Euronet Worldwide Reports First Quarter 2008 Financial Results

LEAWOOD, Kan.--(Business Wire)--
Euronet Worldwide, Inc. ("Euronet" or the "Company") (NASDAQ:
EEFT), a leading electronic payments provider, today announced its
first quarter 2008 financial results.

Euronet's first quarter 2008 financial highlights included:

-- Consolidated revenues of $247.1 million, compared to $170.4
million for the first quarter 2007.

-- Adjusted EBITDA of $29.5 million, compared to $21.9 million
for the first quarter 2007.

-- Operating income of $12.1 million, compared to $11.9 million
in the first quarter 2007.

-- Net loss of $6.8 million, or $0.14 diluted loss per share,
compared to net income for the first quarter 2007 of $9.5
million, or $0.23 diluted earnings per share.

-- Diluted cash earnings per share of $0.29, compared to $0.31
for the first quarter 2007 (see reconciliation of diluted cash
earnings per share in the attached schedules).

-- Transactions of 339.5 million, compared to 270.1 million for
the first quarter 2007.

Two significant factors affect the comparison of Euronet's first
quarter 2008 results with the results for the same period in 2007 --
last year's acquisition of RIA Envia Inc. ("RIA"), the third-largest
global money transfer company, which occurred on April 4, 2007, and
charges incurred in the first quarter 2008 in connection with the
Company's interest in acquiring MoneyGram International, Inc.
("MoneyGram").

Beginning in the second quarter 2007, Euronet included the results
of RIA in its consolidated financial statements, together with the
related equity and debt issued to complete the acquisition. RIA's
operating results are reported in the Money Transfer Segment.

During the fourth quarter 2007, Euronet purchased 1.3 million
shares of MoneyGram common stock at an aggregate cost of $20.0
million. Subsequent to December 31, 2007, the value of MoneyGram
shares declined significantly upon MoneyGram's announcements of losses
in its investment portfolio and the dilutive effect of a capital
placement to fund the losses. During the first quarter 2008, Euronet
decided not to pursue the acquisition of MoneyGram. As a result, in
the first quarter 2008, Euronet recognized $17.5 million in
non-operating unrealized losses associated with the share investment
and expensed acquisition related costs totaling $3.0 million. Euronet
continues to hold the MoneyGram shares.

Results for the first quarter reflect a seasonal reduction in
transactions following the higher transaction levels during the fourth
quarter holiday season. Absent unusual circumstances, we estimate that
each of the Company's three business segments' overall revenue is
approximately 5% to 10% lower during the first quarter of each year
compared to the fourth quarter of the previous year.

Segment and Other Results

As stated above, beginning in the second quarter 2007, Euronet
began reporting the results of RIA in a separate business segment, the
"Money Transfer Segment." This Segment also includes the Company's
pre-existing money transfer business, which was previously included in
the Prepaid Processing Segment. The Segment results reported below
have been restated for prior periods to reflect the pre-existing money
transfer business in the Money Transfer Segment and the combination of
the EFT Processing and Software segments for comparative purposes.
These restatements were for comparative purposes only and had no
impact on Euronet's consolidated results.

The EFT Processing Segment reported the following results for the
first quarter 2008:

-- Revenues of $50.5 million, compared to $42.0 million for the
first quarter 2007.

-- Adjusted EBITDA of $14.2 million, compared to $11.0 million
for the first quarter 2007.

-- Operating income of $9.0 million, compared to $6.9 million for
the first quarter 2007.

-- Transactions of 168.4 million, compared to 130.7 million for
the first quarter 2007.

The EFT Processing Segment ended first quarter 2008 with 11,917
ATMs owned or operated compared to 9,182 ATMs at the end of first
quarter 2007. Euronet owns and/or operates ATMs primarily in Hungary,
Poland, Germany, Croatia, the Czech Republic, the United Kingdom,
Greece, Romania, Slovakia, Albania, Serbia, Montenegro, Ukraine,
Bulgaria, India and China. The year-over-year increases in revenues,
operating income and Adjusted EBITDA were primarily attributable to an
expansion of our ATM network.

For the fourth quarter 2007, the Company reported certain losses
incurred in connection with fraudulent transactions completed through
its network in Poland and Hungary. During the first quarter 2008, the
Company took remedial action regarding the fraudulent transactions
and, accordingly, losses incurred during the first quarter 2008 were
not significant. The improvements in operating income and Adjusted
EBITDA in the first quarter 2008 compared to the first quarter 2007
were offset by the Company's investment to develop processing systems
and capabilities in preparation for the Company's entry into the
cross-border merchant acquiring business. The prior year's first
quarter results included a non-recurring arbitration loss of $1.2
million related to a claim by a former cash supply company related to
the provision of cash during the fourth quarter 1999 and the first
quarter 2000.

The Prepaid Processing Segment reported the following results for
the first quarter 2008:

-- Revenues of $144.3 million, compared to $127.6 million for the
first quarter 2007.

-- Adjusted EBITDA of $14.5 million, compared to $13.5 million
for the first quarter 2007.

-- Operating income of $10.3 million, compared to $9.5 million
for the first quarter 2007.

-- Transactions of 167.3 million, compared to 139.4 million for
the first quarter 2007.

The Prepaid Processing Segment processes electronic point-of-sale
prepaid transactions at approximately 394,000 point-of-sale terminals
across approximately 193,000 retailer locations in Europe, Asia
Pacific, Africa and the U.S.

Growth in revenues in the Prepaid Processing Segment for the first
quarter 2008 compared to the first quarter 2007 was primarily
attributable to organic transaction growth as well as the full
quarter's benefit of the February 2007 acquisition of a U.K. based
prepaid processing company. Operating income also reflects
approximately $0.4 million in increased operating costs incurred in
connection with launching the prepaid processing business and signing
agreements with mobile operators in Italy.

The Money Transfer Segment reported the following results for the
first quarter 2008:

-- Revenues of $52.3 million, compared to $0.8 million for the
first quarter 2007.

-- Adjusted EBITDA of $6.8 million, compared to a loss of $0.8
million for the first quarter 2007.

-- Operating income of $2.0 million, compared to a loss of $0.9
million for the first quarter 2007.

-- Transactions of 3.8 million, compared to less than 0.1 million
for the first quarter 2007.

On a pro forma basis, revenues grew 18% for the quarter, although
transfers increased by approximately 10% for the first quarter 2008
compared to the first quarter 2007. The growth rate of revenues
exceeded the transfer growth rate largely as a result of a 61%
increase in transfers from non-U.S. locations, despite a 9% decline in
transfers to Mexico. While transfers to Mexico declined, gross profit
on transfers to Mexico increased by a few percentage points as a
result of the Company's focus on higher quality transfers. The
increase in transactions from non-U.S. locations was instrumental to
the Segment's pro forma Adjusted EBITDA growth of 74%.

Corporate and other reported $9.2 million of operating expenses
for the first quarter 2008, compared to $3.6 million for the first
quarter 2007. As discussed above, this increase was partially due to a
$3.0 million write-off of acquisition-related professional fees
associated with the Company's pursuit of the acquisition of MoneyGram.
The remaining increase is primarily the result of overall Company
growth and severance costs incurred in the first quarter 2008.

Exclusive of the impact of the unrealized loss related to the
Company's investment in MoneyGram, the Company's effective tax rate
increased to 51% for the first quarter 2008 from 30% for the first
quarter 2007 due primarily to U.S. pre-tax income generated by foreign
currency gains on loans to foreign subsidiaries. However, for U.S.
Federal income tax purposes, the Company has significant net operating
losses that offset taxable income recorded as required by generally
accepted accounting principles ("GAAP").

The Company's unrestricted cash on hand was $237.1 million as of
March 31, 2008 as compared to $267.6 million at December 31, 2007.
Euronet's total indebtedness was $498.5 million as of March 31, 2008,
compared to $557.8 million as of December 31, 2007.

The Company has two convertible debenture issues outstanding: i)
$140 million in principal amount of 1.625% debentures that are
potentially convertible into 4.2 million shares of the Company's
common stock, subject to adjustment; and ii) $175 million in principal
amount of 3.50% debentures that are potentially convertible into 4.3
million shares of the Company's common stock, subject to adjustment.
As required by EITF 04-8, "The Effect of Contingently Convertible Debt
on Diluted Earnings per Share," regardless of whether the conditions
upon which the debentures would be convertible into shares of the
Company's common stock have been met, if dilutive, the impact of the
contingently issuable shares is included in the calculation of diluted
earnings per share under the "if converted" method. As a result of the
Company's net loss for the first quarter 2008, the assumed conversion
of both convertible debenture issues was excluded from the calculation
of earnings per share because including the assumed conversion would
have been accretive. However, the assumed conversion of the Company's
$140 million, 1.625% debentures was dilutive and, accordingly,
included in the Company's calculation of earnings per share for the
first quarter 2007 and cash earnings per share for both the first
quarter 2008 and 2007.

Euronet also announced that it expects diluted cash earnings per
share for the second quarter 2008 to be approximately $0.32.

We believe that Adjusted EBITDA and diluted cash earnings per
share provide useful information to investors because they are
indicators of the strength and performance of our ongoing business
operations, including our ability to fund capital expenditures,
acquisitions and operations and to incur and service debt. These
calculations are commonly used as a basis for investors, analysts and
credit rating agencies to evaluate and compare the operating
performance and value of companies within the payment processing
industry.

The Company's management analyzes historical results adjusted for
certain items that are non-operational, not necessarily ongoing in
nature or that are incremental to the baseline of the business, and
management believes the exclusion of these items, as well as the
inclusion of pro forma results, provides a more complete and
comparable basis for evaluating the underlying business unit
performance.

Adjusted EBITDA is defined as operating income excluding
depreciation, amortization and share-based compensation expenses.
While depreciation and amortization are considered operating costs
under generally accepted accounting principles, these expenses
primarily represent non-cash current period allocations of costs
associated with long-lived assets acquired in prior periods.
Similarly, the expenses recorded for share-based compensation does not
represent a current or future period cash costs.

Diluted cash earnings per share is defined as diluted GAAP
earnings per share excluding the impacts of a) foreign exchange gains
or losses, b) discontinued operations, c) debt restructuring or early
debt retirement charges, d) tax-effected share-based compensation, e)
tax-effected acquired intangible asset amortization and f) other
non-operating or unusual items that cannot be accurately projected.
Further, diluted cash earnings per share includes shares potentially
issuable in settlement of convertible bonds or other obligations, if
the assumed issuances are dilutive.

Pro forma financial information is not intended to represent, or
be indicative of, the results from operations or financial condition
that would have been reported had the related transaction been
completed as of the beginning of the periods presented. Moreover, the
pro forma financial information should not be considered
representative of future results of operations or financial condition.

The attached schedules provide a full reconciliation of these and
other non-GAAP financial measures to a corresponding GAAP financial
measure.

Euronet Worldwide will host an analyst conference call on
Wednesday, April 30, 2008, at 9:00 a.m. U.S. Eastern Time to discuss
these results. To listen to the call via telephone, dial 877-407-9210
(USA) or +1-201-689-8049 (non-USA). The conference call will also be
available via webcast here or
www.euronetworldwide.com. Participants should go to the web site at
least 5 minutes prior to the scheduled start time of the event to
register.

A webcast replay will be available beginning approximately one
hour after the event here To dial in
for the replay, the call-in number is 877-660-6853 (USA) or
+1-201-612-7415 (non-USA). The account number is 286 and the
conference ID number is 281355. The call and webcast replay will be
available for one month. You can access the slide presentation via
webcast or here.

About Euronet Worldwide

Euronet Worldwide is an industry leader in processing secure
electronic financial transactions. The Company offers payment and
transaction processing solutions to financial institutions, mobile
operators and retailers which include comprehensive ATM, POS and Card
outsourcing services; card issuing and merchant acquiring services;
software solutions; consumer money transfer and bill payment services;
and electronic distribution for prepaid mobile airtime and other
prepaid products. Euronet operates and processes transactions from 42
countries.

Euronet's global payment network is extensive - including 11,917
ATMs and approximately 51,000 EFT POS terminals which are under
management in 20 countries; a growing portfolio of outsourced debit
and credit card services and card software solutions; a prepaid
processing network of 394,000 point-of-sale terminals across
approximately 193,000 retailer locations in 14 countries; and a
consumer-to-consumer money transfer network of more than 68,000
locations serving approximately 100 countries. With corporate
headquarters in Leawood, Kansas, USA, and 32 worldwide offices,
Euronet serves clients in 130 countries. For more information, please
visit the Company's web site at www.euronetworldwide.com.

Statements contained in this news release that concern Euronet's
or its management's intentions, expectations, or 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 filings with the Securities
and Exchange Commission, including our Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Copies
of these filings may be obtained by contacting the Company or the SEC.
Euronet does not intend to update these forward-looking statements and
undertakes no duty to any person to provide any such update under any
circumstances.

-0-
*T
EURONET WORLDWIDE, INC.
Consolidated Statements of Operations
(unaudited - in millions, except share and per share data)

Three Months Ended
March 31,
-----------------------
2008 2007
----------- -----------

Revenues:
EFT Processing $50.5 $42.0
Prepaid Processing 144.3 127.6
Money Transfer 52.3 0.8
----------- -----------
Total revenues 247.1 170.4
----------- -----------

Operating expenses:
Direct operating costs 166.0 120.6
Salaries and benefits 32.9 19.0
Selling, general and administrative 21.6 10.8
Depreciation and amortization 14.5 8.1
----------- -----------
Total operating expenses 235.0 158.5
----------- -----------
Operating income 12.1 11.9
----------- -----------

Other income (expense):
Interest income 3.8 4.3
Interest expense (6.9) (3.5)
Income from unconsolidated affiliates 0.3 0.2
Loss on investment securities (17.5) -
Loss on early retirement of debt (0.2) -
Foreign exchange gain, net 13.1 0.4
----------- -----------
Total other income (expense) (7.4) 1.4
----------- -----------
Income from continuing operations before
income taxes and minority interest 4.7 13.3

Income tax expense (11.0) (3.8)
Minority interest (0.5) (0.4)
----------- -----------

Income (loss) from continuing operations (6.8) 9.1

Gain from discontinued operations - 0.4
----------- -----------

Net income (loss) $(6.8) $9.5
=========== ===========

Earnings (loss) per share - diluted:
Continuing operations $(0.14) $0.23
Discontinued operations - -
----------- -----------
Earnings (loss) per share $(0.14) $0.23
=========== ===========

Diluted weighted average shares outstanding 48,956,945 43,688,014
=========== ===========
*T

-0-
*T
EURONET WORLDWIDE, INC.
Consolidated Condensed Balance Sheets
(in millions)

As of
March 31, As of
2008 December 31,
(unaudited) 2007
----------- ------------

ASSETS
Current assets:
Cash and cash equivalents $237.1 $267.6
Restricted cash 87.6 140.2
Inventory - PINs and other 50.7 50.3
Trade accounts receivable, net 273.3 290.4
Other current assets, net 62.6 54.0
----------- ------------

Total current assets 711.3 802.5

Property and equipment, net 97.6 89.0
Goodwill and acquired intangible assets, net 954.6 919.5
Other assets, net 59.3 75.2
----------- ------------

Total assets $1,822.8 $1,886.2
=========== ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and other current
liabilities $466.9 $516.2
Short-term debt obligations 7.3 7.0
----------- ------------

Total current liabilities 474.2 523.2

Debt obligations, net of current portion 480.0 539.3
Capital lease obligations, net of current
portion 11.2 11.5
Deferred income tax 87.3 74.6
Other long-term liabilities 8.9 4.7
Minority interest 10.3 9.0
----------- ------------

Total liabilities 1,071.9 1,162.3

Stockholders' equity 750.9 723.9
----------- ------------

Total liabilities and stockholders' equity $1,822.8 $1,886.2
=========== ============
*T

-0-
*T
EURONET WORLDWIDE, INC.
Reconciliation of Operating Income to Adjusted EBITDA by Segment
(unaudited - in millions)

Three Months Ended March 31, 2008
----------------------------------------------

EFT Prepaid Money
Processing Processing Transfer Consolidated
----------- ----------- -------- -------------

Operating Income $9.0 $10.3 $2.0 $12.1

Add: Depreciation and
amortization 5.2 4.2 4.8 14.5
Add: Share-based
compensation - - - 2.9
----------- ----------- -------- -------------

Earnings before
interest, taxes,
depreciation,
amortization and
share-based
compensation (Adjusted
EBITDA) $14.2 $14.5 $6.8 $29.5
=========== =========== ======== =============

Three Months Ended March 31, 2007
----------------------------------------------

EFT Prepaid Money
Processing Processing Transfer Consolidated
----------- ----------- -------- -------------

Operating Income $6.9 $9.5 $(0.9) $11.9

Add: Depreciation and
amortization 4.1 3.9 0.1 8.1
Add: Share-based
compensation - 0.1 - 1.9
----------- ----------- -------- -------------

Earnings before
interest, taxes,
depreciation,
amortization and
share-based
compensation (Adjusted
EBITDA) $11.0 $13.5 $(0.8) $21.9
=========== =========== ======== =============
*T

-0-
*T
EURONET WORLDWIDE, INC.
Reconciliation of Money Transfer Segment Results
to Pro Forma Money Transfer Segment Results
(unaudited - in millions)

Three Months Ended March 31, 2007
---------------------------------
Total Adjusted Operating
Revenues EBITDA Income
-------------- -------- ---------

Money Transfer Segment $0.8 $(0.8) $(0.9)

Add: Pro forma adjustments 43.7 4.7 0.5
-------------- -------- ---------

Pro Forma Money Transfer Segment $44.5 $3.9 $(0.4)
============== ======== =========
*T

-0-
*T
EURONET WORLDWIDE, INC.
Reconciliation of Diluted Cash Earnings per Share
(unaudited - in millions, except share and per share data)

Three Months Ended
March 31,
-------------------------
2008 2007
----------- -----------

Net income $(6.8) $9.5
Convertible debt interest and
amortization of issuance costs, net of
tax 0.5 (2) 0.7 (1)
----------- -----------

Earnings applicable for common
shareholders (6.3) 10.2

Foreign exchange gain, net of tax (5.0) (0.4)
Share-based compensation, net of tax 2.1 1.8
Intangible asset amortization, net of
tax 4.2 1.8
Loss on early debt retirement, net of
tax 0.1 -
Non-cash GAAP tax expense 2.0 -
Loss on investment securities 17.5 -
Costs associated with termination of an
acquisition, net of tax 1.8 -
Federal excise tax refund, net of tax (0.3) -
Arbitration award, net of tax - 0.9
Gain from discontinued operations - (0.4)
----------- -----------

Earnings applicable for common
shareholders before foreign exchange
gains/losses and share-based
compensation $16.1 $13.9
----------- -----------

Cash earnings per share - diluted (3) $0.29 $0.31
----------- -----------

Basic weighted average shares
outstanding 48,956,945 38,434,178

Incremental shares from assumed
conversion of stock options and
restricted stock - 1,090,348
Additional shares from assumed
conversion of 1.625% convertible
debentures (1) - 4,163,488
----------- -----------

Diluted weighted average shares
outstanding 48,956,945 43,688,014

Incremental shares from assumed
conversion of stock options and
restricted stock 810,002 -
Additional shares from assumed
conversion of 1.625% convertible
debentures (2) 4,163,488 -
Effect of shares issuable in
connection with acquisition
obligations 953,395 -
Effect of unrecognized share-based
compensation on diluted shares
outstanding 1,315,378 1,028,710
----------- -----------

Adjusted diluted weighted average shares
outstanding 56,199,208 44,716,724
----------- -----------

(1) As required by GAAP, the interest cost and amortization of the
convertible debt issuance cost are excluded from income for the
purpose of calculating diluted earnings per share for any period when
the convertible debentures, if converted, would be dilutive to
earnings per share. Further, the convertible shares are treated as if
all were outstanding for the period. The assumed conversion of the
Company's 1.625% convertible debentures was dilutive to the Company's
diluted GAAP earnings per share for the first quarter 2007, but was
not dilutive for the first quarter 2008.

(2) Although the assumed conversion of the 1.625% convertible
debentures was not dilutive to the Company's diluted GAAP earnings
per share for the first quarter 2008, it was dilutive to the
Company's diluted cash earnings per share. Accordingly, the interest
cost and amortization of the convertible debt issuance cost are
excluded from income and the convertible shares are treated as if all
were outstanding for the period

(3) Diluted Cash earnings per share is a non-GAAP measure that should
be considered in addition to, and not as a substitute for, earnings
per share computed in accordance with GAAP.
*T

Euronet Worldwide, Inc.
Shruthi Dyapaiah-Fielder, 913-327-4225
sdyapaiah@eeft.com

Copyright Business Wire 2008