☑ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from | to |
Delaware | 74-2806888 | |
(State or other jurisdiction | ||
of incorporation or organization) | (I.R.S. Employer Identification No.) | |
11400 Tomahawk Creek Parkway, Suite 300 | ||
Leawood, | Kansas | 66211 |
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common Stock | EEFT | Nasdaq Global Select Market |
1.375% Senior Notes due 2026 | EEFT26 | Nasdaq Global Market |
Large accelerated filer | þ | Accelerated filer | o | |||
o | Smaller reporting company | ☐ | ||||
Emerging growth company | ||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o |
Page | |||
Item 1. | 1 | ||
1 | |||
2 | |||
3 | |||
4 | |||
Consolidated Statements of Cash Flows for the | |||
Item 2. | 21 | ||
Item 3. | 39 | ||
Item 4. | 40 | ||
Item 1. | 40 | ||
Item 1A. | 41 | ||
Item 2. | 41 | ||
Item 6. | 42 | ||
As of | |||||||
March 31, 2021 | December 31, 2020 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 1,145,406 | $ | 1,420,255 | |||
ATM cash | 339,883 | 411,054 | |||||
Restricted cash | 2,897 | 3,334 | |||||
Settlement assets | 960,313 | 1,140,875 | |||||
Trade accounts receivable, net of credit losses of $4,717 and $5,926 | 111,384 | 117,517 | |||||
Prepaid expenses and other current assets | 253,308 | 272,900 | |||||
Total current assets | 2,813,191 | 3,365,935 | |||||
Operating right of use lease assets | 171,852 | 162,074 | |||||
Property and equipment, net of accumulated depreciation of $485,467 and $490,429 | 357,272 | 378,441 | |||||
Goodwill | 653,128 | 665,821 | |||||
Acquired intangible assets, net of accumulated amortization of $178,219 and $175,210 | 114,768 | 121,883 | |||||
Other assets, net of accumulated amortization of $57,118 and $55,710 | 240,623 | 232,557 | |||||
Total assets | $ | 4,350,834 | $ | 4,926,711 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Settlement obligations | $ | 960,313 | $ | 1,140,875 | |||
Trade accounts payable | 125,007 | 147,593 | |||||
Accrued expenses and other current liabilities | 361,139 | 404,021 | |||||
Current portion of operating lease liabilities | 51,461 | 52,436 | |||||
Short-term debt obligations and current maturities of long-term debt obligations | 743 | 797 | |||||
Income taxes payable | 29,323 | 36,359 | |||||
Deferred revenue | 74,737 | 73,360 | |||||
Total current liabilities | 1,602,723 | 1,855,441 | |||||
Debt obligations, net of current portion | 1,143,026 | 1,437,589 | |||||
Operating lease obligations, net of current portion | 120,260 | 106,502 | |||||
Deferred income taxes | 39,708 | 37,875 | |||||
Other long-term liabilities | 39,390 | 43,401 | |||||
Total liabilities | 2,945,107 | 3,480,808 | |||||
Equity: | |||||||
Euronet Worldwide, Inc. stockholders’ equity: | |||||||
Preferred Stock, $0.02 par value. 10,000,000 shares authorized; NaN issued | 0— | 0— | |||||
Common Stock, $0.02 par value. 90,000,000 shares authorized; shares issued 63,429,190 and 63,366,010 | 1,268 | 1,267 | |||||
Additional paid-in-capital | 1,240,273 | 1,228,446 | |||||
Treasury stock, at cost, shares issued 10,632,705 and 10,631,961 | (703,514 | ) | (703,032 | ) | |||
Retained earnings | 1,004,490 | 1,013,155 | |||||
Accumulated other comprehensive loss | (137,059 | ) | (94,214 | ) | |||
Total Euronet Worldwide, Inc. stockholders’ equity | 1,405,458 | 1,445,622 | |||||
Noncontrolling interests | 269 | 281 | |||||
Total equity | 1,405,727 | 1,445,903 | |||||
Total liabilities and equity | $ | 4,350,834 | $ | 4,926,711 |
As of | |||||||
September 30, 2017 | December 31, 2016 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 1,062,241 | $ | 734,414 | |||
Restricted cash | 113,617 | 77,674 | |||||
Inventory — PINs and other | 49,108 | 78,115 | |||||
Trade accounts receivable, net of allowances for doubtful accounts of $20,033 at September 30, 2017 and $18,369 at December 31, 2016 | 547,383 | 502,989 | |||||
Prepaid expenses and other current assets | 152,913 | 191,796 | |||||
Total current assets | 1,925,262 | 1,584,988 | |||||
Property and equipment, net of accumulated depreciation of $325,521 at September 30, 2017 and $262,470 at December 31, 2016 | 250,436 | 202,145 | |||||
Goodwill | 743,860 | 689,713 | |||||
Acquired intangible assets, net of accumulated amortization of $176,495 at September 30, 2017 and $150,347 at December 31, 2016 | 155,155 | 165,331 | |||||
Other assets, net of accumulated amortization of $42,549 at September 30, 2017 and $36,984 at December 31, 2016 | 103,208 | 70,695 | |||||
Total assets | $ | 3,177,921 | $ | 2,712,872 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Trade accounts payable | $ | 365,952 | $ | 456,682 | |||
Accrued expenses and other current liabilities | 704,200 | 615,153 | |||||
Current portion of capital lease obligations | 4,977 | 3,293 | |||||
Short-term debt obligations and current maturities of long-term debt obligations | 136,896 | 32,161 | |||||
Income taxes payable | 41,883 | 27,611 | |||||
Deferred revenue | 45,218 | 44,200 | |||||
Total current liabilities | 1,299,126 | 1,179,100 | |||||
Debt obligations, net of current portion | 592,924 | 561,663 | |||||
Capital lease obligations, net of current portion | 9,168 | 6,969 | |||||
Deferred income taxes | 46,361 | 44,079 | |||||
Other long-term liabilities | 32,828 | 20,504 | |||||
Total liabilities | 1,980,407 | 1,812,315 | |||||
Equity: | |||||||
Euronet Worldwide, Inc. stockholders’ equity: | |||||||
Preferred Stock, $0.02 par value. 10,000,000 shares authorized; none issued | — | — | |||||
Common Stock, $0.02 par value. 90,000,000 shares authorized; 58,758,343 issued at September 30, 2017 and 58,389,242 issued at December 31, 2016 | 1,175 | 1,168 | |||||
Additional paid-in-capital | 1,065,987 | 1,045,663 | |||||
Treasury stock, at cost, 6,088,055 shares at September 30, 2017 and 6,085,841 shares at December 31, 2016 | (216,843 | ) | (215,462 | ) | |||
Retained earnings | 459,887 | 278,842 | |||||
Accumulated other comprehensive loss | (113,523 | ) | (210,662 | ) | |||
Total Euronet Worldwide, Inc. stockholders’ equity | 1,196,683 | 899,549 | |||||
Noncontrolling interests | 831 | 1,008 | |||||
Total equity | 1,197,514 | 900,557 | |||||
Total liabilities and equity | $ | 3,177,921 | $ | 2,712,872 |
Three Months Ended March 31, | ||||||||
2021 | 2020 | |||||||
Revenues | $ | 652,670 | $ | 583,907 | ||||
Operating expenses: | ||||||||
Direct operating costs | 434,516 | 359,456 | ||||||
Salaries and benefits | 115,668 | 101,240 | ||||||
Selling, general and administrative | 58,776 | 60,793 | ||||||
Depreciation and amortization | 33,261 | 30,816 | ||||||
Total operating expenses | 642,221 | 552,305 | ||||||
Operating income | 10,449 | 31,602 | ||||||
Other income (expense): | ||||||||
Interest income | 182 | 567 | ||||||
Interest expense | (9,189 | ) | (9,233 | ) | ||||
Foreign currency exchange loss, net | (4,032 | ) | (18,806 | ) | ||||
Other gains, net | 31 | 31 | ||||||
Other expense, net | (13,008 | ) | (27,441 | ) | ||||
(Loss) income before income taxes | (2,559 | ) | 4,161 | |||||
Income tax expense | (6,062 | ) | (2,441 | ) | ||||
Net (loss) income | (8,621 | ) | 1,720 | |||||
Net (income) loss attributable to noncontrolling interests | (44 | ) | 201 | |||||
Net (loss) income attributable to Euronet Worldwide, Inc. | $ | (8,665 | ) | $ | 1,921 | |||
(Loss) earnings per share attributable to Euronet Worldwide, Inc. stockholders: | ||||||||
Basic | $ | (0.16 | ) | $ | 0.04 | |||
Diluted | $ | (0.16 | ) | $ | 0.04 | |||
Weighted average shares outstanding: | ||||||||
Basic | 52,762,845 | 53,607,104 | ||||||
Diluted | 52,762,845 | 54,779,321 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Revenues | $ | 637,834 | $ | 524,025 | $ | 1,647,777 | $ | 1,438,786 | |||||||
Operating expenses: | |||||||||||||||
Direct operating costs | 364,815 | 300,159 | 978,768 | 853,544 | |||||||||||
Salaries and benefits | 82,134 | 71,899 | 232,617 | 212,974 | |||||||||||
Selling, general and administrative | 49,279 | 41,379 | 139,708 | 121,678 | |||||||||||
Acquired intangible assets impairment | — | — | 2,286 | — | |||||||||||
Depreciation and amortization | 24,705 | 20,120 | 69,520 | 58,923 | |||||||||||
Total operating expenses | 520,933 | 433,557 | 1,422,899 | 1,247,119 | |||||||||||
Operating income | 116,901 | 90,468 | 224,878 | 191,667 | |||||||||||
Other income (expense): | |||||||||||||||
Interest income | 380 | 349 | 2,009 | 1,244 | |||||||||||
Interest expense | (9,534 | ) | (7,724 | ) | (25,058 | ) | (20,968 | ) | |||||||
Foreign currency exchange gain (loss), net | 8,179 | (1,527 | ) | 21,035 | (1,299 | ) | |||||||||
Other gains | — | — | 35 | 19,903 | |||||||||||
Other expense, net | (975 | ) | (8,902 | ) | (1,979 | ) | (1,120 | ) | |||||||
Income before income taxes | 115,926 | 81,566 | 222,899 | 190,547 | |||||||||||
Income tax expense | (15,573 | ) | (20,784 | ) | (43,130 | ) | (45,104 | ) | |||||||
Net income | 100,353 | 60,782 | 179,769 | 145,443 | |||||||||||
Net (income) loss attributable to noncontrolling interests | (63 | ) | (49 | ) | 9 | 61 | |||||||||
Net income attributable to Euronet Worldwide, Inc. | $ | 100,290 | $ | 60,733 | $ | 179,778 | $ | 145,504 | |||||||
Earnings per share attributable to Euronet Worldwide, Inc. stockholders: | |||||||||||||||
Basic | $ | 1.91 | $ | 1.16 | $ | 3.43 | $ | 2.78 | |||||||
Diluted | $ | 1.80 | $ | 1.11 | $ | 3.23 | $ | 2.66 | |||||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 52,590,837 | 52,134,500 | 52,463,511 | 52,293,808 | |||||||||||
Diluted | 55,784,485 | 54,523,211 | 55,582,583 | 54,641,388 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net income | $ | 100,353 | $ | 60,782 | $ | 179,769 | $ | 145,443 | |||||||
Translation adjustment | 26,703 | 6,849 | 97,311 | 13,522 | |||||||||||
Comprehensive income | 127,056 | 67,631 | 277,080 | 158,965 | |||||||||||
Comprehensive (income) loss attributable to noncontrolling interests | (113 | ) | (64 | ) | (163 | ) | 14 | ||||||||
Comprehensive income attributable to Euronet Worldwide, Inc. | $ | 126,943 | $ | 67,567 | $ | 276,917 | $ | 158,979 |
Three Months Ended March 31, | ||||||||
2021 | 2020 | |||||||
Net (loss) income | $ | (8,621 | ) | $ | 1,720 | |||
Translation adjustment | (42,901 | ) | (59,818 | ) | ||||
Comprehensive loss | (51,522 | ) | (58,098 | ) | ||||
Comprehensive loss attributable to noncontrolling interests | 12 | 242 | ||||||
Comprehensive loss attributable to Euronet Worldwide, Inc. | $ | (51,510 | ) | $ | (57,856 | ) |
Number of Shares Outstanding | Common Stock | Additional Paid-in Capital | Treasury Stock | ||||||||||||
Balance as of December 31, 2019 | 54,220,854 | $ | 1,256 | $ | 1,190,058 | $ | (463,704 | ) | |||||||
Net income (loss) | |||||||||||||||
Other comprehensive loss | |||||||||||||||
Stock issued under employee stock plans | 80,519 | 1 | 1,701 | (249 | ) | ||||||||||
Share-based compensation | 6,338 | ||||||||||||||
Repurchase of shares | (2,095,683 | ) | (239,763 | ) | |||||||||||
Balance as of March 31, 2020 | 52,205,690 | 1,257 | 1,198,097 | (703,716 | ) |
Number of Shares Outstanding | Common Stock | Additional Paid-in Capital | Treasury Stock | ||||||||||||
Balance as of December 31, 2020 | 52,734,049 | $ | 1,267 | $ | 1,228,446 | $ | (703,032 | ) | |||||||
Net (loss) income | |||||||||||||||
Other comprehensive loss | |||||||||||||||
Stock issued under employee stock plans | 62,436 | 1 | 3,335 | (482 | ) | ||||||||||
Share-based compensation | 8,492 | ||||||||||||||
Balance as of March 31, 2021 | 52,796,485 | 1,268 | 1,240,273 | (703,514 | ) |
Nine Months Ended September 30, | |||||||
2017 | 2016 | ||||||
Net income | $ | 179,769 | $ | 145,443 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 69,520 | 58,923 | |||||
Share-based compensation | 11,817 | 11,352 | |||||
Unrealized foreign exchange (gain) loss, net | (21,035 | ) | 1,299 | ||||
Deferred income taxes | (14,856 | ) | 993 | ||||
Accretion of convertible debt discount and amortization of debt issuance costs | 10,068 | 9,056 | |||||
Gain on sale of investment | — | (19,449 | ) | ||||
Non-cash impairment of acquired intangible assets | 2,286 | — | |||||
Changes in working capital, net of amounts acquired: | |||||||
Income taxes payable, net | 10,924 | 16,006 | |||||
Restricted cash | (3,633 | ) | (10,227 | ) | |||
Inventory — PINs and other | 33,712 | 25,948 | |||||
Trade accounts receivable | (7,861 | ) | 54,356 | ||||
Prepaid expenses and other current assets | 43,826 | (76,594 | ) | ||||
Trade accounts payable | (118,677 | ) | (133,207 | ) | |||
Deferred revenue | (2,497 | ) | 3,181 | ||||
Accrued expenses and other current liabilities | 30,678 | 135,431 | |||||
Changes in noncurrent assets and liabilities | 6,455 | (5,020 | ) | ||||
Net cash provided by operating activities | 230,496 | 217,491 | |||||
Cash flows from investing activities: | |||||||
Acquisitions, net of cash acquired | — | (2,183 | ) | ||||
Purchases of property and equipment | (70,871 | ) | (61,597 | ) | |||
Purchases of other long-term assets | (4,651 | ) | (4,501 | ) | |||
Proceeds from sale of investment | — | 11,900 | |||||
Other, net | 1,499 | 800 | |||||
Net cash used in investing activities | (74,023 | ) | (55,581 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from issuance of shares | 8,328 | 5,098 | |||||
Repurchase of shares | (2,310 | ) | (76,510 | ) | |||
Borrowings from revolving credit agreements | 1,839,963 | 1,961,814 | |||||
Repayments of revolving credit agreements | (1,808,695 | ) | (1,855,053 | ) | |||
Repayments of long-term debt obligations | (6,563 | ) | (5,156 | ) | |||
Repayments of capital lease obligations | (3,473 | ) | (1,997 | ) | |||
Borrowings from short-term debt obligations, net | 99,081 | 2,290 | |||||
Other, net | 284 | 748 | |||||
Net cash provided by financing activities | 126,615 | 31,234 | |||||
Effect of exchange rate changes on cash and cash equivalents | 44,739 | 10,634 | |||||
Increase in cash and cash equivalents | 327,827 | 203,778 | |||||
Cash and cash equivalents at beginning of period | 734,414 | 457,518 | |||||
Cash and cash equivalents at end of period | $ | 1,062,241 | $ | 661,296 | |||
Supplemental disclosure of cash flow information: | |||||||
Interest paid during the period | $ | 17,359 | $ | 12,598 | |||
Income taxes paid during the period | $ | 34,769 | $ | 31,751 | |||
Supplemental disclosure of non-cash investing and financing activities | |||||||
Non-cash consideration received from sale of investment | $ | — | $ | 7,549 |
Retained Earnings | Accumulated Other Comprehensive Loss | Noncontrolling Interests | Total | |||||||||||||
Balance as of December 31, 2019 | $ | 1,016,554 | $ | (164,890 | ) | $ | 68 | $ | 1,579,342 | |||||||
Net income (loss) | 1,921 | (201 | ) | 1,720 | ||||||||||||
Other comprehensive loss | (59,777 | ) | (41 | ) | (59,818 | ) | ||||||||||
Stock issued under employee stock plans | 1,453 | |||||||||||||||
Share-based compensation | 6,338 | |||||||||||||||
Repurchase of shares | (239,763 | ) | ||||||||||||||
Balance as of March 31, 2020 | 1,018,475 | (224,667 | ) | (174 | ) | 1,289,272 |
Retained Earnings | Accumulated Other Comprehensive Loss | Noncontrolling Interests | Total | |||||||||||||
Balance as of December 31, 2020 | $ | 1,013,155 | $ | (94,214 | ) | $ | 281 | $ | 1,445,903 | |||||||
Net (loss) income | (8,665 | ) | 44 | (8,621 | ) | |||||||||||
Other comprehensive loss | (42,845 | ) | (56 | ) | (42,901 | ) | ||||||||||
Stock issued under employee stock plans | 2,854 | |||||||||||||||
Share-based compensation | 8,492 | |||||||||||||||
Balance as of March 31, 2021 | 1,004,490 | (137,059 | ) | 269 | 1,405,727 |
Three Months Ended March 31, | |||||||
2021 | 2020 | ||||||
Net (loss) income | $ | (8,621 | ) | $ | 1,720 | ||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 33,261 | 30,816 | |||||
Share-based compensation | 8,492 | 6,338 | |||||
Unrealized foreign exchange loss, net | 4,032 | 18,806 | |||||
Deferred income taxes | 2,374 | (2,043 | ) | ||||
Accretion of convertible debt discount and amortization of debt issuance costs | 4,979 | 4,616 | |||||
Changes in working capital, net of amounts acquired: | |||||||
Income taxes payable, net | (5,534 | ) | (10,454 | ) | |||
Trade accounts receivable | 148,697 | 300,063 | |||||
Prepaid expenses and other current assets | 29,551 | (119,648 | ) | ||||
Trade accounts payable | (220,439 | ) | (126,242 | ) | |||
Deferred revenue | 3,738 | 4,119 | |||||
Accrued expenses and other current liabilities | 11,234 | 14,811 | |||||
Changes in noncurrent assets and liabilities | (14,409) | (17,018 | ) | ||||
Net cash (used in) provided by operating activities | (2,645 | ) | 105,884 | ||||
Cash flows from investing activities: | |||||||
Acquisitions, net of cash acquired | 0— | 475 | |||||
Purchases of property and equipment | (16,393 | ) | (30,392 | ) | |||
Purchases of other long-term assets | (2,212 | ) | (2,046 | ) | |||
Other, net | 380 | 357 | |||||
Net cash used in investing activities | (18,225 | ) | (31,606 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from issuance of shares | 3,670 | 1,700 | |||||
Repurchase of shares | (808 | ) | (240,530 | ) | |||
Borrowings from revolving credit agreements | 707,100 | 805,500 | |||||
Repayments of revolving credit agreements | (977,500 | ) | (805,500 | ) | |||
Net repayments from short-term debt obligations | (32 | ) | (2,163 | ) | |||
Other, net | (1,641 | ) | (1,651 | ) | |||
Net cash used in financing activities | (269,211 | ) | (242,644 | ) | |||
Effect of exchange rate changes on cash and cash equivalents and restricted cash | (53,188 | ) | (59,260 | ) | |||
Decrease in cash and cash equivalents and restricted cash | (343,269 | ) | (227,626 | ) | |||
Cash and cash equivalents and restricted cash at beginning of period | 2,099,508 | 1,817,379 | |||||
Cash and cash equivalents and restricted cash at end of period | $ | 1,756,239 | $ | 1,589,753 | |||
Supplemental disclosure of cash flow information: | |||||||
Interest paid during the period | $ | 2,703 | $ | 3,678 | |||
Income taxes paid during the period | $ | 11,160 | $ | 16,064 |
7 |
(3) PENDING ACQUISITION
In March 2021, the Company entered into an agreement to purchase the Piraeus Bank Merchant Acquiring business of Piraeus Bank for €300 million, or approximately $360 million. The proposed arrangement will include separate commercial agreements for a long-term strategic partnership with Piraeus Bank for collaborative product distribution, processing and customer referrals. The acquisition will expand the Company’s omnichannel payments strategy and position the Company in Greece’s growing market for merchant acquiring services. The closing is targeted for late 2021 and is subject to regulatory approvals, finalization of the commercial agreements, and customary closing conditions. The Company expects to finance the purchase price using cash on hand.
As of | ||||||||
(in thousands) | March 31, 2021 | December 31, 2020 | ||||||
Settlement assets: | ||||||||
Settlement cash and cash equivalents | $ | 209,853 | $ | 188,191 | ||||
Settlement restricted cash | 58,200 | 76,674 | ||||||
Accounts receivable, net of credit allowance of $33,980 and $35,800 | 478,209 | 641,955 | ||||||
Prepaid expenses and other current assets | 214,051 | 234,055 | ||||||
Total settlement assets | $ | 960,313 | $ | 1,140,875 | ||||
Settlement obligations: | ||||||||
Trade account payables | $ | 356,612 | $ | 571,175 | ||||
Accrued expenses and other current liabilities | 603,701 | 569,700 | ||||||
Total settlement obligations | $ | 960,313 | $ | 1,140,875 |
As of | ||||||||||||||||
(in thousands) | March 31, 2021 | December 31, 2020 | March 31, 2020 | December 31, 2019 | ||||||||||||
Cash and cash equivalents | $ | 1,145,406 | $ | 1,420,255 | $ | 709,521 | $ | 786,081 | ||||||||
Restricted cash | 2,897 | 3,334 | 28,953 | 34,301 | ||||||||||||
ATM cash | 339,883 | 411,054 | 558,580 | 665,641 | ||||||||||||
Settlement cash and cash equivalents | 209,853 | 188,191 | 256,456 | 282,188 | ||||||||||||
Settlement restricted cash | 58,200 | 76,674 | 36,243 | 49,168 | ||||||||||||
Cash and cash equivalents and restricted cash at end of period | $ | 1,756,239 | $ | 2,099,508 | $ | 1,589,753 | $ | 1,817,379 |
Three Months Ended September 30, | Nine Months Ended September 30, | Three Months Ended March 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | 2021 | 2020 | |||||||||||
Computation of diluted weighted average shares outstanding: | ||||||||||||||||
Basic weighted average shares outstanding | 52,590,837 | 52,134,500 | 52,463,511 | 52,293,808 | 52,762,845 | 53,607,104 | ||||||||||
Incremental shares from assumed exercise of stock options and vesting of restricted stock | 1,863,883 | 1,731,451 | 1,789,307 | 1,690,320 | 0— | 1,172,217 | ||||||||||
Incremental shares from assumed conversion of convertible notes | 1,329,765 | 657,260 | 1,329,765 | 657,260 | ||||||||||||
Diluted weighted average shares outstanding | 55,784,485 | 54,523,211 | 55,582,583 | 54,641,388 | 52,762,845 | 54,779,321 |
9 |
(in thousands) | Acquired Intangible Assets | Goodwill | Total Intangible Assets | |||||||||
Balance as of December 31, 2020 | $ | 121,883 | $ | 665,821 | $ | 787,704 | ||||||
Decreases: | ||||||||||||
Acquisition | 0— | 0— | 0— | |||||||||
Amortization | (5,789 | ) | 0— | (5,789 | ) | |||||||
Foreign currency exchange rate changes | (1,326 | ) | (12,693 | ) | (14,019 | ) | ||||||
Balance as of March 31, 2021 | $ | 114,768 | $ | 653,128 | $ | 767,896 |
(in thousands) | Acquired Intangible Assets | Goodwill | Total Intangible Assets | |||||||||
Balance as of December 31, 2016 | $ | 165,331 | $ | 689,713 | $ | 855,044 | ||||||
Increases (Decreases): | ||||||||||||
Amortization | (18,840 | ) | — | (18,840 | ) | |||||||
Other (primarily changes in foreign currency exchange rates and impairment) | 8,664 | 54,147 | 62,811 | |||||||||
Balance as of September 30, 2017 | $ | 155,155 | $ | 743,860 | $ | 899,015 |
Of the total goodwill balance of $653.1 million as of March 31, 2021, $398.0 million relates to the Money Transfer Segment, $132.3 million relates to the epay Segment and the remaining $122.8 million relates to the EFT Processing Segment. Estimated amortization expense on acquired intangible assets with finite lives before income taxes, as of September 30, 2017,March 31, 2021, is expected to total $5.7$17.0 million for the remainder of 2017, $22.82021, $21.5 million for 2018, $21.82022, $16.6 million for 2019, $21.02023, $9.8 million for 2020, $20.12024, $6.4 million for 20212025 and $19.0$6.2 million for 2022.2026.
As of | ||||||||
(in thousands) | March 31, 2021 | December 31, 2020 | ||||||
Accrued expenses | $ | 314,103 | $ | 331,713 | ||||
Derivative liabilities | 41,219 | 65,905 | ||||||
Current portion of finance lease obligations | 5,817 | 6,403 | ||||||
Total | $ | 361,139 | $ | 404,021 |
As of | |||||||
(in thousands) | September 30, 2017 | December 31, 2016 | |||||
Accrued expenses | $ | 278,078 | $ | 210,275 | |||
Money transfer settlement obligations | 289,640 | 219,601 | |||||
Accrued amounts due to mobile operators and other content providers | 104,535 | 121,505 | |||||
Derivative liabilities | 31,947 | 63,772 | |||||
Total | $ | 704,200 | $ | 615,153 |
10 |
As of | As of | ||||||||||||||
(in thousands) | September 30, 2017 | December 31, 2016 | March 31, 2021 | December 31, 2020 | |||||||||||
Credit Facility: | |||||||||||||||
Term loan, due 2019 | $ | 53,438 | $ | 60,000 | |||||||||||
Revolving credit agreements, due 2019 | 191,590 | 159,963 | |||||||||||||
Revolving credit agreement | $ | 0— | $ | 270,400 | |||||||||||
Convertible Debt: | |||||||||||||||
0.75% convertible notes, unsecured, due 2049 | 456,159 | 452,228 | |||||||||||||
245,028 | 219,963 | ||||||||||||||
Convertible Debt: | |||||||||||||||
1.50% convertible notes, unsecured, due 2044 | 366,464 | 358,293 | |||||||||||||
ATM credit facility | 100,000 | — | |||||||||||||
1.375% Senior Notes, due 2026 | 703,680 | 732,840 | |||||||||||||
Other obligations | 24,782 | 23,892 | 813 | 850 | |||||||||||
Total debt obligations | 736,274 | 602,148 | 1,160,652 | 1,456,318 | |||||||||||
Unamortized debt issuance costs | (6,454 | ) | (8,324 | ) | (16,883 | ) | (17,932 | ) | |||||||
Carrying value of debt | 729,820 | 593,824 | 1,143,769 | 1,438,386 | |||||||||||
Short-term debt obligations and current maturities of long-term debt obligations | (136,896 | ) | (32,161 | ) | (743 | ) | (797 | ) | |||||||
Long-term debt obligations | $ | 592,924 | $ | 561,663 | $ | 1,143,026 | $ | 1,437,589 |
12 |
Asset Derivatives | Liability Derivatives | |||||||||||||||||||
Fair Value | Fair Value | |||||||||||||||||||
(in thousands) | Balance Sheet Location | September 30, 2017 | December 31, 2016 | Balance Sheet Location | September 30, 2017 | December 31, 2016 | ||||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||||||
Foreign currency exchange contracts | Other current assets | $ | 44,603 | $ | 75,307 | Other current liabilities | $ | (31,947 | ) | $ | (63,772 | ) |
Asset Derivatives | Liability Derivatives | |||||||||||||||||||
Fair Value | Fair Value | |||||||||||||||||||
(in thousands) | Balance Sheet Location | March 31, 2021 | December 31, 2020 | Balance Sheet Location | March 31, 2021 | December 31, 2020 | ||||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||||||
Foreign currency exchange contracts | Other current assets | $ | 49,390 | $ | 80,879 | Other current liabilities | $ | (41,219 | ) | $ | (65,905 | ) |
Gross Amounts Not Offset in the Consolidated Balance Sheet | ||||||||||||||||||||||||
As of March 31, 2021 | Gross Amounts of Recognized Assets | Gross Amounts Offset in the Consolidated Balance Sheet | Net Amounts Presented in the Consolidated Balance Sheet | Financial Instruments | Cash Collateral Received | Net Amounts | ||||||||||||||||||
Derivatives subject to a master netting arrangement or similar agreement | $ | 49,390 | $ | 0— | $ | 49,390 | $ | (26,069 | ) | $ | (4,243 | ) | $ | 19,078 | ||||||||||
As of December 31, 2020 | ||||||||||||||||||||||||
Derivatives subject to a master netting arrangement or similar agreement | $ | 80,879 | $ | 0— | $ | 80,879 | $ | (44,893 | ) | $ | (2,778 | ) | $ | 33,208 |
Gross Amounts Not Offset in the Consolidated Balance Sheet | ||||||||||||||||||||||||
As of September 30, 2017 | Gross Amounts of Recognized Assets | Gross Amounts Offset in the Consolidated Balance Sheet | Net Amounts Presented in the Consolidated Balance Sheet | Financial Instruments | Cash Collateral Received | Net Amounts | ||||||||||||||||||
Derivatives subject to a master netting arrangement or similar agreement | $ | 44,603 | $ | — | $ | 44,603 | $ | (20,071 | ) | $ | (8,268 | ) | $ | 16,264 | ||||||||||
As of December 31, 2016 | ||||||||||||||||||||||||
Derivatives subject to a master netting arrangement or similar agreement | $ | 75,307 | $ | — | $ | 75,307 | $ | (49,752 | ) | $ | (7,562 | ) | $ | 17,993 |
13 |
Gross Amounts Not Offset in the Consolidated Balance Sheet | ||||||||||||||||||||||||
As of March 31, 2021 | Gross Amounts of Recognized Liabilities | Gross Amounts Offset in the Consolidated Balance Sheet | Net Amounts Presented in the Consolidated Balance Sheet | Financial Instruments | Cash Collateral Paid | Net Amounts | ||||||||||||||||||
Derivatives subject to a master netting arrangement or similar agreement | $ | (41,219 | ) | $ | 0— | $ | (41,219 | ) | $ | 26,069 | $ | 2,307 | $ | (12,843 | ) | |||||||||
As of December 31, 2020 | ||||||||||||||||||||||||
Derivatives subject to a master netting arrangement or similar agreement | $ | (65,905 | ) | $ | 0— | $ | (65,905 | ) | $ | 44,893 | $ | 12,272 | $ | (8,740 | ) |
Gross Amounts Not Offset in the Consolidated Balance Sheet | ||||||||||||||||||||||||
As of September 30, 2017 | Gross Amounts of Recognized Liabilities | Gross Amounts Offset in the Consolidated Balance Sheet | Net Amounts Presented in the Consolidated Balance Sheet | Financial Instruments | Cash Collateral Paid | Net Amounts | ||||||||||||||||||
Derivatives subject to a master netting arrangement or similar agreement | $ | (31,947 | ) | $ | — | $ | (31,947 | ) | $ | 20,071 | $ | 2,581 | $ | (9,295 | ) | |||||||||
As of December 31, 2016 | ||||||||||||||||||||||||
Derivatives subject to a master netting arrangement or similar agreement | $ | (63,772 | ) | $ | — | $ | (63,772 | ) | $ | 49,752 | $ | 1,106 | $ | (12,914 | ) |
Amount of (Loss) Gain Recognized in Income on Derivative Contracts (a) | ||||||||||
Location of (Loss) Gain Recognized in Income on Derivative Contracts | Three Months Ended March 31, | |||||||||
(in thousands) | 2021 | 2020 | ||||||||
Foreign currency exchange contracts - Ria Operations | Foreign currency exchange (loss) gain, net | $ | (2,468 | ) | $ | 1,019 |
Amount of Gain (Loss) Recognized in Income on Derivative Contracts (a) | ||||||||||||||||||
Location of Gain (Loss) Recognized in Income on Derivative Contracts | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
(in thousands) | 2017 | 2016 | 2017 | 2016 | ||||||||||||||
Foreign currency exchange contracts | Foreign currency exchange gain (loss), net | $ | 3,062 | $ | (1,825 | ) | $ | (3,007 | ) | $ | (646 | ) |
|
14 |
As of September 30, 2017 | As of March 31, 2021 | |||||||||||||||||||||||||||||||||||
(in thousands) | Balance Sheet Classification | Level 1 | Level 2 | Level 3 | Total | Balance Sheet Classification | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||
Foreign currency exchange contracts | Other current assets | $ | — | $ | 44,603 | $ | — | $ | 44,603 | Other current assets | $ | 0— | $ | 49,390 | $ | 0— | $ | 49,390 | ||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||||||
Foreign currency exchange contracts | Other current liabilities | $ | — | $ | (31,947 | ) | $ | — | $ | (31,947 | ) | Other current liabilities | $ | 0— | $ | (41,219 | ) | $ | 0— | $ | (41,219 | ) |
As of December 31, 2020 | ||||||||||||||||||
(in thousands) | Balance Sheet Classification | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets | ||||||||||||||||||
Foreign currency exchange contracts | Other current assets | $ | 0— | $ | 80,879 | $ | 0— | $ | 80,879 | |||||||||
Liabilities | ||||||||||||||||||
Foreign currency exchange contracts | Other current liabilities | $ | 0— | $ | (65,905 | ) | $ | 0— | $ | (65,905 | ) |
As of December 31, 2016 | ||||||||||||||||||
(in thousands) | Balance Sheet Classification | Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets | ||||||||||||||||||
Foreign currency exchange contracts | Other current assets | $ | — | $ | 75,307 | $ | — | $ | 75,307 | |||||||||
Liabilities | ||||||||||||||||||
Foreign currency exchange contracts | Other current liabilities | $ | — | $ | (63,772 | ) | $ | — | $ | (63,772 | ) |
15 | |
For the Three Months Ended March 31, 2021 | ||||||||||||||||||||
(in thousands) | EFT Processing | epay | Money Transfer | Corporate Services, Eliminations and Other | Consolidated | |||||||||||||||
Total revenues | $ | 87,076 | $ | 242,303 | $ | 324,900 | $ | (1,609 | ) | $ | 652,670 | |||||||||
Operating expenses: | ||||||||||||||||||||
Direct operating costs | 69,612 | 182,633 | 183,878 | (1,607 | ) | 434,516 | ||||||||||||||
Salaries and benefits | 23,571 | 19,369 | 60,540 | 12,188 | 115,668 | |||||||||||||||
Selling, general and administrative | 11,962 | 9,020 | 36,116 | 1,678 | 58,776 | |||||||||||||||
Depreciation and amortization | 22,027 | 2,124 | 8,963 | 147 | 33,261 | |||||||||||||||
Total operating expenses | 127,172 | 213,146 | 289,497 | 12,406 | 642,221 | |||||||||||||||
Operating (loss) income | $ | (40,096 | ) | $ | 29,157 | $ | 35,403 | $ | (14,015 | ) | $ | 10,449 |
For the Three Months Ended September 30, 2017 | For the Three Months Ended March 31, 2020 | |||||||||||||||||||||||||||||||||||||||
(in thousands) | EFT Processing | epay | Money Transfer | Corporate Services, Eliminations and Other | Consolidated | EFT Processing | epay | Money Transfer | Corporate Services, Eliminations and Other | Consolidated | ||||||||||||||||||||||||||||||
Total revenues | $ | 226,321 | $ | 184,234 | $ | 228,105 | $ | (826 | ) | $ | 637,834 | $ | 145,825 | $ | 172,911 | $ | 266,234 | $ | (1,063 | ) | $ | 583,907 | ||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||||||||||
Direct operating costs | 99,024 | 143,023 | 123,588 | (820 | ) | 364,815 | 87,536 | 130,074 | 142,909 | (1,063 | ) | 359,456 | ||||||||||||||||||||||||||||
Salaries and benefits | 16,817 | 13,955 | 44,110 | 7,252 | 82,134 | 22,091 | 15,697 | 53,864 | 9,588 | 101,240 | ||||||||||||||||||||||||||||||
Selling, general and administrative | 8,878 | 9,145 | 28,648 | 2,608 | 49,279 | 10,941 | 8,838 | 38,582 | 2,432 | 60,793 | ||||||||||||||||||||||||||||||
Depreciation and amortization | 14,805 | 2,461 | 7,403 | 36 | 24,705 | 20,322 | 1,844 | 8,571 | 79 | 30,816 | ||||||||||||||||||||||||||||||
Total operating expenses | 139,524 | 168,584 | 203,749 | 9,076 | 520,933 | 140,890 | 156,453 | 243,926 | 11,036 | 552,305 | ||||||||||||||||||||||||||||||
Operating income (expense) | $ | 86,797 | $ | 15,650 | $ | 24,356 | $ | (9,902 | ) | $ | 116,901 | $ | 4,935 | $ | 16,458 | $ | 22,308 | $ | (12,099 | ) | $ | 31,602 |
16 |
For the Three Months Ended September 30, 2016 | ||||||||||||||||||||
(in thousands) | EFT Processing | epay | Money Transfer | Corporate Services, Eliminations and Other | Consolidated | |||||||||||||||
Total revenues | $ | 152,586 | $ | 167,226 | $ | 204,611 | $ | (398 | ) | $ | 524,025 | |||||||||
Operating expenses: | ||||||||||||||||||||
Direct operating costs | 62,401 | 128,212 | 109,944 | (398 | ) | 300,159 | ||||||||||||||
Salaries and benefits | 12,954 | 13,352 | 38,365 | 7,228 | 71,899 | |||||||||||||||
Selling, general and administrative | 7,642 | 8,133 | 23,924 | 1,680 | 41,379 | |||||||||||||||
Depreciation and amortization | 10,151 | 2,734 | 7,195 | 40 | 20,120 | |||||||||||||||
Total operating expenses | 93,148 | 152,431 | 179,428 | 8,550 | 433,557 | |||||||||||||||
Operating income (expense) | $ | 59,438 | $ | 14,795 | $ | 25,183 | $ | (8,948 | ) | $ | 90,468 |
For the Nine Months Ended September 30, 2017 | ||||||||||||||||||||
(in thousands) | EFT Processing | epay | Money Transfer | Corporate Services, Eliminations and Other | Consolidated | |||||||||||||||
Total revenues | $ | 488,030 | $ | 512,531 | $ | 649,205 | $ | (1,989 | ) | $ | 1,647,777 | |||||||||
Operating expenses: | ||||||||||||||||||||
Direct operating costs | 238,753 | 393,269 | 348,724 | (1,978 | ) | 978,768 | ||||||||||||||
Salaries and benefits | 46,125 | 39,606 | 125,273 | 21,613 | 232,617 | |||||||||||||||
Selling, general and administrative | 23,960 | 27,628 | 77,912 | 10,208 | 139,708 | |||||||||||||||
Acquired intangible assets impairment | 2,286 | — | — | — | 2,286 | |||||||||||||||
Depreciation and amortization | 39,816 | 7,667 | 21,941 | 96 | 69,520 | |||||||||||||||
Total operating expenses | 350,940 | 468,170 | 573,850 | 29,939 | 1,422,899 | |||||||||||||||
Operating income (expense) | $ | 137,090 | $ | 44,361 | $ | 75,355 | $ | (31,928 | ) | $ | 224,878 |
For the Nine Months Ended September 30, 2016 | ||||||||||||||||||||
(in thousands) | EFT Processing | epay | Money Transfer | Corporate Services, Eliminations and Other | Consolidated | |||||||||||||||
Total revenues | $ | 354,282 | $ | 497,945 | $ | 587,664 | $ | (1,105 | ) | $ | 1,438,786 | |||||||||
Operating expenses: | ||||||||||||||||||||
Direct operating costs | 165,520 | 379,423 | 309,706 | (1,105 | ) | 853,544 | ||||||||||||||
Salaries and benefits | 37,601 | 38,052 | 114,582 | 22,739 | 212,974 | |||||||||||||||
Selling, general and administrative | 22,154 | 25,291 | 68,930 | 5,303 | 121,678 | |||||||||||||||
Depreciation and amortization | 28,411 | 8,498 | 21,868 | 146 | 58,923 | |||||||||||||||
Total operating expenses | 253,686 | 451,264 | 515,086 | 27,083 | 1,247,119 | |||||||||||||||
Operating income (expense) | $ | 100,596 | $ | 46,681 | $ | 72,578 | $ | (28,188 | ) | $ | 191,667 |
Total Assets as of | |||||||
(in thousands) | March 31, 2021 | December 31, 2020 | |||||
EFT Processing | $ | 1,400,396 | $ | 1,541,610 | |||
epay | 915,875 | 1,135,204 | |||||
Money Transfer | 1,764,127 | 1,755,651 | |||||
Corporate Services, Eliminations and Other | 270,436 | 494,246 | |||||
Total | $ | 4,350,834 | $ | 4,926,711 |
Property and Equipment, net as of | Total Assets as of | |||||||||||||||
(in thousands) | September 30, 2017 | December 31, 2016 | September 30, 2017 | December 31, 2016 | ||||||||||||
EFT Processing | $ | 181,188 | $ | 139,161 | $ | 1,310,607 | $ | 786,166 | ||||||||
epay | 27,139 | 23,939 | 616,596 | 733,514 | ||||||||||||
Money Transfer | 42,047 | 38,954 | 1,229,899 | 1,136,722 | ||||||||||||
Corporate Services, Eliminations and Other | 62 | 91 | 20,819 | 56,470 | ||||||||||||
Total | $ | 250,436 | $ | 202,145 | $ | 3,177,921 | $ | 2,712,872 |
For the Three Months Ended March 31, 2021 | For the Three Months Ended March 31, 2020 | |||||||||||||||||||||||||||||||
(in thousands) | EFT Processing | epay | Money Transfer | Total | EFT Processing | epay | Money Transfer | Total | ||||||||||||||||||||||||
Europe | $ | 46,862 | $ | 164,908 | $ | 132,839 | $ | 344,609 | $ | 99,474 | $ | 115,277 | $ | 91,058 | $ | 305,809 | ||||||||||||||||
North America | 14,466 | 33,841 | 152,302 | 200,609 | 15,019 | 33,852 | 137,895 | 186,766 | ||||||||||||||||||||||||
Asia Pacific | 25,694 | 34,318 | 28,469 | 88,481 | 31,328 | 19,274 | 30,848 | 81,450 | ||||||||||||||||||||||||
Other | 54 | 9,236 | 11,290 | 20,580 | 4 | 4,508 | 6,433 | 10,945 | ||||||||||||||||||||||||
Eliminations | 0— | 0— | 0— | (1,609 | ) | 0— | 0— | 0— | (1,063) | |||||||||||||||||||||||
Total | $ | 87,076 | $ | 242,303 | $ | 324,900 | $ | 652,670 | $ | 145,825 | $ | 172,911 | $ | 266,234 | $ | 583,907 |
(14) COMMITMENTS
|
The Company enters into operating leases for ATM sites, office spaces, retail stores and equipment. The Company's finance leases are immaterial. Right of use assets and lease liabilities are recognized at the lease commencement date based on the present value of the lease payments over the lease terms.
The present value of lease payments is determined using the incremental borrowing rate based on information available at the lease commencement date. The Company recognizes lease expense for these leases on a straight-line basis over the lease term.
Most leases include an option to renew, with renewal terms that can extend the lease terms. The exercise of lease renewal options is at the Company’s sole discretion. The depreciable life of assets and leasehold improvements are limited by the expected lease terms. The Company also has a unilateral termination right for most of the ATM site leases. Since the Company is not reasonably certain not to exercise termination options, payments for ATM site leases with termination options subject to the short-term lease exemption are expensed in the period incurred and corresponding leases are excluded from the right of use lease asset and lease liability balances. Certain of the Company's lease agreements include variable rental payments based on revenues generated from the use of the leased location and certain leases include rental payments adjusted periodically for inflation. Variable lease payments are recognized when the event, activity or circumstance in the lease agreement on which those payments are assessed occurs and are excluded from the right of use assets and lease liabilities balances. The lease agreements do not contain any material residual value guarantees or material restrictive covenants.
As of March 31, 2021 | |||
Maturity of Lease Liabilities (in thousands) | Operating Leases (1) | ||
Remainder of 2021 | $ | 35,443 | |
2022 | 40,777 | ||
2023 | 30,483 | ||
2024 | 21,829 | ||
2025 | 15,220 | ||
Thereafter | 33,594 | ||
Total lease payments | $ | 177,346 | |
Less: imputed interest | (5,625 | ) | |
Present value of lease liabilities | $ | 171,721 |
(1)Operating lease payments reflect the Company's current fixed obligations under the operating lease agreements. Certain ATM site leases contain termination options that grant the Company the option to terminate the lease prior to the stated term of the agreement. The Company includes the future minimum lease payments for these ATM site leases only to the extent that the termination option is not reasonably certain to be exercised.
Lease Expense (in thousands) | Income Statement Classification | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | ||||
Operating lease expense | Selling, general and administrative and Direct operating costs | $ | 13,858 | $ | 33,188 | ||
Short-term and variable lease expense | Selling, general and administrative and Direct operating costs | 22,549 | 8,680 | ||||
Total lease expense | $ | 36,407 | $ | 41,868 |
Lease Term and Discount Rate of Operating Leases | As of March 31, 2021 | ||
Weighted- average remaining lease term (years) | 5.3 | ||
Weighted- average discount rate | 2.2 | % |
Other Information (in thousands) | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | |||||
Cash paid for amounts included in the measurement of lease liabilities (a) | $ | 13,669 | $ | 32,792 | |||
Supplemental non-cash information on lease liabilities arising from obtaining ROU assets: | |||||||
ROU assets obtained in exchange for new operating lease liabilities | $ | 28,188 | $ | 50,525 |
COVID-19
The outbreak of the COVID-19 (coronavirus) pandemic has resulted in varying degrees of border and business closures, travel restrictions and other social distancing orders in most of the countries where we operate during the first quarter of 2021. These types of orders were first put into effect in late February 2020 or early March 2020. As the number and rate of new cases has fluctuated in various locations around the global, the closures, restrictions and other social distancing orders have been modified, rescinded and/or re-imposed. Some version of these orders remains in almost every location in which we operate. Although vaccines for COVID-19 are becoming widely available in the U.S. and parts of Europe, their availability is still limited in many parts of the world where we operate. In addition, the rate of acceptance and long term effectiveness of the vaccines, especially against new variants, are still unknown. The EFT Segment has experienced declines in certain transaction volumes due to these restrictions, especially high-margin cross-border transactions. The epay Segment has experienced the impacts of consumer movement restrictions in certain markets, while other markets have been positively impacted where we have a higher mix of digital distribution or a higher concentration of retailers that are deemed essential and have remained open during the pandemic. The Money Transfer Segment continues to be impacted by the pandemic related restrictions in certain markets hat limit customers' ability to access our network of company owned stores and agents.
In response to the COVID-19 pandemic driven impacts, we implemented several key measures to offset the impact across the business, including renegotiating certain third party contracts, reducing travel, decreasing capital expenditures, and expanding ATM seasonal deactivations (placing them in dormancy status, terminating, or re-negotiating) in more sites and more markets.
Revenues for the Three Months Ended March 31, | Year-over-Year Change | ||||||||||||||
(dollar amounts in thousands) | 2021 | 2020 | Increase (Decrease) Amount | Increase (Decrease) Percent | |||||||||||
EFT Processing | $ | 87,076 | $ | 145,825 | $ | (58,749 | ) | (40) | % | ||||||
epay | 242,303 | 172,911 | 69,392 | 40 | % | ||||||||||
Money Transfer | 324,900 | 266,234 | 58,666 | 22 | % | ||||||||||
Total | 654,279 | 584,970 | 69,309 | 12 | % | ||||||||||
Corporate services, eliminations and other | (1,609 | ) | (1,063 | ) | (546 | ) | 51 | % | |||||||
Total | $ | 652,670 | $ | 583,907 | $ | 68,763 | 12 | % |
Revenues for the Three Months Ended September 30, | Year-over-Year Change | Revenues for the Nine Months Ended September 30, | Year-over-Year Change | |||||||||||||||||||||||||||
(dollar amounts in thousands) | 2017 | 2016 | Increase (Decrease) Amount | Increase Percent | 2017 | 2016 | Increase (Decrease) Amount | Increase Percent | ||||||||||||||||||||||
EFT Processing | $ | 226,321 | $ | 152,586 | $ | 73,735 | 48 | % | $ | 488,030 | $ | 354,282 | $ | 133,748 | 38 | % | ||||||||||||||
epay | 184,234 | 167,226 | 17,008 | 10 | % | 512,531 | 497,945 | 14,586 | 3 | % | ||||||||||||||||||||
Money Transfer | 228,105 | 204,611 | 23,494 | 11 | % | 649,205 | 587,664 | 61,541 | 10 | % | ||||||||||||||||||||
Total | 638,660 | 524,423 | 114,237 | 22 | % | 1,649,766 | 1,439,891 | 209,875 | 15 | % | ||||||||||||||||||||
Corporate services, eliminations and other | (826 | ) | (398 | ) | (428 | ) | 108 | % | (1,989 | ) | (1,105 | ) | (884 | ) | 80 | % | ||||||||||||||
Total | $ | 637,834 | $ | 524,025 | $ | 113,809 | 22 | % | $ | 1,647,777 | $ | 1,438,786 | $ | 208,991 | 15 | % |
Operating Income (Expense) for the Three Months Ended September 30, | Year-over-Year Change | Operating Income (Expense) for the Nine Months Ended September 30, | Year-over-Year Change | Operating Income (Loss) for the Three Months Ended March 31, | Year-over-Year Change | ||||||||||||||||||||||||||||||||||||||||
(dollar amounts in thousands) | 2017 | 2016 | Increase (Decrease)Amount | Increase (Decrease) Percent | 2017 | 2016 | Increase (Decrease)Amount | Increase (Decrease) Percent | 2021 | 2020 | Increase (Decrease) Amount | Increase (Decrease) Percent | |||||||||||||||||||||||||||||||||
EFT Processing | $ | 86,797 | $ | 59,438 | $ | 27,359 | 46 | % | $ | 137,090 | $ | 100,596 | $ | 36,494 | 36 | % | $ | (40,096 | ) | $ | 4,935 | $ | (45,031 | ) | (912) | % | |||||||||||||||||||
epay | 15,650 | 14,795 | 855 | 6 | % | 44,361 | 46,681 | (2,320 | ) | (5 | )% | 29,157 | 16,458 | 12,699 | 77 | % | |||||||||||||||||||||||||||||
Money Transfer | 24,356 | 25,183 | (827 | ) | (3 | )% | 75,355 | 72,578 | 2,777 | 4 | % | 35,403 | 22,308 | 13,095 | 59 | % | |||||||||||||||||||||||||||||
Total | 126,803 | 99,416 | 27,387 | 28 | % | 256,806 | 219,855 | 36,951 | 17 | % | 24,464 | 43,701 | (19,237 | ) | (44) | % | |||||||||||||||||||||||||||||
Corporate services, eliminations and other | (9,902 | ) | (8,948 | ) | (954 | ) | 11 | % | (31,928 | ) | (28,188 | ) | (3,740 | ) | 13 | % | (14,015 | ) | (12,099 | ) | (1,916 | ) | 16 | % | |||||||||||||||||||||
Total | $ | 116,901 | $ | 90,468 | $ | 26,433 | 29 | % | $ | 224,878 | $ | 191,667 | $ | 33,211 | 17 | % | $ | 10,449 | $ | 31,602 | $ | (21,153 | ) | (67) | % |
Average Translation Rate Three Months Ended September 30, | Increase (Decrease) Percent | Average Translation Rate Nine Months Ended September 30, | Increase (Decrease) Percent | Average Translation Rate Three Months Ended March 31, | |||||||||||||||||||||||||||||
Currency (dollars per foreign currency) | 2017 | 2016 | 2017 | 2016 | 2021 | 2020 | Increase Percent | ||||||||||||||||||||||||||
Australian dollar | $ | 0.7896 | $ | 0.7577 | 4 | % | $ | 0.7661 | $ | 0.7418 | 3 | % | $ | 0.7725 | $ | 0.6144 | 26 | % | |||||||||||||||
British pound | $ | 1.3091 | $ | 1.3125 | — | % | $ | 1.2756 | $ | 1.3931 | (8 | )% | |||||||||||||||||||||
British pounds sterling | $ | 1.3790 | $ | 1.2405 | 11 | % | |||||||||||||||||||||||||||
euro | $ | 1.1754 | $ | 1.1156 | 5 | % | $ | 1.1136 | $ | 1.1162 | — | % | $ | 1.2052 | $ | 1.1026 | 9 | % | |||||||||||||||
Hungarian forint | $ | 0.0038 | $ | 0.0036 | 6 | % | $ | 0.0036 | $ | 0.0036 | — | % | $ | 0.0033 | $ | 0.0031 | 6 | % | |||||||||||||||
Indian rupee | $ | 0.0156 | $ | 0.0149 | 5 | % | $ | 0.0153 | $ | 0.0149 | 3 | % | $ | 0.0137 | $ | 0.0133 | 3 | % | |||||||||||||||
Malaysian ringgit | $ | 0.2347 | $ | 0.2472 | (5 | )% | $ | 0.2302 | $ | 0.2452 | (6 | )% | $ | 0.2461 | $ | 0.2319 | 6 | % | |||||||||||||||
New Zealand dollar | $ | 0.7309 | $ | 0.7221 | 1 | % | $ | 0.7156 | $ | 0.6922 | 3 | % | $ | 0.7188 | $ | 0.5966 | 20 | % | |||||||||||||||
Polish zloty | $ | 0.2762 | $ | 0.2573 | 7 | % | $ | 0.2613 | $ | 0.2563 | 2 | % | $ | 0.2655 | $ | 0.2418 | 10 | % |
Three Months Ended September 30, | Year-over-Year Change | Nine Months Ended September 30, | Year-over-Year Change | |||||||||||||||||||||||||||
(dollar amounts in thousands) | 2017 | 2016 | Increase Amount | Increase Percent | 2017 | 2016 | Increase Amount | Increase Percent | ||||||||||||||||||||||
Total revenues | $ | 226,321 | $ | 152,586 | $ | 73,735 | 48 | % | $ | 488,030 | $ | 354,282 | $ | 133,748 | 38 | % | ||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||
Direct operating costs | 99,024 | 62,401 | 36,623 | 59 | % | 238,753 | 165,520 | 73,233 | 44 | % | ||||||||||||||||||||
Salaries and benefits | 16,817 | 12,954 | 3,863 | 30 | % | 46,125 | 37,601 | 8,524 | 23 | % | ||||||||||||||||||||
Selling, general and administrative | 8,878 | 7,642 | 1,236 | 16 | % | 23,960 | 22,154 | 1,806 | 8 | % | ||||||||||||||||||||
Acquired intangible assets impairment | — | — | — | n/m | 2,286 | — | 2,286 | n/m | ||||||||||||||||||||||
Depreciation and amortization | 14,805 | 10,151 | 4,654 | 46 | % | 39,816 | 28,411 | 11,405 | 40 | % | ||||||||||||||||||||
Total operating expenses | 139,524 | 93,148 | 46,376 | 50 | % | 350,940 | 253,686 | 97,254 | 38 | % | ||||||||||||||||||||
Operating income | $ | 86,797 | $ | 59,438 | $ | 27,359 | 46 | % | $ | 137,090 | $ | 100,596 | $ | 36,494 | 36 | % | ||||||||||||||
Transactions processed (millions) | 615 | 488 | 127 | 26 | % | 1,726 | 1,370 | 356 | 26 | % | ||||||||||||||||||||
ATMs as of September 30, | 38,105 | 29,276 | 8,829 | 30 | % | 38,105 | 29,276 | 8,829 | 30 | % | ||||||||||||||||||||
Average ATMs | 38,123 | 27,350 | 10,773 | 39 | % | 36,524 | 25,802 | 10,722 | 42 | % |
Three Months Ended March 31, | Year-over-Year Change | ||||||||||||||
(dollar amounts in thousands) | 2021 | 2020 | Increase (Decrease) Amount | Increase (Decrease) Percent | |||||||||||
Total revenues | $ | 87,076 | $ | 145,825 | $ | (58,749 | ) | (40) | % | ||||||
Operating expenses: | |||||||||||||||
Direct operating costs | 69,612 | 87,536 | (17,924 | ) | (20) | % | |||||||||
Salaries and benefits | 23,571 | 22,091 | 1,480 | 7 | % | ||||||||||
Selling, general and administrative | 11,962 | 10,941 | 1,021 | 9 | % | ||||||||||
Depreciation and amortization | 22,027 | 20,322 | 1,705 | 8 | % | ||||||||||
Total operating expenses | 127,172 | 140,890 | (13,718 | ) | (10) | % | |||||||||
Operating (loss) income | $ | (40,096 | ) | $ | 4,935 | $ | (45,031 | ) | (912) | % | |||||
Transactions processed (millions) | 925 | 785 | 140 | 18 | % | ||||||||||
ATMs as of March 31, | 36,777 | 42,176 | (5,399 | ) | (13) | % | |||||||||
Average Active ATMs | 36,624 | 44,813 | (8,189 | ) | (18) | % |
Three Months Ended September 30, | Year-over-Year Change | Nine Months Ended September 30, | Year-over-Year Change | |||||||||||||||||||||||||||
(dollar amounts in thousands) | 2017 | 2016 | Increase (Decrease) Amount | Increase (Decrease) Percent | 2017 | 2016 | Increase (Decrease)Amount | Increase (Decrease)Percent | ||||||||||||||||||||||
Total revenues | $ | 184,234 | $ | 167,226 | $ | 17,008 | 10 | % | $ | 512,531 | $ | 497,945 | $ | 14,586 | 3 | % | ||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||
Direct operating costs | 143,023 | 128,212 | 14,811 | 12 | % | 393,269 | 379,423 | 13,846 | 4 | % | ||||||||||||||||||||
Salaries and benefits | 13,955 | 13,352 | 603 | 5 | % | 39,606 | 38,052 | 1,554 | 4 | % | ||||||||||||||||||||
Selling, general and administrative | 9,145 | 8,133 | 1,012 | 12 | % | 27,628 | 25,291 | 2,337 | 9 | % | ||||||||||||||||||||
Depreciation and amortization | 2,461 | 2,734 | (273 | ) | (10 | )% | 7,667 | 8,498 | (831 | ) | (10 | )% | ||||||||||||||||||
Total operating expenses | 168,584 | 152,431 | 16,153 | 11 | % | 468,170 | 451,264 | 16,906 | 4 | % | ||||||||||||||||||||
Operating income | $ | 15,650 | $ | 14,795 | $ | 855 | 6 | % | $ | 44,361 | $ | 46,681 | $ | (2,320 | ) | (5 | )% | |||||||||||||
Transactions processed (millions) | 293 | 314 | (21 | ) | (7 | )% | 901 | 949 | (48 | ) | (5 | )% |
Three Months Ended March 31, | Year-over-Year Change | ||||||||||||||
(dollar amounts in thousands) | 2021 | 2020 | Increase (Decrease) Amount | Increase (Decrease) Percent | |||||||||||
Total revenues | $ | 242,303 | $ | 172,911 | $ | 69,392 | 40 | % | |||||||
Operating expenses: | |||||||||||||||
Direct operating costs | 182,633 | 130,074 | 52,559 | 40 | % | ||||||||||
Salaries and benefits | 19,369 | 15,697 | 3,672 | 23 | % | ||||||||||
Selling, general and administrative | 9,020 | 8,838 | 182 | 2 | % | ||||||||||
Depreciation and amortization | 2,124 | 1,844 | 280 | 15 | % | ||||||||||
Total operating expenses | 213,146 | 156,453 | 56,693 | 36 | % | ||||||||||
Operating income | $ | 29,157 | $ | 16,458 | $ | 12,699 | 77 | % | |||||||
Transactions processed (millions) | 667 | 447 | 220 | 49 | % |
Three Months Ended September 30, | Year-over-Year Change | Nine Months Ended September 30, | Year-over-Year Change | |||||||||||||||||||||||||||
(dollar amounts in thousands) | 2017 | 2016 | Increase (Decrease) Amount | Increase (Decrease) Percent | 2017 | 2016 | Increase Amount | Increase Percent | ||||||||||||||||||||||
Total revenues | $ | 228,105 | $ | 204,611 | $ | 23,494 | 11 | % | $ | 649,205 | $ | 587,664 | $ | 61,541 | 10 | % | ||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||
Direct operating costs | 123,588 | 109,944 | 13,644 | 12 | % | 348,724 | 309,706 | 39,018 | 13 | % | ||||||||||||||||||||
Salaries and benefits | 44,110 | 38,365 | 5,745 | 15 | % | 125,273 | 114,582 | 10,691 | 9 | % | ||||||||||||||||||||
Selling, general and administrative | 28,648 | 23,924 | 4,724 | 20 | % | 77,912 | 68,930 | 8,982 | 13 | % | ||||||||||||||||||||
Depreciation and amortization | 7,403 | 7,195 | 208 | 3 | % | 21,941 | 21,868 | 73 | — | % | ||||||||||||||||||||
Total operating expenses | 203,749 | 179,428 | 24,321 | 14 | % | 573,850 | 515,086 | 58,764 | 11 | % | ||||||||||||||||||||
Operating income | $ | 24,356 | $ | 25,183 | $ | (827 | ) | (3 | )% | $ | 75,355 | $ | 72,578 | $ | 2,777 | 4 | % | |||||||||||||
Transactions processed (millions) | 23.9 | 21.3 | 2.6 | 12 | % | 67.4 | 60.5 | 6.9 | 11 | % |
Three Months Ended March 31, | Year-over-Year Change | ||||||||||||||
(dollar amounts in thousands) | 2021 | 2020 | Increase (Decrease) Amount | Increase (Decrease) Percent | |||||||||||
Total revenues | $ | 324,900 | $ | 266,234 | $ | 58,666 | 22 | % | |||||||
Operating expenses: | |||||||||||||||
Direct operating costs | 183,878 | 142,909 | 40,969 | 29 | % | ||||||||||
Salaries and benefits | 60,540 | 53,864 | 6,676 | 12 | % | ||||||||||
Selling, general and administrative | 36,116 | 38,582 | (2,466 | ) | (6) | % | |||||||||
Depreciation and amortization | 8,963 | 8,571 | 392 | 5 | % | ||||||||||
Total operating expenses | 289,497 | 243,926 | 45,571 | 19 | % | ||||||||||
Operating income | $ | 35,403 | $ | 22,308 | $ | 13,095 | 59 | % | |||||||
Transactions processed (millions) | 31.2 | 27.4 | 3.8 | 14 | % |
Three Months Ended September 30, | Year-over-Year Change | Nine Months Ended September 30, | Year-over-Year Change | Three Months Ended March 31, | Year-over-Year Change | ||||||||||||||||||||||||||||||||||||||||
(dollar amounts in thousands) | 2017 | 2016 | Increase (Decrease) Amount | Increase (Decrease) Percent | 2017 | 2016 | Increase (Decrease) Amount | Increase (Decrease) Percent | 2021 | 2020 | Increase (Decrease) Amount | Increase (Decrease) Percent | |||||||||||||||||||||||||||||||||
Salaries and benefits | $ | 7,252 | $ | 7,228 | $ | 24 | — | % | $ | 21,613 | $ | 22,739 | $ | (1,126 | ) | (5 | )% | $ | 12,188 | $ | 9,588 | $ | 2,600 | 27 | % | ||||||||||||||||||||
Selling, general and administrative | 2,614 | 1,680 | 934 | 56 | % | 10,219 | 5,303 | 4,916 | 93 | % | 1,680 | 2,432 | (752 | ) | (31) | % | |||||||||||||||||||||||||||||
Depreciation and amortization | 36 | 40 | (4 | ) | (10 | )% | 96 | 146 | (50 | ) | (34 | )% | 147 | 79 | 68 | 86 | % | ||||||||||||||||||||||||||||
Total operating expenses | $ | 9,902 | $ | 8,948 | $ | 954 | 11 | % | $ | 31,928 | $ | 28,188 | $ | 3,740 | 13 | % | $ | 14,015 | $ | 12,099 | $ | 1,916 | 16 | % |
Three Months Ended September 30, | Year-over-Year Change | Nine Months Ended September 30, | Year-over-Year Change | |||||||||||||||||||||||||||
(dollar amounts in thousands) | 2017 | 2016 | Increase (Decrease) Amount | Increase (Decrease) Percent | 2017 | 2016 | Increase (Decrease) Amount | Increase (Decrease) Percent | ||||||||||||||||||||||
Interest income | $ | 380 | $ | 349 | $ | 31 | 9 | % | 2,009 | 1,244 | 765 | 61 | % | |||||||||||||||||
Interest expense | (9,534 | ) | (7,724 | ) | (1,810 | ) | 23 | % | (25,058 | ) | (20,968 | ) | (4,090 | ) | 20 | % | ||||||||||||||
Foreign currency exchange gain (loss), net | 8,179 | (1,527 | ) | 9,706 | n/m | 21,035 | (1,299 | ) | 22,334 | n/m | ||||||||||||||||||||
Other gains | — | — | — | n/m | 35 | 19,903 | (19,868 | ) | n/m | |||||||||||||||||||||
Other expense, net | $ | (975 | ) | $ | (8,902 | ) | $ | 7,927 | (89 | )% | $ | (1,979 | ) | $ | (1,120 | ) | $ | (859 | ) | 77 | % |
Three Months Ended March 31, | Year-over-Year Change | ||||||||||||||
(dollar amounts in thousands) | 2021 | 2020 | Increase (Decrease) Amount | Increase (Decrease) Percent | |||||||||||
Interest income | $ | 182 | $ | 567 | $ | (385 | ) | (68) | % | ||||||
Interest expense | (9,189 | ) | (9,233 | ) | 44 | (0) | % | ||||||||
Foreign currency exchange loss, net | (4,032 | ) | (18,806 | ) | 14,774 | (79) | % | ||||||||
Other gains, net | 31 | 31 | — | 0 | % | ||||||||||
Other expense, net | $ | (13,008 | ) | $ | (27,441 | ) | $ | 14,433 | (53) | % |
Subsidiary | Percent Owned | Segment - Country | ||
Movilcarga | 95% | epay - Spain | ||
Euronet China | 85% | EFT - China | ||
Euronet Pakistan | 70% | EFT - Pakistan | ||
EFT - |
Nine Months Ended September 30, | Three Months Ended March 31, | |||||||||||||
Liquidity | 2017 | 2016 | 2021 | 2020 | ||||||||||
Cash and cash equivalents provided by (used in): | ||||||||||||||
Cash and cash equivalents and restricted cash provided by (used in): | ||||||||||||||
Operating activities | $ | 230,496 | $ | 217,491 | $ | (2,645 | ) | $ | 105,884 | |||||
Investing activities | (74,023 | ) | (55,581 | ) | (18,225 | ) | (31,606 | ) | ||||||
Financing activities | 126,615 | 31,234 | (269,211 | ) | (242,644 | ) | ||||||||
Effect of foreign currency exchange rate changes on cash and cash equivalents | 44,739 | 10,634 | ||||||||||||
Increase in cash and cash equivalents | $ | 327,827 | $ | 203,778 | ||||||||||
Effect of foreign currency exchange rate changes on cash and cash equivalents and restricted cash | (53,188 | ) | (59,260 | ) | ||||||||||
Decrease in cash and cash equivalents and restricted cash | $ | (343,269 | ) | $ | (227,626 | ) |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Dollar Value of Shares that May Yet Be Purchased Under the Programs (in thousands) (1) | ||||||||||
January 1 - January 31, 2021 | — | $ | — | — | $ | 259,362 | ||||||||
February 1 - February 28, 2021 | — | — | — | 259,362 | ||||||||||
March 1 - March 31, 2021 | — | — | — | $ | 250,000 | |||||||||
Total | — | $ | — | — |
Exhibit | Description | |
31.1* | ||
31.2* | ||
32.1** | ||
32.2** | ||
101* | The following materials from Euronet Worldwide, Inc.’s Quarterly Report on Form 10-Q for the quarter ended | |
104* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
By: | /s/ MICHAEL J. BROWN | |
Michael J. Brown | ||
Chief Executive Officer | ||
By: | /s/ RICK L. WELLER | |
Rick L. Weller | ||
43 |