HOUSTON, March 8, 2007 (PRIME NEWSWIRE) -- Cardtronics, Inc. ("Cardtronics" or the "Company"), the world's largest non-bank owner/operator of ATMs, today announced its financial results for the quarter ended December 31, 2006.
Fourth Quarter Results
Financial Information
For the fourth quarter of 2006, revenues totaled $74.8 million, representing a 7.2% increase over the $69.8 million in revenues recorded during the fourth 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 $13.9 million for the fourth quarter of 2006, representing a 16.8% increase over the $11.9 million in adjusted EBITDA for the same period in 2005. The year-over-year increase in revenues was primarily attributable to an increase in ATM operating revenues in the Company's United Kingdom operations as a result of additional ATM deployments and higher withdrawal transactions per ATM when compared to the same period in 2005. The increase in adjusted EBITDA was primarily due to the growth in the Company's United Kingdom operations, as noted above, and year-over-year growth in the Company's bank and network branding programs. Such increases were partially offset by cost increases in certain areas, including 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 fourth quarter of 2006 of $2.4 million, which compares to a net loss of $1.6 million for the same period in 2005. The fourth quarter 2006 results include the recognition of $4.8 million ($3.0 million after-tax) in other income primarily related to settlement proceeds received from Winn-Dixie Stores, Inc., one of the Company's merchant customers, as part of Winn-Dixie's successful emergence from bankruptcy. This amount is not included in the adjusted EBITDA figure quoted above. In connection with this settlement, the Company's ATM operating agreement with Winn-Dixie was amended and extended through January 2016. The terms and conditions of the new ATM operating agreement with Winn-Dixie are confidential but compare favorably with those seen in the Company's other domestic turnkey ATM operating agreements.
Key Statistics (Fourth Quarter)
Average transacting ATMs for the fourth quarter of 2006 totaled 25,417, which represents a decrease of 3.7% when compared to the 26,399 average transacting ATMs during the same period in 2005. This decrease was primarily due to a year-over-year decline in the average number of transacting ATMs operating within the United States (primarily on the merchant-owned side of the business), offset slightly by ATM growth in the United Kingdom and Mexico. Cash withdrawal transactions increased 1.9% to 31.3 million during the fourth quarter of 2006 from 30.7 million during the same period in 2005. This increase was primarily due to higher withdrawal transactions associated with the Company's United Kingdom operations and incremental withdrawal transactions associated with the Company's operations in Mexico, offset somewhat by lower year-over-year withdrawal transactions in the United States as a result of the aforementioned decline in merchant-owned ATMs.
Average cash withdrawal transactions per ATM per month during the fourth quarter of 2006 increased 5.9% to 411 from 388 during the same period in 2005. This increase was primarily due to increased activity in the Company's United Kingdom operations, which have higher average transaction volumes than the Company's domestic operations. Average revenues per ATM per month in the fourth quarter of 2006 increased 10.4% to $937 from $849 in the same period in 2005. This increase was primarily due to growth in our United Kingdom operations and additional growth in the Company's domestic bank and network branding programs. Capital expenditures during the quarter totaled $8.7 million.
Full Year Results
Financial Information
Revenues totaled $293.6 million for the year ended December 31, 2006, representing an increase of 9.1% over the $269.0 million in revenues recorded during the year ended December 31, 2005. Adjusted EBITDA totaled $52.9 million for the year ended December 31, 2006, representing a 17.0% increase over the $45.2 million in adjusted EBITDA for the same period in 2005. The year-over-year increases in revenues and adjusted EBITDA were primarily driven by the Company's acquisition of Bank Machine Limited in May 2005, as well as continued growth in the number of ATMs and higher overall withdrawal transactions per ATM associated with the Company's United Kingdom operations. Additionally, increased revenues associated with the Company's bank and network branding programs contributed to the year-over-year increases in revenues and adjusted EBITDA.
The Company incurred a net loss of $0.3 million for the year ended December 31, 2006, compared to a net loss of $2.4 million for the same period in 2005. The decreased loss in 2006 was primarily due to the aforementioned settlement received from Winn-Dixie, which was partially offset by 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 (Full Year)
Average transacting ATMs for the year ended December 31, 2006 totaled 25,778, which represents a decrease of approximately 1.5% when compared to the 26,164 average transacting ATMs during the same period in 2005. Cash withdrawal transactions increased 5.1% to 125.1 million for the year ended December 31, 2006 from 119.0 million during the same period in 2005. The decline in the year-over-year ATM count was the result of a decrease in the average number of transacting ATMs operating within the United States (primarily on the merchant-owned side of the business), as previously noted, which was partially offset by an increase in average transacting ATMs in the Company's operations in the United Kingdom and Mexico. The increase in year-to-date cash withdrawal transactions was primarily driven by the same factors that contributed to the quarterly year-over-year increase, as noted above, and the fact that the prior year withdrawal transactions for the Company's United Kingdom operations only included transactions subsequent to the May 2005 Bank Machine acquisition date.
Average cash withdrawal transactions per ATM per month for the year ended December 31, 2006 increased 6.6% to 404 from 379 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 year ended December 31, 2006 increased 10.1% to $908 from $825 in the same period in 2005. This increase was primarily driven by the growth in our United Kingdom operations, as well as our domestic bank and network branding programs, as previously noted. Capital expenditures during the year ended December 31, 2006 totaled $34.7 million.
"By all accounts, 2006 was a very successful year for Cardtronics," commented Jack Antonini, Chief Executive Officer of Cardtronics. "Domestically, we gained a tremendous amount of acceptance in the financial community with respect to our bank and network branding offerings, more than doubling the number of bank branded ATMs in our portfolio and increasing the number of financial institutions participating in the Allpoint surcharge-free network by over 90%. Internationally, we increased our ATM count in the United Kingdom by nearly 30% in 2006, which helped pave the way for the record financial results that we realized from those operations during the year. Additionally, we entered the Mexico ATM market in February 2006 and have since added a number of high-profile retail accounts to our Mexico operations, which provide very attractive growth opportunities in that market. Looking ahead, we expect 2007 to be another year of significant investment for Cardtronics as we look to take advantage of these trends in each of our respective markets."
Key Highlights
Events since the Company's third quarter earnings release include the following:
* The signing of ING Direct, the nation's largest direct bank and fourth-largest thrift bank with $65.0 billion in assets under management, to the Allpoint nationwide surcharge-free network. * The successful resolution of the Winn-Dixie bankruptcy contingency, including the receipt of nearly $5.0 million in bankruptcy settlement proceeds and the commencement of a new long-term ATM placement agreement between the parties. * The signing of a multi-year bank branding agreement with HSBC to brand 33 ATMs in Walgreens locations in Connecticut. * The successful rollout of over 50 new ATM locations in Mexico. * The addition of two seasoned executives to the Company's Financial Services division, including Bob Colabrese as Senior Vice President of Sales and Bill Knoll as Senior Vice President of Business Development and Product Management.
Guidance for Fiscal 2007
The Company currently expects revenues of $310.0 to $325.0 million, gross profits of $79.0 to $83.0 million, and adjusted EBITDA of $53.0 to $57.0 million for the year ending December 31, 2007. This EBITDA range reflects an anticipated increase of approximately $5.0 million in selling, general, and administrative (SG&A) expenses as the Company looks to bring on additional personnel and incur additional costs during 2007 to support future growth initiatives. The Company will launch a series of new initiatives in 2007 with the general objective of becoming a more important retail marketing and distribution partner to major banks. These new initiatives are expected to further expand the Company's bank branding efforts and should provide a foundation for new revenue streams, including those from potential bank outsourcing arrangements. The centerpiece of this effort is the development of in-house ATM transaction processing capabilities, and also includes the expansion of the Company's sales force to effectively market and sell the Company's anticipated new offerings. While the Company anticipates incremental cost savings from moving its transaction processing capabilities in-house, such savings are expected to be more than offset in 2007 by the incremental personnel costs associated with the Company's new initiatives. Included in the planned increase in SG&A costs is approximately $2.0 million associated with certain regulatory and IT infrastructure improvement projects, including Sarbanes-Oxley compliance.
The Company expects capital expenditures to total approximately $55.0 million in 2007, net of minority interest. This amount reflects growth capital spending in the United States that is similar to last year's, and a significant increase in growth spending in the rapidly-growing United Kingdom and Mexico markets. The 2007 capital expenditure range referenced above also includes $14.0 million in one-time Triple DES compliance upgrade costs in the United States, which will conclude the Company's Triple DES upgrade efforts.
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, trends within the ATM industry; proposed new programs and initiatives; 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; risks associated with the conversion of our ATMs to our in-house processing platform; 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 in the markets in which we conduct our operations.
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 non-bank owner/operator of ATMs with more than 25,000 locations. We operate in every major U.S. market, at over 1,300 locations throughout the UK, and at 350 locations in Mexico. Major merchant-clients include A&P(r), Albertson's(r), Hess Corporation(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), HSBC(r), Sovereign Bank(r), Wachovia(r), and Washington Mutual(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 Twelve Months Ended December 31, 2006 and 2005
(in thousands)
(unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------------------------------
2006 2005 2006 2005
--------- --------- --------- ---------
Revenues:
ATM operating
revenues $ 71,443 $ 67,248 $ 280,985 $ 258,979
ATM product sales
and other revenues 3,402 2,529 12,620 9,986
--------- --------- --------- ---------
Total revenues 74,845 69,777 293,605 268,965
Cost of revenues:
Cost of ATM
operating revenues 52,625 51,068 209,850 199,767
Cost of ATM product
sales and other
revenues 3,301 2,705 11,443 9,681
--------- --------- --------- ---------
Total cost
of revenues 55,926 53,773 221,293 209,448
Gross profit 18,919 16,004 72,312 59,517
Operating expenses:
Selling, general
and administrative
expenses:
Stock-based
compensation 228 131 828 2,201
Other selling,
general and
administrative
expenses 5,730 4,522 20,839 15,664
Depreciation and
accretion expense 4,523 4,421 18,595 12,951
Amortization expense 2,373 3,291 11,983 8,980
--------- --------- --------- ---------
Total operating
expenses 12,854 12,365 52,245 39,796
Income from operations 6,065 3,639 20,067 19,721
Other (income) expense:
Interest expense, net 5,950 5,475 23,143 15,485
Amortization and
write-off of
deferred financing
costs and bond
discount 353 357 1,929 6,941
Minority interest
in subsidiary (97) -- (225) 15
Other (income) loss (4,021) 101 (4,761) 968
--------- --------- --------- ---------
Total other expense 2,185 5,933 20,086 23,409
Income (loss) before
income taxes 3,880 (2,294) (19) (3,688)
Income tax provision
(benefit) 1,525 (725) 308 (1,270)
--------- --------- --------- ---------
Net income (loss) $ 2,355 $ (1,569) $ (327) $ (2,418)
========= ========= ========= =========
Cardtronics, Inc. and Subsidiaries
Consolidated Balance Sheets
As of December 31, 2006 and 2005
(in thousands)
(unaudited)
December 31, December 31,
2006 2005
--------- ---------
Assets
Current assets:
Cash and cash equivalents $ 2,718 $ 1,699
Accounts and notes
receivable, net 14,848 9,746
Inventory 4,444 2,747
Prepaid, deferred
costs, and other
current assets 10,861 4,244
Restricted cash,
short-term 883 4,232
Deferred tax asset 430 1,105
--------- ---------
Total current assets 34,184 23,773
Restricted cash 34 33
Property and equipment, net 86,668 74,151
Intangible assets, net 67,763 75,965
Goodwill 169,563 161,557
Prepaid and other assets 9,510 8,272
--------- ---------
Total assets $ 367,722 $ 343,751
========= =========
Liabilities and
Stockholders' Deficit
Current liabilities:
Current portion of
long-term debt $ 194 $ 3,168
Current portion of
other long-term
liabilities 2,458 2,251
Accounts payable and
other accrued
and current
liabilities 51,550 42,438
--------- ---------
Total current liabilities 54,202 47,857
Long-term liabilities:
Long-term debt, net
of current portion 252,701 244,456
Deferred tax
liability, net 7,284 9,800
Other long-term
liabilities and
minority interest
in subsidiary 13,905 14,393
--------- ---------
Total liabilities 328,092 316,506
Redeemable preferred
stock 76,594 76,329
Stockholders' deficit (36,964) (49,084)
--------- ---------
Total liabilities
and stockholders'
deficit $ 367,722 $ 343,751
========= =========
Cardtronics, Inc. and Subsidiaries
Key Operating Metrics
Three and Twelve Months Ended December 31, 2006 and 2005
(unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
2006 2005 2006 2005
------------ ------------- ------------- ------------
Average
number of
transacting
ATMs 25,417 26,399 25,778 26,164
Monthly
withdrawal
transactions
per ATM 411 388 404 379
Total
withdrawal
transactions 31,321,723 30,739,718 125,078,143 118,960,461
Total
transactions 44,268,660 41,698,961 172,808,148 156,851,207
Per ATM amounts
(per month):
Operating
revenues $ 937 $ 849 $ 908 $ 825
Operating
expenses 690 645 678 636
------------ ------------ ------------ ------------
ATM operating
gross profit $ 247 $ 204 $ 230 $ 189
============ ============ ============ ============
ATM operating
gross margin 26.4% 24.0% 25.3% 22.9%
Capital
expenditures,
excluding
acquisitions
(000s) $ 8,711 $ 4,438 $ 34,732 $ 31,926
Cardtronics, Inc. and Subsidiaries
Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA
Three and Twelve Months Ended December 31, 2006 and 2005
(in thousands)
(unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
2006 2005 2006 2005
-------- -------- -------- --------
Net income (loss) $ 2,355 $ (1,569) $ (327) $ (2,418)
Interest expense
(including
amortization
and write-offs
of deferred
financing costs
and bond discount) 6,303 5,832 25,072 22,426
Income tax
expense (benefit) 1,525 (725) 308 (1,270)
Depreciation and
accretion expense 4,523 4,421 18,595 12,951
Amortization expense 2,373 3,291 11,983 8,980
-------- -------- -------- --------
EBITDA 17,079 11,250 55,631 40,669
Stock compensation
expense (includes
amounts reflected
in cost of ATM
operating revenues) 244 131 879 2,373
Acquisition related
transition costs (110) 192 -- 913
Other (income)
loss (a) (4,021) 101 (4,761) 968
Minority interest (45) -- (61) (15)
Other adjustments 744 242 1,247 274
-------- -------- -------- --------
Adjusted EBITDA $ 13,891 $ 11,916 $ 52,935 $ 45,182
======== ======== ======== ========
(a) Other (income) loss for the three and twelve months ended
December 31, 2006, includes $4.8 million in pre-tax income
related to the receipt of cash and equity securities awarded to
Cardtronics pursuant to the bankruptcy plan of reorganization of
Winn-Dixie Stores, Inc., one of the Company's merchant customers
Also included in other (income) loss for the twelve months ended
December 31, 2006, is $1.6 million in pre-tax income related to
certain termination payments received from two of the Company's
merchant customers. Both the bankruptcy proceeds and termination
payment amounts have been excluded from the calculation of
Adjusted EBITDA, as shown above. The remaining difference between
these amounts and the other (income) loss amounts reflected in
the table above is primarily related to losses on the disposal of
fixed assets.