JOHANNESBURG, Nov. 07, 2019 (GLOBE NEWSWIRE) — Net 1 UEPS Technologies, Inc. (Nasdaq: UEPS; JSE: NT1) today released results for the first fiscal quarter ended September 30, 2019.

Q1 2020 Highlights:

“During the first quarter we made meaningful progress towards the monetization of some of our assets, accomplished several objectives towards commercial launch of various new products internationally, and positioned our South African operations for growth as liquidity becomes available,” said Herman Kotzé, CEO. “In the near term we will continue to push forward on our multiple corporate actions to improve our liquidity, in turn allowing us to reduce liabilities, reinvest in our growth businesses, and return capital to shareholders.”

“Though our Q1 2020 results benefited from certain ad-hoc technology and telecom product sales, most of our key South African businesses remained stable or posted modest growth compared to Q4 2019, while KSNET showed tangible improvements in its profitability as a result of the transformational actions that we have implemented. Until we have clearer visibility on the quantum and timing of various liquidity events, we believe for fiscal 2020 it is prudent for us to reiterate our guidance of adjusted EBITDA of at least $16 million, using a constant currency base of ZAR 14.27/$1, driven by growth in South Korea and South Africa, and reduced losses from our IPG business,” said Alex Smith, CFO.

Summary Financial Metrics

    % change in USD
 % change in ZAR Q1 2020
 Q1 2019
 Q4 2019
 Q1 ’20
vs

Q1 ’19
 Q1 ’20
vs

Q4 ’19
 Q1 ’20
vs

Q1 ’19
 Q1 ’20
vs
Q4 ’19        (All figures in USD ‘000s except per share data)       Revenue(1)80,756  125,884  51,472  (36%) 57% (36%) 62%        GAAP operating (loss) income(2,734) 896  (49,646) nm  (94%) (403%) (94%)        Adjusted (negative) EBITDA(2)2,837  13,240  (749) (79%) nm  (79%) nm         GAAP (loss) earnings per share ($)(0.08) (0.09) (3.23) (11%) (98%) (254%) (98%)Continuing(0.08) (0.12) (3.23) (33%) (98%) (96%) (98%)Discontinued-  0.03  –  nm  nm  nm  nm         Fundamental (loss) earnings per share ($)(2)(0.02) 0.01  (3.05) nm  (99%) (255%) (99%)        Fully-diluted shares outstanding (‘000’s)56,568  56,773  56,804  (0%) (0%) nm  nm         Average period USD/ ZAR exchange rate14.75  14.86  14.29  (1%) 3% nm  nm 

(1) Revenue for Q4 2019, includes revenue that has been reversed of $19.7 million (ZAR 277.6 million) as a result of the Supreme Court ruling discussed in Note 13 to our audited consolidated financial statements on Form 10-K for the year ended June 30, 2019.

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

Factors impacting comparability of our Q1 2020 and Q1 2019 results

Results of Operations by Segment and Liquidity

South African transaction processing

Segment revenue was $19.4 million in Q1 2020, down 49% on a constant currency basis compared with Q1 2019 but up from $18.9 million in Q4 2019. The decrease in segment revenue and operating income was primarily due to the termination of our SASSA contract at the end of Q1 2019. Our revenue and operating income was also adversely impacted by the significant reduction in the number of SASSA grant recipients with SASSA-branded Grindrod cards linked to Grindrod bank accounts as well as a lower number of EPE accounts. These decreases in revenue and operating income were partially offset by higher transaction revenue as a result of increased usage of our ATMs. Our South African transaction processing operating segment activities have been adversely impacted by the loss of EPE customers as a result of SASSA’s auto-migration of accounts to SAPO. Our operating (loss) margin for Q1 2020 and 2019 was (17.4%) and (9.3%), respectively.

International transaction processing

Segment revenue was $34.0 million in Q1 2020, down 14% on a constant currency basis compared with Q1 2019 and down from $36.4 million in Q4 2019. Segment revenue was lower during the first quarter of fiscal 2020, primarily due to an ongoing contraction in IPG transactions processed, specifically meaningfully lower crypto-exchange and China processing activity, modestly lower KSNET revenue as a result of lower transaction values processed and the impact of the weaker KRW/ USD exchange rate on reported KSNET revenue. Operating income during Q1 2020 has improved compared with Q1 2019 due to a reduction in expenses incurred by KSNET and IPG. Operating income margin for Q1 2020 and 2019 was 11.1% and 7.0%, respectively, due to improving profitability at KSNET and reduction of costs at IPG.

Financial inclusion and applied technologies

Segment revenue was $30.1 million in Q1 2020, down 44% on a constant currency basis compared with Q1 2019 but up from $17.6 million in Q4 2019. Segment revenue decreased primarily due to the deconsolidation of DNI, lower lending revenue as a result of our lending book and insurance revenue as a result of fewer customers, and a decrease in inter-segment revenues, partially offset by higher ad hoc technology and telecom product sales. Operating income was significantly lower than Q1 2019, primarily due to the deconsolidation of DNI and lower revenue generation and higher expenses incurred to maintain and expand our financial service infrastructure, partially offset by the ad hoc sales referred to previously. Operating income margin for the Financial inclusion and applied technologies segment was 5.0% and 21.2% during Q1 2020 and 2019, respectively.

Corporate/eliminations

Our corporate expenses decreased primarily due to lower amortization expense as a result of the deconsolidation of DNI, partially offset by higher non-employee director expenses, transaction-related expenditures and external service provider fees.

Cash flow and liquidity

At September 30, 2019, our cash and cash equivalents were $42.0 million and comprised of KRW-denominated balances of KRW 31.7 billion ($26.5 million), ZAR-denominated balances of ZAR 145.8 million ($9.6 million), U.S. dollar-denominated balances of $2.0 million, and other currency deposits, primarily Botswana pula, of $3.0 million, all amounts translated at exchange rates applicable as of September 30, 2019. The decrease in our unrestricted cash balances from June 30, 2019, was primarily due to weaker trading activities, capital expenditures, an additional investment in V2, which was partially offset by utilization of our long-term borrowings and repayment of a loan outstanding by DNI.

Excluding the impact of interest received, interest paid under our South Africa debt and taxes, the decrease in cash provided is primarily due to significantly weaker trading activity during Q1 2020 compared to Q1 2019, as well as the purchase of $12.3 million of Cell C prepaid airtime that is subject to sale restrictions utilizing our borrowings (refer below under financial activities and to Note 3 to our condensed consolidated financial statements). Capital expenditures for Q1 2020 and 2019 were $2.6 million and $3.1 million, respectively, and Q1 2020 capital expenditures relate primarily to the acquisition of additional ATMs in South Africa.

Operating metrics and supplemental presentation for Q1 2020 Results

A supplemental presentation and operating metrics for Q1 2020 will be posted to the Investor Relations page of our website – ir1 prior to our earnings call on Friday, November 8, 2019.

Conference Call

We will host a conference call to review these results on November 8, 2019, at 8:00 a.m. Eastern Time. To participate in the call, dial (US and Canada), (U.K. only) or (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, . 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 December 1, 2019.

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 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.

EBITDA and adjusted EBITDA

Earnings before interest, tax, depreciation and amortization (“EBITDA”) is GAAP operating (loss) income adjusted for depreciation and amortization and, if applicable, impairment losses. Adjusted EBITDA is EBITDA adjusted for costs related to acquisitions and transactions consummated or ultimately not pursued.

Fundamental net (loss) income and fundamental (loss) earnings per share

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

Fundamental net (loss) income and (loss) earnings per share for fiscal 2019 also includes an adjustment for the non-controlling interest portion of the amortization of intangible assets (net of deferred taxes).

We provide earnings guidance only on a non-GAAP basis and do not provide a reconciliation of forward-looking adjusted EBITDA guidance to the most directly comparable GAAP financial measures because of the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation, the amounts of which, based on past experience, could be material.

Management believes that the EBITDA, adjusted EBITDA, fundamental net (loss) income and (loss) 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 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 loss 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 HE(L)PS basic and diluted and the calculation of the denominator for headline diluted (loss) earnings per share.

About Net1

Net1 is a leading provider of transaction processing services, financial inclusion products and services and secure payment technology. Net1 operates market-leading payment processors in South Africa and the Republic of Korea. Net1 offers debit, credit and prepaid processing and issuing services for all major payment networks. In South Africa, Net1 provides innovative low-cost financial inclusion products, including banking, lending and insurance and through DNI is a leading distributor of mobile subscriber starter packs for Cell C, a South African mobile network operator. Net1 leverages its strategic equity investments in Finbond and Bank Frick (both regulated banks), and Cell C to introduce products to new customers and geographies.

Net1 has a primary listing on NASDAQ (NasdaqGS: UEPS) and a secondary listing on the Johannesburg Stock Exchange (JSE: NT1). Visit for additional information about Net1.

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 :
Dhruv Chopra
Group Vice President, Investor Relations
Phone: +

Media Relations :
Bridget von Holdt
Business Director – BCW
Phone: +27-82-610-0650

 NET 1 UEPS TECHNOLOGIES, INC.Unaudited Condensed Consolidated Statements of Operations  Three months ended   September 30,
    2019   2018    (In thousands, except per share data)     REVENUE $ 80,756  $ 125,884      EXPENSE         Cost of goods sold, IT processing, servicing and support  46,794   72,316      Selling, general and administration  31,931   41,878      Depreciation and amortization  4,765   10,794      OPERATING (LOSS) INCOME  (2,734)  896      INTEREST INCOME  651   1,876      INTEREST EXPENSE  1,355   2,759      (LOSS) INCOME BEFORE INCOME TAX EXPENSE  (3,438)  13      INCOME TAX EXPENSE  2,017   6,490      NET LOSS BEFORE EARNINGS FROM EQUITY-ACCOUNTED INVESTMENTS  (5,455)  (6,477)     EARNINGS FROM EQUITY-ACCOUNTED INVESTMENTS  1,063   1,373      NET (LOSS) INCOME  (4,392)  (5,104)Continuing  (4,392)  (8,743)Discontinued  –   3,639      LESS (ADD) NET INCOME (LOSS) ATTRIBUTABLE TO NON-CONTROLLING INTEREST  –   95 Continuing  –   (1,598)Discontinued  –   1,693      NET (LOSS) INCOME ATTRIBUTABLE TO NET1  (4,392)  (5,199)Continuing  (4,392)  (7,145)Discontinued $ –  $ 1,946      Net (loss) income per share, in U.S. dollars    Basic (loss) earnings attributable to Net1 shareholders  $(0.08)  $(0.09)Continuing  $(0.08)  $(0.12)Discontinued  $-   $0.03 Diluted (loss) earnings attributable to Net1 shareholders  $(0.08)  $(0.09)Continuing  $(0.08)  $(0.12)Discontinued  $-   $0.03      

NET 1 UEPS TECHNOLOGIES, INC.Unaudited Condensed Consolidated Balance Sheets September 30,  June 30, 2019  2019(A)   (In thousands, except share data)ASSETSCURRENT ASSETS     Cash and cash equivalents$41,976  $46,065 Restricted cash 68,823   75,446 Accounts receivable, net and other receivables 71,280   72,494 Finance loans receivable, net 29,776   30,631 Inventory 19,059   7,535 Total current assets before settlement assets 230,914   232,171 Settlement assets 73,635   63,479 Total current assets 304,549   295,650 PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of – September: $114,153; June: $117,866 17,324   18,554 OPERATING LEASE RIGHT-OF-USE ASSETS 5,757   – EQUITY-ACCOUNTED INVESTMENTS 146,833   151,116 GOODWILL 142,800   149,387 INTANGIBLE ASSETS, net of accumulated amortization of – September: $124,148; June: $117,866 9,561   11,889 DEFERRED INCOME TAXES 2,287   2,151 OTHER LONG-TERM ASSETS, including reinsurance assets 42,001   44,189 TOTAL ASSETS 671,112   672,936       LIABILITIESCURRENT LIABILITIES     Short-term credit facilities for ATM funding 68,823   75,446 Short-term credit facilities 10,256   9,544 Accounts payable 13,771   17,005 Other payables 61,498   66,449 Operating lease right-of-use lease liability – current 4,493   – Current portion of long-term borrowings 14,510   – Income taxes payable 7,260   6,223 Total current liabilities before settlement obligations 180,611   174,667 Settlement obligations 73,635   63,479 Total current liabilities 254,246   238,146 DEFERRED INCOME TAXES 4,580   4,682 RIGHT-OF-USE OPERATING LEASE LIABILTY – LONG-TERM 1,439   – OTHER LONG-TERM LIABILITIES, including insurance policy liabilities 3,047   3,007 TOTAL LIABILITIES 263,312   245,835 COMMITMENTS AND CONTINGENCIES     REDEEMABLE COMMON STOCK 107,672   107,672       EQUITYCOMMON STOCK     Authorized: 200,000,000 with $0.001 par value;     Issued and outstanding shares, net of treasury – September: 56,568,425; June: 56,568,425 80   80 PREFERRED STOCK     Authorized shares: 50,000,000 with $0.001 par value;     Issued and outstanding shares, net of treasury: September: -; June: – –   – ADDITIONAL PAID-IN-CAPITAL 277,455   276,997 TREASURY SHARES, AT COST: September: 24,891,292; June: 24,891,292 (286,951)  (286,951)ACCUMULATED OTHER COMPREHENSIVE LOSS (214,640)  (199,273)RETAINED EARNINGS 524,184   528,576 TOTAL NET1 EQUITY 300,128   319,429 NON-CONTROLLING INTEREST –   – TOTAL EQUITY 300,128   319,429       TOTAL LIABILITIES, REDEEMABLE COMMON STOCK AND SHAREHOLDERS’ EQUITY$671,112  $672,936       (A) – Derived from audited financial statements

NET 1 UEPS TECHNOLOGIES, INC.Unaudited Condensed Consolidated Statements of Cash Flows    Three months ended   September 30,
   2019   2018    (In thousands)     Cash flows from operating activities    Net (loss) income$(4,392) $(5,104)Depreciation and amortization 4,765   10,794 Allowance for doubtful accounts receivable charged 512   833 Earnings from equity-accounted investments (1,063)  (1,373)Interest on Cedar Cell note –   (156)Fair value adjustments and foreign currency re-measurements 87   (82)Interest payable 632   110 Facility fee amortized –   87 Profit on disposal of property, plant and equipment (154)  (127)Stock-based compensation charge, net 387   587 Dividends received from equity accounted investments 1,068   – (Increase) Decrease in accounts receivable, pre-funded social welfare grants receivable and finance loans receivable (5,666)  13,463 (Increase) Decrease in inventory (12,313)  2,185 Decrease in accounts payable and other payables (3,396)  (9,480)Increase in taxes payable 1,288   8,354 Decrease in deferred taxes (88)  (3,634)Net cash (used in) provided by operating activities (18,333)  16,457      Cash flows from investing activities    Capital expenditures (2,624)  (3,118)Proceeds from disposal of property, plant and equipment 213   274 Investment in equity of equity-accounted investments (1,250)  – Repayment of loans by equity-accounted investments 4,268   – Proceeds on return of investment –   284 Net change in settlement assets (13,509)  75,931 Net cash (used in) provided by investing activities (12,902)  73,371      Cash flows from financing activities    Proceeds from bank overdraft 183,674   84,655 Repayment of bank overdraft (184,829)  – Long-term borrowings utilized 14,798   (10,260)Repayment of long-term borrowings –   7,801 Payment of guarantee fee (148)  – Other financing activities (26)  (1,729)Dividends paid to non-controlling interest –   (136)Net change in settlement obligations 13,509   (75,931)Net cash provided by financing activities 26,978   4,400      Effect of exchange rate changes on cash (6,455)  (949)Net (decrease) increase in cash, cash equivalents and restricted cash (10,712)  93,279 Cash, cash equivalents and restricted cash – beginning 121,511   90,054 Cash, cash equivalents and restricted cash – end of period (1)$110,799  $183,333      

(1) Cash, cash equivalents and restricted cash as of September 30, 2019, includes restricted cash of approximately $68.8 million related to cash withdrawn from the Company’s various debt facilities to fund ATMs. This cash may only be used to fund ATMs and is considered restricted as to use and therefore is classified as restricted cash.

Net 1 UEPS Technologies, Inc.

Attachment A

Operating segment revenue, operating income and operating margin:

Three months ended September 30, 2019 and 2018 and June 30, 2019

      Change – actual
 Change – constant
exchange rate
(1)Key segmental data, in ’000, except marginsQ1 ‘20
  Q1 ‘19
  Q4 ‘19
 Q1 ‘20
vs
Q1‘19
 Q1 ‘20
vs
Q4 ‘19
 Q1 ‘20
vs
Q1‘19
 Q1 ‘20
vs
Q4 ‘19          Revenue:         South African transaction processing $19,399    $37,749    $18,945  (49%) 2% (49%) 6%International transaction processing 34,017    39,387    36,399  (14%) (7%) (14%) (4%)Financial inclusion and applied technologies 30,145    53,206    17,573  (43%) 72% (44%) 77%Continuing 30,145    34,419    17,573  (12%) 72% (13%) 77%Discontinued –    18,787    –  nm  nm  nm  nm Subtotal: Operating segments 83,561    130,342    72,917  (36%) 15% (36%) 18%Intersegment eliminations and revenue refund (2,805)   (4,458)   (21,445) (37%) (87%) (38%) (86%)Consolidated revenue 80,756    125,884    51,472  (36%) 57% (36%) 62%Continuing 80,756    107,097    51,472  (25%) 57% (25%) 62%Discontinued $-    $18,787    $-  nm  nm  nm  nm           Operating (loss) income:         South African transaction processing ($3,385)   ($3,513)   ($2,474) (4%) 37% (4%) 41%International transaction processing 3,790    2,762    2,209  37% 72% 36% 77%Financial inclusion and applied technologies 1,501    11,302    (10,749) (87%) nm  (87%) nm Continuing 1,501    3,470    (10,749) (57%) nm  (57%) nm Discontinued –    7,832    –  nm  nm  nm  nm Subtotal: Operating segments 1,906    10,551    (11,014) (82%) nm  (82%) nm Corporate/Eliminations (4,640)   (9,655)   (38,632) (52%) (88%) (52%) (88%)Continuing (4,640)   (7,005)   (38,632) (34%) (88%) (34%) (88%)Discontinued –    (2,650)   –  nm  nm  nm  nm Consolidated operating (loss) income (2,734)   896    (49,646) nm  (94%) nm  (94%)Continuing (2,734)   (4,286)   (49,646) (36%) (94%) (37%) (94%)Discontinued $-    $5,182    $-  nm  nm  nm  nm           Operating (loss) income margin (%)         South African transaction processing (17.4%)   (9.3%)   (13.1%)     International transaction processing 11.1%   7.0%   6.1%     Financial inclusion and applied technologies 5.0%   21.2%   (61.2%)     Continuing 5.0%   10.1%   (61.2%)     Discontinued nm    41.7%   nm      Consolidated operating margin (3.4%)   0.7%   (96.5%)     Continuing (3.4%)   (4.0%)   (96.5%)     Discontinued nm    27.6%   nm                          (1) – This information shows what the change in these items would have been if the USD/ ZAR exchange rate that prevailed during Q1 2020 also prevailed during Q1 2019 and Q4 2019. 

Earnings from equity-accounted investments:

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

 Q1 2020 Q1 2019 % ChangeDNI(1) $728   $-  nm Share of net income 1,463   –  nm Amortization of intangible assets, net of deferred tax (466)  –  nm Impairment (269)  –  nm Bank Frick (25)  (588) (96%)Share of net income 119   162  (27%)Amortization of intangible assets, net of deferred tax (144)  (144) – Other –   (606) nm Finbond 491   1,875  (74%)Other (131)  86  nm Earnings from equity-accounted investments $1,063   $1,373  (23%)

(1) DNI was included as an equity-accounted investment from August 1, 2017 until June 30, 2018, the date upon which we obtained control and commenced consolidation of DNI, and then again from March 31, 2019. DNI is included in our Financial inclusion and applied technologies operating segment from the acquisition date.

Net 1 UEPS Technologies, Inc.

Attachment B

Reconciliation of GAAP operating (loss) income to EBITDA and adjusted EBITDA:

Three months and year ended September 30, 2019 and 2018

 Three months ended
September 30,   2019  2018             Operating (loss) income – GAAP(2,734) 896     Depreciation and amortization4,765  10,794 EBITDA2,031  11,690 Transaction costs806  1,550 Adjusted EBITDA2,837  13,240       

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

Three months ended September 30, 2019 and 2018

 Net (loss) income
(USD’000)
 (L)EPS,
basic
(USD) Net (loss) income
(ZAR’000)
 (L)EPS,
 basic
(ZAR) 2019 2018 2019 2018  2019 2018 2019 2018                     GAAP(4,392)(5,199)(0.08)(0.09) (64,791)(77,251)(1.15)(1.36)          Intangible asset amortization, net1,413 4,481    20,835 66,578   Stock-based compensation charge387 587    5,709 8,722   Transaction costs806 1,550    11,890 23,031   Intangible asset amortization, net related to equity accounted investments610 144    8,999 2,140   Intangible asset amortization, net related to non-controlling interest- (876)   – (13,016)  Facility fees for debt- 87    – 1,293   Fundamental(1,176)774 (0.02)0.01  (17,358)11,497 (0.31)0.20                   

Net 1 UEPS 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 September 30, 2019 and 2018

 2019  2018     Net loss (USD’000)(4,392) (5,199)Adjustments:   Profit on sale of property, plant and equipment(154) (127)Tax effects on above43  36     Net loss used to calculate headline loss (USD’000)(4,503) (5,290)    Weighted average number of shares used to calculate net loss per share basic loss and headline loss per share basic loss (‘000)56,568  56,723     Weighted average number of shares used to calculate net loss per share diluted loss and headline loss per share diluted loss (‘000)56,568  56,773     Headline loss per share:   Basic, in USD(0.08) (0.09)Diluted, in USD(0.08) (0.09)

Calculation of the denominator for headline diluted loss per share

 Q1 ‘20  Q1 ‘19       Basic weighted-average common shares outstanding and unvested restricted shares expected to vest under GAAP56,568  56,723 Effect of dilutive securities under GAAP-  50 Denominator for headline diluted loss per share56,568  56,773       

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