Market Overview

EVO Reports Second Quarter 2018 Results

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ATLANTA, Aug. 08, 2018 (GLOBE NEWSWIRE) -- EVO Payments, Inc. (NASDAQ:EVOP) ("EVO" or the "Company") today announced its second quarter financial results and its first earnings announcement as a public company. For the second quarter ended June 30, 2018, revenue increased 14% to $140.9 million, compared to $123.9 million in the prior year. On a currency-neutral basis, revenue increased 11% over the prior year. On a GAAP basis for the second quarter, net income attributable to EVO Payments, Inc. was $16.7 million or $0.96 per diluted share, representing net income from the initial public offering date forward.  Adjusted EBITDA defined as earnings before interest, taxes, depreciation, amortization, and the impact of share-based compensation, transition, acquisition-related, and integration costs, increased 12% to $37.0 million for the quarter, compared to $33.0 million in the prior year. On a currency-neutral basis, adjusted EBITDA grew 10% over the prior year. 

For the six months ended June 30, 2018, revenue increased 15% to $269.2 million, compared to $233.5 million in the prior year period. On a currency-neutral basis, revenue increased 10% over the prior year. On a GAAP basis for the year-to-date period, net income attributable to EVO Payments, Inc. was $16.7 million or $0.96 per diluted share, representing net income from the initial public offering date forward.  Adjusted EBITDA increased 16% to $65.6 million for the six months ended June 30, 2018, compared to $56.4 million in the prior year. On a currency-neutral basis, adjusted EBITDA grew 10% for the year-to-date period compared with the same period in the prior year.  (See Schedule 1 for the Condensed Consolidated Statements of Operations and Schedule 4 for the Reconciliation of GAAP to Non-GAAP measures.)

"We are committed to delivering solid results for our shareholders through organic growth, long-term margin expansion and acquisition opportunities. Our second quarter results demonstrate our ability to deliver on our commitments by providing high quality products and services to our growing customer base across North America and Europe," said James Kelly, Chief Executive Officer of EVO, "In addition, we expanded our Spanish customer base by approximately 20,000 new merchants and completed a ten-year alliance with Liberbank, a leading regional Spanish bank focused on the small and medium-sized enterprise market. We also strengthened our Eastern Europe presence through a ten-year alliance agreement with Moneta Money Bank, a leading Czech financial institution."

Outlook

For the full year 2018, the Company expects revenue to range from $556 million to $564 million, reflecting growth of 10% to 12% over 2017 reported results and 9% to 10% over currency-neutral 2017 results. Adjusted EBITDA is expected to be in a range of $142 million and $146 million, reflecting growth of 11% to 14% over 2017 adjusted EBITDA and 10% to 13% over currency-neutral 2017 adjusted EBITDA.  Pro forma adjusted net income per diluted share is expected to be in a range of $0.44 to $0.52.

Conference call

EVO's management will host a conference call for investors at 8:00 a.m. Eastern Time on Wednesday, August 8, 2018 to discuss the results. Participants may access the conference call via the investor relations section of the company's website at www.evopayments.com, or participants may also dial (877) 356-5729 inside North America and (629) 228-0718 outside North America to listen.  The conference ID number is 6550489. A recording of the call will be archived on the company's investor relations website following the live call.

Forward-looking statements

This announcement and the Company's discussion today both include forward-looking statements. Forward-looking statements are subject to risks and uncertainty.  They are not guarantees of future performance, and the Company's actual results could differ materially from the expectations expressed or implied in any forward-looking statements. You should not put undue reliance upon them.  Words such as "anticipates," "believes," "continues," "estimates," "expects," "goal," "objectives," "intends," "may," "opportunity," "plans," "potential," "near-term," "long-term," "projections," "assumptions," "projects," "guidance," "forecast," "outlook," "target," "should," "could," "would," "will" and comparable words are a common way to identify forward-looking statements. Examples of forward-looking statements contained in this release include statements about the Company's full year 2018 outlook.

Factors that could contribute to differences between the Company's actual results and the expectations expressed or implied in any forward-looking statements include the following: changing industry trends and changing needs and preferences of our customers and consumers; the impact of substantial and increasingly intense competition; changes in the competitive landscape, including disintermediation from other participants in the payments chain; the impact of global economic, political and other conditions on trends in consumer, business and government spending; compliance with governmental regulations and other legal obligations, particularly related to privacy, data protection and information security, and consumer protection laws; the ability to protect the Company's systems and data from continually evolving cybersecurity risks or other technological risks; failures in the Company's processing systems, software defects, computer viruses and development delays; degradation of the quality of the products and services the Company offers; the Company's ability to successfully complete, integrate and realize the expected benefits of any acquisitions it pursues or has completed; continued consolidation in the banking and payment services industries; increased customer, referral partner or sales partner attrition; the incurrence of chargeback liability; fraud by merchants or others; service failures by third-party vendors providing products and services to the Company; failure to maintain merchant relationships and alliances; ineffective risk management policies and procedures; reputational harm to the Company or its partners; the Company's ability to recruit, retain and develop qualified personnel; geopolitical and other risks associated with operations outside of the United States; decline in the use of cards as a payment mechanism for consumers or adverse developments with respect to the card industry in general; increases in card network fees; failure to comply with the applicable requirements of card networks; changes in foreign currency exchange rates; inability to raise additional capital to fund the Company's operations on acceptable terms or at all; failure to protect the Company's intellectual property rights and defend against potential patent claims; failure to comply with, or changes in, laws, regulations and enforcement activities; future impairment charges; the impact of the Company's organizational structure; the significant influence of certain of the Company's stockholders over Company decisions; and the other risks and factors, including the risks listed under "Item 1A. Risk factors," contained in the Company's quarterly report on Form 10-Q for the quarter ended June 30, 2018.

Non-GAAP financial measures

EVO Payments, Inc. has supplemented revenue, net income/(loss) and earnings per share information determined in accordance with GAAP by providing these and other measures on an adjusted basis in this release to assist with evaluating performance.   Such financial measures should not be considered as an alternative to GAAP revenue or net income/(loss), 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 evaluate 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 operating results and enhance the overall understanding of financial performance of the Company's core business by presenting the Company's results without giving effect to equity-based compensation, giving pro forma effect to the Company's going forward effective tax rate following its Up-C reorganization, costs related to restructuring transactions, acquisition costs and other transitionary costs.  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 without taking into account fluctuations caused by 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.

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 micro-enterprises to multinational companies and organizations across North America and Europe.  EVO supports all major card types in the markets it serves.  For more information, please visit www.evopayments.com.

EVO Payments, Inc.
Investor contact
Ed O'Hare, 770-709-7353
investor.relations@evopayments.com

or

EVO Payments, Inc.
Media contact
Mark Nawrocki, 720-745-7711
Mark.nawrocki@evopayments.com


EVO Payments, Inc.

Schedule 1 – Condensed Consolidated Statements of Operations (unaudited)

(in thousands, except share and per share data)

                                 
    Three Months Ended June 30,   Six Months Ended June 30,
    2018   2017   % change   2018   2017   % change
                                 
Revenue   $ 140,891     $ 123,899     14%     $ 269,173     $ 233,519     15%  
Operating expenses:                                
Cost of services and products, exclusive of depreciation and amortization shown separately below     50,364       39,172     29%       94,878       75,823     25%  
Selling, general and administrative     115,567       53,517     116%       175,180       104,537     68%  
Depreciation and amortization     20,933       18,613     12%       40,820       35,673     14%  
Total operating expenses     186,864       111,302     68%       310,878       216,033     44%  
(Loss) income from operations     (45,973 )     12,597     (465%)       (41,705 )     17,486     (339%)  
Other (expense) income:                                
Interest income     631       332     90%       1,115       638     75%  
Interest expense     (21,560 )     (15,579 )   38%       (36,870 )     (30,577 )   21%  
Income from investment in unconsolidated investees     246       438     (44%)       761       758     0%  
Other expense, net     (2,620 )     (116 )   2158%       (3,174 )     (174 )   1724%  
Total other expense     (23,303 )     (14,925 )   56%       (38,168 )     (29,355 )   30%  
Loss before income taxes     (69,276 )     (2,328 )   2876%       (79,873 )     (11,869 )   573%  
Income tax benefit (expense)     28,609       (5,543 )   (616%)       24,181       (9,357 )   (358%)  
Net loss     (40,667 )     (7,871 )   417%       (55,692 )     (21,226 )   162%  
Less: Net income attributable to non-controlling interests in consolidating entities     (17,026 )     (1,603 )   962%       (2,001 )     (2,854 )   (30%)  
Net loss attributable to EVO Investco, LLC         $ (9,474 )             $ (24,080 )    
Less: Net loss attributable to non-controlling interests in EVO Investco, LLC     74,406       N/A           74,406       N/A      
Net income attributable to EVO, Inc.   $ 16,713       N/A         $ 16,713       N/A      
                                     
Net earnings per share                                    
Basic   $ 0.97       N/A         $ 0.97       N/A      
Diluted   $ 0.96       N/A         $ 0.96       N/A      
Weighted average shares                                    
Basic     17,293,355       N/A           17,293,355       N/A      
Diluted     17,432,722       N/A           17,432,722       N/A      
                                         
                                         

EVO Payments, Inc.

Schedule 2 – Condensed Consolidated Balance Sheets (unaudited)

(in thousands, except share and interest data)

             
    June 30,   December 31,
    2018   2017
Assets            
Current assets:            
Cash and cash equivalents   $ 207,177     $ 205,142  
Accounts receivable, net     7,045       15,881  
Other receivables     50,985       55,345  
Due from related parties     1,641       2,625  
Inventory     8,795       11,210  
Settlement processing assets     429,923       439,269  
Other current assets     10,639       20,941  
Total current assets     716,205       750,413  
Equipment and improvements, net     100,357       96,587  
Goodwill     316,205       311,678  
Intangible assets, net     310,265       313,483  
Investment in unconsolidated investees     1,712       1,379  
Due from related parties     -       109  
Deferred tax asset     43,429       9,057  
Other assets     24,507       25,592  
Total assets   $ 1,512,680     $ 1,508,298  
             
Liabilities and shareholders'/members' equity (deficit):            
Current liabilities:            
Current portion of long-term debt   $ 45,056     $ 103,571  
Accounts payable     42,088       61,149  
Accrued expenses     109,674       94,235  
Settlement processing obligations     466,777       484,518  
Due to related parties     5,398       7,847  
Total current liabilities     668,993       751,320  
Long-term debt, net of current portion     667,671       760,946  
Due to related parties     560       675  
Deferred tax liability     11,687       11,011  
Tax receivable agreement obligations     2,205       -  
ISO reserves     2,602       2,611  
Total liabilities     1,353,718       1,526,563  
Commitments and contingencies            
Redeemable non-controlling interest     838,789       148,266  
Shareholders' /members' deficit:            
EVO Investco, LLC Units, Outstanding - 0 and 12,371 units at June 30, 2018 and December 31, 2017, respectively.     -       135,166  
Class A common stock (par value $0.0001), Authorized - 200,000,000 and 0 shares, Issued and Outstanding - 17,294,768 and 0 shares at June 30, 2018 and December 31, 2017, respectively.     2       -  
Class B common stock (par value $0.0001), Authorized - 40,000,000 and 0 shares, Issued and Outstanding - 35,913,538 and 0 shares at June 30, 2018 and December 31, 2017, respectively.     4       -  
Class C common stock (par value $0.0001), Authorized - 4,000,000 and 0 shares, Issued and Outstanding - 2,560,955 and 0 shares at June 30, 2018 and December 31, 2017, respectively.     -       -  
Class D common stock (par value $0.0001), Authorized - 32,000,000 and 0 shares, Issued and Outstanding - 24,305,155 and 0 shares at June 30, 2018 and December 31, 2017, respectively.     2       -  
Additional paid-in capital     412,845       -  
Retained earnings     (55,076 )     -  
Accumulated deficit     -       (237,330 )
Accumulated other comprehensive loss     (1,631 )     (67,679 )
Total shareholders'/members' equity (deficit):     356,146       (169,843 )
Nonredeemable non-controlling interests     (1,035,973 )     3,312  
Total deficit     (679,827 )     (166,531 )
Total liabilities and deficit   $ 1,512,680     $ 1,508,298  
                 
                 

EVO Payments, Inc.

Schedule 3 – Condensed Consolidated Statement of Cash Flows (unaudited)

(in thousands)

           
  Six Months Ended June 30,
  2018   2017
Cash flow from operating activities:          
Net loss $ (55,692 )   $ (21,226 )
Adjustments to reconcile net loss to net cash provided by          
(used in) operating activities:          
Depreciation and amortization   40,820       35,673  
Amortization of deferred financing costs   7,094       1,609  
Loss on extinguishment of debt   2,042       -  
Share-based compensation expense   52,134       -  
Loss on disposal of equipment and improvements   449       -  
Undistributed earnings from unconsolidated investees   (125 )     57  
Accrued interest expense   (653 )     211  
Accrued interest income   (55 )     (10 )
Deferred rent   60       15  
Deferred taxes   (28,418 )     7,492  
Loss on payment of contingent consideration   105       -  
Reserve on uncollectible notes receivable   28       -  
Changes in operating assets and liabilities, net of effect of acquisitions:          
Accounts receivable, net   9,232       (5,829 )
Other receivables   3,913       (318 )
Inventory   2,029       (1,813 )
Other current assets   (454 )     (5,869 )
Other assets   665       4,822  
Related parties   (4,971 )     (12,316 )
Accounts payable   (12,330 )     771  
Accrued expenses   7,864       4,236  
Settlement processing funds, net   (8,646 )     (38,015 )
ISO reserves   (7 )     (195 )
   Net cash provided by (used in) operating activities   15,084       (30,705 )
Cash flow from investing activities:          
Restricted cash   -       125,000  
Acquisition of a business, net of cash acquired   (13,890 )     (124,567 )
Purchase of equipment and improvements   (25,970 )     (14,150 )
Acquisition of intangible assets   (15,420 )     (12,335 )
Issuance of notes receivable   (20 )     (27 )
Collections of notes receivable   31       966  
   Net cash used in investing activities   (55,269 )     (25,113 )
Cash flow from financing activities:          
Proceeds from long-term debt   532,594       398,410  
Repayments of long-term debt   (623,732 )     (413,553 )
Deferred financing costs paid   (3,395 )     (19 )
Contingent consideration paid   (958 )     -  
Deferred cash consideration paid   (65,000 )     -  
Acquisition of additional non-controlling interest   (16,916 )     (3,962 )
IPO proceeds   231,500       -  
Contributions by members   -       71,250  
Distribution to members   -       (1,674 )
Distribution to non-controlling interests holders   (5,104 )     (1,873 )
   Net cash provided by financing activities   48,989       48,579  
Effect of exchange rate changes on cash and cash equivalents   (6,769 )     9,007  
   Net increase in cash and cash equivalents   2,035       1,768  
Cash and cash equivalents, beginning of period   205,142       203,324  
Cash and cash equivalents, end of period $ 207,177     $ 205,092  
               
               

EVO Payments, Inc.

Schedule 4 – Reconciliation of GAAP to Non-GAAP measures (unaudited)

(in thousands)

                                 
    Three months ended June 30,   Six months ended June 30,
    2018   2017   % change   2018   2017   % change
                                 
Revenue   $ 140,891     $ 123,899     14%     $ 269,173     $ 233,519     15%  
Currency impact1     -       2,920     N/A       -       12,296     N/A  
Currency-neutral revenue     140,891       126,819     11%       269,173       245,815     10%  
                                 
Net loss     (40,667 )     (7,871 )   417%       (55,692 )     (21,226 )   162%  
Net loss attributable to non-controlling interests     (17,026 )     (1,603 )   962%       (2,001 )     (2,854 )   (30%)  
Income tax (benefit) expense     (28,609 )     5,543     (616%)       (24,181 )     9,357     (358%)  
Interest expense, net     20,929       15,247     37%       35,755       29,939     19%  
Depreciation and amortization     20,933       18,613     12%       40,820       35,673     14%  
Share-based compensation2     51,263       -     N/A       51,263       -     N/A  
Transition, acquisition and integration costs3     30,180       3,027     897%       19,673       5,500     258%  
Adjusted EBITDA     37,003       32,956     12%       65,637       56,389     16%  
Currency impact1     -       684     N/A       -       3,441     N/A  
Currency-neutral adjusted EBITDA   $ 37,003     $ 33,640     10%     $ 65,637     $ 59,830     10%  

1 Represents the impact of currency shifts by adjusting prior year results to current period average fx rates for the currencies in which EVO conducts operations. 
2 Represents $52.1 million of share-based compensation costs incurred with the completion of the initial public offering, less a $0.9 million non-controlling interest component.
3 For the three months ended June 30, 2018, earnings adjustments include $2.4 million of employee termination benefits, $2.0 million of debt extinguishment costs, and $10.0 million of transaction and acquisition related costs. Includes the net loss carryforward adjustment from EVO Investco, LLC of $15.8 million.
  For the three months ended June 30, 2017, earnings adjustments include $1.4 million of employee termination benefits and $1.6 million of transaction and acquisition related costs.
  For the six months ended June 30, 2018, earnings adjustments include $2.4 million of employee termination benefits, $4.0 million of a strategic advisory fee, and $13.3 million of transaction and acquisition related costs.
  For the six months ended June 30, 2017, earnings adjustments include $3.0 million of employee termination benefits and $2.5 million of transaction and acquisition related costs.

Adjusted EBITDA is a supplemental measure of the Company's performance that is not required by, or presented in accordance with, GAAP.  Adjusted EBITDA is not a term defined under U.S. GAAP and does not purport to be an alternative to net income as a measure of operating performance or to cash flows from operating activities as a measure of liquidity. Additionally, adjusted EBITDA is not intended to be a measure of free cash flow available for management's discretionary use as it does not consider certain cash requirements such as interest payments, tax payments and debt service requirements.

Adjusted EBITDA is included in this release because it is a key metric used by the Company's management and board of directors to assess the Company's financial performance. The presentation of adjusted EBITDA is intended to provide additional information to investors about the Company's results of operations that management utilizes on an ongoing basis to assess the Company's core operating performance.  Adjusted EBITDA is also frequently used by analysts, investors and other interested parties to evaluate companies in the industry.

Adjusted EBITDA is defined as income before provision for income taxes, net interest expense, and depreciation and amortization, excluding the additional items described in the reconciliation above. Adjusted EBITDA may not be comparable to similarly titled measures used by other companies. The calculation of adjusted EBITDA has limitations as an analytical tool, including: (a) it does not reflect the Company's cash expenditures, or future requirements for capital expenditures or contractual commitments; (b) it does not reflect changes in, or cash requirements for, the Company's working capital needs; (c) it does not reflect the interest expense or the cash requirements necessary to service interest or principal payments on the Company's indebtedness; (d) it does 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 Adjusted EBITDA does not reflect any cash requirements for such replacements.

 

EVO Payments, Inc.

Schedule 5 – Segment information (unaudited)

(in thousands, except transactions in millions)

                                         
    Three months ended June 30,
    2018   Adjustments1   2018
Adjusted
  2017   Adjustments2   2017
Adjusted
  % change
Transactions:                                        
North America     242.6                   230.7                 5%  
Europe     528.7                   425.9                 24%  
Total     771.3                   656.6                 17%  
                                         
Segment revenue:                                        
North America   $ 79,825     $ -   $ 79,825     $ 74,481     $ -   $ 74,481     7%  
Europe     61,066       -     61,066       49,418       -     49,418     24%  
Total     140,891       -     140,891       123,899       -     123,899     14%  
                                         
Segment profit:                                        
North America     21,774       5,598     27,372       21,912       1,258     23,170     18%  
Europe     14,568       220     14,788       13,865       189     14,054     5%  
Corporate and other     (29,520 )     24,363     (5,157 )     (5,849 )     1,581     (4,268 )   21%  
Total   $ 6,822     $ 30,181   $ 37,003     $ 29,928     $ 3,028   $ 32,956     12%  

1 For the three months ended June 30, 2018, North America segment earnings adjustments include $2.4 million of employee termination benefits and $3.2 million of transaction and acquisition related costs.
  Europe segment earnings adjustment includes $0.2 million of an acquisition related charge.
  Corporate and other adjustments include $2.0 million of debt extinguishment costs, $6.5 million of transaction and acquisition charges, and the net loss carryforward adjustment from EVO Investco, LLC of $15.8 million.
2 For the three months ended June 30, 2017, North America segment earnings adjustment includes $1.3 million of employee termination benefits.
  Europe segment earnings adjustment includes $0.2 million of employee termination benefits.
  Corporate adjustment includes $1.6 million of transaction and acquisition charges.

                                         
    Six months ended June 30,
    2018   Adjustments1   2018
Adjusted
  2017   Adjustments2   2017
Adjusted
  % change
Transactions:                                        
North America     464.2                   445.0                 4%  
Europe     1,005.2                   802.2                 25%  
Total     1,469.4                   1,247.2                 18%  
                                         
Segment revenue:                                        
North America   $ 153,200     $ -   $ 153,200     $ 141,914     $ -   $ 141,914     8%  
Europe     115,973       -     115,973       91,605       -     91,605     27%  
Total     269,173       -     269,173       233,519       -     233,519     15%  
                                         
Segment profit:                                        
North America     42,652       5,729     48,381       35,637       2,763     38,400     26%  
Europe     26,672       220     26,892       25,394       189     25,583     5%  
Corporate and other     (23,360 )     13,724     (9,636 )     (10,142 )     2,548     (7,594 )   27%  
Total   $ 45,964     $ 19,673   $ 65,637     $ 50,889     $ 5,500   $ 56,389     16%  

1 For the six months ended June 30, 2018, North America segment earnings adjustments include $2.5 million of employee termination benefits and $3.2 million of transaction and acquisition related costs.
  Europe segment earnings adjustment includes $0.2 million of an acquisition related charge.
  Corporate and other adjustments include $2.0 million of debt extinguishment costs and $11.7 million of transaction and acquisition charges.
2 For the six months ended June 30, 2017, North America segment earnings adjustment includes $2.8 million of employee termination benefits.
  Europe segment earnings adjustment includes $0.2 million of employee termination benefits.
  Corporate adjustment includes $2.5 million of transaction and acquisition charges.


EVO Payments, Inc.

Schedule 6 – Pro forma adjusted net income (unaudited)

(in thousands, except share and per share data)

                                 
    Three months ended June 30,   Six months ended June 30,
    2018
  2017
  % change   2018
  2017
  % change
                                 
Net loss   $ (40,667 )   $ (7,871 )   417%     $ (55,692 )   $ (21,226 )   162%  
Net loss attributable to non-controlling interests     (17,026 )     (1,603 )   962%       (2,001 )     (2,854 )   (30%)  
Non-GAAP adjustments:                                
Income tax (benefit) expense     (28,609 )     5,543     (616%)       (24,181 )     9,357     (358%)  
Share-based compensation1     51,263       -     N/A       51,263       -     N/A  
Transition, acquisition and integration costs2     37,428       3,027     1136%       26,921       5,500     389%  
Acquisition intangible amortization3     11,094       11,067     0%       21,590       20,778     4%  
Non-GAAP adjusted income before taxes     13,483       10,163     33%       17,900       11,555     55%  
Pro forma taxes at effective tax rate4     (3,146 )     (3,628 )   (13%)       (4,176 )     (4,125 )   1%  
Pro forma adjusted net income   $ 10,337     $ 6,535     58%     $ 13,724     $ 7,430     85%  
                                 
Pro forma adjusted net income per share5   $ 0.13       N/A         $ 0.17       N/A      

1 Represents $52.1 million of share-based compensation costs incurred with the completion of the initial public offering, less a $0.8 million non-controlling interest component.
2 Represents acquisition and integration costs incurred in connection with our acquisitions, charges related to employee termination benefits, other transition activities, $7.2 million of charges related to extinguishment of debt, and the net loss carryforward from EVO Investco, LLC of $15.8 million.
See Schedule 4 for a more detailed description of these charges.
3 Represents amortization of intangible assets acquired through business combinations and other customer portfolio and related asset acquisitions.
4 Pro forma corporate income tax expense calculated using 23.3% and 35.7% for 2018 and 2017, respectively, based on blended federal and state tax rates and utilizing the Tax Reform Act for 2018 federal rates.
5 Uses adjusted shares outstanding including an additional 63.5 million Class B, C, D shares, unvested restricted units, and unvested options that are excluded from the GAAP diluted share count.


EVO Payments, Inc.

Schedule 7 – Financial outlook (unaudited)

(in millions, except per share)

         
    2018 Outlook   2017 Actual
         
Revenue   $556 - $564   $505
         
GAAP net loss per share attributable to EVO   ($0.71) - ($0.64)   N/A
Adjustments1   $1.15 - $1.16   N/A
Pro forma adjusted net income per share   $0.44 - $0.52   N/A
         
GAAP net loss attributable to EVO   ($13) - ($11)   $(40)
Adjustments1   $155 - $157   $168
Adjusted EBITDA   $142 - $146   $128

1 Represents estimated ranges for (a) acquisition and integration costs in connection with our acquisitions, charges related to employee termination benefits and other transition activities; (b) share-based compensation costs; (c) amortization of intangible assets acquired in business combinations and other customer portfolio and related asset acquisitions; and (d) adjustments to income tax expense/ (benefit) to reflect an effective corporate tax rate based on tax reform legislation. GAAP net income per share uses basic share counts and pro forma adjusted net income per share uses adjusted share counts as the denominator including an additional 63.5 million shares inclusive of Class B, C, D, unvested restricted units, and unvested options that are excluded from the GAAP diluted share count. Currency assumptions based on June 30, 2018 year-to-date actual rates and current spot rates forward from July through December.

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