UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE |
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2003
OR
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE |
SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 000-22167
EURONET WORLDWIDE, INC.
(Exact name of the registrant as specified in its charter)
| Delaware |
74-2806888 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. employer identification no.) |
4601 COLLEGE BOULEVARD, SUITE 300
LEAWOOD, KANSAS 66211
(Address of principal executive offices)
(913) 327-4200
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES x No ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨
APPLICABLE ONLY TO CORPORATE ISSUERS:
As of April 30, 2003, the Company had 26,522,966 common shares outstanding.
PART 1—FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
EURONET WORLDWIDE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. dollars, except for share and per share data)
(Unaudited)
| As of |
||||||||
| March 31, 2003 |
December 31, 2002 |
|||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ |
13,930 |
|
$ |
12,021 |
| ||
| Restricted cash and cash held on behalf of others |
|
38,048 |
|
|
4,401 |
| ||
| Trade accounts receivable, net of allowances for doubtful accounts of $1,073 at March 31, 2003 and $484 at December 31, 2002 |
|
36,184 |
|
|
8,380 |
| ||
| Earnings in excess of billings on software installation contracts |
|
763 |
|
|
334 |
| ||
| Deferred income taxes |
|
1,479 |
|
|
426 |
| ||
| Assets held for sale |
|
— |
|
|
10,326 |
| ||
| Prepaid expenses and other current assets |
|
7,000 |
|
|
3,537 |
| ||
| Total current assets |
|
97,404 |
|
|
39,425 |
| ||
| Property, plant and equipment, net |
|
21,260 |
|
|
21,394 |
| ||
| Intangible assets, net |
|
80,128 |
|
|
1,834 |
| ||
| Deferred income taxes |
|
209 |
|
|
1,064 |
| ||
| Other assets, net |
|
2,992 |
|
|
2,842 |
| ||
| Total assets |
$ |
201,993 |
|
$ |
66,559 |
| ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Trade accounts payable |
$ |
50,574 |
|
$ |
2,989 |
| ||
| Current installments of obligations under capital leases |
|
2,888 |
|
|
3,447 |
| ||
| Accrued expenses and other current liabilities |
|
27,004 |
|
|
4,979 |
| ||
| Short-term borrowings |
|
502 |
|
|
380 |
| ||
| Advance payments on contracts |
|
3,033 |
|
|
2,966 |
| ||
| Accrued interest on notes payable |
|
1,372 |
|
|
— |
| ||
| Liabilities held for sale |
|
— |
|
|
3,537 |
| ||
| Billings in excess of earnings on software installation contracts |
|
1,787 |
|
|
1,471 |
| ||
| Total current liabilities |
|
87,160 |
|
|
19,769 |
| ||
| Obligations under capital leases, excluding current installments |
|
3,469 |
|
|
4,301 |
| ||
| Notes payable |
|
64,016 |
|
|
36,318 |
| ||
| Other long term liabilities |
|
7,204 |
|
|
— |
| ||
| Total liabilities |
|
161,849 |
|
|
60,388 |
| ||
| Stockholders’ equity: |
||||||||
| Common stock, $0.02 par value. Authorized 60,000,000 shares; issued and outstanding 26,518,966 shares at March 31, 2003 and 23,883,072 shares at December 31, 2002 |
|
532 |
|
|
480 |
| ||
| Additional paid in capital |
|
155,956 |
|
|
137,426 |
| ||
| Treasury stock |
|
(145 |
) |
|
(145 |
) | ||
| Employee loans for stock |
|
(427 |
) |
|
(427 |
) | ||
| Subscription receivable |
|
(35 |
) |
|
42 |
| ||
| Accumulated deficit |
|
(114,234 |
) |
|
(129,655 |
) | ||
| Restricted reserve |
|
784 |
|
|
784 |
| ||
| Accumulated other comprehensive loss |
|
(2,287 |
) |
|
(2,334 |
) | ||
| Total stockholders’ equity |
|
40,144 |
|
|
6,171 |
| ||
| Total liabilities and stockholders’ equity |
$ |
201,993 |
|
$ |
66,559 |
| ||
See accompanying notes to unaudited consolidated financial statements.
2
EURONET WORLDWIDE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(In thousands of U.S. dollars, except share and per share data)
(Unaudited)
| Three months ended March 31, |
||||||||
| 2003 |
2002 |
|||||||
| Revenues: |
||||||||
| EFT processing services |
$ |
11,889 |
|
$ |
12,177 |
| ||
| Prepaid processing services |
|
17,372 |
|
|
— |
| ||
| Software and related services |
|
3,839 |
|
|
4,863 |
| ||
| Total |
|
33,100 |
|
|
17,040 |
| ||
| Operating expenses: |
||||||||
| Direct operating costs |
|
20,005 |
|
|
7,006 |
| ||
| Salaries and benefits |
|
6,875 |
|
|
6,078 |
| ||
| Selling, general and administrative |
|
2,313 |
|
|
1,501 |
| ||
| Depreciation and amortization |
|
2,756 |
|
|
2,309 |
| ||
| Total operating expenses |
|
31,949 |
|
|
16,894 |
| ||
| Operating income |
|
1,151 |
|
|
146 |
| ||
| Other income/expenses: |
||||||||
| Interest income |
|
353 |
|
|
80 |
| ||
| Interest expense |
|
(1,607 |
) |
|
(1,654 |
) | ||
| Gain on sale of subsidiary |
|
18,001 |
|
|
— |
| ||
| Equity in income from investee companies |
|
37 |
|
|
— |
| ||
| Foreign exchange (loss)/gain, net |
|
(1,839 |
) |
|
412 |
| ||
| Total other income/(expense) |
|
14,945 |
|
|
(1,162 |
) | ||
| Income/(loss) from continuing operations before income taxes and minority interest |
|
16,096 |
|
|
(1,016 |
) | ||
| Income tax (expense)/benefit |
|
(675 |
) |
|
1,665 |
| ||
| Income from continuing operations before minority interest |
|
15,421 |
|
|
649 |
| ||
| Minority interest |
|
— |
|
|
26 |
| ||
| Income from continuing operations |
|
15,421 |
|
|
675 |
| ||
| Discontinued operations: |
||||||||
| Income from operations of discontinued U.S. and France components including gain on disposal of $4,845 for the three months ended March 31, 2002 |
|
— |
|
|
4,762 |
| ||
| Income tax expense |
|
— |
|
|
(1,857 |
) | ||
| Income from discontinued operations |
|
— |
|
|
2,905 |
| ||
| Net income |
|
15,421 |
|
|
3,580 |
| ||
| Translation adjustment |
|
47 |
|
|
(618 |
) | ||
| Comprehensive income |
$ |
15,468 |
|
$ |
2,962 |
| ||
| Income per share—basic |
||||||||
| Income from continuing operations per share |
$ |
0.61 |
|
$ |
0.03 |
| ||
| Income from discontinued operations per share |
|
— |
|
|
0.13 |
| ||
| Net income per share |
$ |
0.61 |
|
$ |
0.16 |
| ||
| Basic weighted average outstanding shares |
|
25,215,308 |
|
|
22,476,888 |
| ||
| Income per share—diluted |
||||||||
| Income from continuing operations per share |
$ |
0.57 |
|
$ |
0.03 |
| ||
| Income from discontinued operations per share |
|
— |
|
|
0.11 |
| ||
| Net income per share |
$ |
0.57 |
|
$ |
0.14 |
| ||