EXHIBIT 99.1
Cardtronics Announces Fourth Quarter 2007 Financial Results
HOUSTON, Feb. 28, 2008 (PRIME NEWSWIRE) -- Cardtronics, Inc. (Nasdaq:CATM), the world's largest owner and operator of ATMs, today announced its financial and operational results for the quarter ended December 31, 2007.
Highlights for the fourth quarter include:
* Consolidated revenues of $116.0 million, up 55% from the fourth
quarter of 2006
* Adjusted EBITDA of $18.3 million, up 32% from the fourth quarter
of 2006
* Significant improvements in key operating metrics versus the fourth
quarter of 2006:
o Average number of transacting ATMs increased by 25%
o Withdrawal transactions per ATM per month increased by 33%
o ATM operating gross profit per ATM per month increased by 18%
* Completion of the Company's initial public offering of 12 million
shares of its common stock for $110.1 million of net proceeds,
which were used to pay down debt previously outstanding under the
Company's revolving credit facility
* Significant international expansion, including net growth during
the quarter of 240 machines, or 13%, in the United Kingdom, and
315 machines, or 31%, in Mexico
A significant factor in comparing Cardtronics' fourth quarter 2007 results with its fourth quarter 2006 results is the Company's acquisition of the financial services business of 7-Eleven, Inc. (the "7-Eleven ATM Transaction"), the results of which have been included in the Company's consolidated financial statements beginning on July 20, 2007.
"2007 was a year of major accomplishments for Cardtronics," remarked Jack Antonini, President and Chief Executive Officer. "In July, we completed our largest acquisition to date, acquiring the ATM and advanced-functionality business of 7-Eleven, and in December, we completed the initial public offering of our common stock. In addition, we continued to make substantial progress on a number of our key strategic initiatives, including the significant expansion of our presence in both the United Kingdom and Mexico, the signing of bank branding agreements covering 1,900 of our domestic ATMs, and the conversion of over 13,000 of our ATMs to our in-house transaction processing switch."
FOURTH QUARTER RESULTS
For the fourth quarter of 2007, revenues totaled $116.0 million, representing a 55% increase over the $74.8 million in revenues recorded during the fourth quarter of 2006. This year-over-year increase was primarily attributable to the 7-Eleven ATM Transaction, which resulted in $36.1 million of incremental revenues during the fourth quarter of 2007.
Adjusted EBITDA totaled $18.3 million for the fourth quarter of 2007 compared to $13.9 million for the fourth quarter of 2006. This 32% increase was primarily attributable to the 7-Eleven ATM Transaction. Adjusted Net Income decreased to $0.6 million ($0.02 per share) from the $2.2 million ($0.10 per share) earned during the fourth quarter of 2006. The year-over-year decrease was primarily the result of incremental cash interest associated with higher debt levels during 2007, incremental depreciation expense due to the increase in the number of machines in the Company's portfolio, and $2.9 million of losses related to the Company's advanced-functionality operations. Specific costs excluded from Adjusted EBITDA and Adjusted Net Income are detailed in a reconciliation included at the end of this press release.
The GAAP net loss for the fourth quarter totaled $7.4 million, reflecting the additional expense amounts discussed above as well as incremental costs incurred to support key initiatives, including the Company's in-house processing conversion efforts and Triple-DES upgrades. The net loss for the quarter also includes a $1.4 million income tax charge associated with valuation allowances against the Company's various deferred tax assets. The $43.5 million net loss available to common shareholders for the fourth quarter of 2007 reflects a one-time, non-cash charge of $36.0 million related to the conversion of the Company's Series B redeemable convertible preferred stock into shares of its common stock in conjunction with the Company's initial public offering. This charge will not recur in the future.
FULL YEAR RESULTS
Revenues totaled $378.3 million for the year ended December 31, 2007, representing a 29% increase over the $293.6 million in revenues recorded during 2006. As was the case with the Company's quarterly results, the year-over-year increase in revenues was primarily attributable to the acquired financial services business of 7-Eleven.
Adjusted EBITDA totaled $60.9 million for the year, representing a 15% increase over the $52.9 million in Adjusted EBITDA for 2006. The year-to-date increase was primarily attributable to the 7-Eleven ATM Transaction. Adjusted Net Income totaled $3.0 million ($0.11 per share) for 2007, which was lower than the $7.3 million ($0.32 per share) generated in 2006. This decrease was attributable to incremental cash interest and depreciation expense during 2007, as well as $5.0 million of losses from the Company's advanced-functionality operations.
The GAAP net loss for the year ended December 31, 2007 totaled $27.1 million, reflecting the additional interest and depreciation expense discussed above as well as the incremental costs associated with the Company's in-house processing conversion efforts and Triple-DES upgrades. The year-to-date 2007 net loss also includes $5.7 million (pre-tax) of impairment charges taken during 2007, the majority of which served to write-off the remaining unamortized intangible asset value associated with a single merchant contract acquired in 2004, and an income tax charge of $4.8 million related to valuation allowances against deferred tax assets. The $63.4 million net loss available to common shareholders for the year ended December 31, 2007, reflects, as mentioned above, a one-time, non-cash charge of $36.0 million related to the conversion of the Company's Series B redeemable convertible preferred stock into shares of its common stock as part of the Company's initial public offering,
2008 GUIDANCE
Below is the Company's financial guidance for fiscal year 2008.
* Revenues of $480.0 million to $505.0 million,
* Overall gross margins of around 24.5%,
* Adjusted EBITDA of $86.0 million to $90.0 million,
* Depreciation and accretion expense of $38.0 million to
$39.0 million,
* Interest expense of $29.0 million to $30.0 million,
* Adjusted net income of $0.30 to $0.35 per diluted share, based on
a range of 39.5 million to 40.0 million shares outstanding, and
* Capital expenditures of $48.0 million to $50.0 million, net of
minority interest.
These amounts include the estimated revenues and losses associated with the Company's advanced-functionality operations. The Company anticipates that pre-tax losses from these operations will be in the range of $3.0 million to $5.0 million for 2008, and that such operations will achieve breakeven results during the second half of 2008. Additionally, the guidance excludes the impact of certain one-time items as well as anticipated stock-based compensation expense and approximately $17.5 million of intangible asset amortization expense.
DISCLOSURE OF NON-GAAP FINANCIAL INFORMATION
EBITDA, Adjusted EBITDA, and Adjusted Net Income are non-GAAP financial measures provided as a complement to results prepared in accordance with accounting principles generally accepted within the United States of America. Management believes that the presentation of these measures and the identification of unusual, non-recurring, or non-cash items enhance an investor's understanding of the underlying trends in the Company's business and provide for better comparability between periods in different years.
Adjusted EBITDA excludes depreciation, accretion, and amortization expense as these amounts can vary substantially from company to company within its industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Additionally, Adjusted EBITDA and Adjusted Net Income exclude certain non-recurring items and, therefore, may not be comparable to similarly titled measures employed by other companies. The non-GAAP financial measures presented herein should not be considered in isolation or as a substitute for operating income, net income, cash flows from operating, investing, or financing activities, or other income or cash flow statement data prepared in accordance with GAAP.
A reconciliation of net income (loss) to EBITDA, Adjusted EBITDA, and Adjusted Net Income is presented in tabular form elsewhere in this press release.
ABOUT CARDTRONICS
Headquartered in Houston, Texas, Cardtronics is the world's largest owner/operator of ATMs. Cardtronics operates over 32,300 ATMs across its portfolio, with ATMs in every major U.S. market, approximately 2,200 ATMs throughout the United Kingdom, and over 1,300 ATMs in Mexico. Major merchant clients include 7-Eleven(r), A&P(r), Chevron(r), Costco(r), CVS(r)/pharmacy, Duane Reade(r), ExxonMobil(r), Rite Aid(r), Safeway(r), Sunoco(r), Target(r), and Walgreens(r). Complementing its ATM operations, Cardtronics works with financial institutions of all sizes to provide their customers with convenient cash access and deposit capabilities through ATM branding, surcharge-free programs, and image deposit. Over 10,000 Cardtronics owned and operated ATMs are currently under contract to feature bank brands. For more information, please visit the Company's website at http://www.cardtronics.com/.
The Cardtronics logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=991
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give our current expectations or forecasts of future events, future financial performance, strategies, expectations, competitive environment, regulation, and availability of resources. Many of the forward-looking statements contained in this release relate to our fourth quarter financial results and the underlying business events which generated those results. They include, among other things, trends within the ATM industry; proposed new programs and initiatives; expectations that regulatory developments or other matters will not have a material adverse effect on our consolidated financial position, results of operations or liquidity; statements concerning projections, predictions, expectations, estimates or forecasts as to our business, financial and operational results and future economic performance; and statements of management's goals and objective s and other similar expressions concerning matters that are not historical facts. Such statements are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements, including risks and uncertainties relating to trends in ATM usage and alternative payment options; changes in the ATM transaction fees the Company receives; decreases in the number of ATMs that can be placed with the Company's top merchants; the Company's reliance on third parties for cash management and other key outsourced services; changes in interest rates; declines in, or system failures that interrupt or delay, ATM transactions; the Company's ability to continue to execute its growth strategies; risks associated with the acquisition of other ATM networks; increased industry competition; increased regulation and regulatory uncertainty; changes in ATM technology; changes in foreign currency rates; and general and economic conditions .
You should not read forward-looking statements as a guarantee of future performance or results. They will not necessarily be accurate indications of the times at or by which such performance or results will be achieved. Forward-looking statements speak only as of the date the statements are made and are based on information available at the time those statements are made and/or management's good faith belief as of that time with respect to future events. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information. Actual results may differ materially from such forward-looking statements for a number of reasons, including those set forth in the Company's filings with the SEC, including the Company's Annual Report on Form 10-K for the year ended December 31, 2006, the Company's Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other reports that have been filed with the SEC during 2007 and 2008.
Statements of Operations
For the Three and Twelve Months ended December 31, 2007 and 2006
(unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
---------------------- ----------------------
2007 2006 2007 2006
---------- ---------- ---------- ----------
(in thousands, except share and
per share information)
Revenues:
ATM operating
revenues $ 112,217 $ 71,443 $ 364,071 $ 280,985
Vcom operating
revenues 566 -- 1,251 --
ATM product sales
and other revenues 3,171 3,402 12,976 12,620
---------- ---------- ---------- ----------
Total revenues 115,954 74,845 378,298 293,605
Cost of revenues:
Cost of ATM operating
revenues (exclusive
of depreciation,
accretion, and
amortization shown
separately below) 84,240 52,625 275,286 209,850
Cost of Vcom
operating revenues 3,421 -- 6,065 --
Cost of ATM product
sales and other
revenues 2,746 3,301 11,942 11,443
---------- ---------- ---------- ----------
Total cost of
revenues 90,407 55,926 293,293 221,293
Gross profit 25,547 18,919 85,005 72,312
Operating expenses:
Selling, general, and
administrative
expenses:
Stock-based
compensation 242 228 963 828
Other selling,
general, and
administrative
expenses 8,130 5,730 28,394 20,839
Depreciation and
accretion expense 8,318 4,523 26,859 18,595
Amortization expense 4,808 2,373 18,870 11,983
---------- ---------- ---------- ----------
Total operating
expenses 21,498 12,854 75,086 52,245
Income from
operations 4,049 6,065 9,919 20,067
Other (income)
expense:
Interest expense, net 9,086 5,950 29,523 23,143
Amortization and
write-off of
deferred financing
costs and bond
discounts 486 353 1,641 1,929
Minority interest in
subsidiary (90) (97) (376) (225)
Other (income) loss 548 (4,021) 1,585 (4,761)
---------- ---------- ---------- ----------
Total other expense 10,030 2,185 32,373 20,086
Income (loss) before
income taxes (5,981) 3,880 (22,454) (19)
Income tax expense 1,424 1,729 4,636 512
---------- ---------- ---------- ----------
Net income (loss) (7,405) 2,151 (27,090) (531)
Preferred stock
conversion and
accretion (1) 36,072 66 36,272 265
---------- ---------- ---------- ----------
Net income (loss)
available to common
shareholders $ (43,477) $ 2,085 $ (63,362) $ (796)
========== ========== ========== ==========
Net income (loss)
per common share:
Basic $ (2.22) $ 0.15 $ (4.11) $ (0.06)
========== ========== ========== ==========
Diluted $ (2.22) $ 0.09 $ (4.11) $ (0.06)
========== ========== ========== ==========
Weighted average
shares outstanding:
Basic 19,628,308 13,836,697 15,423,744 13,904,505
========== ========== ========== ==========
Diluted 19,628,308 22,865,634 15,423,744 13,904,505
========== ========== ========== ==========
(1) The quarterly and full-year amounts for 2007 include a
$36.0 million one-time, non-cash charge associated with the
conversion of the Company's Series B redeemable convertible
preferred stock into shares of the Company's common stock in
conjunction with the Company's initial public offering in
December 2007.
Consolidated Balance Sheets
As of December 31, 2007 and 2006
(unaudited)
December 31
----------------------
2007 2006
---------- ----------
(in thousands)
Assets
Current assets:
Cash and cash equivalents $ 13,439 $ 2,718
Accounts and notes receivable, net 23,248 14,891
Inventory 2,355 4,444
Restricted cash, short-term 5,900 883
Prepaid, deferred costs, and other
current assets 11,754 15,451
---------- ----------
Total current assets 56,696 38,387
Property and equipment, net 163,912 86,668
Intangible assets, net 130,901 67,763
Goodwill 235,185 169,563
Prepaid and other assets 4,502 5,375
---------- ----------
Total assets $ 591,196 $ 367,756
========== ==========
Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
Current portion of long-term debt $ 882 $ 194
Current portion of capital lease
obligations 1,147 --
Current portion of other long-term
liabilities 16,201 2,501
Accounts payable and other accrued and
current liabilities 104,909 51,256
---------- ----------
Total current liabilities 123,139 53,951
Long-term liabilities:
Long-term debt, net of current portion 307,733 252,701
Capital lease obligations, net of current
portion 982 --
Deferred tax liability, net 11,391 7,625
Asset retirement obligations 17,448 9,989
Other long-term liabilities and minority
interest in subsidiary 23,392 4,064
---------- ----------
Total liabilities 484,085 328,330
Redeemable convertible preferred stock -- 76,594
Stockholders' equity (deficit) 107,111 (37,168)
---------- ----------
Total liabilities and stockholders'
equity (deficit) $ 591,196 $ 367,756
========== ==========
Key Operating Metrics
Three and Twelve Months Ended December 31, 2007 and 2006
(unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
---------------------- ----------------------
2007 2006 2007 2006
---------- ---------- ---------- ----------
Average number of
transacting ATMs:
United States:
Company-owned 11,672 11,549 11,563 11,265
United States:
Merchant-owned 11,392 12,205 11,632 13,016
United States:
7-Eleven Financial
Services
Business (1) 5,626 -- 2,585 --
United Kingdom 2,060 1,334 1,718 1,194
Mexico 1,191 329 784 303
---------- ---------- ---------- ----------
Total average
number of
transacting ATMs 31,941 25,417 28,282 25,778
========== ========== ========== ==========
Monthly withdrawal
transactions per ATM 546 411 490 404
Total withdrawal
transactions
(in thousands) 52,314 31,322 166,248 125,078
Total transactions
(in thousands) 80,412 44,269 246,595 172,808
Per ATM per month
amounts:
ATM operating
revenues $ 1,171 $ 937 $ 1,073 $ 908
Cost of ATM operating
revenues (2) 879 690 811 678
---------- ---------- ---------- ----------
ATM operating
gross profit (3) $ 292 $ 247 $ 262 $ 230
========== ========== ========== ==========
ATM operating gross
margin (2) 24.9% 26.4% 24.4% 25.3%
Adjusted per ATM per
month amounts:
ATM operating
revenues $ 1,171 $ 937 $ 1,073 $ 908
Adjusted cost of ATM
operating
revenues (2) (4) 870 679 801 675
---------- ---------- ---------- ----------
Adjusted ATM
operating gross
profit (3) $ 301 $ 258 $ 272 $ 233
========== ========== ========== ==========
Adjusted ATM
operating gross
margin (2) 25.7% 27.5% 25.3% 25.7%
Capital expenditures,
excluding
acquisitions
(in thousands) $ 24,415 $ 9,298 $ 68,645 $ 35,211
(1) The 2007 year-to-date average for the 7-Eleven Financial Services
Business represents the 12-month average of ATMs and Vcom units
under Cardtronics' ownership. The low figure is due to the fact
that Cardtronics did not acquire the portfolio until July 20,
2007. The actual average number of transacting ATMs from the
acquisition date to December 31, 2007 was 5,602.
(2) Amounts presented exclude the effects of depreciation, accretion,
and amortization expense, which are presented separately in our
consolidated statements of operations.
(3) ATM operating gross profit is a measure of profitability that
uses only the revenue and expenses that relate to operating the
ATMs in our portfolio. Revenues and expenses from
advanced-functionality services, ATM equipment sales, and other
ATM-related services are not included.
(4) Adjusted cost of ATM operating revenues excludes the same cost of
revenues adjustments as those used to calculate Adjusted EBITDA.
Reconciliation of Net Income (Loss) to EBITDA, Adjusted EBITDA,
and Adjusted Net Income
Three and Twelve Months Ended December 31, 2007 and 2006
(unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
---------------------- ----------------------
2007 2006 2007 2006
---------- ---------- ---------- ----------
(in thousands, except per share amounts)
Net income (loss) $ (7,405) $ 2,151 $ (27,090) $ (531)
Plus:
Interest expense,
net 9,086 5,950 29,523 23,143
Amortization and
write-off of
deferred financing
costs and bond
discounts 486 353 1,641 1,929
Income tax expense 1,424 1,729 4,636 512
Depreciation and
accretion expense 8,318 4,523 26,859 18,595
Amortization expense 4,808 2,373 18,870 11,983
---------- ---------- ---------- ----------
EBITDA $ 16,717 $ 17,079 $ 54,439 $ 55,631
========== ========== ========== ==========
Add back:
Other (income)
loss (1) 548 (4,021) 1,585 (4,761)
Minority interest (115) (22) (182) (61)
Other cost of
revenues
adjustments (2) 874 870 3,323 1,123
Other selling,
general, and
administrative
expense
adjustments (3) 248 (15) 1,757 1,003
---------- ---------- ---------- ----------
Adjusted EBITDA $ 18,272 $ 13,891 $ 60,922 $ 52,935
---------- ---------- ---------- ----------
Less:
Interest expense,
net 9,086 5,950 29,523 23,143
Depreciation and
accretion expense 8,318 4,523 26,859 18,595
Income tax expense
(at 35%) 304 1,196 1,589 3,919
---------- ---------- ---------- ----------
Adjusted Net Income $ 564 $ 2,222 $ 2,951 $ 7,278
========== ========== ========== ==========
Adjusted Net Income
per Diluted Share $ 0.02 $ 0.10 $ 0.11 $ 0.32
========== ========== ========== ==========
(1) Other loss for the quarter and year ended December 31, 2007
includes $0.5 million and $2.0 million, respectively, in losses
incurred in connection with the deinstallation of ATMs during the
period. These losses were partially offset for the year by
$0.6 million in gains on the sale of equity securities awarded to
the Company pursuant to the bankruptcy plan of reorganization of
Winn-Dixie. Other income for the quarter and year ended
December 31, 2006 consists primarily of $4.8 million in other
income related to settlement proceeds received from Winn-Dixie.
(2) Other cost of revenues adjustments include the following for the
periods indicated:
Three Months Ended Twelve Months Ended
December 31, December 31,
---------------------- ----------------------
2007 2006 2007 2006
---------- ---------- ---------- ----------
(in thousands)
Stock-based
compensation expense $ 40 $ 16 $ 87 $ 51
Triple-DES related
costs 24 722 472 905
In-house processing
conversion costs 684 -- 2,419 --
Other 126 132 345 167
---------- ---------- ---------- ----------
$ 874 $ 870 $ 3,323 $ 1,123
========== ========== ========== ==========
(3) Other selling, general, and administrative expense adjustments
include the following for the periods indicated:
Three Months Ended Twelve Months Ended
December 31, December 31,
---------------------- ----------------------
2007 2006 2007 2006
---------- ---------- ---------- ----------
(in thousands)
Stock-based
compensation expense $ 242 $ 228 $ 963 $ 828
Litigation settlement
costs -- -- 748 --
Other 6 (243) 46 175
---------- ---------- ---------- ----------
$ 248 $ (15) $ 1,757 $ 1,003
========== ========== ========== ==========
CONTACT: Cardtronics, Inc.
J. Chris Brewster, Chief Financial Officer
281-892-0128
cbrewster@cardtronics.com
Tres Thompson, Chief Accounting Officer
281-892-0137
tthompson@cardtronics.com
