Cardtronics Announces Fourth Quarter and Full-Year 2011 Results
HOUSTON, Feb. 2, 2012 (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 and year ended December 31, 2011.
Key financial and operational statistics in the fourth quarter of 2011 as compared to the fourth quarter of 2010 include:
Consolidated revenues of $174.2 million, up by 29%
-- Organic growth for the quarter of 13%
-- Growth from acquisitions of 16%
Adjusted EBITDA of $41.9 million, up by 28%
Adjusted Net Income per diluted share of $0.36, up by 38% from $0.26
GAAP net income of $8.2 million or $0.18 per diluted share, compared to $8.0 million or $0.19 per diluted share in the prior year. The current quarter includes the effect of $3.4 million in acquisition-related costs.
Effects of foreign currency exchange rate movements had an insignificant impact on comparisons of reported revenues, Adjusted EBITDA and Adjusted Net Income per diluted share during the quarter.
The results of operations include the performance of Access to Money and Mr. Cash since November 1, 2011 and October 28, 2011, respectively, which is the date that each acquisition closed.
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 quarterly results are highlighted by continued strong revenue growth, which was up 29% including over 13% organic growth in the quarter and positive contributions from the two acquisitions completed during the quarter," commented Steve Rathgaber, chief executive officer. "Our revenue growth in the quarter fueled impressive growth in earnings as well, as our adjusted net income per share for the quarter was up 38%. With the addition of significant new business in the last quarter and early in 2012, we believe that we are well-positioned to continue generating solid top- and bottom-line growth in 2012 and beyond."
RECENT HIGHLIGHTS
The completion of two acquisitions during the fourth quarter, Access to Money and Mr. Cash. With the acquisition of Mr. Cash, the Company establishes Canadian operations.
The announcement of an exclusive ATM placement agreement with Valero Retail Holdings to place over 950 brand-able ATMs in Valero's entire U.S. portfolio of company-operated convenience stores in the first half of 2012, with expansion rights for future Valero stores.
A contract extension with an existing merchant with approximately 300 ATMs across the United States.
Execution of new ATM placement agreements for over 200 new locations with two regional convenience store chains.
A net increase of 159 bank-branded locations during the fourth quarter under existing contracts.
The execution of an agreement with a new vault cash provider, bringing the total number of financial institutions from whom we receive vault cash supply to seven.
The announcement of organizational changes for the sales and relationship management groups, with its leadership assumed by Todd Clark, an experienced sales and client relations manager that joined the Company in January 2012.
The acquisition of an ATM service and installation business in the U.K., further expanding our in-house ATM operations in that market.
The installation of approximately 300 new Company-owned ATM locations with existing merchants in the United States in the fourth quarter.
FOURTH QUARTER RESULTS
For the fourth quarter of 2011, consolidated revenues totaled $174.2 million, representing a 29% increase from the $134.7 million in consolidated revenues generated during the fourth quarter of 2010. Of the 29% year-over-year increase, 16% was attributable to the results of acquired entities during the second half of 2011. Of the remaining 13% organic revenue increase, 8% was 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) increased bank branding revenues from financial institution partners; and (5) growth in Allpoint, America's largest surcharge-free network. Finally, 5% of the year-over-year increase in consolidated revenues was attributable to higher equipment sales.
Adjusted EBITDA for the fourth quarter of 2011 totaled $41.9 million, a 28% increase compared to $32.8 million during the fourth quarter of 2010, and Adjusted Net Income totaled $15.6 million ($0.36 per diluted share) compared to $11.0 million ($0.26 per diluted share) during the fourth quarter of 2010, or a 38% increase. As with the increase in total revenues, the increases in Adjusted EBITDA and Adjusted Net Income per diluted share were positively affected by the incremental operations of ATMs acquired during the second half of 2011, as well as the organic revenue growth. 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 fourth quarter of 2011 totaled $8.2 million, compared to $8.0 million during the same quarter in 2010. The GAAP Net Income for the fourth quarter of 2011 was only slightly higher than the comparable quarter in the prior year due to the inclusion of $3.4 million in non-recurring acquisition-related costs, higher intangible asset amortization associated with the Company's recent acquisitions, higher stock-based compensation and a higher effective tax rate compared to the prior year, partially offset by the factors identified in the discussion of the increase in Adjusted EBITDA and Adjusted Net Income above.
FULL-YEAR RESULTS
For the year ended December 31, 2011, consolidated revenues totaled $624.6 million, representing a 17% increase from the $532.1 million in consolidated revenues generated during the year ended December 31, 2010. Of the 17% increase, 6% was attributable to the acquisitions in the second half of 2011, 8% was attributable to organic growth in ATM operating revenues, and 3% was attributable to higher equipment sales. As was the case with the Company's quarterly results, the year-over-year increase in ATM operating revenues was attributable to a combination of increased transactions per ATM, increased revenues from managed services agreements, unit growth expansion, growth in Allpoint, and increased bank branding revenues from financial institution partners.
Adjusted EBITDA totaled $156.3 million for the year ended December 31, 2011, representing a 19% increase over the $130.8 million in Adjusted EBITDA for 2010, and Adjusted Net Income totaled $58.5 million ($1.37 per diluted share) for 2011, up 37% on a per share basis from $41.2 million ($1.00 per diluted share) during 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 year ended December 31, 2011 totaled $70.2 million, compared to $41.0 million during 2010. As was the case with the quarterly results, the results for the year ended December 31, 2011 include the net impact of earnings contributions from the acquired entities, mostly offset by non-recurring acquisition-related costs. Excluding these 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. The results for the year ended December 31, 2010 include $14.4 million in non-recurring expenses associated with the Company's financing activities. In both 2011 and 2010, the Company recorded net tax benefits of $13.2 million and $17.1 million, respectively, as a result of certain tax reporting and structural changes in 2011 and the release of the Company's valuation allowances on its domestic deferred tax assets in 2010.
2012 GUIDANCE
Below is the Company's financial guidance for the year ending December 31, 2012.
Revenues of $735.0 million to $750.0 million;
Overall gross margins of approximately 31.3% to 31.9%;
Adjusted EBITDA of $178.0 million to $186.0 million;
Depreciation and accretion expense of approximately $53.5 million to $55.5 million, net of noncontrolling interests;
Cash interest expense of approximately $20.0 million to $21.5 million, net of noncontrolling interests;
Adjusted Net Income of $1.55 to $1.61 per diluted share, based on approximately 43.9 million weighted average diluted shares outstanding; and
Capital expenditures of approximately $70.0 million, net of noncontrolling interests.
The Adjusted EBITDA and Adjusted Net Income guidance excludes the impact of $10.5 million of anticipated stock-based compensation expense and $23.3 million of expected intangible asset amortization expense, both on a pre-tax basis. Additionally, this guidance is based on average foreign currency exchange rates of $1.55 U.S. to £1.00 U.K., $13.00 Mexican pesos to $1.00 U.S., and $1.00 Canadian dollar to $1.00 U.S.
LIQUIDITY
The Company continues to maintain a very strong liquidity position, with $82.0 million in available borrowing capacity under its $250.0 million revolving credit facility as of December 31, 2011. In addition, the amended credit facility can be extended to up to $325.0 million under certain conditions. The Company's outstanding indebtedness as of December 31, 2011 consisted of $200.0 million in senior subordinated notes due 2018, $166.0 million in borrowings under its revolving credit facility due 2016, and $4.9 million in equipment financing notes associated with its majority-owned Mexico subsidiary.
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, Thursday, February 2, 2012, at 4:30 p.m. Central Time (5:30 p.m. Eastern Time) to discuss its financial results for the quarter and the year ended December 31, 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 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 16, 2012, and can be accessed by calling (855) 859-2056 or (404) 537-3406 and entering 43730173 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 March 2, 2012.
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 approximately 52,900 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.
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:
the Company's financial outlook and the financial outlook of the ATM industry;
the Company's ability to respond to recent and future regulatory changes, including possible effects from the Dodd-Frank Wall Street Reform and Consumer Protection Act which could result in different behavior by consumers, retailers and banks;
the Company's ability to respond to potential reductions in the amount of interchange fees that it receives from global and regional debit networks for transactions conducted on its ATMs, including a recent announcement by a major global network that will result in lower fees earned by the Company on transactions processed over this network;
the Company's ability to provide new ATM solutions to retailers and financial institutions;
the Company's ATM vault cash rental needs, including potential liquidity issues with its vault cash providers;
the continued implementation of the Company's corporate strategy;
the Company's ability to compete successfully with new and existing competitors;
the Company's ability to renew and strengthen its existing customer relationships and add new customers;
the Company's ability to meet the service levels required by its service level agreements with its customers;
the Company's ability to pursue and successfully integrate acquisitions;
the Company's ability to successfully manage its existing international operations and to continue to expand internationally;
the Company's ability to prevent security breaches;
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 manage concentration risks with key customers, vendors and service providers;
changes in interest rates and foreign currency rates; and
the additional risks the Company is exposed to in its U.K. armored transport business.
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, 2011 and 2010
(Unaudited)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2011
2010
2011
2010
(In thousands, except share and per share information)
Revenues:
ATM operating revenues
$165,055
$132,563
$597,219
$522,900
ATM product sales and other revenues
9,127
2,186
27,357
9,178
Total revenues
174,182
134,749
624,576
532,078
Cost of revenues:
Cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization shown separately below)
110,717
89,171
396,347
351,490
Cost of ATM product sales and other revenues
7,706
1,970
23,768
8,902
Total cost of revenues
118,423
91,141
420,115
360,392
Gross profit
55,759
43,608
204,461
171,686
Operating expenses:
Selling, general, and administrative expenses
15,881
11,647
55,582
44,581
Acquisition-related expenses
3,448
—
4,747
—
Depreciation and accretion expense
12,958
11,373
47,962
42,724
Amortization expense
5,674
3,904
17,914
15,471
Loss on disposal of assets
701
807
981
2,647
Total operating expenses
38,662
27,731
127,186
105,423
Income from operations
17,097
15,877
77,275
66,263
Other expense:
Interest expense, net
5,306
4,933
20,116
26,629
Amortization of deferred financing costs and bond discounts
218
211
993
2,029
Write-off of deferred financing costs and bond discounts
—
—
—
7,296
Redemption costs for early extinguishment of debt
—
—
—
7,193
Other income
(1,062)
(705)
(804)
(878)
Total other expense
4,462
4,439
20,305
42,269
Income before income taxes
12,635
11,438
56,970
23,994
Income tax expense (benefit)
4,589
3,438
(13,176)
(17,139)
Net income
8,046
8,000
70,146
41,133
Net (loss) income attributable to noncontrolling interests
(107)
(28)
(87)
174
Net income attributable to controlling interests and available to common stockholders
$8,153
$8,028
$70,233
$40,959
Net income per common share — basic
$0.18
$0.19
$1.60
$0.98
Net income per common share — diluted
$0.18
$0.19
$1.58
$0.96
Weighted average shares outstanding — basic
42,794,563
41,023,404
42,201,491
40,347,194
Weighted average shares outstanding — diluted
43,352,237
41,822,811
42,886,780
41,059,381
Condensed Consolidated Balance Sheets
As of December 31, 2011 and 2010
December 31, 2011
December 31, 2010
(Unaudited)
(In thousands)
Assets
Current assets:
Cash and cash equivalents
$5,576
$3,189
Accounts and notes receivable, net
40,867
20,270
Inventory
3,517
1,795
Restricted cash, short-term
4,512
4,466
Current portion of deferred tax asset, net
26,902
15,017
Prepaid expenses, deferred costs, and other current assets
13,056
10,222
Total current assets
94,430
54,959
Property and equipment, net
191,331
156,465
Intangible assets, net
111,603
74,799
Goodwill
271,562
164,558
Deferred tax asset, net
23,101
715
Prepaid expenses, deferred costs, and other assets
20,774
3,819
Total assets
$712,801
$455,315
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt and notes payable
$2,317
$3,076
Current portion of other long-term liabilities
25,101
24,493
Accounts payable and other accrued and current liabilities
112,212
71,425
Total current liabilities
139,630
98,994
Long-term liabilities:
Long-term debt
368,632
251,757
Deferred tax liability, net
—
10,268
Asset retirement obligations
34,517
26,657
Other long-term liabilities
56,877
23,385
Total liabilities
599,656
411,061
Stockholders' equity
113,145
44,254
Total liabilities and stockholders' equity
$712,801
$455,315
SELECTED INCOME STATEMENT DETAIL:
Total revenues by segment:
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2011
2010
2011
2010
(In thousands)
United States
$142,438
$106,764
$501,328
$423,109
United Kingdom
25,536
21,882
97,665
82,583
Other international
6,208
6,103
25,583
26,386
Total revenues
$174,182
$134,749
$624,576
$532,078
Breakout of ATM operating revenues:
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2011
2010
2011
2010
(In thousands)
Surcharge revenues
$78,561
$65,188
$290,501
$267,713
Interchange revenues
54,180
40,686
189,587
158,343
Bank branding and surcharge-free network revenues
25,497
21,581
93,449
81,335
Managed services revenues
3,201
1,704
10,476
3,783
Other revenues
3,616
3,404
13,206
11,726
Total ATM operating revenues
$165,055
$132,563
$597,219
$522,900
Total cost of revenues by segment:
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2011
2010
2011
2010
(In thousands)
United States
$93,360
$69,922
$325,394
$277,902
United Kingdom
20,152
16,628
75,109
62,386
Other international
4,911
4,591
19,612
20,104
Total cost of revenues
$118,423
$91,141
$420,115
$360,392
Breakout of cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization):
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2011
2010
2011
2010
(In thousands)
Merchant commissions
$52,230
$41,097
$186,043
$166,377
Vault cash rental expense
11,624
9,859
40,818
38,642
Other costs of cash
15,814
12,164
55,159
46,686
Repairs and maintenance
11,815
9,485
41,474
36,307
Communications
4,835
3,940
17,563
15,514
Transaction processing
1,466
867
4,833
4,942
Stock-based compensation
134
158
903
752
Other expenses
12,799
11,601
49,554
42,270
Total cost of ATM operating revenues
$110,717
$89,171
$396,347
$351,490
Breakout of selling, general, and administrative expenses:
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2011
2010
2011
2010
(In thousands)
Employee costs
$7,585
$6,069
$27,971
$24,720
Stock-based compensation
2,194
1,275
8,421
5,284
Professional fees
2,405
1,625
7,348
5,711
Other
3,697
2,678
11,842
8,866
Total selling, general, and administrative expenses
$15,881
$11,647
$55,582
$44,581
Depreciation and accretion expense by segment:
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2011
2010
2011
2010
(In thousands)
United States
$7,906
$7,148
$28,698
$27,321
United Kingdom
4,334
3,476
16,194
12,541
Other international
718
749
3,070
2,862
Total depreciation and accretion expense
$12,958
$11,373
$47,962
$42,724
SELECTED BALANCE SHEET DETAIL:
Long-term debt:
December 31, 2011
December 31, 2010
(In thousands)
8.25% senior subordinated notes
$200,000
$200,000
Revolving credit facility
166,000
46,200
Equipment financing notes
4,949
8,633
Total long-term debt
$370,949
$254,833
Share count rollforward:
Total shares outstanding as of December 31, 2010
42,833,342
Shares repurchased
(156,254)
Shares issued — restricted stock grants and stock options exercised
1,349,855
Shares forfeited — restricted stock
(27,500)
Total shares outstanding as of December 31, 2011
43,999,443
SELECTED CASH FLOW DETAIL:
Selected cash flow statement amounts:
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2011
2010
2011
2010
(In thousands)
Cash provided by operating activities
$43,973
$32,175
$113,325
$105,168
Cash used in investing activities
(53,767)
(10,693)
(234,454)
(50,652)
Cash provided by (used in) financing activities
10,161
(21,002)
123,532
(62,150)
Effect of exchange rate changes on cash
3
86
(16)
374
Net increase (decrease) in cash and cash equivalents
For the Three and Twelve Months Ended December 31, 2011 and 2010
(Unaudited)
The following table excludes the effect of the acquisitions completed in 2011 for EDC, Access to Money, and Mr. Cash for comparative purposes:
EXCLUDING 2011 ACQUISITIONS
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2011
2010
2011
2010
Average number of transacting ATMs:
United States: Company-owned
19,832
18,471
19,318
18,272
United Kingdom
3,467
2,944
3,255
2,832
Mexico
2,874
2,947
2,897
2,867
Canada
—
—
—
—
Subtotal
26,173
24,362
25,470
23,971
United States: Merchant-owned
7,785
8,436
8,086
8,626
Average number of transacting ATMs: ATM operations
33,958
32,798
33,556
32,597
United States: Managed services (1)
4,731
3,871
4,319
3,241
United Kingdom: Managed services
21
—
18
—
Average number of transacting ATMs: Managed services
4,752
3,871
4,337
3,241
Total average number of transacting ATMs
38,710
36,669
37,893
35,838
Total transactions (in thousands):
ATM operations
132,275
107,095
491,041
413,780
Managed services
7,173
5,391
26,107
17,580
Total transactions
139,448
112,486
517,148
431,360
Total cash withdrawal transactions (in thousands):
ATM operations
80,984
64,588
300,799
253,890
Managed services
4,600
3,635
17,241
13,020
Total cash withdrawal transactions
85,584
68,223
318,040
266,910
Per ATM per month amounts (excludes managed services):
Cash withdrawal transactions
795
656
747
649
ATM operating revenues
$1,376
$1,330
$1,374
$1,327
Cost of ATM operating revenues (2)
900
891
902
891
ATM operating gross profit (2) (3)
$476
$439
$472
$436
ATM operating gross margin (2) (3)
34.6%
33.0%
34.4%
32.9%
___________________
(1) Includes 2,564 and 2,533 ATMs for the three months ended December 31, 2011 and 2010, respectively, and 2,523 and 2,535 ATMs for the twelve months ended December 31, 2011 and 2010, respectively, for which the Company only provided EFT transaction processing services.
(2) Amounts presented exclude the effect of depreciation, accretion, and amortization expense, which is presented separately in the Company's consolidated statements of operations.
(3) 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.
Key Operating Metrics — Including 2011 Acquisitions
For the Three and Twelve Months Ended December 31, 2011 and 2010
(Unaudited)
INCLUDING 2011 ACQUISITIONS
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2011
2010
2011
2010
Average number of transacting ATMs:
United States: Company-owned
24,161
18,471
21,125
18,272
United Kingdom
3,467
2,944
3,255
2,832
Mexico
2,874
2,947
2,897
2,867
Canada
342
—
105
—
Subtotal
30,844
24,362
27,382
23,971
United States: Merchant-owned
13,789
8,436
9,934
8,626
Average number of transacting ATMs: ATM operations
44,633
32,798
37,316
32,597
United States: Managed services (1)
4,731
3,871
4,319
3,241
United Kingdom: Managed services
21
—
18
—
Average number of transacting ATMs: Managed services
4,752
3,871
4,337
3,241
Total average number of transacting ATMs
49,385
36,669
41,653
35,838
Total transactions (in thousands):
ATM operations
149,837
107,095
516,564
413,780
Managed services
7,173
5,391
26,107
17,580
Total transactions
157,010
112,486
542,671
431,360
Total cash withdrawal transactions (in thousands):
ATM operations
93,413
64,588
318,615
253,890
Managed services
4,600
3,635
17,241
13,020
Total cash withdrawal transactions
98,013
68,223
335,856
266,910
Per ATM per month amounts (excludes managed services):
Cash withdrawal transactions
698
656
712
649
ATM operating revenues
$1,209
$1,330
$1,310
$1,327
Cost of ATM operating revenues (2)
808
891
866
891
ATM operating gross profit (2) (3)
$401
$439
$444
$436
ATM operating gross margin (2) (3)
33.2%
33.0%
33.9%
32.9%
___________________
(1) Includes 2,564 and 2,533 ATMs for the three months ended December 31, 2011 and 2010, respectively, and 2,523 and 2,535 ATMs for the twelve months ended December 31, 2011 and 2010, respectively, for which the Company only provided EFT transaction processing services.
(2) Amounts presented exclude the effect of depreciation, accretion, and amortization expense, which is presented separately in the Company's consolidated statements of operations.
(3) 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.
Key Operating Metrics — Ending Machine Count
As of December 31, 2011 and 2010
(Unaudited)
As of December 31,
2011
2010
Ending number of transacting ATMs:
United States: Company-owned
24,590
18,828
United Kingdom
3,505
2,963
Mexico
2,847
2,937
Canada
512
—
Subtotal
31,454
24,728
United States: Merchant-owned
16,651
8,388
Ending number of transacting ATMs: ATM operations
48,105
33,116
United States: Managed services (1)
4,759
3,854
United Kingdom: Managed services
22
—
Ending number of transacting ATMs: Managed services
4,781
3,854
Total ending number of transacting ATMs
52,886
36,970
___________________
(1) Includes 2,590 and 2,508 ATMs as of December 31, 2011 and 2010, respectively for which the Company only provided EFT transaction processing services.
Reconciliation of Net Income Attributable to Controlling Interests to Adjusted EBITDA and Adjusted Net Income
For the Three and Twelve Months Ended December 31, 2011 and 2010
(Unaudited)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2011
2010
2011
2010
(In thousands, except share and per share amounts)
Net income attributable to controlling interests
$8,153
$8,028
$70,233
$40,959
Adjustments:
Interest expense, net
5,306
4,933
20,116
26,629
Amortization of deferred financing costs and bond discounts
218
211
993
2,029
Write-off of deferred financing costs and bond discounts
—
—
—
7,296
Redemption costs for early extinguishment of debt
—
—
—
7,193
Income tax expense (benefit)
4,589
3,438
(13,176)
(17,139)
Depreciation and accretion expense
12,958
11,373
47,962
42,724
Amortization expense
5,674
3,904
17,914
15,471
EBITDA
$36,898
$31,887
$144,042
$125,162
Add back:
Loss on disposal of assets (1)
701
807
981
2,647
Other income (2)
(1,070)
(760)
(849)
(1,004)
Noncontrolling interests (3)
(431)
(582)
(1,897)
(1,984)
Stock-based compensation expense (4)
2,315
1,423
9,283
5,998
Acquisition-related costs (5)
3,448
—
4,747
—
Adjusted EBITDA
$41,861
$32,775
$156,307
$130,819
Less:
Interest expense, net (4)
5,243
4,824
19,771
26,161
Depreciation and accretion expense (4)
12,613
11,006
46,465
41,322
Adjusted pre-tax income
24,005
16,945
90,071
63,336
Income tax expense (at 35%) (6)
8,402
5,931
31,525
22,168
Adjusted Net Income
$15,603
$11,014
$58,546
$41,168
Adjusted Net Income per share
$0.36
$0.27
$1.39
$1.02
Adjusted Net Income per diluted share
$0.36
$0.26
$1.37
$1.00
Weighted average shares outstanding — basic
42,794,563
41,023,404
42,201,491
40,347,194
Weighted average shares outstanding — diluted
43,352,237
41,822,811
42,886,780
41,059,381
_________________
(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, Access to Money and Mr. Cash.
(6)35% represents the Company's estimated long-term, cross-jurisdictional effective tax rate.
Reconciliation of Free Cash Flow
For the Three and Twelve Months Ended December 31, 2011 and 2010
(Unaudited)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2011
2010
2011
2010
(In thousands)
Cash provided by operating activities
$43,973
$32,175
$113,325
$105,168
Payments for capital expenditures:
Cash used in investing activities, excluding acquisitions
(29,827)
(10,693)
(66,886)
(50,652)
Capital expenditures financed by direct debt
—
—
—
(542)
Total payments for capital expenditures
(29,827)
(10,693)
(66,886)
(51,194)
Free cash flow
$14,146
$21,482
$46,439
$53,974
Reconciliation of Estimated Net Income to EBITDA, Adjusted EBITDA, and Adjusted Net Income
For the Year Ending December 31, 2012
(Unaudited)
Estimated Range
Full Year 2012
(In millions, except per share information)
Net income
$41.0
--
$43.9
Adjustments:
Interest expense, net
20.1
--
21.6
Amortization of deferred financing costs
1.0
--
1.0
Income tax expense
25.4
--
27.5
Depreciation and accretion expense
55.5
--
57.0
Amortization expense
23.3
--
23.3
EBITDA
$166.3
--
$174.3
Add back:
Noncontrolling interests
(1.4)
--
(1.4)
Loss on disposal of assets
0.5
--
0.5
Stock-based compensation expense
10.5
--
10.5
Other expense
2.1
--
2.1
Adjusted EBITDA
$178.0
--
$186.0
Less:
Interest expense, net (1)
20.0
--
21.5
Depreciation and accretion expense (1)
53.5
--
55.5
Income tax expense (at 35%) (2)
36.6
--
38.2
Adjusted Net Income
$67.9
--
$70.8
Adjusted Net Income per diluted share
$1.55
--
$1.61
Weighted average shares outstanding — diluted
43.9
--
43.9
__________________
(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.
