Greetings, and welcome to the Euronet Worldwide Fourth Quarter 2014 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time [Operator Instructions]. It is now my pleasure to introduce your host, Mr. Jeff Newman, Executive Vice President and General Counsel for Euronet Worldwide. Thank you, Mr. Newman, you may begin.

Thank you, Ben. Good morning, and welcome, everyone, to Euronet's quarterly results conference call. We'll present our results for the fourth quarter and full-year 2014 on this call. We have Mike Brown, our CEO; Rick Weller, our CFO; and Kevin Caponecchi, Executive Vice President and CEO of our epay division on the call. Before we begin, I need to make our forward-looking statements disclaimer. Statements made on this call 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; technological issues associated with the operation of our complex processing systems, including security breaches; changes in ATM and other transaction fees; and changes in laws and regulations affecting the Company's business, including immigration laws and anti-money laundering regulations. 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 via the SEC's EDGAR website or 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. The Company regularly posts important information to the Investor Relations section of its website. Now I'll turn the call over to our CFO, Rick Weller.

Thank you, Jeff, and good morning, and welcome to everyone on the call. I will begin my comments on Slide 5. As you can see we finished the year with very strong fourth quarter results fueled by double-digit constant currency growth from all three segments. We achieved revenue of $462 million operating income of $49.5 million and adjusted EBITDA $71.4 million. Last year, our fourth quarter 2013 results included an $18.4 million non-cash impairment which we excluded to arrive at adjusted operating income. We believe this analysis provides a more relevant comparison of operating results. Our cash EPS was $0.74, a 17% increase from $0.63 over the fourth quarter 2013 and $0.02 ahead of our guidance. And it’s the eighth consecutive quarter we have achieved double-digit growth in adjusted cash earnings per share. This $0.74 includes about a penny of headwind from foreign currency fluctuations, since we provided guidance in October and about $0.03 loss from a write-off of an epay investment. Last year’s cash EPS also included about $0.05 of income tax benefit that did not repeat in 4Q this year. Unlike last year, this year our quarterly results did not realize any extra tax benefits. So when you do the math for the puts and takes you will see that our fundamental business in the fourth quarter did well better than the impressive 17% cash EPS gross shows. Overall, this was an excellent quarter for Euronet and positions us well to continue the momentum into 2015. Slide 6, shows the three-year transaction trend for each segment. EFT transactions grew 3% primarily fueled by growth in Europe, partially offset by a decline in Cashnet transactions in India. Epay transactions grew 20% driven by growth in India, Germany, Australia, Russia and the Middle East, which was partially offset by declines…

Thank you, Rick. And welcome everybody to our call. As you may know 2014 marked Euronet’s 20th anniversary, I think these results speak for themselves. 2014 was by far our best year yet. As I reflect back on this 20 year journey there are few key indicators that sum up our exceptional run. We have moved from a startup company to one that generates over a $130 million in cash flow from operations per year. This year alone, we earned more than $1.6 billion in revenue. We achieved record cash earnings per share. We processed more than 2.5 billion transactions. Our EFT team exceeded 20,000 ATMs that we directly operate. Our epay teams became the market leader in digital gift code distribution. Our Money Transfer segment exceeded $500 million in revenue for the first time. Our business is not just about moving around bits and bytes. Our partners trust us with more than $72 billion in cash every year and not only did we achieve the confidence of the world’s largest retailer, but Walmart named Ria as their supplier of the year at the Annual Walmart Services Supplier Conference. And these are just a few of the exceptional accomplishments achieved by the hard work and dedication of our teams around the world. We have great momentum in each of these segments and are well positioned for another great year in 2015. Now let’s move along to Slide number 19. This was simply an outstanding year of our EFT business. Our full-year adjusted operating income growth accelerated to 47% from 40% last year in 2013 and 35% in 2012. As I’ve mentioned before these earnings or the result of the continued focus of our teams to work hard every day to find new high quality locations for ATMs and POS terminals…

[Operator Instructions] Our first question comes from the line of Peter Heckman of Avondale. Your line is open. Please go ahead.

Good morning gentlemen, nice result.

Thank you, very much Pete.

Thank you.

And there's a lot of information there. I just had a couple follow-ups. Can you talk about - and based on the results, I don't think there was a mid-tier [act], but can you talk about any pricing actions that have occurred in the money transfer market, either domestic or internationally, competitively; and any that you foresee here in the near future?

Well, it can really foresee the future perfectly, but I can tell you as Rick mentioned in one of his comments, we really have seen really no pricing movements in really any of our markets. I mean with the exception of course that when after we launched the Walmart-2-Walmart I think the pressure that was put on one of our competitors there caused them to drop there U.S. Domestic Money Transfer price down to around a 11.50 or something, but that you can check on, but for us we’ve seen no pricing pressures anywhere. Really. Other than the normal competitive stuff that we have see on a everyday basis.

Great. And then within Europe, some of the discussions that are having there as regards to potentially capping a credit and debit interchange. Do you see that as a potential catalyst for more outsourcing agreements on credit/debit card processing, POS processing?

Probably, not and you know because in Europe we’re 98% on the ATM side as apposed to the POS acquiring side. So whatever happens there even if I don’t even expect it to change much, but if did really wouldn’t affect us much.

All right. Then last question and I'll get back in the queue. Rick, could you give us the total shares outstanding at the end of the period?

Its about 55 million shares, it’s in our press release, the actual number in terms of what our weighted average shares outstanding is Pete, so it’s...

I'm just - given that you bought a lot of stock back in December [Technical Difficulty].

Its 54,337.

All right, thanks so much.

Thank you. Our next question comes from the line of Alex Veytsman of Monness, Crespi, Hardt. Your line is open, please go ahead.

Hi, good morning congratulations on an excellent quarters.

Thank you very much.

Just wanted to ask you about one of your markets, about Russia specifically. First of all, if you could remind us the exposure that you have. And also, given that 2015 is looking relatively weak from an economic standpoint for the country. And of course, there's a lot of uncertainties with the falling price of oil and everything else, with the sanctions – could you just give us more color on that particular market?

We do, Kevin maybe you answer that one, because it’s mostly epay that’s in Russia?

Yes, the only Euronet business in Russia today is epay and our principal epay business in Russia, is the distribution of non-mobile content, which makes up a relatively small portion of the total portfolio. So in summary our exposure to Russia is relatively small.

Got it, got it. So it wouldn't move the needle, basically?

No, no.

Okay, got it. And then as far as the Walmart opportunity, could you maybe discuss your next steps for 2015? Where are you seeing – what are your targets throughout the year kind of - what are some of the opportunities you are seeing?

Well, you know now that we, it took us about, I would estimate around seven months to fully ramp up the transactions that we did with Walmart and all other stores. And but one thing is interesting through the ramp up all the time the Walmart executives were telling us that their domestic money transfer business is seasonal. So but we’ve never seen the seasonality yet, because we continue to grow month-on-month. And so in fact we had our largest week ever last week in numbers of transactions. So all we’re going to do is continue to keep our nose to the grindstone work really hard on delivering quality product to Walmart and its customers. And we’ll kind of see what goes from there, as far as all of Ria’s we’re just going to continue to compete in all the segments as Rick mentioned we had strong organic growth just within the U.S., within Ria last year and we will continue to do that.

Got it. Sounds good. Thank you.

Thank you. Our next question comes from the line of Chris Shutler of William Blair. Your line is open. Please go ahead.

Hi, yes, good morning.

Good morning, Chris.

So, first in the EFT segment, just wondering, Mike, what your plans are for expanding the ATM count in 2015. And I'm guessing it is still around 2,000 machines, but maybe you could clarify there, and what split of Europe versus India you are thinking?

Well, I’ll give you the same answer I give every quarter, we can only put ATMs at once we find good sites. The nice thing is last year we put in about 2000 ATMs, we got the staff to do so, we are out there looking for sites, we still see ourselves really at the beginning of this runway as far as places and countries, we just expanded to France as an example, we could see more countries expansion and more deeper penetration in the current countries. So if I can get in another couple thousand this year would be wonderful, but it’s not a number I can project because I am really at the mercy of finding the good locations that are going to generate us profit. We can find locations, but we’ve just kind got to find ones that will be profitable. But 2000 sounds like a reasonable number as far as the - as the balance between India and Europe. Kevin correct me if I am wrong here, but maybe it’s kind of two-thirds Europe, one-third India would be my guess, but again that’s all based upon where I can find them, if these guys find more than 2000 or the better and because we don’t say your quote is 2000, we say your quota is as many as you can possibly put in that are great.

Yes, make sense. And then, Mike, anything new on the outsourcing front? I saw the agreement in Poland this quarter. Maybe just an update there and any kind of additional opportunities you're seeing?

Well, we see a few as we – every year we announced the handful of these things, they are darn hard to sell because of all the labor and other issues that we have to kind of fight within the bureaucracies of the bank, but we get bigger and bigger ever year, the price and the quality of the services and the value-added services we can give the bank get better, so it gives us a pretty strong value proposition, we are actually growing most of - a lot of our outsourcing services are coming out of Asia-Pac. So we’ll keep after them, but I don’t want my future to wrap only in the hands of outsourcing deals that’s why we are aggressively pursuing new locations of our own.

All right, great. And maybe lastly, in EFT, just help us think through, the profits there have obviously been growing a lot faster than transactions and revenue. Maybe you could just – I know you've done this in the past, but break down a little bit the key drivers of that, in terms of DCC versus other value-added services. And then help us think through the sustainability of the recent trends over the next couple of years. And how much of it will be driven based on existing ATMs that are already in place, versus new ATMs that you plan to add? Thanks.

Okay so if you remember the basic premise of how it all works. So when we do in ATM outsource in deal in a market, lets say for example we do this in one of the European markets and we charge a bank maybe $200 and $250 per ATM per month to run their network of $100 or $200 or $300 ATM. That maximizes our revenue, because its X amount per month, the only way I can get bigger is if Fed bank adds more branches and more ATMs, but as you can see across Europe none of the banks have very good financials. So nobody is adding too many new ATMs right now. And so the way you grow it and then here is the deal because is the fixed amount per month per ATM. Its becomes regardless - the number of transactions are irrelevant. So they can add more cards and end up with more transaction so when you do your little division, you will notice that actually you could say if all you did was driving deals your revenue per transaction would continue to go down. Now the other reasons ours has gone the other way is because of we haven’t focus like lets take Poland where you might do 3000 transactions in a month at an ATM and that’s were charge in $250 you can see right there that that’s going to be less than $0.10 of transaction. Right, but if I own that ATM here the property economics are different, here we make more than the $250 per month per ATM, assuming we pick a great location. And so and when we and we get all the revenue for that and so if we are able to a domestic transaction that might be $0.28 in Poland and $0.45 in Italy and they range around there. You do an international transaction may be make a bucker two. So depending on how it all works as we continue to add more ATMs on our own, we are focusing on sites where we can acquire them more - lots of local and lots of high value transaction so then you are average goes up. We also have other things too, I mean now that kind of tricks up our sleeves, we have cash expectance network and other services marketing services across those ATMs and so forth that just kind of add into that revenue and then you kind of divide it out. So that probably have made this even more complex than you wanted, but I could say as add our own ATM faster than we add outsourced ATMs, you will see our average revenue per transaction and revenue per ATM go up.

Okay. Thanks Mike.

Thank you. Our next question comes from the line of Tim Willi of Wells Fargo. Your line is open. Please go ahead.

Thanks and good morning, Mike, Rick and Kevin. A couple questions, first on epay. I think that it's probably the strongest quarter for the top line that I can recall in years. And I guess I'm - obviously non-telephony is going quite well. Are you at a point, when you look at that business, where you think you have crossed over the line where the impact of the non-telephony clearly is going to outweigh the issues that have been weighing on the telephony business? And maybe, sustainably, the top line here is going to look better over the next couple of years, versus the last couple?

Yes, Tim, this is Kevin. It’s always a challenge, we see some stabilization of telephony in some markets we still have some challenges in the mobile sector and other markets, but to your point, we’re reaching a point of critical mass of non-mobile content. We continue to expand that in markets and I think the other thing that you heard Rick and Mike talk about was new channels specifically the digital channel. We had a lot of success in the digital channel launching brands to new digital channels in the fourth quarter and that played out nicely for us in the quarter and we expect that as Mike said that to continue.

Okay. And then just a follow-up on epay. And then I want to ask a quick one on money transfer. But in terms of sort of what you would call the content providers that are turning to you guys for distribution whether it be physical or, as you mentioned, digital, Kevin - obviously you've launched products that outside of iTunes and Google, but getting into more stuff that seems to be getting traction. How would you characterize the pipeline of people that are coming to you and talking about, we want to create something to be distributed and sold on a prepaid basis, whether it's physical or digital? Has that line at the door gotten bigger or smaller, then sort of sustainable, in terms of people that want to talk about trying to put a deal together?

Yes, that’s an interesting question. So Tim, I would say, this is Kevin again. I would say that’s continuing to grow because we’re also seeing the trend of existing products changing how they distribute. So for example Netflix, Netflix in the United States is traditionally been a subscription service that you pay for with a credit card. As Netflix looks to expanding markets outside of those that are dominated with credit cards, they need another vehicle to allow payment. And so by putting in on a card or putting in on a PIN-on-Receipt, we can facilitate allowing Netflix to expand the market they would otherwise not easily be able to expand to. The success that we’ve had with the software category, that’s widely understood that certain brands are converting from CD-ROM to POSA cards. Antivirus software, the same scenario. So I would say that the pipeline is not shrinking, it’s actually in the process of growing. This whole transformation from physical to virtual continues to open up new doors for us and new opportunities.

Great, thanks. And then just last one on money transfer, and I'll hop off after I ask it. In terms of the cadence over the course of the quarter, was there still acceleration in terms of foot traffic or transactions, to the best of your knowledge, as you look at how the business went, where we exited on a much stronger rate than we began the quarter? It sounded like that was the case, but I just want to verify that.

I think that’s pretty accurate and a lot of people asked us last quarter because on Halloween Moneygram dropped their, domestic money transfer price by a significant amount and a lot of people were wondering how that might effect us and honestly we seen nothing. So if anything I think that’s just their drop in price is just helping making domestic money transfers more affordable to the average U.S. consumer. And when you look at their alternatives, we might have - if you are sending 600 bucks, you might have paid $50 to send money and now you pay 950 with us. What this is doing to is bringing new people into this market, so that pie is actually getting bigger for domestic money transfers. So all this we don’t quite know where it’s all going to go, but we are happy that it continues to grow like I mentioned last week was our best week in our history of Walmart-2-Walmart. So who knows, we’ll see where it goes.

Great, thanks very much.

Thank you. Our next question comes from the line of Mike Grondahl of Piper Jaffray. Your line is open. Please go ahead.

Yes, guys congratulations on another strong quarter. Couple of questions. First off, is there any update on any new retailers out there, whether in the US or globally? And then the money transfer operating margin, at 10%, was quite strong. How should we think about that number going forward?

Well, I’ll answer the first quarter - first question which was other retailers I mean we are talking to retailers all the time Mike and our feeling is to close a big deal with the big name retailer takes a long time and I don’t want to mess up that deal before it gets announced. So traditionally will announce that actually not even after we sign it, but after we go live. So you guys just have to wait and see and we will kind of wait and see as we sign more deals. With the exception of the kind of ongoing margin within the Money Transfer segment I will let Rick handle that one.

Yes, Mike I would think that you will continue to see consistent to improving kind of margins there, because we benefited in the second half of the year, by the launch of the Walmart-2-Walmart product and the acquisition of HiFX. So those pieces will continue to be in our business and as Mike said we had a good week, last week on the Walmart-2-Walmart product, which will continue to enhance that number. So the fourth quarter wasn’t a fluke, there wasn’t any kind of unusual weird or one-time type of things that came into those numbers. So as we continue to add more and more volume into the business we should see that number stable to improving.

Okay, great. And then with HiFX, any update on the US or Canadian rollout? And then is the white label program they're doing for two banks, is that a big deal? Just curious how we think about that?

Well with respect to the expansion, we are hoping the towards the very beginning of next quarter that we should go live here in the U.S. with HiFX. We are trying to get it into Q1, but there is some regulatory [grouches] that were slowing as down here but we are getting through them all. And licensing that kind of junk and so it but looks towards the very beginning the Q2 we hopefully will be live in the U.S. with HiFX so that will add a new market, we're excited about that. Your second question was I forgot.

Oh, just Canada.

Canada will follow the U.S. so we will get U.S. live and do that for a couple of quarters and then we will work on Canada.

And then the white label [indiscernible].

Oh, yes, white label. So and then the last name with white label those are two banks - now we are quite sure how big this could be, but these are banks that specialize with customer who live in one place and then they have like vacation homes in others. And so they would be typically a perfect target bank to a white label product, we’ve never done won before so I’m kind of - I’m reluctant to give any guesses on how that will happen, but we’ll let you know maybe we’ll give you some early indication on our next quarterly call.

Okay. And then just the last question here. You guys called out Pakistan for some ATM deployment. I mean would you describe that as a new, exciting market, or a small market? How should we think about that?

We’ve been in Pakistan for either providing some of the largest banks there software to run their ATMs or doing a joint venture that we have there, running ATMs kind of like what we do in India and we’ve been there for five years, probably not Kevin. And this deal - Kevin, why don’t you jump in, but if I remember this was another outsourcing deal.

Yes, we have a relationship with the largest bank in Pakistan that relationship has been going for couple of years now. I’ve been focused on trying to expand that business beyond the one relationship that we have, it took a little time outsourcing is a new model in Pakistan as it relates to their ATMs and we had some success towards in the last year and we have a nice pipeline going into this year, that we’ve got to get close and executed. So I would say Pakistan in terms of total ATMs is relatively small market, but it has lots of potential.

So we got over a 100 million people in it.

Okay. Thank you, guys.

You bet.

Thank you. Our next question comes from the line of Doug Greiner of JMP Securities. Your line is open. Please go ahead.

In the existing Ria money transfer business, what are the key drivers behind the healthy organic growth?

Honestly, I think we’ve got the best value proposition out there for the agent. I mean there is just - and I think that’s really what it comes out to an agent can make a larger percentage of the customer fees and a larger take with us and again with our competitors we’ve got an aggressive sales force. We understand the business well, we’ve now added the largest retailer in the world as a chain, so prior to that there were only two companies that really played in the chain business. So we’ve just got a lot of opportunity, it’s just really hard work I’d tell you once team does a great job around the world, both in Europe and elsewhere and also in the U.S. they just do a really good job, signing up those agents and giving them a value proposition that they can stick with.

And then as you look out into 2015, just what are the puts and takes for growth areas where you could see acceleration or deceleration there?

Well, I think you can tell by Q4s numbers I mean we accelerated across all three of our segments, the only thing that I’ve got as a headwind is this fricking currency. As Rick said consensus before all the currency changes and so forth those was around $0.54 to $0.55. And we are saying had it not been for currency, we would have been dang near close to $0.60. So we are beating everybody’s expectations and it’s the only thing we’ve got is this currency as a headwind. But I told my guys, stop whining about currency, and get out there and sell faster. So that’s what we are doing.

Great, thanks. End of Q&A

Thank you and I am showing no further questions in the queue. I would like to turn the conference back over for any closing remarks.

All right, well that’s perfect. It’s a couple of minutes after nine. I thank everybody for your time. And I look forward to talking to you in roughly 90 days.

Bye-bye.