News

TRM reports increased sales, operating loss

March 30, 2006

PORTLAND, Ore. -Despite a healthy increase in ATM sales in 2005, TRM Corp. Dec. 30 reported operating losses for both the fourth quarter and full year.

Fourth-quarter ATM sales jumped from $30.5 million in '04 to $44.5 million in '05, and full-year sales went from $74.9 million to $192.5 million. But deferred costs associated with the company's proposed acquisition of the Travelex UK Ltd.'s ATM business, and expenses related to the November 2004 acquisition of the eFunds Corp. portfolio, hit the company hard in 4Q. Higher vault cash costs and amortization/depreciation from the 2004, increased theft and increases in labor costs also took their toll.

During an earnings call Dec. 30, the company said it won't complete the acquisition of Travelex' ATM business. (Read also, TRM to renegotiate deal with Travelex.)

TRM reported a negative operating margin of 69.3 percent in 4Q '05 for its ATM business, down from 6 percent in 4Q '04. For the year, the ATM business margin fell 91 percent, from 14.9 percent to 1.4 percent.

The year-over-year increase in ATM sales reflects ATM unit acquisitions, including the acquisition of the eFunds ATM portfolio and organic ATM growth.

While sales increased on the ATM side, they fell on the Photocopying side. Sales in 4Q '05 fell 15 percent, from $11.8 million to $10 million. For the year, sales fell 19 percent, from $51.1 million in '04 to $41.4 million.

Sales in the Photocopy business did reflect an increase from 3Q '05 to 4Q '05, due primarily to a $1.1 million settlement gain and the successful implementation of price increases at roughly 6,500 U.S. sites.

TRM said it expects to continue photocopy price increases through 2006.

The decrease in Photocopying sales for Q4 '04 to Q4 '05 reflects lower copy volumes per unit and a lower number of transacting units, the company said.