• Lesaka Reports Fourth Quarter 2022 Results

    Source: Nasdaq GlobeNewswire / 09 Sep 2022 15:05:01   America/Chicago

    JOHANNESBURG, South Africa, Sept. 09, 2022 (GLOBE NEWSWIRE) -- Lesaka Technologies, Inc. (Nasdaq: LSAK; JSE: LSK) today released results for the fourth fiscal quarter and year ended June 30, 2022.

    Highlights:

    Performance for the quarter ended June 30, 2022 (Q4 2022)

    • Group revenue of $121.8 million in Q4 2022, compared to $34.5 million for the quarter ended June 30, 2021 (Q4 2021), driven by the inclusion of Connect from April 14, 2022 which added $86.2 million to the Group’s revenue and 23% growth in revenue in the existing merchant business. On a constant currency basis, the existing merchant business grew revenue 35% in Q4 2022 to ZAR304 million1.
    • The Group’s operating loss of $10.1 million in Q4 2022 improved from an operating loss of $13.6 million for Q4 2021.
    • Segment Adjusted EBITDA (before corporate/eliminations) for Q4 2022 improved to a profit of $6.1 million compared to a loss of $6.7 million in Q4 2021, demonstrating progress made on the transformative journey to build the leading South African fintech platform, bringing financial inclusion and digitization. Looking forward, the Group is well positioned for growth.
    • The Connect acquisition closed early in Q4 2022 and the Connect business continued to deliver strong growth during the quarter, slightly ahead of expectations. The integration process of the two groups has been very encouraging, with tangible results already achieved.

    Performance for the year ended June 30, 2022

    • Successful execution of our strategy outlined last year, demonstrated by the closing of the Connect acquisition and progress on the Consumer segment turnaround.
    • Revenue for the year increased to $222.6 million, from $130.8 million driven by the inclusion of Connect from April 14, 2022 which added $86.2 million to the Group’s revenue and 13% growth in revenue in the existing merchant business.
    • Consumer business revenues were flat in 2022, where our focus was primarily on right-sizing the cost base. It is encouraging that cost savings were achieved whilst growing our active account base and maintaining transaction volumes and revenues in the Consumer business.
    • The Group’s operating loss of $40.2 million for the year reflects a 25% improvement compared to the operating loss of $53.9 million reported for the year ended June 30, 2021.
    • Normalized EBITDA (before corporate/eliminations) after normalizing for $12.4 million of once off adjustments improved 57% to a $18.6 million loss from a $42.9 million loss in the previous year, driven by increased revenue in our existing Merchant segment, continued execution on cost saving initiatives and the contribution of Connect during the final quarter.
    • Cost optimization initiatives and restructuring the operations of the Consumer business in 2022 delivered cost saving in excess of original expectations, with approximately $19.7 million (ZAR300 million1) in costs removed from the Consumer business cost base on an annualized basis, of which $13.7 million (ZAR208 million1) was realized in this year ended June 30, 2022.
    1. Translated at the average exchange rate of ZAR 15.20 to $1 for fiscal 2022 and ZAR15.56 to $ for Q4 2022.

    “We are delighted with the Group’s achievements over the past year. The strategy set by our new Board in 2020 and communicated to the market over the past 12 months is being effectively executed. With the Connect acquisition, Lesaka now has a complete product offering to the underserved consumers and merchants in Southern Africa, which advances our vision to build the leading South African full-service fintech platform. What has been most encouraging is the way the Lesaka and Connect teams are working together to explore and execute opportunities to increase revenues, improve performance and deliver better value to our customers through our unique dual-sided ecosystem. Great progress has also been made in the Consumer segment turnaround, which is now very close to breakeven. We will continue to focus on optimizing cost structures as well as account growth and cross-selling opportunities to increase ARPU. After a year of tremendous change and transformation, the Group is well positioned to take advantage of the high growth opportunities our market presents,” said Chris Meyer, Lesaka Group CEO.


    Summary Financial Metrics

    Three months ended

     Three months ended        
     Jun 30,
    2022    		 Jun 30,
    2021    		 Mar 31,
    2022    		 Q4 ’22 vs
    Q4 ’21    		 Q4 ’22 vs
    Q3 ’22    		 Q4 ’22 vs
    Q4 ’21    		 Q4 ’22 vs
    Q3 ’22
    (All figures in USD ‘000s except per share data)USD ‘000’s
    (except per share data)    		 % change in USD % change in ZAR
    Revenue 121,789   34,517   35,202   253%  246%  288%  245%
                  
    GAAP operating loss (10,122)  (13,600)  (9,421)  (26%)  7%  (18%)  7%
                    
    Adjusted EBITDA (loss)(1) 1,337   (8,208)  (2,828)  nm   nm   nm   nm 
                        
    GAAP (loss) income per share ($) (0.25)  0.03   (0.06)  nm   327%  nm   326%
                      
    Fundamental loss per share ($)(1) (0.09)  (0.18)  (0.05)  (50%)  80%  (45%)  79%
                  
    Fully-diluted shares outstanding (‘000’s) 61,619   56,937   57,791   8%  7%  n/a   n/a 
                      
    Average period USD / ZAR exchange rate 15.56   14.17   15.61   10%  (0%)  n/a   n/a 


    Year ended

     Year ended        
     June 30,
    2022    		 June 30
    2021    		  F2022 vs
    F2021    		   F2022 vs
    F2021    		 
    (All figures in USD ‘000s except per share data)USD ‘000’s
    (except per share data)    		% change in USD % change in ZAR
    Revenue 222,609   130,786   70%  65%
            
    GAAP operating loss (40,195)  (53,872)  (25%)  (28%)
            
    Adjusted EBITDA loss(1) (18,637)  (42,907)  (57%)  (58%)
            
    GAAP loss per share ($) (0.75)  (0.67)  12%  8%
            
    Fundamental loss per share ($)(1) (0.49)  (0.87)  (44%)  (46%)
            
    Fully-diluted shares outstanding (‘000’s) 58,364   56,898   3%  n/a 
              
    Average period USD / ZAR exchange rate 15.20   15.72   (3%)  n/a 

    (1) Adjusted EBITDA income (loss), fundamental loss and fundamental loss per share are non-GAAP measures and are described below under “Use of Non-GAAP Measures—Operating income before depreciation and amortization and adjusted EBITDA, and —Fundamental net loss and fundamental loss per share.” See Attachment B for a reconciliation of GAAP operating loss to EBITDA income (loss) and Adjusted EBITDA (loss), and GAAP net loss to fundamental net loss and loss per share.


    Factors impacting comparability of our Q4 2022 and Q4 2021 results

    • Higher revenue: Our revenues increased 288% in ZAR, primarily due to the contribution from Connect, which contributed ZAR 1,341 million in Q4 2022 compared to nil in Q4 2021 with the Connect Group acquired on April 14, 2022. On a constant currency basis the existing Merchant business grew revenue 35% in Q4 22 to ZAR304 million. Group revenue drivers in the quarter included an increase in hardware sales, an increase in merchant transaction processing fees, and a moderate increase in lending and insurance revenues;
    • Lower operating losses: Operating losses decreased, delivering an improvement of 18% in ZAR compared with the prior period primarily due to contribution from Connect, the closure of the loss-making IPG operations and the implementation of various cost reduction initiatives in our Consumer business, which was partially offset by an increase in acquisition related intangible asset amortization;
    • Significant transaction costs: We expensed $4.2 million of transaction costs related to the Connect acquisition; and
    • Foreign exchange movements: The U.S. dollar was 10% stronger against the ZAR during the fourth quarter of fiscal 2022, which impacted our reported results.

    Results of Operations by Segment and Liquidity

    Consumer

    Segment revenue was $15.7 million in Q4 2022, down 6% compared with Q4 2021, and down 5% compared with Q3 2022, on a constant currency basis. Segment revenue decreased primarily due to lower processing fees, partially offset by higher lending and insurance revenues and higher account holder fees. Our EBITDA loss reduced during Q4 2022 compared with the comparable periods as a result of the cost reduction initiatives, including the Q3 2022 reorganization process, embarked on during fiscal 2022 and a recalibration, in June 2022, of our allowance for doubtful microlending finance loans receivable from 10% of the lending book outstanding to 6.5% of the lending book, which resulted in a release from the allowance in fiscal 2022, which decreases were partially offset by an increase in insurance-related claims experience. Our EBITDA loss margin (calculated as EBITDA loss divided by revenue) for Q4 2022 and 2021 was (9%) and (38%), respectively.

    Merchant

    Segment revenue was $105.7 million in Q4 2022, up 632% compared with Q4 2021 and up 470% compared to Q3 2022 on a constant currency basis. Segment revenue increased due to the inclusion of Connect for two and a half months and an increase in hardware sales and processing fees. The increase in segment EBITDA is primarily due to the inclusion of Connect, which was partially offset by higher costs related to processing fees and higher employee-related expenses. Connect records a significant proportion of its airtime sales in revenue and cost of sales, while only earning a relatively small margin. This depresses the EBITDA margins shown by the business. Our EBITDA margin for Q4 2022 and 2021 was 7% and 2%, respectively.

    Other

    Other includes the activities of IPG in fiscal 2021 and our other legacy businesses outside South Africa, principally Botswana.

    Segment revenue decreased due to lower revenue following the closure of IPG in fiscal 2021. We recorded an EBITDA contribution during the fourth quarter of fiscal 2022 following the closure of our loss-making activities performed through IPG.

    Corporate/Eliminations

    Our corporate expenses generally include acquisition-related intangible asset amortization; expenses incurred related to corporate actions; expenditures related to compliance with the Sarbanes-Oxley Act of 2002; non-employee directors’ fees; certain employee and executive bonuses; stock-based compensation; legal fees; audit fees; directors and officer’s insurance premiums; elimination entries; and from fiscal 2022 our group CEO’s compensation.

    Our corporate expenses for fiscal 2022 increased compared with fiscal 2021 primarily due to transaction related expenses of $4.2 million (ZAR 65.9 million) related to the Connect acquisition, legacy adjustments of clearing and settlement accounts of $1.6 million (ZAR 25.7 million) and significantly higher stock-based compensation charges due to the expansion of our senior management team. The legacy processing adjustments represents amounts we identified during the current fiscal quarter related to prior periods.

    Cash flow and liquidity

    At June 30, 2022, our cash and cash equivalents were $43.9 million and comprised of ZAR-denominated balances of ZAR 0.5 billion ($32.8 million), U.S. dollar-denominated balances of $9.6 million, and other currency deposits, primarily Botswana pula, of $1.5 million, all amounts translated at exchange rates applicable as of June 30, 2022. The decrease in our unrestricted cash balances from June 30, 2021 was primarily due to utilization of cash reserves to fund a portion of the Connect purchase consideration that was payable in cash, and to fund our operations and payment of reorganization costs, which was partially offset by the receipt of $11.4 million related to the sale of Bank Frick in fiscal 2021 and a $3.7 million gain on foreign currency options.

    Q1 2023 Outlook

    The Company expects the following for the three months ended September 2022:

    • Revenue between $130 million and $133 million; and
    • Total Segment Adjusted EBITDA of between $6.1 million and $6.5 million.

    Webcast and Conference Call

    Lesaka will host a webcast and conference call to review results on September 12, 2022, at 8:00 a.m. Eastern Time.

    The results webcast can be accessed by using the following link: https://tinyurl.com/2hbdpuew

    Webcast ID: 890 1764 5390
    Participants using the webcast will be able to ask questions by raising their hand and then asking the question “live.”

    Conference Call dial-in:

    • US Toll-Free: + 309 205 3325
    • South Africa Toll-Free + 27 87 550 3946

    Participants using the conference call dial-in will be unable to ask questions.

    A replay of the results presentation webcast will be available on the Lesaka investor relations website following the conclusion of the live event.

    Use of Non-GAAP Measures

    U.S. securities laws require that when we publish any non-GAAP measures, we disclose the reason for using these non-GAAP measures and provide reconciliations to the most directly comparable GAAP measures. The presentation of EBITDA, adjusted EBITDA, fundamental net (loss) income and fundamental (loss) earnings per share and headline (loss) earnings per share are non-GAAP measures.

    Operating income before depreciation and amortization and adjusted EBITDA

    Operating income before depreciation and amortization is GAAP operating (loss) income adjusted for depreciation and amortization. Adjusted EBITDA is earnings before interest, tax, depreciation and amortization (“EBITDA”), adjusted for unusual non-recurring items, costs related to acquisitions and transactions consummated or ultimately not pursued.

    Fundamental net loss and fundamental loss per share

    Fundamental net loss and loss per share is GAAP net loss and loss per share adjusted for the amortization of acquisition-related intangible assets (net of deferred taxes), stock-based compensation charges, and unusual non-recurring items, including costs related to acquisitions and transactions consummated or ultimately not pursued.

    Fundamental net loss and loss per share for fiscal 2022 also includes adjustments for a gain related to fair value adjustments in respect of currency options, reorganization costs incurred, legacy processing adjustments, a gain on disposal of equity securities and a loss on disposal of equity-accounted investments.

    Fundamental net loss and loss per share for fiscal 2021 also includes adjustments related to changes in the fair value of equity securities, loss on disposal of equity-accounted investments, impairment losses related to an equity-accounted investment and the deferred tax liability reversal related to the impairment of the equity-accounted investment.

    Management believes that the EBITDA, adjusted EBITDA, fundamental net (loss) income and (loss) earnings per share metrics enhance its own evaluation, as well as an investor’s understanding, of our financial performance. Attachment B presents the reconciliation between GAAP operating income and EBITDA and adjusted EBITDA; and GAAP net (loss) income and (loss) earnings per share and fundamental net (loss) income and (loss) earnings per share.

    Headline (loss) earnings per share (“H(L)EPS”)

    The inclusion of H(L)EPS in this press release is a requirement of our listing on the JSE. H(L)EPS basic and diluted is calculated using net (loss) income which has been determined based on GAAP. Accordingly, this may differ to the headline (loss) 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.

    H(L)EPS basic and diluted is calculated as GAAP net (loss) income adjusted for the impairment losses related to our equity-accounted investments and (profit) loss on sale of property, plant and equipment. Attachment C presents the reconciliation between our net (loss) income used to calculate (loss) earnings per share basic and diluted and H(L)EPS basic and diluted and the calculation of the denominator for headline diluted (loss) earnings per share.

    About Lesaka (www.lesakatech.com)

    Lesaka Technologies, (Lesaka™) is a South African Fintech company that utilizes its proprietary banking and payment technologies to deliver superior financial services solutions to merchants (B2B) and consumers (B2C) in Southern Africa. Lesaka’s mission is to drive true financial inclusion for both merchant and consumer markets through offering affordable financial services to previously underserved sectors of the economy. Lesaka offers cash management solutions, growth capital, card acquiring, bill payment technologies and value-added services to formal and informal retail merchants as well as banking, lending, and insurance solutions to consumers across Southern Africa. The Lesaka journey originally began as “Net1” in 1997 and later rebranded to Lesaka (2022), with the acquisition of the Connect. As Lesaka, the business continues to grow its systems and capabilities to deliver meaningful fintech-enabled, innovative solutions for South Africa’s merchant and consumer markets.

    Lesaka has a primary listing on NASDAQ (NasdaqGS: LSAK) and a secondary listing on the Johannesburg Stock Exchange (JSE: LSK). Visit www.lesakatech.com for additional information about Lesaka Technologies (Lesaka ™).

    Forward-Looking Statements

    This announcement contains forward-looking statements that involve known and unknown risks and uncertainties. A discussion of various factors that may 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:
    Partner – ICR
    Email: LesakaIR@icrinc.com

    Media Relations Contact:
    Janine Bester Gertzen
    Email: Janine@thenielsennetwork.com


    LESAKA TECHNOLOGIES, INC.
    Unaudited Condensed Consolidated Statements of Operations
     Unaudited (A)
     Three months ended Year ended
     June 30, June 30,
      2022   2021   2022   2021 
     (In thousands) (In thousands)
                
    REVENUE$121,789  $34,517  $222,609  $130,786 
                
    EXPENSE           
                
    Cost of goods sold, IT processing, servicing and support 100,522   22,353   168,317   96,248 
    Selling, general and administration 21,663   24,546   74,993   84,063 
    Depreciation and amortization 5,491   1,218   7,575   4,347 
    Reorganization costs -   -   5,894   - 
    Transaction costs related to Connect Group acquisition 4,235   -   6,025   - 
                
    OPERATING LOSS (10,122)  (13,600)  (40,195)  (53,872)
                
    CHANGE IN FAIR VALUE OF EQUITY SECURITIES -   23,362   -   49,304 
                
    GAIN RELATED TO FAIR VALUE ADJUSTMENT TO CURRENCY OPTIONS -   -   3,691   - 
                
    LOSS ON DISPOSAL OF EQUITY-ACCOUNTED INVESTMENT 30   -   376   13 
                
    GAIN ON DISPOSAL OF EQUITY SECURITIES -   -   720   - 
                
    LOSS ON DISPOSAL OF EQUITY-ACCOUNTED INVESTMENT - BANK FRICK -   -   -   472 
                
    INTEREST INCOME 626   482   2,089   2,416 
                
    INTEREST EXPENSE 3,557   814   5,829   2,982 
                
    (LOSS) INCOME BEFORE INCOME TAX EXPENSE (13,083)  9,430   (39,900)  (5,619)
                
    INCOME TAX (BENEFIT) EXPENSE (427)  3,011   327   7,560 
                
    NET (LOSS) INCOME BEFORE LOSS FROM EQUITY-ACCOUNTED INVESTMENTS (12,656)  6,419   (40,227)  (13,179)
                
    LOSS FROM EQUITY-ACCOUNTED INVESTMENTS (2,493)  (4,780)  (3,649)  (24,878)
                
    NET LOSS ATTRIBUTABLE TO LESAKA (15,149)  1,639   (43,876)  (38,057)
                
    Net loss per share, in United States dollars:           
    Basic loss attributable to Lesaka shareholders$(0.25) $0.03  $(0.75) $(0.67)
    Diluted loss attributable to Lesaka shareholders$(0.25) $0.03  $(0.75) $(0.67)

    (A) Derived from audited consolidated financial statements.


    LESAKA TECHNOLOGIES, INC.
    Condensed Consolidated Balance Sheets
     (A) (A)
     June 30, June 30,
      2022   2021 
     (In thousands, except share data)
    ASSETS     
    CURRENT ASSETS     
    Cash and cash equivalents$43,940  $198,572 
    Restricted cash 60,860   25,193 
    Accounts receivable, net of allowance of - 2022: $509; 2021: $267 and other receivables 28,898   26,583 
    Finance loans receivable, net of allowance of - 2022: $1,691; 2021: $2,349 33,892   21,142 
    Inventory 34,226   22,361 
    Total current assets before settlement assets 201,816   293,851 
    Settlement assets 15,916   466 
    Total current assets 217,732   294,317 
    PROPERTY, PLANT AND EQUIPMENT, net of acc. depr. of - 2022: $35,249; 2021: $38,535 24,599   7,492 
    OPERATING LEASE RIGHT-OF-USE 7,146   4,519 
    EQUITY-ACCOUNTED INVESTMENTS 5,861   10,004 
    GOODWILL 162,657   29,153 
    INTANGIBLE ASSETS, net of acc. amort. of - 2022: $16,390; 2021: $16,403 156,702   357 
    DEFERRED INCOME TAXES 3,776   622 
    OTHER LONG-TERM ASSETS, including reinsurance assets 78,092   81,866 
    TOTAL ASSETS 656,565   428,330 
    LIABILITIES     
    CURRENT LIABILITIES     
    Short-term credit facilities for ATM funding 51,338   14,245 
    Short-term credit facilities 14,880   - 
    Accounts payable 18,572   7,113 
    Other payables 34,362   27,588 
    Operating lease liability - current 2,498   2,822 
    Current portion of long-term borrowings 6,804   - 
    Income taxes payable 2,140   256 
    Total current liabilities before settlement obligations 130,594   52,024 
    Settlement obligations 15,276   466 
    Total current liabilities 145,870   52,490 
    DEFERRED INCOME TAXES 54,211   10,415 
    OPERATING LEASE LIABILITY - LONG TERM 4,827   1,890 
    LONG-TERM BORROWINGS 134,842   - 
    OTHER LONG-TERM LIABILITIES, including insurance policy liabilities 2,466   2,576 
    TOTAL LIABILITIES 342,216   67,371 
    REDEEMABLE COMMON STOCK 79,429   84,979 
    EQUITY     
    LESAKA EQUITY:     
    COMMON STOCK     
    Authorized: 200,000,000 with $0.001 par value;     
    Issued and outstanding shares, net of treasury: 2022: 62,324,321; 2021: 56,716,620 83   80 
    PREFERRED STOCK     
    Authorized shares: 50,000,000 with $0.001 par value;     
    Issued and outstanding shares, net of treasury: 2022: -; 2021: - -   - 
    ADDITIONAL PAID-IN-CAPITAL 327,891   301,959 
    TREASURY SHARES, AT COST: 2022: 24,891,292; 2021: 24,891,292 (286,951)  (286,951)
    ACCUMULATED OTHER COMPREHENSIVE LOSS (168,840)  (145,721)
    RETAINED EARNINGS 362,737   406,613 
    TOTAL LESAKA EQUITY 234,920   275,980 
    NON-CONTROLLING INTEREST -   - 
    TOTAL EQUITY 234,920   275,980 
    TOTAL LIABILITIES, REDEEMABLE COMMON STOCK AND SHAREHOLDERS’ EQUITY$656,565  $428,330 

    (A) Derived from audited consolidated financial statements.


    LESAKA TECHNOLOGIES, INC.
    Unaudited Condensed Consolidated Statements of Cash Flows
     Unaudited (A)
     Three months ended Year ended
     June 30, June 30,
      2022   2021   2022   2021 
     (In thousands) (In thousands)
                
    Cash flows from operating activities           
    Net loss$(15,149) $1,639  $(43,876) $(38,057)
    Depreciation and amortization 5,491   1,218   7,575   4,347 
    Movement in allowance for doubtful accounts receivable 334   (803)  1,551   110 
    Interest payable 208   45   9   (1)
    Fair value adjustment related to financial liabilities 10   (361)  (466)  840 
    Gain on disposal of equity securities -   -   (720)  - 
    Loss on disposal of equity-accounted investment 30   -   376   13 
    Loss on disposal of equity-accounted investment - Bank Frick -   -   -   472 
    Loss from equity-accounted investments 2,493   4,780   3,649   24,878 
    Movement in allowance for doubtful loans -   4,000   38   4,739 
    Change in fair value of equity securities -   (23,362)  -   (49,304)
    (Profit) Loss on disposal of property, plant and equipment (449)  (120)  (2,849)  480 
    Stock-based compensation charge 1,251   (532)  2,962   344 
    Dividends received from equity accounted investments 18   69   155   194 
    Decrease (Increase) in accounts receivable and finance loans receivable 12,021   (479)  9,055   3,751 
    (Increase) Decrease in inventory (4,793)  (1,363)  (4,820)  1,279 
    (Decrease) Increase in accounts payable and other payables (7,183)  4,058   (8,851)  (335)
    Increase (Decrease) in taxes payable 643   (1,712)  1,087   (17,210)
    (Decrease) Increase in deferred taxes (1,866)  4,665   (2,324)  5,089 
    Net cash used in operating activities (6,690)  (8,258)  (37,198)  (58,371)
    Cash flows from investing activities           
    Capital expenditures (2,837)  (338)  (4,558)  (4,285)
    Proceeds from disposal of property, plant and equipment 688   226   4,217   571 
    Acquisition of Connect, net of cash acquired (202,159)  -   (202,159)  - 
    Proceeds from disposal of equity securities -   -   720   - 
    Proceeds from disposal of equity-accounted investment 46   -   865   - 
    Proceeds from disposal of equity-accounted investment - Bank Frick 3,890   -   11,390   18,568 
    Proceeds from disposal of Net1 Korea, net of cash disposed -   -   -   20,114 
    Proceeds from disposal of DNI as equity-accounted investment -   -   -   6,010 
    Loan to equity-accounted investment -   -   -   (1,238)
    Repayment of loans by equity-accounted investments -   -   -   134 
    Net change in settlement assets (4,265)  1,711   (4,163)  7,901 
    Net cash (used in) cash provided by investing activities (204,637)  1,599   (193,688)  47,775 
    Cash flows from financing activities           
    Proceeds from bank overdraft 164,464   98,324   570,862   360,083 
    Repayment of bank overdraft (152,951)  (97,137)  (525,459)  (365,440)
    Long-term borrowings utilized 78,851   -   78,851   - 
    Repayment of long-term borrowings (5,581)  -   (5,581)  - 
    Guarantee fee (1,307)  -   (1,307)  - 
    Proceeds from issue of shares -   -   759   53 
    Proceeds from disgorgement of shareholders' short-swing profits -   -   -   124 
    Net change in settlement obligations 4,236   (1,711)  4,134   (7,901)
    Net cash provided by (used in) financing activities 87,712   (524)  122,259   (13,081)
    Effect of exchange rate changes on cash (11,633)  4,118   (10,338)  14,957 
    Net decrease in cash, cash equivalents and restricted cash (135,248)  (3,065)  (118,965)  (8,720)
    Cash, cash equivalents and restricted cash – beginning of period 240,048   226,830   223,765   232,485 
    Cash, cash equivalents and restricted cash – end of period$104,800  $223,765  $104,800  $223,765 

    (A) Derived from audited consolidated financial statements.


    Lesaka Technologies, Inc.

    Attachment A

    Operating segment revenue, operating (loss) income and operating (loss) margin:

    Three months ended June 30, 2022 and 2021 and March 31, 2022

      Three months endedChange - actualChange –
    constant
    exchange rate    (1)
      Jun 30, 2022
    		 Jun 30, 2021 Mar 31, 2022Q4 '22
    vs
    Q4 '21    		Q4 '22
    vs
    Q3 '22    		Q4 '22
    vs
    Q4 '21    		Q4 '22
    vs
    Q3 '22
    Key segmental data, in ’000, except margins   
    Revenue:             
    Consumer $15,700  $18,282  $16,429  (14%) (4%) (6%) (5%)
    Merchant  105,714   15,855   18,478  567% 472% 632% 470%
    Other  475   463   397  3% 20% 13% 19%
    Subtotal: Operating segments  121,889   34,600   35,304  252% 245% 287% 244%
    Intersegment eliminations  (100)  (83)  (102) 20% (2%) 32% (2%)
    Consolidated revenue $121,789  $34,517  $35,202  253% 246% 288% 245%
                  
    Segment Adjusted EBITDA             
    Consumer $(1,361) $(6,908) $(6,866) (80%) (80%) (78%) (80%)
    Merchant  7,354   257   1,271  2,761% 479% 3,043% 477%
    Other  150   (89)  87  nm  72% nm  72%
    Total Segment Adjusted EBITDA  6,143   (6,740)  (5,508) nm  nm  nm  nm 
    Corporate/Eliminations  (9,466)  (4,485)  (2,560) 111% 270% 132% 269%
    Subtotal  (3,323)  (11,225)  (8,068) (70%) (59%) (67%) (59%)
    Less: Lease adjustments  1,308   1,157   890  13% 47% 24% 47%
    Less: Depreciation and amortization  5,491   1,218   463  351% 1,086% 395% 1,082%
    Consolidated operating loss $(10,122) $(13,600) $(9,421) (26%) 7% (18%) 7%
                  
    Segment Adjusted EBITDA (loss) margin (%)             
    Consumer  (8.7%)  (37.8%)  (41.8%)    
    Merchant  7.0%  1.6%  6.9%    
    Other  31.6%  (19.2%)  21.9%    
    Consolidated EBITDA (loss) margin  (8.3%)  (39.4%)  (26.8%)    

    (1) – This information shows what the change in these items would have been if the USD/ ZAR exchange rate that prevailed during Q4 2022 also prevailed during Q4 2021 and Q3 2022.


    Year ended June 30, 2022 and 2021

            Change -
    actual    		Change –
    constant
    exchange
    rate    (2)
      Year ended
    June 30,    		 F2022
    vs
    F2021    		F2022
    vs
    F2021
    Key segmental data, in ’000, except margins  2022   2021  
    Revenue:         
    Consumer $65,932  $66,149   (0%) (4%)
    Merchant  155,366   61,478   153% 144%
    Other  1,695   3,318   (49%) (51%)
    Subtotal: Operating segments  222,993   130,945   70% 65%
    Intersegment eliminations  (384)  (159)  142% 134%
    Consolidated revenue $222,609  $130,786   70% 65%
              
    Segment Adjusted EBITDA         
    Consumer(1) $(22,232) $(26,303)  (15%) (18%)
    Merchant  11,305   4,728   139% 131%
    Other  503   (10,374)  nm  nm 
    Total Segment Adjusted EBITDA  (10,424)  (31,949)  (67%) (68%)
    Corporate/Eliminations  (18,241)  (13,428)  36% 31%
    Subtotal  (28,665)  (45,377)  (37%) (39%)
    Less: Lease adjustments  3,955   4,148   (5%) (8%)
    Less: Depreciation and amortization  7,575   4,347   74% 69%
    Consolidated operating loss $(40,195) $(53,872)  (25%) (28%)
              
    Segment Adjusted EBITDA (loss) margin (%)         
    Consumer  (33.7%)  (39.8%)   
    Merchant  7.3%  7.7%   
    Other  29.7%  (312.7%)   
    Consolidated EBITDA (loss) margin  (18.1%)  (41.2%)   

    (1) – Consumer Segment Adjusted EBITDA for fiscal 2022, includes reorganization costs of $5.9 million.
    (2) – This information shows what the change in these items would have been if the USD/ ZAR exchange rate that prevailed during fiscal 2022 also prevailed during fiscal 2021.


    (Loss) Earnings from equity-accounted investments:

    The table below presents the relative (loss) earnings from our equity-accounted investments:

     Three months ended
    June 30,    		  Nine months ended
    March 31,
      2022   2021  % change  2022   2021  % change
    Finbond$(2,509) $(1,742)  44% $(3,665) $(22,009)  (83%)
    Share of net loss (2,509)  (1,742)  44%  (3,665)  (4,359)  (16%)
    Impairment -   -   nm   -   (17,650)  nm 
    Bank Frick -   -   nm   -   1,156   nm 
    Share of net income -   -   nm   -   1,156   nm 
    Other 16   (3,038)  nm   16   (4,025)  nm 
    Share of net income (loss) 16   (92)  nm   16   (531)  nm 
    Impairment -   (2,946)  nm   -   (3,494)  nm 
    Loss from equity-accounted investments$(2,493) $(4,780)  (48%) $(3,649) $(24,878)  (85%)


    Lesaka Technologies, Inc.

    Attachment B

    Reconciliation of GAAP operating loss to EBITDA loss and adjusted EBITDA loss:

    Three and twelve months ended June 30, 2022 and 2021

     Three months ended
    June 30,    		 Year ended
    June 30,
      2022   2021   2022   2021 
    Operating loss - GAAP$(10,122) $(13,600) $(40,195) $(53,872)
                
    Depreciation and amortization 5,491   1,218   7,575   4,347 
    Operating loss before depreciation and amortization (4,631)  (12,382)  (32,620)  (49,525)
    Legacy processing adjustments 1,629   -   1,629   - 
    Reorganization costs -   -   5,894   - 
    Allowance for doubtful EMI loans receivable -   -   -   4,739 
    Transaction costs 4,339   337   6,460   1,879 
    Adjusted EBITDA (loss)$1,337  $(12,045) $(18,637) $(42,907)


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

    Three months ended June 30, 2022 and 2021

     Net (loss) income
    (USD '000)    		 (L)PS, basic
    (USD)    		 Net (loss) income
    (ZAR '000)    		 (L)PS, basic
    (ZAR)
      2022   2021   2022   2021   2022   2021   2022   2021 
    GAAP (15,149)  1,639   (0.25)  0.03   (235,783)  23,223   (3.83)  0.40 
                    
    Transaction costs 4,339   174       67,533   2,465     
    Intangible asset amortization, net 2,664   70       41,462   990     
    Stock-based compensation charge 1,251   (532)      19,471   (7,538)    
    Legacy processing adjustments, net 1,173   -       18,539   -     
    Loss on sale of equity-accounted investment 30   -       467   -     
    Change in fair value of equity securities, net -   (18,456)      -   (261,497)    
    Impairment of equity method investment -   2,946       -   41,741     
    Allowance for doubtful EMI loans receivable -   4,000       -   56,675     
    Fundamental (5,692)  (10,159)  (0.09)  (0.18)  (88,311)  (143,941)  (1.43)  (2.54)


    Twelve months ended June 30, 2022 and 2021

     Net (loss) income
    (USD '000)    		 (L) EPS, basic
    (USD)    		 Net (loss) income
    (ZAR '000)    		 (L)EPS, basic
    (ZAR)
      2022   2021   2022   2021   2022   2021   2022   2021 
    GAAP (43,876)  (38,057)  (0.75)  (0.67)  (666,818)  (598,111)  (11.43)  (10.54)
                    
    Transaction costs 6,460   1,879       98,178   29,531     
    Reorganization costs, net of tax 5,894   -       89,576   -     
    Gain related to fair value adjustment to currency options (3,691)  -       (56,095)  -     
    Stock-based compensation charge 2,962   344       45,016   5,406     
    Intangible asset amortization, net 2,765   253       42,012   3,961     
    Legacy processing adjustments, net 1,173   -       18,539   -     
    Gain on disposal of equity securities (720)  -       (10,942)  -     
    Loss on sale of equity-accounted investment 376   13       5,714   204     
    Change in fair value of equity securities, net -   (38,950)      -   (612,149)    
    Impairment of equity method investments -   21,144       -   327,140     
    Reversal of deferred taxes related to impairment of equity method investment -   (1,353)      -   (22,633)    
    Allowance for doubtful EMI loans receivable -   4,739       -   74,479     
    Loss on disposal of equity-accounted investment - Bank Frick -   472       -   7,418     
    Fundamental (28,657)  (49,516)  (0.49)  (0.87)  (434,820)  (784,754)  (7.45)  (13.82)


    Lesaka Technologies, Inc.

    Attachment C

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

    Three months ended June 30, 2022 and 2021

      2022   2021 
        
    Net (loss) income (USD’000) (15,149)  1,639 
    Adjustments:   
    Loss on sale of equity-accounted investment 30   - 
    Impairment of equity method investments -   2,946 
    Profit on sale of property, plant and equipment (449)  (120)
    Tax effects on above 126   34 
        
    Net (loss) income used to calculate headline loss (USD’000) (15,442)  4,499 
        
    Weighted average number of shares used to calculate net (loss) income per share basic and headline (loss) income per share basic (‘000) 61,619   56,678 
        
    Weighted average number of shares used to calculate net (loss) income per share diluted and headline (loss) income per share diluted loss (‘000) 61,619   56,937 
        
    Headline (loss) income per share:   
    Basic, in USD (0.25)  0.08 
    Diluted, in USD (0.25)  0.08 


    Twelve months ended June 30, 2022 and 2021

      2022   2021 
        
    Net loss (USD’000) (43,876)  (38,057)
    Adjustments:   
    Gain on disposal of equity securities (720)  - 
    Loss on sale of equity-accounted investment 376   - 
    Impairment of equity method investments -   21,144 
    Loss on disposal of equity-accounted investment - Bank Frick -   430 
    (Profit) Loss on sale of property, plant and equipment (2,849)  480 
    Tax effects on above 798   (134)
        
    Net loss used to calculate headline loss (USD’000) (46,271)  (16,137)
        
    Weighted average number of shares used to calculate net loss per share basic loss and headline loss per share basic loss (‘000) 58,364   56,765 
        
    Weighted average number of shares used to calculate net loss per share diluted loss and headline loss per share diluted loss (‘000) 58,364   56,898 
        
    Headline loss per share:   
    Basic, in USD (0.79)  (0.28)
    Diluted, in USD (0.79)  (0.28)


    Calculation of the denominator for headline diluted loss per share

     Three months ended
    June 30,    		 Year ended
      2022   2021   2022   2021 
                    
    Basic weighted-average common shares outstanding and unvested restricted shares expected to vest under GAAP 61,619   56,678   58,364   56,765 
    Effect of dilutive securities under GAAP -   259   -   133 
    Denominator for headline diluted loss per share 61,619   56,937   58,364   56,898 

    Weighted average number of shares used to calculate headline diluted loss per share represents 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 diluted loss per share because we do not use the two-class method to calculate headline diluted loss per share.


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