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Net 1 UEPS Technologies, Inc. Reports Third Quarter 2014 Results

- Revenue and Fundamental EPS of $138 million and $0.47, a constant currency increase of 60% and 1,070% respectively;

JOHANNESBURG, SOUTH AFRICA -- (Marketwired) -- 05/08/14 -- Net 1 UEPS Technologies Inc. (NASDAQ:UEPS)(JSE:NT1) today released results for the third quarter of fiscal 2014.


Summary Financial Metrics                                                   
                                                                            
                                           Three months ended March 31,     
                                     ---------------------------------------
                                                          % change  % change
                                          2014      2013    in USD    in ZAR
                                     ---------------------------------------
(All figures in USD '000s except per                                        
 share data)                                                                
Revenue                                138,126  111,141        24%       60%
GAAP net income (loss)                  17,182   (4,681)       nm        nm 
Fundamental net income (1)              21,688    2,362       818%    1,079%
GAAP earnings (loss) per share ($)        0.38    (0.10)       nm        nm 
Fundamental earnings per share ($)                                          
 (1)                                      0.47     0.05       840%    1,070%
Fully-diluted shares outstanding                                            
 ('000's)                               45,954   45,597         1%          
Average period USD/ ZAR exchange rate    10.87     8.47        28%          
                                                                            
                                            Nine months ended March 31,     
                                      --------------------------------------
                                                          % change  % change
                                           2014     2013    in USD    in ZAR
                                      --------------------------------------
(All figures in USD '000s except per                                        
 share data)                                                                
Revenue                                 398,903  334,265       19%       46%
GAAP net income                          41,527    4,692      785%      986%
Fundamental net income (1)               57,009   21,897      160%      220%
GAAP earnings per share ($)                0.91     0.10      781%      981%
Fundamental earnings per share ($) (1)     1.25     0.48      160%      218%
Fully-diluted shares outstanding                                            
 ('000's)                                45,997   45,593        1%          
Average period USD/ ZAR exchange rate     10.38     8.46       23%          
                                                                            
(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 (loss) to fundamental net income and earnings (loss) per 
share.                                                                      

Factors impacting comparability of our Q3 2014 and Q3 2013 results


--  Unfavorable impact from the strengthening of the US dollar against the
    ZAR: The US dollar appreciated by 28% against the ZAR during Q3 2014,
    which negatively impacted our reported results; 
--  SASSA implementation complete: Our SASSA contract implementation is
    complete. We incurred implementation-related expenditure, including
    smart card costs, of approximately $20.6 million during Q3 2013; 
--  Increased contribution by KSNET: Our results were positively impacted by
    growth in our Korean operations; 
--  Growth in financial services: The year-over-year expansion of our
    financial services offering during Q3 2014, resulted in higher revenue
    and operating income from UEPS-based lending; 
--  Ad hoc hardware sales in fiscal 2014: We sold more terminals and cards
    during Q3 2014 as a result of ad hoc orders received from our customers;
--  Higher revenue resulting from an increase in low-margin prepaid airtime
    and electricity sales: Our revenue has increased as a result of the
    growth of our prepaid airtime offering during Q3 2014, which has lower
    margins compared with our other South African businesses; 
--  Lower US government investigation-related and US lawsuit expenses: We
    incurred lower US government investigation-related expenses during Q3
    2014 compared to during 2013, which was partially offset by an increase
    in US lawsuit-related expenses; and 
--  Fiscal 2013 bad debt provision: In fiscal 2013 we provided $2.3 million
    related to the expired NUETS Iraqi customer contracts. 

Comments and Outlook

"I am delighted with the quality of our third quarter performance," said Dr. Serge Belamant, Chairman and CEO of Net1. "Despite the many distractions faced by the Company during the last two years, our staff members have maintained focus and, once again, demonstrated our ability to deliver sterling results under adverse circumstances. I commend all of those Net1 employees who remain loyal and committed to ensure we deliver the highest level of service and continue to expand our business activities in physical and virtual payment technologies, both locally and internationally."

"We believe that the publication of any new SASSA tender may take some time and we are ready to propose an enhanced version of our current UEPS/EMV solution, which would continue to provide SASSA with the business functionality which they described in detail during the legal processes. We are proud that our technology has already saved the public purse in excess of ZAR 3 billion ($286 million) per annum, with the removal of more than a million invalid grants. In the mean time, we will continue to optimize our cost structures and focus on the marketing of our complementary and supplementary products in order to diversify our business and enhance our profitability," he concluded.

"We expect the momentum from the execution of our strategy to continue driving top and bottom line growth," said Herman Kotze, Chief Financial Officer of Net1. "For fiscal 2014, we now expect fundamental earnings per share of at least $1.90, assuming a constant currency base of ZAR 8.71/$1. The share count assumption in our guidance includes the 4.4 million shares that were issued as part of our BEE transaction on April 16, 2014," he concluded.

South African Constitutional Court remedy related to SASSA tender

On April 17, 2014, the South African Constitutional Court ruled on the appropriate remedy following its declaration on November 29, 2013, that the tender process followed by the South African Social Security Agency, or SASSA, in awarding a contract to us was constitutionally invalid. The declaration of invalidity of our contract was upheld, but suspended until a new tender is awarded, or for the remainder of the existing contract period if no tender is awarded. SASSA is required to initiate a new tender process within 30 days of the Court's ruling and any award must be for a period of five years. If a new tender is not awarded, the declaration of invalidity of our current contract will be further suspended until the completion of the five-year period for which the contract was originally awarded.

Implementation of December 2013 BEE transaction

On April 16, 2014 we implemented our Relationship Agreements with our BEE partners, concluded during December 2013, and we have accordingly issued 4,400,000 shares to the BEE partners.

Under the Relationship Agreements, we issued 4,100,000 shares of our common stock to Business Venture Investments 1567 Proprietary Limited (RF) and 300,000 shares to Born Free Investments 272 Proprietary Limited at a price of ZAR 60.00 per share. In order to facilitate the transactions, one of our wholly owned subsidiaries lent the funds to the BEE partners to effect the purchase of the BEE shares.

Results of Operations by Segment and Liquidity

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

South African transaction-based activities

Segment revenue was $64.9 million in Q3 2014, up 10% compared with Q3 2013 in USD and up 41% on a constant currency basis. In ZAR, increase in segment revenue was primarily due to more low-margin transaction fees generated from beneficiaries using the South African National Payment System, incremental prepaid airtime sales driven by the rollout of our prepaid airtime product, and reflects the elimination of inter-company transactions. Segment operating income margin was 17% and (7)%, respectively, and increased primarily due to the absence of SASSA implementation costs in Q3 2014. Excluding amortization of acquisition-related intangibles, Q3 2014 segment operating income margin was 19% compared with (5) % in Q3 2013.

International transaction-based activities

KSNET contributes the majority of our revenues and operating income in this segment. Segment revenue was $34.9 million in Q3 2014, up 6% compared with Q3 2013 in USD and 36% on a constant currency basis. Revenue increased primarily due to KSNET's revenue growth during Q3 2014 and was partially offset by the expiration and non-renewal of NUETS' contract with its Iraqi customer in Q3 2013. Operating income during Q3 2014 was higher due to increase in revenue contribution from KSNET and due to the NUETS Iraqi customer bad debt provision in fiscal 2013, but partially offset by ongoing losses related to our XeoHealth launch in the United States and at Net1 Virtual Card, as well as ongoing competition in the Korean marketplace. Excluding the amortization of intangibles, Q3 2014 operating income margin was 13% compared to 6% during Q3 2013.

Smart card accounts

Segment revenue was $10.6 million in Q3 2014, up 23% compared with Q3 2013 in USD and 57% on a constant currency basis driven exclusively by the increase in the number of smart card accounts. Segment operating income margin from providing smart card accounts for each of Q3 2014 and 2013 was 29% and 28%, respectively.

Financial services

UEPS-based lending contributes the majority of the revenue and operating income in this segment. Segment revenue was $11.1 million in Q3 2014, up 572% compared with Q3 2013 in USD and 763% higher on a constant currency basis, principally due to the increase in the number of loans granted as we rolled out our product nationally. The year-over-year increase in operating income was partially offset by the higher UEPS-based lending operating cost base in fiscal 2014 and the re-allocation of UEPS-based lending corporate and administration overhead expenses to this segment. Smart Life did not contribute to operating income in Q3 2014 as it is currently unable to issue new insurance policies as a result of the suspension of its license by the Financial Services Board in fiscal 2013.

Hardware, software and related technology sales

Segment revenue was $16.6 million in Q3 2014, up 90% compared with Q3 2013 in USD and 144% on a constant currency basis. The increase in revenue and operating income resulted from higher ad hoc terminal and smart card sales. Excluding amortization of all intangibles, segment operating income margin was 24% compared to 20% during Q3 2013.

Corporate/eliminations

The decrease in our corporate expenses resulted primarily from lower legal fees incurred in connection with the US government investigations compared to Q3 2013, partially offset by higher other corporate head office-related expenses.

Cash flow and liquidity

At March 31, 2013, we had cash and cash equivalents of $30.9 million, down from $53.7 million at June 30, 2013. The decrease in our cash balances from June 30, 2013, was primarily due to the expansion of our UEPS-based lending business, working capital changes, the repayment of a portion of our Korean debt and acquisition of all of the remaining shares of KSNET that we did not already own.

Excluding the impact of interest received, interest paid under our Korean debt and taxes, the decrease in cash from operating activities resulted from the expansion of our UEPS-based lending book, offset by cash inflows from improved trading activity and the substantial elimination of implementation costs related to our SASSA contract in fiscal 2014. Capital expenditures for Q3 2014 and 2013 were $4.8 million and $5.1 million, respectively, and have increased primarily due to the acquisition of more payment processing terminals in 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 (loss) and earnings (loss) 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, as well as in fiscal 2013, acquisition-related costs. 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 (loss) and earnings (loss) per share.

Headline earnings (loss) 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 (loss) which has been determined based on GAAP. Accordingly, this may differ to the headline earnings (loss) 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 (loss) adjusted for the profit on sale of property, plant and equipment, net of related tax effects. Attachment C presents the reconciliation between our net income (loss) used to calculate earnings (loss) per share basic and diluted and HEPS basic and diluted and the calculation of the denominator for headline diluted earnings (loss) per share.

Conference Call

We will host a conference call to review Q3 2014 results on May 9, 2014, 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 June 1, 2014.

About Net1 (www.net1.com)

Net1 is a leading provider of alternative payment systems that leverage its Universal Electronic Payment System, or 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 also completely 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, Republic of Korea, and Ghana. In addition, Net1's proprietary Mobile Virtual Card technology offers secure mobile payments and banking services in developed and emerging countries while its MediKredit and XeoHealth subsidiaries provide its proprietary 5010 and ICD-10 compliant real-time claims adjudication system.

Net1 has a primary listing on the Nasdaq and a secondary listing on the JSE Limited.

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.


NET 1 UEPS TECHNOLOGIES INC.                                                
Unaudited Condensed Consolidated Statements of Operations                   
                                                                            
                            Three months ended        Nine months ended     
                        ----------------------------------------------------
                                 March 31,                 March 31,        
                          ------------------------  ------------------------
                                2014         2013         2014         2013 
                          -----------  -----------  -----------  -----------
                        (In thousands, except per (In thousands, except per 
                                      share data)               share data) 
                                                                            
REVENUE                  $   138,126  $   111,141  $   398,903  $   334,265 
                                                                            
EXPENSE                                                                     
                                                                            
  Cost of goods sold, IT                                                    
   processing, servicing                                                    
   and support                63,149       51,461      187,591      143,789 
                                                                            
  Selling, general and                                                      
   administration             40,586       53,846      121,916      149,854 
                                                                            
  Depreciation and                                                          
   amortization               10,442       10,560       30,245       31,051 
                                                                            
                          -----------  -----------  -----------  -----------
OPERATING INCOME (LOSS)       23,949       (4,726)      59,151        9,571 
                                                                            
INTEREST INCOME                3,438        2,515        9,993        8,195 
                                                                            
INTEREST EXPENSE               1,734        2,023        5,712        6,117 
                          -----------  -----------  -----------  -----------
                                                                            
INCOME (LOSS) BEFORE                                                        
 INCOME TAX EXPENSE           25,653       (4,234)      63,432       11,649 
                                                                            
INCOME TAX EXPENSE             8,535          472       22,119        7,172 
                          -----------  -----------  -----------  -----------
                                                                            
NET INCOME (LOSS) BEFORE                                                    
 EARNINGS FROM EQUITY-                                                      
 ACCOUNTED INVESTMENTS        17,118       (4,706)      41,313        4,477 
                                                                            
EARNINGS FROM EQUITY-                                                       
 ACCOUNTED INVESTMENTS            52           22          202          204 
                          -----------  -----------  -----------  -----------
                                                                            
NET INCOME (LOSS)             17,170       (4,684)      41,515        4,681 
                                                                            
ADD NET LOSS                                                                
 ATTRIBUTABLE TO NON-                                                       
 CONTROLLING INTEREST            (12)          (3)         (12)         (11)
                                                                            
                          -----------  -----------  -----------  -----------
NET INCOME (LOSS)                                                           
 ATTRIBUTABLE TO NET1    $    17,182  $    (4,681) $    41,527  $     4,692 
                          -----------  -----------  -----------  -----------
                          -----------  -----------  -----------  -----------
                                                                            
Net income (loss) per                                                       
 share, in United States                                                    
 dollars                                                                    
  Basic earnings (loss)                                                     
   attributable to Net1                                                     
   shareholders                $0.38       $(0.10)       $0.91        $0.10 
  Diluted earnings                                                          
   (loss) attributable                                                      
   to Net1 shareholders        $0.37       $(0.10)       $0.90        $0.10 
                                                                            
                                                                            
                                                                            
NET 1 UEPS TECHNOLOGIES, INC.                                               
Unaudited Condensed Consolidated Balance Sheets                             
                                                                            
                                                    Unaudited           (A) 
                                                    March 31,      June 30, 
                                                         2014          2013 
                                                ----------------------------
                                                (In thousands, except share 
                                                           data)            
                                   ASSETS                                   
CURRENT ASSETS                                                              
  Cash and cash equivalents                      $     30,875  $     53,665 
  Pre-funded social welfare grants receivable           4,728         2,934 
  Accounts receivable, net of allowances of -                               
   March: $1,592; June: $4,701                        132,356       102,614 
  Finance loans receivable, net of allowances of                            
   - March: $1,815; June: $-                           42,379         8,350 
  Inventory                                            10,491        12,222 
  Deferred income taxes                                 5,350         4,938 
                                                  ------------  ------------
    Total current assets before settlement                                  
     assets                                           226,179       184,723 
      Settlement assets                               744,782       752,476 
                                                  ------------  ------------
        Total current assets                          970,961       937,199 
PROPERTY, PLANT AND EQUIPMENT, net of                                       
 accumulated depreciation of - March: $92,314;                              
 June: $84,808                                         46,150        48,301 
EQUITY-ACCOUNTED INVESTMENTS                            1,347         1,183 
GOODWILL                                              179,832       175,806 
INTANGIBLE ASSETS, net                                 69,265        77,257 
OTHER LONG-TERM ASSETS, including reinsurance                               
 assets                                                34,338        36,576 
                                                  ------------  ------------
  TOTAL ASSETS                                      1,301,893     1,276,322 
                                                  ------------  ------------
                                                  ------------  ------------
                                                       40,570               
                                LIABILITIES                                 
CURRENT LIABILITIES                                                         
  Bank overdraft                                            -             - 
  Accounts payable                                     14,592        26,567 
  Other payables                                       35,682        33,808 
  Current portion of long-term borrowings              14,005        14,209 
  Income taxes payable                                 11,749         2,275 
                                                  ------------  ------------
    Total current liabilities before settlement                             
     obligations                                       76,028        76,859 
      Settlement obligations                          744,782       752,476 
                                                  ------------  ------------
        Total current liabilities                     820,810       829,335 
DEFERRED INCOME TAXES                                  17,343        18,727 
LONG-TERM BORROWINGS                                   58,061        66,632 
OTHER LONG-TERM LIABILITIES, including insurance                            
 policy liabilities                                    20,117        21,659 
                                                  ------------  ------------
  TOTAL LIABILITIES                                   916,331       936,353 
                                                  ------------  ------------
COMMITMENTS AND CONTINGENCIES                                               
                                                                            
                                   EQUITY                                   
COMMON STOCK                                                                
  Authorized: 200,000,000 with $0.001 par value;                            
  Issued and outstanding shares, net of treasury                            
   - March: 45,783,342; June: 45,592,550                   59            59 
PREFERRED STOCK                                                             
  Authorized shares: 50,000,000 with $0.001 par                             
   value;                                                                   
  Issued and outstanding shares, net of                                     
   treasury: March: -; June: -                              -             - 
ADDITIONAL PAID-IN-CAPITAL                            165,076       160,670 
TREASURY SHARES, AT COST: March: 13,455,090;                                
 June: 13,455,090                                    (175,823)     (175,823)
ACCUMULATED OTHER COMPREHENSIVE LOSS                  (97,910)     (100,858)
RETAINED EARNINGS                                     494,145       452,618 
                                                  ------------  ------------
  TOTAL NET1 EQUITY                                   385,547       336,666 
  NON-CONTROLLING INTEREST                                 15         3,303 
                                                  ------------  ------------
    TOTAL EQUITY                                      385,562       339,969 
                                                  ------------  ------------
                                                  ------------  ------------
                                                                            
                                                  ------------  ------------
      TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $  1,301,893  $  1,276,322 
                                                  ------------  ------------
                                                  ------------  ------------
                                                                            
(A) - Derived from audited financial statements                             
                                                                            
                                                                            
                                                                            
NET 1 UEPS TECHNOLOGIES, INC.                                               
Unaudited Condensed Consolidated Statements of Cash Flows                   
                                                                            
                                  Three months ended    Nine months ended   
                                --------------------------------------------
                                       March 31,             March 31,      
                                  --------------------  --------------------
                                      2014       2013       2014       2013 
                                  ---------  ---------  ---------  ---------
                                    (In thousands)        (In thousands)    
                                                                            
Cash flows from operating                                                   
 activities                                                                 
Net income (loss)                $  17,170  $  (4,684) $  41,515  $   4,681 
Depreciation and amortization       10,442     10,560     30,245     31,051 
Earnings from equity-accounted                                              
 investments                           (52)       (22)      (202)      (204)
Fair value adjustments                 110       (299)        49        408 
Interest payable                        30      1,054      1,696      3,363 
(Profit) loss on disposal of                                                
 property, plant and equipment         (26)         3        (42)       (83)
Stock-based compensation charge        922      1,092      2,820      3,325 
Facility fee amortized                  79         71        657        235 
Increase in accounts receivable,                                            
 pre-funded social welfare                                                  
 grants receivable and finance                                              
 loans receivable                   (6,443)    (4,818)   (67,521)    (3,987)
Decrease (Increase) in inventory     2,821      4,949        979     (2,260)
Increase (Decrease) in accounts                                             
 payable and other payables          2,656      4,533    (10,895)    (1,755)
Increase in taxes payable            8,069        948      9,431        354 
Decrease in deferred taxes          (1,141)    (1,201)    (3,019)    (4,133)
                                  ---------  ---------  ---------  ---------
  Net cash provided by operating                                            
   activities                       34,637     12,186      5,713     30,995 
                                  ---------  ---------  ---------  ---------
                                                                            
Cash flows from investing                                                   
 activities                                                                 
Capital expenditures                (4,848)    (5,053)   (17,309)   (17,103)
Proceeds from disposal of                                                   
 property, plant and equipment         123         31      2,124        387 
Acquisitions, net of cash                                                   
 acquired                                -          -          -     (2,143)
(Investment in equity in)                                                   
 Repayment of loan by equity-                                               
 accounted investment                  (25)         -        (25)         3 
Proceeds from maturity of                                                   
 investments related to                                                     
 insurance business                      -          -          -        545 
Other investing activities, ne3t       571          -       (570)         - 
Net change in settlement assets   (277,912)  (156,363)   (21,409)  (168,419)
                                  ---------  ---------  ---------  ---------
  Net cash used in investing                                                
   activities                     (282,091)  (161,385)   (36,049)  (186,730)
                                  ---------  ---------  ---------  ---------
                                                                            
Cash flows from financing                                                   
 activities                                                                 
Long-term borrowings obtained        1,028          -     72,633          - 
Repayment of long-term                                                      
 borrowings                              -          -    (87,008)    (7,307)
Payment of facility fee                  -          -       (872)         - 
Proceeds from bank overdraft             -          -     24,580          - 
Repayment of bank overdraft        (23,335)         -    (23,335)         - 
Acquisition of interests in                                                 
 KSNET                                   -          -     (1,968)         - 
Proceeds from issue of common                                               
 stock                                  88          -         88        240 
Net change in settlement                                                    
 obligations                       277,912    156,363     21,409    168,419 
                                  ---------  ---------  ---------  ---------
  Net cash provided by financing                                            
   activities                      255,693    156,363      5,527    161,352 
                                  ---------  ---------  ---------  ---------
                                                                            
Effect of exchange rate changes                                             
 on cash                               274     (2,664)     2,019     (2,124)
                                  ---------  ---------  ---------  ---------
Net increase (decrease) in cash                                             
 and cash equivalents                8,513      4,500    (22,790)     3,493 
Cash and cash equivalents -                                                 
 beginning of period                22,362     38,116     53,665     39,123 
                                  ---------  ---------  ---------  ---------
Cash and cash equivalents - end                                             
 of period                       $  30,875  $  42,616  $  30,875  $  42,616 
                                  ---------  ---------  ---------  ---------
                                  ---------  ---------  ---------  ---------

Net 1 UEPS Technologies, Inc.

Attachment A

Operating segment revenue, operating income and operating margin:

Three months ended March 31, 2014 and 2013 and December 31, 2013


                                                                            
                                                                            
Key segmental data, in $ '000,       Q3 '14          Q3 '13          Q2 '14 
                               -------------   -------------   -------------
Revenue:                                                                    
  SA transaction-based                                                      
   activities                       $64,864         $59,009         $72,237 
  International transaction-                                                
   based activities                  34,994          33,119          37,288 
  Smart card accounts                10,612           8,657          11,237 
  Financial services                 11,099           1,651           6,199 
  Hardware, software and                                                    
   related technology sales          16,557           8,705          10,322 
                               -------------   -------------   -------------
    Total consolidated revenue     $138,126        $111,141        $137,283 
                               -------------   -------------   -------------
                               -------------   -------------   -------------
                                                                            
Consolidated operating income                                               
 (loss):                                                                    
  SA transaction-based                                                      
   activities                       $11,145         ($4,197)        $13,398 
                               -------------   -------------   -------------
    Operating income (loss)                                                 
     excluding amortization          12,308          (3,127)         13,916 
    Amortization of intangible                                              
     assets                          (1,163)         (1,070)           (518)
                               -------------   -------------   -------------
  International transaction-                                                
   based activities                   1,322          (1,362)          1,365 
                               -------------   -------------   -------------
    Operating income excluding                                              
     amortization                     4,680           1,866           4,883 
    Amortization of intangible                                              
     assets                          (3,358)         (3,228)         (3,518)
                               -------------   -------------   -------------
  Smart card accounts                 3,025           2,467           3,203 
  Financial services                  5,119           1,147           1,727 
  Hardware, software and                                                    
   related technology sales           4,000           1,699           1,592 
                               -------------   -------------   -------------
    Operating income (loss)                                                 
     excluding amortization           4,066           1,785           1,663 
    Amortization of intangible                                              
     assets                             (66)            (86)            (71)
                               -------------   -------------   -------------
  Corporate/ Eliminations              (662)         (4,480)         (2,483)
                               -------------   -------------   -------------
    Total operating income                                                  
     (loss)                         $23,949         ($4,726)        $18,802 
                               -------------   -------------   -------------
                               -------------   -------------   -------------
                                                                            
Operating income margin (%)                                                 
  SA transaction-based                                                      
   activities                           17%             (7%)            19% 
  International transaction-                                                
   based activities                      4%             (4%)             4% 
  International transaction-                                                
   based activities excluding                                               
   amortization                         13%              6%             13% 
  Smart card accounts                   29%             28%             29% 
  Financial services                    46%             69%             28% 
  Hardware, software and                                                    
   related technology sales             24%             20%             15% 
  Overall operating margin              17%             (4%)            14% 
                                                                            

                                                          Change - constant 
                                     Change - actual       exchange rate(1) 
                               ---------------------------------------------
                                   Q3 '14     Q3 '14     Q3 '14      Q3 '14 
                                       vs         vs         vs          vs 
Key segmental data, in $ '000,     Q3 '13     Q2 '14     Q3 '13      Q2 '14 
                               ---------------------------------------------
Revenue:                                                                    
  SA transaction-based                                                      
   activities                         10%       (10%)       41%         (4%)
  International transaction-                                                
   based activities                    6%        (6%)       36%          0% 
  Smart card accounts                 23%        (6%)       57%          1% 
  Financial services                 572%        79%       763%         92% 
  Hardware, software and                                                    
   related technology sales           90%        60%       144%         72% 
                                                                            
    Total consolidated revenue        24%         1%        60%          8% 
                                                                            
                                                                            
Consolidated operating income                                               
 (loss):                                                                    
  SA transaction-based                                                      
   activities                          nm       (17%)        nm        (11%)
                               ---------------------------------------------
    Operating income (loss)                                                 
     excluding amortization            nm       (12%)        nm         (5%)
    Amortization of intangible                                              
     assets                            9%       125%        40%        140% 
                               ---------------------------------------------
  International transaction-                                                
   based activities                    nm        (3%)        nm          4% 
                               ---------------------------------------------
    Operating income excluding                                              
     amortization                    151%        (4%)      222%          3% 
    Amortization of intangible                                              
     assets                            4%        (5%)       34%          2% 
                               ---------------------------------------------
  Smart card accounts                 23%        (6%)       57%          1% 
  Financial services                 346%       196%       473%        217% 
  Hardware, software and                                                    
   related technology sales          135%       151%       202%        169% 
                               ---------------------------------------------
    Operating income (loss)                                                 
     excluding amortization          128%       144%       193%        162% 
    Amortization of intangible                                              
     assets                          (23%)       (7%)       (1%)        (0%)
                               ---------------------------------------------
  Corporate/ Eliminations            (85%)      (73%)      (81%)       (71%)
                                                                            
    Total operating income                                                  
     (loss)                            nm        27%         nm         36% 
                                                                            
                                                                            
Operating income margin (%)                                                 
  SA transaction-based                                                      
   activities                                                               
  International transaction-                                                
   based activities                                                         
  International transaction-                                                
   based activities excluding                                               
   amortization                                                             
  Smart card accounts                                                       
  Financial services                                                        
  Hardware, software and                                                    
   related technology sales                                                 
  Overall operating margin                                                  
                                                                            
(1) - This information shows what the change in these items would have been 
if the USD/ ZAR exchange rate that prevailed during the third quarter of    
fiscal 2014 also prevailed during the third quarter of fiscal 2013 and the  
second quarter of fiscal 2014.                                              

Nine months ended March 31, 2014 and 2013


                                                                   Change - 
                                                                   constant 
                                                          Change - exchange 
                                                            actual  rate(1) 
                                                          ------------------
                                                             F2014    F2014 
Key segmental data, in '000,                                    vs       vs 
 except margins                        F2014       F2013     F2013    F2013 
                                  ----------- ----------- ------------------
Revenue:                                                                    
  SA transaction-based activities   $200,133    $181,137       10%      36% 
  International transaction-based                                           
   activities                        109,099      97,881       11%      37% 
  Smart card accounts                 33,178      25,240       31%      61% 
  Financial services                  19,725       4,483      340%     440% 
  Hardware, software and related                                            
   technology sales                   36,768      25,524       44%      77% 
                                  ----------- -----------                   
    Total consolidated revenue      $398,903    $334,265       19%      46% 
                                  ----------- -----------                   
                                  ----------- -----------                   
                                                                            
Consolidated operating income                                               
 (loss):                                                                    
  SA transaction-based activities    $37,825      $4,136      815%   1,022% 
                                  ----------- ----------- ------------------
    Operating income excluding                                              
     amortization                     40,057       8,139      392%     504% 
    Amortization of intangible                                              
     assets                           (2,232)     (4,003)     (44%)    (32%)
                                  ----------- ----------- ------------------
  International transaction-based                                           
   activities                          4,738      (1,331)       nm       nm 
                                  ----------- ----------- ------------------
    Operating income excluding                                              
     amortization                     14,751       8,366       76%     116% 
    Amortization of intangible                                              
     assets                          (10,013)     (9,697)       3%      27% 
                                  ----------- ----------- ------------------
  Smart card accounts                  9,456       7,194       31%      61% 
  Financial services                   6,902       3,292      110%     157% 
  Hardware, software and related                                            
   technology sales                    8,540       4,478       91%     134% 
                                  ----------- ----------- ------------------
    Operating income excluding                                              
     amortization                      8,748       4,732       85%     127% 
    Amortization of intangible                                              
     assets                             (208)       (254)     (18%)      1% 
                                  ----------- ----------- ------------------
  Corporate/ Eliminations             (8,310)     (8,198)       1%      24% 
                                  ----------- -----------                   
    Total operating income           $59,151      $9,571      518%     658% 
                                  ----------- -----------                   
                                  ----------- -----------                   
                                                                            
Operating income margin (%)                                                 
  SA transaction-based activities        19%          2%                    
  International transaction-based                                           
   activities                             4%         (1%)                   
  International transaction-based                                           
   activities excluding                                                     
   amortization                          14%          9%                    
  Smart card accounts                    29%         29%                    
  Financial services                     35%         73%                    
  Hardware, software and related                                            
   technology sales                      23%         18%                    
  Overall operating margin               15%          3%                    
                                                                            
(1) - This information shows what the change in these items would have been 
if the USD/ ZAR exchange rate that prevailed during the year to date fiscal 
2014 also prevailed during the year to date fiscal 2013.                    

Net 1 UEPS Technologies, Inc.

Attachment B

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

Three months ended March 31, 2014 and 2013


                                    E(L)PS,                       E(L)PS,   
                    Net income       basic       Net income        basic    
                     (USD'000)       (USD)        (ZAR'000)        (ZAR)    
                  ----------------------------------------------------------
                     2014   2013   2014  2013     2014    2013   2014  2013 
                  ----------------------------------------------------------
                                                                            
GAAP               17,182 (4,681)  0.38 (0.10) 186,842 (39,632)  4.08 (0.87)
                                                                            
  Intangible asset                                                          
   amortization,                                                            
   net              3,443  3,295                37,431  27,898              
  Stock-based                                                               
   compensation                                                             
   charge             922  1,092                10,026   9,245              
  Facility fees                                                             
   for KSNET debt      79     71                   859     601              
  US government                                                             
   investigations-                                                          
   related and US                                                           
   lawsuit                                                                  
   expenses            62  2,557                   674  21,648              
  Acquisition-                                                              
   related costs        -     28                     -     237              
                  ---------------             -----------------             
    Fundamental    21,688  2,362   0.47  0.05  235,832  19,997   5.15  0.44 
                  ---------------             -----------------             
                  ---------------             -----------------             

Nine months ended March 31, 2014 and 2013


                                                                    EPS,    
                     Net income    EPS, basic     Net income        basic   
                      (USD'000)       (USD)        (ZAR'000)        (ZAR)   
                  ----------------------------------------------------------
                      2014    2013  2014  2013     2014     2013  2014  2013
                  ----------------------------------------------------------
                                                                            
GAAP                41,527   4,692  0.91  0.10  431,054   39,684  9.42  0.87
                                                                            
  Intangible asset                                                          
   amortization,                                                            
   net               9,385  10,453               97,414   88,403            
  Stock-based                                                               
   compensation                                                             
   charge            2,914   3,325               30,248   28,122            
  Facility fees                                                             
   for KSNET debt      657     235                6,820    1,988            
  US government                                                             
   investigations-                                                          
   related and US                                                           
   lawsuit                                                                  
   expenses          2,526   3,117               26,220   26,363            
  Acquisition-                                                              
   related costs         -      75                    -      634            
                  ----------------            ------------------            
    Fundamental     57,009  21,897  1.25  0.48  591,756  185,194 12.94  4.07
                  ----------------            ------------------            
                  ----------------            ------------------            

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 March 31, 2014 and 2013


                                                            2014       2013 
                                                      ----------------------
                                                                            
Net income (loss) (USD'000)                               17,182     (4,681)
Adjustments:                                                                
    Profit on sale of property, plant and equipment          (26)         3 
    Tax effects on above                                       7         (1)
                                                                            
                                                      ----------------------
Net income (loss) used to calculate headline earnings                       
 (USD'000)                                                17,163     (4,679)
                                                      ----------------------
                                                      ----------------------
                                                                            
Weighted average number of shares used to calculate                         
 net income (loss) per share basic earnings and                             
 headline earnings (loss) per share basic earnings                          
 ('000)                                                   45,776     45,545 
                                                                            
Weighted average number of shares used to calculate                         
 net income (loss) per share diluted earnings and                           
 headline earnings (loss) per share diluted earnings                        
 ('000)                                                   45,954     45,597 
                                                                            
Headline earnings (loss) per share:                                         
  Basic, in USD                                             0.37      (0.10)
  Diluted, in USD                                           0.37      (0.10)

Nine months ended March 31, 2014 and 2013


                                                            2014       2013 
                                                      ----------------------
                                                                            
Net income (USD'000)                                      41,527      4,692 
Adjustments:                                                                
  Profit on sale of property, plant and equipment            (42)       (83)
  Tax effects on above                                        12         23 
                                                                            
                                                      ----------------------
Net income used to calculate headline earnings                              
 (USD'000)                                                41,497      4,632 
                                                      ----------------------
                                                      ----------------------
                                                                            
Weighted average number of shares used to calculate                         
 net income per share basic earnings and headline                           
 earnings per share basic earnings ('000)                 45,742     45,530 
                                                                            
Weighted average number of shares used to calculate                         
 net income per share diluted earnings and headline                         
 earnings per share diluted earnings ('000)               45,997     45,593 
                                                                            
Headline earnings per share:                                                
  Basic, in USD                                             0.90       0.10 
  Diluted, in USD                                           0.90       0.10 

Calculation of the denominator for headline diluted earnings per share


                                              Q3 '14  Q3 '13   F2014   F2013
                                            --------------------------------
                                                                            
Basic weighted-average common shares                                        
 outstanding and unvested restricted shares                                 
 expected to vest under GAAP                  45,776  45,545  45,742  45,530
  Effect of dilutive securities under GAAP       178      52     255      63
                                            --------------------------------
    Denominator for headline diluted                                        
     earnings per share                       45,954  45,597  45,997  45,593
                                            --------------------------------
                                            --------------------------------

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.

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