CINCINNATI and LONDON, Nov. 8,
2018 /PRNewswire/ -- Worldpay, Inc. (NYSE: WP, LSE:
WPY) ("Worldpay" or the "Company") today announced financial
results for the third quarter ended September 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 84% to $1,017.9 million as compared to $554.2 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 9% on a pro forma basis as compared to the prior
year period. On a GAAP basis, net income per diluted share
attributable to Worldpay, Inc. decreased 98% to $0.01 as compared to $0.57 in the prior year period. The GAAP decrease
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 17% to $1.05 as compared to
$0.90 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.)
"I am excited about the momentum that we are building in the
marketplace as the newly combined Worldpay," said Charles Drucker, chairman and co-chief executive
officer of Worldpay. "We are winning because we offer our clients a
powerful value proposition that includes a unique combination of
global reach, innovative technologies, and tailored solutions that
differentiates us from our competitors."
|
Worldpay, Inc.
Third Quarter 2018 Results
(unaudited)
(in millions,
except share data)
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
September 30,
2018
|
|
September 30,
2017 (1)
|
|
%
Change
|
|
Pro Forma
(2)
% Change
|
|
Pro Forma
(2)
Constant
Currency
% Change
|
|
|
|
|
|
|
|
|
|
|
|
Net
revenue
|
$
|
1,017.9
|
|
|
$
|
554.2
|
|
|
84%
|
|
9%
|
|
9%
|
|
Technology
Solutions
|
419.7
|
|
|
224.7
|
|
|
87%
|
|
17%
|
|
17%
|
|
Merchant
Solutions
|
507.5
|
|
|
244.1
|
|
|
108%
|
|
4%
|
|
4%
|
|
Issuer
Solutions
|
90.7
|
|
|
85.4
|
|
|
6%
|
|
4%
|
|
4%
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
496.8
|
|
|
270.1
|
|
|
84%
|
|
|
|
|
|
Adj. EBITDA
Margin
|
48.8%
|
|
|
48.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net income
attributable to Worldpay, Inc.
|
$
|
2.8
|
|
|
$
|
92.1
|
|
|
(97)%
|
|
|
|
|
|
GAAP Net income per
diluted share attributable to
Worldpay, Inc.
|
$
|
0.01
|
|
|
$
|
0.57
|
|
|
(98)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net
income
|
$
|
330.8
|
|
|
$
|
168.0
|
|
|
97%
|
|
|
|
|
|
Adjusted net income
per share
|
$
|
1.05
|
|
|
$
|
0.90
|
|
|
17%
|
|
|
|
|
|
(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.
|
Adjusted EBITDA
Adjusted EBITDA was $496.8 million or 48.8% of net revenue in the
third quarter, representing 10 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 150
basis points on a pro forma basis over the prior year period.
|
Worldpay, Inc.
Fourth Quarter and Full-Year Financial Outlook
(in millions,
except share data)
|
|
Fourth Quarter
Financial Outlook
|
Full Year
Financial Outlook
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
2018
Outlook
|
|
2017 Actual
(2)
|
|
2018 Outlook
(1)
|
|
2017 Actual
(2)
|
|
Net
revenue
|
$1,027 -
$1,055
|
|
$569
|
|
$3,900 -
$3,930
|
|
$2,123
|
|
GAAP Net income
(loss) per diluted share
attributable to Worldpay, Inc.
|
$0.06 -
$0.20
|
|
$(0.37)
|
|
($0.25) -
($0.09)
|
|
$0.80
|
|
Adjusted net income
per share
|
$1.05 -
$1.10
|
|
$0.97
|
|
$3.95 -
$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 third 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
(866) 548-4713, in the U.K. by dialing 0800 358 6377, or for
international callers +1 (323) 794-2093, and referencing code
5170010#. 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 5170010#. 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 omni-commerce. With an integrated
technology platform, Worldpay offers a comprehensive suite of
products and services, delivered globally through a single
provider. Worldpay processes over 40 billion transactions annually,
supporting more than 300 payment types across 146 countries and 126
currencies. The company is focused on expanding into high-growth
markets and customer segments, including global eCommerce,
integrated payments and B2B. Visit us at www.worldpay.com.
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
|
Schedule
1
Worldpay, Inc.
Consolidated
Statements of Income
(Unaudited)
(in millions,
except share data)
|
|
|
Three Months Ended
September 30,
|
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2018
|
|
2017
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
|
Revenue
|
$
|
1,017.9
|
|
|
$
|
1,033.7
|
|
|
(2)
|
%
|
|
$
|
2,875.4
|
|
|
$
|
2,960.6
|
|
|
(3)
|
%
|
|
Network fees and
other costs
|
—
|
|
|
479.5
|
|
|
NM
|
|
|
—
|
|
|
1,406.3
|
|
|
NM
|
|
|
Net
Revenue(1)
|
1,017.9
|
|
|
554.2
|
|
|
84
|
%
|
|
2,875.4
|
|
|
1,554.3
|
|
|
85
|
%
|
|
Sales and
marketing
|
295.8
|
|
|
173.8
|
|
|
70
|
%
|
|
845.2
|
|
|
497.1
|
|
|
70
|
%
|
|
Other operating
costs
|
174.8
|
|
|
79.4
|
|
|
120
|
%
|
|
515.4
|
|
|
234.3
|
|
|
120
|
%
|
|
General and
administrative
|
140.7
|
|
|
49.6
|
|
|
184
|
%
|
|
527.6
|
|
|
189.6
|
|
|
178
|
%
|
|
Depreciation and
amortization
|
328.9
|
|
|
82.5
|
|
|
299
|
%
|
|
824.0
|
|
|
237.0
|
|
|
248
|
%
|
|
Income from
operations
|
77.7
|
|
|
168.9
|
|
|
(54)
|
%
|
|
163.2
|
|
|
396.3
|
|
|
(59)
|
%
|
|
Interest
expense—net
|
(75.2)
|
|
|
(38.5)
|
|
|
95
|
%
|
|
(230.3)
|
|
|
(97.4)
|
|
|
136
|
%
|
|
Non-operating
(expense) income(2)
|
(3.5)
|
|
|
21.2
|
|
|
(117)
|
%
|
|
(34.1)
|
|
|
13.7
|
|
|
(349)
|
%
|
|
(Loss) income before
applicable income taxes
|
(1.0)
|
|
|
151.6
|
|
|
(101)
|
%
|
|
(101.2)
|
|
|
312.6
|
|
|
(132)
|
%
|
|
Income tax (benefit)
expense
|
(4.6)
|
|
|
44.7
|
|
|
(110)
|
%
|
|
(5.0)
|
|
|
83.5
|
|
|
(106)
|
%
|
|
Net income
(loss)
|
3.6
|
|
|
106.9
|
|
|
(97)
|
%
|
|
(96.2)
|
|
|
229.1
|
|
|
(142)
|
%
|
|
Less: Net income
attributable to non-
controlling interests
|
(0.8)
|
|
|
(14.8)
|
|
|
(95)
|
%
|
|
(1.5)
|
|
|
(39.3)
|
|
|
(96)
|
%
|
|
Net income (loss)
attributable to
Worldpay, Inc.
|
$
|
2.8
|
|
|
$
|
92.1
|
|
|
(97)
|
%
|
|
$
|
(97.7)
|
|
|
$
|
189.8
|
|
|
(151)
|
%
|
|
Net income (loss) per
share attributable to
Worldpay, Inc. Class A common stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.01
|
|
|
$
|
0.57
|
|
|
(98)
|
%
|
|
$
|
(0.34)
|
|
|
$
|
1.18
|
|
|
(129)
|
%
|
|
Diluted(3)
|
$
|
0.01
|
|
|
$
|
0.57
|
|
|
(98)
|
%
|
|
$
|
(0.34)
|
|
|
$
|
1.17
|
|
|
(129)
|
%
|
|
Shares used in
computing net income (loss)
per share of Class A common stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
301,240,681
|
|
|
161,465,849
|
|
|
|
|
290,385,855
|
|
|
161,205,066
|
|
|
|
|
Diluted
|
313,881,826
|
|
|
162,882,396
|
|
|
|
|
290,385,855
|
|
|
162,617,782
|
|
|
|
|
_______________
|
|
|
|
(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 nine months ended
September 30, 2018, Revenue is equivalent to Net revenue as a
result of the company's adoption of ASC 606. For the three and nine
months ended September 30, 2017, Net revenue is equivalent to
Revenue less Network fees and other costs.
|
|
(2)
|
Non-operating expense
during the nine months ended September 30, 2018 primarily consists
of expenses relating to the Company's financing arrangements
entered into in connection with the Worldpay Group plc 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
Worldpay Group plc. Non-operating income for the nine months ended
September 30, 2017 primarily consists of an unrealized gain
relating to the change in the fair value of a deal contingent
forward entered into in connection with the Worldpay Group plc
acquisition, partially offset by 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 nine
months ended September 30, 2018, approximately 13.5 million
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
nine months ended September 30, 2017, approximately 23.6
million and 31.2 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 nine months ended September 30, 2018 and
for the three and nine months ended September 30, 2017.
Additionally, due to the net loss for the nine months ended
September 30, 2018, any remaining potentially dilutive
securities were also excluded from the denominator in computing
dilutive net income per share.
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
(Loss) income before
applicable income taxes
|
$
|
(1.0)
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Taxes
|
(3.6)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Net income
(loss)
|
$
|
2.6
|
|
|
$
|
92.1
|
|
|
$
|
(97.7)
|
|
|
$
|
189.8
|
|
|
Diluted
shares
|
313,881,826
|
|
|
162,882,396
|
|
|
290,385,855
|
|
|
162,617,782
|
|
|
Diluted
EPS
|
$
|
0.01
|
|
|
$
|
0.57
|
|
|
$
|
(0.34)
|
|
|
$
|
1.17
|
|
|
Schedule
2
Worldpay, Inc.
Adjusted Net
Income
(Unaudited)
(in millions,
except share data)
|
|
|
Three Months
Ended
|
|
|
|
Nine Months
Ended
|
|
|
|
September
30,
|
|
September
30,
|
|
|
|
September
30,
|
|
September
30,
|
|
|
|
2018
|
|
2017
|
|
% Change
|
|
2018
|
|
2017
|
|
% Change
|
|
Net (loss) income
before applicable
income taxes
|
$
|
(1.0)
|
|
|
$
|
151.6
|
|
|
(101)
|
%
|
|
$
|
(101.2)
|
|
|
$
|
312.6
|
|
|
(132)
|
%
|
|
Non-GAAP
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Transition,
acquisition and
integration costs(1) (2)
|
47.4
|
|
|
5.1
|
|
|
829
|
%
|
|
277.6
|
|
|
67.9
|
|
|
309
|
%
|
|
Share-based
compensation(2)
|
42.8
|
|
|
13.6
|
|
|
215
|
%
|
|
99.0
|
|
|
35.1
|
|
|
182
|
%
|
|
Intangible
amortization(2) (3)
|
289.5
|
|
|
55.3
|
|
|
424
|
%
|
|
715.0
|
|
|
161.5
|
|
|
343
|
%
|
|
Non-operating expense
(income)(4)
|
3.5
|
|
|
(21.2)
|
|
|
(117)
|
%
|
|
34.1
|
|
|
(13.7)
|
|
|
(349)
|
%
|
|
Non-GAAP adjusted
income
before applicable income taxes
|
382.2
|
|
|
204.4
|
|
|
87
|
%
|
|
1,024.5
|
|
|
563.4
|
|
|
82
|
%
|
|
Less:
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted tax
expense(5)
|
50.9
|
|
|
35.9
|
|
|
42
|
%
|
|
128.7
|
|
|
94.8
|
|
|
36
|
%
|
|
Adjusted tax
rate
|
13
|
%
|
|
18
|
%
|
|
|
|
13
|
%
|
|
17
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other(6)
|
0.5
|
|
|
0.5
|
|
|
—
|
%
|
|
1.2
|
|
|
1.2
|
|
|
—
|
%
|
|
Adjusted net
income
|
$
|
330.8
|
|
|
$
|
168.0
|
|
|
97
|
%
|
|
$
|
894.6
|
|
|
$
|
467.4
|
|
|
91
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income
per share
|
$
|
1.05
|
|
|
$
|
0.90
|
|
|
17
|
%
|
|
$
|
2.92
|
|
|
$
|
2.41
|
|
|
21
|
%
|
|
Adjusted shares
outstanding(7)
|
313,881,826
|
|
|
186,524,461
|
|
|
|
|
306,107,456
|
|
|
193,860,354
|
|
|
|
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 nine months ended September 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
September 30, 2018
|
|
Three Months Ended
September 30, 2017
|
|
Transition,
Acquisition & Integration
|
|
Share-Based
Compensation
|
|
Amortization of
Intangible Assets
|
|
Transition,
Acquisition & Integration
|
|
Share-Based
Compensation
|
|
Amortization of
Intangible Assets
|
|
Other operating
costs
|
$
|
16.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
General and
administrative
|
30.6
|
|
|
42.8
|
|
|
—
|
|
|
2.5
|
|
|
13.6
|
|
|
—
|
|
|
Depreciation and
amortization
|
—
|
|
|
—
|
|
|
289.5
|
|
|
—
|
|
|
—
|
|
|
55.3
|
|
|
Total
adjustments
|
$
|
47.4
|
|
|
$
|
42.8
|
|
|
$
|
289.5
|
|
|
$
|
5.1
|
|
|
$
|
13.6
|
|
|
$
|
55.3
|
|
|
|
|
Nine Months Ended
September 30, 2018
|
|
Nine Months Ended
September 30, 2017
|
|
Transition,
Acquisition & Integration
|
|
Share-Based
Compensation
|
|
Amortization of
Intangible Assets
|
|
Transition,
Acquisition & Integration
|
|
Share-Based
Compensation
|
|
Amortization of
Intangible Assets
|
|
Other operating
costs
|
$
|
54.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
General and
administrative
|
223.6
|
|
|
99.0
|
|
|
—
|
|
|
57.0
|
|
|
35.1
|
|
|
—
|
|
|
Depreciation and
amortization
|
—
|
|
|
—
|
|
|
715.0
|
|
|
—
|
|
|
—
|
|
|
161.5
|
|
|
Total
adjustments
|
$
|
277.6
|
|
|
$
|
99.0
|
|
|
$
|
715.0
|
|
|
$
|
67.9
|
|
|
$
|
35.1
|
|
|
$
|
161.5
|
|
|
|
|
(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 34.0% 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: (1) the amortization of
intangible assets and other tax attributes resulting from or
acquired with our acquisitions, (2) the tax basis step up
associated with our separation from Fifth Third Bank and (3) 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 13.5 million 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 nine months ended September 30, 2018. The
adjusted shares outstanding includes 23.6 million and 31.2 million
of weighted average Class B units of Worldpay Holding that are
excluded from the GAAP dilutive net income per share calculation
for the three and nine months ended September 30, 2017,
respectively.
|
|
Schedule
3
Worldpay, Inc.
Segment
Information
(Unaudited)
(in
millions)
|
|
|
Technology
Solutions
|
|
|
Three Months Ended
September 30,
|
|
|
|
2018
|
|
2017
|
|
% Change
|
|
Revenue
|
$
|
419.7
|
|
|
$
|
339.9
|
|
|
23
|
%
|
|
Network fees and
other costs
|
—
|
|
|
115.2
|
|
|
NM
|
|
|
Net
revenue(1)
|
419.7
|
|
|
224.7
|
|
|
87
|
%
|
|
Sales and
marketing
|
115.2
|
|
|
73.6
|
|
|
57
|
%
|
|
Segment
profit
|
$
|
304.5
|
|
|
$
|
151.1
|
|
|
102
|
%
|
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2018
|
|
2017
|
|
% Change
|
|
Revenue
|
$
|
1,157.7
|
|
|
$
|
919.4
|
|
|
26
|
%
|
|
Network fees and
other costs
|
—
|
|
|
335.3
|
|
|
NM
|
|
|
Net
revenue(1)
|
1,157.7
|
|
|
584.1
|
|
|
98
|
%
|
|
Sales and
marketing
|
309.2
|
|
|
203.3
|
|
|
52
|
%
|
|
Segment
profit
|
$
|
848.5
|
|
|
$
|
380.8
|
|
|
123
|
%
|
|
|
|
Merchant
Solutions
|
|
|
Three Months Ended
September 30,
|
|
|
|
2018
|
|
2017
|
|
% Change
|
|
Revenue
|
$
|
507.5
|
|
|
$
|
576.7
|
|
|
(12)
|
%
|
|
Network fees and
other costs
|
—
|
|
|
332.6
|
|
|
NM
|
|
|
Net
revenue(1)
|
507.5
|
|
|
244.1
|
|
|
108
|
%
|
|
Sales and
marketing
|
174.0
|
|
|
94.4
|
|
|
84
|
%
|
|
Segment
profit
|
$
|
333.5
|
|
|
$
|
149.7
|
|
|
123
|
%
|
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2018
|
|
2017
|
|
% Change
|
|
Revenue
|
$
|
1,460.1
|
|
|
$
|
1,695.9
|
|
|
(14)
|
%
|
|
Network fees and
other costs
|
—
|
|
|
976.2
|
|
|
NM
|
|
|
Net
revenue(1)
|
1,460.1
|
|
|
719.7
|
|
|
103
|
%
|
|
Sales and
marketing
|
516.8
|
|
|
276.3
|
|
|
87
|
%
|
|
Segment
profit
|
$
|
943.3
|
|
|
$
|
443.4
|
|
|
113
|
%
|
|
|
|
Issuer
Solutions
|
|
|
Three Months Ended
September 30,
|
|
|
|
2018
|
|
2017
|
|
% Change
|
|
Revenue
|
$
|
90.7
|
|
|
$
|
117.1
|
|
|
(23)
|
%
|
|
Network fees and
other costs
|
—
|
|
|
31.7
|
|
|
NM
|
|
|
Net
revenue(1)
|
90.7
|
|
|
85.4
|
|
|
6
|
%
|
|
Sales and
marketing
|
6.6
|
|
|
5.8
|
|
|
14
|
%
|
|
Segment
profit
|
$
|
84.1
|
|
|
$
|
79.6
|
|
|
6
|
%
|
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2018
|
|
2017
|
|
% Change
|
|
Revenue
|
$
|
257.6
|
|
|
$
|
345.3
|
|
|
(25)
|
%
|
|
Network fees and
other costs
|
—
|
|
|
94.8
|
|
|
NM
|
|
|
Net
revenue(1)
|
257.6
|
|
|
250.5
|
|
|
3
|
%
|
|
Sales and
marketing
|
19.2
|
|
|
17.5
|
|
|
10
|
%
|
|
Segment
profit
|
$
|
238.4
|
|
|
$
|
233.0
|
|
|
2
|
%
|
|
_______________
|
|
|
|
(1)
|
See note (1) in
Schedule 1.
|
|
Schedule
4
Worldpay, Inc.
Condensed
Consolidated Statements of Financial Position
(Unaudited)
(in
millions)
|
|
|
|
September 30,
2018
|
|
December 31,
2017
|
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
373.7
|
|
|
$
|
126.5
|
|
|
Accounts
receivable—net
|
|
1,599.8
|
|
|
986.6
|
|
|
Merchant
float
|
|
1,427.9
|
|
|
—
|
|
|
Settlement
assets
|
|
3,306.8
|
|
|
142.0
|
|
|
Prepaid
expenses
|
|
87.3
|
|
|
33.5
|
|
|
Other
|
|
549.3
|
|
|
84.0
|
|
|
Total current
assets
|
|
7,344.8
|
|
|
1,372.6
|
|
|
|
|
|
|
|
Customer
incentives
|
|
66.3
|
|
|
68.4
|
|
|
Property,
equipment and software—net
|
|
1,053.8
|
|
|
473.7
|
|
|
Intangible
assets—net
|
|
3,364.8
|
|
|
678.5
|
|
|
Goodwill
|
|
14,674.8
|
|
|
4,173.0
|
|
|
Deferred
taxes
|
|
789.8
|
|
|
739.5
|
|
|
Proceeds from
senior unsecured notes
|
|
—
|
|
|
1,135.2
|
|
|
Other
assets
|
|
67.2
|
|
|
26.1
|
|
|
Total
assets
|
|
$
|
27,361.5
|
|
|
$
|
8,667.0
|
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts payable and
accrued expenses
|
|
$
|
1,169.2
|
|
|
$
|
631.9
|
|
|
Settlement
obligations
|
|
5,396.3
|
|
|
816.2
|
|
|
Current portion of
notes payable
|
|
226.5
|
|
|
107.9
|
|
|
Current portion of
tax receivable agreement obligations
|
|
109.1
|
|
|
245.5
|
|
|
Deferred
income
|
|
23.1
|
|
|
18.9
|
|
|
Current maturities of
capital lease obligations
|
|
25.2
|
|
|
8.0
|
|
|
Other
|
|
609.9
|
|
|
6.0
|
|
|
Total current
liabilities
|
|
7,559.3
|
|
|
1,834.4
|
|
|
Long-term
liabilities:
|
|
|
|
|
|
Notes
payable
|
|
7,723.7
|
|
|
5,586.4
|
|
|
Tax receivable
agreement obligations
|
|
589.7
|
|
|
535.0
|
|
|
Capital lease
obligations
|
|
22.4
|
|
|
4.5
|
|
|
Deferred
taxes
|
|
540.3
|
|
|
65.6
|
|
|
Other
|
|
104.6
|
|
|
40.5
|
|
|
Total long-term
liabilities
|
|
8,980.7
|
|
|
6,232.0
|
|
|
Total
liabilities
|
|
16,540.0
|
|
|
8,066.4
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
Total equity
(1)
|
|
10,821.5
|
|
|
600.6
|
|
|
Total liabilities and
equity
|
|
$
|
27,361.5
|
|
|
$
|
8,667.0
|
|
|
_______________
|
|
|
|
(1)
|
Includes equity
attributable to non-controlling interests.
|
|
Schedule
5
Worldpay, Inc.
Consolidated
Statements of Cash Flows
(Unaudited)
(in
millions)
|
|
|
Nine Months
Ended
|
|
September 30,
2018
|
|
September 30,
2017
|
|
Operating
Activities:
|
|
|
|
|
Net (loss)
income
|
$
|
(96.2)
|
|
|
$
|
229.1
|
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization expense
|
824.0
|
|
|
237.0
|
|
|
Amortization of
customer incentives
|
19.9
|
|
|
18.7
|
|
|
Amortization and
write-off of debt issuance costs
|
73.2
|
|
|
3.9
|
|
|
Gain on foreign
currency forward
|
(35.9)
|
|
|
(24.4)
|
|
|
Share-based
compensation expense
|
99.0
|
|
|
35.1
|
|
|
Deferred tax
expense
|
(26.2)
|
|
|
60.0
|
|
|
Tax receivable
agreements non-cash items
|
(4.7)
|
|
|
(6.1)
|
|
|
Other
|
(6.5)
|
|
|
2.3
|
|
|
Change in operating
assets and liabilities:
|
|
|
|
|
Accounts
receivable
|
(67.0)
|
|
|
46.7
|
|
|
Net settlement assets
and obligations
|
(366.5)
|
|
|
4.3
|
|
|
Customer
incentives
|
(19.4)
|
|
|
(17.7)
|
|
|
Prepaid and other
assets
|
(22.4)
|
|
|
(82.9)
|
|
|
Accounts payable and
accrued expenses
|
(140.8)
|
|
|
22.3
|
|
|
Other
liabilities
|
(10.9)
|
|
|
(17.4)
|
|
|
Net cash
provided by operating activities
|
219.6
|
|
|
510.9
|
|
|
Investing
Activities:
|
|
|
|
|
Purchases of property
and equipment
|
(191.9)
|
|
|
(81.9)
|
|
|
Acquisition of
customer portfolios and related assets and other
|
(56.0)
|
|
|
(38.2)
|
|
|
Purchase of interest
rate caps
|
(8.1)
|
|
|
—
|
|
|
Proceeds from foreign
currency forward
|
71.5
|
|
|
—
|
|
|
Cash acquired (used)
in acquisitions, net of cash used
|
1,396.3
|
|
|
(531.5)
|
|
|
Net cash
provided by (used in) investing activities
|
1,211.8
|
|
|
(651.6)
|
|
|
Financing
Activities:
|
|
|
|
|
Proceeds from
issuance of long-term debt
|
2,951.8
|
|
|
1,270.0
|
|
|
Borrowings on
revolving credit facility
|
3,308.0
|
|
|
5,405.0
|
|
|
Repayment of
revolving credit facility
|
(3,533.0)
|
|
|
(5,046.0)
|
|
|
Repayment of debt and
capital lease obligations
|
(2,732.6)
|
|
|
(108.0)
|
|
|
Payment of debt
issuance costs
|
(91.1)
|
|
|
(24.0)
|
|
|
Proceeds from
issuance of Class A common stock under employee stock
plans
|
18.2
|
|
|
10.8
|
|
|
Repurchase of
Class A common stock (to satisfy tax withholding
obligations)
|
(16.2)
|
|
|
(9.2)
|
|
|
Purchase and
cancellation of Class A common stock
|
—
|
|
|
(1,268.1)
|
|
|
Settlement of certain
tax receivable agreements
|
(112.5)
|
|
|
(77.3)
|
|
|
Payments under tax
receivable agreements
|
(55.3)
|
|
|
(46.5)
|
|
|
Distributions to
non-controlling interests
|
(7.7)
|
|
|
(12.5)
|
|
|
Net cash
(used in) provided by financing activities
|
(270.4)
|
|
|
94.2
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
1,161.0
|
|
|
(46.5)
|
|
|
Cash and cash
equivalents—Beginning of period
|
1,272.2
|
|
|
139.1
|
|
|
Effect of exchange
rate changes on cash
|
(143.5)
|
|
|
—
|
|
|
Cash and cash
equivalents—End of period
|
$
|
2,289.7
|
|
|
$
|
92.6
|
|
|
Cash
Payments:
|
|
|
|
|
Interest
|
$
|
205.1
|
|
|
$
|
94.3
|
|
|
Income
taxes
|
16.7
|
|
|
31.6
|
|
|
Schedule
6
Worldpay, Inc.
Reconciliation of
GAAP Net Income to Adjusted EBITDA
(Unaudited)
(in
millions)
|
|
|
Three Months Ended
September 30,
|
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2018
|
|
2017
|
|
% Change
|
|
2018
|
|
2017
|
|
% Change
|
|
Net income
(loss)
|
$
|
3.6
|
|
|
$
|
106.9
|
|
|
(97)
|
%
|
|
$
|
(96.2)
|
|
|
$
|
229.1
|
|
|
(142)
|
%
|
|
Income tax (benefit)
expense
|
(4.6)
|
|
|
44.7
|
|
|
(110)
|
%
|
|
(5.0)
|
|
|
83.5
|
|
|
(106)
|
%
|
|
Non-operating expense
(income)(1)
|
3.5
|
|
|
(21.2)
|
|
|
(117)
|
%
|
|
34.1
|
|
|
(13.7)
|
|
|
(349)
|
%
|
|
Interest
expense—net
|
75.2
|
|
|
38.5
|
|
|
95
|
%
|
|
230.3
|
|
|
97.4
|
|
|
136
|
%
|
|
Share-based
compensation
|
42.8
|
|
|
13.6
|
|
|
215
|
%
|
|
99.0
|
|
|
35.1
|
|
|
182
|
%
|
|
Transition,
acquisition and integration costs(2)
|
47.4
|
|
|
5.1
|
|
|
829
|
%
|
|
277.6
|
|
|
67.9
|
|
|
309
|
%
|
|
Depreciation and
amortization
|
328.9
|
|
|
82.5
|
|
|
299
|
%
|
|
824.0
|
|
|
237.0
|
|
|
248
|
%
|
|
Adjusted
EBITDA
|
$
|
496.8
|
|
|
$
|
270.1
|
|
|
84
|
%
|
|
$
|
1,363.8
|
|
|
$
|
736.3
|
|
|
85
|
%
|
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 (2) in
Schedule 2.
|
|
Schedule
7
Worldpay, Inc.
Outlook
Summary
(Unaudited)
|
|
|
Fourth Quarter
Financial Outlook
|
|
Full Year
Financial Outlook
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
2018
Outlook
|
|
2017 Actual
(2)
|
|
2018 Outlook
(1)
|
|
2017 Actual
(2)
|
|
GAAP net income
(loss) per share attributable to
Worldpay, Inc.
|
$0.06 -
$0.20
|
|
$(0.37)
|
|
($0.25) -
($0.09)
|
|
$0.80
|
|
Adjustments to
reconcile GAAP to non-GAAP
adjusted net income per share(3)
|
$0.99 -
$0.90
|
|
$1.34
|
|
$4.20 -
$4.09
|
|
$2.57
|
|
Adjusted net income
per share
|
$1.05 -
$1.10
|
|
$0.97
|
|
$3.95 -
$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.
|
_______________
|
|
|
|
(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 including 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 income (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 December 31, 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.
|
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SOURCE Worldpay, Inc.
