HOUSTON, May 8, 2008 (PRIME NEWSWIRE) -- Cardtronics, Inc. (Nasdaq:CATM), the world's largest operator of ATMs, today announced its financial and operational results for the quarter ended March 31, 2008.
Highlights for the first quarter include:
-- Consolidated revenues of $120.6 million, up 62% from the first
quarter of 2007
-- Adjusted EBITDA of $19.0 million, up 60% from the first quarter of
2007
-- Adjusted Net Income of $1.5 million, up from an Adjusted Net Loss
of $0.3 million in the first quarter of 2007
-- Significant improvements in key operating metrics versus the first
quarter of 2007:
- Average number of transacting ATMs increased by 29%
- Total transactions increased by 87%
- Total cash withdrawal transactions increased by 73%
- Cash withdrawal transactions per ATM per month increased by 34%
- ATM operating revenues per ATM per month increased by 25%
- ATM operating gross profit per ATM per month increased by 29%
-- The transitioning of our advanced-functionality "Vcom" ATMs and
our United Kingdom ATM portfolio over to our electronic funds
transfer ("EFT") processing platform. As of March 31, 2008, we
were processing transactions for approximately 20,300 of our ATMs.
-- The public announcements of three significant processing,
placement, and branding arrangements:
- On January 22, 2008, we announced that Circle K Stores, a
subsidiary of Alimentation Couche-Tard Inc., one of the largest
convenience store operators in the world, selected Cardtronics
to be the transaction processor for domestic Circle K owned and
operated ATMs across the Midwest and Great Lakes regions. As
of March 31, 2008, our EFT processing operations were
processing transactions for 675 Circle K ATMs.
- On January 31, 2008, we announced that Cardtronics had signed
an eight-year agreement with Safeway Inc., one of the largest
food and drug retailers in North America, under which
Cardtronics will provide 650 Safeway locations with
comprehensive ATM services, including cash management,
maintenance, customer service, monitoring and processing
solutions.
- On March 13, 2008, Washington Mutual announced it will place
its brand on over 425 Cardtronics-owned ATMs in CVS(r)/pharmacy
drugstores throughout Arizona and California.
A significant factor in comparing Cardtronics' first quarter 2008 results with its first quarter 2007 results is the Company's acquisition of the financial services business of 7-Eleven, Inc. (the "7-Eleven ATM Transaction"), the results of which have been included in the Company's consolidated financial statements beginning on July 20, 2007.
"Cardtronics had a solid first quarter," commented Jack Antonini, Cardtronics' President and Chief Executive Officer. "While the first quarter of each year has historically been our softest due to seasonality, we were quite pleased with our most recent results. These results reinforced our ability to perform well in a troubled economy, and our performance is a tribute to the way we have positioned our company over the past several years, working to reshape our business from simply providing cash to becoming the preferred provider of financial self-service solutions to consumers, retailers, and financial institutions."
FIRST QUARTER RESULTS
For the first quarter of 2008, revenues totaled $120.6 million, representing a 62% increase over the $74.5 million in revenues recorded during the first quarter of 2007. While our domestic and international operations generated higher revenues during the first quarter of 2008, the year-over-year increase was primarily attributable to the 7-Eleven ATM Transaction, which resulted in $37.2 million of incremental revenues.
Adjusted EBITDA totaled $19.0 million for the first quarter of 2008 compared to $11.9 million for the first quarter of 2007, and Adjusted Net Income totaled $1.5 million (or $0.04 per share) compared to an Adjusted Net Loss of $0.3 million (or a $0.02 loss per share) for the first quarter of 2007. This year-over-year increase was primarily attributable to the 7-Eleven ATM Transaction. Specific costs excluded from Adjusted EBITDA and Adjusted Net Income (Loss) are detailed in a reconciliation included at the end of this press release.
The GAAP net loss for the first quarter totaled $4.6 million, reflecting the incremental $4.7 million of depreciation, accretion, and amortization expense associated with the 7-Eleven ATM Acquisition and the increased number of machines in the Company's United Kingdom and Mexico operations, the additional $1.9 million of interest expense associated with slightly higher debt levels during the first quarter of 2008, and $1.3 million of losses related to the Company's advanced-functionality operations. The net loss for the quarter also includes a $1.2 million income tax charge associated with valuation allowances against the Company's various deferred tax assets. This charge is reflected in the "income tax expense (benefit)" line item of our consolidated statement of operations.
2008 GUIDANCE
The Company is reconfirming its expectations for the following financial measures for the year ending December 31, 2008:
-- Revenues of $480.0 million to $505.0 million,
-- Overall gross margins of approximately 24.5%,
-- Adjusted EBITDA of $86.0 million to $90.0 million,
-- Depreciation and accretion expense of $38.0 million to $39.0
million,
-- Interest expense of $29.0 million to $30.0 million,
-- Adjusted Net Income of $0.30 to $0.35 per diluted share, based on
a range of 39.5 million to 40.0 million shares outstanding, and
-- Capital expenditures of $48.0 million to $50.0 million, net of
minority interest.
These amounts include the estimated revenues and losses associated with the Company's advanced-functionality operations. The Company anticipates that pre-tax losses from these operations will be in the range of $3.0 million to $5.0 million for 2008. Additionally, the guidance excludes the impact of certain one-time items as well as anticipated stock-based compensation expense and approximately $17.5 million of intangible asset amortization expense.
DISCLOSURE OF NON-GAAP FINANCIAL INFORMATION
EBITDA, Adjusted EBITDA, and Adjusted Net Income (Loss) 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. 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 our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Additionally, Adjusted EBITDA and Adjusted Net Income (Loss) exclude certain non-recurring or non-cash items and, therefore, may not be comparable to similarly titled measures employed by other companies. 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 statement data prepared in accordance with GAAP.
A reconciliation of net loss to EBITDA, Adjusted EBITDA, and Adjusted Net Income (Loss) is presented in tabular form at the end of this press release.
ABOUT CARDTRONICS
Headquartered in Houston, Texas, Cardtronics is the world's largest operator of ATMs. Cardtronics operates approximately 32,600 ATMs across its portfolio, with ATMs in every major U.S. market, 2,350 ATMs throughout the United Kingdom, and 1,425 ATMs in Mexico. Major merchant clients include 7-Eleven(r), A&P(r), Chevron(r), Costco(r), CVS(r)/pharmacy, Duane Reade(r), ExxonMobil(r), Rite Aid(r), Safeway(r), Sunoco(r), Target(r), and Walgreens(r). Complementing its ATM operations, Cardtronics works with financial institutions of all sizes to provide their customers with convenient cash access and deposit capabilities through ATM branding, surcharge-free programs, and image deposit. Over 9,500 Cardtronics owned and operated ATMs currently feature bank brands. For more information, please visit the Company's website at http://www.cardtronics.com/.
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 our current expectations or forecasts of future events, future financial performance, strategies, expectations, competitive environment, regulation, and availability of resources. Many of the forward-looking statements contained in this release relate to our first quarter financial results and the underlying business events which generated those results. 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 trends in ATM usage and alternative payment options; changes in the ATM transaction fees the Company receives; decreases in the number of ATMs that can be placed with the Company's top merchants; the Company's reliance on third parties for cash management and other key outsourced services; changes in interest rates; declines in, or system failures that interrupt or delay, ATM transactions; the Company's ability to continue to execute its growth strategies; risks associated with the acquisition of other ATM networks; increased industry competition; increased regulation and regulatory uncertainty; 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. Actual results may differ materially from such forward-looking statements for a number of reasons, including those set forth in the Company's filings with the SEC, including the Company's Annual Report on Form 10-K for the year ended December 31, 2007.
Consolidated Statements of Operations
For the Three Months Ended March 31, 2008 and 2007
(Unaudited)
Three Months Ended
March 31,
--------------------------
2008 2007
--------- ----------
(In thousands, except share
and per share information)
Revenues:
ATM operating revenues $ 115,062 $ 71,656
Vcom operating revenues 1,235 --
ATM product sales and other revenues 4,278 2,862
--------- ----------
Total revenues 120,575 74,518
Cost of revenues:
Cost of ATM operating revenues
(exclusive of depreciation,
accretion, and amortization
shown separately below) 86,832 54,736
Cost of Vcom operating revenues 2,269 --
Cost of ATM product sales and other
revenues 4,164 2,797
--------- ----------
Total cost of revenues 93,265 57,533
Gross profit 27,310 16,985
Operating expenses:
Selling, general, and administrative
expenses:
Stock-based compensation 201 206
Other selling, general, and
administrative expenses 8,350 6,238
Depreciation and accretion expense 9,082 6,398
Amortization expense 4,503 2,486
--------- ----------
Total operating expenses 22,136 15,328
Income from operations 5,174 1,657
Other (income) expense:
Interest expense, net 7,632 5,892
Amortization of deferred financing
costs and bond discounts 508 356
Minority interest in subsidiary -- (112)
Other (income) loss 1,061 (119)
--------- ----------
Total other expense 9,201 6,017
Loss before income taxes (4,027) (4,360)
Income tax expense (benefit) 565 (973)
--------- ----------
Net loss (4,592) (3,387)
Preferred stock accretion expense -- 67
-- --
Net loss available to common
shareholders $ (4,592) $ (3,454)
========= ==========
Net loss per common share - basic and
diluted $ (0.12) $ (0.25)
========= ==========
Weighted average shares outstanding -
basic and diluted 38,589,878 13,965,875
========== ===========
Consolidated Balance Sheets
As of March 31, 2008 and December 31, 2007
March 31, Dec. 31,
2008 2007
---------- ----------
(Unaudited) (Audited)
(In thousands)
Assets
Current assets:
Cash and cash equivalents $ 8,908 $ 13,439
Accounts and notes receivable, net 26,324 23,248
Inventory 3,633 2,355
Restricted cash, short-term 8,419 5,900
Prepaid, deferred costs, and other
current assets 14,772 11,843
--------- ---------
Total current assets 62,056 56,785
Property and equipment, net 174,225 163,912
Intangible assets, net 126,227 130,901
Goodwill 234,355 235,185
Prepaid and other assets 4,657 4,502
--------- ---------
Total assets $ 601,520 $ 591,285
========= =========
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $ 980 $ 882
Current portion of capital lease
obligations 922 1,147
Current portion of other long-term
liabilities 23,173 16,201
Accounts payable and other accrued
and current liabilities 87,025 104,909
--------- ---------
Total current liabilities 112,100 123,139
Long-term liabilities:
Long-term debt, net of current
portion 343,190 307,733
Capital lease obligations, net of
current portion 785 982
Deferred tax liability, net 11,884 11,480
Asset retirement obligations 18,374 17,448
Other long-term liabilities 27,413 23,392
--------- ---------
Total liabilities 513,746 484,174
Stockholders' equity 87,774 107,111
--------- ---------
Total liabilities and
stockholders' equity $ 601,520 $ 591,285
========= =========
Key Operating Metrics
For the Three Months Ended March 31, 2008 and 2007
(Unaudited)
Three Months Ended
March 31,
-----------------------
2008 2007
-------- --------
Average number of transacting ATMs:
United States: Company-owned 12,182 11,542
United States: Merchant-owned 10,947 11,843
United States: 7-Eleven Financial
Services Business 5,672 --
United Kingdom 2,252 1,419
Mexico 1,422 424
-------- --------
Total average number of
transacting ATMs 32,475 25,228
======== ========
Total transactions (in thousands) 83,037 44,449
Total cash withdrawal transactions
(in thousands) 53,890 31,180
Monthly cash withdrawal transactions
per ATM 553 412
Per ATM per month amounts:
ATM operating revenues $ 1,181 $ 947
Cost of ATM operating revenues (1) 891 723
-------- --------
ATM operating gross profit (2) $ 290 $ 224
======== ========
ATM operating gross margin (1) 24.5% 23.6%
Adjusted per ATM per month amounts:
ATM operating revenues $ 1,181 $ 947
Adjusted cost of ATM operating
revenues (1)(3) 887 713
-------- --------
Adjusted ATM operating gross
profit(2) $ 294 $ 234
======== ========
Adjusted ATM operating gross
margin(1) 24.9% 24.7%
Capital expenditures, excluding
acquisitions and net of minority
interest (in thousands) $ 26,064 $ 13,882
-------------------
(1) Amounts presented exclude the effects of depreciation, accretion,
and amortization expense, which are represented separately in
our consolidated statements of operations.
(2) ATM operating gross profit is a measure of profitability that
uses only the revenue and expenses that relate to operating
the ATMs in our portfolio. Revenues and expenses from
advanced-functionality services, ATM equipment sales, and other
ATM-related services are not included.
(3) Adjusted cost of ATM operating revenues excludes the same cost
of revenues adjustments as those used to calculate Adjusted
EBITDA and Adjusted Net Income (Loss).
Reconciliation of Net Loss to EBITDA, Adjusted EBITDA,
and Adjusted Net Income (Loss)
For the Three Months Ended March 31, 2008 and 2007
(Unaudited)
Three Months Ended
March 31,
-----------------------
2008 2007
-------- --------
(In thousands, except
share and per share
amounts)
Net loss $ (4,592) $ (3,387)
Adjustments:
Interest expense, net 7,632 5,892
Amortization of deferred financing
costs and bond discounts 508 356
Income tax expense (benefit) 565 (973)
Depreciation and accretion expense 9,082 6,398
Amortization expense 4,503 2,486
-------- --------
EBITDA $ 17,698 $ 10,772
-------- --------
Add back:
Other (income) loss (1) 1,061 (119)
Minority interest (48) (5)
Adjustments to cost of revenues (2) 403 784
Adjustments to selling, general,
and administrative expenses (3) (144) 418
-------- --------
Adjusted EBITDA $ 18,970 $ 11,850
-------- --------
Less:
Interest expense, net 7,632 5,892
Depreciation and accretion expense 9,082 6,398
Income tax expense (benefit) (at 35%) 790 (154)
-------- --------
Adjusted Net Income (Loss) $ 1,466 $ (286)
======== ========
Adjusted Net Income (Loss) per Share $ 0.04 $ (0.02)
======== ========
Adjusted Net Income (Loss) per Diluted
Share $ 0.04 $ (0.02)
======== ========
Weighted average shares outstanding -
basic 38,589,878 13,965,875
========== ==========
Weighted average shares outstanding -
diluted 39,819,023 13,965,875
========== ==========
-----------------
(1) Other loss for the three months ended March 31, 2008 was
primarily comprised of losses on the disposal of fixed assets
that were incurred in conjunction with the deinstallation of ATMs
during the period. Other income for the three months ended
March 31, 2007 included $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 that were incurred in conjunction with the
deinstallation of ATMs during the period.
(2) Adjustments to cost of revenues include the following for
the three month periods ended March 31, 2008 and 2007:
2008 2007
------ ------
(In thousands)
In-house processing conversion costs $ 171 $ 498
Triple-DES related costs 12 206
Stock-based compensation expense 65 16
Other 155 64
----- -----
$ 403 $ 784
===== =====
(3) Adjustments to selling, general, and administrative
expenses include the following for the three month periods ended
March 31, 2008 and 2007:
2008 2007
------ ------
(In thousands)
Elimination of previously established
acquisition-related accrual $ (345) $ --
Stock-based compensation expense 201 206
Litigation settlement costs -- 190
Other -- 22
------ -----
$ (144) $ 418
====== =====