Euronet Worldwide Reports Fourth Quarter and Full Year 2015 Financial Results
- Revenues of
$470.6 million , a 2% increase from$462.0 million (11% increase on a constant currency(1) basis). - Operating income of
$55.2 million , a 12% increase from$49.5 million (23% increase on a constant currency basis). - Adjusted EBITDA(2) of
$76.9 million , an 8% increase from$71.4 million (19% increase on a constant currency basis). - Net income attributable to
Euronet of$33.5 million or$0.61 diluted earnings per share, compared with net income of$30.1 million or$0.55 diluted earnings per share. - Adjusted cash earnings per share(3) of
$0.92 , a 24% increase from$0.74 . - Transactions of 699 million, a 3% increase from 677 million.
- Revenues of
$1,772.3 million , a 7% increase from$1,664.2 million (19% increase on a constant currency basis). - Operating income of
$204.9 million , a 29% increase from$158.7 million (50% increase on a constant currency basis). - Adjusted EBITDA of
$287.7 million , an 18% increase from$242.9 million (36% increase on a constant currency basis). - Net income attributable to
Euronet of$98.8 million or$1.83 diluted earnings per share, compared with net income of$101.6 million or$1.89 diluted earnings per share. - Adjusted cash earnings per share of
$3.32 , a 28% increase from$2.59 . - Transactions of 2,722 million, a 7% increase from 2,554 million.
See the reconciliation of non-GAAP items in the attached financial schedules.
"For the fourth quarter we delivered adjusted cash earnings per share of
Segment and Other Results
The EFT Processing Segment reports the following results for the fourth quarter 2015 compared with the same period or date in 2014:
- Revenues of
$92.9 million , a 7% increase from$87.1 million (19% increase on a constant currency basis). - Operating income of
$20.7 million , a 9% decrease from$22.8 million (2% increase on a constant currency basis). - Adjusted EBITDA of
$29.2 million , a 6% decrease from$30.9 million (6% increase on a constant currency basis). - Transactions of 338 million, a 6% increase from 319 million.
- Operated 21,360 ATMs as of
December 31, 2015 , a 5% increase from 20,364.
The EFT Processing Segment reports the following results for the full year 2015 compared with the same period in 2014:
- Revenues of
$379.6 million , a 6% increase from$358.7 million (22% increase on a constant currency basis). - Operating income of
$94.4 million , a 3% increase from$91.4 million (21% increase on a constant currency basis). - Adjusted EBITDA of
$126.0 million , a 3% increase from$122.8 million (20% increase on a constant currency basis). - Transactions of 1,318 million, a 4% increase from 1,262 million.
Constant currency revenue, operating income and adjusted EBITDA growth for the fourth quarter and full year was the result of a 5% expansion of the ATM network as well as transaction growth of 6% and 4% for the fourth quarter and full year, respectively.
It is important to note the following three events to better understand the EFT segment results:
- During the fourth quarter, the Company recorded a
$1.3 million reserve for cash in transit to ATMs held in an account at a bank which declared bankruptcy. - The previously announced Company-initiated contract amendment and extension in the first quarter 2015 with one of the Company's largest European customers resulted in lower constant currency operating income of approximately
$1.2 million and$5.5 million for the fourth quarter and full-year, respectively. - The previously announced termination of approximately 1,300 loss-generating ATMs in China.
Excluding these key items, constant currency operating income would have grown 13% and 29%, adjusted EBITDA would have grown 14% and 26%, and transactions would have grown 15% and 9%
for the fourth quarter and full year, respectively, and ATMs would have grown 12% for both the quarter and full year, with expansion across
The epay Segment reports the following results for the fourth quarter 2015 compared with the same period or date in 2014:
- Revenues of
$191.1 million , a 14% decrease from$221.6 million (3% decrease on a constant currency basis). - Operating income of
$20.0 million , a 3% increase from$19.5 million (15% increase on a constant currency basis). - Adjusted EBITDA of
$22.7 million , a 1% decrease from$23.0 million (11% increase on a constant currency basis). - Transactions of 342 million, compared with 343 million for the fourth quarter 2014.
- Point-of-sale ("POS") terminals of approximately 674,000 as of
December 31, 2015 , a 1% decrease from approximately 681,000 as ofDecember 31, 2014 . - Retailer locations of approximately 307,000 as of
December 31, 2015 , compared with approximately 306,000 as ofDecember 31, 2014 .
The epay Segment reports the following results for the full year 2015 compared with the same period in 2014:
- Revenues of
$708.3 million , a 10% decrease from$783.8 million (5% increase on a constant currency basis). - Operating income of
$66.5 million , a 9% increase from$60.9 million (25% increase on a constant currency basis). - Adjusted EBITDA of
$77.7 million , a 1% increase from$76.7 million (16% increase on a constant currency basis). - Transactions of 1,335 million, a 7% increase from 1,244 million.
epay full year constant currency revenue, operating income and adjusted EBITDA growth was primarily the result of increased sales of non-mobile products, partially offset by certain mobile content transaction declines. The constant currency revenue decline in the fourth quarter was the result of a shift in the mix of transactions where a commission is earned to transactions where a processing fee is earned. Despite the revenue decline, fourth quarter constant currency gross profit increased 4%, which the Company was able to leverage to the bottom line and, combined with efficient operating expense management, resulted in 15% constant currency operating income growth for the fourth quarter.
The decrease in fourth quarter transactions was driven by year-over-year declines in the
The Money Transfer Segment reports the following results for the fourth quarter 2015 compared with the same period or date in 2014:
- Revenues of
$186.9 million , a 22% increase from$153.6 million (27% increase on a constant currency basis). - Operating income of
$23.4 million , a 52% increase from$15.4 million (62% increase on a constant currency basis). - Adjusted EBITDA of
$30.3 million , a 35% increase from$22.5 million (44% increase on a constant currency basis). - Total transactions of 19.3 million, a 32% increase from 14.6 million.
- Network locations of approximately 292,000 as of
December 31, 2015 , a 20% increase from approximately 243,000.
The Money Transfer Segment reports the following results for the full year 2015 compared with the same period in 2014:
- Revenues of
$685.6 million , a 31% increase from$523.1 million (40% increase on a constant currency basis). - Operating income of
$78.7 million , an 84% increase from$42.7 million (105% increase on a constant currency basis). - Adjusted EBITDA of
$105.3 million , a 57% increase from$67.1 million (73% increase on a constant currency basis). - Total transactions of 68.7 million, a 42% increase from 48.5 million.
Money Transfer fourth quarter and full year constant currency revenue, operating income, adjusted EBITDA and transaction growth was driven by double-digit organic growth across the existing Ria business, including the
For the fourth quarter and full year, money transfers grew 38% and 49%, respectively. Non-transfer transactions such as bill payment and international mobile recharge grew 3% for both the full year and fourth quarter. Combined, total transactions grew 32% and 42% for the fourth quarter and full year, respectively.
Corporate and Other reports
Balance Sheet and Financial Position
Unrestricted cash on hand was
Guidance
The Company currently expects adjusted cash earnings per share for the first quarter 2015, 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
(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 EBITDA is defined as net income excluding interest, income tax expense, depreciation, amortization, share-based compensation and other non-operating or non-recurring items that are considered expenses under
(3) Adjusted cash 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. | |||||||||||||||
| Consolidated Statements of Income | |||||||||||||||
| (unaudited - in millions, except share and per share data) | |||||||||||||||
| Year Ended | Three Months Ended | ||||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||||
| Revenues | $ | 1,772.3 | $ | 1,664.2 | $ | 470.6 | $ | 462.0 | |||||||
| Operating expenses: | |||||||||||||||
| Direct operating costs | 1,081.9 | 1,033.4 | 290.1 | 289.7 | |||||||||||
| Salaries and benefits | 259.2 | 243.2 | 67.0 | 64.7 | |||||||||||
| Selling, general and administrative | 156.3 | 157.6 | 40.1 | 39.5 | |||||||||||
| Depreciation and amortization | 70.0 | 71.3 | 18.2 | 18.6 | |||||||||||
| Total operating expenses | 1,567.4 | 1,505.5 | 415.4 | 412.5 | |||||||||||
| Operating income | 204.9 | 158.7 | 55.2 | 49.5 | |||||||||||
| Other income (expense): | |||||||||||||||
| Interest income | 2.1 | 2.5 | 0.5 | 0.6 | |||||||||||
| Interest expense | (24.9 | ) | (12.2 | ) | (6.3 | ) | (4.7 | ) | |||||||
| Other income (expense) | 0.3 | (1.8 | ) | — | (1.8 | ) | |||||||||
| Foreign currency exchange loss | (41.5 | ) | (5.7 | ) | (7.4 | ) | (0.6 | ) | |||||||
| Total other expense, net | (64.0 | ) | (17.2 | ) | (13.2 | ) | (6.5 | ) | |||||||
| Income before income taxes | 140.9 | 141.5 | 42.0 | 43.0 | |||||||||||
| Income tax expense | (42.5 | ) | (40.0 | ) | (8.5 | ) | (12.8 | ) | |||||||
| Net income | 98.4 | 101.5 | 33.5 | 30.2 | |||||||||||
| Net loss (income) attributable to noncontrolling interests | 0.4 | 0.1 | — | (0.1 | ) | ||||||||||
| Net income attributable to | $ | 98.8 | $ | 101.6 | $ | 33.5 | $ | 30.1 | |||||||
| Earnings per share attributable to | |||||||||||||||
| $ | 1.83 | $ | 1.89 | $ | 0.61 | $ | 0.55 | ||||||||
| Diluted weighted average shares outstanding | 54,076,676 | 53,901,040 | 54,824,950 | 54,337,625 | |||||||||||
| EURONET WORLDWIDE, INC. | |||||||
| Condensed Consolidated Balance Sheets | |||||||
| (unaudited - in millions) | |||||||
| As of | As of | ||||||
| December 31, | |||||||
| 2015 | 2014 | ||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 457.5 | $ | 468.0 | |||
| Restricted cash | 45.3 | 68.0 | |||||
| Inventory - PINs and other | 72.1 | 85.7 | |||||
| Trade accounts receivable, net | 423.3 | 375.6 | |||||
| Prepaid expenses and other current assets | 132.8 | 108.6 | |||||
| Total current assets | 1,131.0 | 1,105.9 | |||||
| Property and equipment, net | 157.4 | 125.3 | |||||
| 853.2 | 758.2 | ||||||
| Other assets, net | 51.1 | 49.1 | |||||
| Total assets | $ | 2,192.7 | $ | 2,038.5 | |||
| LIABILITIES AND EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable and other current liabilities | $ | 889.8 | $ | 835.5 | |||
| Short-term debt obligations | 14.1 | 13.4 | |||||
| Total current liabilities | 903.9 | 848.9 | |||||
| Debt obligations, net of current portion | 405.5 | 397.3 | |||||
| Capital lease obligations, net of current portion | 4.1 | 2.1 | |||||
| Deferred income taxes | 33.9 | 39.0 | |||||
| Other long-term liabilities | 19.3 | 18.3 | |||||
| Total liabilities | 1,366.7 | 1,305.6 | |||||
| Equity | 826.0 | 732.9 | |||||
| Total liabilities and equity | $ | 2,192.7 | $ | 2,038.5 | |||
| EURONET WORLDWIDE, INC. | |||||||||||||||||||
| Reconciliation of Net Income to Operating Income (Expense) and Adjusted EBITDA | |||||||||||||||||||
| (unaudited - in millions) | |||||||||||||||||||
| Three months ended | |||||||||||||||||||
| EFT Processing | epay | Money Transfer | Corporate Services | Consolidated | |||||||||||||||
| Net income | $ | 33.5 | |||||||||||||||||
| Add: Income tax expense | 8.5 | ||||||||||||||||||
| Add: Total other expense, net | 13.2 | ||||||||||||||||||
| Operating income (expense) | $ | 20.7 | $ | 20.0 | $ | 23.4 | $ | (8.9 | ) | $ | 55.2 | ||||||||
| Add: Depreciation and amortization | 8.5 | 2.7 | 6.9 | 0.1 | 18.2 | ||||||||||||||
| Add: Share-based compensation | — | — | — | 3.5 | 3.5 | ||||||||||||||
| Earnings (expense) before interest, taxes, depreciation, amortization and share-based compensation (Adjusted EBITDA) (1) | $ | 29.2 | $ | 22.7 | $ | 30.3 | $ | (5.3 | ) | $ | 76.9 | ||||||||
| Three months ended | |||||||||||||||||||
| EFT Processing | epay | Money Transfer | Corporate Services | Consolidated | |||||||||||||||
| Net income | $ | 30.2 | |||||||||||||||||
| Add: Income tax expense | 12.8 | ||||||||||||||||||
| Add: Total other expense, net | 6.5 | ||||||||||||||||||
| Operating income (expense) | $ | 22.8 | $ | 19.5 | $ | 15.4 | $ | (8.2 | ) | $ | 49.5 | ||||||||
| Add: Depreciation and amortization | 7.9 | 3.5 | 7.1 | 0.1 | 18.6 | ||||||||||||||
| Add: Share-based compensation | 0.2 | — | — | 3.1 | 3.3 | ||||||||||||||
| Earnings (expense) before interest, taxes, depreciation, amortization and share-based compensation (Adjusted EBITDA) (1) | $ | 30.9 | $ | 23.0 | $ | 22.5 | $ | (5.0 | ) | $ | 71.4 | ||||||||
| (1) 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 | |||||||||||||||||||
| EURONET WORLDWIDE, INC. | |||||||||||||||||||
| Reconciliation of Net Income to Operating Income (Expense) and Adjusted EBITDA | |||||||||||||||||||
| (unaudited - in millions) | |||||||||||||||||||
| Year ended | |||||||||||||||||||
| EFT Processing | epay | Money Transfer | Corporate Services | Consolidated | |||||||||||||||
| Net income | $ | 98.4 | |||||||||||||||||
| Add: Income tax expense | 42.5 | ||||||||||||||||||
| Add: Total other expense, net | 64.0 | ||||||||||||||||||
| Operating income (expense) | $ | 94.4 | $ | 66.5 | $ | 78.7 | $ | (34.7 | ) | $ | 204.9 | ||||||||
| Add: Depreciation and amortization | 31.8 | 11.1 | 26.6 | 0.5 | 70.0 | ||||||||||||||
| Add: Share-based compensation | (0.2 | ) | 0.1 | — | 12.9 | 12.8 | |||||||||||||
| Earnings (expense) before interest, taxes, depreciation, amortization and share-based compensation (Adjusted EBITDA) (1) | $ | 126.0 | $ | 77.7 | $ | 105.3 | $ | (21.3 | ) | $ | 287.7 | ||||||||
| Year ended | |||||||||||||||||||
| EFT Processing | epay | Money Transfer | Corporate Services | Consolidated | |||||||||||||||
| Net income | $ | 101.5 | |||||||||||||||||
| Add: Income tax expense | 40.0 | ||||||||||||||||||
| Add: Total other expense, net | 17.2 | ||||||||||||||||||
| Operating income (expense) | $ | 91.4 | $ | 60.9 | $ | 42.7 | $ | (36.3 | ) | $ | 158.7 | ||||||||
| Add: Depreciation and amortization | 30.8 | 15.7 | 24.4 | 0.4 | 71.3 | ||||||||||||||
| Add: Share-based compensation | 0.6 | 0.1 | — | 12.2 | 12.9 | ||||||||||||||
| Earnings (expense) before interest, taxes, depreciation, amortization and share-based compensation (Adjusted EBITDA) (1) | $ | 122.8 | $ | 76.7 | $ | 67.1 | $ | (23.7 | ) | $ | 242.9 | ||||||||
| (1) 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 | |||||||||||||||||||
| EURONET WORLDWIDE, INC. | |||||||||||||||
| Reconciliation of Adjusted Cash Earnings per Share | |||||||||||||||
| (unaudited - in millions, except share and per share data) | |||||||||||||||
| Year Ended | Three Months Ended | ||||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||||
| Net income attributable to | $ | 98.8 | $ | 101.6 | $ | 33.5 | $ | 30.1 | |||||||
| Foreign currency exchange loss | 41.5 | 5.7 | 7.4 | 0.6 | |||||||||||
| Intangible asset amortization | 23.9 | 24.4 | 6.2 | 6.7 | |||||||||||
| Share-based compensation | 12.8 | 12.9 | 3.5 | 3.3 | |||||||||||
| Income tax effect of above adjustments | (6.0 | ) | (6.7 | ) | (2.2 | ) | (1.9 | ) | |||||||
| Non-cash interest accretion | 9.9 | 1.6 | 2.5 | 1.6 | |||||||||||
| Non-cash GAAP tax (benefit) expense | (0.4 | ) | 1.0 | — | 0.2 | ||||||||||
| Adjusted cash earnings(1) | $ | 180.5 | $ | 140.5 | $ | 50.9 | $ | 40.6 | |||||||
| Adjusted cash earnings per share - diluted(1) | $ | 3.32 | $ | 2.59 | $ | 0.92 | $ | 0.74 | |||||||
| Diluted weighted average shares outstanding (GAAP) | 54,076,676 | 53,901,040 | 54,824,950 | 54,337,625 | |||||||||||
| Effect of unrecognized share-based compensation on diluted shares outstanding | 321,702 | 337,703 | 345,684 | 309,061 | |||||||||||
| Adjusted diluted weighted average shares outstanding | 54,398,378 | 54,238,743 | 55,170,634 | 54,646,686 | |||||||||||
| (1) Adjusted cash earnings and adjusted cash 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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