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Cardtronics reports strong fourth quarter and yearend results

Cardtronics' gross profit per machine was $425 in 2010's fourth quarter.

February 10, 2011

Steven Rathgaber, CEO of Cardtronics Inc., told analysts Thursday that the ATM independent sales organization had "another strong quarter that capped off what was a great year."

Rathgaber then ticked off a list of accomplishments in 2010 and in the fourth quarter. They included expanding a surcharge-free ATM access agreement with BB&T Bank in North Carolina, adding 2,500 ATMs in Mexico to the Allpoint surcharge-free ATM network, signing an agreement to purchase 100 “high transacting” ATMs in Northern Ireland and reaching a multiyear managed-services agreement with an unnamed supermarket chain in the Northeast United States. That list went on and on.

The biggest part of the announcement, however, was Cardtronics' bottom line earnings and revenues. Cardtronics, the world’s largest non-bank owner of ATMs, reported record fourth quarter and yearend results for the period ending Dec. 31, 2010.

The Houston-based ATM independent sales organization recorded fourth-quarter revenues of $134.7 million, up 8 percent compared with $124.7 million in 2009’s fourth quarter. Cardtronics reported a fourth-quarter net income of $8 million, up 375 percent compared with $1.68 million in 2009’s fourth quarter.

In 2010, Cardtronics logged revenues of $532.07 million, up 7.8 percent compared with $493.35 million in 2009. Net income in 2010 was $41.13 million compared with $5.77 million in 2009.

The company operated 36,669 transacting ATMs in 2010’s fourth quarter compared with 34,796 transacting ATMs in 2009’s fourth quarter. In 2010, the ATM ISO operated 35,837 transacting ATMs compared with 34,567 transacting ATMs in 2009.

The ISO reported fourth-quarter surcharge revenues of $64.97 million, up 4.5 percent compared with $62.16 million. Surcharge revenues for 2010 were $266.8 million, compared with $254.50 million in 2009. Interchange revenues for 2010’s fourth quarter were $40.88 million, compared with $39.05 million. For 2010, Cardtronics reported interchange revenues of $159.27 million, compared with $149.90 million.

Fourth-quarter revenues from bank branding and the Allpoint surcharge-free network were $21.65 million, compared with $17.90 million in 2009’s fourth quarter. For 2010, revenues from bank branding and the Allpoint surcharge-free ATM network were $81.63 million, compared with $67.87 million in 2009.

Managed services reached fourth-quarter revenues of $1.52 million, compared with $130,000 in 2009’s fourth quarter. In the 2010, managed services reported revenues of $2.89 million, compared with $490,000 in 2009.

Cardtronics recorded 68.22 million total cash withdrawals in 2010’s fourth quarter, compared with 63.10 million cash withdrawal transactions in 2009. There were 643 cash withdrawal transactions per machine in the 2010’s fourth quarter, compared with 615 cash withdrawals per machine in 2009’s fourth quarter. The ATM operating gross profit per machine was $425 in 2010’s fourth quarter, compared with $395 per machine in 2009’s fourth quarter. In 2010, Cardtronics logged 266.9 million cash withdrawal transactions, compared with 255.86 million cash withdrawal transactions in 2009.

The company now has a “laser focus” on revenue growth and improving shareholder value, said Rathgaber.

J. Chris Brewster, Cardtronics' chief financial officer, said the company’s ability to increase surcharge fees in some instances, signing or extending bank branding agreements, unit growth and the Allpoint Network's ability to sign new agreements were key components to driving revenue growth.

“Allpoint and bank branding are very important to Cardtronics future profitability and growth,” Rathgaber added.

Brewster issued a 2011 revenue guidance of $559 million to $569 million. Cardtronics stock was selling for $18.85 per share in early morning trading on Friday.