HOUSTON, Aug. 10, 2006 (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, 2006.
Second Quarter Results
Financial Information
For the second quarter of 2006, revenues totaled $73.3 million, representing a 5.9% increase over the $69.2 million in revenues recorded during the second quarter of 2005. The Company's adjusted earnings before interest, taxes, depreciation and amortization ("EBITDA"), which represents EBITDA adjusted for certain items as provided for by the Company's bank credit facility, totaled $13.7 million for the second quarter of 2006, representing a 13.2% increase over the $12.1 million in adjusted EBITDA for the same period in 2005. The year-over-year increase in revenues was primarily attributable to incremental revenues associated with the Company's United Kingdom operations, which began in May 2005 with the acquisition of Bank Machine Limited. Because this acquisition was consummated in May of last year, the prior year United Kingdom results only reflect two months' worth of operating history. The increase in adjusted EBITDA was primarily due to the benefits associated with having three months of results from the Company's United Kingdom operations in 2006, and year-over-year growth in the Company's bank and network branding revenues. Such increases were partially offset by cost increases in certain areas, including higher ATM cash costs (a component of cost of revenues) and higher selling, general and administrative costs resulting from the Company's year-over-year growth and various developmental activities.
Adjusted EBITDA is a non-GAAP measure of financial performance. We are required by the terms of our bank credit facility to comply with certain covenants that are based on it.
The Company recorded net income for the second quarter of 2006 of $0.8 million, which compares to net income of $1.4 million for the same period in 2005. The 2006 quarterly results include $1.1 million ($0.7 million net of tax) in other income related to a contract termination payment received from one of the Company's merchant customers. Such payment has been excluded from the aforementioned adjusted EBITDA amount for the quarter.
Key Statistics
Average transacting ATMs for the second quarter of 2006 totaled 25,755, representing a decrease of 1.8% when compared to the 26,232 average transacting ATMs during the same period in 2005. Such decrease was primarily due to a year-over-year decline in the number of merchant-owned ATMs transacting within the United States, offset slightly by ATM growth in the United Kingdom and Mexico. Cash withdrawal transactions increased 3.6% to 31.5 million during the second quarter of 2006 from 30.4 million during the same period in 2005. Such increase was primarily due to higher withdrawal transactions associated with the Company's United Kingdom operations, incremental withdrawal transactions associated with the Company's recently acquired operations in Mexico, and higher year-over-year withdrawal transactions associated with bank and network branded locations.
Average cash withdrawal transactions per ATM per month during the second quarter of 2006 increased 5.7% to 408 from 386 during the same period in 2005. This increase was primarily due to three full months of activity in 2006 from the Company's United Kingdom operations, which have higher average transaction volumes than the Company's domestic operations, and higher transactions associated with the Company's bank and network branded locations. Average revenues per ATM per month in the second quarter of 2006 increased 8.3% to $909 from $839 in the same period in 2005. Such increase was primarily due to the aforementioned full quarter impact of our United Kingdom operations and additional growth in the Company's domestic bank and network branding program. Capital expenditures during the quarter totaled $7.2 million.
Six Month Results
Financial Information
Revenues totaled $142.4 million for the six months ended June 30, 2006, representing an increase of 11.7% over the $127.5 million in revenues recorded during the first six months of 2005. Adjusted EBITDA totaled $25.2 for the six months ended June 30, 2006, representing a 18.3% increase over the $21.3 million in adjusted EBITDA for the same period in 2005. As was the case with the quarterly results, the year-over-year increases in revenues and adjusted EBITDA were driven by the Company's acquisition of Bank Machine Limited in 2005 and, to a lesser degree, increased revenues associated with the Company's bank and network branding initiatives.
The Company incurred a net loss of $2.4 million for the six months ended June 30, 2006, compared to $2.0 million in net income for the same period in 2005. The year-over-year decrease in net income was largely due to the additional interest, depreciation and amortization expense amounts associated with the Company's 2005 acquisitions, as well as higher operating and selling, general and administrative costs, as previously discussed.
Key Statistics
Average transacting ATMs for the six months ended June 30, 2006, totaled 25,983, essentially unchanged from the 25,935 average transacting ATMs during the same period in 2005. Cash withdrawal transactions increased 8.7% to 61.5 million for the six months ended June 30, 2006, from 56.6 million during the same period in 2005. The flat year-over-year ATM count was comprised of an increase in average transacting ATMs in the Company's United Kingdom and Mexico operations, offset by a decrease in the number of average transacting ATMs operating within the United States (primarily on the merchant-owned side of the business), as previously noted. The increase in year-to-date cash withdrawal transactions was driven by the same factors that contributed to the quarterly year-over-year increase, as noted above.
Average cash withdrawal transactions per ATM per month for the six months ended June 30, 2006, increased 8.2% to 394 from 364 during the same period in 2005. This increase was primarily due to the Company's United Kingdom operations, which have higher average transaction volumes than the Company's domestic operations and were in place for the full year-to-date period in 2006. Average revenues per ATM per month for the six months ended June 30, 2006, increased 11.7% to $877 from $785 in the same period in 2005. Such increase was driven by the same factors that contributed to the quarterly year-over-year increase, as noted above. Capital expenditures during the six months ended June 30, 2006, totaled $11.3 million.
"We continue to be pleased with the progress that we have made this year with respect to our key goals," commented Jack Antonini, Chief Executive Officer of Cardtronics. "Our bank and network branding initiatives continue to show strong progress and are expected to provide a solid platform for the future growth of our domestic operations. Internationally, we continue to be very excited about the opportunities for growth that we see in both our United Kingdom and Mexico operations."
Guidance for 2006
Based on the results achieved year-to-date, the Company is updating its earnings guidance for the year ending December 31, 2006. The Company now expects full-year revenues to be in the range of $280 to $290 million, up from the $270 to $290 million range that was previously communicated. Additionally, the Company expects its full-year Adjusted EBITDA to be in the range of $48 to $52 million, up from the previously communicated range of $46 to $50 million.
Non-GAAP Financial Information
Adjusted EBITDA is not intended to represent cash flows from operations as defined by 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 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.
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; trends within the ATM industry; 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 more than 25,000 locations. We operate in every major U.S. market, and at over 1,000 locations throughout the UK and over 300 locations in Mexico. Major merchant-clients include A&P(r), Albertson's(r), Amerada Hess(r), Barnes & Noble(r) College Bookstores, BP(r) Amoco, Chevron(r), Costco(r), CVS(r)/pharmacy, ExxonMobil(r), Duane Reade(r), Rite Aid(r), Sunoco(r), Target(r) and Walgreens(r). Cardtronics also works closely with financial institutions across the U.S., including Chase(r), Sovereign Bank(r), and Wachovia(r), to brand ATMs in these major merchants and provide convenient access for their customers and the ability to preserve and expand their markets. 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, 2006 and 2005
(in thousands)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------------------------
2006 2005 2006 2005
--------- --------- --------- ---------
Revenues:
ATM operating
revenues $ 70,246 $ 66,056 $ 136,655 $ 122,128
ATM product
sales and
other revenues 3,008 3,134 5,740 5,326
--------- --------- --------- ---------
Total revenues 73,254 69,190 142,395 127,454
Cost of revenues:
Cost of ATM
operating
revenues 52,407 50,640 102,945 95,087
Cost of ATM product
sales and other
revenues 2,478 2,844 5,037 4,803
--------- --------- --------- ---------
Total cost of
revenues 54,885 53,484 107,982 99,890
Gross profit 18,369 15,706 34,413 27,564
Operating expenses:
Selling, general and
administrative
expenses:
Stock-based
compensation 238 129 360 1,939
Other selling,
general and
administrative
expenses 4,822 3,806 9,538 6,761
Depreciation and
accretion expense 4,641 2,898 8,858 5,142
Amortization expense 2,330 2,151 7,347 3,709
--------- --------- --------- ---------
Total operating
expenses 12,031 8,984 26,103 17,551
Income from operations 6,338 6,722 8,310 10,013
Other (income) expense:
Interest expense, net 5,658 3,415 11,322 5,269
Amortization and
write-off of deferred
financing costs
and bond discount 336 798 1,214 1,131
Minority interest in
subsidiary (49) 3 (57) 15
Other (income) loss (854) 229 (657) 432
--------- --------- --------- ---------
Total other (income)
expense 5,091 4,445 11,822 6,847
Income (loss) before
income taxes 1,247 2,277 (3,512) 3,166
Income tax provision
(benefit) 478 830 (1,157) 1,151
--------- --------- --------- ---------
Net income (loss) $ 769 $ 1,447 $ (2,355) $ 2,015
========= ========= ========= =========
Cardtronics, Inc. and Subsidiaries
Consolidated Balance Sheets
As of June 30, 2006 and December 31, 2005
(in thousands)
(unaudited)
June 30, December 31,
2006 2005
-------------------------
Assets
Current assets:
Cash and cash
equivalents $ 3,936 $ 1,699
Accounts and notes
receivable, net 9,660 9,746
Inventory 4,948 2,747
Prepaid, deferred
costs, and other
current assets 5,043 4,244
Restricted cash,
short-term 814 4,232
Deferred tax asset 1,125 1,105
--------- ---------
Total current assets 25,526 23,773
Restricted cash 34 33
Property and equipment,
net 73,313 74,151
Intangible assets, net 70,189 75,965
Goodwill 166,688 161,557
Prepaid and other assets 13,866 8,272
--------- ---------
Total assets $ 349,616 $ 343,751
========= =========
Liabilities and
Stockholders' Deficit
Current liabilities:
Notes payable and capital
leases $ 147 $ 3,168
Current portion of other
long-term liabilities 2,281 2,251
Accounts payable and
accrued liabilities 44,355 42,438
--------- ---------
Total current liabilities 46,783 47,857
Long-term liabilities:
Long-term debt, net of
current portion 244,318 244,456
Deferred tax liability 10,914 9,800
Other long-term liabilities
and minority interest in
subsidiary 13,550 14,393
--------- ---------
Total liabilities 315,565 316,506
Redeemable preferred stock 76,462 76,329
Stockholders' deficit (42,411) (49,084)
--------- ---------
Total liabilities and
stockholders' deficit $ 349,616 $ 343,751
========= =========
Cardtronics, Inc. and Subsidiaries
Key Operating Metrics
Three and Six Months Ended June 30, 2006 and 2005
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
---------------------------------------------------
2006 2005 2006 2005
---------------------------------------------------
Average number
of transacting
ATMs 25,755 26,232 25,983 25,935
Monthly
withdrawal
transactions
per ATM 408 386 394 364
Total withdrawal
transactions 31,519,243 30,364,374 61,493,213 56,601,224
Total
transactions 42,954,753 39,535,697 83,481,683 72,950,243
Per ATM amounts
(per month):
Operating
revenues $ 909 $ 839 $ 877 $ 785
Operating
expenses 678 643 660 611
----------- ----------- ----------- -----------
ATM operating
gross profit $ 231 $ 196 $ 217 $ 174
=========== =========== =========== ===========
ATM operating
gross margin 25.4% 23.3% 24.7% 22.1%
Capital
expenditures,
excluding
acquisitions
(000s) $ 7,170 $ 5,721 $ 11,296 $ 10,704
Cardtronics, Inc. and Subsidiaries
Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA
Three and Six Months Ended June 30, 2006 and 2005
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------------------------------
2006 2005 2006 2005
-------- --------- -------- --------
Net income (loss) $ 769 $ 1,447 $ (2,355) $ 2,015
Interest expense
(including amortization
and write-offs of
deferred financing costs
and bond discount) 5,994 4,213 12,536 6,400
Income tax provision
(benefit) 478 830 (1,157) 1,151
Depreciation and accretion
expense 4,641 2,898 8,858 5,142
Amortization expense 2,330 2,151 7,347 3,709
-------- --------- -------- --------
EBITDA 14,212 11,539 25,229 18,417
Stock compensation expense
(includes amounts
reflected in cost of ATM
operating revenues) 254 129 380 2,111
Acquisition related
transition costs 29 307 110 396
Other (income) loss (a) (854) 229 (657) 432
Other 15 (70) 91 (38)
-------- --------- -------- --------
Adjusted EBITDA $ 13,656 $ 12,134 $ 25,153 $ 21,318
======== ======== ======== ========
(a) The 2006 other (income) loss amounts include $1.1 million in
pre-tax income related to a contract termination payment received from
one of the Company's merchant customers. This amount is excluded from
the calculation of Adjusted EBITDA as shown above.