Bank / Credit Union

Pandemic hammers Cardtronics Q4 2020 and full year sales and earnings

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February 24, 2021

Pandemic-related restrictions continued to impact consumer activity and transaction levels for Cardtronics, as evidenced by the ATM owner/operator's Q4 2020 and full year results. Adverse impacts from government-mandated lockdown restrictions for certain geographies, in particular the operations in the U.K., Canada, Germany, and Spain, accelerated during the second half of the fourth quarter. These restrictions are continuing into the first quarter of 2021, which is also typically the seasonally lowest transacting quarter of the year.

The company reported total revenues of $274.8 million for Q4 2020, down 18.9% from $338.8 million in the prior year, and down 19.7% on a constant-currency basis. ATM operating revenues of $259 million, were down 19.6% from $322 million in the prior year, and down 20.4% on a constant-currency basis.

GAAP net income fell from $12.6 million in Q4 2019 to $9.6 million in Q4 2020, translating to a decline from 28 cents per diluted share in 2019 to 21 cents in Q4 2020. Adjusted net income per diluated sahre fell from 70 cents to 64 cents in the respective quarters.

Total revenues for 2020 were $1.09 billion, down 18.9% from $1.35 billion in the prior year, and down 18.8% on a constant-currency basis. ATM operating revenues of $1.04 billion were down 18.8% from $1.28 billion in the prior year, and down 18.6% on a constant-currency basis.

GAAP net income fell from $48.3 million in 2019 to $17.1 million in 2020, translating from $1.05 per diluted share to 42 cents per diluted share. Adjusted net income per share fell from $2.52 to $1.69.

The fourth quarter revenue missed analyst expectations by $740,000, according to Seeking Alpha, while the Non-GAAP EPS of 64 cents beat expectations by 10 cents and GAAP EPS of 21 cents missed estimates by 6 cents.

Shares traded at $38.70 today against a 52-week range of $15.71 to $42.09.

The company added several fintechs to its Allpoint ATM network of convenient and surcharge-free ATMs, including Ahead Financials, a LendUp Global company; Clair; and Marqeta. Cardtronics also signed new managed services agreement with First Midwest Bank to operate approximately 160 ATMs, including branch and off-premise ATMs.

The company also expanded branding relationship with Citizens Bank for nearly 200 ATMs at CVS locations in the Detroit and deployed over 2,500 new ATMs in Q4, including over 1,500 in the U.S. and over 300 in South Africa, and enabled proprietary neoterm software on over 20,000 ATMs by the end of 2020.

"During a year filled with unique challenges, our team continued to execute on our strategic priorities and evolve the business to deliver expanded solutions for our customers," Ed West, CEO of Cardtronics, said in the press release. "We secured major new partnerships with leading retailers, financial institutions, and fintechs demonstrating the increasing importance and value of our trusted network and managed services capabilities. Through continued operational execution and technology enhancements, we generated strong free cash flows and positioned the business for long-term growth in revenues and profits."

As previously announced on Jan. 25, 2021, Cardtronics entered into an acquisition agreement with NCR Corp. whereby NCR will acquire all outstanding shares of Cardtronics for $39.00 per share in cash. The transaction, which was approved by the board of directors of both companies, is expected to close in mid-2021, subject to the satisfaction of customary closing conditions, including regulatory approvals and approvals by holders of Cardtronics' outstanding common shares.

In light of the pending transaction, Cardtronics doesn't expect to hold quarterly earnings conference calls but does expect to issue a quarterly earnings release and to provide additional financial and business information in an earnings supplement posted on the company's website.

"The execution of our strategy has positioned the company well, and we are excited about our recent announcement of a definitive acquisition agreement reached with NCR. Our customers' needs and expectations are growing and evolving, and we believe by combining our capabilities, we are better positioned to offer our customers an even broader range of financial solutions, enhanced level of services, and greater overall value," said West.