Article

Cardtronics delivers strong third quarter financial results

Revenue during the quarter grew 21 percent year over year, exceeding analysts' estimates.

November 8, 2011 by Kim Williams — Reporter, NetWorld Alliance

Cardtronics Inc. this week announced its financial and operational results for the quarter ended Sept. 30, 2011. The company delivered stronger than estimated results, hitting its 52-week high.

Key financial and operational statistics in the third quarter of 2011 as compared to the third quarter of 2010 include (with some statistics showing the results excluding the contribution from the EDC acquisition, which closed on July 25, 2011):

• Consolidated revenues of $165.1 million, up by 21 percent;
• Adjusted net income per diluted share of $0.39, up by 39 percent from $0.28;
• Gross margin of 33.2 percent;
• Adjusted EBITDA of $43.0 million, up by 23 percent;
• GAAP net income of $46.9 million, up by 126 percent;
• GAAP net income per diluted share of $1.05, up from $0.49, significantly impacted by non-recurring refinancing-related charges incurred in the third quarter of 2010 and an increase in tax benefit in the third quarter of 2011;
• Total transactions increased by 28 percent;
• Total cash withdrawal transactions per ATM increased by 19 percent;
• Total transactions per ATM increased by 17 percent; and
• Operating gross profit per ATM increased by 9 percent.

"Our third quarter results were very strong, driven by impressive organic revenue growth of 12 percent and a nice contribution from our recently completed EDC acquisition," said Steve Rathgaber, chief executive officer. "With our continued solid execution of our core business strategy along with complementary business expansion opportunities, we are very excited about the company's future growth prospects."

Recent company highlights

• The integration of the EDC ATM business with the company's existing operations. The results of operations include the performance of EDC since the acquisition date of July 25, 2011.
• The completion on Nov. 1, 2011 of the acquisition of Access to Money, an ATM operator, with approximately 8,000 ATMs in small retailers and approximately 2,000 ATMs in two major retailers.
• The execution of an ATM managed services agreement for 89 ATMs with FirstBank for its ATMs located in King Soopers, a local brand name operated by the Kroger Co. in Colorado.
• The execution of an ATM services agreement with Harris Teeter, a chain of supermarkets located primarily in U.S. Mid-Atlantic States, to initially install 100 ATMs in its stores as well as in any new Harris Teeter stores.
• The acquisition on Oct. 28, 2011 of Mr. Cash, a Canadian operator with approximately 600 ATMs. This also marks Cardtronics' initial expansion into Canada.

Nine months results

For the nine months ended Sept. 30, 2011, consolidated revenues totaled $450.4 million, representing a 13 percent increase from the $397.3 million in consolidated revenues generated during the same period in 2010.

According to the company, the year-over-year increase was partially attributable to the inclusion of EDC's operations into the company's consolidated results and a combination of increased transactions per ATM, increased revenues from managed services agreements, higher equipment sales, unit growth expansion, growth in Allpoint and increased bank branding revenues from financial institution partners.

Adjusted EBITDA totaled $114.4 million, representing a 17 percent increase over the $98.0 million in adjusted EBITDA for the same period in 2010, and adjusted net income totaled $42.9 million ($1.01 per diluted share) for the first nine months of 2011, up 36 percent on a per share basis from $30.2 million ($0.74 per diluted share) during the same period in 2010.

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