for the first quarter of 2012
Non-GAAP net income1 was $18.5 million for the first quarter of 2013 versus $20.5 million for the first quarter of 2012
Non-GAAP diluted earnings per share1 were $0.42 for the first quarter of 2013 versus $0.46 for the first quarter of 2012
EBITDA plus employee stock-based compensation expense and stock-based retailer incentive compensation expense (adjusted EBITDA1) was $34.2 million for the first quarter of 2013 versus $36.0 million for the first quarter of 2012
1 | Reconciliations of total operating revenues to non-GAAP total operating revenues, net income to non-GAAP net income, diluted earnings per share to non-GAAP diluted earnings per share and net income to adjusted EBITDA, respectively, are provided in the tables immediately following the consolidated financial statements of cash flows. Additional information about the Company's non-GAAP financial measures can be found under the caption "About Non-GAAP Financial Measures" below. | |
Key business metrics for the quarter ended March 31, 2013:
Number of cash transfers was 11.25 million for the first quarter of 2013, an increase of 1.16 million, or 11%, over the first quarter of 2012
Number of active cards at quarter end was 4.49 million, a decrease of 0.20 million, or 4%, over the first quarter of 2012
Gross dollar volume (GDV) was $5.1 billion for the first quarter of 2013, an increase of $249 million, or 5%, versus the first quarter of 2012
Purchase volume was $3.6 billion for the first quarter of 2013, an increase of $95 million, or 3%, over the first quarter of 2012
Please refer to the Company's Annual Report on Form 10-K for a description of the key business metrics described above. The following table shows the Company's quarterly key business metrics for each of the last five calendar quarters:
2013 | 2012 | |||||||||||||||||
Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||
(In millions) | ||||||||||||||||||
Number of cash transfers | 11.25 | 11.04 | 10.52 | 10.14 | 10.09 | |||||||||||||
Number of active cards at quarter end | 4.49 | 4.37 | 4.42 | 4.44 | 4.69 | |||||||||||||
Gross dollar volume | $ | 5,072 | $ | 4,279 | $ | 4,070 | $ | 3,980 | $ | 4,823 | ||||||||
Purchase volume | $ | 3,582 | $ | 3,233 | $ | 2,966 | $ | 2,943 | $ | 3,487 | ||||||||
Select Business Updates
As of the quarter ended March 31, 2013, Green Dot has 700,000 direct deposit customers with retention of approximately 20 months, and 2.1 million cash reloading customers with retention of approximately 9 months, for a blended retention of approximately 12 months. At 2.8 million reloading customers, Green Dot believes that its reloading customer base is larger than the entire customer base of any other company in the prepaid industry, with customer retention that is among the best in our industry
Green Dot remains on track to make its new mobile bank account product available to the general public this summer. The company plans to demonstrate the latest developments on GoBank at the Finovate financial technology conference in San Francisco on May 14th
Green Dot's new RushCard Live product in conjunction with UniRush LLC launched earlier this month and is now in the process of rolling out to more than 4,000 Rite Aid stores and 7,000 CVS/pharmacy stores nationwide. Green Dot believes RushCard Live will contribute to overall category growth in participating retailers over time
John Keatley, Green Dot's Chief Financial Officer, added, "We had solid revenue growth in the first quarter, driven in large part by the increasing quality and retention of our portfolio. This was encouraging given the significant headwinds that we encountered in Q1, including increased competition, the impact of new risk controls, and lower tax refund volumes than we have seen in previous years. Adjusted EBITDA margins were impacted year-over-year due to the integration of the Loopt acquisition, which was not reflected in our prior year results. Based on our first quarter results, we have increased our full year non-GAAP revenue guidance to $525-550 million. Our guidance for full year adjusted EBITDA and non-GAAP EPS remains unchanged, as we anticipate the possibility of investments required to support new growth initiatives."
Outlook for 2013
Green Dot's updated outlook is based on a number of assumptions that Green Dot believes are reasonable at the time of this earnings release. Information regarding potential risks that could cause the actual results to differ from these forward-looking statements is set forth below and in Green Dot's filings with the Securities and Exchange Commission.
For 2013, Green Dot now expects full year non-GAAP total operating revenues2 to be in the range of $525 million to $550 million.
Green Dot's guidance for full year adjusted EBITDA and non-GAAP EPS is unchanged. Green Dot continues to expect adjusted EBITDA2 to be between $85 million and $100 million for the full year, and full-year non-GAAP diluted EPS2 to be between $0.95 and $1.20.
Conference Call
The Company will host a conference call to discuss first quarter 2013 financial results today at 5:00 p.m. ET. In addition to the conference call, there will be a webcast presentation of accompanying slides accessible on the Company's investor relations website. Hosting the call will be Steve Streit, Chief Executive Officer, and John Keatley, Chief Financial Officer. The conference call can be accessed live over the phone by dialing (866) 524-3160, or (412) 317-6760 for international callers. A replay will be available approximately two hours after the call concludes and can be accessed by dialing (877) 870-5176 or (858) 384-5517 for international callers; the conference ID is 10027361. The replay of the webcast will be available until Thursday, May 7, 2013. The live call and the replay, along with supporting materials, can also be accessed through the Company's investor relations website at http://ir.greendot.com/.
Forward-Looking Statements
This earnings release contains forward-looking statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include, among other things, statements regarding the Company's full-year 2013 guidance, including all the statements under "Outlook for 2013," and other future events that involve risks and uncertainties. Actual results may differ materially from those contained in the forward-looking statements contained in this earnings release, and reported results should not be considered as an indication of future performance. The potential risks and uncertainties that could cause actual results to differ from those projected include, among other things, the Company's dependence on revenues derived from Walmart and three other retail distributors, impact of competition, the Company's reliance on retail distributors for the promotion of its products and services, demand for the Company's new and existing products and services, continued and improving returns from the Company's investments in new growth initiatives, potential difficulties in integrating operations of acquired entities and acquired technologies, the Company's ability to operate in a highly regulated environment, changes to existing laws or regulations affecting the Company's operating methods or economics, the Company's reliance on third-party vendors and card issuing banks, changes in credit card association or other network rules or standards, changes in card association and debit network fees or products or interchange rates, instances of fraud developments in the prepaid financial services industry that impact prepaid debit card usage generally, business interruption or systems failure, and the Company's involvement litigation or investigations. These and other risks are discussed in greater detail in the Company's Securities and Exchange Commission filings, including its most recent annual report on Form 10-K and quarterly report on Form 10-Q, which are available on the Company's investor relations website at http://ir.greendot.com/ and on the SEC website at www.sec.gov. All information provided in this release and in the attachments is as of April 30, 2013, and the Company assumes no obligation to update this information as a result of future events or developments.
About Non-GAAP Financial Measures
To supplement the Company's consolidated financial statements presented in accordance with accounting principles generally accepted in the United States of America (GAAP), the Company uses measures of operating results that are adjusted to exclude net interest income; income tax expense; depreciation and amortization; employee stock-based compensation expense; and stock-based retailer incentive compensation expense. This earnings release includes non-GAAP total operating revenues, non-GAAP net income, non-GAAP earnings per share, non-GAAP weighted-average shares issued and outstanding and adjusted EBITDA. It also includes full-year 2013 guidance for non-GAAP total operating revenues, adjusted EBITDA and Non-GAAP diluted earnings per share. These non-GAAP financial measures are not calculated or presented in accordance with, and are not alternatives or substitutes for, financial measures prepared in accordance with GAAP, and should be read only in conjunction with the Company's financial measures prepared in accordance with GAAP. The Company's non-GAAP financial measures may be different from similarly-titled non-GAAP financial measures used by other companies. The Company believes that the presentation of non-GAAP financial measures provides useful information to management and investors regarding underlying trends in its consolidated financial condition and results of operations. The Company's management regularly uses these supplemental non-GAAP financial measures internally to understand, manage and evaluate the Company's business and make operating decisions. For additional information regarding the Company's use of non-GAAP financial measures and the items excluded by the Company from one or more of its historic and projected non-GAAP financial measures, investors are encouraged to review the reconciliations of the Company's historic and projected non-GAAP financial measures to the comparable GAAP financial measures, which are attached to this earnings release, and which can be found by clicking on "Financial Information" in the Investor Relations section of the Company's website at http://ir.greendot.com/.
About Green Dot
Green Dot Corporation is a Bank Holding Company with a mission to reinvent personal banking for the masses. Its market leading brand of prepaid debit cards and prepaid reload services are available to consumers at more than 60,000 retail locations nationwide and online at greendot.com. The company is headquartered in Pasadena, California with technology offices in Mountain View, California and Westlake Village, California and its bank subsidiary, Green Dot Bank, located in Provo, Utah.
GREEN DOT CORPORATION CONSOLIDATED BALANCE SHEETS | |||||||||
March 31, | December 31, | ||||||||
2013 | 2012 | ||||||||
(Unaudited) | |||||||||
(In thousands, except par value) | |||||||||
Assets | |||||||||
Current assets: | |||||||||
Unrestricted cash and cash equivalents | $ | 370,159 | $ | 293,590 | |||||
Federal funds sold | 3,001 | 3,001 | |||||||
Investment securities available-for-sale, at fair value | 100,742 | 115,244 | |||||||
Settlement assets | 48,459 | 36,127 | |||||||
Accounts receivable, net | 50,561 | 40,441 | |||||||
Prepaid expenses and other assets | 25,204 | 31,952 | |||||||
Income tax receivable | — | 7,386 | |||||||
Net deferred tax assets | 2,338 | 2,478 | |||||||
Total current assets | 600,464 | 530,219 | |||||||
Restricted cash | 634 | 634 | |||||||
Investment securities, available-for-sale, at fair value | 62,443 | 68,543 | |||||||
Accounts receivable, net | 10,913 | 10,931 | |||||||
Loans to bank customers, net of allowance for loan losses of $450 and $475 as of March 31, 2013 | |||||||||
and December 31, 2012, respectively | 7,228 | 7,552 | |||||||
Prepaid expenses and other assets | 2,053 | 1,530 | |||||||
Property and equipment, net | 58,098 | 58,376 | |||||||
Deferred expenses | 9,784 | 12,510 | |||||||
Net deferred tax assets | 4,579 | 4,629 | |||||||
Goodwill and intangible assets | 30,772 | 30,804 | |||||||
Total assets | $ | 786,968 | $ | 725,728 | |||||
Liabilities and Stockholders' Equity | |||||||||
Current liabilities: | |||||||||
Accounts payable | $ | 18,933 | $ | 31,411 | |||||
Deposits | 222,022 | 198,451 | |||||||
Obligations to customers | 61,204 | 46,156 | |||||||
Settlement obligations | 16,940 | 3,639 | |||||||
Amounts due to card issuing banks for overdrawn accounts | 53,178 | 50,724 | |||||||
Other accrued liabilities | 29,089 | 29,469 | |||||||
Deferred revenue | 14,852 | 19,557 | |||||||
Income tax payable | 446 | — | |||||||
Total current liabilities | 416,664 | 379,407 | |||||||
Other accrued liabilities | 21,818 | 18,557 | |||||||
Total liabilities | 438,482 | 397,964 | |||||||
Stockholders' equity: | |||||||||
Convertible Series A preferred stock, $0.001 par value: 10 shares authorized and 7 shares | |||||||||
issued and outstanding as of March 31, 2013 and December 31, 2012, respectively | 7 | 7 | |||||||
Class A common stock, $0.001 par value; 100,000 shares authorized as of March 31, 2013 and | |||||||||
December 31, 2012, respectively; 32,157 and 31,798 shares issued and outstanding as of March | |||||||||
31, 2013 and December 31, 2012, respectively | 32 | 31 | |||||||
Class B convertible common stock, $0.001 par value, 100,000 shares authorized as of March 31, | |||||||||
2013 and December 31, 2012, respectively; 3,918 and 4,197 shares issued and outstanding as | |||||||||
of March 31, 2013 and December 31, 2012, respectively | 3 | 4 | |||||||
Additional paid-in capital | 163,784 | 158,656 | |||||||
Retained earnings | 184,556 | 168,960 | |||||||
Accumulated other comprehensive income | 104 | 106 | |||||||
Total stockholders' equity | 348,486 | 327,764 | |||||||
Total liabilities and stockholders' equity | $ | 786,968 | $ | 725,728 | |||||
GREEN DOT CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | ||||||||||
Three Months Ended March 31, | ||||||||||
2013 | 2012 | |||||||||
(In thousands, except per share data) | ||||||||||
Operating revenues: | ||||||||||
Card revenues and other fees | $ | 64,667 | $ | 61,222 | ||||||
Cash transfer revenues | 44,335 | 39,643 | ||||||||
Interchange revenues | 46,756 | 43,506 | ||||||||
Stock-based retailer incentive compensation | (1,609 | ) | (3,190 | ) | ||||||
Total operating revenues | 154,149 | 141,181 | ||||||||
Operating expenses: | ||||||||||
Sales and marketing expenses | 56,177 | 52,572 | ||||||||
Compensation and benefits expenses | 31,754 | 26,153 | ||||||||
Processing expenses | 21,999 | 20,850 | ||||||||
Other general and administrative expenses | 20,880 | 15,968 | ||||||||
Total operating expenses | 130,810 | 115,543 | ||||||||
Operating income | 23,339 | 25,638 | ||||||||
Interest income | 819 | 959 | ||||||||
Interest expense | (17 | ) | (24 | ) | ||||||
Income before income taxes | 24,141 | 26,573 | ||||||||
Income tax expense | 8,555 | 10,205 | ||||||||
Net income | 15,586 | 16,368 | ||||||||
Income attributable to preferred stock | (2,493 | ) | (2,650 | ) | ||||||
Net income allocated to common stockholders | $ | 13,093 | $ | 13,718 | ||||||
Basic earnings per common share: | ||||||||||
Class A common stock | $ | 0.36 | $ | 0.39 | ||||||
Class B common stock | $ | 0.36 | $ | 0.39 | ||||||
Basic weighted-average common shares issued and outstanding: | ||||||||||
Class A common stock | 30,951 | 28,839 | ||||||||
Class B common stock | 4,096 | 5,230 | ||||||||
Diluted earnings per common share: | ||||||||||
Class A common stock | $ | 0.35 | $ | 0.37 | ||||||
Class B common stock | $ | 0.35 | $ | 0.37 | ||||||
Diluted weighted-average common shares issued and outstanding: | ||||||||||
Class A common stock | 36,293 | 35,867 | ||||||||
Class B common stock | 5,190 | 7,012 | ||||||||
GREEN DOT CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | ||||||||||
