Bank Machine acquisition proves profitable for Cardtronics

Feb. 22, 2006

HOUSTON - Cardtronics Inc., the world's largest ISO, reported an annual revenue increase of $76.1 million, from $192 million to $268.97 million.

That year-over-year revenue increase, according to a news release, related to a number of acquisitions the company completed in 2005, including the acquisition of United Kingdom-based Bank Machine Ltd. in May and the spring acquisitions of ATM portfolios owned by BAS Communications Inc. and Neo Concepts Inc.

Revenue for the fourth quarter, which ended Dec. 31, also increased, from $61.9 million in 4Q '04 to $69.8 million.

While revenue climbed, net income dropped. In the fourth quarter, net income dropped from $1.46 million in '04 to a loss of $888,000. For the year, net income fell from $4.6 million in '04 to $947,000.

The company's net loss related to expenses associated with its '05 acquisitions. The accelerated roll out of ATMs in Walgreens and CVS locations throughout the United States during '05 also continued to negatively impact Cardtronics' period results. Those machines are still ramping to profitable transaction levels, the company said.

The company's average transacting ATMs in the fourth quarter of '05 totaled 26,411, up 6.7 percent from the same period in '04. Average cash-withdrawal transactions per ATM per month during the quarter increased 6.3 percent - an increase Cardtronics attributes to its acquisition of Bank Machine, which has higher-than-average transaction volumes than the company's domestic operations.

The company's average revenue per ATM per month for the quarter also increased, from $775 to $846 because of Bank Machine, as well as network branding revenues in the U.S.

"We are pleased with our growth in revenues and EBITDA, and the progress we made during the year on our key strategic initiatives," said Cardtronics chief executive Jack Antonini. Cardtronics' acquisition of ATM National Inc., which owned and operated the Allpoint surcharge-free network, earlier this year is expected to have a big impact in 2006. Allpoint is the nation's largest surcharge-free ATM network, and is a major component of Cardtronics' strategy to profitably participate in the market for surcharge-free ATM transactions – a market Cardtronics estimates represents between 70 percent and 75 percent of the U.S. ATM transaction market.

Cardtronics also purchased a majority interest in a Mexican ATM operator in February 2006 that is expected to have significant impact. This business, which is jointly owned by Cardtronics and two Mexican partners, is well-positioned to capitalize on the anticipated growth in off-premise ATMs, now that surcharging has been given the green light in Mexico.

Cardtronics now operates approximately 285 ATMs, primarily in retail locations, in Mexico.

"We believe that the investments we've made and continue to make in our bank and network branding initiatives, including the accelerated rollout of ATMs in key domestic retail locations, our acquisition of the Allpoint surcharge-free network, and the signing of the MasterCard surcharge-free alliance, provide a solid platform for future growth as financial institutions of all sizes look for convenient and cost-effective ways to attract and retain customers."

Topics: Bank / Credit Union , Distributors / ISO / IAD , Public Companies

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