10-Q 1 evop-20180630x10q.htm 10-Q evop_Current Folio_10Q

   

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

              QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2018

or

              TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ___________ to ___________

Commission file number: 001-38504

EVO Payments, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

 

Delaware

 

82-1304484

State or Other Jurisdiction of

Incorporation or Organization

 

I.R.S. Employer Identification No.

 

 

 

Ten Glenlake Parkway

South Tower, Suite 950

Atlanta, Georgia

 

30328

Address of Principal Executive Offices

 

Zip Code

(516) 479-9000

Registrant’s Telephone Number, Including Area Code

 

Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes      No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes     No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

 

Large accelerated filer 

Accelerated filer 

Non-accelerated filer 

Smaller reporting company 

Emerging growth company 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes ☐    No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

 

 

 

Class of Stock

 

Shares Outstanding as of July 31, 2018

Class A Common Stock, par value $0.0001 per share

 

17,295,239

Class B Common Stock, par value $0.0001 per share

 

35,913,538

Class C Common Stock, par value $0.0001 per share

 

2,560,955

Class D Common Stock, par value $0.0001 per share

 

24,305,155

 

 

 

 

 

 

 

 


 

EVO PAYMENTS, INC. AND SUBSIDIARIES

Table of Contents

 

 

 

 

    

Page(s)

PART I. FINANCIAL INFORMATION 

 

1

Item 1. Unaudited Condensed Consolidated Financial Statements

 

 

Unaudited Condensed Consolidated Balance Sheets 

 

2

Unaudited Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income 

 

3

Unaudited Condensed Consolidated Statements of Changes in Equity 

 

4

Unaudited Condensed Consolidated Statements of Cash Flows 

 

6

Notes to Unaudited Condensed Consolidated Financial Statements 

 

7-35

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 

 

36-53

Item 3. Quantitative and Qualitative Disclosures About Market Risk 

 

53

Item 4. Controls and Procedures 

 

54

PART II. OTHER INFORMATION 

 

54

Item 1. Legal Proceedings 

 

54

Item 1A. Risk Factors 

 

54

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 

 

55

Item 3. Defaults Upon Senior Securities 

 

55

Item 4. Mine Safety Disclosures 

 

55

Item 5. Other Information 

 

55

Item 6. Exhibits 

 

55

SIGNATURES 

 

56

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

Forward-Looking Statements

This quarterly report on Form 10-Q contains statements about future events and expectations that constitute forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on our beliefs, assumptions and expectations of our future financial and operating performance and growth plans, taking into account the information currently available to us. The following are examples of forward-looking statements contained in this quarterly report on Form 10-Q:  None of the forward-looking statements in this quarterly report on Form 10-Q are statements of historical fact. Forward-looking statements involve risks and uncertainties that may cause our actual results to differ materially from the expectations of future results we express or imply in any forward-looking statements, and you should not place undue reliance on such statements. Factors that could contribute to these differences include the following: (1) our ability to anticipate and respond to changing industry trends and the needs and preferences of our customers and consumers; (2) the impact of substantial and increasingly intense competition worldwide in the financial services and payment technology industries on our overall business and operations; (3) the impact of changes in the competitive landscape, including disintermediation from other participants in the payments chain, on our business; (4) the effects of global economic, political and other conditions on trends in consumer, business and government spending, and the corresponding impact on the demand for our services; (5) our compliance with governmental regulations and other legal obligations, particularly related to privacy, data protection and information security, and consumer protection laws; (6) our ability to protect our systems and data from continually evolving cybersecurity risks or other technological risks; (7) failures in our processing systems software defects, computer viruses and development delays, which could damage customer relations and expose us to liability; (8) degradation of the quality of the products and services we offer, including support services, which could adversely impact our ability to attract and retain merchants and partners; (9) risks associated with our ability to successfully complete, integrate and realize the expected benefits of any acquisitions we elect to pursue in the future or have previously completed; (10) continued consolidation in the banking and payment services industries; (11) increased customer, referral partner or sales partner attrition; (12) the incurrence of chargeback liability if our merchants refuse to or cannot reimburse chargebacks resolved in favor of their customers; (13) fraud by merchants or others; (14) the failure of third-party vendors that provide products and services to us to fulfill their obligations in a timely manner or at all; (15) failure to maintain merchant relationships and alliances; (16) ineffective risk management policies and procedures; (17) damage to our reputation, or the reputation of our partners; (18) our inability to recruit, retain and develop qualified personnel; (19) geopolitical and other risks associated with our operations outside of the United States; (20) a decline in the use of cards as a payment mechanism for consumers or adverse developments with respect to the card industry in general; (21) increases in card network fees; (22) failure to comply with the applicable requirements of card networks, and potential fines, suspensions us or termination of our registrations resulting from such failure to comply; (23) changes in foreign currency exchange rates; (24) our inability to raise additional capital to fund our operations on economized terms or at all; (25) failure to protect our intellectual property rights and defend ourselves from potential patent claims; (26) failure to comply with, or changes in, laws, regulations and enforcement activities; (27) the effect of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) allowing us to postpone the date by which we must comply with certain laws and regulations intended to protect investors and to reduce the amount of information we provide in our reports filed with the Securities and Exchange Commission (the “SEC”); (28) future impairment charges; (29) our dependence on distributions from EVO, LLC to pay our taxes and expenses, including payments to the Continuing LLC Owners (as defined in “Note 15, “Shareholders’ Equity,” in the notes to the accompanying unaudited condensed consolidated financial statements) in respect of certain tax benefits under the tax receivable agreement we entered into in connection with our IPO, and in the event that any tax benefits are disallowed, our inability to be reimbursed for any payments made to the Continuing LLC Owners; (30) our organizational structure, which confers certain benefits upon the Continuing LLC Owners that will not benefit holders of our Class A common stock to the same extent; (31) the significant influence the Continuing LLC Owners continue to have over us, including control over decisions that require the approval of stockholders; (32) certain provisions of Delaware law and antitakeover provisions in our organizational documents could delay or prevent a change of control; and (33) risks listed under “Risk factors” contained in Part II of this quarterly report on Form 10-Q.

 


 

Words such as “anticipates,” “believes,” “continues,” “estimates,” “expects,” “goal,” “objectives,” “intends,” “may,” “opportunity,” “plans,” “potential,” “near-term,” “long-term,” “projections,” “assumptions,” “projects,” “guidance,” “forecasts,” “outlook,” “target,” “trends,” “should,” “could,” “would,” “will” and similar expressions are intended to identify such forward-looking statements. We qualify any forward-looking statements entirely by the cautionary factors listed above, among others. Other risks, uncertainties and factors, not listed above, could also cause our actual results to differ materially from those projected in any forward-looking statements we make. We assume no obligation to update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

 

 

 

 


 

PART  I - FINANCIAL INFORMATION

 

Financial Statements Introductory Note

 

The unaudited condensed consolidated financial statements and other disclosures contained in this quarterly report on Form 10-Q are those of EVO Payments, Inc. (“EVO, Inc.”) which is the registrant, and those of EVO Investco, LLC (“EVO, LLC”).  On May 25, 2018, EVO, LLC completed a series of reorganization transactions (the “Reorganization Transactions”) in connection with the initial public offering of EVO, Inc.’s Class A common stock (the “IPO”). As a result of the Reorganization Transactions and the IPO, EVO, Inc. became the managing member and owner of approximately 21.7% of the outstanding membership interests of EVO, LLC. For more information regarding these transactions, see Note 15, “Shareholders’ Equity,” to our unaudited condensed consolidated financial statements contained in this quarterly report on Form 10-Q.

The unaudited condensed consolidated financial statements contained in this quarterly report on Form 10-Q reflect the historical results of operations and the financial position of EVO, Inc., including consolidation of its investment in EVO, LLC, commencing May 23, 2018. Prior to May 23, 2018, the unaudited condensed consolidated financial statements included herein represent the financial statements of EVO, LLC and its subsidiaries (the “Group”). The historical unaudited condensed consolidated financial statements do not reflect what the financial position, results of operations or cash flows of EVO, Inc. or the Group would have been had these companies been stand-alone public companies for the periods presented. Specifically, the historical unaudited condensed consolidated financial statements of the Group do not give effect to the following matters:

·

Reorganization Transactions or the IPO;

·

U.S. corporate federal income taxes; and

·

Non-controlling interests held by other members of EVO, LLC.

 

As a consequence, earnings per share information reported in the unaudited condensed consolidated statements of comprehensive income for the three months and six months ended June 30, 2018 reflect only the net income available for common stockholders for the period from May 23, 2018 through June 30, 2018, as detailed in Note 2, “Earnings per share,” to our unaudited condensed consolidated financial statements contained in this quarterly report on Form 10-Q.

Except where the context requires otherwise, references to "we", "us," "our" or the “Company” refer (1) on or prior to the completion of the Reorganization Transactions on May 23, 2018, to the Group, and (2) following the consummation of the Reorganization Transactions on May 23, 2018, to EVO, Inc. and all of its direct and indirect subsidiaries, including EVO, LLC.

1


 

EVO PAYMENTS, INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated Balance Sheets

(In thousands, except share and interest data)

 

 

 

 

 

 

 

 

 

June 30, 

 

December 31, 

 

    

2018

    

2017

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

207,177

 

$

205,142

Accounts receivable, net

 

 

7,045

 

 

15,881

Other receivables

 

 

50,985

 

 

55,345

Due from related parties

 

 

1,641

 

 

2,625

Inventory

 

 

8,795

 

 

11,210

Settlement processing assets

 

 

429,923

 

 

439,269

Other current assets

 

 

10,639

 

 

20,941

Total current assets

 

 

716,205

 

 

750,413

Equipment and improvements, net

 

 

100,357

 

 

96,587

Goodwill

 

 

316,205

 

 

311,678

Intangible assets, net

 

 

310,265

 

 

313,483

Investment in unconsolidated investees

 

 

1,712

 

 

1,379

Due from related parties

 

 

 —

 

 

109

Deferred tax asset

 

 

43,429

 

 

9,057

Other assets

 

 

24,507

 

 

25,592

Total assets

 

$

1,512,680

 

$

1,508,298

 

 

 

 

 

 

 

Liabilities and Shareholders'/Members’ Equity (Deficit)

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Current portion of long-term debt

 

$

45,056

 

$

103,571

Accounts payable

 

 

42,088

 

 

61,149

Accrued expenses

 

 

109,674

 

 

94,235

Settlement processing obligations

 

 

466,777

 

 

484,518

Due to related parties

 

 

5,398

 

 

7,847

Total current liabilities

 

 

668,993

 

 

751,320

Long-term debt, net of current portion

 

 

667,671

 

 

760,946

Due to related parties

 

 

560

 

 

675

Deferred tax liability

 

 

11,687

 

 

11,011

Tax receivable agreement obligations

 

 

2,205

 

 

 —

ISO reserves

 

 

2,602

 

 

2,611

Total liabilities

 

 

1,353,718

 

 

1,526,563

Commitments and contingencies

 

 

 

 

 

 

Redeemable non-controlling interests

 

 

838,789

 

 

148,266

Shareholders'/members' equity (deficit):

 

 

 

 

 

 

Shareholders'/members' equity (deficit):

 

 

 

 

 

 

Class A Units, Outstanding - 0 and 6,374 units at June 30, 2018 and December 31, 2017, respectively.

 

 

 —

 

 

54,453

Class B Units, Outstanding - 0 and 3,506 units at June 30, 2018 and December 31, 2017, respectively.

 

 

 —

 

 

 —

Class C Units, Outstanding - 0 and 375 units at June 30, 2018 and December 31, 2017, respectively.

 

 

 —

 

 

9,463

Class D Units, Outstanding - 0 and 1,104 units at June 30, 2018 and December 31, 2017, respectively.

 

 

 —

 

 

 —

Class E Units, Outstanding - 0 and 1,012 units at June 30, 2018 and December 31, 2017, respectively.

 

 

 —

 

 

71,250

Class A common stock (par value $0.0001 per share), Authorized - 200,000,000 and 0 shares, Issued and Outstanding - 17,294,768 and 0 shares at June 30, 2018 and December 31, 2017, respectively.

 

 

 2

 

 

 —

Class B common stock (par value $0.0001 per share), Authorized - 40,000,000 and 0 shares, Issued and Outstanding - 35,913,538 and 0 shares at June 30, 2018 and December 31, 2017, respectively.

 

 

 4

 

 

 —

Class C common stock (par value $0.0001 per share), Authorized - 4,000,000 and 0 shares, Issued and Outstanding - 2,560,955 and 0 shares at June 30, 2018 and December 31, 2017, respectively.

 

 

 —

 

 

 —

Class D common stock (par value $0.0001 per share), Authorized - 32,000,000 and 0 shares, Issued and Outstanding - 24,305,155 and 0 shares at June 30, 2018 and December 31, 2017, respectively.

 

 

 2

 

 

 —

Additional paid-in capital

 

 

412,845

 

 

 —

Retained earnings

 

 

(55,076)

 

 

 —

Accumulated deficit

 

 

 —

 

 

(237,330)

Accumulated other comprehensive loss

 

 

(1,631)

 

 

(67,679)

Total shareholders'/members' equity (deficit)

 

 

356,146

 

 

(169,843)

Nonredeemable non-controlling interests

 

 

(1,035,973)

 

 

3,312

Total deficit

 

 

(679,827)

 

 

(166,531)

Total liabilities and deficit

 

$

1,512,680

 

$

1,508,298

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

2


 

EVO PAYMENTS, INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income

(In thousands, except share and per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Three Months Ended June 30, 

      

Six Months Ended June 30, 

 

 

2018

 

2017

 

2018

 

2017

Revenue

 

$

140,891

 

$

123,899

 

$

269,173

 

$

233,519

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of services and products, exclusive of depreciation and amortization shown separately below

 

 

50,364

 

 

39,172

 

 

94,878

 

 

75,823

Selling, general and administrative

 

 

115,567

 

 

53,517

 

 

175,180

 

 

104,537

Depreciation and amortization

 

 

20,933

 

 

18,613

 

 

40,820

 

 

35,673

Total operating expenses

 

 

186,864

 

 

111,302

 

 

310,878

 

 

216,033

(Loss) income from operations

 

 

(45,973)

 

 

12,597

 

 

(41,705)

 

 

17,486

Other (expense) income:

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

631

 

 

332

 

 

1,115

 

 

638

Interest expense

 

 

(21,560)

 

 

(15,579)

 

 

(36,870)

 

 

(30,577)

Income from investment in unconsolidated investees

 

 

246

 

 

438

 

 

761

 

 

758

Other expense, net

 

 

(2,620)

 

 

(116)

 

 

(3,174)

 

 

(174)

Total other expense

 

 

(23,303)

 

 

(14,925)

 

 

(38,168)

 

 

(29,355)

Loss before income taxes

 

 

(69,276)

 

 

(2,328)

 

 

(79,873)

 

 

(11,869)

Income tax benefit (expense)

 

 

28,609

 

 

(5,543)

 

 

24,181

 

 

(9,357)

Net loss

 

 

(40,667)

 

 

(7,871)

 

 

(55,692)

 

 

(21,226)

Less: Net income attributable to non-controlling interests in consolidated entities

 

 

(1,233)

 

 

(1,603)

 

 

(2,001)

 

 

(2,854)

Net loss attributable to EVO Investco, LLC

 

 

 

 

$

(9,474)

 

 

 

 

$

(24,080)

Less: Net loss attributable to non-controlling interests of EVO Investco, LLC

 

 

58,613

 

 

 

 

 

74,406

 

 

 

Net income attributable to EVO Payments, Inc.

 

$

16,713

 

 

 

 

$

16,713

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.97

 

 

 

 

$

0.97

 

 

 

Diluted

 

$

0.96

 

 

 

 

$

0.96

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average Class A common stock outstanding

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

17,293,355

 

 

 

 

 

17,293,355

 

 

 

Diluted

 

 

17,432,722

 

 

 

 

 

17,432,722

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive (loss) income:

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(40,667)

 

$

(7,871)

 

$

(55,692)

 

$

(21,226)

Unrealized gain on defined benefit pension plan

 

 

 —

 

 

33

 

 

 —

 

 

520

Unrealized (loss) gain on foreign currency translation adjustment

 

 

(28,144)

 

 

25,357

 

 

(9,160)

 

 

53,799

Other comprehensive (loss) income

 

 

(28,144)

 

 

25,390

 

 

(9,160)

 

 

54,319

Comprehensive (loss) income

 

 

(68,811)

 

 

17,519

 

 

(64,852)

 

 

33,093

Less: Comprehensive income (loss) attributable to

 

 

 

 

 

 

 

 

 

 

 

 

consolidated entities

 

 

4,263

 

 

(1,603)

 

 

2,152

 

 

24,845

Comprehensive income attributable to EVO Investco, LLC

 

 

 

 

$

15,916

 

 

 

 

$

57,938

Less other comprehensive loss attributable to

 

 

 

 

 

 

 

 

 

 

 

 

non-controlling interest of EVO Investco, LLC

 

 

79,630

 

 

 

 

 

77,782

 

 

 

Comprehensive income attributable to EVO Payments, Inc.

 

$

15,082

 

 

 

 

$

15,082

 

 

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

3


 

EVO PAYMENTS, INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Changes in Equity

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Class A LLC Units

 

Class B LLC Units

 

Class C LLC Units

 

Class D LLC Units

 

Class E LLC Units

 

Class A Common Stock

 

 

Interests

 

Amounts

 

Interests

 

Amounts

 

Interests

 

Amounts

 

Interests

 

Amounts

 

Interests

 

Amounts

 

Shares

 

Amounts

Balance, January 1, 2018

    

6,374

    

$

54,453

    

3,506

    

$

 —

 

375

    

$

9,463

 

1,107

    

$

 —

 

1,012

    

$

71,250

 

 —

    

$

 —

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income prior to Reorganization Transactions

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

Cumulative translation adjustment prior to Reorganization Transactions

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

Distributions prior to Reorganization Transactions

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

Acquisition of additional shares in a consolidated subsidiary

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

Legacy deficit / accumulated comprehensive loss allocation (Class C&D)

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

Legacy deficit / accumulated comprehensive loss allocation (Class B)

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

Equity issued in connection with acquisition prior to Reorganization Transactions

 

(6,374)

 

 

(54,453)

 

(3,506)

 

 

 —

 

(375)

 

 

(9,463)

 

(1,107)

 

 

 —

 

(1,012)

 

 

(71,250)

 

1,319

 

 

 —

Share-based compensation prior to Reorganization Transactions, net of share settlement

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

494

 

 

 —

Class B redeemable non-controlling interests fair value adjustment in connection to Reorganization Transactions

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effect of Reorganization Transactions

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

1,813

 

 

 —

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sale of Class A common stock in initial public offering, net

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

15,434

 

 

 2

Contingent consideration settled in Class A common stock

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

48

 

 

 —

Deferred taxes in connection with the Reorganization Transactions

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

Tax receivable agreement obligations in connection with the Reorganization Transactions

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

Net income subsequent to the Reorganization Transactions

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

Cumulative translation adjustment subsequent to the Reorganization Transactions

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

Legacy redeemable non-controlling interests fair value adjustment

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

Class B redeemable non-controlling interests fair value adjustment in conjunction with the Reorganization Transactions

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

Balance, June 30, 2018

 

 —

 

$

 —

 

 —

 

$

 —

 

 —

 

$

 —

 

 —

 

$

 —

 

 —

 

$

 —

 

17,295

 

$

 2

 

See accompanying notes to unaudited condensed consolidated financial statements.

4


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

Total EVO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

 

other

 

Payments,

 

Nonredeemable

 

 

 

 

 

Class B Common Stock

 

Class C Common Stock

 

Class D Common Stock

 

paid-in

 

Retained

 

Accumulated

 

comprehensive

 

Inc. (deficit)

 

non-controlling

 

Total

 

 

Shares

 

Amounts

 

Shares

 

Amounts

 

Shares

 

Amounts

 

capital

 

earnings

 

deficit

 

loss

 

/equity

 

interests

 

deficit

Balance, January 1, 2018

    

 —

    

$

 —

    

 —

    

$

 —

    

 —

    

$

 —

    

$

 —

    

$

 —

    

$

(237,330)

    

$

(67,679)

    

$

(169,843)

    

$

3,312

    

$

(166,531)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income prior to Reorganization Transactions

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(24,412)

 

 

 —

 

 

(24,412)

 

 

 —

 

 

(24,412)

Cumulative translation adjustment prior to Reorganization Transactions

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(6,337)

 

 

(6,337)

 

 

 —

 

 

(6,337)

Distributions prior to Reorganization Transactions

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(1,334)

 

 

(1,334)

Acquisition of additional shares in a consolidated subsidiary

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(20,924)

 

 

 —

 

 

(20,924)

 

 

(1,141)

 

 

(22,065)

Legacy deficit / accumulated comprehensive loss allocation (Class C&D)

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

132,181

 

 

34,612

 

 

166,793

 

 

(166,793)

 

 

 —

Legacy deficit / accumulated comprehensive loss allocation (Class B)

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

150,485

 

 

39,404

 

 

189,889

 

 

 —

 

 

189,889

Equity issued in connection with acquisition prior to Reorganization Transactions

 

35,914

 

 

 4

 

2,561

 

 

 —

 

24,305

 

 

 2

 

 

135,160

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Share-based compensation prior to Reorganization Transactions, net of share settlement

 

 —

 

 

 —

 

 —

 

 

 —

 

 —

 

 

 —

 

 

51,339

 

 

 —

 

 

 —

 

 

 —

 

 

51,339

 

 

 —

 

 

51,339

Class B redeemable non-controlling interests fair value adjustment in connection to Reorganization Transactions

 

 —

 

 

 —