News

Euronet's earnings improve for '03 despite drop in 4Q

February 25, 2004

LEAWOOD, Kan. - A foreign exchange loss drove Euronet Worldwide Inc.'s (Nasdaq: EEFT) fourth-quarter loss, but acquisitions boosted the company's revenue for the quarter and its earnings and revenue for 2003.

For the quarter that ended Dec. 31, Euronet posted a loss of more than $2.2 million, or 8 cents a share, compared with a loss of more than $2.8 million, or 12 cents a share, a year earlier.

Excluding the foreign exchange loss, earnings were $2.4 million, or 8 cents a share. Thomson First Call analysts' consensus estimate, excluding the one-time charge, was 7 cents a share.

Revenue for the quarter totaled more than $70.1 million, up almost fourfold from about $18.6 million in 2002's fourth quarter.

For the year, the company reported earnings of almost $11.8 million, or 41 cents a share, compared with a loss of more than $6.5 million, or 28 cents a share, in 2002. Excluding one-time items, earnings were $3.6 million, or 13 cents a share.

Analysts' consensus estimate, excluding one-time items, was 10 cents a share.

Revenue for the year totaled more than $204.4 million, up from more than $71 million in 2002.

The EFT Processing Segment reported annual revenues for 2003 of $52.8 million, a decrease of $1.1 million over 2002 revenues of $53.9 million. Adjusted EBITDA for the EFT Processing Segment for the year 2003 was $13.9 million, compared to $13.4 million for 2002. Operating income for the year 2003 was $6.6 million, compared to $4.8 million for 2002.

The year-over-year revenue decrease was attributable to the January 2003 sale of the Segment's UK ATM network, which was nearly offset by growth in the EFT Processing Segment. If the effects of the U.K. ATM network sale and related outsourcing agreement were excluded from 2002, 2003's revenues and adjusted EBITDA increased by $11.9 million and $3.3 million, respectively. (See related story Euronet sells UK ATM business)

The year-over-year increases in operating income and adjusted EBITDA were largely attributable to a 45 percent increase in transactions processed, an 11 percent increase in ATMs under management and expense control management, which more than offset the $900,000 in 2002 operating income related to the U.K. ATM Network operations sold in January 2003.

The EFT Processing Segment processed 114.7 million transactions in 2003, compared to 79.2 million transactions in 2002. The segment completed the year with 3,350 ATMs owned and/or operated, compared to 3,005 ATMs at the end of 2002. Euronet owns and/or operates ATMs in Hungary, Poland, Germany, Croatia, the Czech Republic, the UK, Greece, Kosovo, Slovakia, Romania, Egypt and India.

The Prepaid Processing Segment, established in February 2003 with the acquisition of e-pay Limited, reported 2003 revenues of $136.2 million, adjusted EBITDA of $15.6 million and operating income of $11.9 million. (See related story Euronet expands prepaid business with acquisition of UK processor)

The Software Solutions Segment reported annual revenues of $15.5 million in 2003, compared to revenues of $17.1 million in 2002. The Corporate and Other Segment had $6.7 million of expenses for 2003, compared to $5.6 million for 2002.