STRATEGIC PARTNERS
March 7, 2002
LEAWOOD, Kan. -- Euronet Services Inc.(Nasdaq: EEFT) reported record revenues of $14 million for the third quarter of 2000, an increase of 18 percent over third quarter 1999 revenues of $11.8 million. Euronet's third quarter revenues also represent an increase of 9 percent, or $1.1 million, over second quarter 2000 revenues of $12.9 million.
Euronet's 2000 year-to-date revenues of $38.9 million compare with 1999 year-to-date revenues of $30.7 million, representing a 27 percent improvement.
The Network Services Division posted a strong performance with third quarter revenues of $9.6 million, up 36 percent over revenues of $7 million for the same period of 1999. This represents an 8 percent increase over second quarter 2000 revenues of $8.9 million. The Software Division's third quarter revenues increased by 12 percent over the second quarter, from $4 million to $4.5 million.
The operating results include a number of non-recurring items that reflect a shift in emphasis from a divisional structure to an integrated model focused on electronic financial transaction processing. These items, which total a net $10.8 million, are reported as operating expenses and include an $11.2 million write-down of intangible assets associated with the December 1998 acquisition of Arkansas Systems, Inc. ("Arksys") and a write-down of approximately $800,000 of ATM assets acquired in 1999 and 2000 in two independent network purchases. A non-recurring gain of approximately $1.2 million has been recorded as a component of direct operating costs as the result of a change in importation regulations in Hungary.
The operating loss for the quarter was $16.9 million ( if adjusted to exclude the above-mentioned non-recurring items, this figure would be $6.1 million), as compared to $5.6 million in third quarter 1999 and $6.3 million in second quarter 2000. Negative EBITDA adjusted for non-recurring items was $3.5 million, as compared to negative $3.1 million in Q3 1999 and negative $3.6 million in Q2 2000. The company's net loss was $15.8 million for the third quarter of 2000, as compared to $10.5 million in Q2 2000 and $9.9 million in Q3 1999.
The number of ATMs owned or operated by Euronet Services increased by 42 percent over the past year, from 1,817 ATMs at Sept. 30, 1999 to 2,573 ATMs at the end of this quarter. Quarterly transactions on the network increased by 47 percent, from 9.4 million in Q3 1999 to 13.8 million in Q3 2000. Transactions for the year to date Sept. 30, 2000 have already exceeded full year 1999.
The Software Division's sales backlog has increased to $3.7 million compared to $3.4 million at June 30, 2000 (which compares to a backlog of $2.6 million as of Sept. 30, 1999), Euronet foresees softer recognized revenue from this division for the fourth quarter of 2000. "We have found that software sales in our customer sectors are cyclical and generally slow down during the fourth quarter," said Brown. "Our outsourcing service solutions revenues should help mitigate the effect of these softer sales during this period."
Euronet Services will host an analyst conference call on Oct. 31 at 10 a.m. US Eastern Standard time to further discuss these results. The conference call will be broadcast on the Internet, and can be accessed at http://www.vcall.com
