HOUSTON, May 11, 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 March 31, 2007.
Financial Information
For the first quarter of 2007, revenues totaled $74.5 million, representing a 7.8% increase over the $69.1 million in revenues recorded during the first quarter of 2006. 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 $11.9 million for the first quarter of 2007, representing a 3.5% increase over the $11.5 million in adjusted EBITDA for the same period in 2006. The year-over-year increase in revenues was primarily attributable to an increase in ATM operating revenues from 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 2006. Also contributing to the increase was an increase in ATM operating revenues associated with the Company's Mexico operations, which also resulted from additional ATM deployments. The increase in adjusted EBITDA was primarily due to the growth in the Company's United Kingdom operations, as noted above, offset somewhat by lower year-over-year results in the United States. The lower results in the United States were primarily due to higher selling, general, and administrative costs associated with certain business development activities, as well as higher administrative costs associated with the Company's ongoing public company reporting requirements, including Sarbanes-Oxley.
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 a net loss for the first quarter of 2007 of $3.4 million, which compares to a net loss of $3.1 million for the same period in 2006. The 2007 net loss amount reflects the aforementioned incremental selling, general, and administrative costs, as well as higher depreciation expense amounts associated with the Company's ongoing Triple-DES ATM upgrade and replacement program. The 2006 net loss amount includes a $2.8 million (pre-tax) impairment charge related to a previously acquired domestic ATM portfolio.
Key Statistics
Average transacting ATMs for the first quarter of 2007 totaled 25,228, which represents a decrease of 3.7% when compared to the 26,188 average transacting ATMs during the same period in 2006. 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 in the first quarter of 2007 increased 4.0% to 31.2 million from 30.0 million during the same period in 2006. This increase was primarily due to higher withdrawal transactions associated with the Company's United Kingdom and Mexico operations, which were 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 first quarter of 2007 increased 7.9% to 412 from 382 during the same period in 2006. 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 first quarter of 2007 increased 12.1% to $947 from $845 in the same period in 2006. 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 $13.9 million.
"Our first quarter results were generally where we expected them to be," commented Jack Antonini, Chief Executive Officer of Cardtronics. "As previously communicated, we expect 2007 to be a year of significant investment for Cardtronics as we look to take advantage of what we believe are favorable trends in our key markets. On the domestic front, we have already converted over 3,100 existing company-owned ATMs to our in-house transaction processing switch during 2007. This conversion effort, which is currently ahead of schedule, will ultimately allow us to offer advanced functionality and services on all of our domestic company-owned ATMs, and is critical to our strategic initiative to offer additional ATM solutions to financial institutions throughout the United States. Internationally, we deployed over 300 ATMs in high-volume retail locations in the United Kingdom and Mexico during the quarter, further building on the strong foundations that we have created in those markets."
KEY HIGHLIGHTS
Recent highlights include the following:
-- The conversion of over 3,100 company-owned ATMs to our in-house
transaction processing switch during 2007.
-- Net growth during the quarter of over 130 machines, or 9.5%, in
our high-volume United Kingdom ATM fleet. This represents a
substantial increase in our growth rate in this important market.
-- The successful rollout of approximately 190 additional ATMs in
Mexico, the majority of which were deployed under our long-term
agreements with OXXO and FRAGUA.
-- The signing of a multi-year bank branding agreement with Guaranty
Bank to brand 24 ATMs in CVS/pharmacy locations across the
Minneapolis, Minnesota area.
-- The announcement of the planned expansion of our Allpoint
surcharge-free network to include our ATMs located in the United
Kingdom.
-- The recent amendment of our credit facility, which, among other
things, reduced the interest rate charged on amounts outstanding
under the facility and increased the amount of capital
expenditures that we can incur on an annual basis.
GUIDANCE FOR 2007
The Company continues to expect 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. Furthermore, the Company continues to expect capital expenditures to total approximately $55.0 million in 2007, net of minority interest.
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 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 approximately 1,500 locations throughout the UK, and over 500 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), 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/.
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Cardtronics, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
Three Months Ended March 31, 2007 and 2006
(in thousands)
(unaudited)
2007 2006
-------- --------
Revenues:
ATM operating revenues $ 71,656 $ 66,409
ATM product sales and other revenues 2,862 2,732
-------- --------
Total revenues 74,518 69,141
Cost of revenues:
Cost of ATM operating revenues 54,736 50,539
Cost of ATM product sales and other
revenues 2,797 2,559
-------- --------
Total cost of revenues 57,533 53,098
Gross profit 16,985 16,043
Operating expenses:
Selling, general and administrative
expenses:
Stock-based compensation 206 122
Other selling, general and
administrative expenses 6,238 4,716
Depreciation and accretion expense 6,398 4,217
Amortization expense 2,486 5,016
-------- --------
Total operating expenses 15,328 14,071
Income from operations 1,657 1,972
Other (income) expense:
Interest expense, net 5,892 5,665
Amortization and write-off of
deferred financing costs and bond
discount 356 877
Minority interest in subsidiary (112) (8)
Other (income) loss (119) 197
-------- --------
Total other expense 6,017 6,731
Loss before income taxes (4,360) (4,759)
Income tax benefit (973) (1,635)
-------- --------
Net loss $ (3,387) $ (3,124)
======== ========
Cardtronics, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
As of March 31, 2007 and December 31, 2006
(in thousands)
(unaudited)
March 31, December 31,
2007 2006
--------- ---------
Assets
Current assets:
Cash and cash equivalents $ 1,782 $ 2,718
Accounts and notes receivable, net 12,800 14,891
Inventory 5,315 4,444
Prepaid, deferred costs, and other
current assets 10,814 16,334
--------- ---------
Total current assets 30,711 38,387
Property and equipment, net 92,890 86,668
Intangible assets, net 64,697 67,763
Goodwill 169,477 169,563
Prepaid and other assets 5,797 5,375
--------- ---------
Total assets $ 363,572 $ 367,756
========= =========
Liabilities and Stockholders' Deficit
Current liabilities:
Current portion of long-term debt $ 282 $ 194
Current portion of other long-term
liabilities 2,365 2,501
Accounts payable and other accrued
and current liabilities 43,912 51,256
--------- ---------
Total current liabilities 46,559 53,951
Long-term liabilities:
Long-term debt, net of current
portion 262,769 252,701
Deferred tax liability, net 5,904 7,625
Other long-term liabilities and
minority interest in subsidiary 13,864 14,053
--------- ---------
Total liabilities 329,096 328,330
Redeemable preferred stock 76,661 76,594
Stockholders' deficit (42,185) (37,168)
--------- ---------
Total liabilities and
stockholders' deficit $ 363,572 $ 367,756
========= =========
Cardtronics, Inc. and Subsidiaries
Key Operating Metrics
Three Months Ended March 31, 2007 and 2006
(unaudited)
2007 2006
----------- -----------
Average number of transacting ATMs 25,228 26,188
Monthly withdrawal transactions
per ATM 412 382
Total withdrawal transactions 31,179,639 29,973,970
Total transactions 44,449,217 40,826,930
Per ATM amounts (per month):
Operating revenues $ 947 $ 845
Operating expenses 723 643
----------- -----------
ATM operating gross profit $ 224 $ 202
=========== ===========
ATM operating gross margin 23.6% 23.9%
Capital expenditures, excluding
acquisitions and net of minority
interest (000s) $ 13,907 $ 4,086
Cardtronics, Inc. and Subsidiaries
Reconciliation of Net Loss to EBITDA and Adjusted EBITDA
Three Months Ended March 31, 2007 and 2006
(in thousands)
(unaudited)
2007 2006
-------- --------
Net loss $ (3,387) $ (3,124)
Interest expense (including
amortization and write-offs of
deferred financing costs and bond
discount) 6,248 6,542
Income tax benefit (973) (1,635)
Depreciation and accretion expense 6,398 4,217
Amortization expense 2,486 5,016
-------- --------
EBITDA 10,772 11,016
Stock compensation expense (includes
amounts reflected in cost of ATM
operating revenues) 222 126
Acquisition related transition costs 73 81
Other (income) loss (a) (119) 197
Minority interest (5) 8
Other adjustments (b) 907 70
-------- --------
Adjusted EBITDA $ 11,850 $ 11,498
======== ========
(a) Other (income) loss for the three months ended March 31, 2007,
includes $0.6 million in gains on the sale of equity securities
awarded to Cardtronics pursuant to the bankruptcy plan of
reorganization of Winn-Dixie Stores, Inc., one of the Company's
merchant customers. This amount was partially offset by $0.5
million in losses on the disposal of fixed assets during the
period. Both the bankruptcy proceeds and loss on asset disposal
amounts have been excluded from the calculation of Adjusted
EBITDA, as shown above
(b) Other adjustments consists primarily of $0.5 million of costs
incurred related to the Company's efforts to convert its ATM
portfolio over to its in-house transaction processing switch and
$0.2 million of inventory adjustments related to our Triple-DES
upgrade efforts