EXHIBIT 99.1
Cardtronics Announces Fourth Quarter and Full-Year 2014 Results - Surpasses $1 Billion in Annual Revenues
HOUSTON, Feb. 4, 2015 (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, 2014.
Key financial statistics in the fourth quarter of 2014 as compared to the fourth quarter of 2013 include:
- Total revenues of $283.9 million, up 17% from $241.9 million.
- ATM operating revenues of $260.8 million, up 11% from $234.6 million.
- Adjusted Net Income per diluted share of $0.64, up 31% from $0.49.
- Adjusted EBITDA of $65.6 million, up 15% from $57.3 million.
- Adjusted Gross Profit Margin of 33.0% up from 32.5%.
- GAAP net income of $5.5 million or $0.12 per diluted share, compared to $7.5 million net income or $0.16 per diluted share. GAAP net income was negatively impacted in the fourth quarter of 2014 by higher intangible asset amortization expense and a higher GAAP income tax expense compared to the fourth quarter of last year.
"We had a very busy fourth quarter, which was highlighted by closing of the Welch and Sunwin acquisitions and the Co-op Food ATM placement contract. We are very excited about the new business and expect significant contributions in 2015 and beyond, as we fully realize the potential of those recent acquisitions," said Steve Rathgaber, the company's chief executive officer. "2014 was another great year for Cardtronics in which we surpassed the $1 billion revenue mark and continued to grow the business profitably, which is a reflection of our formula for success - core business execution and expansion through smart acquisitions."
RECENT HIGHLIGHTS
- Commenced migration of the Co-op Food ATM estate to our U.K. business, with a total of over 1,900 high-transacting ATM locations anticipated to be completely migrated by the summer of 2015. We also expect to install additional ATMs in a majority of the 800 Co-op Food locations that do not currently have ATMs.
- Expanded our relationship with Waitrose / John Lewis stores in the U.K. to add an additional 300 plus ATM sites in 2015.
- Extended our relationship with The Pantry, a leading convenience store chain, for which we manage and operate more than 1,400 ATMs.
- Completed the acquisition of Sunwin Services Group ("Sunwin") in the U.K., Sunwin provides cash logistics, ATM maintenance, and other services.
- Closed the acquisition of Welch ATM, a leading ATM operator of approximately 26,000 ATMs in the United States.
- Expanded a relationship with PNC Bank to brand 95 additional locations in the southeast United States.
- Renewed a relationship with First Data's Star network to allow Star surcharge-free program member financial institutions access to our Allpoint Network's surcharge-free ATMs.
- Completed a five year contract renewal with Global Cash Card, a leading provider of custom pay card solutions.
- Extended our existing relationship to become the sole ATM supplier to a leading fuel and convenience store operator in the U.K., taking on an additional 75 sites to increase the total ATM count with this operator to over 300 ATMs.
Please refer to the "Disclosure of Non-GAAP Financial Information" contained later in this press release for definitions of Adjusted EBITDA, Adjusted Net Income, Adjusted Gross Profit Margin, Adjusted Net Income per diluted share and Free Cash Flow. For additional financial information, including reconciliations to comparable accounting principles generally accepted in the United States of America ("GAAP"), please refer to the supplemental schedules of selected financial information at the end of this press release.
FOURTH QUARTER RESULTS
Consolidated revenues totaled $283.9 million for the fourth quarter of 2014, representing a 17% increase from the $241.9 million generated during the fourth quarter of 2013. Our ATM operating revenues were up 11% from the fourth quarter of 2013, driven both by acquisitions and organic growth. For the quarter, we achieved an organic growth rate in ATM operating revenues of 6% on a constant-currency basis. ATM product sales and other revenues were $23.1 million, up from $7.4 million in 2013, with the majority of the year-over-year increase attributable to the recently acquired Sunwin business in the U.K. which provides cash in transit, ATM maintenance and other services.
Adjusted EBITDA for the fourth quarter of 2014 totaled $65.6 million, compared to $57.3 million during the fourth quarter of 2013, and Adjusted Net Income totaled $29.0 million ($0.64 per diluted share) compared to $21.7 million ($0.49 per diluted share) during the fourth quarter of 2013. The increases in Adjusted EBITDA and Adjusted Net Income per diluted share were primarily driven by the Company's revenue growth. Adjusted Net Income was also positively impacted in the quarter by lower depreciation expense, which was down approximately $0.7 million from the prior year, as a result of certain assets becoming fully depreciated and a change in an estimate regarding asset retirement obligations. 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 2014 totaled $5.5 million, compared to GAAP net income of $7.5 million during the fourth quarter of 2013. The decrease in GAAP net income from the fourth quarter of 2013 was primarily due to an increase in amortization expense related to intangible assets acquired during 2014 and a higher income tax rate.
Effects of foreign currency exchange rate movements had a slightly negative impact on reported consolidated revenues, Adjusted EBITDA and Adjusted Net Income per diluted share during the quarter.
FULL - YEAR RESULTS
For the year ended December 31, 2014, consolidated revenues totaled $1.05 billion, representing a 20% increase from the $876.5 million generated during the same period in 2013. Of the 20% year-over-year increase, 13% was driven by revenues attributable to businesses acquired over the past year, with the remaining 7% increase attributable to organic growth from new and existing merchants and financial institution customers.
Adjusted EBITDA totaled $253.9 million for the year ended December 31, 2014, representing a 16% increase over the $218.8 million in Adjusted EBITDA for the same period in 2013. Adjusted Net Income totaled $108.0 million ($2.41 per diluted share) for the year ended December 31, 2014, up 25% on a per share basis from $86.2 million ($1.93 per diluted share) during the same period in 2013. The increases in both Adjusted EBITDA and Adjusted Net Income were primarily due to year-over-year-revenue growth.
GAAP net income for the year ended December 31, 2014 totaled $37.1 million, compared to $23.8 million during 2013. The increase in GAAP net income from the year ended December 31, 2013 was primarily due to an increase in gross margin attributable to higher revenues and lower income tax expense, partially offset by certain debt retirement costs and higher intangible asset amortization in 2014.
2015 GUIDANCE
Below is the Company's financial guidance for the year ending December 31, 2015:
- Revenues of $1.17 billion to $1.20 billion;
- Gross Profit Margin of approximately 33.0% to 33.5%;
- Adjusted EBITDA of $293 million to $302 million;
- Depreciation and accretion expense of approximately $91 million to $93 million, net of noncontrolling interests;
- Cash interest expense of approximately $20 million to $21 million, net of noncontrolling interests;
- Adjusted Net Income per diluted share of $2.74 to $2.83, based on approximately 45.2 million weighted average diluted shares outstanding; and
- Capital expenditures of approximately $140 million to $150 million.
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 $1.50 U.S. to £1.00 U.K., $14.75 Mexican pesos to $1.00 U.S., $1.00 Canadian dollar to $0.825 U.S., and €1.00 Euros to $1.15 U.S. This guidance also assumes that we continue operations at existing economic terms under our material customer contracts.
LIQUIDITY
The Company continues to maintain a strong liquidity position, with $238 million in available borrowing capacity under its $375 million revolving credit facility as of December 31, 2014. The Company's outstanding indebtedness as of December 31, 2014 consisted of $250 million in senior notes due 2022, $288 million convertible senior notes due 2020 (of which $225 million is recorded as long-term debt on our balance sheet, with the remaining balance in additional paid-in capital), and $137 million in borrowings under its revolving credit facility due 2019.
DISCLOSURE OF NON-GAAP FINANCIAL INFORMATION
Adjusted EBITDA, Adjusted Net Income, Adjusted Gross Profit Margin, 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 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 acquisition-related expenses, certain other non-operating and nonrecurring costs, loss 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 Gross Profit Margin is calculated excluding certain nonrecurring costs from the cost of ATM operating revenues. Adjusted Net Income represents net income computed in accordance with GAAP, before amortization of intangible assets, loss on disposal of assets, stock-based compensation expense, certain other expense (income) amounts, nonrecurring expenses, and acquisition-related expenses, and uses an assumed tax rate of 32% for the three and twelve months ended December 31, 2014, 35% through June 30, 2013 and 33.5% from July 1, 2013 through December 31, 2013, with certain adjustments for noncontrolling interests. Adjusted EBITDA %, Adjusted Pre-tax Income %, and Adjusted Net Income % are calculated by taking the respective non-GAAP financial measures over GAAP total revenues. 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 excludes 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.
The non-GAAP financial measures presented herein should not be considered in isolation or as a substitute for operating income, gross profit margin, 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, Wednesday, February 4, 2015, at 4:00 p.m. Central Time (5:00 p.m. Eastern Time) to discuss its financial results for the quarter and year ended December 31, 2014. 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 Wednesday, February 18, 2015, and can be accessed by calling (855) 859-2056 or (404) 537-3406 and entering 68999748 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 28, 2015.
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 owns/operates approximately 110,200 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.
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 "anticipate," "believe," "estimate," "expect," "future," "will" 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 and future economic performance, and 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;
- 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 successfully manage its existing international operations and to continue to expand internationally;
- the Company's ability to prevent thefts of cash and data 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;
- the Company's ability to successfully implement 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, 2014 and 2013 |
| (Unaudited) |
| | | | | |
| | | | | |
| | Three Months Ended | Twelve Months Ended |
| | December 31, | December 31, |
| | 2014 | 2013 | 2014 | 2013 |
| | (In thousands, except share and per share information) |
| Revenues: | | | | |
| ATM operating revenues | $ 260,795 | $ 234,559 | $ 1,007,765 | $ 854,196 |
| ATM product sales and other revenues | 23,078 | 7,386 | 47,056 | 22,290 |
| Total revenues | 283,873 | 241,945 | 1,054,821 | 876,486 |
| Cost of revenues: | | | | |
| Cost of ATM operating revenues (excludes depreciation, accretion, and amortization of intangible assets shown separately below) | 168,905 | 156,598 | 659,350 | 573,959 |
| Cost of ATM product sales and other revenues | 21,262 | 7,021 | 44,698 | 21,328 |
| Total cost of revenues | 190,167 | 163,619 | 704,048 | 595,287 |
| Gross profit | 93,706 | 78,326 | 350,773 | 281,199 |
| Operating expenses: | | | | |
| Selling, general, and administrative expenses | 33,334 | 25,598 | 113,470 | 84,592 |
| Acquisition-related expenses | 5,022 | 7,858 | 18,050 | 15,400 |
| Depreciation and accretion expense | 18,730 | 19,424 | 75,622 | 68,480 |
| Amortization of intangible assets | 11,121 | 7,509 | 35,768 | 27,336 |
| Loss on disposal of assets | 1,562 | 2,321 | 3,224 | 2,790 |
| Total operating expenses | 69,769 | 62,710 | 246,134 | 198,598 |
| Income from operations | 23,937 | 15,616 | 104,639 | 82,601 |
| Other expense (income): | | | | |
| Interest expense, net | 4,609 | 5,585 | 20,776 | 21,155 |
| Amortization of deferred financing costs and note discounts | 2,694 | 1,196 | 13,036 | 1,931 |
| Redemption costs for early extinguishment of debt | -- | -- | 9,075 | -- |
| Other expense (income) | 1,949 | (120) | (1,616) | (3,150) |
| Total other expense | 9,252 | 6,661 | 41,271 | 19,936 |
| Income before income taxes | 14,685 | 8,955 | 63,368 | 62,665 |
| Income tax expense | 9,989 | 3,239 | 28,174 | 42,018 |
| Net income | 4,696 | 5,716 | 35,194 | 20,647 |
| Net loss attributable to noncontrolling interests | (826) | (1,751) | (1,946) | (3,169) |
| Net income attributable to controlling interests and available to common stockholders | $ 5,522 | $ 7,467 | $ 37,140 | $ 23,816 |
| | | | | |
| Net income per common share – basic | $ 0.12 | $ 0.16 | $ 0.83 | $ 0.52 |
| Net income per common share – diluted | $ 0.12 | $ 0.16 | $ 0.82 | $ 0.52 |
| | | | | |
| Weighted average shares outstanding – basic | 44,440,227 | 44,364,436 | 44,338,408 | 44,371,313 |
| Weighted average shares outstanding – diluted | 45,025,059 | 44,518,525 | 44,867,304 | 44,577,635 |
| | | | | |
| | | |
| Condensed Consolidated Balance Sheets |
| As of December 31, 2014 and December 31, 2013 |
| | | |
| | | |
| | December 31, 2014 | December 31, 2013 |
| | (In thousands) |
| Assets | (Unaudited) | |
| Current assets: | | |
| Cash and cash equivalents | $ 31,875 | $ 86,939 |
| Accounts and notes receivable, net | 80,321 | 58,274 |
| Inventory | 5,971 | 5,302 |
| Restricted cash, short-term | 20,427 | 14,896 |
| Current portion of deferred tax asset, net | 24,303 | 21,202 |
| Prepaid expenses, deferred costs, and other current assets | 34,508 | 20,159 |
| Total current assets | 197,405 | 206,772 |
| Property and equipment, net | 335,795 | 270,966 |
| Intangible assets, net | 177,540 | 161,615 |
| Goodwill | 511,963 | 404,491 |
| Deferred tax asset, net | 10,487 | 9,680 |
| Prepaid expenses, deferred costs, and other assets | 22,600 | 2,679 |
| Total assets | $ 1,255,790 | $ 1,056,203 |
| | | |
| Liabilities and Stockholders' Equity | | |
| Current liabilities: | | |
| Current portion of long-term debt and notes payable | $ 35 | $ 1,289 |
| Current portion of other long-term liabilities | 34,937 | 35,597 |
| Accounts payable and other accrued and current liabilities | 215,950 | 177,909 |
| Total current liabilities | 250,922 | 214,795 |
| Long-term liabilities: | | |
| Long-term debt | 612,662 | 489,225 |
| Asset retirement obligations | 52,039 | 60,665 |
| Deferred tax liability, net | 15,916 | 5,668 |
| Other long-term liabilities | 37,716 | 38,736 |
| Total liabilities | 969,255 | 809,089 |
| Stockholders' equity | 286,535 | 247,114 |
| Total liabilities and stockholders' equity | $ 1,255,790 | $ 1,056,203 |
| | | |
| | | | | |
| SELECTED INCOME STATEMENT DETAIL: |
| | | | | |
| Total revenues by segment: |
| | | | | |
| | Three Months Ended | Twelve Months Ended |
| | December 31, | December 31, |
| | 2014 | 2013 | 2014 | 2013 |
| | (In thousands) |
| | | | | |
| United States | $ 191,464 | $ 172,135 | $ 731,618 | $ 665,709 |
| Europe | 83,964 | 65,059 | 293,666 | 178,855 |
| Other International | 10,469 | 7,899 | 40,694 | 40,704 |
| Eliminations | (2,024) | (3,148) | (11,157) | (8,782) |
| Total revenues | $ 283,873 | $ 241,945 | $ 1,054,821 | $ 876,486 |
| | | | | |
| Breakout of ATM operating revenues: |
| | | | | |
| | Three Months Ended | Twelve Months Ended |
| | December 31, | December 31, |
| | 2014 | 2013 | 2014 | 2013 |
| | (In thousands) |
| | | | | |
| Surcharge revenues | $ 114,755 | $ 107,338 | $ 456,146 | $ 392,931 |
| Interchange revenues | 88,400 | 79,262 | 341,769 | 278,295 |
| Bank branding and surcharge-free network revenues | 42,196 | 36,640 | 156,673 | 142,266 |
| Managed services revenues | 7,768 | 5,826 | 24,595 | 20,568 |
| Other revenues | 7,676 | 5,493 | 28,582 | 20,136 |
| Total ATM operating revenues | $ 260,795 | $ 234,559 | $ 1,007,765 | $ 854,196 |
| | | | | |
| Total cost of revenues by segment: |
| | | | | |
| | Three Months Ended | Twelve Months Ended |
| | December 31, | December 31, |
| | 2014 | 2013 | 2014 | 2013 |
| | (In thousands) |
| | | | | |
| United States | $ 124,342 | $ 109,671 | $ 474,000 | $ 426,635 |
| Europe | 59,041 | 48,520 | 207,213 | 140,812 |
| Other International | 9,124 | 8,247 | 34,012 | 36,122 |
| Eliminations | (2,340) | (2,819) | (11,177) | (8,282) |
| Total cost of revenues | $ 190,167 | $ 163,619 | $ 704,048 | $ 595,287 |
| | | | | |
| Breakout of cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization): |
| | | | | |
| | Three Months Ended | Twelve Months Ended |
| | December 31, | December 31, |
| | 2014 | 2013 | 2014 | 2013 |
| | (In thousands) |
| | | | | |
| Merchant commissions | $ 78,545 | $ 72,933 | $ 316,543 | $ 270,410 |
| Vault cash rental | 16,771 | 13,142 | 62,805 | 49,356 |
| Other costs of cash | 19,510 | 20,731 | 83,438 | 78,512 |
| Repairs and maintenance | 18,113 | 16,778 | 63,253 | 56,987 |
| Communications | 7,079 | 6,657 | 25,998 | 23,007 |
| Transaction processing | 3,856 | 4,357 | 14,560 | 12,334 |
| Stock-based compensation | 369 | 260 | 1,273 | 911 |
| Other expenses | 24,662 | 21,740 | 91,480 | 82,442 |
| Total cost of ATM operating revenues | $ 168,905 | $ 156,598 | $ 659,350 | $ 573,959 |
| | | | | |
| Breakout of selling, general, and administrative expenses: |
| | | | | |
| | Three Months Ended | Twelve Months Ended |
| | December 31, | December 31, |
| | 2014 | 2013 | 2014 | 2013 |
| | (In thousands) |
| | | | | |
| Employee costs | $ 18,138 | $ 13,633 | $ 62,399 | $ 44,728 |
| Stock-based compensation | 4,648 | 3,149 | 15,229 | 11,413 |
| Professional fees | 2,178 | 2,036 | 7,312 | 7,950 |
| Other | 8,370 | 6,780 | 28,530 | 20,501 |
| Total selling, general, and administrative expenses | $ 33,334 | $ 25,598 | $ 113,470 | $ 84,592 |
| | | | | |
| Depreciation and accretion expense by segment: |
| | | | | |
| | Three Months Ended | Twelve Months Ended |
| | December 31, | December 31, |
| | 2014 | 2013 | 2014 | 2013 |
| | (In thousands) |
| | | | | |
| United States | $ 11,201 | $ 11,059 | $ 43,817 | $ 41,450 |
| Europe | 6,418 | 7,293 | 27,546 | 22,448 |
| Other International | 1,111 | 1,072 | 4,259 | 4,582 |
| Total depreciation and accretion expense | $ 18,730 | $ 19,424 | $ 75,622 | $ 68,480 |
| | | | | |
| | | |
| SELECTED BALANCE SHEET DETAIL: |
| | | |
| Long-term debt: |
| | | |
| | December 31, 2014 | December 31, 2013 |
| | (In thousands) |
| Revolving credit facility | $ 137,292 | $ 72,547 |
| 8.25% senior subordinated notes (1) | -- | 200,000 |
| 5.125% senior notes (2) | 250,000 | -- |
| 1.00% convertible senior notes (3) | 225,370 | 216,635 |
| Equipment financing notes | 35 | 1,332 |
| Total long-term debt | $ 612,697 | $ 490,514 |
| | | |
| (1) During the year ended December 31, 2014, the Company repurchased and retired all of its outstanding 8.25% senior subordinated notes. |
| (2) During the year ended December 31, 2014, the Company completed the issuance and sale of $250.0 million aggregate principal amount of 5.125% senior notes due 2022. |
| (3) The total principal amount outstanding for these 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 net debt amount is 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, 2013 | 44,375,952 |
| Shares repurchased | (183,927) |
| Shares issued – restricted stock grants and stock options exercised | 93,092 |
| Shares vested – restricted stock units | 295,419 |
| Shares forfeited – restricted stock awards | (18,414) |
| Total shares outstanding as of December 31, 2014 | 44,562,122 |
| | |
| | | | | |
| SELECTED CASH FLOW DETAIL: |
| | | | | |
| Selected cash flow statement amounts: |
| | | | | |
| | Three Months Ended | Twelve Months Ended |
| | December 31, | December 31, |
| | 2014 | 2013 | 2014 | 2013 |
| | (In thousands) |
| | | | | |
| Cash provided by operating activities | $ 78,292 | $ 61,082 | $ 181,352 | $ 183,557 |
| Cash used in investing activities | (263,000) | (34,174) | (336,881) | (266,740) |
| Cash provided by financing activities | 80,817 | 41,391 | 106,449 | 154,988 |
| Effect of exchange rate changes on cash | (5,095) | 84 | (5,984) | 1,273 |
| Net (decrease) increase in cash and cash equivalents | (108,986) | 68,383 | (55,064) | 73,078 |
| Cash and cash equivalents at beginning of period | 140,861 | 18,556 | 86,939 | 13,861 |
| Cash and cash equivalents at end of period | $ 31,875 | $ 86,939 | $ 31,875 | $ 86,939 |
| | | | | |
| | | | | |
| Key Operating Metrics – Excluding Acquisitions in All Periods Presented |
| For the Three and Twelve Months Ended December 31, 2014 and 2013 |
| (Unaudited) |
| | | | | |
| The following table excludes the effect of acquisitions in the three and twelve months ended December 31, 2014 for comparative purposes: |
| | | | | |
| EXCLUDING ACQUISITIONS | Three Months Ended | Twelve Months Ended |
| | December 31, | December 31, |
| | 2014 | 2013 | 2014 | 2013 |
| Average number of transacting ATMs: | | | | |
| United States: Company-owned | 30,323 | 29,118 | 28,574 | 28,333 |
| United Kingdom | 12,503 | 11,516 | 8,033 | 7,450 |
| Mexico | 2,107 | 2,195 | 2,153 | 2,533 |
| Canada | 1,623 | 1,623 | 1,650 | 1,600 |
| Germany | 898 | 843 | 344 | 365 |
| Subtotal | 47,454 | 45,295 | 40,754 | 40,281 |
| United States: Merchant-owned | 19,965 | 21,707 | 20,369 | 21,072 |
| Average number of transacting ATMs: ATM operations | 67,419 | 67,002 | 61,123 | 61,353 |
| | | | | |
| U.S.: Managed services - Turnkey | 2,151 | 2,168 | 2,128 | 2,191 |
| U.S.: Managed services - Processing Plus | 12,056 | 11,259 | 9,284 | 8,220 |
| U.K.: Managed services | 21 | 21 | 21 | 21 |
| Canada: Managed services | 898 | 301 | 535 | 306 |
| Average number of transacting ATMs: Managed services | 15,126 | 13,749 | 11,968 | 10,738 |
| | | | | |
| Total average number of transacting ATMs | 82,545 | 80,751 | 73,091 | 72,091 |
| | | | | |
| Total transactions (in thousands): | | | | |
| ATM operations | 251,374 | 243,363 | 923,160 | 860,062 |
| Managed services | 7,611 | 17,555 | 51,322 | 60,027 |
| Total transactions | 258,985 | 260,918 | 974,482 | 920,089 |
| | | | | |
| Total cash withdrawal transactions (in thousands): | | | | |
| ATM operations | 149,420 | 142,002 | 545,122 | 521,282 |
| Managed services | 4,448 | 11,715 | 32,956 | 40,223 |
| Total cash withdrawal transactions | 153,868 | 153,717 | 578,078 | 561,505 |
| | | | | |
| Per ATM per month amounts (excludes managed services): | | | | |
| Cash withdrawal transactions | 749 | 706 | 743 | 708 |
| | | | | |
| ATM operating revenues | $ 1,121 | $ 1,132 | $ 1,182 | $ 1,127 |
| Cost of ATM operating revenues (1) | 731 | 756 | 777 | 744 |
| ATM operating gross profit (1) (2) | $ 390 | $ 376 | $ 405 | $ 383 |
| | | | | |
| ATM operating gross profit margin (1) (2) | 34.8% | 33.2% | 34.3% | 34.0% |
| | | | | |
| (1) 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. Additionally, the three and twelve months ended December 31, 2013 excludes $0.3 million and $8.7 million, respectively, of nonrecurring expense related to retroactive property taxes on certain ATM locations in the U.K. |
| (2) ATM operating gross profit and ATM operating gross profit 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 Acquisitions in All Periods Presented |
| For the Three and Twelve Months Ended December 31, 2014 and 2013 |
| (Unaudited) |
| | | | | |
| | | | | |
| INCLUDING ACQUISITIONS | Three Months Ended | Twelve Months Ended |
| | December 31, | December 31, |
| | 2014 | 2013 | 2014 | 2013 |
| Average number of transacting ATMs: | | | | |
| United States: Company-owned | 37,989 | 29,118 | 32,330 | 28,333 |
| United Kingdom | 12,610 | 11,516 | 12,098 | 7,450 |
| Mexico | 2,107 | 2,195 | 2,153 | 2,533 |
| Canada | 1,623 | 1,623 | 1,650 | 1,600 |
| Germany | 898 | 843 | 878 | 365 |
| Subtotal | 55,227 | 45,295 | 49,109 | 40,281 |
| United States: Merchant-owned | 23,500 | 21,707 | 22,590 | 21,072 |
| Average number of transacting ATMs: ATM operations | 78,727 | 67,002 | 71,699 | 61,353 |
| | | | | |
| U.S.: Managed services - Turnkey | 2,151 | 2,168 | 2,128 | 2,191 |
| U.S.: Managed services - Processing Plus | 29,044 | 11,259 | 17,057 | 8,220 |
| U.K.: Managed services | 21 | 21 | 21 | 21 |
| Canada: Managed services | 898 | 301 | 535 | 306 |
| Average number of transacting ATMs: Managed services | 32,114 | 13,749 | 19,741 | 10,738 |
| | | | | |
| Total average number of transacting ATMs | 110,841 | 80,751 | 91,440 | 72,091 |
| | | | | |
| Total transactions (in thousands): | | | | |
| ATM operations | 273,381 | 243,363 | 1,040,241 | 860,062 |
| Managed services | 31,267 | 17,555 | 87,338 | 60,027 |
| Total transactions | 304,648 | 260,918 | 1,127,579 | 920,089 |
| | | | | |
| Total cash withdrawal transactions (in thousands): | | | | |
| ATM operations | 163,792 | 142,002 | 617,419 | 521,282 |
| Managed services | 21,819 | 11,715 | 59,938 | 40,223 |
| Total cash withdrawal transactions | 185,611 | 153,717 | 677,357 | 561,505 |
| | | | | |
| Per ATM per month amounts (excludes managed services): | | | | |
| Cash withdrawal transactions | 694 | 706 | 718 | 708 |
| | | | | |
| ATM operating revenues | $ 1,064 | $ 1,132 | $ 1,136 | $ 1,127 |
| Cost of ATM operating revenues (1) | 689 | 756 | 743 | 744 |
| ATM operating gross profit (1) (2) | $ 375 | $ 376 | $ 393 | $ 383 |
| | | | | |
| ATM operating gross profit margin (1) (2) | 35.2% | 33.2% | 34.6% | 34.0% |
| | | | | |
| (1) 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. Additionally, the three and twelve months ended December 31, 2013 excludes $0.3 million and $8.7 million, respectively, of nonrecurring expense related to retroactive property taxes on certain ATM locations in the U.K. |
| (2) ATM operating gross profit and ATM operating gross profit 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, 2014 and 2013 |
| (Unaudited) |
| | | |
| | As of December 31, |
| Ending number of transacting ATMs: | 2014 | 2013 |
| United States: Company-owned | 37,931 | 29,425 |
| United Kingdom | 12,911 | 11,522 |
| Mexico | 2,034 | 1,984 |
| Canada | 1,597 | 1,621 |
| Germany | 918 | 856 |
| Total Company-owned | 55,391 | 45,408 |
| United States: Merchant-owned | 22,826 | 21,576 |
| Ending number of transacting ATMs: ATM operations | 78,217 | 66,984 |
| | | |
| United States: Managed services - Turnkey | 2,149 | 2,169 |
| United States: Managed services - Processing Plus | 28,924 | 11,155 |
| United Kingdom: Managed services | 21 | 21 |
| Canada: Managed services | 895 | 265 |
| Ending number of transacting ATMs: Managed services | 31,989 | 13,610 |
| | | |
| Total ending number of transacting ATMs | 110,206 | 80,594 |
| | | |
| | | | | |
| Reconciliation of Net Income Attributable to Controlling Interests to EBITDA, Adjusted EBITDA, and |
| Adjusted Net Income |
| For the Three and Twelve Months Ended December 31, 2014 and 2013 |
| (Unaudited) |
| | | | | |
| | Three Months Ended | Twelve Months Ended |
| | December 31, | December 31, |
| | 2014 | 2013 | 2014 | 2013 |
| | (In thousands, except share and per share amounts) |
| Net income attributable to controlling interests and available to common stockholders | $ 5,522 | $ 7,467 | $ 37,140 | $ 23,816 |
| Adjustments: | | | | |
| Interest expense, net | 4,609 | 5,585 | 20,776 | 21,155 |
| Amortization of deferred financing costs and note discounts | 2,694 | 1,196 | 13,036 | 1,931 |
| Redemption costs for early extinguishment of debt | -- | -- | 9,075 | -- |
| Income tax expense | 9,989 | 3,239 | 28,174 | 42,018 |
| Depreciation and accretion expense | 18,730 | 19,424 | 75,622 | 68,480 |
| Amortization of intangible assets | 11,121 | 7,509 | 35,768 | 27,336 |
| EBITDA | $ 52,665 | $ 44,420 | $ 219,591 | $ 184,736 |
| | | | | |
| Add back: | | | | |
| Loss on disposal of assets | 1,562 | 2,321 | 3,224 | 2,790 |
| Other expense (income) | 1,949 | (120) | (1,616) | (3,150) |
| Noncontrolling interests (1) | (553) | (970) | (1,745) | (2,399) |
| Stock-based compensation expense (2) | 4,991 | 3,402 | 16,432 | 12,290 |
| Acquisition-related expenses (3) | 5,022 | 7,858 | 18,050 | 15,400 |
| Other adjustments to cost of ATM operating revenues (4) | -- | 311 | -- | 8,670 |
| Other adjustments to selling, general, and administrative expenses (5) | -- | 59 | -- | 505 |
| Adjusted EBITDA | $ 65,636 | $ 57,281 | $ 253,936 | $ 218,842 |
| Less: | | | | |
| Interest expense, net (2) | 4,607 | 5,567 | 20,745 | 21,057 |
| Depreciation and accretion expense (2) | 18,445 | 19,051 | 74,314 | 66,857 |
| Adjusted pre-tax income | 42,584 | 32,663 | 158,877 | 130,928 |
| Income tax expense (6) | 13,627 | 10,942 | 50,840 | 44,777 |
| Adjusted Net Income | $ 28,957 | $ 21,721 | $ 108,037 | $ 86,151 |
| | | | | |
| Adjusted Net Income per share | $ 0.65 | $ 0.49 | $ 2.44 | $ 1.94 |
| Adjusted Net Income per diluted share | $ 0.64 | $ 0.49 | $ 2.41 | $ 1.93 |
| | | | | |
| Weighted average shares outstanding - basic | 44,440,227 | 44,364,436 | 44,338,408 | 44,371,313 |
| Weighted average shares outstanding - diluted | 45,025,059 | 44,518,525 | 44,867,304 | 44,577,635 |
| | | | | |
| (1) Noncontrolling interests adjustment made such that Adjusted EBITDA includes only the Company's 51% ownership interest in the Adjusted EBITDA of its Mexico subsidiary. |
| (2) Amounts exclude 49% of the expenses incurred by the Company's Mexico subsidiary as such amounts are allocable to the noncontrolling interest stockholders. |
| (3) Acquisition-related expenses include nonrecurring costs incurred for professional and legal fees and certain transition and integration-related costs, including contract termination costs and facility exit costs, related to acquisitions. |
| (4) Adjustment to cost of ATM operating revenues for the three and twelve months ended December 31, 2013 is related to a nonrecurring charge for retroactive property taxes on certain ATM locations in the U.K. |
| (5) Adjustment to selling, general, and administrative expenses in 2013 represents nonrecurring severance related costs associated with management of the Company's U.K. operation. |
| (6) Calculated using the Company's estimated long-term, cross-jurisdictional effective cash tax rate of 32% for the three and twelve months ended December 31, 2014, 35% through June 30, 2013 and 33.5% from July 1 through December 31, 2013. |
| | | | | |
| | | | | | | |
| Reconciliation of Adjusted Gross Profit Margin |
| For the Three and Twelve Months Ended December 31, 2014 and 2013 |
| (Unaudited) |
| | | | | | | |
| | | | | | | |
| | Three Months Ended December 31, 2014 | Three Months Ended December 31, 2013 |
| | As reported | | Adjusted | As reported | | Adjusted |
| | (GAAP) | Adjustments | (Non-GAAP) | (GAAP) | Adjustments | (Non-GAAP) |
| | (In thousands) |
| | | | | | | |
| Total revenues | $ 283,873 | $ -- | $ 283,873 | $ 241,945 | $ -- | $ 241,945 |
| Total cost of revenues (1) | 190,167 | -- | 190,167 | 163,619 | (311) | 163,308 |
| Gross profit | $ 93,706 | $ -- | $ 93,706 | $ 78,326 | $ 311 | $ 78,637 |
| Gross profit margin | 33.0% | | 33.0% | 32.4% | | 32.5% |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | Twelve Months Ended December 31, 2014 | Twelve Months Ended December 31, 2013 |
| | As reported | | Adjusted | As reported | | Adjusted |
| | (GAAP) | Adjustments | (Non-GAAP) | (GAAP) | Adjustments | (Non-GAAP) |
| | (In thousands) |
| | | | | | | |
| Total revenues | $ 1,054,821 | $ -- | $ 1,054,821 | $ 876,486 | $ -- | $ 876,486 |
| Total cost of revenues (1) | 704,048 | -- | 704,048 | 595,287 | (8,670) | 586,617 |
| Gross profit | $ 350,773 | $ -- | $ 350,773 | $ 281,199 | $ 8,670 | $ 289,869 |
| Gross profit margin | 33.3% | | 33.3% | 32.1% | | 33.1% |
| | | | | | | |
| (1) Adjustment to cost of ATM operating revenues for the three and twelve months ended December 31, 2013 is related to a nonrecurring charge related to retroactive property taxes on certain ATM locations in the U.K. |
| | | | | | | |
| | | | | |
| Reconciliation of Free Cash Flow |
| For the Three and Twelve Months Ended December 31, 2014 and 2013 |
| (Unaudited) |
| | | | | |
| | Three Months Ended | Twelve Months Ended |
| | December 31, | December 31, |
| | 2014 | 2013 | 2014 | 2013 |
| | (In thousands) |
| Cash provided by operating activities | $ 78,292 | $ 61,082 | $ 181,352 | $ 183,557 |
| Payments for capital expenditures: | | | | |
| Cash used in investing activities, excluding acquisitions | (44,833) | (31,551) | (109,911) | (77,153) |
| Free cash flow (1) | $ 33,459 | $ 29,531 | $ 71,441 | $ 106,404 |
| | | | | |
| (1) Free cash flow for the year ended December 31, 2013 included the collection of a $13.4 million insurance receivable. |
| | | | | |
| | | | |
| Reconciliation of Estimated Net Income to EBITDA, Adjusted EBITDA, and Adjusted Net Income |
| For the Year Ending December 31, 2015 |
| (Unaudited) |
| | | | |
| | Estimated Range |
| | Full Year 2015 |
| | (In millions, except per share information) |
| | | | |
| Net income | $ 71.2 | - | $ 75.3 |
| Adjustments: | | | |
| Interest expense, net | 20.2 | - | 21.0 |
| Amortization of deferred financing costs and note discount | 10.8 | - | 10.8 |
| Income tax expense | 33.5 | - | 35.6 |
| Depreciation and accretion expense | 92.5 | - | 94.5 |
| Amortization of intangible assets | 40.0 | - | 40.0 |
| EBITDA | $ 268.2 | - | $ 277.2 |
| | | | |
| Add back: | | | |
| Noncontrolling interests (1) | (1.2) | - | (1.2) |
| Acquisition-related costs | 10.0 | - | 10.0 |
| Stock-based compensation expense | 16.0 | - | 16.0 |
| Adjusted EBITDA | $ 293.0 | - | $ 302.0 |
| Less: | | | |
| Interest expense, net (2) | 20.2 | - | 21.0 |
| Depreciation and accretion expense (2) | 91.0 | - | 93.0 |
| Income tax expense (3) | 58.1 | - | 60.2 |
| Adjusted Net Income | $ 123.7 | - | $ 127.8 |
| | | | |
| Adjusted Net Income per diluted share | $ 2.74 | - | $ 2.83 |
| | | | |
| Weighted average shares outstanding – diluted | 45.2 | - | 45.2 |
| | | | |
| (1) Noncontrolling interests adjustment made such that Adjusted EBITDA includes only the Company's 51% ownership interest in the Adjusted EBITDA of its Mexico subsidiary. |
| (2) 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. |
| (3) Calculated using the Company's estimated long-term, cross-jurisdictional effective cash tax rate of 32%. |
| | | | |
| Contact Information: |
| | |
| Cardtronics — Media | Cardtronics — Investors |
| Nick Pappathopoulos | Chris Brewster |
| Director – Public Relations | Chief Financial Officer |
| 832-308-4396 | 832-308-4128 |
| npappathopoulos@cardtronics.com | cbrewster@cardtronics.com |
| | |
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