VeriFone Announces Additional Detailed Cash Flow Data
VeriFone Systems, Inc. (NYSE: PAY), is providing additional detailed cash flow data and information to address recent topics raised by investors regarding VeriFone's reported cash flow for the six months ending April 30, 2012, included in the press release issued on May 24, 2012, titled “VeriFone Reports Results for the Second Quarter of Fiscal 2012.” It is VeriFone's general policy to respond to investor concerns as quickly as possible by updating or providing additional financial details. In this instance, we received a number of questions regarding cash flow and are therefore providing more detailed information. This additional detailed cash flow data and information, provided in the text and below table of this press release, is consistent with the level of detail that would be presented in a Form 10-K. In addition, it is also consistent with what we expect to include in VeriFone's quarterly report on Form 10-Q for the quarter ended April 30, 2012 (“Q2FY12”), which we expect to file on or prior to June 11, 2012.
In Q2 FY12, VeriFone ramped up expenditures for revenue-generating assets related to the roll out of Point's Payment-as-a-Service offering beyond Point's traditional markets and our expanded deployment of media-related equipment in London taxis and at gas stations. These expenditures for revenue-generating assets are investments in payment terminals, taxicab systems, gas pump systems and similar equipment that VeriFone continues to own and which generates advertising or other service-fee or rental revenue. Upon further consideration, we have now classified this cash flow data to be included as cash flows from investing activities for Q2 FY12 to reflect the nature of the expenditures related to these businesses. Accordingly, the Net Cash Provided by Operating Activities for the six months ended April 30, 2012 is revised from $50.3 million to $62.9 million while Net Cash Used in Investing Activities is revised from $1,084 million to $1,097 million for the same period.
Further, VeriFone is providing the following supplemental disclosures regarding its previously-provided summary press release information and cash flows as furnished with the May 24 press release:
VeriFone notes that in Q2 FY12, Net Cash Provided by Operating Activities before Changes in Operating Assets and Liabilities was $79.5 million, up from $35.7 million in Q1 FY12, and exceeding the Non-GAAP Net Income of $71.4 million for Q2 FY12. Acquisition-related expenses and restructuring costs excluded from Non-GAAP earnings were more than offset by a higher level of taxes in Non-GAAP earnings than taxes reported under GAAP. Working capital, excluding cash, has fluctuated substantially in prior quarters and these balance sheet items increased by approximately $33 million in Q2 FY12, reflecting primarily higher receivables and lower accounts payable. Other significant Q2 FY12 changes to cash flows include cash re-assigned to restricted cash to cover certain long term operating letters of credit, and a net pay down of other operating obligations, such as warranty obligations, where cash expenditures are continuing against previously-accrued amounts.
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