Gross Dollar Volume (GDV) of $2.8 billion during Q4 2011 as compared to $2.5 billion during Q4 2010
Our Annual Report on Form 10-K for the year ended December 31, 2011 will contain a further description of our key business metrics.
"We delivered another solid quarter, and we set the stage for continued growth in 2012 and beyond with new business development wins," said Dan Henry, chief executive officer of NetSpend. "Throughout the year, we focused on growing and diversifying our business. Our number of active cards with direct deposit continues to increase every quarter, which provides stability to our business. We also signed key agreements with PayPal, BET, 7-Eleven, Blackhawk and InComm throughout the year to diversify and expand our distribution channels."
Fiscal Fourth Quarter 2011 Results
Revenues were $76.8 million for the quarter ended December 31, 2011, an increase of approximately 9% over the $70.2 million of revenues recorded in the same quarter of 2010. This increase was substantially driven by the increase in direct deposit accounts, and to a lesser extent, the expansion of product features across NetSpend's direct deposit customer base. This increase was offset in part by a decline in gift card related revenue because NetSpend ceased marketing gift cards in August 2010. Gift card revenue declined approximately $0.8 million to less than $0.1 million in the fourth quarter of 2011. Interchange revenue represented approximately 22% of total revenue during the three months ended December 31, 2011.
Net income was $9.6 million for the quarter ended December 31, 2011, an increase of 81% over the net income of $5.3 million recorded in the quarter ended December 31, 2010. NetSpend's net income for the quarter ended December 31, 2011 includes an aggregate of $11.2 million of net interest expense, income tax expense, depreciation and amortization and other losses. Net income for the quarter ended December 31, 2011 also includes approximately $2.4 million in stock-based compensation expense. For the quarter ended December 31, 2010, the comparable amount of net interest expense, income tax expense and depreciation and amortization was $7.6 million. Net income for the quarter ended December 31, 2010 also includes approximately $2.9 million in stock-based compensation expense.
NetSpend reported that it expects full year 2012 revenue to be between $338 and $347 million, its adjusted EBITDA to fall between $90 and $94 million and it adjusted net income per fully diluted share to be between $0.51 and $0.55. This 2012 guidance assumes investments in the launch and rollout of signed partners which will reduce normalized operating margins by approximately 250 basis points.
The foregoing expectations reflect the following assumptions:
- An effective tax rate of approximately 40%;
- Non-cash equity compensation of between approximately $10 and $11 million;
- Cash outlays for capital expenditures for the full year of between
approximately $10 and $12 million;
- An effective cost of debt capital of approximately 3.5%; and
- Fully diluted shares outstanding for the full year of approximately 88
Investor Conference Call and Webcast
NetSpend will host an investor conference call to discuss its fourth quarter 2011 results today, February 16, 2012, at 5:00 p.m. EST. The conference call can be accessed live over the phone by dialing (877) 853-5634 or (707) 287-9375 for international callers. A replay will be available until February 23, 2012 at (855) 859-2056 or (404) 537-3406 for international callers; the conference ID is 48120358. The call will be webcast live from NetSpend's website at http://investor.netspend.com .
NetSpend is a leading provider of general-purpose reloadable (GPR) prepaid debit cards and related financial services to the estimated 60 million underbanked consumers in the United States who do not have a traditional bank account or who rely on alternative financial services. The Company's mission is to develop products and services that empower underbanked consumers with the convenience, security and freedom to be self-banked. Headquartered in Austin, TX, NetSpend is traded on the NASDAQ stock exchange under the symbol NTSP. Please visit http://www.netspend.com for more information.
Follow NetSpend on Twitter: http://twitter.com/netspend or Facebook: http://www.facebook.com/netspend .
Source: Company press release.
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