Euronet Worldwide Reports First Quarter 2017 Financial Results
- Revenues of
$473.4 million , an 8% increase from$437.9 million (10% increase on a constant currency(1) basis). - Operating income of
$41.3 million , a 1% decrease from$41.9 million (essentially flat on a constant currency basis). - Adjusted operating income(2) of
$42.5 million , a 1% increase from$41.9 million (3% increase on a constant currency basis). - Adjusted EBITDA(3) of
$67.8 million , a 4% increase from$64.9 million (7% increase on a constant currency basis). - Net
income attributable to
Euronet of$28.1 million or$0.51 diluted earnings per share, compared with net income of$29.1 million or$0.53 diluted earnings per share. - Adjusted earnings per share(4) of
$0.73 , a 6% increase from$0.69 . - Transactions of 865 million, a 13% increase from 765 million.
Note: Costs related to the proposed MoneyGram transaction are included in Corporate expense and are excluded from adjusted operating income, adjusted EBITDA and adjusted EPS. See the reconciliation of non-GAAP items in the attached financial schedules.
"I am pleased that we continued to deliver double-digit consolidated constant currency revenue growth in the first
quarter," stated
Segment and Other Results
The EFT Processing Segment reports the following results for the first quarter 2017 compared with the same period or date in 2016:
- Revenues of
$105.8 million , a 22% increase from$86.6 million (24% increase on a constant currency basis). - Operating income of
$11.0 million , a 17% decrease from$13.3 million (15% decrease on a constant currency basis). - Adjusted EBITDA of
$22.8 million , a 3% increase from$22.1 million (5% increase on a constant currency basis). - Transactions of 537 million, a 27% increase from 424 million.
- Operated 35,145 ATMs as of
March 31, 2017 , a 42% increase from 24,761.
First quarter
constant currency revenue and adjusted EBITDA growth was a result of a 42% year-over-year increase in ATMs and a 27% increase in transactions, primarily from
The decline in operating income is the result of anticipated income impacts from the cash
demonetization constraints of the
For the first quarter, transaction growth outpaced changes in revenue and operating income as a result of a large number of low-value debit card transactions from low-margin processing agreements signed in
The epay Segment reports the following results for the first quarter 2017 compared with the same period or date in 2016:
- Revenues of
$164.1 million , a 4% decrease from$170.1 million (1% decrease on a constant currency basis). - Operating income of
$13.9 million , a 12% decrease from$15.8 million (9% decrease on a constant currency basis). - Adjusted EBITDA of
$16.4 million , a 13% decrease from$18.9 million (11% decrease on a constant currency basis). - Transactions of 308 million, a 4% decrease from 322 million.
- Point-of-sale ("POS") terminals of approximately 666,000 as of
March 31, 2017 , a 1% increase from approximately 658,000. - Retailer locations of approximately 308,000 as of
March 31, 2017 , a 2% increase from approximately 301,000.
epay constant currency revenue declines were primarily the result of certain mobile transaction declines, largely offset by increased sales of non-mobile products. Similar to prior years, epay segment first quarter revenues declined year-over-year, largely as a result of declines in the mobile product which is less seasonal throughout the year, while non-mobile products are more heavily weighted to the fourth quarter. Accordingly, the declines in the first quarter are expected to be covered by growth in the non-mobile products as we move through to the fourth quarter.
Operating income and adjusted EBITDA declined at a faster rate than revenue due to favorable expense items in the prior year and increased advertising costs related to certain non-mobile customer campaigns and product launches.
The Money Transfer Segment reports the following results for the first quarter 2017 compared with the same period or date in 2016:
- Revenues of
$204.0 million , a 12% increase from$181.6 million (14% increase on a constant currency basis). - Operating income of
$26.1 million , a 21% increase from$21.5 million (22% increase on a constant currency basis). - Adjusted EBITDA of
$33.4 million , a 16% increase from$28.8 million (18% increase on a constant currency basis). - Total transactions of 20.7 million, an 11% increase from 18.7 million.
- Network locations of approximately 321,000 as of
March 31, 2017 , a 4% increase from approximately 310,000.
Double-digit money transfer revenue, operating income, adjusted EBITDA and transaction growth was driven by growth across all sectors of Ria's business together with continued expansion of the
First quarter money transfers grew 12% and non-transfer transactions, such as currency exchange and check cashing, grew 1%, resulting in total transaction growth of 11%.
Corporate and Other reports
Balance Sheet and Financial Position
Unrestricted cash on hand was
Guidance
The Company currently expects adjusted earnings per share for the second quarter 2017, assuming foreign currency exchange rates remain stable through the end of the quarter, to be approximately
Non-GAAP Measures
In addition to the results presented in accordance with
The Company does not provide a reconciliation of its forward-looking non-GAAP measures to GAAP due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for GAAP and the related GAAP to non-GAAP reconciliation, including adjustments that would be necessary for currency exchange rate fluctuations and other charges reflected in the Company's reconciliation of historic numbers, the amount of which, based on historical experience, could be significant.
(1) Constant currency financial measures are computed as if foreign currency exchange rates did not change from the prior period. This information is provided to illustrate the impact of changes in foreign currency exchange rates on the Company's results when compared to the prior period.
(2)Adjusted operating income is defined as operating income excluding expenses related to the potential MoneyGram acquisition.
(3)Adjusted EBITDA is defined as net income excluding interest, income tax expense, depreciation, amortization, share-based compensation, expenses related to the potential MoneyGram acquisition and other non-operating or non-recurring items that are considered expenses or income under
(4) Adjusted earnings per share is defined as diluted
Conference Call and Slide Presentation
A webcast replay will be available beginning approximately one hour after the event at http://ir.euronetworldwide.com and will remain available for one year.
About
Statements contained in this news release that concern
| EURONET WORLDWIDE, INC. | |||||||
| Condensed Consolidated Balance Sheets | |||||||
| (in millions) | |||||||
| As of | |||||||
| As of | |||||||
| 2017 | December 31, | ||||||
| (unaudited) | 2016 | ||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 763.6 | $ | 734.4 | |||
| Restricted cash | 100.0 | 77.7 | |||||
| Inventory - PINs and other | 44.0 | 78.1 | |||||
| Trade accounts receivable, net | 370.9 | 503.0 | |||||
| Prepaid expenses and other current assets | 166.7 | 191.8 | |||||
| Total current assets | 1,445.2 | 1,585.0 | |||||
| Property and equipment, net | 217.9 | 202.1 | |||||
| 859.6 | 855.0 | ||||||
| Other assets, net | 75.1 | 70.8 | |||||
| Total assets | $ | 2,597.8 | $ | 2,712.9 | |||
| LIABILITIES AND EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable and other current liabilities | $ | 973.4 | $ | 1,143.6 | |||
| Short-term debt obligations | 34.1 | 35.5 | |||||
| Total current liabilities | 1,007.5 | 1,179.1 | |||||
| Debt obligations, net of current portion | 562.2 | 561.7 | |||||
| Capital lease obligations, net of current portion | 8.6 | 7.0 | |||||
| Deferred income taxes | 44.4 | 44.1 | |||||
| Other long-term liabilities | 21.4 | 20.5 | |||||
| Total liabilities | 1,644.1 | 1,812.4 | |||||
| Equity | 953.7 | 900.5 | |||||
| Total liabilities and equity | $ | 2,597.8 | $ | 2,712.9 | |||
| EURONET WORLDWIDE, INC. | |||||||||||
| Consolidated Statements of Income | |||||||||||
| (unaudited - in millions, except share and per share data) | |||||||||||
| Three Months Ended | |||||||||||
| 2017 | 2016 | ||||||||||
| Revenues | $ | 473.4 | $ | 437.9 | |||||||
| Operating expenses: | |||||||||||
| Direct operating costs | 296.6 | 271.6 | |||||||||
| Salaries and benefits | 71.9 | 67.2 | |||||||||
| Selling, general and administrative | 42.0 | 37.9 | |||||||||
| Depreciation and amortization | 21.6 | 19.3 | |||||||||
| Total operating expenses | 432.1 | 396.0 | |||||||||
| Operating income | 41.3 | 41.9 | |||||||||
| Other income (expense): | |||||||||||
| Interest income | 1.2 | 0.5 | |||||||||
| Interest expense | (7.2 | ) | (6.4 | ) | |||||||
| Foreign currency exchange gain | 1.7 | 2.2 | |||||||||
| Total other expense, net | (4.3 | ) | (3.7 | ) | |||||||
| Income before income taxes | 37.0 | 38.2 | |||||||||
| Income tax expense | (9.0 | ) | (9.1 | ) | |||||||
| Net income | 28.0 | 29.1 | |||||||||
| Net loss attributable to noncontrolling interests | 0.1 | — | |||||||||
| Net income attributable to | $ | 28.1 | $ | 29.1 | |||||||
| Earnings per share attributable to | |||||||||||
| Worldwide, Inc. stockholders - diluted | $ | 0.51 | $ | 0.53 | |||||||
| Diluted weighted average shares outstanding | 54,921,779 | 54,529,588 | |||||||||
| Reconciliation of Net Income to Adjusted Operating Income (Expense) and Adjusted EBITDA | |||||||||||||||||||
| (unaudited - in millions) | |||||||||||||||||||
| Three months ended | |||||||||||||||||||
| EFT Processing | epay | Money Transfer | Corporate Services | Consolidated | |||||||||||||||
| Net income | $ | 28.0 | |||||||||||||||||
| Add: Income tax expense | 9.0 | ||||||||||||||||||
| Add: Total other expense, net | 4.3 | ||||||||||||||||||
| Operating income (expense) | $ | 11.0 | $ | 13.9 | $ | 26.1 | $ | (9.7 | ) | $ | 41.3 | ||||||||
| Add: Expenses incurred for proposed acquisition of MoneyGram | — | — | — | 1.2 | 1.2 | ||||||||||||||
| Adjusted operating income (expense) (1) | 11.0 | 13.9 | 26.1 | (8.5 | ) | 42.5 | |||||||||||||
| Add: Depreciation and amortization | 11.8 | 2.5 | 7.3 | — | 21.6 | ||||||||||||||
| Add: Share-based compensation | — | — | — | 3.7 | 3.7 | ||||||||||||||
| Earnings (expense) before interest, taxes, depreciation, amortization, proposed transaction expenses and share-based compensation (Adjusted EBITDA) (2) | $ | 22.8 | $ | 16.4 | $ | 33.4 | $ | (4.8 | ) | $ | 67.8 | ||||||||
| Three months ended | |||||||||||||||||||
| EFT Processing | epay | Money Transfer | Corporate Services | Consolidated | |||||||||||||||
| Net income | $ | 29.1 | |||||||||||||||||
| Add: Income tax expense | 9.1 | ||||||||||||||||||
| Add: Total other expense, net | 3.7 | ||||||||||||||||||
| Operating income (expense) | $ | 13.3 | $ | 15.8 | $ | 21.5 | $ | (8.7 | ) | $ | 41.9 | ||||||||
| Add: Depreciation and amortization | 8.8 | 3.1 | 7.3 | 0.1 | 19.3 | ||||||||||||||
| Add: Share-based compensation | — | — | — | 3.7 | 3.7 | ||||||||||||||
| Earnings (expense) before interest, taxes, depreciation, amortization and share-based compensation (Adjusted EBITDA) (2) | $ | 22.1 | $ | 18.9 | $ | 28.8 | $ | (4.9 | ) | $ | 64.9 | ||||||||
(1) Adjusted operating income excludes costs related to the potential acquisition of MoneyGram and is a non-GAAP measure that should be considered in addition to, and not a substitute for, net income computed in accordance with
(2) Adjusted EBITDA is a non-GAAP measure that should be considered in addition to, and not a substitute for, net income computed in accordance with
| Reconciliation of Adjusted Earnings per Share | |||||||
| (unaudited - in millions, except share and per share data) | |||||||
| Three Months Ended | |||||||
| 2017 | 2016 | ||||||
| Net income attributable to | $ | 28.1 | $ | 29.1 | |||
| Foreign currency exchange gain | (1.7 | ) | (2.2 | ) | |||
| Intangible asset amortization | 6.3 | 6.4 | |||||
| Share-based compensation | 3.7 | 3.7 | |||||
| Expenses incurred for proposed acquisition of MoneyGram | 1.2 | — | |||||
| Income tax effect of above adjustments | (1.6 | ) | (1.9 | ) | |||
| Non-cash interest accretion | 2.7 | 2.6 | |||||
| Non-cash GAAP tax expense | 1.8 | — | |||||
| Adjusted earnings(1) | $ | 40.5 | $ | 37.7 | |||
| Adjusted earnings per share - diluted(1) | $ | 0.73 | $ | 0.69 | |||
| Diluted weighted average shares outstanding (GAAP) | 54,921,779 | 54,529,588 | |||||
| Effect of unrecognized share-based compensation on diluted shares outstanding | 284,102 | 233,357 | |||||
| Adjusted diluted weighted average shares outstanding | 55,205,881 | 54,762,945 | |||||
(1) Adjusted earnings and adjusted earnings per share are non-GAAP measures that should be considered in addition to, and not
as a substitute for, net income and earnings per share computed in accordance with
Contact:Euronet Worldwide , Inc. Stephanie Taylor +1-913-327-4200
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