TIDMWPY
RNS Number : 3616X
Worldpay, Inc
09 August 2018
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH
JURISDICTION
FOR IMMEDIATE RELEASE
August 9, 2018
Worldpay Reports Second Quarter 2018 Results
Accelerating Organic Growth and Expanding Margins Generated
Superior Financial Results
Raising Full Year Guidance to Reflect Improving Trends
CINCINNATI and LONDON, August 9, 2018 - Worldpay, Inc. (NYSE:
WP, LSE: WPY) ("Worldpay" or the "Company") today announced
financial results for the second quarter ended June 30, 2018.
Worldpay, Inc. was formed on January 16, 2018 through Vantiv,
Inc.'s previously announced acquisition of Worldpay Group plc. Net
revenue for Worldpay, Inc. increased 90% to $1.0 billion as
compared to $530.0 million in Vantiv Inc.'s prior year period. Had
the Vantiv Inc./Worldpay Group plc transaction closed on January 1,
2017, net revenue would have increased by 11% on a pro forma basis
and by 9% on a pro forma constant currency basis as compared to the
prior year period. On a GAAP basis, net income per diluted share
attributable to Worldpay, Inc. decreased 102% to $(0.01) as
compared to $0.42 in the prior year period. The GAAP loss is
primarily due to transition, acquisition and integration costs and
intangible amortization incurred in connection with the Vantiv,
Inc./Worldpay Group plc transaction. Adjusted net income per share
increased 25% to $1.04 as compared to $0.83 in the prior year
period. (See Schedule 1 for net income per diluted share
attributable to Worldpay, Inc. and Schedule 2 for adjusted net
income per share.)
"Just two quarters after closing the Worldpay transaction, our
combination is already delivering superior results through
accelerating organic revenue growth and significant earnings
accretion," said Charles Drucker, chairman and co-chief executive
officer and Philip Jansen, co-chief executive officer at Worldpay.
"With our leading global ecommerce and integrated payments
capabilities, we are uniquely positioned to capitalize on the most
significant areas of secular growth across the payments
industry."
Adjusted EBITDA
Adjusted EBITDA was $492.9 million or 49.0% of net revenue in
the second quarter, representing 70 basis points of margin
expansion as compared to Vantiv, Inc. results on a stand-alone
basis in the prior year period. Had the Vantiv, Inc./Worldpay Group
plc transaction closed on January 1, 2017, Adjusted EBITDA margins
would have expanded by 160 basis points on a pro forma basis over
the prior year period.
Worldpay, Inc. Second Quarter 2018 Results
(unaudited)
(in millions, except share data)
Three Months Ended
Pro Forma
Pro Forma (2) Constant
June 30, June 30, (2) % Currency
2018 2017 (1) % Change Change % Change
--------------- -------------- --------- ---------- --------------
Net revenue $ 1,006.8 $ 530.0 90% 11% 9%
Technology Solutions 401.6 197.2 104% 21% 19%
Merchant Solutions 520.4 251.9 107% 5% 3%
Issuer Solutions 84.8 80.9 5% 2% 2%
Adjusted EBITDA 492.9 256.2 92%
Adj. EBITDA Margin 49.0% 48.3%
GAAP Net (loss) income attributable
to Worldpay, Inc. $ (2.9) $ 68.8 (104)%
GAAP Net (loss) income per
diluted share attributable
to Worldpay, Inc. $ (0.01) $ 0.42 (102)%
Adjusted net income $ 327.1 $ 164.7 99%
Adjusted net income per share $ 1.04 $ 0.83 25%
(1) 2017 actuals include Vantiv, Inc. results only.
(2) Illustrates what the combined results would have been had
the Vantiv, Inc./Worldpay Group plc transaction closed on January
1, 2017.
Increasing Financial Guidance
"We are raising our net revenue and adjusted earnings guidance
ranges for the full year 2018," said Stephanie Ferris, chief
financial officer at Worldpay. "We expect the accelerating organic
growth trends that we achieved during the second quarter to
continue for the rest of the year, and we are increasing our
organic revenue growth expectations by one point for the full year
with a partial offset due to currency. In addition, we continue to
carefully manage expenses, resulting in further earnings
accretion."
Worldpay, Inc. Third Quarter and Full-Year Financial Outlook
(in millions, except share data)
Third Quarter Financial
Outlook Full Year Financial Outlook
-------------------------------
Three Months Ended September
30, Year Ended December 31,
2017 Actual 2018 Outlook 2017 Actual
2018 Outlook (2) (1) (2)
----------------- ------------ ---------------- ------------
Net revenue $1,000 - $1,020 $554 $3,880 - $3,930 $2,123
GAAP Net income per diluted
share attributable to Worldpay, ($0.06) -
Inc. $0.06 - $0.13 $0.57 $0.12 $0.80
Adjusted net income per
share $1.00 - $1.03 $0.90 $3.93 - $4.00 $3.37
(1) Combined company guidance excludes Worldpay Group plc net
revenue and EPS contribution for the period from January 1, 2018 -
January 15, 2018, prior to the completion of its previously
announced acquisition by Vantiv, Inc. on January 16, 2018. Combined
company guidance is based on an assumed exchange rate of U.S.
dollar/pound sterling of $1.31.
(2) 2017 actuals include Vantiv, Inc. results only.
ASC 606
Worldpay adopted Accounting Standards Codification Topic 606,
Revenue from Contracts with Customers ("ASC 606"), effective
January 1, 2018. Under ASC 606, Network fees and other costs are
now netted against Revenue and no longer appear as an expense
between Revenue and Net revenue as they were shown in prior
periods. As a result, Revenue and Net revenue are now equivalent.
This change in presentation reduces Revenue by the amount of
Network fees and other costs to an amount equivalent to Net
revenue, but has no impact on Net income, Adjusted net income, or
Adjusted EBITDA.
Earnings Conference Call and Audio Webcast
The Company will host a conference call to discuss the second
quarter 2018 financial results today at 8:00 a.m. ET. The
conference call can be accessed live over the phone in the U.S. and
Canada by dialing (800) 667-5617, in the U.K. by dialing 0800 756
3333, or for international callers +1 (334) 323-0509, and
referencing code 3061646#. A replay will be available approximately
two hours after the call concludes and can be accessed for the U.S.
and Canada by dialing (888) 203-1112, in the U.K. by dialing 0808
101 1153, or for international callers +1 (719) 457-0820, and
entering replay passcode 3061646#. The call will also be webcast
live from the Company's investor relations website at
http://investor.worldpay.com. Following completion of the call, a
recorded replay of the webcast will be available on the
website.
About Worldpay, Inc.
Worldpay, Inc. (NYSE: WP; LSE: WPY) is a leading payments
technology company with unique capability to power global
integrated omni-commerce. With industry-leading scale and an
unmatched integrated technology platform, Worldpay offers clients a
comprehensive suite of products and services globally, delivered
through a single provider.
Worldpay processes over 40 billion transactions annually through
more than 300 payment types across 146 countries and 126
currencies. The company's growth strategy includes expanding into
high-growth markets, verticals and customer segments, including
global eCommerce, Integrated Payments and B2B.
Worldpay, Inc. was formed in 2018 through the combination of the
No. 1 merchant acquirers in the U.S. and the U.K. Worldpay, Inc.
trades on the New York Stock Exchange as "WP" and the London Stock
Exchange as "WPY."
Non-GAAP and Pro Forma Financial Measures
This earnings release presents non-GAAP and pro forma financial
information including adjusted EBITDA, Underlying EBITDA, adjusted
net income, and adjusted net income per share. These are important
financial performance measures for the Company, but are not
financial measures as defined by GAAP. The presentation of this
financial information is not intended to be considered in isolation
of or as a substitute for, or superior to, the financial
information prepared and presented in accordance with GAAP. The
Company uses these non-GAAP and adjusted financial performance
measures for financial and operational decision making and as a
means to evaluate period-to-period comparisons. The Company
believes that they provide useful information about operating
results, enhance the overall understanding of past financial
performance and future prospects, and allow for greater
transparency with respect to key metrics used by management in its
financial and operational decision making. Reconciliations of these
measures to
the most directly comparable GAAP financial measures are
presented in the attached schedules.
Forward-Looking Statements
This release contains forward-looking statements that are
subject to risks and uncertainties. All statements other than
statements of historical fact or relating to present facts or
current conditions included in this release are forward-looking
statements including any statements regarding guidance and
statements of a general economic or industry specific nature.
Forward-looking statements give our current expectations and
projections relating to our financial condition, results of
operations, guidance, plans, objectives, future performance and
business. You can identify forward-looking statements by the fact
that they do not relate strictly to historical or current facts.
These statements may include words such as "anticipate,"
"estimate," "expect," "project," "plan," "intend," "believe,"
"may," "should," "can have," "likely" and other words and terms of
similar meaning in connection with any discussion of the timing or
nature of future operating or financial performance or other
events.
The forward-looking statements contained in this release are
based on assumptions that we have made in light of our industry
experience and our perceptions of historical trends, current
conditions, expected future developments and other factors we
believe are appropriate under the circumstances. As you review and
consider information presented herein, you should understand that
these statements are not guarantees of future performance or
results. They depend upon future events and are subject to risks,
uncertainties (many of which are beyond our control) and
assumptions. Although we believe that these forward-looking
statements are based on reasonable assumptions, you should be aware
that many factors could affect our actual future performance or
results and cause them to differ materially from those anticipated
in the forward-looking statements. Certain of these factors and
other risks are discussed in the company's filings with the U.S.
Securities and Exchange Commission (the "SEC") and include, but are
not limited to: (i) our ability to adapt to developments and change
in our industry; (ii) competition; (iii) unauthorized disclosure of
data or security breaches; (iv) systems failures or interruptions;
(v) our ability to expand our market share or enter new markets;
(vi) our ability to successfully integrate the businesses of our
predecessor companies; (vii) our ability to identify and complete
acquisitions, joint ventures and partnerships; (viii) failure to
comply with applicable requirements of Visa, MasterCard or other
payment networks or changes in those requirements; (ix) our ability
to pass along fee increases; (x) termination of sponsorship or
clearing services; (xi) loss of clients or referral partners; (xii)
reductions in overall consumer, business and government spending;
(xiii) fraud by merchants or others; (xiv) a decline in the use of
credit, debit or prepaid cards; (xv) consolidation in the banking
and retail industries; (xvi) changes in foreign currency exchange
rates; (xvii) the effects of governmental regulation or changes in
laws; (xviii) geopolitical, regulatory, tax and business risks
associated with our international operations; and (xix) outcomes of
future litigation or investigations and our dual-listings with the
NYSE and LSE. Should one or more of these risks or uncertainties
materialize, or should any of these assumptions prove incorrect,
our actual results may vary in material respects from those
projected in these forward-looking statements. More information on
potential factors that could affect the company's financial results
and performance is included from time to time in the "Risk Factors"
and "Management's Discussion and Analysis of Financial Condition
and Results of Operations" sections of the company's periodic
reports filed with the SEC, including the company's most recently
filed Annual Report on Form 10-K and its subsequent filings with
the SEC.
Any forward-looking statement made by us in this release speaks
only as of the date of this release. Factors or events that could
cause our actual results to differ may emerge from time to time,
and it is not possible for us to predict all of them. We undertake
no obligation to publicly update any forward-looking statement,
whether as a result of new information, future developments or
otherwise, except as may be required by law.
CONTACTS
Investors
Nathan Rozof, CFA or Ignatius Njoku
Investor Relations
(866) 254-4811
(513) 900-4811
IR@worldpay.com
Media
Andrew Ciafardini
Corporate Communications
(513) 900-5308
Andrew.Ciafardini@worldpay.com
Worldpay, Inc. LEI number: 213800TV56O7TZI4U902
Schedule 1
Worldpay, Inc.
Consolidated Statements of Income
(Unaudited)
(in millions, except share data)
Three Months Ended Six Months Ended
June 30, June 30,
2018 2017 Change 2018 2017 Change
-------------- -------------- -------------- -------------- ---------
Revenue $ 1,006.8 $ 998.7 1% $ 1,857.5 $ 1,926.9 (4)%
Network fees and
other costs - 468.7 NM - 926.8 NM
------------- ------------- ------------- -------------
Net Revenue(1) 1,006.8 530.0 90% 1,857.5 1,000.1 86%
Sales and
marketing 283.4 168.3 68% 549.4 323.3 70%
Other operating
costs 185.5 79.0 135% 340.6 154.9 120%
General and
administrative 136.8 50.7 170% 386.9 140.0 176%
Depreciation and
amortization 287.9 78.4 267% 495.1 154.5 220%
------------- ------------- ------------- -------------
Income from
operations 113.2 153.6 (26)% 85.5 227.4 (62)%
Interest
expense-net (79.9) (29.7) 169% (155.1) (58.9) 163%
Non-operating
expense(2) (22.0) (3.4) 547% (30.6) (7.5) 308%
------------- ------------- ------------- -------------
Income (loss)
before
applicable
income taxes 11.3 120.5 (91)% (100.2) 161.0 (162)%
Income tax
expense
(benefit) 12.8 33.6 (62)% (0.4) 38.8 (101)%
------------- ------------- ------------- -------------
Net (loss)
income (1.5) 86.9 (102)% (99.8) 122.2 (182)%
Less: Net income
attributable
to
non-controlling
interests (1.4) (18.1) (92)% (0.7) (24.5) (97)%
------------- ------------- ------------- -------------
Net (loss)
income
attributable
to Worldpay,
Inc. $ (2.9) $ 68.8 (104)% $ (100.5) $ 97.7 (203)%
========= === ======== ========= =========
Net (loss)
income per share
attributable to
Worldpay,
Inc. Class A
common stock:
Basic $ (0.01) $ 0.43 (102)% $ (0.35) $ 0.61 (157)%
Diluted (3) $ (0.01) $ 0.42 (102)% $ (0.35) $ 0.60 (158)%
Shares used in
computing
net (loss)
income per share
of Class A
common stock:
Basic 296,204,304 161,266,692 284,868,484 161,072,513
Diluted 296,204,304 162,510,616 284,868,484 162,483,315
(1) Based on the Company's adoption of Accounting Standard
Update 2014-09, Revenue From Contracts With Customers (Topic 606)
("ASC 606") effective January 1, 2018, Network fees and other costs
are now netted against Revenue. For the three and six months ended
June 30, 2018, Revenue is equivalent to Net revenue as a result of
the company's adoption of ASC 606. For the three and six months
ended June 30, 2017, Net revenue is equivalent to Revenue less
Network fees and other costs.
(2) Non-operating expense during the six months ended June 30,
2018 primarily consists of expenses relating to the Company's
financing arrangements entered into in connection with the Legacy
Worldpay acquisition, repricing of the Company's debt in June 2018
and the change in fair value of the Mercury tax receivable
agreement ("TRA"), partially offset by a gain on the settlement of
a deal contingent forward entered into in connection with the
Company's acquisition of Legacy Worldpay. Non-operating expenses
for the six months ended June 30, 2017 primarily relates to the
change in fair value of the Mercury TRA.
(3) Due to our structure as a C corporation and Worldpay
Holding's structure as a pass-through entity for tax purposes, the
numerator in the diluted net income per share calculation is
adjusted to reflect the Company's income tax expense at an expected
effective tax rate assuming the conversion of the Class B units of
Worldpay Holding into shares of our Class A common stock. During
the three and six months ended June 30, 2018, approximately 15.0
million and 15.1 million, respectively, weighted average Class B
units of Worldpay Holding were excluded in computing diluted net
income per share because including them would have an antidilutive
effect. Additionally, during the three and six months ended June
30, 2017, approximately 35.0 million weighted-average dilutive
Class B units of Worldpay Holding were excluded in computing
diluted net income per share because including them would have an
antidilutive effect. As the Class B units of Worldpay Holding were
not included, the numerator used in the calculation of diluted net
income per share was equal to the numerator used in the calculation
of basic net income per share for the three and six months ended
June 30, 2018 and 2017, respectively. Additionally, due to the net
loss for the three and six months ended June 30, 2018, any
remaining potentially dilutive securities were also excluded from
the denominator in computing dilutive net income per share.
Three Months Ended Six Months Ended
June 30, June 30,
2018 2017 2018 2017
---------------- ------------- -------------- ---------------
(Loss) income before applicable
income taxes $ - $ - $ - $ -
Taxes - - - -
Net (loss) income $ (2.9) $ 68.8 $ (100.5) $ 97.7
Diluted shares 296,204,304 162,510,616 284,868,484 162,483,315
Diluted EPS $ (0.01) $ 0.42 $ (0.35) $ 0.60
Schedule 2
Worldpay, Inc.
Adjusted Net Income
(Unaudited)
(in millions, except share data)
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
2018 2017 % Change 2018 2017 % Change
----------------- ----------------- ----------- ----------------- ----------------- -----------
Net (loss) income
before applicable
income taxes $ 11.3 $ 120.5 (91)% $ (100.2) $ 161.0 (162)%
Non-GAAP
Adjustments:
Transition,
acquisition
and integration
costs(1)
(2) 52.8 13.3 297% 230.2 62.8 267%
Share-based
compensation(2) 39.0 10.9 258% 56.2 21.5 161%
Intangible
amortization(2)
(3) 252.7 54.3 365% 425.5 106.2 301%
Non-operating
expense(4) 22.0 3.4 547% 30.6 7.5 308%
------------- ------------- ------------- -------------
Non-GAAP
adjusted
income before
applicable
income taxes 377.8 202.4 87% 642.3 359.0 79%
Less: Adjustments
Adjusted tax
expense(5) 50.3 37.2 35% 77.8 58.9 32%
Adjusted tax rate 13% 18% 12% 16%
Other (6) 0.4 0.5 (20)% 0.7 0.7 -%
------------- ------------- ------------- -------------
Adjusted net
income $ 327.1 $ 164.7 99% $ 563.8 $ 299.4 88%
=== ======== === ======== === ======== === ========
Adjusted net
income
per share $ 1.04 $ 0.83 25% $ 1.87 $ 1.52 23%
Adjusted shares
outstanding(7) 313,431,291 197,553,442 302,127,796 197,526,141
Non-GAAP and Adjusted Financial Measures
This schedule presents non-GAAP and adjusted financial measures,
which are important financial performance measures for the Company,
but are not financial measures as defined by GAAP. Such financial
measures should not be considered as alternatives to GAAP, and such
measures may not be comparable to those reported by other
companies.
Adjusted net income is derived from GAAP income before
applicable income taxes and adjusted for the following items
described below:
(1) Represents acquisition and integration costs incurred in
connection with our acquisitions, charges related to employee
terminations and other transition activities. Included in
Transition, acquisition and integration costs in the six months
ended June 30, 2017 is a $38 million charge to G&A related to a
settlement agreement stemming from legacy litigation of an acquired
company.
(2) Below are the adjustments to Other operating costs, General
and administrative and Depreciation and amortization.
Three Months Ended June Three Months Ended June
30, 2018 30, 2017
Transition, Amortization Transition, Amortization
Acquisition Share-Based of Intangible Acquisition Share-Based of Intangible
& Integration Compensation Assets & Integration Compensation Assets
-------------- --------------- --------------- -------------- --------------- -----------------
Other operating
costs $ 27.0 $ - $ - $ 5.0 $ - $ -
General and
administrative 25.8 39.0 - 8.3 10.9 -
Depreciation
and
amortization - - 252.7 - - 54.3
-------------- --------------- --------------- -------------- --------------- ---------------
Total
adjustments $ 52.8 $ 39.0 $ 252.7 $ 13.3 $ 10.9 $ 54.3
==== ======== ==== ========= ===== ======== ==== ======== ==== ========= ===== ========
Six Months Ended June Six Months Ended June
30, 2018 30, 2017
Transition, Amortization Transition, Amortization
Acquisition Share-Based of Intangible Acquisition Share-Based of Intangible
& Integration Compensation Assets & Integration Compensation Assets
-------------- --------------- --------------- -------------- --------------- -----------------
Other operating
costs $ 37.2 $ - $ - $ 8.2 $ - $ -
General and
administrative 193.0 56.2 - 54.6 21.5 -
Depreciation
and
amortization - - 425.5 - - 106.2
-------------- --------------- --------------- -------------- --------------- ---------------
Total
adjustments $ 230.2 $ 56.2 $ 425.5 $ 62.8 $ 21.5 $ 106.2
==== ======== ==== ========= ===== ======== ==== ======== ==== ========= ===== ========
(3) Represents amortization of intangible assets acquired
through business combinations and customer portfolio and related
asset acquisitions.
(4) See note 2 in Schedule 1.
(5) Represents adjusted income tax expense to reflect an
effective tax rate of 19.8% for 2018 and 34% for 2017, assuming the
conversion of the Class B units of Worldpay Holding into shares of
Class A common stock, including the tax effect of adjustments
described above. Adjusted tax expense includes tax benefits due to
the amortization of intangible assets and other tax attributes
resulting from or acquired with our acquisitions, and to the tax
basis step up associated with our separation from Fifth Third Bank
and to the purchase or exchange of Class B units of Worldpay
Holding, net of payment obligations under tax receivable
agreements. The effective tax rate is expected to remain at 19.8%
for the remainder of 2018.
(6) Represents the non-controlling interest, net of adjusted
income tax expense discussed in (5) above, associated with a
consolidated joint venture.
(7) The adjusted shares outstanding includes 15.0 million and
15.1 million for the three and six months ended June 30, 2018,
respectively, of weighted average Class B units of Worldpay Holding
and other potentially dilutive securities that are excluded from
the GAAP dilutive net income per share calculation for the three
and six months ended June 30, 2018 because including them would
have an antidilutive effect. The adjusted shares outstanding
includes 35.0 million for the three and six months ended June 30,
2017, respectively, of weighted average Class B units of Worldpay
Holding that are excluded from the GAAP dilutive net income per
share for the three and six months ended June 30, 2017, because
including them would have an antidilutive effect.
Schedule 3
Worldpay, Inc.
Segment Information
(Unaudited)
(in millions)
Technology Solutions
Three Months Ended June 30,
2018 2017 % Change
----------------- --------------- -----------
Revenue $ 401.6 $ 307.6 31%
Network fees and other
costs - 110.4 NM
----------------- ---------------
Net revenue(1) 401.6 197.2 104%
Sales and marketing 98.1 69.5 41%
----------------- ---------------
Segment profit $ 303.5 $ 127.7 138%
=== ============ =========== ======
Six Months Ended June 30,
2018 2017 % Change
---------------- -------------- -----------
Revenue $ 738.0 $ 579.5 27%
Network fees and other
costs - 220.1 NM
---------------- --------------
Net revenue(1) 738.0 359.4 105%
Sales and marketing 194.0 129.7 50%
---------------- --------------
Segment profit $ 544.0 $ 229.7 137%
=== =========== ========== ======
Merchant Solutions
Three Months Ended June 30,
2018 2017 % Change
----------------- --------------- -----------
Revenue $ 520.4 $ 579.1 (10)%
Network fees and other
costs - 327.2 NM
----------------- ---------------
Net revenue(1) 520.4 251.9 107%
Sales and marketing 179.0 93.1 92%
----------------- ---------------
Segment profit $ 341.4 $ 158.8 115%
=== ============ =========== ======
Six Months Ended June 30,
2018 2017 % Change
-------------- -------------- -----------
Revenue $ 952.6 $ 1,119.2 (15)%
Network fees and other
costs - 643.6 NM
-------------- --------------
Net revenue(1) 952.6 475.6 100%
Sales and marketing 342.8 181.9 88%
-------------- --------------
Segment profit $ 609.8 $ 293.7 108%
========== ============= ======
Issuer Solutions
Three Months Ended June 30,
2018 2017 % Change
---------------- ---------------- -----------
Revenue $ 84.8 $ 112.0 (24)%
Network fees and other
costs - 31.1 NM
---------------- ----------------
Net revenue(1) 84.8 80.9 5%
Sales and marketing 6.3 5.7 11%
---------------- ---------------- ------
Segment profit $ 78.5 $ 75.2 4%
=== =========== ============ ======
Six Months Ended June 30,
2018 2017 % Change
---------------- -------------- -----------
Revenue $ 166.9 $ 228.2 (27)%
Network fees and other
costs - 63.1 NM
---------------- --------------
Net revenue(1) 166.9 165.1 1%
Sales and marketing 12.6 11.7 8%
---------------- -------------- ------
Segment profit $ 154.3 $ 153.4 1%
=== =========== ========== ======
(1) Based on the Company's adoption of ASC 606 effective January
1, 2018, Network fees and other costs are now netted against
Revenue. For the three and six months ended June 30, 2018, Revenue
is equivalent to Net revenue as a result of the company's adoption
of ASC 606. For the three and six months ended June 30, 2017, Net
revenue is equivalent to Revenue less Network fees and other
costs.
Schedule 4
Worldpay, Inc.
Condensed Consolidated Statements of Financial Position
(Unaudited)
(in millions)
June 30, December
2018 31, 2017
--------- --------------
Assets
Current assets:
Cash and cash equivalents $ 367.7 $ 126.5
Accounts receivable-net 1,577.6 986.6
Merchant float 1,873.2 -
Settlement assets 1,991.7 142.0
Prepaid expenses 81.0 33.5
Other 540.4 84.0
--------- ------------
Total current assets 6,431.6 1,372.6
Customer incentives 69.2 68.4
Property, equipment and software-net 1,032.2 473.7
Intangible assets-net 3,505.9 678.5
Goodwill 14,820.1 4,173.0
Deferred taxes 793.0 739.5
Proceeds from senior unsecured notes - 1,135.2
Other assets 69.8 26.1
------------
Total assets $26,721.8 $ 8,667.0
======== ========
Liabilities and equity
Current liabilities:
Accounts payable and accrued expenses $ 1,112.8 $ 631.9
Settlement obligations 4,561.6 816.2
Current portion of notes payable 226.6 107.9
Current portion of tax receivable agreement
obligations 143.9 245.5
Deferred income 26.2 18.9
Current maturities of capital lease obligations 29.9 8.0
Other 613.0 6.0
--------- ------------
Total current liabilities 6,714.0 1,834.4
Long-term liabilities:
Notes payable 7,860.9 5,586.4
Tax receivable agreement obligations 589.7 535.0
Capital lease obligations 26.8 4.5
Deferred taxes 546.4 65.6
Other 109.4 40.5
--------- ------------
Total long-term liabilities 9,133.2 6,232.0
Total liabilities 15,847.2 8,066.4
Commitments and contingencies
Equity:
Total equity (1) 10,874.6 600.6
--------- ------------
Total liabilities and equity $26,721.8 $ 8,667.0
======== ========
(1) Includes equity attributable to non-controlling
interests.
Schedule 5
Worldpay, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
(in millions)
Six Months Ended
June 30, 2018 June 30, 2017
---------------- ------------------
Operating Activities:
Net (loss) income $ (99.8) $ 122.2
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization expense 495.1 154.5
Amortization of customer incentives 12.6 13.0
Amortization and write-off of debt issuance
costs 72.9 2.3
Realized gain on foreign currency forward (35.9) -
Share-based compensation expense 56.2 21.5
Deferred tax expense 27.3 40.5
Tax receivable agreements non-cash items (6.4) (9.2)
Other 1.2 1.2
Change in operating assets and liabilities:
Accounts receivable (50.3) 65.6
Net settlement assets and obligations 105.7 40.8
Customer incentives (14.8) (13.6)
Prepaid and other assets (18.6) (34.0)
Accounts payable and accrued expenses (159.6) 28.6
Other liabilities (6.8) (15.2)
--------------- ---------------
Net cash provided by operating activities 378.8 418.2
--------------- ---------------
Investing Activities:
Purchases of property and equipment (103.1) (58.9)
Acquisition of customer portfolios and related
assets and other (51.1) (19.6)
Purchase of interest rate caps (8.1)
Proceeds from foreign currency forward 71.5 -
Cash acquired (used) in acquisitions, net of
cash used 1,405.8 (531.5)
--------------- ---------------
Net cash provided by (used in) investing
activities 1,315.0 (610.0)
--------------- ---------------
Financing Activities:
Proceeds from issuance of long-term debt 2,951.8 -
Borrowings on revolving credit facility 2,598.0 3,051.0
Repayment of revolving credit facility (2,823.0) (2,693.0)
Repayment of debt and capital lease obligations (2,590.3) - (70.2)
Payment of debt issuance costs (91.1) (1.1)
Proceeds from issuance of Class A common stock
under employee stock plans 14.9 10.1
Repurchase of Class A common stock (to satisfy
tax withholding obligations) (11.7) (5.7)
Settlement of certain tax receivable agreements (85.3) (61.3)
Payments under tax receivable agreements (55.3) (46.5)
Distributions to non-controlling interests (6.4) (10.7)
--------------- ---------------
Net cash (used in) provided by financing
activities (98.4) 172.6
--------------- ---------------
Net increase (decrease) in cash and cash equivalents 1,595.4 (19.2)
Cash and cash equivalents-Beginning of period 1,272.2 139.1
Effect of exchange rate changes on cash (139.2) -
--------------- ---------------
Cash and cash equivalents-End of period $ 2,728.4 $ 119.9
=========== ==== =========
Cash Payments:
Interest $ 149.3 $ 56.6
Income taxes 6.2 21.0
Schedule 6
Worldpay, Inc.
Reconciliation of GAAP Net Income to Adjusted EBITDA
(Unaudited)
(in millions)
Three Months Ended Six Months Ended
June 30, June 30,
2018 2017 % Change 2018 2017 % Change
------------- -------- ----------- ------------ ------- -----------
Net (loss) income $ (1.5) $ 86.9 (102)% $ (99.8) $ 122.2 (182)%
Income tax expense
(benefit) 12.8 33.6 (62)% (0.4) 38.8 (101)%
Non-operating
expenses(1) 22.0 3.4 547% 30.6 7.5 308%
Interest expense-net 79.9 29.7 169% 155.1 58.9 163%
Share-based
compensation 39.0 10.9 258% 56.2 21.5 161%
Transition,
acquisition
and integration
costs(2) 52.8 13.3 297% 230.2 62.8 267%
Depreciation and
amortization 287.9 78.4 267% 495.1 154.5 220%
------------ -------- ----------- -------
Adjusted EBITDA $ 492.9 $ 256.2 92% $ 867.0 $ 466.2 86%
======== ======= ======= ======
Non-GAAP Financial Measures
This schedule presents adjusted EBITDA, which is an important
financial performance measure for the Company, but is not a
financial measure as defined by GAAP. Such financial measure should
not be considered as an alternative to GAAP net income, and such
measure may not be comparable to those reported by other
companies.
(1) See note (2) in Schedule 1.
(2) See note (3) in Schedule 2.
Schedule 7
Worldpay, Inc.
Outlook Summary
(Unaudited)
Third Quarter Financial Full Year Financial
Outlook Outlook
--------------------------------- ---------------------------
Three Months Ended September Year Ended December
30, 31,
2017 Actual 2018 Outlook 2017 Actual
2018 Outlook (2) (1) (2)
----------------- ------------- ------------- ------------
GAAP net income per share
attributable to Worldpay, ($0.06) -
Inc. $0.06 - $0.13 $0.57 $0.12 $0.80
Adjustments to reconcile
GAAP to non-GAAP adjusted
net income per share(3) $0.94 - $0.90 $0.33 $3.99 - $3.88 $2.57
Adjusted net income per share $1.00 - $1.03 $0.90 $3.93 - $4.00 $3.37
================== ============= ============= ============
Non-GAAP and Adjusted Financial Measures
This schedule presents non-GAAP and adjusted financial measures,
which are important financial performance measures for the Company,
but are not financial measures as defined by GAAP. Such financial
measures should not be considered as alternatives to GAAP, and such
measures may not be comparable to those reported by other
companies.
The Company adopted ASC 606, effective January 1, 2018. Under
ASC 606, Network fees and other costs are now netted against
Revenue and no longer appear as an expense between Revenue and Net
revenue as they were shown in prior periods. As a result, Revenue
and Net revenue are now equivalent. This change in presentation
reduces Revenue by the amount of Network fees and other costs to an
amount equivalent to Net revenue, but has no impact on Net income,
Adjusted net income, or Adjusted EBITDA.
(1) Combined company guidance excludes Worldpay Group plc EPS
contribution for the period prior to the acquisition closing from
January 1, 2018 to January 15, 2018. Combined company guidance is
based on an assumed exchange rate of U.S. dollar/pound sterling of
$1.31.
(2) 2017 actuals include Vantiv, Inc. results only.
(3) Represents estimated ranges of adjustments for the following
items: (a) acquisition and integration costs incurred in connection
with our acquisitions, charges related to employee termination
benefits and other transition activities; (b) share-based
compensation; (c) amortization of intangible assets acquired in
business combinations and customer portfolio and related asset
acquisitions; (d) non-operating expenses, (f) adjustments to income
tax expense to reflect an effective tax rate based on tax reform
and our new tax structure for the three months ended September 30,
2018 and the full year 2018, which includes the impact of the
excess tax benefit relating to stock compensation as a result of
the Company adopting the new stock compensation accounting guidance
in 2017, assuming conversion of the Fifth Third Bank
non-controlling interests into shares of Class A common stock,
including the tax effect of adjustments described above; and (g)
tax benefits due to the amortization of intangible assets and other
tax attributes resulting from or acquired with our acquisitions,
and to the tax basis step up associated with our separation from
Fifth Third Bank and the purchase or exchange of Class B units of
Worldpay Holding, net of payment obligations under tax receivable
agreements.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR EAEPNESAPEFF
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August 09, 2018 07:00 ET (11:00 GMT)
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