Cardtronics, Inc. (Nasdaq:CATM) (the "Company"), the world's
largest non-bank owner of ATMs, today announced its financial and
operational results for the quarter and year ended December 31,
2010.
Key financial and operational statistics in the fourth quarter
of 2010 compared to the fourth quarter of 2009 include:
- Consolidated revenues of $134.7 million, up by 8%
- Revenue growth of approximately 12% for the Company's core
business operations, which include the Company's domestic
Company-owned ATM placement, surcharge-free and managed services
businesses, as well as its international operations
- Gross margin of 32.4%, up from 31.4%
- Adjusted EBITDA of $32.8 million, up approximately 19%
- Adjusted Net Income per diluted share of $0.26, up from
$0.17
- GAAP Net Income of $8.0 million, up from $1.5 million
- Free Cash Flow of $21.5 million, consisting of $32.2 million of
cash provided by operating activities, less $10.7 million of
capital expenditures, enabling a $26.8 million reduction in
outstanding debt under the Company's revolving credit facility
- Continued improvements in several key operating metrics
(amounts presented exclude transactions from the Company's managed
services offerings):
- Total withdrawal transactions increased by over 6%;
- Total transactions increased by over 10%; and
- Total transactions per ATM increased by over 8%
Please refer to the "Disclosure of Non-GAAP Financial
Information" contained later in this release for definitions of
Adjusted EBITDA, Adjusted Net Income, and Free Cash Flow. For
additional financial information, including reconciliations to
comparable GAAP measures, please refer to the supplemental
schedules of selected financial information at the end of this
release.
"We finished 2010 with another strong quarter, capping off what
was a great year for Cardtronics," commented Steven Rathgaber, the
Company's Chief Executive Officer. Mr. Rathgaber continued, "For
the full-year 2010, our revenues grew by 8% and our Adjusted Net
Income per diluted share grew by 47%. We also generated $54.0
million in Free Cash Flow for the year, enabling us to reduce our
ratio of total debt outstanding to Adjusted EBITDA to 1.9 from 2.8
a year ago. We are certainly proud of these financial achievements,
but also believe we have many opportunities to continue to drive
significant revenue and earnings growth in 2011 and beyond. With
our leading network of ATMs placed in prime retail locations,
increased focus on driving organic transaction and revenue growth
and continued operational execution, we believe that we are
well-positioned to continue to create significant shareholder
value."
RECENT HIGHLIGHTS
- Expansion of the Company's bank branding agreement with PNC
Bank to place 135 ATMs in CVS/pharmacy stores across Indiana.
- Execution of a master service agreement with a major bank,
allowing for the Company to provide multiple services including
bank branding.
- Execution of a multi-year agreement with a leading supermarket
chain in the Northeast, to provide a full suite of ATM management
services to over 80 high-volume ATMs by the third quarter of
2011.
- Execution of an agreement with EZCORP, a leading provider of
specialty consumer financial services, to place ATMs in up to 270
locations.
- Execution of an agreement with Univision Prepaid Card, under
which the Company will provide Univision's prepaid cardholders with
unlimited free access to ATMs in the Company's Allpoint Network. A
significant media campaign for the new cards has been launched on
the Univision broadcast networks in the first quarter of 2011,
highlighting the Allpoint Network's ubiquitous tie to the
program.
- Execution of a multi-year agreement with North Carolina-based
BB&T, one of the largest banking institutions in the U.S., to
provide surcharge-free ATM access to its Florida and Texas banking
clients through the Company's Allpoint Network.
- Addition of over 2,500 ATMs in Mexico to the Company's Allpoint
Network, providing U.S. Allpoint members with expanded benefits
through convenient, surcharge-free ATM access while they travel to
Mexico. This expansion grows the Allpoint Network reach to over
43,000 ATMs in the U.S., U.K., Puerto Rico, Australia and, now,
Mexico.
- Partnership with i-design, a United Kingdom-based provider of
marketing platforms for self-service devices, to bring third-party
advertising to the Company's ATMs.
- Finalization of a relationship with Softgate Systems (formerly
IPP) to provide next-day bill payment capabilities on the Company's
2,200 multi-function financial services kiosks in 7-Eleven retail
locations, significantly increasing customer access for next-day
bill payments to over 40,000 billers nationwide.
- Launch of a second cash depot in Manchester, U.K., which brings
the number of ATMs that the Company provides cash-in-transit
services to approximately 1,380 ATMs in the U.K., up from
approximately 780 at the end of 2009.
- Execution of an agreement in the U.K. to obtain over 100
high-transacting ATMs in Northern Ireland.
- Execution of the first managed services agreement in the U.K.,
with Yorkshire Building Society, a U.K. financial services
institution, to take over the management of Yorkshire's 20
ATMs.
FOURTH QUARTER RESULTS
For the fourth quarter of 2010, consolidated revenues totaled
$134.7 million, representing an 8% increase from the $124.8 million
in revenues generated during the fourth quarter of 2009. The 8%
year-over-year increase reflects 12% revenue growth in the
Company's core business operations, which was driven by a
combination of increases in transactions per machine, increased
revenues from managed services agreements, year-over-year surcharge
rate increases implemented in the United States, and unit growth in
the Company's United Kingdom and Mexico operating segments.
Additionally, the Company continued to grow revenues in its leading
surcharge-free network, Allpoint, with continued growth of its
customer base.
Adjusted EBITDA for the fourth quarter of 2010 totaled $32.8
million, compared to $27.6 million during the fourth quarter of
2009, and Adjusted Net Income totaled $11.0 million ($0.26 per
diluted share) compared to $7.0 million ($0.17 per diluted share)
during the fourth quarter of 2009. These increases were primarily
attributable to the increase in revenues (discussed above), the
Company's ability to leverage its fixed-cost infrastructure to
generate strong margins from those higher revenues, and the reduced
interest expense enabled by the refinancing of the Company's debt
executed in the previous quarter. Specific costs excluded from
Adjusted EBITDA and Adjusted Net Income are detailed in a
reconciliation included at the end of this press release.
GAAP Net Income for the fourth quarter of 2010 totaled $8.0
million, compared to $1.5 million during the same quarter in 2009.
The year-over-year increase was attributable to the factors
identified in the discussion of Adjusted EBITDA and Adjusted Net
Income above.
FULL-YEAR RESULTS
Revenues totaled $532.1 million for the year ended December 31,
2010, representing an 8% increase over the $493.4 million in
revenues recorded during the year ended December 31, 2009. As was
the case with the Company's quarterly results, the year-over-year
increase in revenues was primarily attributable to revenue growth
in its core business operations, slightly offset by a decline in
the Company's merchant-owned account base.
Adjusted EBITDA totaled $130.8 million for the year ended
December 31, 2010, representing a 19% increase over the $110.4
million in Adjusted EBITDA for 2009, and Adjusted Net Income
totaled $41.2 million ($1.00 per diluted share) for 2010, which
represented a 51% increase from the $27.3 million ($0.68 per
diluted share) generated during 2009. Increases in both Adjusted
EBITDA and Adjusted Net Income were primarily due to the same
factors noted above for the Company's quarterly results and because
of reduced operating costs per unit compared to the same period in
the prior year.
GAAP Net Income for the year ended December 31, 2010 totaled
$41.0 million, compared to $5.3 million during 2009. The results
for the year ended December 31, 2010 include certain non-recurring
items associated with the Company's financing activities and
reversal of domestic deferred tax asset valuation allowances during
the year. Excluding these one-time effects, the improvement in
the Company's GAAP results was primarily driven by the same factors
outlined above with respect to Adjusted EBITDA and Adjusted Net
Income.
GUIDANCE
Below is the Company's financial guidance for the fiscal year
ending December 31, 2011, which is consistent with what was
previously issued:
- Revenues of $559.0 million to $569.0 million;
- Overall gross margins of approximately 32.5% to 32.9%;
- Adjusted EBITDA of $136.0 million to $141.0 million;
- Depreciation and accretion expense of $45.0 to $45.8
million;
- Cash interest expense of $19.0 million;
- Adjusted Net Income of $1.14 to $1.20 per diluted share, based
on approximately 41.9 million to 42.3 million weighted average
diluted shares outstanding; and
- Capital expenditures of approximately $50.0 million, net of
noncontrolling interests.
The above Adjusted EBITDA and Adjusted Net Income guidance
excludes the impact of $8.1 million of anticipated stock-based
compensation expense and $15.2 million of expected intangible asset
amortization expense, both on a pretax basis. Additionally,
the above guidance is based on average foreign currency exchange
rates of $1.50 U.S. to £1.00 U.K. and $13.00 Mexican pesos to $1.00
U.S.
For reconciliations of Adjusted EBITDA and Adjusted Net Income
to comparable GAAP measures, please refer to the supplemental
schedules at the end of this release.
LIQUIDITY
The Company continues to maintain a very strong liquidity
position, with $124.5 million in available borrowing capacity under
the Company's $175.0 million revolving credit facility as of
December 31, 2010. The Company's outstanding indebtedness as
of December 31, 2010 consisted of $200.0 million in senior
subordinated notes due 2018, $46.2 million in borrowings under its
revolving credit facility due 2015, and $8.6 million in equipment
financing notes associated with its majority-owned Mexico
subsidiary.
In January 2011, the Company significantly expanded and extended
the terms of the interest rate hedging program it utilizes to
stabilize its vault cash rental costs in the United
States. Further details on the changes in the Company's
interest rate hedging program in the United States are included in
a schedule shown on page 10 of this release.
DISCLOSURE OF NON-GAAP FINANCIAL
INFORMATION
EBITDA, Adjusted EBITDA, Adjusted Net Income, and Free Cash Flow
are non-GAAP financial measures provided as a complement to results
prepared in accordance with accounting principles generally
accepted within the United States of America ("GAAP") and may not
be comparable to similarly-titled measures reported by other
companies. Management believes that the presentation of these
measures and the identification of unusual, non-recurring, or
non-cash items enhance an investor's understanding of the
underlying trends in the Company's business and provide for better
comparability between periods in different years.
Adjusted EBITDA excludes depreciation, accretion, and
amortization expense as these amounts can vary substantially from
company to company within the Company's industry depending upon
accounting methods and book values of assets, capital structures,
and the method by which the assets were acquired. During the
year ended December 31, 2010, as a result of certain financing
activities, the Company recorded a $7.2 million charge associated
with the early extinguishment of debt and a $7.3 million charge to
write off certain unamortized deferred financing costs and bond
discounts related to the instruments retired. These charges have
been excluded from EBITDA, Adjusted EBITDA, and Adjusted Net Income
as the Company views these charges as one-time, non-recurring
events specifically related to the Company's decision to improve
its capital structure and financial flexibility and not related to
the Company's ongoing operations. Furthermore, management
feels the inclusion of such a charge in EBITDA would not contribute
to management's understanding of the operating results and
effectiveness of its business. Since Adjusted EBITDA and
Adjusted Net Income exclude certain non-recurring or non-cash
items, these measures may not be comparable to similarly-titled
measures employed by other companies. Free Cash Flow is cash
provided by operating activities less payments for capital
expenditures, including those financed through direct
debt. The non-GAAP financial measures presented herein should
not be considered in isolation or as a substitute for operating
income, net income, cash flows from operating, investing, or
financing activities, or other income or cash flow statement data
prepared in accordance with GAAP.
A reconciliation of Net Income Attributable to Controlling
Interests to EBITDA, Adjusted EBITDA, and Adjusted Net Income and a
calculation of Free Cash Flow are presented in tabular form at the
end of this press release.
CONFERENCE CALL INFORMATION
The Company will host a conference call today, Thursday,
February 10, 2011, at 4:30 p.m. Central Time (5:30 p.m. Eastern
Time) to discuss its financial results for the quarter and the year
ended December 31, 2010. To access the call, please call the
conference call operator at:
Dial in: (877) 303-9205
Alternate dial-in: (760) 536-5226
Please call in fifteen minutes prior to the scheduled start time
and request to be connected to the "Cardtronics Fourth Quarter
Earnings Conference Call." Additionally, a live audio webcast of
the conference call will be available online through the investor
relations section of the Company's website at
http://www.cardtronics.com.
A digital replay of the conference call will be available
through Thursday, February 24, 2011, and can be accessed by calling
(800) 642-1687 or (706) 645-9291 and entering 38568472 for the
conference ID. A replay of the conference call will also be
available online through the Company's website subsequent to the
call through March 10, 2011.
ABOUT CARDTRONICS
Cardtronics (Nasdaq:CATM) is the world's largest non-bank owner
of ATMs. The Company operates over 34,100 ATMs in the United
States, the United Kingdom, Mexico, and the Caribbean, primarily
with well-known retailers such as 7-Eleven®, Chevron®,
Costco®, CVS®/pharmacy, ExxonMobil®, Hess®, Rite Aid®, Safeway®,
Target®, and Walgreens®. Cardtronics also assists in the
operation of approximately 2,900 ATMs under managed services
contracts with customers such as Kroger®, Travelex®, and Circle
K®. In addition to its retail ATM operations, the Company
provides services to large and small banks, credit unions, and
prepaid card issuers allowing them to place their brands on over
11,900 Cardtronics' ATMs and providing surcharge-free access
through Cardtronics' Allpoint Network. For more information,
visit http://www.cardtronics.com.
The Cardtronics logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=991
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. Forward-looking statements give the Company's current
expectations or forecasts of future events, future financial
performance, strategies, expectations, competitive environment,
regulation, and availability of resources. The forward-looking
statements contained in this release include, among other things,
statements concerning projections, predictions, expectations,
estimates or forecasts as to the Company's business, financial and
operational results and future economic performance, and statements
of management's goals and objectives and other similar expressions
concerning matters that are not historical facts. These
statements are subject to risks and uncertainties that could cause
actual performance or results to differ materially from those
expressed in or suggested by the forward-looking
statements. These risks and uncertainties include, but are not
limited to, the following:
- the Company's financial outlook and the financial outlook of
the ATM industry;
- the Company's ability to respond to recent and future
regulatory changes that may impact the ATM and financial services
industries;
- the Company's ability to respond to potential reductions in the
amount of interchange fees that it receives from global and
regional debit networks for transactions conducted on its
ATMs;
- the Company's ability to provide new ATM solutions to financial
institutions;
- the Company's ATM vault cash rental needs, including potential
liquidity issues with its vault cash providers;
- the implementation of the Company's corporate strategy,
including successful implementation of certain strategic
organizational changes that were recently initiated;
- the Company's ability to compete successfully with new and
existing competitors;
- the Company's ability to renew and strengthen its existing
customer relationships and add new customers;
- the Company's ability to meet the service levels required by
its service level agreements with its customers;
- the Company's ability to pursue and successfully integrate
acquisitions;
- the Company's ability to successfully manage its existing
international operations and to continue to expand
internationally;
- the Company's ability to prevent security breaches;
- the Company's ability to manage the risks associated with its
third-party service providers failing to perform their contractual
obligations;
- the Company's ability to manage concentration risks with key
vendors and service providers;
- changes in interest rates and foreign currency rates; and
- the additional risks the Company is exposed to in its armored
transport business.
Other factors that could cause the Company's actual performance
or results to differ from its projected results are described in
its filings with the Securities and Exchange Commission, including
its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and
Current Reports on Form 8-K. You should not read forward-looking
statements as a guarantee of future performance or
results. They will not necessarily be accurate indications of
the times at or by which such performance or results will be
achieved. Forward-looking statements speak only as of the date
the statements are made and are based on information available at
the time those statements are made and/or management's good faith
belief as of that time with respect to future events. The
Company assumes no obligation to update forward-looking statements
to reflect actual results, changes in assumptions or changes in
other factors affecting forward-looking information.
Consolidated Statements
of Operations |
For the Three and
Twelve Months Ended December 31, 2010 and 2009 |
(Unaudited) |
|
|
|
|
|
|
|
Three Months
Ended |
Twelve Months
Ended |
|
December
31, |
December
31, |
|
2010 |
2009 |
2010 |
2009 |
|
(In thousands, except share and
per share information) |
Revenues: |
|
|
|
|
ATM operating revenues |
$132,563 |
$122,002 |
$522,900 |
$483,138 |
ATM product sales and other
revenues |
2,186 |
2,755 |
9,178 |
10,215 |
Total revenues |
134,749 |
124,757 |
532,078 |
493,353 |
Cost of revenues: |
|
|
|
|
Cost of ATM operating revenues (exclusive of
depreciation, accretion, and amortization shown separately
below) |
89,171 |
82,620 |
351,490 |
333,907 |
Cost of ATM product sales and other
revenues |
1,970 |
2,922 |
8,902 |
10,567 |
Total cost of revenues |
91,141 |
85,542 |
360,392 |
344,474 |
Gross profit |
43,608 |
39,215 |
171,686 |
148,879 |
Operating expenses: |
|
|
|
|
Selling, general, and administrative expenses
(1) |
11,647 |
10,878 |
44,581 |
41,527 |
Depreciation and accretion expense |
11,373 |
9,860 |
42,724 |
39,420 |
Amortization expense |
3,904 |
5,480 |
15,471 |
18,916 |
Loss on disposal of assets |
807 |
1,185 |
2,647 |
6,016 |
Total operating expenses |
27,731 |
27,403 |
105,423 |
105,879 |
Income from operations |
15,877 |
11,812 |
66,263 |
43,000 |
Other expense: |
|
|
|
|
Interest expense, net |
4,933 |
7,305 |
26,629 |
30,133 |
Amortization of deferred financing costs and
bond discounts |
211 |
618 |
2,029 |
2,395 |
Write-off of deferred financing costs and
bond discounts |
— |
— |
7,296 |
— |
Redemption costs for early extinguishment of
debt |
— |
— |
7,193 |
— |
Other (income) expense |
(705) |
1,244 |
(878) |
456 |
Total other expense |
4,439 |
9,167 |
42,269 |
32,984 |
Income before income taxes |
11,438 |
2,645 |
23,994 |
10,016 |
Income tax expense (benefit) (2) |
3,438 |
961 |
(17,139) |
4,245 |
Net income |
8,000 |
1,684 |
41,133 |
5,771 |
Net (loss) income attributable to
noncontrolling interests |
(28) |
225 |
174 |
494 |
Net income attributable to controlling
interests and available to common shareholders |
$8,028 |
$1,459 |
$40,959 |
$5,277 |
|
|
|
|
|
Net income per common share –
basic |
$0.19 |
$0.04 |
$0.98 |
$0.13 |
Net income per common share –
diluted |
$0.19 |
$0.03 |
$0.96 |
$0.13 |
|
|
|
|
|
Weighted average shares outstanding –
basic |
41,023,404 |
39,600,166 |
40,347,194 |
39,244,057 |
Weighted average shares outstanding –
diluted |
41,822,811 |
40,910,286 |
41,059,381 |
39,896,366 |
_____________________ |
|
|
|
|
|
|
|
|
|
(1) Selling, general, and
administrative expenses for the twelve month period ended December
31, 2010 include $1.0 million of costs associated with the
preparation and filing of a shelf registration statement and the
completion of two secondary equity offerings and $0.7 million in
accrued severance costs associated with the Company's recent
management reorganization. Additionally, it includes
approximately $0.2 million and $1.5 million for the three and
twelve month periods ended December 31, 2010, respectively, in
incremental stock-based compensation expense (when compared to the
same periods in the prior year. The twelve month period ended
December 31, 2009 includes $1.2 million in severance costs
associated with the departure of the Company's former Chief
Executive Officer in March 2009. |
(2) Income tax benefit for the
twelve month period ended December 31, 2010 includes $27.2 million
in benefits related to the reversal of previously-established
valuation allowances on the Company's domestic deferred tax
assets. |
|
Condensed Consolidated
Balance Sheets |
As of December 31, 2010
and December 31, 2009 |
|
|
|
|
December 31,
2010 |
December 31,
2009 |
|
(Unaudited) |
|
|
(In thousands) |
|
Assets |
|
|
Current assets: |
|
|
Cash and cash equivalents |
$3,189 |
$10,449 |
Accounts and notes receivable,
net |
20,270 |
27,700 |
Inventory |
1,795 |
2,617 |
Restricted cash, short-term |
4,466 |
3,452 |
Current portion of deferred tax asset,
net |
15,017 |
— |
Prepaid expenses, deferred costs, and
other current assets |
10,222 |
8,850 |
Total current assets |
54,959 |
53,068 |
Property and equipment, net |
156,465 |
147,348 |
Intangible assets, net |
74,799 |
89,036 |
Goodwill |
164,558 |
165,166 |
Deferred tax asset, net |
715 |
— |
Prepaid expenses, deferred costs, and other
assets |
3,819 |
5,786 |
Total assets |
$455,315 |
$460,404 |
|
|
|
Liabilities and Stockholders' Equity
(Deficit) |
|
|
Current liabilities: |
|
|
Current portion of long-term debt and
notes payable |
$3,076 |
$2,122 |
Capital lease obligations |
— |
235 |
Current portion of other long-term
liabilities |
24,493 |
26,047 |
Accounts payable and other accrued and
current liabilities |
71,425 |
73,608 |
Total current liabilities |
98,994 |
102,012 |
Long-term liabilities: |
|
|
Long-term debt, net of related
discounts |
251,757 |
304,930 |
Deferred tax liability, net |
10,268 |
12,250 |
Asset retirement obligations |
26,657 |
24,003 |
Other long-term liabilities |
23,385 |
18,499 |
Total liabilities |
411,061 |
461,694 |
Stockholders' equity (deficit) |
44,254 |
(1,290) |
Total liabilities and stockholders'
equity (deficit) |
$455,315 |
$460,404 |
|
|
|
|
|
|
|
|
|
|
SELECTED INCOME STATEMENT
DETAIL: |
|
|
|
|
|
|
|
|
|
Total revenues by
segment: |
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
Twelve Months
Ended |
|
December
31, |
December
31, |
|
2010 |
2009 |
2010 |
2009 |
|
(In thousands) |
United States |
$106,764 |
$98,878 |
$423,109 |
$401,934 |
United Kingdom |
21,882 |
20,302 |
82,583 |
73,096 |
Mexico |
6,103 |
5,577 |
26,386 |
18,323 |
Total revenues |
$134,749 |
$124,757 |
$532,078 |
$493,353 |
|
|
|
|
|
Breakout of ATM operating
revenues: |
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
Twelve Months
Ended |
|
December
31, |
December
31, |
|
2010 |
2009 |
2010 |
2009 |
|
(In thousands) |
Surcharge revenues |
$64,971 |
$62,163 |
$266,827 |
$254,503 |
Interchange revenues |
40,883 |
39,055 |
159,273 |
149,908 |
Bank branding and surcharge-free network
revenues |
21,656 |
17,908 |
81,631 |
67,873 |
Managed services revenues |
1,525 |
130 |
2,890 |
494 |
Other revenues |
3,528 |
2,746 |
12,279 |
10,360 |
Total ATM operating revenues |
$132,563 |
$122,002 |
$522,900 |
$483,138 |
|
|
|
|
|
Total cost of revenues by
segment (exclusive of depreciation, accretion, and
amortization): |
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
Twelve Months
Ended |
|
December
31, |
December
31, |
|
2010 |
2009 |
2010 |
2009 |
|
(In thousands) |
United States |
$69,922 |
$67,125 |
$277,902 |
$279,582 |
United Kingdom |
16,628 |
14,456 |
62,386 |
51,419 |
Mexico |
4,591 |
3,961 |
20,104 |
13,473 |
Total cost of revenues |
$91,141 |
$85,542 |
$360,392 |
$344,474 |
|
|
|
|
|
Breakout of cost of ATM
operating revenues (exclusive of depreciation, accretion, and
amortization): |
|
|
|
|
|
|
|
|
|
Three Months
Ended |
Twelve Months
Ended |
|
December
31, |
December
31, |
|
2010 |
2009 |
2010 |
2009 |
|
(In thousands) |
Merchant commissions |
$41,097 |
$38,874 |
$166,377 |
$156,936 |
Vault cash rental expense |
9,859 |
8,764 |
38,642 |
33,950 |
Other costs of cash |
12,164 |
10,618 |
46,686 |
43,599 |
Repairs and maintenance |
9,485 |
9,197 |
36,307 |
38,740 |
Communications |
3,940 |
3,675 |
15,514 |
14,876 |
Transaction processing |
867 |
1,512 |
4,942 |
6,431 |
Stock-based compensation |
158 |
208 |
752 |
798 |
Other expenses |
11,601 |
9,772 |
42,270 |
38,577 |
Total cost of ATM operating
revenues |
$89,171 |
$82,620 |
$351,490 |
$333,907 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Breakout of selling, general, and
administrative expenses: |
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
Twelve Months
Ended |
|
December
31, |
December
31, |
|
2010 |
2009 |
2010 |
2009 |
|
(In thousands) |
Employee costs |
$6,069 |
$6,096 |
$24,720 |
$23,535 |
Stock-based compensation |
1,275 |
1,036 |
5,284 |
3,822 |
Professional fees |
1,625 |
1,099 |
5,711 |
4,674 |
Other |
2,678 |
2,647 |
8,866 |
9,496 |
Total selling, general, and
administrative expenses |
$11,647 |
$10,878 |
$44,581 |
$41,527 |
|
|
|
|
|
Depreciation and accretion expense by
segment: |
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
Twelve Months
Ended |
|
December
31, |
December
31, |
|
2010 |
2009 |
2010 |
2009 |
|
(In thousands) |
United States |
$7,148 |
$6,586 |
$27,321 |
$26,824 |
United Kingdom |
3,476 |
2,771 |
12,541 |
10,799 |
Mexico |
749 |
503 |
2,862 |
1,797 |
Total depreciation and accretion
expense |
$11,373 |
$9,860 |
$42,724 |
$39,420 |
|
|
|
|
|
|
SELECTED BALANCE SHEET
DETAIL: |
|
|
|
|
|
Long-term debt and capital lease
obligations: |
|
|
|
|
|
|
December 31,
2010 |
December 31,
2009 |
|
(In thousands) |
8.25% senior subordinated notes |
$200,000 |
$ — |
9.25% senior subordinated notes, net of
discounts |
— |
297,242 |
Revolving credit facility |
46,200 |
— |
Equipment financing notes |
8,633 |
9,810 |
Capital lease obligations |
— |
235 |
Total long-term debt and capital lease
obligations |
$254,833 |
$307,287 |
|
|
|
Share count
rollforward: |
|
|
|
|
|
Total shares outstanding as of December 31,
2009 |
40,900,532 |
|
Shares repurchased |
(138,046) |
|
Shares issued – restricted stock grants and
stock options exercised |
2,157,206 |
|
Shares forfeited – restricted
stock |
(87,250) |
|
Total shares outstanding as of December
31, 2010 |
42,832,442 |
|
|
|
|
|
|
SELECTED CASH FLOW
DETAIL: |
|
|
|
|
|
|
|
|
|
Selected cash flow statement
amounts: |
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
Twelve Months
Ended |
|
December
31, |
December
31, |
|
2010 |
2009 |
2010 |
2009 |
|
(In thousands) |
Cash provided by operating
activities |
$32,175 |
$26,990 |
$105,168 |
$74,874 |
Cash used in investing activities |
(10,693) |
(6,957) |
(50,652) |
(26,031) |
Cash used in financing activities |
(21,002) |
(15,666) |
(62,150) |
(42,232) |
Effect of exchange rate changes on
cash |
86 |
(59) |
374 |
414 |
Net increase (decrease) in cash and cash
equivalents |
$566 |
$4,308 |
($7,260) |
$7,025 |
Cash and cash equivalents at beginning of
period |
2,623 |
6,141 |
10,449 |
3,424 |
Cash and cash equivalents at end of
period |
$3,189 |
$10,449 |
$3,189 |
$10,449 |
|
|
|
|
|
DETAIL OF CHANGES
IN INTEREST RATE HEDGING PROGRAM: |
|
|
|
|
|
|
|
|
|
The following table shows the
Company's interest rate hedging program in place in the United
States before and after the changes made in January 2011: |
|
|
|
|
|
|
Notional
Amounts |
|
Year |
United
States |
Weighted Average
Fixed Rate |
|
Before |
After |
Before |
After |
|
(In
thousands) |
|
2011 |
$625,000 |
$625,000 |
3.61% |
3.61% |
2012 |
$525,000 |
$750,000 |
3.66% |
3.52% |
2013 |
$275,000 |
$750,000 |
3.57% |
3.36% |
2014 |
$100,000 |
$750,000 |
3.61% |
3.29% |
2015 |
$ — |
$550,000 |
— |
3.27% |
2016 |
$ — |
$350,000 |
— |
3.28% |
|
Key Operating
Metrics |
For the Three and
Twelve Months Ended December 31, 2010 and 2009 |
(Unaudited) |
|
|
|
|
|
|
Three Months
Ended |
Twelve Months
Ended |
|
December
31, |
December
31, |
|
2010 |
2009 |
2010 |
2009 |
Average number of transacting
ATMs: |
|
|
|
|
United States: Company-owned |
18,471 |
18,181 |
18,272 |
18,190 |
United States: Merchant-owned |
9,445 |
9,938 |
9,627 |
10,066 |
United Kingdom |
2,944 |
2,687 |
2,832 |
2,606 |
Mexico |
2,947 |
2,359 |
2,867 |
2,197 |
Average number of transacting ATMs: ATM
operations |
33,807 |
33,165 |
33,598 |
33,059 |
United States: Managed services (1) |
2,862 |
1,631 |
2,239 |
1,508 |
Total average number of transacting
ATMs |
36,669 |
34,796 |
35,837 |
34,567 |
|
|
|
|
|
Total transactions (in
thousands): |
|
|
|
|
ATM operations |
107,894 |
97,681 |
417,226 |
383,323 |
Managed services |
4,591 |
2,318 |
14,133 |
9,042 |
Total transactions |
112,485 |
99,999 |
431,359 |
392,365 |
|
|
|
|
|
Total cash withdrawal transactions
(in thousands): |
|
|
|
|
ATM operations |
65,172 |
61,209 |
256,440 |
244,378 |
Managed services |
3,051 |
1,896 |
10,471 |
7,488 |
Total cash withdrawal
transactions |
68,223 |
63,105 |
266,911 |
251,866 |
|
|
|
|
|
Per ATM per month amounts (excludes
managed services): |
|
|
|
|
Cash withdrawal transactions |
643 |
615 |
636 |
616 |
|
|
|
|
|
ATM operating revenues |
$1,292 |
$1,225 |
$1,290 |
$1,217 |
Cost of ATM operating revenues (2) |
867 |
830 |
866 |
842 |
ATM operating gross profit (2)
(3) |
$425 |
$395 |
$424 |
$375 |
|
|
|
|
|
ATM operating gross margin (2) (3) |
32.9% |
32.2% |
32.9% |
30.8% |
|
|
|
|
|
Capital expenditures (in thousands) (4) |
$10,693 |
$9,013 |
$51,194 |
$28,530 |
Capital expenditures, net of noncontrolling
interests (in thousands) (4) |
$10,664 |
$7,495 |
$49,536 |
$25,799 |
___________________ |
|
|
|
|
|
|
|
|
|
(1) Includes 1,692 and
1,704 ATMs for the three and twelve months ended December 31, 2010,
respectively, and all ATMs for the three and twelve months ended
December 31, 2009, for which the Company only provided EFT
transaction processing services. |
(2) Amounts presented
exclude the effect of depreciation, accretion, and amortization
expense, which is presented separately in the Company's
consolidated statements of operations. |
(3) ATM operating gross
profit and ATM operating gross margin are measures of profitability
that use only the revenues and expenses that relate to operating
ATMs in the Company's portfolio. Revenues and expenses from managed
services and ATM equipment sales and other ATM-related services are
not included. |
(4) Capital expenditures
include amounts financed by direct debt for the twelve month period
ended December 31, 2010 and for the three and twelve month periods
ended December 31, 2009. |
|
Reconciliation of Net
Income Attributable to Controlling Interests to EBITDA, Adjusted
EBITDA, and |
Adjusted Net
Income |
For the Three and
Twelve Months Ended December 31, 2010 and 2009 |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
Twelve Months
Ended |
|
December
31, |
December
31, |
|
2010 |
2009 |
2010 |
2009 |
|
(In thousands, except share and
per share amounts) |
Net income attributable to
controlling interests |
$8,028 |
$1,459 |
$40,959 |
$5,277 |
Adjustments: |
|
|
|
|
Interest expense, net |
4,933 |
7,305 |
26,629 |
30,133 |
Amortization of deferred financing costs
and bond discounts |
211 |
618 |
2,029 |
2,395 |
Write-off of deferred financing costs and
bond discounts |
— |
— |
7,296 |
— |
Redemption costs for early extinguishment
of debt |
— |
— |
7,193 |
— |
Income tax expense (benefit) |
3,438 |
961 |
(17,139) |
4,245 |
Depreciation and accretion
expense |
11,373 |
9,860 |
42,724 |
39,420 |
Amortization expense |
3,904 |
5,480 |
15,471 |
18,916 |
EBITDA |
$31,887 |
$25,683 |
$125,162 |
$100,386 |
|
|
|
|
|
Add back: |
|
|
|
|
Loss on disposal of assets (1) |
807 |
1,185 |
2,647 |
6,016 |
Other income (2) |
(760) |
(194) |
(1,004) |
(982) |
Noncontrolling interests (3) |
(582) |
(334) |
(1,984) |
(1,281) |
Stock-based compensation expense (4) |
1,423 |
1,240 |
5,998 |
4,617 |
Other adjustments to cost of ATM
operating revenues |
— |
1 |
— |
154 |
Other adjustments to selling, general,
and administrative expenses (5) |
— |
— |
— |
1,463 |
Adjusted EBITDA |
$32,775 |
$27,581 |
$130,819 |
$110,373 |
Less: |
|
|
|
|
Interest expense, net (4) |
4,824 |
7,219 |
26,161 |
29,811 |
Depreciation and accretion expense
(4) |
11,006 |
9,613 |
41,322 |
38,539 |
Income tax expense (at 35%) (6) |
5,931 |
3,762 |
22,168 |
14,708 |
Adjusted Net Income |
$11,014 |
$6,987 |
$41,168 |
$27,315 |
|
|
|
|
|
Adjusted Net Income per
share |
$0.27 |
$0.18 |
$1.02 |
$0.70 |
Adjusted Net Income per diluted
share |
$0.26 |
$0.17 |
$1.00 |
$0.68 |
|
|
|
|
|
Weighted average shares outstanding –
basic |
41,023,404 |
39,600,166 |
40,347,194 |
39,244,057 |
Weighted average shares outstanding –
diluted |
41,822,811 |
40,910,286 |
41,059,381 |
39,896,366 |
_________________ |
|
|
|
|
|
|
|
|
|
(1) Primarily comprised of
losses on the disposal of fixed assets that were incurred with the
deinstallation of ATMs during the periods. The higher amounts
during 2009 were primarily the result of certain optimization
efforts taken during that year. |
(2) Amounts exclude
unrealized (gains) losses related to derivatives not designated as
hedging instruments. |
(3) Noncontrolling
interests adjustment made such that Adjusted EBITDA includes only
the Company's 51% ownership interest in the Adjusted EBITDA of its
Mexico subsidiary. |
(4) Amounts exclude 49% of
the expenses incurred by the Company's Mexico subsidiary as such
amounts are allocable to the noncontrolling interest
shareholders. |
(5) For the twelve month
period ended December 31, 2009, other adjustments to selling,
general, and administrative expenses primarily consisted of
severance costs associated with the departure of the Company's
former Chief Executive Officer in March 2009. |
(6) 35% represents the Company's
estimated long-term, cross-jurisdictional effective tax rate. |
|
Reconciliation of Free
Cash Flow |
For the Three and
Twelve Months Ended December 31, 2010 and 2009 |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
Twelve Months
Ended |
|
December
31, |
December
31, |
|
2010 |
2009 |
2010 |
2009 |
|
(In thousands) |
Cash provided by operating
activities |
$32,175 |
$26,990 |
$105,168 |
$74,874 |
Payments for capital expenditures: |
|
|
|
|
Cash used in investing
activities |
(10,693) |
(6,957) |
(50,652) |
(26,031) |
Fixed assets financed by direct
debt |
— |
(2,056) |
(542) |
(2,499) |
Total payments for capital
expenditures |
(10,693) |
(9,013) |
(51,194) |
(28,530) |
Free cash flow |
$21,482 |
$17,977 |
$53,974 |
$46,344 |
|
Reconciliation of
Estimated Net Income to EBITDA, Adjusted EBITDA, and Adjusted Net
Income |
For the Year Ending
December 31, 2011 |
(Unaudited) |
|
|
|
|
|
Estimated
Range |
|
Full Year
2011 |
|
(In millions) |
|
|
|
|
Net income |
$34.1 |
-- |
$37.1 |
Adjustments: |
|
|
|
Interest expense, net |
19.0 |
-- |
19.0 |
Amortization of deferred financing
costs |
1.0 |
-- |
1.0 |
Income tax expense |
13.4 |
-- |
14.6 |
Depreciation and accretion expense |
45.0 |
-- |
45.8 |
Amortization expense |
15.2 |
-- |
15.2 |
EBITDA |
$127.7 |
-- |
$132.7 |
|
|
|
|
Add back: |
|
|
|
Noncontrolling interests |
(1.8) |
-- |
(1.8) |
Loss on disposal of assets |
2.0 |
-- |
2.0 |
Stock-based compensation expense |
8.1 |
-- |
8.1 |
Adjusted EBITDA |
$136.0 |
-- |
$141.0 |
Less: |
|
|
|
Interest expense, net (1) |
18.6 |
-- |
18.6 |
Depreciation and accretion expense (1) |
43.7 |
-- |
44.5 |
Income tax expense (at 35%) (2) |
25.8 |
-- |
27.2 |
Adjusted Net
Income |
$47.9 |
-- |
$50.7 |
|
|
|
|
Adjusted Net Income per diluted
share |
$1.14 |
-- |
$1.20 |
|
|
|
|
Weighted average shares outstanding –
diluted |
41.9 |
-- |
42.3 |
|
|
|
|
|
|
|
|
(1)Amounts exclude 49% of the
expenses to be incurred by the Company's Mexico subsidiary as such
amounts are allocable to the noncontrolling interest
shareholders. |
(2) 35% represents the Company's
estimated long-term, cross-jurisdictional effective tax rate. |
CONTACT: Investors:
Chris Brewster, Chief Financial Officer
832-308-4128
cbrewster@cardtronics.com
Media:
Tom Pierce, Chief Marketing Officer
832-308-4111
tpierce@cardtronics.com
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