*About the author: Ed Roberts is a seasoned financial industry reporter and a new contributor to ATM Marketplace. To submit a comment about this article, contact the editor, Tracy Kitten.

HOUSTON - Difficulties for independent sales organizations in the ATM market won't slow Cardtronics Inc., says chief financial officer Chris Brewster. While the fortunes of several major ATM ISOs have taken a downturn, Cardtronics, the largest independent ATM owner and operator in the world, continues to thrive.

Earlier this month, Portland, Ore.-based TRM Corp., trailing only Cardtronics in size with a fleet of some 18,000 ATMs, saw its share price fall below $3 after reporting a second-quarter loss of $4.2 million, coming on the heels of a first-quarter loss of $1.5 million.

And earlier this week, Global Axcess Corp., the Ponte Vedra, Fla.-based operator of 5,000 ATMs, which has seen its stock price plunge as low as 60 cents a share, reported a loss of $373,000, eight times greater than losses reported just a year earlier.

But Cardtronics, which has more than 25,000 ATMs under its belt, appears to be headed in a different direction. The privately held company eked out net income of $800,000 in its second quarter after a first-quarter loss of $3.2 million. And first-quarter revenue, fueled by last year's acquisition of British ISO Bank Machine Ltd., jumped 6 percent to $73.3 million.

What stands out for Brewster are the company's adjusted earnings before interest, taxes, depreciation and amortization, commonly known as EBITDA. Cardtronics' EBITDA totaled $13.7 million during 2Q '06, a 13 percent increase from the $12.1 million in adjusted EBITDA the company reported for the same period last year.

The numbers, Brewster said, show that Cardtronics' corporate strategy is bearing fruit - a strategy that includes a focus on branding ATMs for large banks like JP Morgan Chase & Co., Wachovia and Sovereign Bank in retail locations.

Retailers that Cardtronics works with include New York-based Duane Reade and national chains like Target Corp., Walgreen Co., CVS Corp., A&P Group Ltd., Albertsons LLC, Barnes & Noble Inc., College Bookstores of America Inc., BP PLC, Chevron Corp. and Rite Aid Corp.

"These chains are adding an average of one new store every day," Brewster said. "Our primary growth strategy doesn't focus on merchant-owned ATMs. We're focusing on the company-owned (Cardtronics-owned) side. We see this as a solid path for growth."

Beyond its strong retail relationships, Cardtronics has the backing of deep-pocketed investment firms TA Associates of Boston and Houston-based CapStreet Group. Both are Cardtronics' biggest owners.

Those deep pockets, Brewster said, have allowed the 17-year-old Cardtronics to continue its ambitious expansion strategy, which included the acquisition of Bank Machine in the United Kingdom, the surcharge-free Allpoint Network, and Mexico's only ATM ISO.

"We see Mexico as a significant growth opportunity," he said.

The company still plans to move ahead with MasterCard to launch a national surcharge-free ATM network, but the project, announced a year ago, has been slow to materialize, Brewster said.

Digging into the pockets

Cardtronics has a $35 million capital budget set for 2006 - $25 million of which is earmarked for U.S. projects, including ATM upgrades for Triple DES and the addition of 2,000 new ATMs over the next few years.

The company also plans to eventually go public - an idea that's been tossed around for three years, most recently in March 2004 - but Brewster wouldn't give any definitive initial public offering timeline. Cardtronics pulled its most recent plans for an IPO in March 2004, saying simply that the market wasn't right.