EVO Payments, Inc. (NASDAQ: EVOP) (“EVO” or the “Company”) today
announced its fourth quarter and full year 2021 financial results.
For the quarter ended December 31, 2021, reported revenue was
$133.2 million compared to $116.7 million in the prior year, an
increase of 14%. On a currency neutral basis, revenue for the
quarter increased 17%. On a GAAP basis for the quarter, net income
was $6.6 million compared to $3.9 million in the prior year. For
2021, GAAP net income includes $5.7 million of costs associated
with refinancing the Company’s credit agreement. Adjusted EBITDA
increased 12% to $50.1 million for the quarter, and on a currency
neutral basis, adjusted EBITDA increased 15%.
For the year ended December 31, 2021, reported revenue was
$496.6 million compared to $439.1 million in the prior year, an
increase of 13%. On a currency neutral basis, revenue for the year
ended December 31, 2021 increased 11%. On a GAAP basis for the year
ended December 31, 2021, net income was $17.7 million compared to a
net loss of $4.2 million in the prior year, which includes a $0.2
million gain and $17.6 million gain on investment in equity
securities, respectively. For 2021, GAAP net income also includes
$5.7 million of costs associated with refinancing the Company’s
credit agreement. Adjusted EBITDA increased 21% to $178.0 million
for the year ended December 31, 2021, and on a currency neutral
basis, adjusted EBITDA increased 20%.
“EVO delivered strong fourth quarter and full-year results,
including double-digit constant currency revenue and adjusted
EBITDA growth, and we are well positioned to continue to
demonstrate solid performance in 2022,” said James G. Kelly, Chief
Executive Officer of EVO. “Throughout the year, we executed on our
strategic priorities as we signed new bank and tech-enabled
referral partners, enhanced our proprietary products and
capabilities, announced multiple acquisitions that complement our
core growth strategies, and increased our public disclosures on a
range of initiatives. As we move further into 2022, we look forward
to closing our acquisition in Greece and capitalizing on additional
M&A opportunities, which, together with our international and
tech-enabled businesses, will drive continued growth for the
Company.”
Outlook
We expect 2022 full-year revenue to range from $550 million to
$560 million, representing growth of 11% to 13% over 2021 results.
On a GAAP basis, net income is expected to range from $47 million
to $54 million compared to $18 million in 2021. Adjusted EBITDA is
expected to range from $202 million to $205 million, reflecting
growth of 13% to 15% over 2021 adjusted EBITDA. The adjusted EBITDA
margin is expected to range from 36.6% to 36.7%, reflecting
expansion of 80 to 90 basis points over the 2021 adjusted EBITDA
margin.
Conference Call
EVO’s executive management team will host a conference call and
online webcast at 8:00 a.m. Eastern Time on Wednesday, February 23,
2022 to discuss the results. The conference call may be accessed by
dialing (888) 550-5460 (U.S. and Canada) or (646) 960-0831
(international) and referring to conference ID number 7602681. A
live webcast of the conference call and associated presentation
slides will be available on the “Investors” section of the
Company’s website at www.evopayments.com. A replay of the webcast
will be archived on the Company's investor relations website
following the call.
Forward-Looking Statements
This release and the accompanying earnings conference call
contain statements about future events and expectations that
constitute forward-looking statements. Forward-looking statements
are often identified by words such as “anticipates,” “believes,”
“continues,” “estimates,” “expects,” “goal,” “objectives,”
“intends,” “may,” “opportunity,” “plans,” “potential,” “near-term,”
“long-term,” “projections,” “assumptions,” “projects,” “guidance,”
“forecasts,” “outlook,” “target,” “trends,” “should,” “could,”
“would,” “will” and similar expressions. We intend such
forward-looking statements to be covered by the safe harbor
provisions for forward-looking statements contained in Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Forward-looking
statements are based on our current beliefs, assumptions,
estimates, and expectations, taking into account the information
currently available to us, and are not guarantees of future results
or performance. Forward-looking statements are not statements of
historical fact. Forward-looking statements involve risks and
uncertainties that may cause our actual results to differ
materially from the expectations of future results we express or
imply in any forward-looking statements, and you should not place
undue reliance on such statements. Factors that could contribute to
these differences include the following: (1) the continuing
uncertainties regarding the ultimate scope and trajectory of the
COVID-19 pandemic (including its variant strains) on our business
and our merchants, including the impact of social distancing,
shelter-in-place, shutdowns of non-essential businesses and similar
measures imposed or undertaken by governments; (2) our ability to
anticipate and respond to changing industry trends and the needs
and preferences of our customers and consumers; (3) the impact of
substantial and increasingly intense competition; (4) the impact of
changes in the competitive landscape, including disintermediation
from other participants in the payments chain; (5) the effects of
global economic, political, market, health and other conditions,
including the continuing impact of the COVID-19 pandemic; (6) our
compliance with governmental regulations and other legal
obligations, particularly related to privacy, data protection,
information security, and consumer protection laws; (7) our ability
to protect our systems and data from continually evolving
cybersecurity risks or other technological risks; (8) failures in
our processing systems, software defects, computer viruses, and
development delays; (9) degradation of the quality of the products
and services we offer, including support services; (10) our ability
to recruit, retain and develop qualified personnel; (11) risks
associated with our ability to successfully complete, integrate and
realize the expected benefits of acquisitions; (12) continued
consolidation in the banking and payment services industries,
including the impact of the combination of Banco Popular and Grupo
Santander and the related bank branch consolidation; (13) increased
customer, referral partner, or sales partner attrition; (14) the
incurrence of chargebacks; (15) failure to maintain or collect
reimbursements; (16) fraud by merchants or others; (17) the failure
of our third-party vendors to fulfill their obligations; (18)
failure to maintain merchant and sales relationships or financial
institution alliances; (19) ineffective risk management policies
and procedures; (20) our inability to retain smaller-sized
merchants and the impact of economic fluctuations on such
merchants, (21) damage to our reputation, or the reputation of our
partners; (22) seasonality and volatility; (23) geopolitical and
other risks associated with our operations outside of the United
States; (24) any decline in the use of cards as a payment mechanism
or other adverse developments with respect to the card industry in
general; (25) increases in card network fees; (26) failure to
comply with card networks requirements; (27) a requirement to
purchase the equity interests of our eService subsidiary in Poland
held by our JV partner; (28) changes in foreign currency exchange
rates; (29) future impairment charges; (30) risks relating to our
indebtedness, including our ability to raise additional capital to
fund our operations on economized terms or at all and exposure to
interest rate risks; (31) the planned phase out of LIBOR and the
transition to other benchmarks; (32) restrictions imposed by our
credit facilities and outstanding indebtedness; (33) participation
in accelerated funding programs; (34) failure to enforce and
protect our intellectual property rights; (35) failure to comply
with, or changes in, laws, regulations and enforcement activities,
including those relating to corruption, anti-money laundering, data
privacy, and financial institutions; (36) impact of new or revised
tax regulations; (37) legal proceedings; (38) our dependence on
distributions from EVO Investco LLC to pay our taxes and expenses,
including certain payments to the Continuing LLC Owners (as defined
in our public filings) and, in the event that any tax benefits are
disallowed, our inability to be reimbursed for payments made to the
Continuing LLC Owners; (39) our organizational structure, including
benefits available to the Continuing LLC Owners that are not
available to holders of our Class A common stock to the same
extent; (40) the risk that we could be deemed an investment company
under the Investment Company Act of 1940, as amended; (41) the
significant influence the Continuing LLC Owners continue to have
over us, including control over decisions that require the approval
of stockholders; (42) certain provisions of Delaware law and
antitakeover provisions in our organizational documents could delay
or prevent a change of control; (43) certain provisions in our
organizational documents, including those that provide Delaware as
the exclusive forum for litigation matters and that renounce the
doctrine of corporate opportunity; (44) our ability to maintain
effective internal control over financial reporting and disclosure
controls and procedures; (45) changes in our stock price, including
relating to downgrades, analyst reports, and future sales by us or
by existing stockholders; and (46) the other risks and
uncertainties included from time to time in our filings with the
SEC, including those listed under “Risk Factors” contained in Part
I of our Annual Report on Form 10-K for the year ended December 31,
2021.
We qualify any forward-looking statements entirely by the
cautionary factors listed above, among others. Other risks,
uncertainties and factors, not listed above, could also cause our
actual results to differ materially from those projected in any
forward-looking statements we make. We assume no obligation to
update or revise these forward-looking statements for any reason,
or to update the reasons actual results could differ materially
from those anticipated in these forward-looking statements, even if
new information becomes available in the future.
Non-GAAP financial measures
EVO Payments, Inc. has supplemented revenue, segment profit, net
income (loss), earnings per share information and weighted average
common shares determined in accordance with GAAP by providing these
and other measures on an adjusted basis in this release. The
non-GAAP financial measures presented herein should not be
considered in isolation of, as a substitute for, or superior to,
financial information prepared in accordance with GAAP, and such
measures may not be comparable to those reported by other
companies. Management uses these adjusted financial performance
measures for financial and operational decision making and as a
means to facilitate period-to-period comparisons. Management also
uses these non-GAAP financial measures, together with other
metrics, to set goals for and measure the performance of the
business and to determine incentive compensation. The Company
believes that these adjusted measures provide useful information to
investors about the Company’s ongoing underlying operating
performance and enhance the overall understanding of financial
performance of the Company’s core business by presenting the
Company’s results without giving effect to non-operational items
such as equity-based compensation and costs related to transition,
acquisition and integration matters, and giving effect to a
normalized effective tax rate for the Company. This release also
contains information on various financial measures presented on a
currency-neutral basis. The Company believes these currency-neutral
measures provide useful information to investors about the
Company’s performance by excluding fluctuations caused solely by
movements in currency exchange rates in the non-U.S. jurisdictions
where the Company operates. Reconciliations of each non-GAAP
measure to the most directly comparable GAAP measure are included
in the schedules to this release.
Among other non-GAAP financial measures presented, this release
contains a presentation of our adjusted EBITDA and adjusted net
income, and adjusted net income per share information. These
measures do not purport to be an alternative to cash flows from
operating activities as a measure of liquidity, and are not
intended to be a measure of free cash flow available for
management’s discretionary use as they do not consider certain cash
requirements such as tax payments and, in the case of adjusted
EBITDA, interest payments and debt service requirements. Further,
adjusted EBITDA does not purport to be an alternative to net income
as a measure of operating performance. These measures, or measures
similar to them, are frequently used by analysts, investors, and
other interested parties to evaluate companies in the industry.
Adjusted EBITDA is defined as net income (loss) before provision
for income taxes, net interest expense, and depreciation and
amortization, excluding the impact of net income attributable to
non-controlling interests in consolidated entities (including
related depreciation and amortization and income taxes),
share-based compensation, gain (loss) on investment in equity
securities, financing costs, currency exchange impacts, and
transition, acquisition and integration costs.
Adjusted net income is defined as net income (loss) adjusted to
exclude income taxes, the impact of net income attributable to
non-controlling interests in consolidated entities (including
related depreciation and amortization and income taxes),
share-based compensation, gain (loss) on investment in equity
securities, financing costs, currency exchange impacts, transition,
acquisition and integration costs, and amortization of acquisition
intangibles and subsequently adjusted to give effect to a
normalized tax rate for the Company.
The calculation of adjusted EBITDA and adjusted net income have
limitations as analytical tools, including: (a) they do not reflect
the Company’s cash expenditures, or future requirements for capital
expenditures or contractual commitments; (b) they do not reflect
changes in, or cash requirements for, the Company’s working capital
needs; (c) in the case of adjusted EBITDA, it does not reflect the
interest expense or the cash requirements necessary to service
interest or principal payments on the Company’s indebtedness; (d)
they do not reflect the Company’s tax expense or the cash
requirements to pay the Company’s taxes; and (e) although
depreciation and amortization are non-cash charges, the assets
being depreciated and amortized will often have to be replaced in
the future and these measures do not reflect any cash requirements
for such replacements.
Adjusted net income per share is defined as adjusted net income
divided by pro forma weighted average shares. On May 25, 2021, all
32,163,538 outstanding shares of Class B common stock were
automatically cancelled for no consideration and each outstanding
share of the Company’s Class C common stock was automatically
converted into one share of Class D common stock. Prior to May 25,
2021, pro forma weighted average shares is defined as GAAP common
weighted average shares (equal to our weighted average Class A
common shares) plus our weighted average Class B common shares,
weighted average Class C common shares, weighted average Class D
common shares, dilutive equity awards measured under the treasury
stock method, and weighted average preferred shares (including
paid-in-kind dividends). Following May 25, 2021, pro forma weighted
average shares is defined as GAAP common weighted average shares
(equal to our weighted average Class A common shares), plus
weighted average Blueapple common shares (formerly Class B common
shares), weighted average Class D common shares (which include
converted weighted average Class C common shares), dilutive equity
awards measured under the treasury stock method, and weighted
average preferred shares (including paid-in-kind dividends).
Weighted average preferred shares is defined as the weighted
average shares of Class A common stock issuable upon a voluntary
conversion of the Company’s Series A convertible preferred stock by
its holder. Blueapple common shares (formerly Class B common
shares) is defined as the weighted average Class A common shares
issuable upon the exercise by Blueapple, Inc., a Delaware
corporation which is controlled by entities affiliated with the
Company’s founder and Chairman of the board of directors
(“Blueapple”), of its right to cause the Company to use its
commercially reasonable best efforts to pursue a public offering of
up to 32,163,538 Class A common shares and use the net proceeds
therefrom to purchase an equivalent number of the units of EVO
Investco, LLC held by Blueapple.
Net Debt to LTM Adjusted EBITDA ratio is a non-GAAP measure
defined as total long-term debt less available cash (cash on the
balance sheet and cash in transit less certain merchant settlement
account balances and merchant reserves) divided by the trailing
twelve month Adjusted EBITDA. This ratio is frequently used by
investors, and management believes this measure provides relevant
and useful information.
About EVO Payments, Inc.
EVO Payments, Inc. (NASDAQ: EVOP) is a leading payment
technology and services provider. EVO offers an array of
innovative, reliable, and secure payment solutions to merchants
ranging from small and mid-size enterprises to multinational
companies and organizations across the globe. As a fully integrated
merchant acquirer and payment processor in over 50 markets and 150
currencies worldwide, EVO provides competitive solutions that
promote business growth, increase customer loyalty, and enhance
data security in the international markets it serves.
EVO PAYMENTS, INC. AND
SUBSIDIARIES Schedule 1 - Consolidated Statements of
Operations (unaudited) (in thousands, except share and
per share data)
Three Months Ended December 31,
Year Ended December 31,
2021
2020
% change
2021
2020
% change
Revenue
$
133,189
$
116,673
14
%
$
496,645
$
439,101
13
%
Operating expenses: Cost of services and products
21,489
21,302
1
%
75,765
84,336
(10
%)
Selling, general and administrative
68,067
59,097
15
%
266,117
250,676
6
%
Depreciation and amortization
19,827
21,808
(9
%)
83,389
85,924
(3
%)
Impairment of intangible assets
-
20
NM
-
802
NM
Total operating expenses
109,383
102,227
7
%
425,271
421,738
1
%
Income from operations
23,806
14,446
65
%
71,374
17,363
311
%
Other expense: Interest income
627
315
99
%
1,651
1,172
41
%
Interest expense
(4,879
)
(6,244
)
22
%
(23,161
)
(30,160
)
23
%
(Loss) gain on investment in equity securities
(731
)
1,824
NM
237
17,574
(99
%)
Other (expense) income, net
(10,034
)
1,944
NM
(10,375
)
3,007
NM
Total expense
(15,017
)
(2,161
)
(595
%)
(31,648
)
(8,407
)
(276
%)
Income before income taxes
8,789
12,285
(28
%)
39,726
8,956
344
%
Income tax expense
(2,179
)
(8,423
)
74
%
(22,037
)
(13,122
)
(68
%)
Net income (loss)
6,610
3,862
71
%
17,689
(4,166
)
NM
Less: Net income attributable to non-controlling interests in
consolidated entities
2,519
1,545
63
%
9,003
7,189
25
%
Less: Net income (loss) attributable to non-controlling interests
of EVO Investco, LLC
229
1,253
(82
%)
33
(9,679
)
100
%
Net income (loss) attributable to EVO Payments, Inc.
3,862
1,064
263
%
8,653
(1,676
)
NM
Less: Accrual of redeemable preferred stock paid-in-kind dividends
2,551
2,397
6
%
9,889
6,528
51
%
Net income (loss) attributable to Class A common stock
$
1,311
$
(1,333
)
NM
$
(1,236
)
$
(8,204
)
85
%
Earnings per share Basic
$0.02
($0.03
)
($0.03
)
($0.20
)
Diluted
$0.02
($0.03
)
($0.03
)
($0.20
)
Weighted average Class A common stock outstanding Basic
47,430,864
43,572,332
47,092,937
41,980,163
Diluted
52,163,165
43,572,332
47,092,937
41,980,163
EVO PAYMENTS, INC. AND
SUBSIDIARIES Schedule 2 - Consolidated Balance Sheets
(unaudited) (in thousands, except share data)
December 31,
December 31,
2021
2020
Assets Current assets: Cash and cash equivalents
$
410,368
$
418,439
Accounts receivable, net
16,065
17,052
Other receivables
18,087
20,128
Inventory
4,210
5,221
Settlement processing assets
311,681
285,705
Other current assets
20,514
15,284
Total current assets
780,925
761,829
Equipment and improvements, net
68,506
83,606
Goodwill, net
385,651
383,108
Intangible assets, net
200,726
217,077
Deferred tax assets
238,261
234,749
Operating lease right-of-use assets
34,704
35,124
Investment in equity securities, at fair value
25,398
25,526
Other assets
19,214
16,702
Total assets
$
1,753,385
$
1,757,721
Liabilities and Shareholders' Equity (Deficit)
Current liabilities: Settlement lines of credit
$
7,887
$
13,718
Current portion of long-term debt
14,058
4,628
Accounts payable
6,889
9,482
Accrued expenses and other current liabilities
127,060
118,251
Settlement processing obligations
422,109
446,344
Current portion of operating lease liabilities, inclusive of
related party liability of $1.3 million and $1.1 million at
December 31, 2021 and December 31, 2020, respectively
7,122
6,614
Total current liabilities
585,125
599,037
Long-term debt, net of current portion
568,632
579,162
Deferred tax liabilities
22,207
13,957
Tax receivable agreement obligations, inclusive of related party
liability of $169.4 million and $164.3 million at December 31, 2021
and December 31, 2020, respectively
180,143
173,890
Operating lease liabilities, net of current portion, inclusive of
related party liability of $1.0 million and $2.2 million at
December 31, 2021 and December 31, 2020, respectively
28,948
30,968
Other long-term liabilities
7,891
10,174
Total liabilities
1,392,946
1,407,188
Commitments and contingencies Redeemable non-controlling interests
1,029,090
1,055,633
Redeemable preferred stock (par value, $0.0001 per share),
Authorized, Issued and Outstanding – 152,250 shares at December 31,
2021 and December 31, 2020. Liquidation preference: $168,309 and
$158,647 at December 31, 2021 and December 31, 2020, respectively
164,007
154,118
Shareholders' equity (deficit): Class A common stock (par value
$0.0001), Authorized - 200,000,000 shares, Issued and Outstanding -
47,446,061 and 46,401,607 shares at December 31, 2021 and December
31, 2020, respectively
5
5
Class B common stock (par value $0.0001), Authorized - 40,000,000
shares, Issued and Outstanding - 0 and 32,163,538 shares at
December 31, 2021 and December 31, 2020, respectively
-
3
Class C common stock (par value $0.0001), Authorized - 4,000,000
shares, Issued and Outstanding - 0 and 1,720,425 shares at December
31, 2021 and December 31, 2020, respectively
-
-
Class D common stock (par value $0.0001), Authorized - 32,000,000
shares, Issued and Outstanding - 3,783,074 and 2,390,870 shares at
December 31, 2021 and December 31, 2020, respectively
-
-
Additional paid-in capital
-
-
Accumulated deficit attributable to Class A common stock
(652,871
)
(675,209
)
Accumulated other comprehensive (loss) income
(9,154
)
1,045
Total EVO Payments, Inc. shareholders' deficit
(662,020
)
(674,156
)
Nonredeemable non-controlling interests
(170,638
)
(185,062
)
Total deficit
(832,658
)
(859,218
)
Total liabilities, redeemable non-controlling interests, redeemable
preferred stock, and shareholders' deficit
$
1,753,385
$
1,757,721
EVO PAYMENTS, INC. AND
SUBSIDIARIES Schedule 3 - Consolidated Statements of
Cash Flows (unaudited) (in thousands)
Year Ended December
31,
2021
2020
Cash flows from operating activities: Net income (loss)
$
17,689
$
(4,166
)
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: Depreciation and amortization
83,389
85,924
Gain on sale of investment
-
(336
)
Gain on investment in equity securities
(237
)
(17,574
)
Amortization of deferred financing costs
2,427
2,675
Loss on unamortized deferred financing costs
3,471
-
Loss on extinguishment of debt
2,196
-
Loss on disposal of equipment and improvements
1,308
1,741
Share-based compensation expense
27,419
20,664
Impairment of intangible assets
-
802
Accrued interest expense
-
(3,935
)
Deferred taxes, net
8,258
2,599
Other
4,983
(1,740
)
Changes in operating assets and liabilities, net of effect of
acquisitions: Accounts receivable, net
293
(267
)
Other receivables
1,652
4,020
Inventory
801
3,993
Other current assets
(4,610
)
(1,413
)
Operating lease right-of-use assets
6,554
7,825
Other assets
(3,802
)
3,466
Accounts payable
2,475
(8,326
)
Accrued expenses and other current liabilities
10,728
(895
)
Settlement processing funds, net
(49,566
)
34,157
Operating lease liabilities
(7,584
)
(8,571
)
Other
(4,247
)
(4,623
)
Net cash provided by operating activities
103,597
116,020
Cash flows from investing activities: Acquisition of businesses,
net of cash acquired
(18,809
)
-
Purchase of equipment and improvements
(33,395
)
(20,481
)
Acquisition of intangible assets
(22,550
)
(6,821
)
Return of capital on equity method investment
-
906
Collections of notes receivable
50
429
Net cash used in investing activities
(74,704
)
(25,967
)
Cash flows from financing activities: Net repayments of settlement
lines of credit
(5,584
)
(19,896
)
Proceeds from long-term debt
725,600
185,250
Repayments of long-term debt
(728,769
)
(301,843
)
Deferred financing costs paid
(5,927
)
-
Deferred and contingent consideration paid
(610
)
(2,130
)
Secondary offering proceeds
-
115,538
Purchase of LLC Interests, Class B and Class D common stock in
connection with the secondary offerings
-
(115,538
)
Repurchases of shares to satisfy minimum tax withholding
(4,577
)
(1,345
)
Proceeds from issuance of redeemable preferred stock
-
149,250
Redeemable preferred stock issuance costs
-
(1,660
)
Proceeds from exercise of common stock options
7,866
6,145
Distributions to non-controlling interest holders
(13,868
)
(4,513
)
Contribution from non-controlling interest holders
1,487
505
Net cash (used in) provided by financing activities
(24,382
)
9,763
Effect of exchange rate changes on cash, cash equivalents, and
restricted cash
(12,435
)
14,634
Net (decrease) increase in cash, cash equivalents, and restricted
cash
(7,924
)
114,450
Cash, cash equivalents, and restricted cash, beginning of year
418,539
304,089
Cash, cash equivalents, and restricted cash, end of year
$
410,615
$
418,539
EVO PAYMENTS, INC. AND
SUBSIDIARIES Schedule 4 - Reconciliation of GAAP to
Non-GAAP measures (in thousands)
Three Months Ended December
31,
Year Ended December
31,
2021
2020
% change
2021
2020
% change
Revenue
$
133,189
$
116,673
14
%
$
496,645
$
439,101
13
%
Currency impact1
-
(2,407
)
NM
-
6,859
NM
Currency-neutral revenue
$
133,189
$
114,266
17
%
$
496,645
$
445,960
11
%
Net income (loss)
$
6,610
$
3,862
71
%
$
17,689
$
(4,166
)
NM
Net income attributable to non-controlling interests in
consolidated entities
(2,519
)
(1,545
)
(63
%)
(9,003
)
(7,189
)
(25
%)
Income tax expense2
6,517
8,423
(23
%)
26,375
13,122
101
%
Interest expense, net
4,252
5,929
(28
%)
21,510
28,988
(26
%)
Depreciation and amortization
19,827
21,808
(9
%)
83,389
85,924
(3
%)
Loss (gain) on investment in equity securities
731
(1,824
)
NM
(237
)
(17,574
)
99
%
Share-based compensation
5,960
5,273
13
%
27,419
20,664
33
%
Transition, acquisition and integration costs3
2,183
2,763
(21
%)
4,296
24,135
(82
%)
Other adjustments4
6,587
-
NM
6,587
2,697
144
%
Adjusted EBITDA
50,148
44,689
12
%
178,027
146,601
21
%
Currency impact1
-
(1,042
)
NM
-
1,964
NM
Currency-neutral adjusted EBITDA
$
50,148
$
43,647
15
%
$
178,027
$
148,565
20
%
1 Represents the impact of currency shifts by
adjusting prior year results to current period average foreign
exchange rates for the currencies in which EVO conducts operations.
2 Income tax expense for the three months and year ended December
31, 2021 includes a $4.3 million expense and tax benefit from our
tax receivable agreement obligation and corresponding deferred tax
asset revaluation due to the true-up of state tax rates. The
expense is reflected in other expense on the statement of
operations. 3 For the year ended December 31, 2020, adjustments
include $5.9 million of employee termination benefits, $17.4
million of transition, acquisition and integration costs, and a
$0.8 million of intangible asset impairment of a tradename. 4 Other
adjustments for the three months and year ended December 31, 2021
includes $5.7 million of costs associated with refinancing the
credit agreement and $0.9 million foreign exchange remeasurement
losses on intercompany assets and liabilities. For the year ended
December 31, 2020, other adjustments include a $2.7 million
adjustment for foreign exchange remeasurement losses on
intercompany assets and liabilities.
EVO
PAYMENTS, INC. AND SUBSIDIARIES Schedule 5 - Segment
Information (unaudited) (dollar amount in thousands,
transactions in millions)
Three months ended December
31,
2021
% of Segment revenue
Adjustments1
2021 Adjusted
2020
% of Segment revenue
Adjustments2
Foreign Exchange
impact3
2020 Adjusted
Adjusted % change
Transactions Americas
285.1
256.4
11
%
Europe
878.0
670.2
31
%
Total
1,163.1
926.6
26
%
Segment revenue Americas
$
80,353
60
%
$
-
$
80,353
$
73,620
63
%
$
-
$
(240
)
$
73,380
10
%
Europe
52,836
40
%
-
52,836
43,052
37
%
-
(2,167
)
40,886
29
%
Revenue
133,189
100
%
-
133,189
116,673
100
%
-
(2,407
)
114,266
17
%
Segment profit Americas
29,997
10,583
40,580
34,403
1,326
(145
)
35,584
14
%
Europe
15,321
1,587
16,908
15,385
(1,060
)
(897
)
13,428
26
%
Total segment profit
45,318
12,170
57,488
49,788
266
(1,042
)
49,012
17
%
Corporate
(9,009
)
1,669
(7,340
)
(6,038
)
673
-
(5,365
)
(37
%)
Total
$
36,310
$
13,839
$
50,148
$
43,751
$
938
$
(1,042
)
$
43,647
15
%
4Segment profit margin - Americas
37.3
%
50.5
%
46.7
%
48.5
%
4Segment profit margin - Europe
29.0
%
32.0
%
35.7
%
32.8
%
5Margin - Total
27.3
%
37.7
%
37.5
%
38.2
%
1 For the three months ended December 31, 2021, the Americas
segment profit adjustments includes $0.1 million of transition,
acquisition and integration costs, $0.5 million of foreign exchange
remeasurement losses on intercompany assets and liabilities, $4.3
million tax expense from our tax receivable agreement obligation
and corresponding deferred tax asset revaluation due to state tax
rates and $5.7mm of costs associated with refinancing the credit
agreement. The Europe segment profit adjustments includes a loss on
investment in equity securities of $0.7 million, $0.4 million of
transition, acquisition and integration costs, and $0.5 million of
foreign exchange remeasurement losses on intercompany assets and
liabilities. Corporate adjustments includes $1.7 million of
transition, acquisition, and integration related costs. 2 For the
three months ended December 31, 2020, the Americas segment profit
adjustments include $1.3 million of transition, acquisition and
integration costs. The Europe segment profit adjustments includes
$0.8 million of transition, acquisition and integration costs, and
excludes a gain on investment in equity securities of $1.8 million.
Corporate adjustments include $0.7 million of transition,
acquisition, and integration related costs. 3 Represents the impact
of currency shifts by adjusting prior year results to current
period average foreign exchange rates for the currencies in which
EVO conducts operations. 4 Segment profit and Corporate exclude
share-based compensation and therefore is not included in the
Adjustments totals. 5 Segment profit margin is defined as segment
profit divided by segment revenue. Total margin includes Corporate
expenses.
EVO PAYMENTS, INC. AND
SUBSIDIARIES Schedule 5 - Segment Information
(unaudited) (dollar amount in thousands, transactions in
millions)
Year Ended December 31,
2021
% of Segment revenue
Adjustments1
2021 Adjusted
2020
% of Segment revenue
Adjustments2
Foreign Exchange
impact3
2020 Adjusted
Adjusted % change
Transactions Americas
1,066.1
973.8
9
%
Europe
3,135.6
2,588.5
21
%
Total
4,201.7
3,562.3
18
%
Segment revenue Americas
$
307,183
62
%
$
-
$
307,183
$
275,233
63
%
$
-
$
3,427
$
278,659
10
%
Europe
189,462
38
%
-
189,462
163,868
37
%
-
3,433
167,301
13
%
Revenue
496,645
100
%
-
496,645
439,101
100
%
-
6,859
445,960
11
%
Segment profit Americas
135,081
11,343
146,424
106,051
13,023
1,716
120,790
21
%
Europe
63,588
626
64,214
65,448
(8,643
)
248
57,054
13
%
Total segment profit
198,669
11,969
210,638
171,499
4,380
1,964
177,844
18
%
Corporate
(35,625
)
3,014
(32,611
)
(34,157
)
4,878
-
(29,279
)
(11
%)
Total
$
163,044
$
14,983
$
178,027
$
137,342
$
9,258
$
1,964
$
148,565
20
%
4Segment profit margin - Americas
44.0
%
47.7
%
38.5
%
43.3
%
4Segment profit margin - Europe
33.6
%
33.9
%
39.9
%
34.1
%
5Margin - Total
32.8
%
35.8
%
31.3
%
33.3
%
1 For the year ended December 31, 2021, the Americas segment
profit adjustments includes $0.9 million of transition, acquisition
and integration costs, $0.5 million of foreign exchange
remeasurement losses on intercompany assets and liabilities, a $4.3
million tax expense from our tax receivable agreement obligation
and corresponding deferred tax asset revaluation due to state tax
rates and $5.7mm of costs associated with refinancing the credit
agreement. The Europe segment profit adjustments excludes a gain on
investment in equity securities of $0.2 million, includes $0.3
million of transition, acquisition and integration costs, and $0.5
million of foreign exchange remeasurement losses on intercompany
assets and liabilities. Corporate adjustments includes $3.0 million
of transition, acquisition, and integration related costs. 2 For
the year ended December 31, 2020, the Americas segment profit
adjustments includes $3.8 million of employee termination benefits,
$6.7 million of transition, acquisition an integration costs, $1.7
million adjustment for foreign exchange remeasurement losses on
intercompany assets and liabilities, and $0.8 million intangible
asset impairment of a tradename. The Europe adjustments includes
$1.5 million in employee termination benefits, $6.4 million of
transition, acquisition and integration costs, $1.0 million
adjustment for foreign exchange remeasurement losses on
intercompany assets and liabilities and excludes a gain on
investment in equity securities of $17.6 million. Corporate
adjustments includes $0.6 million in employee termination benefits
and $4.3 million of transition, acquisition and integration costs.
3 Represents the impact of currency shifts by adjusting prior year
results to current period average foreign exchange rates for the
currencies in which EVO conducts operations. 4 Segment profit and
Corporate exclude share-based compensation and therefore is not
included in the Adjustments totals. 5 Segment profit margin is
defined as segment profit divided by segment revenue. Total margin
includes Corporate expenses.
EVO PAYMENTS,
INC. AND SUBSIDIARIES Schedule 6 - Adjusted Net
Income (unaudited) Non-GAAP Reconciliation (in
thousands, except share and per share data)
Three Months Ended December
31,
Year Ended December
31,
2021
2020
% change
2021
2020
% change
Net income (loss)
$
6,610
$
3,862
71
%
$
17,689
$
(4,166
)
NM
Net income attributable to non-controlling interests in
consolidated entities
(2,519
)
(1,545
)
(63
%)
(9,003
)
(7,189
)
(25
%)
Income tax expense1
6,517
8,423
(23
%)
26,375
13,122
101
%
Loss (gain) on investment in equity securities
731
(1,824
)
NM
(237
)
(17,574
)
99
%
Share-based compensation
5,960
5,273
13
%
27,419
20,664
33
%
Transition, acquisition and integration costs2
2,183
2,763
(21
%)
4,296
24,135
(82
%)
Other adjustments3
6,587
-
NM
6,587
2,697
144
%
Acquisition intangible amortization4
9,510
10,303
(8
%)
37,673
42,424
(11
%)
Non-GAAP adjusted income before taxes
35,579
27,255
31
%
110,801
74,113
50
%
Income taxes at normalized tax rate5
(8,041
)
(6,160
)
(31
%)
(25,041
)
(16,749
)
(50
%)
Adjusted net income
$
27,538
$
21,095
31
%
$
85,760
$
57,363
50
%
Adjusted net income per share6
$
0.29
$
0.23
26
%
$
0.91
$
0.64
42
%
1 Income tax expense for the three months and year
ended December 31, 2021 includes a $4.3 million expense and tax
benefit from our tax receivable agreement obligation and
corresponding deferred tax asset revaluation due to the true-up of
state tax rates. The expense is reflected in other expense on the
statement of operations. 2 For the year ended December 31, 2020,
earnings adjustments includes $5.9 million of employee termination
benefits, $17.4 million of transition, acquisition and integration
costs, and $0.8 million intangible asset impairment of a tradename.
3 Other adjustments for the three months and year ended December
31, 2021 includes $5.7 million of costs associated with refinancing
the credit agreement and $0.9 million foreign exchange
remeasurement losses on intercompany assets and liabilities. For
the year ended December 31, 2020, other adjustments include a $2.7
million adjustment for foreign exchange remeasurement losses on
intercompany assets and liabilities. 4 Represents amortization of
intangible assets acquired through business combinations and other
merchant portfolio and related asset acquisitions. 5 Normalized
corporate income tax expense calculated using 22.6% for all
periods. 6 Reflects pro forma weighted average shares for the
period using GAAP weighted average common shares (equal to weighted
average Class A common shares), plus weighted average Class B
shares (prior to May 25, 2021), weighted average Blueapple common
shares (following May 25, 2021, formerly Class B common shares),
weighted average Class C shares (prior to May 25, 2021), weighted
average Class D common shares (which, following May 25, 2021,
include converted weighted average Class C common shares), weighted
average preferred shares including paid-in-kind dividends, and
dilutive equity awards measured under the treasury stock method.
Three Months Ended Dec. 31, Year Ended Dec.
31, (share count in millions)
2021
2020
2021
2020
Class A (GAAP weighted average common stock)
47.4
43.6
47.1
42.0
Blueapple common shares (formerly Class B)
32.2
33.5
32.2
34.0
Class C
-
1.8
-
2.1
Class D
3.8
3.8
3.9
4.2
Stock options, RSUs, RSAs
0.9
1.0
1.1
0.8
Series A convertible preferred (if converted)
10.6
10.0
10.3
6.9
Pro forma weighted average shares
94.9
93.6
94.6
90.0
EVO PAYMENTS, INC. AND
SUBSIDIARIES Schedule 7 - Net Debt to Adjusted EBITDA
Ratio Non-GAAP Reconciliation (in thousands)
Year Ended
12/31/2021
Net income
$
17,689
Net income attributable to non-controlling interests in
consolidated entities
(9,003
)
Income tax expense
26,375
Interest expense, net
21,510
Depreciation and amortization
83,389
Gain on investment in equity securities
(237
)
Share-based compensation
27,419
Transition, acquisition and integration costs
4,296
Other adjustments
6,587
Adjusted EBITDA
$
178,027
Ratio of Net Debt to LTM
Adjusted EBITDA 12/31/2021 Gross debt
$
588,000
Less: available cash1
(204,066
)
Net debt
$
383,934
Net debt to LTM adjusted EBITDA
2.2x ______________ 1
Available cash includes cash in transit from December 31, 2021
transaction date.
EVO PAYMENTS, INC. AND
SUBSIDIARIES Schedule 8 - 2022 Outlook
(unaudited) Non-GAAP Reconciliation ($ in millions)
2022 Outlook 2021 Actual %
Change Revenue
$550 to $560
$497
11% - 13%
Net income (GAAP)
$47 to $54
$18
Adjustments1
155 to 151
160
Adjusted EBITDA
$202 to $205
$178
13% - 15%
Adjusted EBITDA margin
36.7% to 36.6%
35.8
%
90 - 80 bps
1 Represents an estimated range of adjustments to
reconcile GAAP net income (loss) to adjusted EBITDA, a non-GAAP
measure. These adjustments include a) net income attributable to
non-controlling interests in consolidated entities, b) income tax
expense, c) net interest expense, d) depreciation and amortization,
e) share-based compensation, and f) costs related to transition,
acquisition or integration activities. Differences may exist due to
rounding. Estimates of these adjustments used in the
forward-looking measures are subject to variability, complexity and
limited visibility of these items.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220223005035/en/
EVO Payments, Inc. Sarah Jane Schneider Investor Relations &
Corporate Communications Manager 770-709-7365
investor.relations@evopayments.com
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