NEWS RELEASE

<< Back
Feb 4, 2016
Cardtronics Announces Fourth Quarter and Full-Year 2015 Results

HOUSTON, Feb. 04, 2016 (GLOBE NEWSWIRE) -- Cardtronics, Inc. (Nasdaq:CATM) (the "Company"), the world's largest retail ATM owner/operator, today announced its financial and operational results for the quarter and year ended December 31, 2015.

Key financial statistics in the fourth quarter of 2015 as compared to the fourth quarter of 2014 include:

  • Total revenues of $303.3 million, up 7% from $283.9 million (9% on a constant-currency basis).
  • ATM operating revenues of $291.7 million, up 12% from $260.8 million (14% on a constant-currency basis).
  • Gross margin of 35.5%, up from 33.0% in 2014.
  • Adjusted Net Income per diluted share of $0.71, up 11% from $0.64.
  • Adjusted EBITDA of $73.2 million, up 12% from $65.6 million.
  • GAAP Net Income of $14.8 million, or $0.33 per diluted share, compared to GAAP Net Income of $5.5 million, or $0.12 per diluted share.
  • Cash flows from operating activities of $109.4 million, up 40% from $78.3 million.       

"We had a strong 2015 — our fifth consecutive year featuring double-digit revenue and adjusted earnings growth. We also continued to diversify our revenues and profits, expanded our global footprint, added many new customers across our markets, and made some important investments in product and strategy, positioning us favorably for growth in the future," commented Steve Rathgaber, Cardtronics' chief executive officer.

RECENT HIGHLIGHTS

  • Reached an agreement with Aldi, the U.K.'s sixth largest supermarket chain, to deploy 450 ATMs across the majority of their U.K. stores in 2016.
  • Reached agreements with 18 new financial institutions to join our Allpoint surcharge-free network, enabling almost 700,000 new cardholders with surcharge-free access to many of our conveniently located ATMs at major merchants across the U.S.
  • Expanded our branding and managed services relationships with CIBC in Canada, with Key Bank in several western U.S. states, and with Santander in Puerto Rico.
  • Executed an ATM placement agreement with Poland-based Statoil, a division of Couche-Tard.       

2015 MILESTONES

  • Total annual revenues were $1.2 billion in 2015 representing a 14% increase over 2014 and the fifth consecutive year with double-digit revenue and Adjusted Net Income per share growth.
  • The Company handled over 759 million cash withdrawal transactions and dispensed almost $100 billion in cash in 2015.

Refer to the "Disclosure of Non-GAAP Financial Information" contained later in this press release for definitions of Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income per diluted share, Free Cash Flow, and Revenue on a constant-currency basis. For additional financial information, including reconciliations to the most comparable financial measure recognized under accounting principles generally accepted in the United States of America ("GAAP"), refer to the supplemental schedules of selected financial information at the end of this press release.

FOURTH QUARTER RESULTS

Consolidated revenues totaled $303.3 million for the fourth quarter of 2015, representing a 7% increase from $283.9 million generated in the fourth quarter of 2014. ATM operating revenues were up 12% from the fourth quarter of 2014. Adjusting for unfavorable movements in currency exchange rates, ATM operating revenues were up approximately 14% from the fourth quarter of 2014, driven by nearly equal components of organic and acquisition-related revenue contributions.

Adjusted EBITDA for the fourth quarter of 2015 totaled $73.2 million, representing a 12% increase over the $65.6 million of Adjusted EBITDA during the fourth quarter of 2014. Adjusted Net Income totaled $32.2 million ($0.71 per diluted share) for the fourth quarter of 2015, compared to $29.0 million ($0.64 per diluted share) during the fourth quarter in 2014. The increases in Adjusted EBITDA and Adjusted Net Income were primarily driven by the Company's revenue growth and margin expansion. Adjusted EBITDA and Adjusted Net Income are detailed in a reconciliation included at the end of this press release.

GAAP Net Income for the fourth quarter of 2015 totaled $14.8 million, compared to GAAP Net Income of $5.5 million during the fourth quarter in 2014. The increase in GAAP Net Income for the fourth quarter of 2015 was the result of the revenue growth and margin expansion and a lower effective tax rate in the quarter.

FULL - YEAR RESULTS

Consolidated revenues totaled $1.2 billion for the year ended December 31, 2015, representing a 14% increase from the $1.05 billion in consolidated revenues generated during 2014. ATM operating revenues were up 13% from 2014. Adjusting for unfavorable movements in currency exchange rates, ATM operating revenues were up approximately 16% for the year ended December 31, 2015, driven by a combination of organic and acquisition-related growth.

Adjusted EBITDA for the year ended December 31, 2015 totaled $296.4 million, representing a 17% increase over the $253.9 million of Adjusted EBITDA during 2014. Adjusted Net Income totaled $130.8 million ($2.88 per diluted share) for the year ended December 31, 2015, compared to $108.0 million ($2.41 per diluted share) during the same period in 2014. The increases in both Adjusted EBITDA and Adjusted Net Income were primarily due to the same factors discussed above, including the Company's year-over-year revenue growth and margin improvement.

GAAP Net Income for the year ended December 31, 2015 totaled $67.1 million, compared to GAAP Net Income of $37.1 million during the same period in 2014. The increase in GAAP Net Income for the year ended December 31, 2015 was primarily due to the same factors impacting Adjusted EBITDA and also the net gain recognized on the sale of our non-core retail cash-in-transit operation in the U.K., offset by acquisition and divestiture-related costs incurred during the period.

2016 GUIDANCE

Below is the Company's financial guidance for the year ending December 31, 2016:

  • Revenues of $1.24 billion to $1.27 billion;
  • Gross Profit Margin of 35.0% to 35.5%;
  • Adjusted EBITDA of $315 million to $325 million;
  • Depreciation and accretion expense of $94 million to $96 million, net of noncontrolling interests;
  • Cash interest expense of $18 million to $19 million, net of noncontrolling interests;
  • Adjusted Net Income per diluted share of $3.00 to $3.13, based on approximately 45.8 million weighted average diluted shares outstanding; and
  • Capital expenditures of $150 million to $160 million, net of noncontrolling interests.

The Adjusted EBITDA and Adjusted Net Income guidance excludes the impact of certain expenses, as outlined in the reconciliation provided at the end of this press release. Additionally, this guidance is based on average foreign currency exchange rates for the remainder of the year of £1.00 U.K. to $1.45 U.S., $17.00 Mexican pesos to $1.00 U.S., $1.00 Canadian dollar to $0.70 U.S., and €1.00 Euros to $1.05 U.S.

LIQUIDITY

The Company had $284.2 million in available borrowing capacity under its $375.0 million revolving credit facility and $26.3 million in cash on hand as of December 31, 2015. The Company's outstanding indebtedness as of December 31, 2015 consisted of $250.0 million in senior notes due 2022, $287.5 million convertible senior notes due 2020 (of which $234.6 million is currently recorded as long-term debt on the balance sheet, which is being accreted up to the principal balance of $287.5 million over the term of the notes), and $90.8 million in borrowings under its revolving credit facility due 2019.

DISCLOSURE OF NON-GAAP FINANCIAL INFORMATION

Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income per diluted share, Free Cash Flow, and Revenue on a constant-currency basis are non-GAAP financial measures provided as a complement to results prepared in accordance with U.S. GAAP and may not be comparable to similarly-titled measures reported by other companies. The Company uses these non-GAAP financial measures in managing and measuring the performance of its business, including setting and measuring incentive based compensation for management. Management believes that the presentation of these measures and the identification of unusual, nonrecurring, 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 of intangible assets 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 also excludes stock-based compensation expense, acquisition and divestiture-related expenses, certain other non-operating and nonrecurring expenses, gains or losses on disposal of assets, the Company's obligations for the payment of income taxes, interest expense and other obligations such as capital expenditures, and includes an adjustment for noncontrolling interests. Adjusted EBITDA % is calculated by taking Adjusted EBITDA over U.S. GAAP total revenues. Adjusted Net Income represents net income computed in accordance with U.S. GAAP, before amortization of intangible assets, gains or losses on disposal of assets, stock-based compensation expense, certain other expense (income) amounts, nonrecurring expenses, and acquisition and divestiture-related expenses, and uses an estimated long-term cash tax rate of 32.0% for the three and twelve months ended December 31, 2015 and 2014, with certain adjustments for noncontrolling interests. Adjusted Net Income per diluted share is calculated by dividing Adjusted Net Income by weighted average diluted shares outstanding. 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 Free Cash Flow measure 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. Management calculates Revenue on a constant-currency basis by using the average foreign exchange rates applicable in the corresponding period of the previous year and applying these rates to foreign-denominated revenue of the current period. The difference between revenue calculated based on these foreign exchange rates and revenue calculated in accordance with U.S. GAAP is referred to as the foreign exchange impact on revenue. Management uses Revenue on a constant-currency basis to eliminate the effect foreign currency has on comparability between periods.

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 U.S. GAAP. Reconciliations of the non-GAAP financial measures used herein to the most directly comparable U.S. 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, Thursday, February 4, 2016, at 4:00 p.m. Central Time (5:00 p.m. Eastern Time) to discuss its financial results for the fourth quarter and year ended December 31, 2015. 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 Fourth 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 Thursday, February 18, 2016, and can be accessed by calling (855) 859-2056 or (404) 537-3406 and entering 25530442 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 February 29, 2016.

ABOUT CARDTRONICS (NASDAQ:CATM)

Making ATM cash access convenient where people shop, work and live, Cardtronics is at the convergence of retailers, financial institutions, prepaid card programs and the customers they share. Cardtronics provides services to approximately 190,000 retail ATMs in North America and Europe. Whether Cardtronics is driving foot traffic for North America and Europe's top retailers, enhancing ATM brand presence for card issuers or expanding card holders' surcharge-free cash access, Cardtronics is convenient access to cash, when and where consumers need it. Cardtronics is where cash meets commerce.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release contains "forward-looking statements" within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as "project," "believe," "estimate," "expect," "future," "anticipate," "intend," "contemplate," "foresee," "would," "could," "plan," and similar references to future periods. Forward-looking statements give the Company's current expectations, beliefs, assumptions or forecasts of future events, future financial performance, strategies, expectations, competitive environment, regulation, and availability of resources. The forward-looking statements contained in this press release include, among other things, statements concerning projections, predictions, expectations, estimates or forecasts as to the Company's business, financial and operational results, future economic performance, statements of management's goals and objectives, and other similar expressions concerning matters that are not historical facts. 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:

  • the Company's financial outlook and the financial outlook of the ATM industry and the continued usage of cash by consumers at rates near historical patterns;
  • the Company's ability to respond to recent and future network and regulatory changes, including forthcoming requirements surrounding Europay, MasterCard, and Visa ("EMV") security standards;
  • the Company's ability to renew its existing customer relationships on comparable economic terms and add new customers;
  • the Company's ability to pursue and successfully integrate acquisitions;
  • changes in interest rates and foreign currency rates;
  • the Company's ability to successfully manage its existing international operations and to continue to expand internationally;
  • the Company's ability to manage concentration risks with key customers, vendors and service providers;
  • the Company's ability to prevent thefts of cash;
  • the Company's ability to manage cybersecurity risks and prevent data breaches;
  • the Company's ability to respond to potential reductions in the amount of net interchange fees that it receives from global and regional debit networks for transactions conducted on its ATMs due to pricing changes implemented by those networks as well as changes in how issuers route their ATM transactions over those networks;
  • the Company's ability to provide new ATM solutions to retailers and financial institutions including placing additional banks' brands on ATMs currently deployed;
  • the Company's ATM vault cash rental needs, including potential liquidity issues with its vault cash providers and its ability to continue to secure vault cash rental agreements in the future;
  • the Company's ability to manage the risks associated with its third-party service providers failing to perform their contractual obligations;
  • the Company's ability to successfully implement and evolve its corporate strategy;
  • the Company's ability to compete successfully with new and existing competitors;
  • the Company's ability to meet the service levels required by its service level agreements with its customers;
  • the additional risks the Company is exposed to in its U.K. armored transport business; and
  • the Company's ability to retain its key employees and maintain good relations with its employees.

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 Twelve Months Ended December 31, 2015 and 2014
(In thousands, excluding share and per share amounts)
(Unaudited)
             
  Three Months Ended Twelve Months Ended
  December 31,  December 31,
  2015 2014 2015 2014
Revenues:            
ATM operating revenues $  291,726  $  260,795  $  1,134,021  $  1,007,765 
ATM product sales and other revenues    11,578     23,078     66,280     47,056 
Total revenues    303,304     283,873     1,200,301     1,054,821 
Cost of revenues:            
Cost of ATM operating revenues (excludes depreciation, accretion, and amortization of                    
intangible assets shown separately below.)    183,742     168,905     720,925     659,350 
Cost of ATM product sales and other revenues    11,819     21,262     62,012     44,698 
Total cost of revenues    195,561     190,167     782,937     704,048 
Gross profit    107,743     93,706     417,364     350,773 
Operating expenses:            
Selling, general, and administrative expenses    39,664     33,334     140,501     113,470 
Acquisition and divestiture-related expenses    5,929     5,022     27,127     18,050 
Depreciation and accretion expense    20,888     18,730     85,030     75,622 
Amortization of intangible assets    9,758     11,121     38,799     35,768 
(Gain) loss on disposal of assets    (1,585)    1,562     (14,010)    3,224 
Total operating expenses    74,654     69,769     277,447     246,134 
Income from operations    33,089     23,937     139,917     104,639 
Other expense:            
Interest expense, net    4,955     4,609     19,451     20,776 
Amortization of deferred financing costs and note discount    2,908     2,694     11,363     13,036 
Redemption costs for early extinguishment of debt    —     —         9,075 
Other expense (income)    898     1,949     3,780     (1,616)
Total other expense    8,761     9,252     34,594     41,271 
Income before income taxes    24,328     14,685     105,323     63,368 
Income tax expense    9,505     9,989     39,342     28,174 
Net income    14,823     4,696     65,981     35,194 
Net loss attributable to noncontrolling interests    (18)    (826)    (1,099)    (1,946)
Net income attributable to controlling interests and available to common stockholders $  14,841  $  5,522  $  67,080  $  37,140 
             
Net income per common share — basic $  0.33  $  0.12  $  1.50  $  0.83 
Net income per common share — diluted $  0.33  $  0.12  $  1.48  $  0.82 
             
Weighted average shares outstanding — basic    44,876,922     44,440,227     44,796,701     44,338,408 
Weighted average shares outstanding — diluted    45,496,524     45,025,059     45,368,687     44,867,304 


Condensed Consolidated Balance Sheets
As of December 31, 2015 and December 31, 2014
(In thousands)
       
  December 31, 2015 December 31, 2014
  (Unaudited)   
ASSETS      
Current assets:      
Cash and cash equivalents $ 26,297 $ 31,875
Accounts and notes receivable, net   72,009   80,321
Inventory, net   10,675   5,971
Restricted cash   31,565   20,427
Current portion of deferred tax asset, net   16,300   24,303
Prepaid expenses, deferred costs, and other current assets   56,678   34,508
Total current assets   213,524   197,405
Property and equipment, net   375,488   335,795
Intangible assets, net   157,848   177,540
Goodwill   548,936   511,963
Deferred tax asset, net   11,950   10,487
Prepaid expenses, deferred costs, and other noncurrent assets   19,257   22,600
Total assets $ 1,327,003 $ 1,255,790
       
LIABILITIES AND STOCKHOLDERS' EQUITY      
Current liabilities:      
Current portion of long-term debt $ — $ 35
Current portion of other long-term liabilities   32,732   34,937
Accounts payable and other accrued and current liabilities   244,908   215,950
Total current liabilities   277,640   250,922
Long-term liabilities:      
Long-term debt   575,399   612,662
Asset retirement obligations   51,685   52,039
Deferred tax liability, net   21,829   15,916
Other long-term liabilities   30,657   37,716
Total liabilities   957,210   969,255
Stockholders' equity   369,793   286,535
Total liabilities and stockholders' equity $ 1,327,003 $ 1,255,790
       

SELECTED INCOME STATEMENT DETAIL:

 Total revenues by segment:           
    
 Three Months Ended Twelve Months Ended
 December 31,  December 31,
 2015 2014 2015 2014
 (In thousands)
North America$  215,450  $  203,386  $  838,966  $  773,945 
Europe   90,699     82,149     370,967     287,266 
Eliminations   (2,845)    (1,662)    (9,632)    (6,390)
Total revenues  $  303,304  $  283,873  $  1,200,301  $  1,054,821 


Breakout of ATM operating revenues:           
            
 Three Months Ended Twelve Months Ended
 December 31,  December 31,
 2015 2014 2015 2014
 (In thousands)
Surcharge revenues$ 116,082 $ 114,755 $ 464,376 $ 456,146
Interchange revenues  109,868   88,400   422,831   341,769
Bank-branding and surcharge-free network revenues  45,012   42,196   174,047   156,673
Managed services revenues  8,739   7,768   34,599   24,595
Other revenues  12,025   7,676   38,168   28,582
Total ATM operating revenues$ 291,726 $ 260,795 $ 1,134,021 $ 1,007,765


Total cost of revenues by segment:           
            
 Three Months Ended Twelve Months Ended
 December 31,  December 31,
 2015 2014 2015 2014
 (In thousands)
North America$  137,409  $  133,627  $  535,777  $  506,278 
Europe   60,997     58,202     256,792     204,160 
Eliminations   (2,845)    (1,662)    (9,632)    (6,390)
Total cost of revenues$  195,561  $  190,167  $  782,937  $  704,048 


Breakout of cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangible assets):
            
 Three Months Ended Twelve Months Ended
 December 31,  December 31,
 2015 2014 2015 2014
 (In thousands)
Merchant commissions$ 87,177 $ 78,545 $ 343,539 $ 316,543
Vault cash rental  17,442   16,771   69,064   62,805
Other costs of cash  17,366   19,510   71,687   83,438
Repairs and maintenance  16,651   18,113   68,903   63,253
Communications  8,015   7,079   30,992   25,998
Transaction processing  3,713   3,856   15,349   14,560
Stock-based compensation  326   369   1,218   1,273
Other expenses  33,052   24,662   120,173   91,480
Total cost of ATM operating revenues$ 183,742 $ 168,905 $ 720,925 $ 659,350


Breakout of selling, general, and administrative expenses:
            
 Three Months Ended Twelve Months Ended
 December 31,  December 31,
 2015 2014 2015 2014
 (In thousands)
Employee costs$ 18,883 $ 18,138 $ 71,883 $ 62,399
Stock-based compensation  4,748   4,648   18,236   15,229
Professional fees  6,768   2,178   17,974   7,312
Other expenses  9,265   8,370   32,408   28,530
Total selling, general, and administrative expenses$ 39,664 $ 33,334 $ 140,501 $ 113,470


Depreciation and accretion expense by segment:           
            
 Three Months Ended Twelve Months Ended
 December 31,  December 31,
 2015 2014 2015 2014
 (In thousands)
North America$ 12,589 $ 12,341 $ 51,119 $ 48,115
Europe  8,299   6,389   33,911   27,507
Total depreciation and accretion expense$ 20,888 $ 18,730 $ 85,030 $ 75,622
            

SELECTED BALANCE SHEET DETAIL:

Long-term debt:
      
 December 31, 2015 December 31, 2014
 (In thousands)
Revolving credit facility$ 90,835 $ 137,292
5.125% Senior notes  250,000   250,000
1.00% Convertible senior notes (1)  234,564   225,370
Total long-term debt$ 575,399 $ 612,662

______________________
(1) 
The total principal amount outstanding for these convertible instruments is $287.5 million, but in accordance with U.S. GAAP the estimated fair value of the conversion feature at issuance was recorded as additional paid-in capital within equity. The convertible senior notes are being accreted over the term of the notes to the full principal amount ($287.5 million).

 
Share count rollforward:
   
Total shares outstanding as of December 31, 2014   44,562,122 
Shares repurchased   (138,037)
Shares issued — stock options exercised   105,466 
Shares vested — restricted stock units   427,569 
Shares forfeited — restricted stock awards   (3,500)
Total shares outstanding as of December 31, 2015   44,953,620 
     

SELECTED CASH FLOW DETAIL:

Selected cash flow statement amounts:
             
  Three Months Ended  Twelve Months Ended
  December 31,  December 31,
  2015 2014 2015 2014
  (In thousands)
Cash provided by operating activities $  109,442  $  78,292  $  256,553  $  188,553 
Cash used in investing activities    (38,473)    (263,000)    (209,562)    (336,881)
Cash (used in) provided by financing activities    (61,818)    80,817     (48,520)    99,248 
Effect of exchange rate changes on cash    (1,337)    (5,095)    (4,049)    (5,984)
Net increase (decrease) in cash and cash equivalents    7,814     (108,986)    (5,578)    (55,064)
Cash and cash equivalents as of beginning of period    18,483     140,861     31,875     86,939 
Cash and cash equivalents as of end of period $  26,297  $  31,875  $  26,297  $  31,875 


Key Operating Metrics — Excluding Acquisitions in All Periods Presented
For Three and Twelve Months Ended December 31, 2015 and 2014
(Unaudited)
 
The following table excludes the effect of acquisitions for the three and twelve months ended December 31, 2015 for comparative purposes:
              
 EXCLUDING ACQUISITIONS: Three Months Ended  Twelve Months Ended 
  December 31,  December 31,  
  2015 2014 2015 2014 
Average number of transacting ATMs:             
United States: Company-owned   38,821   37,989   32,729   32,330 
United Kingdom   13,805   12,610   13,368   12,098 
Mexico   1,417   2,107   1,524   2,153 
Canada   1,875   1,623   1,781   1,650 
Germany and Poland   1,088   898   1,012   878 
Subtotal   57,006   55,227   50,414   49,109 
United States: Merchant-owned (1)   18,757   23,500   18,095   22,590 
Average number of transacting ATMs — ATM operations   75,763   78,727   68,509   71,699 
              
Managed Services and Processing             
United States: Managed services — Turnkey   2,202   2,172   2,189   2,149 
United States: Managed services — Processing Plus and Processing operations, net   30,391   29,044   18,493   17,057 
Canada: Managed services   1,318   898   1,089   535 
Average number of transacting ATMs — Managed services and processing   33,911   32,114   21,771   19,741 
              
Total average number of transacting ATMs   109,674   110,841   90,280   91,440 
              
Total transactions (in thousands):             
ATM operations   274,823   273,381   1,046,506   1,040,241 
Managed services and processing, net   34,484   31,267   101,295   87,338 
Total transactions   309,307   304,648   1,147,801   1,127,579 
              
Cash withdrawal transactions (in thousands):             
ATM operations   164,669   163,792   631,450   617,419 
              
Per ATM per month amounts (excludes managed services and processing):             
Cash withdrawal transactions   724   694   768   718 
              
ATM operating revenues $ 1,133 $ 1,064 $ 1,190 $ 1,136 
Cost of ATM operating revenues (2)    725   689   763   743 
ATM operating gross profit (2) (3)  $ 408 $ 375 $ 427 $ 393 
              
ATM operating gross profit margin (2) (3)    36.0%  35.2%  35.9%  34.6%

___________________

(1) Certain ATMs previously reported in this category are now included in the United States: Managed services - Processing Plus and Processing operations, net category below.
(2) Amounts presented exclude the effect of depreciation, accretion, and amortization of intangible assets, which is presented separately in the Company's Consolidated Statements of Operations.
(3) Revenues and expenses relating to managed services, processing, and ATM equipment sales and other ATM-related services are not included in these calculations.

 
Key Operating Metrics — Including Acquisitions in All Periods Presented
For Three and Twelve Months Ended December 31, 2015 and 2014
(Unaudited)
              
 INCLUDING ACQUISITIONS: Three Months Ended  Twelve Months Ended 
  December 31,  December 31,  
  2015 2014 2015 2014 
Average number of transacting ATMs:             
United States: Company-owned   38,821   37,989   38,440   32,330 
United Kingdom   15,737   12,610   14,991   12,098 
Mexico   1,417   2,107   1,524   2,153 
Canada   1,875   1,623   1,781   1,650 
Germany and Poland   1,088   898   1,012   878 
Subtotal   58,938   55,227   57,748   49,109 
United States: Merchant-owned (1)   18,757   23,500   19,905   22,590 
Average number of transacting ATMs — ATM operations   77,695   78,727   77,653   71,699 
              
Managed Services and Processing             
United States: Managed services — Turnkey   2,202   2,172   2,189   2,149 
United States: Managed services — Processing Plus and Processing operations, net (2)   109,018   29,044   69,583   17,057 
Canada: Managed services   1,318   898   1,089   535 
Average number of transacting ATMs — Managed services and processing   112,538   32,114   72,861   19,741 
              
Total average number of transacting ATMs   190,233   110,841   150,514   91,440 
              
Total transactions (in thousands):             
ATM operations   324,705   273,381   1,251,626   1,040,241 
Managed services and processing, net (2)   164,567   31,267   404,268   87,338 
Total transactions   489,272   304,648   1,655,894   1,127,579 
              
Cash withdrawal transactions (in thousands):             
ATM operations   195,335   163,792   759,408   617,419 
              
Per ATM per month amounts (excludes managed services and processing):             
Cash withdrawal transactions   838   694   815   718 
              
ATM operating revenues $ 1,183 $ 1,064 $ 1,161 $ 1,136 
Cost of ATM operating revenues (3)   752   689   742   743 
ATM operating gross profit (3) (4) $ 431 $ 375 $ 419 $ 393 
              
ATM operating gross profit margin (3) (4)   36.4%  35.2%  36.1%  34.6%

__________________

(1) Certain ATMs previously reported in this category are now included in the United States: Managed services - Processing Plus and Processing operations, net category below.
(2) The notable increase in the United States: Managed services - Processing Plus and Processing operations, net category is mostly attributable to the July 1, 2015 acquisition of CDS and the incremental number of transacting ATMs for which CDS provides processing services.
(3) Amounts presented exclude the effect of depreciation, accretion, and amortization of intangible assets, which is presented separately in the Company's Consolidated Statements of Operations.
(4) Revenues and expenses relating to managed services, processing, and ATM equipment sales and other ATM-related services are not included in this calculation.

 
Key Operating Metrics — Ending Machine Count
As of December 31, 2015 and 2014
(Unaudited)
     
  As of December 31,
  2015 2014
Ending number of transacting ATMs:    
United States: Company-owned  38,893  37,931
United Kingdom  15,735  12,911
Mexico  1,406  2,034
Canada  1,850  1,597
Germany and Poland  1,121  918
Total Company-owned  59,005  55,391
United States: Merchant-owned  18,164  22,826
Ending number of transacting ATMs: ATM operations  77,169  78,217
     
United States: Managed services — Turnkey  2,196  2,170
United States: Managed services — Processing Plus and Processing operations, net  109,021  28,924
Canada: Managed services  1,405  895
Ending number of transacting ATMs: Managed services and processing, net  112,622  31,989
     
Total ending number of transacting ATMs  189,791  110,206


 
Reconciliation of Net Income Attributable to Controlling Interest to EBITDA, Adjusted EBITDA, and Adjusted Net Income
For the Three and Twelve Months Ended December 31, 2015 and 2014
(Unaudited)
             
  Three Months Ended  Twelve Months Ended
  December 31,  December 31,
  2015 2014 2015 2014
Net income attributable to controlling interests and available to common stockholders $  14,841  $  5,522  $  67,080  $  37,140 
Adjustments:            
Interest expense, net    4,955     4,609     19,451     20,776 
Amortization of deferred financing costs and note discount    2,908     2,694     11,363     13,036 
Redemption costs for early extinguishment of debt    —     —         9,075 
Income tax expense    9,505     9,989     39,342     28,174 
Depreciation and accretion expense    20,888     18,730     85,030     75,622 
Amortization of intangible assets    9,758     11,121     38,799     35,768 
EBITDA  $  62,855  $  52,665  $  261,065  $  219,591 
             
Add back:            
(Gain) loss on disposal of assets    (1,585)    1,562     (14,010)    3,224 
Other expense (income)    898     1,949     3,780     (1,616)
Noncontrolling interests (1)    42     (553)    (996)    (1,745)
Stock-based compensation expense (2)    5,062     4,991     19,421     16,432 
Acquisition and divestiture-related expenses (3)    5,929     5,022     27,127     18,050 
Adjusted EBITDA $  73,201  $  65,636  $  296,387  $  253,936 
Less:            
Interest expense, net (2)    4,954     4,607     19,447     20,745 
Depreciation and accretion expense (2)    20,840     18,445     84,608     74,314 
Adjusted pre-tax income $  47,407  $  42,584  $  192,332  $  158,877 
Income tax expense (4)    15,170     13,627     61,546     50,840 
Adjusted Net Income $  32,237  $  28,957  $  130,786  $  108,037 
             
Adjusted Net Income per share $  0.72  $  0.65  $  2.92  $  2.44 
Adjusted Net Income per diluted share $  0.71  $  0.64  $  2.88  $  2.41 
             
Weighted average shares outstanding - basic    44,876,922     44,440,227     44,796,701     44,338,408 
Weighted average shares outstanding - diluted    45,496,524     45,025,059     45,368,687     44,867,304 

_______________________

(1) Noncontrolling interests adjustment made such that Adjusted EBITDA includes only the Company's ownership interest in the Adjusted EBITDA of its Mexico subsidiary. In December 2015, the Company increased its ownership interest in its Mexico subsidiary from 51.0% to 95.7%.
(2) Amounts exclude a portion of the expenses incurred by the Company's Mexico subsidiary to account for the amounts allocable to the noncontrolling interest stockholders. In December 2015, the Company increased its ownership interest in its Mexico subsidiary.
(3) Acquisition and divestiture-related expenses include nonrecurring costs incurred for professional and legal fees and certain transition and integration-related costs, including contract termination and facility exit costs, employee-related severance costs, and related to our recent divestitures, excess operating costs associated with facilities that are in the process of being shut down or transitioned as a result of recent divestitures.
(4) Calculated using the Company's estimated long-term, cross-jurisdictional effective cash tax rate of 32.0%.

 
Reconciliation of Free Cash Flow
For the Three and Twelve Months Ended December 31, 2015 and 2014
(Unaudited)
             
  Three Months Ended  Twelve Months Ended
  December 31,  December 31,
  2015 2014 2015 2014
  (In thousands)
Cash provided by operating activities $  109,442  $  78,292  $  256,553  $  188,553 
Payments for capital expenditures:            
Cash used in investing activities, excluding acquisitions and divestitures    (38,473)    (44,833)    (142,349)    (109,909)
Free cash flow $  70,969  $  33,459  $  114,204  $  78,644 


 
Reconciliation of Estimated Net Income to EBITDA, Adjusted EBITDA, and Adjusted Net Income
For the Year Ending December 31, 2016
(In millions, excluding share and per share amounts)
(Unaudited)
       
  Estimated Range
Full Year 2016
Net Income $ 87.0 $ 93.0
Adjustments:      
Interest expense, net   19.0   18.0
Amortization of deferred financing costs and note discount   11.5   11.5
Income tax expense   40.5   43.5
Depreciation and accretion expense   94.0   96.0
Amortization of intangible assets   45.0   45.0
EBITDA $ 297.0 $ 307.0
       
Add Back:      
Stock-based compensation expense   18.0   18.0
Adjusted EBITDA $ 315.0 $ 325.0
Less:      
Interest expense, net   19.0   18.0
Depreciation and accretion expense   94.0   96.0
Income tax expense (2)   64.6   67.5
Adjusted Net Income $ 137.4 $ 143.5
       
Adjusted Net Income per diluted share $ 3.00 $ 3.13
       
Weighted average shares outstanding - diluted   45.8   45.8

_______________________

(1) Noncontrolling interests adjustment made such that Adjusted EBITDA includes only the Company's interest of its Mexico subsidiary. In December 2015, the Company increased its ownership interest in its Mexico subsidiary from 51.0% to 95.7%.
(2) Calculated using the Company's estimated long-term, cross-jurisdictional effective cash tax rate of 32.0%.

Contact Information:
  
Media RelationsInvestor Relations
Nick PappathopoulosPhillip Chin
Director — Public RelationsEVP Corporate Development & Investor Relations
832-308-4396832-308-4975
npappathopoulos@cardtronics.com   ir@cardtronics.com


Cardtronics is a registered trademark of Cardtronics, Inc.
All other trademarks are the property of their respective owners.
###


  
      
Top