HOUSTON, Aug. 12, 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 June 30, 2008.
Notable items for the second quarter include:
* Consolidated revenues of $127.0 million, up 64% from the second
quarter of 2007
* Adjusted EBITDA of $22.5 million, up 82% from the second quarter
of 2007
* Adjusted Net Income of $3.1 million versus $0.8 million in the
second quarter of 2007
* Significant improvements in key operating metrics versus the
second quarter of 2007:
-- Average number of transacting ATMs increased by 29%
-- Total transactions increased by 84%
-- Total cash withdrawal transactions increased by 78%
-- Cash withdrawal transactions per ATM per month increased by 38%
-- ATM operating revenues per ATM per month increased by 28%
-- ATM operating gross profit per ATM per month increased by 31%
* Continued transitioning of our ATM portfolio over to our in-house
electronic funds transfer ("EFT") processing platform. As of
June 30, 2008, we were processing transactions for approximately
23,000 ATMs.
* Completion of the exchange of our previously-issued $100.0 million
91/4% senior subordinated notes - Series B for new 91/4% senior
subordinated notes that have been registered with the Securities
and Exchange Commission ("SEC"). The new notes have the same terms
and conditions as our previous notes except that the new notes
have been registered with the SEC and can be publicly traded.
A significant factor in comparing Cardtronics' second quarter 2008 results with its second 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 strong second quarter," commented Jack Antonini, Cardtronics' Chief Executive Officer. "While the majority of the double-digit growth we experienced was due to the acquisition of the 7-Eleven ATM portfolio, our legacy U.S. operations delivered solid financial results, meeting or exceeding our internal projections for the majority of our key performance metrics. We continue to see attractive growth opportunities to leverage our scale as the largest provider of financial self-service solutions. Our extensive network of ATMs, retailer relationships, financial institution partnerships, and product, service and processing capabilities provide new partners a powerful platform from which to grow their businesses."
SECOND QUARTER RESULTS
For the second quarter of 2008, revenues totaled $127.0 million, representing a 64% increase over the $77.2 million in revenues recorded during the second quarter of 2007. While our domestic and international operations generated higher revenues during the second quarter of 2008, the year-over-year increase was primarily attributable to the 7-Eleven ATM Transaction, which resulted in $38.4 million of incremental revenues.
Adjusted EBITDA totaled $22.5 million for the second quarter of 2008 compared to $12.4 million for the second quarter of 2007, and Adjusted Net Income totaled $3.1 million ($0.08 per diluted share) compared to an Adjusted Net Income of $0.8 million ($0.03 per diluted share) for the second 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 are detailed in a reconciliation included at the end of this press release.
The GAAP net loss for the second quarter totaled $3.4 million, reflecting the incremental $7.0 million of depreciation, accretion, and amortization expense that resulted from the 7-Eleven ATM Transaction and the increased number of company-owned machines deployed in the United States, the United Kingdom, and Mexico, and an additional $1.9 million of interest expense associated with higher debt levels during the second quarter of 2008. The net loss for the quarter also includes a $1.3 million pre-tax charge in our United Kingdom operations associated with delays experienced in obtaining our Europay MasterCard Visa ("EMV") certification with one of the major networks. This charge, which is reflected in the "Cost of ATM operating revenues" line item of our consolidated statement of operations, has been added back to arrive at Adjusted EBITDA and Adjusted Net Income, net of taxes.
SIX MONTH RESULTS
Revenues totaled $247.6 million for the six months ended June 30, 2008, representing a 63% increase over the $151.8 million in revenues recorded during the six months ended June 30, 2007. As was the case with the Company's quarterly results, the year-over-year increase in revenues was primarily attributable to the 7-Eleven ATM Transaction.
Adjusted EBITDA totaled $41.5 million for the six months ended June 30, 2008, representing a 71% increase over the $24.3 million in Adjusted EBITDA for the same period in 2007. Adjusted Net Income totaled $4.6 million ($0.11 per diluted share) for the first six months of 2008, which was higher than the $0.5 million ($0.02 per diluted share) generated during the first six months of 2007. Increases in both Adjusted EBITDA and Adjusted Net Income were primarily the result of the 7-Eleven ATM Transaction.
The GAAP net loss for the six months ended June 30, 2008 totaled $8.0 million. As was the case with the Company's quarterly results, year-to-date GAAP net loss reflects the incremental depreciation, accretion, and amortization expense that resulted from the 7-Eleven ATM Transaction and the increased number of deployed ATMs, the additional interest expense associated with higher debt levels, and the $1.3 million pre-tax charge related to our United Kingdom operations.
2008 GUIDANCE
The Company is now expecting the following financial measures for the year ending December 31, 2008:
* Revenues of $490.0 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 approximately 40.5 million shares outstanding, and * Capital expenditures of $53.0 million to $55.0 million, net of minority interest.
The above 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 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 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 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 33,000 ATMs across its portfolio, with ATMs in every major U.S. market, approximately 2,500 ATMs throughout the United Kingdom, and approximately 1,800 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. Approximately 10,000 Cardtronics owned and operated ATMs currently feature bank brands. For more information, please visit the Company's website at http://www.cardtronics.com/.
The Cardtronics logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=991
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 second quarter financial results and the underlying business events which generated those results. They include, among other things, 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; network security related to our EFT and third party processing platforms; 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 and Six Months Ended June 30, 2008 and 2007
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
---------------------- ----------------------
2008 2007 2008 2007
---------- ---------- ---------- ----------
(In thousands, except share and per share
information)
Revenues:
ATM operating revenues $ 121,505 $ 73,964 $ 236,567 $ 145,620
Vcom operating revenues 1,363 -- 2,598 --
ATM product sales and
other revenues 4,107 3,275 8,385 6,137
---------- ---------- ---------- ----------
Total revenues 126,975 77,239 247,550 151,757
Cost of revenues:
Cost of ATM operating
revenues (exclusive of
depreciation,
accretion, and
amortization shown
separately below) 91,862 56,344 178,694 111,080
Cost of Vcom operating
revenues 1,739 -- 4,008 --
Cost of ATM product
sales and other
revenues 3,662 3,288 7,826 6,085
---------- ---------- ---------- ----------
Total cost of revenues 97,263 59,632 190,528 117,165
Gross profit 29,712 17,607 57,022 34,592
Operating expenses:
Selling, general, and
administrative
expenses 9,800 6,920 18,351 13,364
Depreciation and
accretion expense 10,039 5,182 19,121 11,580
Amortization expense 4,501 2,372 9,004 4,858
---------- ---------- ---------- ----------
Total operating
expenses 24,340 14,474 46,476 29,802
Income from operations 5,372 3,133 10,546 4,790
Other (income) expense:
Interest expense, net 8,252 6,360 16,392 12,608
Minority interest in
subsidiary -- -- -- (112)
Other loss 1,042 478 2,103 359
---------- ---------- ---------- ----------
Total other expense 9,294 6,838 18,495 12,855
Loss before income
taxes (3,922) (3,705) (7,949) (8,065)
Income tax (benefit)
expense (540) 1,910 25 937
---------- ---------- ---------- ----------
Net loss (3,382) (5,615) (7,974) (9,002)
Preferred stock
accretion -- 66 -- 133
---------- ---------- ---------- ----------
Net loss available to
common shareholders $ (3,382) $ (5,681) $ (7,974) $ (9,135)
========== ========== ========== ==========
Net loss per common
share - basic and
diluted $ (0.09) $ (0.41) $ (0.21) $ (0.65)
========== ========== ========== ==========
Weighted average shares
outstanding - basic
and diluted 38,735,027 14,026,960 38,662,452 13,996,586
========== ========== ========== ==========
Consolidated Balance Sheets
As of June 30, 2008 and December 31, 2007
June 30, Dec. 31,
2008 2007
---------- ----------
(Unaudited) (Audited)
(In thousands)
Assets
Current assets:
Cash and cash equivalents $ 5,155 $ 13,439
Accounts and notes receivable, net 21,405 23,248
Inventory 3,508 2,355
Restricted cash, short-term 12,061 5,900
Prepaid, deferred costs, and other current
assets 14,300 11,843
---------- ----------
Total current assets 56,429 56,785
Property and equipment, net 176,088 163,912
Intangible assets, net 121,698 130,901
Goodwill 234,466 235,185
Prepaid and other assets 8,524 4,502
---------- ----------
Total assets $ 597,205 $ 591,285
========== ==========
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $ 1,293 $ 882
Current portion of capital lease obligations 853 1,147
Current portion of other long-term liabilities 18,878 16,201
Accounts payable and other accrued and current
liabilities 86,572 104,909
---------- ----------
Total current liabilities 107,596 123,139
Long-term liabilities:
Long-term debt, net of current portion 341,158 307,733
Capital lease obligations, net of current
portion 598 982
Deferred tax liability, net 11,329 11,480
Asset retirement obligations 19,100 17,448
Other long-term liabilities 13,661 23,392
---------- ----------
Total liabilities 493,442 484,174
Stockholders' equity 103,763 107,111
---------- ----------
Total liabilities and stockholders' equity $ 597,205 $ 591,285
========== ==========
Key Operating Metrics
For the Three and Six Months Ended June 30, 2008 and 2007
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
2008 2007 2008 2007
-------- -------- -------- --------
Average number of transacting
ATMs:
United States: Company-owned 12,390 11,568 12,262 11,544
United States: Merchant-owned 10,720 11,706 10,855 11,778
United States: 7-Eleven
Financial Services Business 5,697 -- 5,684 --
United Kingdom 2,413 1,583 2,331 1,502
Mexico 1,581 627 1,514 524
-------- -------- -------- --------
Total average number of
transacting ATMs 32,801 25,484 32,646 25,348
======== ======== ======== ========
Total transactions (in
thousands) 89,788 48,726 172,825 93,176
Total cash withdrawal
transactions (in thousands) 58,710 33,044 112,599 64,224
Monthly cash withdrawal
transactions per ATM 597 432 575 422
Per ATM per month amounts:
ATM operating revenues $ 1,235 $ 967 $ 1,208 $ 957
Cost of ATM operating
revenues(1) 934 737 912 730
-------- -------- -------- --------
ATM operating gross profit(2) $ 301 $ 230 $ 296 $ 227
======== ======== ======== ========
ATM operating gross margin(1) 24.4% 23.8% 24.5% 23.7%
Adjusted per ATM per month
amounts:
ATM operating revenues $ 1,235 $ 967 $ 1,208 $ 957
Adjusted cost of ATM operating
revenues(1)(3) 913 725 900 719
-------- -------- -------- --------
Adjusted ATM operating gross
profit(2) $ 322 $ 242 $ 308 $ 238
======== ======== ======== ========
Adjusted ATM operating gross
margin(1) 26.1% 25.0% 25.5% 24.9%
Capital expenditures, excluding
acquisitions and net of
minority interest (in
thousands) $ 16,169 $ 10,138 $ 42,233 $ 24,045
-----------------------------
(1) Amounts presented exclude the effects of depreciation, accretion,
and amortization expense, which are presented 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 includes the same
adjustments to cost of revenues as those used to calculate
Adjusted EBITDA and Adjusted Net Income.
Reconciliation of Net Loss to EBITDA, Adjusted EBITDA, and Adjusted
Net Income
For the Three and Six Months Ended June 30, 2008 and 2007
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
---------------------- ----------------------
2008 2007 2008 2007
---------- ---------- ---------- ----------
(In thousands, except share and per share
amounts)
Net loss $ (3,382) $ (5,615) $ (7,974) $ (9,002)
Adjustments:
Interest expense, net 7,722 6,000 15,354 11,892
Amortization of
deferred financing
costs and bond
discounts 530 360 1,038 716
Income tax (benefit)
expense (540) 1,910 25 937
Depreciation and
accretion expense 10,039 5,182 19,121 11,580
Amortization expense 4,501 2,372 9,004 4,858
---------- ---------- ---------- ----------
EBITDA $ 18,870 $ 10,209 $ 36,568 $ 20,981
---------- ---------- ---------- ----------
Add back:
Other loss(1) 1,042 478 2,103 359
Minority interest (98) 90 (146) 85
Adjustments to cost of
ATM operating
revenues(2) 2,046 913 2,449 1,697
Adjustments to
selling, general, and
administrative
expenses(3) 669 720 525 1,138
---------- ---------- ---------- ----------
Adjusted EBITDA $ 22,529 $ 12,410 $ 41,499 $ 24,260
---------- ---------- ---------- ----------
Less:
Interest expense, net 7,722 6,000 15,354 11,892
Depreciation and
accretion expense 10,039 5,182 19,121 11,580
Income tax expense
(at 35%) 1,668 430 2,458 276
---------- ---------- ---------- ----------
Adjusted Net Income $ 3,100 $ 798 $ 4,566 $ 512
========== ========== ========== ==========
Adjusted Net Income per
Share $ 0.08 $ 0.06 $ 0.12 $ 0.04
========== ========== ========== ==========
Adjusted Net Income per
Diluted Share $ 0.08 $ 0.03 $ 0.11 $ 0.02
========== ========== ========== ==========
Weighted average shares
outstanding - basic 38,735,027 14,026,960 38,662,452 13,996,586
========== ========== ========== ==========
Weighted average
shares outstanding -
diluted 39,886,138 23,032,053 39,820,125 23,017,810
========== ========== ========== ==========
------------------------
(1) Other losses for the three and six month periods ended June 30,
2008 and the three month period ended June 30, 2007 were
primarily comprised of losses on the disposal of fixed assets
that were incurred in conjunction with the deinstallation of ATMs
during the periods. Other losses for the six months ended
June 30, 2007 included $1.0 million of losses on the disposal of
fixed assets that were incurred in connection with the
deinstallation of ATMs during the period, which was partially
offset by $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.
(2) Adjustments to cost of ATM operating revenues include the
following for the periods indicated:
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
2008 2007 2008 2007
-------- -------- -------- --------
(In thousands)
Charges related to U.K. EMV
certification delays $ 1,349 $ -- $ 1,349 $ --
In-house EFT processing
conversion costs 115 657 286 1,155
U.K. in-house armored
operation development costs 216 -- 283 --
Triple-DES related items 231 199 243 405
Stock-based compensation
expense 132 15 197 31
Other 3 42 91 106
-------- -------- -------- --------
Total adjustments to cost of
ATM operating revenues $ 2,046 $ 913 $ 2,449 $ 1,697
======== ======== ======== ========
(3) Adjustments to selling, general, and administrative expenses
include the following for the periods indicated:
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
2008 2007 2008 2007
-------- -------- -------- --------
(In thousands)
Stock-based compensation
expense $ 413 $ 218 $ 614 $ 424
Litigation settlement costs -- 478 -- 668
Other 256 24 (89) 46
-------- -------- -------- --------
Total adjustments to selling,
general, and administrative
expenses $ 669 $ 720 $ 525 $ 1,138
======== ======== ======== ========