UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 7, 2011 (November 7, 2011)
Cardtronics Inc.
(Exact name of registrant as specified in its charter)
Delaware |
001-33864 |
76-0681190 |
(State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
3250 Briarpark Drive, Suite 400, Houston, Texas |
77042 |
(Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code: (832) 308-4000
________________________________________________________________________________
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: |
||
[ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
[ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
[ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
[ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition.
On November 7, 2011, Cardtronics, Inc. issued a press release regarding its financial results for the quarter ended September 30, 2011. A copy of the press release has been attached hereto as Exhibit 99.1 and is incorporated herein by reference. This information is not deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934 and pursuant to Item 2.02 of Form 8-K, will not be incorporated by reference into any filing under the Securities Act of 1933 unless specifically identified therein as being incorporated therein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
99.1 Press release dated November 7, 2011
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Cardtronics Inc.
(Registrant) |
||
November 7, 2011
(Date) |
/s/ J. CHRIS BREWSTER
J. Chris Brewster Chief Financial Officer |
EXHIBIT 99.1
HOUSTON, Nov. 7, 2011 (GLOBE NEWSWIRE) -- Cardtronics, Inc. (Nasdaq:CATM) (the "Company"), the world's largest retail ATM owner, today announced its financial and operational results for the quarter ended September 30, 2011.
Key financial and operational statistics in the third quarter of 2011 as compared to the third quarter of 2010 include (with some statistics showing the results excluding the contribution from the EDC acquisition, which closed on July 25, 2011):
- Total transactions increased by 28% (up by 20% excluding the contribution from the EDC acquisition)
- Total cash withdrawal transactions per ATM increased by 19%
- Total transactions per ATM increased by 17%
- Operating gross profit per ATM increased by 9%
Effects of foreign currency exchange rate movements had an insignificant impact on reported revenues, Adjusted EBITDA and Adjusted Net Income per diluted share during the quarter.
Please refer to the "Disclosure of Non-GAAP Financial Information" contained later in this release for definitions of Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income per diluted share and Free Cash Flow. For additional financial information, including reconciliations to comparable GAAP measures, please refer to the supplemental schedules of selected financial information at the end of this release.
"Our third quarter results were very strong, driven by impressive organic revenue growth of 12% and a nice contribution from our recently completed EDC acquisition," commented Steve Rathgaber, chief executive officer. "With our continued solid execution of our core business strategy along with complementary business expansion opportunities, we are very excited about the Company's future growth prospects."
RECENT HIGHLIGHTS
THIRD QUARTER RESULTS
For the third quarter of 2011, consolidated revenues totaled $165.1 million, representing a 21% increase from the $136.6 million in consolidated revenues generated during the third quarter of 2010. Of the 21% year-over-year increase, 9% was attributable to the inclusion of EDC's operations into the Company's consolidated results for 68 days in the quarter. The remaining 12% organic revenue increase is attributable to a combination of the following: (1) increased transactions per ATM in the Company's domestic and United Kingdom operations; (2) unit growth expansion; (3) increased revenues from managed services agreements; (4) higher equipment sales; (5) increased bank branding revenues from financial institution partners; and (6) growth in Allpoint, the Company's leading surcharge-free network.
Adjusted EBITDA for the third quarter of 2011 totaled $43.0 million, compared to $34.9 million during the third quarter of 2010, and Adjusted Net Income totaled $16.9 million ($0.39 per diluted share) compared to $11.4 million ($0.28 per diluted share) during the third quarter of 2010. The increases in Adjusted EBITDA and Adjusted Net Income per diluted share were positively affected by the incremental operations of ATMs acquired from EDC, as well as the organic revenue growth. The year-over-year improvement in Adjusted Net Income per diluted share was also partially attributable to lower interest expense, which was $1.8 million lower than a year ago, resulting from the refinancing of the Company's debt in the third quarter of 2010, partially offset by the additional borrowings under the Company's amended credit facility to fund the acquisition of EDC. Specific costs excluded from Adjusted EBITDA and Adjusted Net Income are detailed in a reconciliation included at the end of this press release.
GAAP Net Income for the third quarter of 2011 totaled $46.9 million, compared to $20.8 million during the same quarter in 2010. The GAAP Net Income for the third quarter of 2011 included $37.0 million of income tax benefit, which was recorded as the result of certain tax reporting and structuring changes the Company implemented during the quarter with respect to its U.K. operations. The third quarter of 2010 also included a net income tax benefit of $20.7 million due to the release of valuation allowances related to the Company's domestic deferred tax assets. Partially offsetting the income tax benefit in 2010, the Company recorded approximately $14.5 million in pre-tax non-recurring charges associated with the Company's early retirement of its senior subordinated notes and the refinancing of its credit facility. The year-over-year increase in GAAP Net Income, aside from income taxes and prior year non-recurring charges, was a result of the factors identified in the discussion of Adjusted EBITDA and Adjusted Net Income above, partially offset by higher stock-based compensation and non-recurring acquisition-related costs.
NINE MONTHS RESULTS
For the nine months ended September 30, 2011, consolidated revenues totaled $450.4 million, representing a 13% increase from the $397.3 million in consolidated revenues generated during the same period in 2010. As was the case with the Company's quarterly results, the year-over-year increase was partially attributable to the inclusion of EDC's operations into the Company's consolidated results and a combination of increased transactions per ATM, increased revenues from managed services agreements, higher equipment sales, unit growth expansion, growth in Allpoint, and increased bank branding revenues from financial institution partners.
Adjusted EBITDA totaled $114.4 million for the nine months ended September 30, 2011, representing a 17% increase over the $98.0 million in Adjusted EBITDA for the same period in 2010, and Adjusted Net Income totaled $42.9 million ($1.01 per diluted share) for the first nine months of 2011, up 36% on a per share basis from $30.2 million ($0.74 per diluted share) during the same period in 2010. The increases in both Adjusted EBITDA and Adjusted Net Income were primarily due to the same factors noted above for the Company's quarterly results.
GAAP Net Income for the nine months ended September 30, 2011 totaled $62.1 million, compared to $32.9 million during the same period in 2010. As was the case with the quarterly results, the results for the nine-month periods ended September 30, 2011 and 2010 include certain non-recurring items related to taxes and re-financing costs. Excluding these non-recurring effects, the improvement in the Company's GAAP results was primarily driven by the same factors outlined above with respect to Adjusted EBITDA and Adjusted Net Income.
GUIDANCE
Update of Full-Year 2011 Guidance
The Company is updating the financial guidance it previously issued regarding its anticipated full-year 2011 results, and now expects the following, which includes expected results from the Access to Money acquisition from the date of closing (November 1, 2011) through the end of the year:
The Adjusted EBITDA and Adjusted Net Income guidance excludes the impact of $9.2 million of anticipated stock-based compensation expense and $18.2 million of expected intangible asset amortization expense, both on a pre-tax basis. Additionally, this guidance is based on average foreign currency exchange rates during the October to December period of $1.55 U.S. to £1.00 U.K. and $13.00 Mexican pesos to $1.00 U.S. Finally, the guidance assumes that interest rates during the October to December period remain relatively consistent with what the Company has experienced during the first nine months of the year.
LIQUIDITY, BALANCE SHEET AND OTHER
On July 25, 2011, concurrent with the closing of the EDC acquisition, the Company expanded the borrowing capacity under its revolving credit facility from $175.0 million to $250.0 million and extended the term of the credit facility by one year through July 15, 2016. In addition, the amended credit facility can be extended to up to $325.0 million under certain conditions. The amendment also modified certain pricing terms and restrictive covenants, the terms of which are generally more favorable for the Company. As of the end of the quarter, the Company had $156.3 million in outstanding borrowings under its amended credit facility, resulting in approximately $89.4 million in available credit, net of outstanding borrowings and letters of credit.
In October, a large international network announced planned reductions to the net interchange payments it makes to ATM deployers. The Company plans to discuss this action and its possible impact to the Company in greater detail on its conference call today (see below for further details regarding this conference call).
DISCLOSURE OF NON-GAAP FINANCIAL INFORMATION
Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income per diluted share and Free Cash Flow 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 ("GAAP") and may not be comparable to similarly-titled measures reported by other companies. 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 the Company's industry depending upon accounting methods and book values of assets, capital structures, and the method by which the assets were acquired. Adjusted EBITDA does not reflect acquisition-related costs and our obligations for the payment of income taxes, interest expense or other obligations such as capital expenditures. Adjusted Net Income represents net income computed in accordance with GAAP, before amortization expense, loss on disposal of assets, noncontrolling interests, stock-based compensation expense and certain other expense (income) and acquisition-related costs. Adjusted Net Income per diluted share is calculated by dividing Adjusted Net Income by average weighted diluted shares outstanding calculated in accordance with GAAP. Free Cash Flow is defined as cash provided by operating activities less payments for capital expenditures, including those financed through direct debt but excluding acquisitions. The measure of Free Cash Flow does not take into consideration certain other non-discretionary cash requirements such as, for example, mandatory principal payments on portions of the Company's long-term debt.
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 measures prepared in accordance with GAAP. Reconciliations of the non-GAAP financial measures used herein to the most directly comparable GAAP financial measures are presented in tabular form at the end of this press release.
CONFERENCE CALL INFORMATION
The Company will host a conference call today, Monday, November 7, 2011, at 4:00 p.m. Central Time (5:00 p.m. Eastern Time) to discuss its financial results for the quarter ended September 30, 2011. To access the call, please call the conference call operator at:
Dial in: (877) 303-9205
Alternate dial-in: (760) 536-5226
Please call in fifteen minutes prior to the scheduled start time and request to be connected to the "Cardtronics Third Quarter Earnings Conference Call." Additionally, a live audio webcast of the conference call will be available online through the investor relations section of the Company's website at www.cardtronics.com.
A digital replay of the conference call will be available through Monday, November 21, 2011, and can be accessed by calling (855) 859-2056 or (404) 537-3406 and entering 18166776 for the conference ID. A replay of the conference call will also be available online through the Company's website subsequent to the call through December 6, 2011.
ABOUT CARDTRONICS (Nasdaq:CATM)
Making ATM cash access convenient where people shop, work and live their lives, Cardtronics is at the convergence of retailers, financial institutions, prepaid card programs and the customers they share. Cardtronics owns/operates more than 52,800 retail ATMs in U.S. and international locales. Whether Cardtronics is driving foot traffic for America's most relevant retailers, enhancing ATM brand presence for card issuers or expanding card holders' surcharge-free cash access on the local, national or global scene, Cardtronics is convenient access to cash, when and where consumers need it. Cardtronics is where cash meets commerce.
The Cardtronics logo is available at http://www.globenewswire.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 the Company's current expectations or forecasts of future events, future financial performance, strategies, expectations, competitive environment, regulation, and availability of resources. The forward-looking statements contained in this release include, among other things, statements concerning projections, predictions, expectations, estimates or forecasts as to the Company's 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, including the expectation of operational and financial results from the contribution of the EDC and Access to Money businesses. These 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. These risks and uncertainties include, but are not limited to, the following:
Additional information regarding known material factors that could cause the Company's actual performance or results to differ from its projected results are described in its filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K. 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. The Company assumes no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information.
Consolidated Statements of Operations | ||||
For the Three and Nine Months Ended September 30, 2011 and 2010 | ||||
(Unaudited) | ||||
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||
2011 | 2010 | 2011 | 2010 | |
(In thousands, except share and per share information) | ||||
Revenues: | ||||
ATM operating revenues | $ 157,636 | $ 134,090 | $ 432,164 | $ 390,337 |
ATM product sales and other revenues | 7,423 | 2,515 | 18,230 | 6,992 |
Total revenues | 165,059 | 136,605 | 450,394 | 397,329 |
Cost of revenues: | ||||
Cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization shown separately below) | 103,727 | 89,026 | 285,630 | 262,319 |
Cost of ATM product sales and other revenues | 6,501 | 2,425 | 16,062 | 6,932 |
Total cost of revenues | 110,228 | 91,451 | 301,692 | 269,251 |
Gross profit | 54,831 | 45,154 | 148,702 | 128,078 |
Operating expenses: | ||||
Selling, general, and administrative expenses | 13,772 | 11,519 | 39,701 | 32,934 |
Acquisition-related expenses | 956 | — | 1,299 | — |
Depreciation and accretion expense | 12,197 | 10,865 | 35,004 | 31,351 |
Amortization expense | 4,946 | 3,823 | 12,240 | 11,567 |
Loss on disposal of assets | 117 | 368 | 280 | 1,840 |
Total operating expenses | 31,988 | 26,575 | 88,524 | 77,692 |
Income from operations | 22,843 | 18,579 | 60,178 | 50,386 |
Other expense: | ||||
Interest expense, net | 5,243 | 7,064 | 14,810 | 21,696 |
Amortization of deferred financing costs and bond discounts | 351 | 546 | 775 | 1,818 |
Write-off of deferred financing costs and bond discounts | — | 7,296 | — | 7,296 |
Redemption costs for early extinguishment of debt | — | 7,193 | — | 7,193 |
Other expense (income) | 318 | (207) | 258 | (173) |
Total other expense | 5,912 | 21,892 | 15,843 | 37,830 |
Income (loss) before income taxes | 16,931 | (3,313) | 44,335 | 12,556 |
Income tax benefit | (29,869) | (23,968) | (17,765) | (20,577) |
Net income | 46,800 | 20,655 | 62,100 | 33,133 |
Net (loss) income attributable to noncontrolling interests | (85) | (108) | 20 | 202 |
Net income attributable to controlling interests and available to common stockholders | $ 46,885 | $ 20,763 | $ 62,080 | $ 32,931 |
Net income per common share – basic | $ 1.06 | $ 0.49 | $ 1.42 | $ 0.79 |
Net income per common share – diluted | $ 1.05 | $ 0.49 | $ 1.40 | $ 0.78 |
Weighted average shares outstanding – basic | 42,570,137 | 40,529,280 | 42,001,624 | 40,119,310 |
Weighted average shares outstanding – diluted | 43,195,554 | 41,207,238 | 42,727,446 | 40,790,504 |
Condensed Consolidated Balance Sheets | ||
As of September 30, 2011 and December 31, 2010 | ||
September 30, 2011 | December 31, 2010 | |
(Unaudited) | ||
(In thousands) | ||
Assets | ||
Current assets: | ||
Cash and cash equivalents | $ 5,206 | $ 3,189 |
Accounts and notes receivable, net | 32,716 | 20,270 |
Inventory | 2,108 | 1,795 |
Restricted cash, short-term | 3,568 | 4,466 |
Current portion of deferred tax asset, net | 18,780 | 15,017 |
Prepaid expenses, deferred costs, and other current assets | 12,685 | 10,222 |
Total current assets | 75,063 | 54,959 |
Property and equipment, net | 174,154 | 156,465 |
Intangible assets, net | 112,415 | 74,799 |
Goodwill | 269,521 | 164,558 |
Deferred tax asset, net | 10,493 | 715 |
Prepaid expenses, deferred costs, and other assets | 19,878 | 3,819 |
Total assets | $ 661,524 | $ 455,315 |
Liabilities and Stockholders' Equity | ||
Current liabilities: | ||
Current portion of long-term debt and notes payable | $ 2,717 | $ 3,076 |
Current portion of other long-term liabilities | 24,868 | 24,493 |
Accounts payable and other accrued and current liabilities | 84,648 | 71,425 |
Total current liabilities | 112,233 | 98,994 |
Long-term liabilities: | ||
Long-term debt | 359,484 | 251,757 |
Deferred tax liability, net | 62 | 10,268 |
Asset retirement obligations | 32,456 | 26,657 |
Other long-term liabilities | 54,178 | 23,385 |
Total liabilities | 558,413 | 411,061 |
Stockholders' equity | 103,111 | 44,254 |
Total liabilities and stockholders' equity | $ 661,524 | $ 455,315 |
SELECTED INCOME STATEMENT DETAIL: | ||||
Total revenues by segment: | ||||
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||
2011 | 2010 | 2011 | 2010 | |
(In thousands) | ||||
United States | $ 132,861 | $ 108,785 | $ 358,890 | $ 316,345 |
United Kingdom | 26,060 | 21,737 | 72,129 | 60,701 |
Mexico | 6,138 | 6,083 | 19,375 | 20,283 |
Total revenues | $ 165,059 | $ 136,605 | $ 450,394 | $ 397,329 |
Breakout of ATM operating revenues: | ||||
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||
2011 | 2010 | 2011 | 2010 | |
(In thousands) | ||||
Surcharge revenues | $ 76,579 | $ 68,149 | $ 211,940 | $ 202,525 |
Interchange revenues | 50,695 | 40,820 | 135,407 | 117,657 |
Bank branding and surcharge-free network revenues | 24,399 | 20,761 | 67,952 | 59,754 |
Managed services revenues | 3,025 | 1,034 | 7,275 | 2,079 |
Other revenues | 2,938 | 3,326 | 9,590 | 8,322 |
Total ATM operating revenues | $ 157,636 | $ 134,090 | $ 432,164 | $ 390,337 |
Total cost of revenues by segment: | ||||
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||
2011 | 2010 | 2011 | 2010 | |
(In thousands) | ||||
United States | $ 85,834 | $ 70,239 | $ 232,034 | $ 207,980 |
United Kingdom | 19,666 | 16,506 | 54,957 | 45,758 |
Mexico | 4,728 | 4,706 | 14,701 | 15,513 |
Total cost of revenues | $ 110,228 | $ 91,451 | $ 301,692 | $ 269,251 |
Breakout of cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization): | ||||
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||
2011 | 2010 | 2011 | 2010 | |
(In thousands) | ||||
Merchant commissions | $ 49,018 | $ 42,160 | $ 133,813 | $ 125,280 |
Vault cash rental expense | 10,381 | 9,902 | 29,194 | 28,783 |
Other costs of cash | 14,377 | 11,513 | 39,345 | 34,522 |
Repairs and maintenance | 10,882 | 8,929 | 29,659 | 26,822 |
Communications | 4,619 | 3,972 | 12,728 | 11,574 |
Transaction processing | 1,362 | 956 | 3,367 | 4,075 |
Stock-based compensation | 251 | 226 | 769 | 594 |
Other expenses | 12,837 | 11,368 | 36,755 | 30,669 |
Total cost of ATM operating revenues | $ 103,727 | $ 89,026 | $ 285,630 | $ 262,319 |
Breakout of selling, general, and administrative expenses: | ||||
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||
2011 | 2010 | 2011 | 2010 | |
(In thousands) | ||||
Employee costs | $ 7,061 | $ 6,647 | $ 20,386 | $ 18,651 |
Stock-based compensation | 2,122 | 1,481 | 6,227 | 4,009 |
Professional fees | 1,917 | 1,220 | 4,943 | 4,086 |
Other | 2,672 | 2,171 | 8,145 | 6,188 |
Total selling, general, and administrative expenses | $ 13,772 | $ 11,519 | $ 39,701 | $ 32,934 |
Depreciation and accretion expense by segment: | ||||
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||
2011 | 2010 | 2011 | 2010 | |
(In thousands) | ||||
United States | $ 7,238 | $ 6,842 | $ 20,792 | $ 20,172 |
United Kingdom | 4,183 | 3,179 | 11,860 | 9,065 |
Mexico | 776 | 844 | 2,352 | 2,114 |
Total depreciation and accretion expense | $ 12,197 | $ 10,865 | $ 35,004 | $ 31,351 |
SELECTED BALANCE SHEET DETAIL: | ||
Long-term debt: | ||
September 30, 2011 | December 31, 2010 | |
(In thousands) | ||
8.25% senior subordinated notes | $ 200,000 | $ 200,000 |
Revolving credit facility | 156,300 | 46,200 |
Equipment financing notes | 5,901 | 8,633 |
Total long-term debt | $ 362,201 | $ 254,833 |
Share count rollforward: | |
Total shares outstanding as of December 31, 2010 | 42,833,342 |
Shares repurchased | (145,251) |
Shares issued – restricted stock grants and stock options exercised | 1,135,442 |
Shares forfeited – restricted stock | (13,750) |
Total shares outstanding as of September 30, 2011 | 43,809,783 |
SELECTED CASH FLOW DETAIL: | ||||
Selected cash flow statement amounts: | ||||
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||
2011 | 2010 | 2011 | 2010 | |
(In thousands) | ||||
Cash provided by operating activities | $ 38,313 | $ 20,392 | $ 69,352 | $ 72,993 |
Cash used in investing activities | (155,290) | (18,947) | (180,687) | (39,959) |
Cash provided by (used in) financing activities | 118,042 | (38,782) | 113,371 | (41,148) |
Effect of exchange rate changes on cash | 143 | (129) | (19) | 288 |
Net increase (decrease) in cash and cash equivalents | $ 1,208 | $ (37,466) | $ 2,017 | $ (7,826) |
Cash and cash equivalents at beginning of period | 3,998 | 40,089 | 3,189 | 10,449 |
Cash and cash equivalents at end of period | $ 5,206 | $ 2,623 | $ 5,206 | $ 2,623 |
Key Operating Metrics | ||||||||
For the Three and Nine Months Ended September 30, 2011 and 2010 | ||||||||
(Unaudited) | ||||||||
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||
2011 | 2010 | 2011 | 2010 | |||||
Average number of transacting ATMs: | ||||||||
United States: Company-owned (1) | 21,288 | 18,125 | 19,881 | 18,178 | ||||
United Kingdom | 3,341 | 2,878 | 3,187 | 2,796 | ||||
Mexico | 2,902 | 2,916 | 2,906 | 2,843 | ||||
Subtotal (1) | 27,531 | 23,919 | 25,974 | 23,817 | ||||
United States: Merchant-owned | 8,080 | 8,574 | 8,192 | 8,689 | ||||
Average number of transacting ATMs: ATM operations | 35,611 | 32,493 | 34,166 | 32,506 | ||||
United States: Managed services (2) | 4,525 | 3,353 | 4,191 | 3,057 | ||||
United Kingdom: Managed services | 21 | — | 17 | — | ||||
Average number of transacting ATMs: Managed services | 4,546 | 3,353 | 4,208 | 3,057 | ||||
Total average number of transacting ATMs (1) | 40,157 | 35,846 | 38,374 | 35,563 | ||||
Total transactions (in thousands): | ||||||||
ATM operations | 136,928 | 107,163 | 366,727 | 306,685 | ||||
Managed services | 7,404 | 4,727 | 18,934 | 12,189 | ||||
Total transactions (3) | 144,332 | 111,890 | 385,661 | 318,874 | ||||
Total cash withdrawal transactions (in thousands): | ||||||||
ATM operations | 84,237 | 64,652 | 225,202 | 189,302 | ||||
Managed services | 4,832 | 3,525 | 12,641 | 9,385 | ||||
Total cash withdrawal transactions (4) | 89,069 | 68,177 | 237,843 | 198,687 | ||||
Per ATM per month amounts (excludes managed services): | ||||||||
Cash withdrawal transactions | 788 | 663 | 732 | 647 | ||||
ATM operating revenues | $ 1,447 | $ 1,365 | $ 1,382 | $ 1,327 | ||||
Cost of ATM operating revenues (5) | 948 | 905 | 910 | 892 | ||||
ATM operating gross profit (5) (6) | $ 499 | $ 460 | $ 472 | $ 435 | ||||
ATM operating gross margin (5) (6) | 34.5% | 33.7% | 34.2% | 32.8% | ||||
Capital expenditures (in thousands) (7) | $ 11,663 | $ 18,947 | $ 37,060 | $ 40,501 | ||||
Capital expenditures, net of noncontrolling interests (in thousands) (7) | $ 11,605 | $ 18,537 | $ 36,959 | $ 38,872 | ||||
(1) Includes 2,470 and 823 ATMs from the EDC acquisition for the three and nine months ended September 30, 2011, respectively. | ||||||||
(2) Includes 2,519 and 2,579 ATMs for the three months ended September 30, 2011 and 2010, respectively, and 2,508 and 2,543 ATMs for the nine months ended September 30, 2011 and 2010, respectively, for which the Company only provided EFT transaction processing services. | ||||||||
(3) Includes 7,961 total transactions from the EDC acquisition for the three and nine months ended September 30, 2011. | ||||||||
(4) Includes 5,387 cash withdrawal transactions from the EDC acquisition for the three and nine months ended September 30, 2011. | ||||||||
(5) Amounts presented exclude the effect of depreciation, accretion, and amortization expense, which is presented separately in the Company's consolidated statements of operations. | ||||||||
(6) ATM operating gross profit and ATM operating gross margin are measures of profitability that are calculated based on only the revenues and expenses that relate to operating ATMs in the Company's portfolio. Revenues and expenses relating to managed services and ATM equipment sales and other ATM-related services are not included. | ||||||||
(7) Capital expenditures include amounts financed by direct debt for the nine month period ended September 30, 2010. |
Reconciliation of Net Income Attributable to Controlling Interests to Adjusted EBITDA and Adjusted | ||||
Net Income | ||||
For the Three and Nine Months Ended September 30, 2011 and 2010 | ||||
(Unaudited) | ||||
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
||
2011 | 2010 | 2011 | 2010 | |
(In thousands, except share and per share amounts) | ||||
Net income attributable to controlling interests | $ 46,885 | $ 20,763 | $ 62,080 | $ 32,931 |
Adjustments: | ||||
Interest expense, net | 5,243 | 7,064 | 14,810 | 21,696 |
Amortization of deferred financing costs and bond discounts | 351 | 546 | 775 | 1,818 |
Write-off of deferred financing costs and bond discounts | — | 7,296 | — | 7,296 |
Redemption costs for early extinguishment of debt | — | 7,193 | — | 7,193 |
Income tax benefit | (29,869) | (23,968) | (17,765) | (20,577) |
Depreciation and accretion expense | 12,197 | 10,865 | 35,004 | 31,351 |
Amortization expense | 4,946 | 3,823 | 12,240 | 11,567 |
EBITDA | $ 39,753 | $ 33,582 | $ 107,144 | $ 93,275 |
Add back: | ||||
Loss on disposal of assets (1) | 117 | 368 | 280 | 1,840 |
Other expense (income) (2) | 328 | (247) | 221 | (244) |
Noncontrolling interests (3) | (471) | (530) | (1,466) | (1,402) |
Stock-based compensation expense (4) | 2,363 | 1,699 | 6,968 | 4,575 |
Acquisition-related costs (5) | 956 | — | 1,299 | — |
Adjusted EBITDA | $ 43,046 | $ 34,872 | $ 114,446 | $ 98,044 |
Less: | ||||
Interest expense, net (4) | 5,163 | 6,949 | 14,528 | 21,338 |
Depreciation and accretion expense (4) | 11,818 | 10,452 | 33,852 | 30,315 |
Income tax expense (at 35%) (6) | 9,123 | 6,115 | 23,123 | 16,237 |
Adjusted Net Income | $ 16,942 | $ 11,356 | $ 42,943 | $ 30,154 |
Adjusted Net Income per share | $ 0.40 | $ 0.28 | $ 1.02 | $ 0.75 |
Adjusted Net Income per diluted share | $ 0.39 | $ 0.28 | $ 1.01 | $ 0.74 |
Weighted average shares outstanding – basic | 42,570,137 | 40,529,280 | 42,001,624 | 40,119,310 |
Weighted average shares outstanding – diluted | 43,195,554 | 41,207,238 | 42,727,446 | 40,790,504 |
(1) Primarily comprised of losses on the disposal of fixed assets that were incurred with the deinstallation of ATMs during the periods. | ||||
(2) Amounts exclude unrealized and realized (gains) losses related to derivatives not designated as hedging instruments. | ||||
(3) Noncontrolling interests adjustment made such that Adjusted EBITDA includes only the Company's 51% ownership interest in the Adjusted EBITDA of its Mexico subsidiary. | ||||
(4) Amounts exclude 49% of the expenses incurred by the Company's Mexico subsidiary as such amounts are allocable to the noncontrolling interest shareholders. | ||||
(5) Acquisition-related costs include non-recurring costs incurred for professional and legal fees and certain transition and integration-related costs, related to the acquisition of EDC, LocatorSearch, and Access to Money. | ||||
(6) 35% represents the Company's estimated long-term, cross-jurisdictional effective tax rate. |
Reconciliation of Free Cash Flow | ||||
For the Three and Nine Months Ended September 30, 2011 and 2010 | ||||
(Unaudited) | ||||
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||
2011 | 2010 | 2011 | 2010 | |
(In thousands) | ||||
Cash provided by operating activities | $ 38,313 | $ 20,392 | $ 69,352 | $ 72,993 |
Payments for capital expenditures: | ||||
Cash used in investing activities, excluding acquisitions | (11,663) | (18,947) | (37,060) | (39,959) |
Capital expenditures financed by direct debt | — | — | — | (542) |
Total payments for capital expenditures | (11,663) | (18,947) | (37,060) | (40,501) |
Free cash flow | $ 26,650 | $ 1,445 | $ 32,292 | $ 32,492 |
Reconciliation of Estimated Net Income to EBITDA, Adjusted EBITDA, and Adjusted Net Income | |||
For the Year Ending December 31, 2011 | |||
(Unaudited) | |||
|
Estimated Range Full Year 2011 |
||
(In millions) | |||
Net income | $ 68.5 | - | $ 70.0 |
Adjustments: | |||
Interest expense, net | 20.3 | - | 20.3 |
Amortization of deferred financing costs | 1.0 | - | 1.0 |
Income tax benefit | (13.5) | - | (13.0) |
Depreciation and accretion expense | 47.8 | - | 47.8 |
Amortization expense | 18.2 | - | 18.2 |
EBITDA | $ 142.3 | - | $ 144.3 |
Add back: | |||
Noncontrolling interests | (1.9) | - | (1.9) |
Loss on disposal of assets | 0.5 | - | 0.5 |
Stock-based compensation expense | 9.2 | - | 9.2 |
Acquisition-related costs | 4.9 | - | 4.9 |
Adjusted EBITDA | $ 155.0 | - | $ 157.0 |
Less: | |||
Interest expense, net (1) | 19.9 | - | 19.9 |
Depreciation and accretion expense (1) | 46.2 | - | 46.2 |
Income tax expense (at 35%) (2) | 31.1 | - | 31.8 |
Adjusted Net Income | $ 57.8 | - | $ 59.1 |
Adjusted Net Income per diluted share | $ 1.35 | - | $ 1.38 |
Weighted average shares outstanding – diluted | 42.9 | - | 42.9 |
(1) Amounts exclude 49% of the expenses to be incurred by the Company's Mexico subsidiary as such amounts are allocable to the noncontrolling interest shareholders. | |||
(2) 35% represents the Company's estimated long-term, cross-jurisdictional effective tax rate. |
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CONTACT: Cardtronics - Media Nick Pappathopoulos Director - Public Relations 832-308-4396 npappathopoulos@cardtronics.com Cardtronics - Investors Chris Brewster Chief Financial Officer 832-308-4128 cbrewster@cardtronics.com