Cardtronics, Inc. (Nasdaq:CATM) (the "Company"), the world's
largest retail ATM owner, today announced its financial and
operational results for the quarter ended September 30, 2011.
Key financial and operational statistics in the third quarter of
2011 as compared to the third quarter of 2010 include (with some
statistics showing the results excluding the contribution from the
EDC acquisition, which closed on July 25, 2011):
- Consolidated revenues of $165.1 million, up by 21% (up by 12%
excluding the contribution from the EDC acquisition)
- Adjusted Net Income per diluted share of $0.39, up by 39% from
$0.28
- Gross margin of 33.2%, remaining fairly consistent with the
prior year
- Adjusted EBITDA of $43.0 million, up by 23%
- GAAP net income of $46.9 million, up by 126%, significantly
impacted by non-recurring refinancing-related charges incurred in
the third quarter of 2010 and an increase in tax benefit in the
third quarter of 2011.
- GAAP net income per diluted share of $1.05, up from $0.49,
significantly impacted by non-recurring refinancing-related charges
incurred in the third quarter of 2010 and an increase in tax
benefit in the third quarter of 2011.
- Continued improvements in several key operating metrics
(amounts presented exclude transactions from the Company's managed
services offerings):
- Total transactions increased by 28% (up by 20% excluding the
contribution from the EDC acquisition)
- Total cash withdrawal transactions per ATM increased by
19%
- Total transactions per ATM increased by 17%
- Operating gross profit per ATM increased by 9%
Effects of foreign currency exchange rate movements had an
insignificant impact on reported revenues, Adjusted EBITDA and
Adjusted Net Income per diluted share during the quarter.
Please refer to the "Disclosure of Non-GAAP Financial
Information" contained later in this release for definitions of
Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income per
diluted share 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.
"Our third quarter results were very strong, driven by
impressive organic revenue growth of 12% and a nice contribution
from our recently completed EDC acquisition," commented Steve
Rathgaber, chief executive officer. "With our continued solid
execution of our core business strategy along with complementary
business expansion opportunities, we are very excited about the
Company's future growth prospects."
RECENT HIGHLIGHTS
- The successful integration of the EDC ATM business with the
Company's existing operations. The results of operations include
the performance of EDC since the acquisition date of July 25,
2011.
- The completion on November 1, 2011 of the acquisition of Access
to Money, a leading ATM operator, with approximately 8,000 ATMs in
small retailers and approximately 2,000 ATMs in two major
retailers.
- The execution of an ATM managed services agreement for 89 ATMs
with FirstBank for its ATMs located in King Soopers (a local brand
name operated by Kroger Co.) in Colorado.
- The execution of an ATM services agreement with Harris Teeter,
a chain of supermarkets located primarily in U.S. Mid-Atlantic
States, to initially install 100 ATMs in its stores as well as in
any new Harris Teeter stores.
- The acquisition on October 28, 2011 of Mr. Cash, a Canadian
operator of approximately 600 ATMs, which provides the Company with
a platform and management to serve its U.S. retailer clients with
Canadian operations as well as to serve potential new Canadian
retailers.
- The addition of over 600 new (excluding acquisitions)
Company-owned ATM locations in the United States in the third
quarter.
THIRD QUARTER RESULTS
For the third quarter of 2011, consolidated revenues totaled
$165.1 million, representing a 21% increase from the $136.6 million
in consolidated revenues generated during the third quarter of
2010. Of the 21% year-over-year increase, 9% was attributable to
the inclusion of EDC's operations into the Company's consolidated
results for 68 days in the quarter. The remaining 12% organic
revenue increase is attributable to a combination of the following:
(1) increased transactions per ATM in the Company's domestic and
United Kingdom operations; (2) unit growth expansion; (3) increased
revenues from managed services agreements; (4) higher equipment
sales; (5) increased bank branding revenues from financial
institution partners; and (6) growth in Allpoint, the Company's
leading surcharge-free network.
Adjusted EBITDA for the third quarter of 2011 totaled $43.0
million, compared to $34.9 million during the third quarter of
2010, and Adjusted Net Income totaled $16.9 million ($0.39 per
diluted share) compared to $11.4 million ($0.28 per diluted share)
during the third quarter of 2010. The increases in Adjusted EBITDA
and Adjusted Net Income per diluted share were positively affected
by the incremental operations of ATMs acquired from EDC, as well as
the organic revenue growth. The year-over-year improvement in
Adjusted Net Income per diluted share was also partially
attributable to lower interest expense, which was $1.8 million
lower than a year ago, resulting from the refinancing of the
Company's debt in the third quarter of 2010, partially offset by
the additional borrowings under the Company's amended credit
facility to fund the acquisition of EDC. 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 third quarter of 2011 totaled $46.9
million, compared to $20.8 million during the same quarter in 2010.
The GAAP Net Income for the third quarter of 2011 included $37.0
million of income tax benefit, which was recorded as the result of
certain tax reporting and structuring changes the Company
implemented during the quarter with respect to its U.K. operations.
The third quarter of 2010 also included a net income tax benefit of
$20.7 million due to the release of valuation allowances related to
the Company's domestic deferred tax assets. Partially offsetting
the income tax benefit in 2010, the Company recorded approximately
$14.5 million in pre-tax non-recurring charges associated with the
Company's early retirement of its senior subordinated notes and the
refinancing of its credit facility. The year-over-year increase in
GAAP Net Income, aside from income taxes and prior year
non-recurring charges, was a result of the factors identified in
the discussion of Adjusted EBITDA and Adjusted Net Income above,
partially offset by higher stock-based compensation and
non-recurring acquisition-related costs.
NINE MONTHS RESULTS
For the nine months ended September 30, 2011, consolidated
revenues totaled $450.4 million, representing a 13% increase from
the $397.3 million in consolidated revenues generated during the
same period in 2010. As was the case with the Company's quarterly
results, the year-over-year increase was partially attributable to
the inclusion of EDC's operations into the Company's consolidated
results and a combination of increased transactions per ATM,
increased revenues from managed services agreements, higher
equipment sales, unit growth expansion, growth in Allpoint, and
increased bank branding revenues from financial institution
partners.
Adjusted EBITDA totaled $114.4 million for the nine months ended
September 30, 2011, representing a 17% increase over the $98.0
million in Adjusted EBITDA for the same period in 2010, and
Adjusted Net Income totaled $42.9 million ($1.01 per diluted share)
for the first nine months of 2011, up 36% on a per share basis from
$30.2 million ($0.74 per diluted share) during the same period in
2010. The increases in both Adjusted EBITDA and Adjusted Net Income
were primarily due to the same factors noted above for the
Company's quarterly results.
GAAP Net Income for the nine months ended September 30, 2011
totaled $62.1 million, compared to $32.9 million during the same
period in 2010. As was the case with the quarterly results, the
results for the nine-month periods ended September 30, 2011 and
2010 include certain non-recurring items related to taxes and
re-financing costs. Excluding these non-recurring 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
Update of Full-Year 2011 Guidance
The Company is updating the financial guidance it previously
issued regarding its anticipated full-year 2011 results, and now
expects the following, which includes expected results from the
Access to Money acquisition from the date of closing (November 1,
2011) through the end of the year:
- Revenues of $615.0 million to $620.0 million;
- Overall gross margins of approximately 32.8% to 32.9%;
- Adjusted EBITDA of $155.0 million to $157.0 million;
- Depreciation and accretion expense of approximately $46.2
million, net of noncontrolling interests
- Cash interest expense of approximately $19.9 million, net of
noncontrolling interests
- Adjusted Net Income of $1.35 to $1.38 per diluted share, based
on approximately 42.9 million weighted average diluted shares
outstanding; and
- Capital expenditures of approximately $64.4 million, net of
noncontrolling interests.
The Adjusted EBITDA and Adjusted Net Income guidance excludes
the impact of $9.2 million of anticipated stock-based compensation
expense and $18.2 million of expected intangible asset amortization
expense, both on a pre-tax basis. Additionally, this guidance
is based on average foreign currency exchange rates during the
October to December period of $1.55 U.S. to £1.00 U.K. and $13.00
Mexican pesos to $1.00 U.S. Finally, the guidance assumes that
interest rates during the October to December period remain
relatively consistent with what the Company has experienced during
the first nine months of the year.
LIQUIDITY, BALANCE SHEET AND OTHER
On July 25, 2011, concurrent with the closing of the EDC
acquisition, the Company expanded the borrowing capacity under its
revolving credit facility from $175.0 million to $250.0 million and
extended the term of the credit facility by one year through July
15, 2016. In addition, the amended credit facility can be extended
to up to $325.0 million under certain conditions. The amendment
also modified certain pricing terms and restrictive covenants, the
terms of which are generally more favorable for the Company. As of
the end of the quarter, the Company had $156.3 million in
outstanding borrowings under its amended credit facility, resulting
in approximately $89.4 million in available credit, net of
outstanding borrowings and letters of credit.
In October, a large international network announced planned
reductions to the net interchange payments it makes to ATM
deployers. The Company plans to discuss this action and its
possible impact to the Company in greater detail on its conference
call today (see below for further details regarding this conference
call).
DISCLOSURE OF NON-GAAP FINANCIAL
INFORMATION
Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income per
diluted share 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. Adjusted EBITDA
does not reflect acquisition-related costs and our obligations for
the payment of income taxes, interest expense or other obligations
such as capital expenditures. Adjusted Net Income represents net
income computed in accordance with GAAP, before amortization
expense, loss on disposal of assets, noncontrolling interests,
stock-based compensation expense and certain other expense (income)
and acquisition-related costs. Adjusted Net Income per diluted
share is calculated by dividing Adjusted Net Income by average
weighted diluted shares outstanding calculated in accordance with
GAAP. Free Cash Flow is defined as cash provided by operating
activities less payments for capital expenditures, including those
financed through direct debt but excluding acquisitions. The
measure of Free Cash Flow does not take into consideration certain
other non-discretionary cash requirements such as, for example,
mandatory principal payments on portions of the Company's long-term
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 measures prepared in
accordance with GAAP. Reconciliations of the non-GAAP financial
measures used herein to the most directly comparable GAAP financial
measures are presented in tabular form at the end of this press
release.
CONFERENCE CALL INFORMATION
The Company will host a conference call today, Monday, November
7, 2011, at 4:00 p.m. Central Time (5:00 p.m. Eastern Time) to
discuss its financial results for the quarter ended September 30,
2011. 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 Third 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
www.cardtronics.com.
A digital replay of the conference call will be available
through Monday, November 21, 2011, and can be accessed by calling
(855) 859-2056 or (404) 537-3406 and entering 18166776 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 December 6, 2011.
ABOUT
CARDTRONICS (Nasdaq:CATM)
Making ATM cash access convenient where people shop, work and
live their lives, Cardtronics is at the convergence of retailers,
financial institutions, prepaid card programs and the customers
they share. Cardtronics owns/operates more than 52,800 retail ATMs
in U.S. and international locales. Whether Cardtronics is driving
foot traffic for America's most relevant retailers, enhancing ATM
brand presence for card issuers or expanding card holders'
surcharge-free cash access on the local, national or global scene,
Cardtronics is convenient access to cash, when and where consumers
need it. Cardtronics is where cash meets commerce.
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, including the
expectation of operational and financial results from the
contribution of the EDC and Access to Money businesses. 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, including possible effects from the Dodd-Frank
Wall Street Reform and Consumer Protection Act which could result
in different behavior by consumers, retailers and banks;
- 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,
including a recent announcement by a major global network that will
likely result in lower fees earned by the Company on transactions
processed over this network;
- the Company's ability to provide new ATM solutions to retailers
and financial institutions;
- the Company's ATM vault cash rental needs, including potential
liquidity issues with its vault cash providers;
- the continued implementation of the Company's corporate
strategy;
- 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
customers, vendors and service providers;
- changes in interest rates and foreign currency rates; and
- the additional risks the Company is exposed to in its U.K.
armored transport business.
Additional information regarding known material 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 Nine
Months Ended September 30, 2011 and 2010 |
(Unaudited) |
|
|
Three
Months Ended September 30,
|
Nine Months
Ended September 30, |
|
2011 |
2010 |
2011 |
2010 |
|
(In thousands, except share and
per share information) |
Revenues: |
|
|
|
|
ATM operating revenues |
$ 157,636 |
$ 134,090 |
$ 432,164 |
$ 390,337 |
ATM product sales and other
revenues |
7,423 |
2,515 |
18,230 |
6,992 |
Total revenues |
165,059 |
136,605 |
450,394 |
397,329 |
Cost of revenues: |
|
|
|
|
Cost of ATM operating revenues (exclusive of
depreciation, accretion, and amortization shown separately
below) |
103,727 |
89,026 |
285,630 |
262,319 |
Cost of ATM product sales and other
revenues |
6,501 |
2,425 |
16,062 |
6,932 |
Total cost of
revenues |
110,228 |
91,451 |
301,692 |
269,251 |
Gross profit |
54,831 |
45,154 |
148,702 |
128,078 |
Operating expenses: |
|
|
|
|
Selling, general, and administrative expenses
|
13,772 |
11,519 |
39,701 |
32,934 |
Acquisition-related expenses |
956 |
— |
1,299 |
— |
Depreciation and accretion expense |
12,197 |
10,865 |
35,004 |
31,351 |
Amortization expense |
4,946 |
3,823 |
12,240 |
11,567 |
Loss on disposal of assets |
117 |
368 |
280 |
1,840 |
Total operating expenses |
31,988 |
26,575 |
88,524 |
77,692 |
Income from operations |
22,843 |
18,579 |
60,178 |
50,386 |
Other expense: |
|
|
|
|
Interest expense, net |
5,243 |
7,064 |
14,810 |
21,696 |
Amortization of deferred financing costs and
bond discounts |
351 |
546 |
775 |
1,818 |
Write-off of deferred financing costs and
bond discounts |
— |
7,296 |
— |
7,296 |
Redemption costs for early extinguishment of
debt |
— |
7,193 |
— |
7,193 |
Other expense (income) |
318 |
(207) |
258 |
(173) |
Total other expense |
5,912 |
21,892 |
15,843 |
37,830 |
Income (loss) before income taxes |
16,931 |
(3,313) |
44,335 |
12,556 |
Income tax benefit |
(29,869) |
(23,968) |
(17,765) |
(20,577) |
Net income |
46,800 |
20,655 |
62,100 |
33,133 |
Net (loss) income attributable to
noncontrolling interests |
(85) |
(108) |
20 |
202 |
Net income attributable to controlling
interests and available to common stockholders |
$ 46,885 |
$ 20,763 |
$ 62,080 |
$ 32,931 |
|
|
|
|
|
Net income per common share –
basic |
$ 1.06 |
$ 0.49 |
$ 1.42 |
$ 0.79 |
Net income per common share –
diluted |
$ 1.05 |
$ 0.49 |
$ 1.40 |
$ 0.78 |
|
|
|
|
|
Weighted average shares outstanding –
basic |
42,570,137 |
40,529,280 |
42,001,624 |
40,119,310 |
Weighted average shares outstanding –
diluted |
43,195,554 |
41,207,238 |
42,727,446 |
40,790,504 |
|
Condensed Consolidated
Balance Sheets |
As of September 30,
2011 and December 31, 2010 |
|
|
September 30,
2011 |
December 31,
2010 |
|
(Unaudited) |
|
|
(In thousands) |
Assets |
|
|
Current assets: |
|
|
Cash and cash
equivalents |
$ 5,206 |
$ 3,189 |
Accounts and notes
receivable, net |
32,716 |
20,270 |
Inventory |
2,108 |
1,795 |
Restricted cash,
short-term |
3,568 |
4,466 |
Current portion of
deferred tax asset, net |
18,780 |
15,017 |
Prepaid expenses, deferred
costs, and other current assets |
12,685 |
10,222 |
Total current assets |
75,063 |
54,959 |
Property and equipment, net |
174,154 |
156,465 |
Intangible assets, net |
112,415 |
74,799 |
Goodwill |
269,521 |
164,558 |
Deferred tax asset, net |
10,493 |
715 |
Prepaid expenses, deferred costs, and other
assets |
19,878 |
3,819 |
Total assets |
$ 661,524 |
$ 455,315 |
|
|
|
Liabilities and Stockholders'
Equity |
|
|
Current liabilities: |
|
|
Current portion of
long-term debt and notes payable |
$ 2,717 |
$ 3,076 |
Current portion of other
long-term liabilities |
24,868 |
24,493 |
Accounts payable and other
accrued and current liabilities |
84,648 |
71,425 |
Total current
liabilities |
112,233 |
98,994 |
Long-term liabilities: |
|
|
Long-term debt |
359,484 |
251,757 |
Deferred tax liability,
net |
62 |
10,268 |
Asset retirement
obligations |
32,456 |
26,657 |
Other long-term
liabilities |
54,178 |
23,385 |
Total liabilities |
558,413 |
411,061 |
Stockholders' equity |
103,111 |
44,254 |
Total liabilities and
stockholders' equity |
$ 661,524 |
$ 455,315 |
|
SELECTED INCOME
STATEMENT DETAIL: |
|
Total revenues by
segment: |
|
|
Three
Months Ended September
30, |
Nine Months
Ended September 30, |
|
2011 |
2010 |
2011 |
2010 |
|
(In thousands) |
United States |
$ 132,861 |
$ 108,785 |
$ 358,890 |
$ 316,345 |
United Kingdom |
26,060 |
21,737 |
72,129 |
60,701 |
Mexico |
6,138 |
6,083 |
19,375 |
20,283 |
Total revenues |
$ 165,059 |
$ 136,605 |
$ 450,394 |
$ 397,329 |
|
|
|
Breakout of ATM operating
revenues: |
|
|
|
Three
Months Ended September
30, |
Nine Months
Ended September 30, |
|
2011 |
2010 |
2011 |
2010 |
|
(In thousands) |
Surcharge revenues |
$ 76,579 |
$ 68,149 |
$ 211,940 |
$ 202,525 |
Interchange revenues |
50,695 |
40,820 |
135,407 |
117,657 |
Bank branding and surcharge-free network
revenues |
24,399 |
20,761 |
67,952 |
59,754 |
Managed services revenues |
3,025 |
1,034 |
7,275 |
2,079 |
Other revenues |
2,938 |
3,326 |
9,590 |
8,322 |
Total ATM operating
revenues |
$ 157,636 |
$ 134,090 |
$ 432,164 |
$ 390,337 |
|
|
|
Total cost of revenues by
segment: |
|
|
|
|
|
|
Three
Months Ended September
30, |
Nine Months
Ended September 30, |
|
2011 |
2010 |
2011 |
2010 |
|
(In thousands) |
United States |
$ 85,834 |
$ 70,239 |
$ 232,034 |
$ 207,980 |
United Kingdom |
19,666 |
16,506 |
54,957 |
45,758 |
Mexico |
4,728 |
4,706 |
14,701 |
15,513 |
Total cost of
revenues |
$ 110,228 |
$ 91,451 |
$ 301,692 |
$ 269,251 |
|
Breakout of cost of ATM
operating revenues (exclusive of depreciation, accretion, and
amortization): |
|
|
Three
Months Ended September
30, |
Nine Months
Ended September 30, |
|
2011 |
2010 |
2011 |
2010 |
|
(In thousands) |
Merchant commissions |
$ 49,018 |
$ 42,160 |
$ 133,813 |
$ 125,280 |
Vault cash rental expense |
10,381 |
9,902 |
29,194 |
28,783 |
Other costs of cash |
14,377 |
11,513 |
39,345 |
34,522 |
Repairs and maintenance |
10,882 |
8,929 |
29,659 |
26,822 |
Communications |
4,619 |
3,972 |
12,728 |
11,574 |
Transaction processing |
1,362 |
956 |
3,367 |
4,075 |
Stock-based compensation |
251 |
226 |
769 |
594 |
Other expenses |
12,837 |
11,368 |
36,755 |
30,669 |
Total cost of ATM
operating revenues |
$ 103,727 |
$ 89,026 |
$ 285,630 |
$ 262,319 |
|
Breakout of selling,
general, and administrative expenses: |
|
|
Three
Months Ended September
30, |
Nine Months
Ended September 30, |
|
2011 |
2010 |
2011 |
2010 |
|
(In thousands) |
Employee costs |
$ 7,061 |
$ 6,647 |
$ 20,386 |
$ 18,651 |
Stock-based compensation |
2,122 |
1,481 |
6,227 |
4,009 |
Professional fees |
1,917 |
1,220 |
4,943 |
4,086 |
Other |
2,672 |
2,171 |
8,145 |
6,188 |
Total selling, general, and
administrative expenses |
$ 13,772 |
$ 11,519 |
$ 39,701 |
$ 32,934 |
|
Depreciation and
accretion expense by segment: |
|
|
Three
Months Ended September
30, |
Nine Months
Ended September 30, |
|
2011 |
2010 |
2011 |
2010 |
|
(In thousands) |
United States |
$ 7,238 |
$ 6,842 |
$ 20,792 |
$ 20,172 |
United Kingdom |
4,183 |
3,179 |
11,860 |
9,065 |
Mexico |
776 |
844 |
2,352 |
2,114 |
Total depreciation and
accretion expense |
$ 12,197 |
$ 10,865 |
$ 35,004 |
$ 31,351 |
|
|
|
SELECTED BALANCE SHEET
DETAIL: |
|
|
|
|
|
Long-term debt: |
|
|
|
September 30,
2011 |
December 31,
2010 |
|
(In thousands) |
8.25% senior subordinated notes |
$ 200,000 |
$ 200,000 |
Revolving credit facility |
156,300 |
46,200 |
Equipment financing notes |
5,901 |
8,633 |
Total long-term
debt |
$ 362,201 |
$ 254,833 |
|
|
Share count
rollforward: |
|
|
|
Total shares outstanding as of December 31,
2010 |
42,833,342 |
Shares repurchased |
(145,251) |
Shares issued – restricted stock grants and
stock options exercised |
1,135,442 |
Shares forfeited – restricted
stock |
(13,750) |
Total shares outstanding
as of September 30, 2011 |
43,809,783 |
|
SELECTED CASH FLOW
DETAIL: |
|
Selected cash flow
statement amounts: |
|
|
Three
Months Ended September
30, |
Nine Months
Ended September 30, |
|
2011 |
2010 |
2011 |
2010 |
|
(In thousands) |
Cash provided by operating
activities |
$ 38,313 |
$ 20,392 |
$ 69,352 |
$ 72,993 |
Cash used in investing activities |
(155,290) |
(18,947) |
(180,687) |
(39,959) |
Cash provided by (used in) financing
activities |
118,042 |
(38,782) |
113,371 |
(41,148) |
Effect of exchange rate changes on
cash |
143 |
(129) |
(19) |
288 |
Net increase (decrease) in cash
and cash equivalents |
$ 1,208 |
$ (37,466) |
$ 2,017 |
$ (7,826) |
Cash and cash equivalents at beginning of
period |
3,998 |
40,089 |
3,189 |
10,449 |
Cash and cash equivalents at end of
period |
$ 5,206 |
$ 2,623 |
$ 5,206 |
$ 2,623 |
Key Operating
Metrics |
For the Three and Nine
Months Ended September 30, 2011 and 2010 |
(Unaudited) |
|
|
|
|
Three
Months Ended September
30, |
Nine Months
Ended September 30, |
|
2011 |
2010 |
2011 |
2010 |
Average number of transacting
ATMs: |
|
|
|
|
United States: Company-owned (1) |
21,288 |
18,125 |
19,881 |
18,178 |
United Kingdom |
3,341 |
2,878 |
3,187 |
2,796 |
Mexico |
2,902 |
2,916 |
2,906 |
2,843 |
Subtotal (1) |
27,531 |
23,919 |
25,974 |
23,817 |
United States: Merchant-owned |
8,080 |
8,574 |
8,192 |
8,689 |
Average number of transacting ATMs: ATM
operations |
35,611 |
32,493 |
34,166 |
32,506 |
|
|
|
|
|
United States: Managed services (2) |
4,525 |
3,353 |
4,191 |
3,057 |
United Kingdom: Managed services |
21 |
— |
17 |
— |
Average number of transacting ATMs:
Managed services |
4,546 |
3,353 |
4,208 |
3,057 |
|
|
|
|
|
Total average number of transacting ATMs
(1) |
40,157 |
35,846 |
38,374 |
35,563 |
|
|
|
|
|
Total transactions (in
thousands): |
|
|
|
|
ATM operations |
136,928 |
107,163 |
366,727 |
306,685 |
Managed services |
7,404 |
4,727 |
18,934 |
12,189 |
Total transactions
(3) |
144,332 |
111,890 |
385,661 |
318,874 |
|
|
|
|
|
Total cash withdrawal transactions
(in thousands): |
|
|
|
|
ATM operations |
84,237 |
64,652 |
225,202 |
189,302 |
Managed services |
4,832 |
3,525 |
12,641 |
9,385 |
Total cash withdrawal
transactions (4) |
89,069 |
68,177 |
237,843 |
198,687 |
|
|
|
|
|
Per ATM per month amounts (excludes
managed services): |
|
|
|
|
Cash withdrawal transactions |
788 |
663 |
732 |
647 |
|
|
|
|
|
ATM operating revenues |
$ 1,447 |
$ 1,365 |
$ 1,382 |
$ 1,327 |
Cost of ATM operating revenues (5) |
948 |
905 |
910 |
892 |
ATM operating gross
profit (5) (6) |
$ 499 |
$ 460 |
$ 472 |
$ 435 |
|
|
|
|
|
ATM operating gross margin (5) (6) |
34.5% |
33.7% |
34.2% |
32.8% |
|
|
|
|
|
Capital expenditures (in thousands) (7) |
$ 11,663 |
$ 18,947 |
$ 37,060 |
$ 40,501 |
Capital expenditures, net of noncontrolling
interests (in thousands) (7) |
$ 11,605 |
$ 18,537 |
$ 36,959 |
$ 38,872 |
|
|
|
|
|
(1) Includes 2,470 and 823 ATMs
from the EDC acquisition for the three and nine months ended
September 30, 2011, respectively. |
|
|
|
|
(2) Includes 2,519 and 2,579
ATMs for the three months ended September 30, 2011 and 2010,
respectively, and 2,508 and 2,543 ATMs for the nine months ended
September 30, 2011 and 2010, respectively, for which the Company
only provided EFT transaction processing services. |
|
|
|
|
(3) Includes 7,961 total
transactions from the EDC acquisition for the three and nine months
ended September 30, 2011. |
|
|
|
|
(4) Includes 5,387 cash
withdrawal transactions from the EDC acquisition for the three and
nine months ended September 30, 2011. |
|
|
|
|
(5) Amounts presented exclude the
effect of depreciation, accretion, and amortization expense, which
is presented separately in the Company's consolidated statements of
operations. |
|
|
|
|
(6) ATM operating gross profit
and ATM operating gross margin are measures of profitability that
are calculated based on only the revenues and expenses that relate
to operating ATMs in the Company's portfolio. Revenues and expenses
relating to managed services and ATM equipment sales and other
ATM-related services are not included. |
|
|
|
|
(7) Capital expenditures include
amounts financed by direct debt for the nine month period ended
September 30, 2010. |
|
|
|
|
Reconciliation of Net
Income Attributable to Controlling Interests to Adjusted EBITDA and
Adjusted |
Net
Income |
For the Three and Nine
Months Ended September 30, 2011 and 2010 |
(Unaudited) |
|
Three Months
Ended September 30, |
Nine Months
Ended September 30, |
|
2011 |
2010 |
2011 |
2010 |
|
(In thousands, except share and
per share amounts) |
Net income attributable to
controlling interests |
$ 46,885 |
$ 20,763 |
$ 62,080 |
$ 32,931 |
Adjustments: |
|
|
|
|
Interest expense,
net |
5,243 |
7,064 |
14,810 |
21,696 |
Amortization of deferred
financing costs and bond discounts |
351 |
546 |
775 |
1,818 |
Write-off of deferred
financing costs and bond discounts |
— |
7,296 |
— |
7,296 |
Redemption costs for
early extinguishment of debt |
— |
7,193 |
— |
7,193 |
Income tax
benefit |
(29,869) |
(23,968) |
(17,765) |
(20,577) |
Depreciation and
accretion expense |
12,197 |
10,865 |
35,004 |
31,351 |
Amortization
expense |
4,946 |
3,823 |
12,240 |
11,567 |
EBITDA |
$ 39,753 |
$ 33,582 |
$ 107,144 |
$ 93,275 |
|
|
|
|
|
Add back: |
|
|
|
|
Loss on disposal of
assets (1) |
117 |
368 |
280 |
1,840 |
Other expense (income)
(2) |
328 |
(247) |
221 |
(244) |
Noncontrolling interests
(3) |
(471) |
(530) |
(1,466) |
(1,402) |
Stock-based compensation
expense (4) |
2,363 |
1,699 |
6,968 |
4,575 |
Acquisition-related costs
(5) |
956 |
— |
1,299 |
— |
Adjusted EBITDA |
$ 43,046 |
$ 34,872 |
$ 114,446 |
$ 98,044 |
Less: |
|
|
|
|
Interest expense, net
(4) |
5,163 |
6,949 |
14,528 |
21,338 |
Depreciation and
accretion expense (4) |
11,818 |
10,452 |
33,852 |
30,315 |
Income tax expense (at
35%) (6) |
9,123 |
6,115 |
23,123 |
16,237 |
Adjusted Net Income |
$ 16,942 |
$ 11,356 |
$ 42,943 |
$ 30,154 |
|
|
|
|
|
Adjusted Net Income per
share |
$ 0.40 |
$ 0.28 |
$ 1.02 |
$ 0.75 |
Adjusted Net Income per diluted
share |
$ 0.39 |
$ 0.28 |
$ 1.01 |
$ 0.74 |
|
|
|
|
|
Weighted average shares outstanding –
basic |
42,570,137 |
40,529,280 |
42,001,624 |
40,119,310 |
Weighted average shares outstanding –
diluted |
43,195,554 |
41,207,238 |
42,727,446 |
40,790,504 |
|
|
|
|
|
(1) Primarily comprised of
losses on the disposal of fixed assets that were incurred with the
deinstallation of ATMs during the periods. |
(2) Amounts exclude
unrealized and realized (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) Acquisition-related
costs include non-recurring costs incurred for professional and
legal fees and certain transition and integration-related costs,
related to the acquisition of EDC, LocatorSearch, and Access to
Money. |
(6) 35% represents the
Company's estimated long-term, cross-jurisdictional effective tax
rate. |
|
|
|
|
Reconciliation of Free
Cash Flow |
For the Three and Nine
Months Ended September 30, 2011 and 2010 |
(Unaudited) |
|
|
Three Months
Ended September 30, |
Nine Months
Ended September 30, |
|
2011 |
2010 |
2011 |
2010 |
|
(In thousands) |
Cash provided by operating
activities |
$ 38,313 |
$ 20,392 |
$ 69,352 |
$ 72,993 |
Payments for capital expenditures: |
|
|
|
|
Cash used in investing
activities, excluding acquisitions |
(11,663) |
(18,947) |
(37,060) |
(39,959) |
Capital expenditures financed
by direct debt |
— |
— |
— |
(542) |
Total payments for capital
expenditures |
(11,663) |
(18,947) |
(37,060) |
(40,501) |
Free cash flow |
$ 26,650 |
$ 1,445 |
$ 32,292 |
$ 32,492 |
|
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 |
$ 68.5 |
- |
$ 70.0 |
Adjustments: |
|
|
|
Interest expense,
net |
20.3 |
- |
20.3 |
Amortization of deferred
financing costs |
1.0 |
- |
1.0 |
Income tax
benefit |
(13.5) |
- |
(13.0) |
Depreciation and
accretion expense |
47.8 |
- |
47.8 |
Amortization
expense |
18.2 |
- |
18.2 |
EBITDA |
$ 142.3 |
- |
$ 144.3 |
|
|
|
|
Add back: |
|
|
|
Noncontrolling
interests |
(1.9) |
- |
(1.9) |
Loss on disposal of
assets |
0.5 |
- |
0.5 |
Stock-based compensation
expense |
9.2 |
- |
9.2 |
Acquisition-related
costs |
4.9 |
- |
4.9 |
Adjusted EBITDA |
$ 155.0 |
- |
$ 157.0 |
Less: |
|
|
|
Interest expense, net
(1) |
19.9 |
- |
19.9 |
Depreciation and
accretion expense (1) |
46.2 |
- |
46.2 |
Income tax expense (at
35%) (2) |
31.1 |
- |
31.8 |
Adjusted Net
Income |
$ 57.8 |
- |
$ 59.1 |
|
|
|
|
Adjusted Net Income per diluted
share |
$ 1.35 |
- |
$ 1.38 |
|
|
|
|
Weighted average shares outstanding –
diluted |
42.9 |
- |
42.9 |
|
|
|
|
(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. |
Cardtronics and Allpoint are registered trademarks of
Cardtronics, Inc.
All other trademarks are the property of their respective
owners.
CONTACT: Cardtronics - Media
Nick Pappathopoulos
Director - Public Relations
832-308-4396
npappathopoulos@cardtronics.com
Cardtronics - Investors
Chris Brewster
Chief Financial Officer
832-308-4128
cbrewster@cardtronics.com
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