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Euronet Worldwide Reports Second Quarter 2013 Financial Results

Euronet's global payment network is extensive - including 17,242 ATMs, approximately 67,000 EFT POS terminals and a growing portfolio of outsourced debit and credit card services which are under management in 43 countries; card software solutions; a prepaid processing network of approximately 689,000 POS terminals at approximately 348,000 retailer locations in 35 countries; and a consumer-to-consumer money transfer network of approximately 204,000 locations serving 133 countries. With corporate headquarters in Leawood, Kansas, USA, and 52 worldwide offices, Euronet serves clients in approximately 155 countries. For more information, please visit the Company's website at www.euronetworldwide.com .

Statements contained in this news release that concern Euronet's or its management's intentions, expectations, or predictions of future performance, are forward-looking statements. Euronet's actual results may vary materially from those anticipated in such forward-looking statements as a result of a number of factors, including: conditions in world financial markets and general economic conditions, including economic conditions in specific countries or regions; technological developments affecting the market for the Company's products and services; foreign currency exchange rate fluctuations; the effects of any potential future computer security breaches; the Company's ability to renew existing contracts at profitable rates; changes in fees payable for transactions performed for cards bearing international logos or over switching networks such as card transactions on ATMs; changes in the Company's relationship with, or in fees charged by, the Company's business partners; competition; the outcome of claims and other loss contingencies affecting the Company; and changes in laws and regulations affecting the Company's business, including immigration laws. These risks and other risks are described in the Company's filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Copies of these filings may be obtained via the SEC's Edgar website or by contacting the Company or the SEC. Any forward-looking statements made in this release speak only as of the date of this release. Euronet does not intend to update these forward-looking statements and undertakes no duty to any person to provide any such update under any circumstances. The Company regularly posts important information to the investor relations section of its website.

 
EURONET WORLDWIDE, INC.
Consolidated Statements of Operations
(unaudited - in millions, except share and per share data)
   
  Three Months Ended
  June 30,
  2013 2012
     
Revenues $341.5 $302.4
     
Operating expenses:    
Direct operating costs 214.3 192.6
Salaries and benefits 51.8 44.9
Selling, general and administrative 31.4 28.9
Depreciation and amortization 16.2 16.1
Total operating expenses 313.7 282.5
Operating income 27.8 19.9
     
Other income (expense):    
Interest income 0.4 1.3
Interest expense (2.5) (5.6)
Income from unconsolidated affiliates 0.1 0.3
Other expense, net (0.4) (0.2)
Foreign exchange gain (loss), net 1.5 (4.8)
Total other expense, net (0.9) (9.0)
Income before income taxes 26.9 10.9
     
Income tax expense (8.7) (5.2)
     
Net income 18.2 5.7
Net income attributable to noncontrolling interests (0.1)
     
Net income attributable to Euronet Worldwide, Inc. $18.1 $5.7
     
Earnings per share attributable to Euronet Worldwide, Inc. stockholders - diluted $0.35 $0.11
     
Diluted weighted average shares outstanding 51,517,640 51,671,501
 
 
EURONET WORLDWIDE, INC.
Condensed Consolidated Balance Sheets
(in millions)
     
  As of  
  June 30, As of
  2013 December 31,
  (unaudited) 2012
     
ASSETS    
Current assets:    
Cash and cash equivalents $189.9 $201.4
Restricted cash 58.4 71.7
Inventory - PINs and other 83.7 101.2
Trade accounts receivable, net 325.5 370.8
Other current assets, net 78.8 68.1
     
Total current assets 736.3 813.2
     
Property and equipment, net 107.3 115.5
Goodwill and acquired intangible assets, net 594.8 565.2
Other assets, net 53.8 57.6
     
Total assets $1,492.2 $1,551.5
     
LIABILITIES AND EQUITY    
Current liabilities:    
Accounts payable and other current liabilities $623.2 $686.7
Short-term debt obligations 10.8 10.0
Total current liabilities 634.0 696.7
     
Debt obligations, net of current portion 280.7 286.7
Capital lease obligations, net of current portion 4.0 4.6
Deferred income taxes 21.0 22.0
Other long-term liabilities 14.8 14.9
     
Total liabilities 954.5 1,024.9
     
Equity 537.7 526.6
     
Total liabilities and equity $1,492.2 $1,551.5
     
 
EURONET WORLDWIDE, INC.
Reconciliation of Net Income to Adjusted EBITDA
(unaudited - in millions)
   
  Three months ended June 30, 2013
  EFT Processing epay Money Transfer Corporate Services Consolidated
           
Net income         $18.2
           
Add: Income tax expense         8.7
Add: Total other expense, net         0.9
           
Operating income (expense) $15.0 $12.4 $8.8 $(8.4) 27.8
           
Add: Depreciation and amortization 7.7 3.9 4.5 0.1 16.2
Add: Share-based compensation 3.7 3.7
           
Earnings (expense) before interest, taxes, depreciation, amortization and share-based compensation (Adjusted EBITDA) (1) $22.7 $16.3 $13.3 $(4.6) $47.7
           
           
  Three months ended June 30, 2012
  EFT Processing epay Money Transfer Corporate Services Consolidated
           
 Net income         $5.7
           
Add: Income tax expense         5.2
 Add: Total other expense, net         9.0
           
Operating income (expense) $10.3 $10.1 $6.7 $(7.2) 19.9
           
Add: Depreciation and amortization 6.3 5.1 4.6 0.1 16.1
Add: Share-based compensation 0.1 2.9 3.0
           
Earnings (expense) before interest, taxes, depreciation, amortization and share-based compensation (Adjusted EBITDA) (1) $16.6 $15.3 $11.3 $(4.2) $39.0

(1) Adjusted EBITDA is a non-GAAP measure that should be considered in addition to, and not a substitute for, net income and operating income computed in accordance with U.S. GAAP. 

 
EURONET WORLDWIDE, INC.
Reconciliation of Adjusted Cash Earnings per Share
(unaudited - in millions, except share and per share data)
   
  Three Months Ended
  June 30,
  2013 2012
     
Net income attributable to Euronet Worldwide, Inc. $18.1 $5.7
Foreign exchange (gain) loss, net of tax (1.4) 4.6
Intangible asset amortization, net of tax 4.5 4.6
Share-based compensation, net of tax 3.5 2.9
Non-cash 3.5% convertible debt accretion interest, net of tax 2.0
Non-cash GAAP tax expense 0.3 0.4
     
Adjusted cash earnings (2) $25.0 $20.2
     
Adjusted cash earnings per share - diluted (2) $0.48 $0.39
     
Diluted weighted average shares outstanding 51,517,640 51,671,501
     
Effect of assumed conversion of convertible debentures (1) 88,587
     
Effect of unrecognized share-based compensation on diluted shares outstanding 688,998 701,800
     
Adjusted diluted weighted average shares outstanding 52,295,225 52,373,301

(1) As required by U.S. GAAP, the interest cost and amortization of the convertible debt issuance cost are excluded from income for the purpose of calculating diluted earnings per share for any period when the convertible debentures, if converted, would be dilutive to earnings per share. Further, the convertible shares are treated as if all were outstanding for the period. Although the assumed conversion of the convertible debentures was not dilutive to the Company's GAAP earnings for the periods presented, it was dilutive to the Company's adjusted cash earnings per share for the three months ended June 30, 2013. Accordingly, the interest cost is excluded from income and the convertible shares are treated as if all were outstanding for the period.

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