Euronet's Q4 and Full Year 99 Results Meet Expectations
Euronet's Q4 and Full Year 99 Results Meet Expectations
Euronet's Q4 and Full Year 99 Results Meet Expectations LEAWOOD, Kansas -- Euronet Services Inc. (Nasdaq: EEFT) announced record revenues of $41.5 million for 1999, an increase of 249% over 1998 revenues of $11.9 million. The operating loss was $26.8 million for 1999, up from a $22.6 million loss for 1998, while the net loss for 1999 was $30.9 million compared with a net loss of $28.4 million for 1998. The losses were in line with management's expectations for the development of the Company's software capabilities and further investment in its ATM network.
The Company has shown consistent improvement in its results over the past four quarters, led by the ATM network services division that produced a positive EBITDA of $400,000 for the fourth quarter. EBITDA results for the ATM network services division in the fourth quarter of 1999 improved by over $2.7 million compared with the first quarter of the year. Included in the fourth quarter operating results was a gain of $657,000 resulting from the sale of the Croatian network assets. This positive EBITDA result for the ATM network services division, however, was offset by expected losses in the software division due to weak fourth quarter revenues. The EBITDA loss for the software division was $2.1 million for the fourth quarter, and $3.4 million for the Company as a whole including the corporate division.
Michael J. Brown, Euronet's Chairman and CEO, said, "We are very pleased with this quarter's results. Reaching positive EBITDA for the ATM network during the fourth quarter is a major milestone in confirming the success of our business strategy. Our success has not been limited to a few countries -- all our mature operations are showing strong improvement in operating performance."
Software revenues for the fourth quarter were 45% lower than the previous quarter. Mr. Brown commented, "As we expected, we saw slower software sales in the third and fourth quarter of 1999 due primarily to the lead-up to the year 2000 which has negatively impacted fourth quarter recognized revenue in our software division. We expect this factor will negatively impact recognized revenue in the first quarter and into the second quarter of 2000. We have invested in the development of some exciting new e-commerce and m-commerce products that should enhance this division's performance as we move further into 2000. We also believe that these new products and enhancements of our existing core products will accelerate software sales in the first and second quarters."
Daniel C. Stevens, Euronet's Chief Financial Officer, added, "The most encouraging news about our results for the fourth quarter is that they reflect a continuing trend of improved operating performance. Even with a poor fourth quarter for our software division, we were able to hold EBITDA losses relatively flat from the third to the fourth quarter for the Company as a whole. This shows that our underlying business fundamentals are strong and that the expected upturn in software sales should be quickly reflected in improved operating results."
As of December 31, 1999 Euronet owned or operated a total of 2,283 ATMs, compared with 1,271 ATMs at the year-end 1998. Of the 2,283 ATMs, 69% are owned by Euronet as part of its proprietary network, and 31% are customer-owned and operated by Euronet under outsourcing agreements. Euronet owns or operates ATMs in Hungary, Poland, Germany, Croatia, the Czech Republic, France, the U.K., and the U.S.
Euronet Services Inc. is a leading provider of electronic financial solutions and transaction processing services. Euronet operates a network of over 2,200 ATMs in Europe and the U.S., and offers the Arksys software suite of integrated solutions for electronic payment and transaction delivery systems. With eight offices in Europe and three in the United States, Euronet Services offers ATM network development and participation, outsourced management solutions, comprehensive software solutions, and professional consulting services to retail banks and companies in more than 70 countries around the world.
Any statements contained in this news release that concern the Company's or management's intentions, expectations, or are 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: technological developments affecting the market for the Company's products and services; foreign exchange fluctuations; and changes in laws and regulations affecting the Company's business. These risks and other risks are described in the Company's periodic filings with the Securities and Exchange Commission, including but not limited to Euronet's Form 10-K for the period ended December 31, 1998, and Forms 10-Q for the periods ended March 31, 1999, June 30, 1999 and September 30, 1999. Copies of these filings may be obtained by contacting the Company or the SEC.
The Company has shown consistent improvement in its results over the past four quarters, led by the ATM network services division that produced a positive EBITDA of $400,000 for the fourth quarter. EBITDA results for the ATM network services division in the fourth quarter of 1999 improved by over $2.7 million compared with the first quarter of the year. Included in the fourth quarter operating results was a gain of $657,000 resulting from the sale of the Croatian network assets. This positive EBITDA result for the ATM network services division, however, was offset by expected losses in the software division due to weak fourth quarter revenues. The EBITDA loss for the software division was $2.1 million for the fourth quarter, and $3.4 million for the Company as a whole including the corporate division.
Michael J. Brown, Euronet's Chairman and CEO, said, "We are very pleased with this quarter's results. Reaching positive EBITDA for the ATM network during the fourth quarter is a major milestone in confirming the success of our business strategy. Our success has not been limited to a few countries -- all our mature operations are showing strong improvement in operating performance."
Software revenues for the fourth quarter were 45% lower than the previous quarter. Mr. Brown commented, "As we expected, we saw slower software sales in the third and fourth quarter of 1999 due primarily to the lead-up to the year 2000 which has negatively impacted fourth quarter recognized revenue in our software division. We expect this factor will negatively impact recognized revenue in the first quarter and into the second quarter of 2000. We have invested in the development of some exciting new e-commerce and m-commerce products that should enhance this division's performance as we move further into 2000. We also believe that these new products and enhancements of our existing core products will accelerate software sales in the first and second quarters."
Daniel C. Stevens, Euronet's Chief Financial Officer, added, "The most encouraging news about our results for the fourth quarter is that they reflect a continuing trend of improved operating performance. Even with a poor fourth quarter for our software division, we were able to hold EBITDA losses relatively flat from the third to the fourth quarter for the Company as a whole. This shows that our underlying business fundamentals are strong and that the expected upturn in software sales should be quickly reflected in improved operating results."
As of December 31, 1999 Euronet owned or operated a total of 2,283 ATMs, compared with 1,271 ATMs at the year-end 1998. Of the 2,283 ATMs, 69% are owned by Euronet as part of its proprietary network, and 31% are customer-owned and operated by Euronet under outsourcing agreements. Euronet owns or operates ATMs in Hungary, Poland, Germany, Croatia, the Czech Republic, France, the U.K., and the U.S.
Euronet Services Inc. is a leading provider of electronic financial solutions and transaction processing services. Euronet operates a network of over 2,200 ATMs in Europe and the U.S., and offers the Arksys software suite of integrated solutions for electronic payment and transaction delivery systems. With eight offices in Europe and three in the United States, Euronet Services offers ATM network development and participation, outsourced management solutions, comprehensive software solutions, and professional consulting services to retail banks and companies in more than 70 countries around the world.
Any statements contained in this news release that concern the Company's or management's intentions, expectations, or are 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: technological developments affecting the market for the Company's products and services; foreign exchange fluctuations; and changes in laws and regulations affecting the Company's business. These risks and other risks are described in the Company's periodic filings with the Securities and Exchange Commission, including but not limited to Euronet's Form 10-K for the period ended December 31, 1998, and Forms 10-Q for the periods ended March 31, 1999, June 30, 1999 and September 30, 1999. Copies of these filings may be obtained by contacting the Company or the SEC.