HOUSTON, Sept. 7, 2005 (PRIMEZONE) -- Cardtronics, Inc. ("Cardtronics" or the "Company"), the world's largest independent owner/operator of ATMs, today announced its financial results for the quarter ended June 30, 2005.
For the second quarter of 2005, revenues totaled $69.2 million, representing a 99.4% increase over the $34.7 million in revenues recorded during the second quarter of 2004. Net income for the second quarter of 2005 totaled approximately $0.2 million, compared to approximately $0.8 million for the same period in 2004. The quarterly results for both periods include write-offs of deferred financing costs totaling $2.5 million in each period, resulting from the refinancing of the Company's bank credit facilities in May 2005 and June 2004. The year-over-year increase in revenues was primarily due to the Company's acquisition of the E*TRADE ATM portfolio in June 2004, and, to a lesser extent, additional acquisitions consummated during the first six months of 2005, including the BAS Communications, Inc. ATM portfolio in March 2005; the Neo Concepts, Inc. ATM portfolio in April 2005; and Bank Machine Limited in the United Kingdom in May 2005. The decrease in net income was primarily due to the additional interest, depreciation and amortization expense amounts associated with the aforementioned acquisitions.
Earnings before interest, taxes, depreciation and amortization ("EBITDA") totaled $11.5 million for the second quarter of 2005, representing a 71.6% increase over the $6.7 million in EBITDA recorded during the second quarter of 2004. Adjusted EBITDA, which represents EBITDA adjusted for the items described in the tables included in this release and as provided for by the Company's bank credit facility, totaled $11.9 million for the second quarter of 2005, representing a 70.0% increase over the $7.0 million in Adjusted EBITDA for the same period in 2004. The increases in EBITDA and Adjusted EBITDA were primarily due to the year-over-year revenue growth resulting primarily from the Company's various acquisitions during the past year, as highlighted above, and to a lesser extent, continued growth in the Company's bank and network branding initiatives.
EBITDA and Adjusted EBITDA are non-GAAP measures of financial performance. We are required by the terms of our bank credit facility to maintain specified levels of Adjusted EBITDA. Reference is made to the tables at the end of this release for a reconciliation of these items to net income.
For the six months ended June 30, 2005, revenues totaled $127.5 million, representing an increase of 88.3% over the $67.7 million in revenues recorded during the first six months of 2004. Net income for the six months ended June 30, 2005, totaled $2.1 million, compared to $1.1 million for the same period in 2004. As was the case with the quarterly results outlined above, the year-over-year increase in revenues was due primarily to the E*TRADE ATM portfolio acquisition consummated in June 2004. The year-over-year increase in net income was largely due to the fact that the 2004 results included an additional $1.3 million, net of tax, in stock compensation charges when compared to the 2005 results.
EBITDA totaled $20.2 million for six months ended June 30, 2005, representing a 102.0% increase over the $10.0 million in EBITDA recorded during the same period in 2004. Adjusted EBITDA totaled $20.9 million for the six months ended June 30, 2005, representing a 58.3% increase over the $13.2 million in Adjusted EBITDA for the same period in 2004. As was the case with the quarterly results, the increases in EBITDA and Adjusted EBITDA were driven by the Company's recent acquisitions and, to a lesser degree, increased revenues associated with the Company's bank and network branding initiatives.
The 2005 results are not fully reflective of the operations of the acquired Neo Concepts, Inc. portfolio (which was in transition to the Company's operating platform during the second quarter) or of Bank Machine Limited, which has only been included in the Company's financial results for two months during the second quarter.
"Cardtronics has achieved a tremendous amount of progress with respect to its growth initiatives during the first six months of 2005," remarked Jack Antonini, Chief Executive Officer of Cardtronics. "With the Bank Machine acquisition, our first outside of the United States, we have demonstrated our commitment to expanding our domestic ATM operating expertise to selected international markets. Additionally, we have continued to make great strides domestically with our bank-branding program, as evidenced by the recent agreement with JPMorgan Chase to brand our ATMs located in Duane Reade drugstores throughout the New York metropolitan area. Combined, we have laid a solid foundation for our future domestic and international growth initiatives."
Key Highlights
Recent key highlights include the following:
-- The acquisition of Bank Machine Limited, an independent owner
and operator of approximately 1,000 ATMs located throughout the
United Kingdom, in May 2005. Such acquisition represents the
Company's initial expansion into international markets and
provides a solid platform for future international growth
opportunities. As part of the acquisition, Ron Delnevo, the CEO
of Bank Machine, was appointed to the Company's board of
directors.
-- The amendment of the Company's existing bank credit facilities
as part of the Bank Machine acquisition in May 2005. The new
facilities, which included $300.0 million in total commitments,
were comprised of (i) a first lien term facility of $125.0
million, (ii) a second lien term facility of $75.0 million and
(iii) a revolving credit facility of up to $100.0 million. The
first and second lien term loans were fully repaid in connection
with the closing of the Company's senior subordinated notes
offering, which was completed in August 2005 and is described
further below. Furthermore, the Company's revolving credit
facility was increased to $150.0 million upon the closing of the
notes offering, with approximately $40.8 million currently drawn.
-- The acquisition of the ATM portfolio of Neo Concepts, Inc., an
independent owner and operator of approximately 360 ATMs, most of
which are located at BP Amoco locations throughout the Midwest.
-- The signing of an ATM branding agreement with JPMorgan Chase
whereby Chase has agreed to brand approximately 250 ATMs located
in Duane Reade stores throughout the New York metropolitan area.
-- The sale of $200.0 million in senior subordinated notes (the
"Notes") in August 2005. The Notes, which carry a 9 1/4% coupon
and are due in August 2013, were sold to qualified institutional
buyers pursuant to Rule 144A and certain institutions outside of
the United States pursuant to Regulation S of the Securities Act
of 1933, as amended. The offering was upsized from the $150.0
million offering size initially contemplated. Proceeds from the
offering were utilized to repay existing bank indebtedness of the
Company, as highlighted above.
-- The renewal of the Company's multi-year contract with Amerada
Hess. The new agreement expands the Company's existing
relationship with Hess, which currently includes 370 Hess
convenience stores located along the Eastern Seaboard, to include
an additional 220 locations in Florida during 2006.
-- The hiring of Drew Soinski as the Company's Executive
Vice-President and Chief Marketing Officer. With over 25 years of
executive sales and marketing experience at companies such as
First Horizon Merchant Services, National Processing, Inc.,
TransGlobal and National Bancard Corporation, Drew will help to
expand and strengthen the Company's ongoing marketing efforts and
brand awareness initiatives.
Non-GAAP Financial Information
EBITDA and Adjusted EBITDA are not intended to represent cash flows from operations as defined by generally accepted accounting principles ("GAAP") in the United States and should not be used as an alternative to net income as an indicator of operating performance or to cash flow as a measure of liquidity. While EBITDA is frequently used as a measure of operating performance and the ability to meet debt service requirements, it is not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the methods of calculation. Adjusted EBITDA, as presented herein, is calculated in the manner similar to that in our bank credit facility and, as such, is not comparable to other similarly titled captions of other companies. The Company believes that referencing EBITDA and Adjusted EBITDA will be helpful to our investors, as we believe it is used by the lenders under our bank credit facility in their evaluation of the Company. A reconciliation of EBITDA and Adjusted EBITDA to net income is included elsewhere in this press release.
Cautionary Note Regarding Forward-Looking Statements
The information in this press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give our current expectations or forecasts of future events, future financial performance, strategies, expectations, competitive environment, regulation and availability of resources. They include, among other things, proposed new programs; expectations that regulatory developments or other matters will not have a material adverse effect on our consolidated financial position, results of operations or liquidity; statements concerning projections, predictions, expectations, estimates or forecasts as to our 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. Such 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, including risks and uncertainties relating to reliance on third parties for cash management services; increased regulation and regulatory uncertainty; trends in ATM usage; decreases in the number of ATMs we can place with our top merchants; increased industry competition; our ability to continue to execute our growth strategies; risks associated with the acquisition of other ATM networks; changes in interest rates; declines in, or system failures that interrupt or delay, ATM transactions; changes in the ATM transaction fees we receive; changes in ATM technology; changes in foreign currency rates; and general and economic conditions.
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. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information.
About Cardtronics
Headquartered in Houston, Texas, Cardtronics is the world's largest owner/operator of ATMs with a nationwide U.S. network of more than 25,000 locations operating in every major market and in all 50 states as well as 1,000 locations throughout the United Kingdom. Major U.S. merchant-clients include A&P, Albertson's, Amerada Hess, Barnes & Noble College Bookstores, BP Amoco, Chevron, Costco, CVS/pharmacy, ExxonMobil, Duane Reade, Rite Aid, SSP/Circle K, Sunoco, Target and Walgreens. Cardtronics' unique ATM footprint enables it to offer ATM branding opportunities to financial institutions across the USA. Branded ATMs deployed at Cardtronics' major merchant-clients increase account access convenience for the depositors of these financial institutions as well as customer foot traffic for the merchant-clients. For more information about Cardtronics, please visit http://www.cardtronics.com/
The Cardtronics logo is available at http://www.primezone.com/newsroom/prs/?pkgid=991
Cardtronics, Inc. and Subsidiaries
Consolidated Statements of Operations
Three and Six Months Ended June 30, 2005 and 2004
(in thousands)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2005 2004 2005 2004
-------- -------- -------- --------
Revenues:
ATM revenues $ 66,056 $ 33,324 $122,128 $ 64,640
ATM product sales
and other revenues 3,134 1,346 5,326 3,019
-------- -------- -------- --------
Total revenues 69,190 34,670 127,454 67,659
Cost of revenues:
Cost of ATM revenues 50,640 24,521 94,915 48,400
Cost of ATM product sales
and other revenues 2,844 1,261 4,804 2,695
-------- -------- -------- --------
Total cost of revenues 53,484 25,782 99,719 51,095
Gross profit 15,706 8,888 27,735 16,564
Operating expenses:
Selling, general and
administrative expenses 3,936 2,097 7,040 6,517
Depreciation and
accretion expense 2,898 1,290 5,142 2,490
Amortization expense 2,151 1,143 3,709 2,286
-------- -------- -------- --------
Total operating expenses 8,985 4,530 15,891 11,293
Income from operations 6,721 4,358 11,844 5,271
Other expenses:
Interest expense 3,415 415 5,269 755
Amortization and write-off
of deferred financing costs 2,799 2,597 2,905 2,683
Minority interest in
subsidiary 5 -- 16 --
Other 228 59 430 93
-------- -------- -------- --------
Total other expenses 6,447 3,071 8,620 3,531
Income before income taxes 274 1,287 3,224 1,740
Income tax provision 107 489 1,172 629
-------- -------- -------- --------
Net income 167 798 2,052 1,111
Preferred stock dividends
and accretion expense 66 567 1,262 1,121
-------- -------- -------- --------
Net income (loss) available
to common stockholders $ 101 $ 231 $ 790 $ (10)
======== ======== ======== ========
Cardtronics, Inc. and Subsidiaries
Consolidated Balance Sheets
As of June 30, 2005 and December 31, 2004
(in thousands, except share and per share amounts)
June 30, December 31,
2005 2004
--------- ---------
Assets (unaudited)
Current assets:
Cash and cash equivalents $ 5,652 $ 1,412
Accounts and notes receivable, net 9,667 11,473
Inventory 3,308 2,609
Prepaid, deferred costs, and other
current assets 5,359 2,503
Deferred tax asset 2,812 2,412
--------- ---------
Total current assets 26,798 20,409
Property and equipment, net 62,714 44,992
Intangible assets, net 79,365 43,077
Goodwill 152,234 84,977
Prepaid and other assets 6,457 1,854
--------- ---------
Total assets $ 327,568 $ 195,309
========= =========
Liabilities and Stockholders' Deficit
Current liabilities:
Current portion of long-term debt $ -- $ 15,000
Current portion of other long-term
liabilities 2,251 1,176
Accounts payable and accrued liabilities 33,954 24,814
--------- ---------
Total current liabilities 36,205 40,990
Long-term liabilities:
Long-term debt, net of current portion 236,859 113,541
Deferred tax liability 12,298 6,231
Other long-term liabilities and
minority interest in subsidiary 15,770 13,077
--------- ---------
Total liabilities 301,132 173,839
--------- ---------
Redeemable preferred stock 76,196 23,634
Stockholders' deficit:
Subscriptions receivable
(at face value) (1,476) (1,862)
Additional paid-in capital 682 --
Accumulated other comprehensive
income (loss), net (627) 886
Retained earnings/accumulated deficit 536 (329)
Treasury stock (48,875) (859)
--------- ---------
Total stockholders' deficit (49,760) (2,164)
--------- ---------
Total liabilities and
stockholders' deficit $ 327,568 $ 195,309
========= =========
Cardtronics, Inc. and Subsidiaries
Key Operating Metrics
Three and Six Months Ended June 30, 2005 and 2004
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2005 2004 2005 2004
---------- ---------- ---------- ----------
Average number of
transacting ATMs 26,241 12,004 25,943 11,992
Surcharge transactions
per ATM 1,056 1,268 2,004 2,500
Total surcharge
transactions 27,698,115 15,226,342 51,991,222 29,977,958
Total transactions 39,535,697 20,528,906 72,950,243 40,306,799
Per surcharge
transaction amounts:
Transaction revenue $ 2.38 $ 2.19 $ 2.35 $ 2.15
Transaction expenses 1.83 1.61 1.83 1.61
---------- ---------- ---------- ----------
Transaction gross
profit $ 0.55 $ 0.58 $ 0.52 $ 0.54
========== ========== ========== ==========
Transaction gross
margin 23.3% 26.4% 22.3% 25.1%
Capital expenditures
(000s) $ 6,377 $ 3,698 $ 12,699 $ 7,723
Cardtronics, Inc. and Subsidiaries
Reconciliation of Net Income to EBITDA and Adjusted EBITDA
Three and Six Months Ended June 30, 2005 and 2004
(in thousands)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2005 2004 2005 2004
------- ------- ------- -------
Net Income $ 167 $ 798 $ 2,052 $ 1,111
Interest expense 6,214 3,012 8,174 3,438
Income tax expense 107 489 1,172 629
Depreciation expense 2,898 1,290 5,142 2,490
Amortization expense 2,151 1,143 3,709 2,286
------- ------- ------- -------
EBITDA 11,537 6,732 20,249 9,954
Stock compensation expense 129 309 301 2,488
Acquisition related
transition costs 307 20 396 336
Initial public offering costs 1 (35) 22 396
Other (74) -- (74) --
------- ------- ------- -------
Adjusted EBITDA $11,900 $ 7,026 $20,894 $13,174
======= ======= ======= =======