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Exhibit 99.1

 

 

CARDTRONICS ANNOUNCES SECOND QUARTER 2017 RESULTS

 

HOUSTON, August 2, 2017 — (GLOBE NEWSWIRE) — Cardtronics plc (Nasdaq: CATM) (“Cardtronics” or the “Company”), the world’s largest ATM owner/operator, announced today its financial and operational results for the quarter ended June 30, 2017.

 

Key financial statistics in the second quarter of 2017 as compared to the second quarter of 2016 include:

 

·                  Total revenues of $385.1 million, up 19% from $324.0 million (up 22% on a constant-currency basis), driven by the DCPayments and Spark acquisitions completed during January 2017.

·                  ATM operating revenues of $373.3 million, up 20% from $311.3 million (up 23% on a constant-currency basis).

·                  GAAP Net Income of $15.2 million, or $0.33 per diluted share, down from GAAP Net Income of $20.1 million, or $0.44 per diluted share.

·                  Adjusted EBITDA of $87.7 million ($90.9 million on a constant-currency basis), up from $81.7 million in the prior year.

·                  Adjusted Net Income per diluted share of $0.76 ($0.79 on a constant-currency basis), down from $0.80, impacted by the additional interest and depreciation expense from the acquisitions completed during January 2017.

 

“Our second quarter was marked by operational focus as we made significant progress on several key fronts, including the integration of DCPayments, software and EMV upgrades on a significant portion of our Company-owned U.S. ATM fleet, and the continued execution of our cost efficiency initiative. We made significant strides in the quarter to position ourselves for steady execution of the core business and focused pursuit of growth opportunities with financial institutions,” commented Steve Rathgaber, Cardtronics’ chief executive officer.

 

RECENT HIGHLIGHTS

 

·                  Expanded the Citibank branding relationship to 100 ATMs in Rite Aid stores in the New York City area.

·                  Secured ATM operating contracts representing over 1,000 locations across our regions.

·                  Secured a surcharge-free access arrangement with Caixa d’Enginyers (Engineers Savings Bank), our first surcharge-free network relationship in Spain.

·                  Extended our ATM placement agreement with Harris Teeter grocery stores. Harris Teeter, a subsidiary of The Kroger Co., operates over 240 stores across seven states.

·                  Added 28 new financial institutions to our Allpoint Network and enabled over 500,000 cardholders with surcharge-free access to our ATM network.

·                  Expanded the Allpoint Network to include 3,200 additional ATMs in Rite Aid and Kroger store locations.

 

See Disclosure of Non-GAAP Financial Information in this earnings release for definitions of Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income per diluted share, Free Cash Flow, and certain other non-GAAP measures on a constant-currency basis. For additional information, including reconciliations to the most directly comparable financial measure recognized under accounting principles generally accepted in the U.S. (“GAAP”), see the supplemental schedules of selected financial information in this earnings release.

 

SECOND QUARTER RESULTS

 

Consolidated revenues totaled $385.1 million for the second quarter of 2017, representing a 19% increase from $324.0 million from the same period of 2016, driven by the DirectCash Payments Inc. (“DCPayments”) and Spark ATM Systems Pty Ltd. (“Spark”) acquisitions completed during January 2017. ATM operating revenues for the second quarter of 2017 were up 20% from the same period of 2016. Adjusting for movements in currency exchange rates, ATM operating revenues were up 23% from the same period of 2016.

 

Driven primarily by the acquisitions completed during January 2017, ATM operating revenues in North America increased 11% and ATM operating revenues in Europe & Africa increased 6% (16% on a constant-currency basis) compared to the same period of 2016. The DCPayments operations in Australia & New Zealand contributed $32.9 million in ATM operating revenues and $8.9 million in gross profit during the second quarter of 2017. The appreciation of the U.S. dollar relative to the British pound adversely impacted the Company’s reported revenues and profits in the second quarter of 2017. The British pound was on average 10% weaker relative to the U.S. dollar during the second quarter of 2017 compared to the same period of 2016.

 

1



 

GAAP Net Income for the second quarter of 2017 was $15.2 million compared to GAAP Net Income of $20.1 million during the same period of 2016. The decrease in GAAP Net Income was primarily the result of the incremental interest, depreciation, and intangible asset amortization expenses associated with the acquisitions completed during January 2017, as well as the incremental professional services and other costs associated with the Company’s integration of the acquisitions. The Company’s GAAP tax rate was 23.6% for the second quarter of 2017 compared to 32.9% for the same period of 2016.

 

Adjusted EBITDA for the second quarter of 2017 totaled $87.7 million ($90.9 million on a constant-currency basis) compared to $81.7 million of Adjusted EBITDA during the same period of 2016. The increase in Adjusted EBITDA was primarily driven by the acquisitions completed during January 2017, partially offset by changes in currency exchange rates and higher operating costs, primarily associated with the Company’s U.S. ATM fleet upgrade to enable technology enhancements and comply with the EMV security standard and interim fraud loss exposure. Adjusted Net Income totaled $35.0 million ($0.76 per diluted share or $0.79 on a constant-currency basis) for the second quarter of 2017, compared to $36.8 million ($0.80 per diluted share) during the same period of 2016. The decrease in Adjusted Net Income is attributable to the factors discussed above and increased depreciation and interest expense associated with the acquisitions, as well as increased depreciation expense associated with the Company’s U.S. ATM fleet upgrade.

 

SIX MONTH RESULTS

 

Consolidated revenues totaled $742.7 million for the six months ended June 30, 2017, representing an 18% increase from $627.2 million from the same period of 2016, driven by the acquisitions completed during January 2017. ATM operating revenues for the six months ended June 30, 2017 were up 19% from the same period of 2016. Adjusting for movements in currency exchange rates, ATM operating revenues were up 22% from the same period of 2016.

 

Driven by the acquisitions completed during January 2017, ATM operating revenues in North America increased 10% and ATM operating revenues in Europe & Africa increased 2% (14% on a constant-currency basis) compared to the same period of 2016. The DCPayments operations in Australia & New Zealand contributed $64.4 million in ATM operating revenues and $17.1 million in gross profit during the six months ended June 30, 2017. The appreciation of the U.S. dollar relative to the British pound adversely impacted the Company’s reported revenues and profits in the six months ended June 30, 2017. The British pound was on average 12% weaker relative to the U.S. dollar during the six months ended June 30, 2017 compared to the same period of 2016.

 

GAAP Net Income for the six months ended June 30, 2017 was $14.3 million compared to GAAP Net Income of $35.5 million during the same period of 2016. The decrease in GAAP Net Income is partially attributable to $8.2 million of restructuring expenses recognized during the six months ended June 30, 2017, mostly related to employee severance costs in conjunction with the Company’s cost reduction initiative. The Company also incurred $12.4 million of professional services and other costs associated with the completion and integration of the acquisitions completed during January 2017. Also, related to the recently completed acquisitions, the Company’s intangible asset amortization expense was up $11.5 million compared to the same period of 2016. The Company’s GAAP tax rate was 10.8% for the six months ended June 30, 2017 compared to 33.4% for the same period of 2016.

 

Adjusted EBITDA for the six months ended June 30, 2017 totaled $158.9 million ($164.8 million on a constant-currency basis) compared to $154.9 million of Adjusted EBITDA during the same period of 2016. The increase in Adjusted EBITDA was primarily driven by the acquisitions completed during January 2017, partially offset by lower revenue in the U.S., coupled with changes in currency exchange rates and higher operating costs, primarily associated with the Company’s U.S. ATM fleet upgrade to comply with the EMV security standard and interim fraud loss exposure and to enable other technology enhancements. Adjusted Net Income totaled $60.6 million ($1.31 per diluted share or $1.36 on a constant-currency basis) for the six months ended June 30, 2017, compared to $68.1 million ($1.49 per diluted share) during the same period of 2016. The decrease in Adjusted Net Income is attributable to the factors discussed above and increased depreciation and interest expense associated with the acquisitions, as well as increased depreciation expense associated with the Company’s U.S. ATM fleet upgrade.

 

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BORROWINGS AND LIQUIDITY

 

On April 4, 2017, the Company issued $300 million in aggregate principal amount of 5.50% Senior Notes due 2025 (the “2025 Notes”) in a private placement offering. The net proceeds after payment of the related expenses were used to repay a portion of the outstanding borrowings under the revolving credit facility. Subsequent to the issuance of the 2025 Notes, the revolving credit facility was amended to decrease the borrowing capacity from $600 million to $400 million. The revolving credit facility was also amended to include an accordion provision enabling an additional potential borrowing capacity of approximately $100 million under certain conditions.

 

As of June 30, 2017, the Company had outstanding borrowings of approximately $184 million and approximately $216 million in available borrowing capacity under its $400 million revolving credit facility due in 2021. Additionally, the Company had $53 million in cash as of June 30, 2017. The Company’s other outstanding indebtedness as of June 30, 2017 included $288 million Convertible Senior Notes due 2020, $250 million in Senior Notes due 2022, and the $300 million 2025 Notes that were issued during the second quarter of 2017. The Convertible Senior Notes due 2020, Senior Notes due 2022, and 2025 Notes had carrying balances of $246 million, $248 million, and $295 million, respectively, and are reflected as long-term debt on the balance sheet, net of unamortized discount and capitalized debt issuance costs.

 

SEGMENT REPORTING CHANGE

 

During the second quarter of 2017, the DCPayments operations in Canada and Mexico were integrated into the Company’s North America operations and are now reported in the North America segment. The Australia and New Zealand operations that were acquired in the DCPayments acquisition are now presented in a newly created Australia & New Zealand segment. The DCPayments operations in the U.K. are now reported within the Company’s Europe & Africa segment. Additionally, the Company’s transaction processing operations are now reported within the North America segment, having previously been reported in the Corporate & Other segment. Conforming changes to prior periods have been made, where applicable.

 

2017 GUIDANCE

 

Below is the Company’s financial guidance for the full year 2017:

 

·                  Revenues of $1.45 billion to $1.5 billion;

·                  Gross profit margin of 33.1% to 33.3%;

·                  GAAP Net Income of $47 million to $54 million;

·                  Adjusted EBITDA of $325 million to $340 million;

·                  Depreciation and accretion expense of $112 million to $115 million;

·                  Cash interest expense of $34 million to $35 million;

·                  Adjusted Net Income of $130 million to $139 million;

·                  Adjusted Net Income per diluted share of $2.80 to $3.00, based on approximately 46.3 million weighted average diluted shares outstanding; and

·                  Capital expenditures of $130 million to $140 million.

 

The Adjusted EBITDA and Adjusted Net Income guidance excludes the impact of certain expenses, as outlined in the reconciliation provided at the end of this earnings release. This guidance is based on average foreign currency exchange rates for the year of £1.00 U.K. to $1.25 U.S., $20.00 Mexican pesos to $1.00 U.S., $1.00 Canadian dollar to $0.77 U.S., €1.00 Euros to $1.10 U.S., $1.00 Australian dollar to $0.77 U.S., and R14.29 South African Rand to $1.00 U.S. Additionally, this guidance is based on an estimated non-GAAP tax rate of approximately 27% for the remainder of 2017.

 

Included in the guidance above is the assumption that the deinstallations of the ATMs at 7-Eleven locations in the U.S. will occur primarily throughout the next five months of 2017 and be substantially complete by the end of the year, with a small number of units expected to continue to operate into the first quarter of 2018. 7-Eleven in the U.S. accounted for approximately 18% of the Company’s consolidated revenues for the year ended 2016. The Company estimates that the incremental gross margin associated with these revenues is approximately 45%, compared to the Company’s reported consolidated gross margin of 36% in 2016. While the ATM deinstallation schedule remains subject to change as of the

 

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date of this earnings release, the Company currently estimates that the approximate revenue impact associated with the deinstallations is approximately $40 million to $60 million and the approximate impact to gross margin will be approximately $30 million to $35 million in 2017, relative to 2016, during which the Company had the contract in place for the full year.

 

CONFERENCE CALL INFORMATION

 

The Company will host a conference call today, Wednesday, August 2, 2017, at 4:00 p.m. Central Time (5:00 p.m. Eastern Time) to discuss its financial results for the quarter ended June 30, 2017. To access the call, please call the conference call operator at:

 

Dial in:

 

(877) 806-7890

Alternate dial-in:

 

(973) 935-8713

 

Please call in fifteen minutes prior to the scheduled start time and request to be connected to the “Cardtronics Second Quarter 2017 Earnings Conference Call.” Additionally, a live audio webcast of the conference call will be available online through the investor relations section of the Company’s website at www.cardtronics.com.

 

A digital replay of the conference call will be available through Wednesday, August 16, 2017, and can be accessed by calling (855) 859-2056 or (404) 537-3406 and entering 40593740 for the conference ID. A replay of the conference call will also be available online through the Company’s website subsequent to the call through August 31, 2017.

 

ABOUT CARDTRONICS (NASDAQ: CATM)

 

Making ATM cash access convenient where people shop, work, and live, Cardtronics is at the convergence of retailers, financial institutions, prepaid card programs, and the customers they share. Cardtronics provides services to approximately 237,000 ATMs in North America, Europe, Asia-Pacific, and Africa. Whether Cardtronics is driving foot traffic for top retailers, enhancing ATM brand presence for card issuers or expanding card holders’ surcharge-free cash access, Cardtronics is convenient access to cash, when and where consumers need it. Cardtronics is where cash meets commerce.

 

CONTACT INFORMATION

 

Media Relations
Nick Pappathopoulos
Director — Public Relations
832-308-4396
npappathopoulos@cardtronics.com

 

Investor Relations
Phillip Chin
EVP — Corporate Development & Investor Relations
832-308-4975
ir@cardtronics.com

 

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

 

This earnings release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and are intended to be covered by the safe harbor provisions thereof. These forward-looking statements are based on management’s current expectations and beliefs concerning future developments and their potential effect on the Company and there can be no assurance that future developments affecting the Company will be those that are anticipated. All comments concerning the Company’s expectations for future revenues and operating results are based on its estimates for its existing operations and do not include the potential impact of any future acquisitions. The Company’s forward-looking statements involve significant risks and uncertainties (some of which are beyond its control) and assumptions that could cause actual results to differ materially from its historical experience and present expectations or projections. Risk factors are described in the Company’s 2016 Form 10-K, and those set forth from time-to-time in other filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on forward-looking statements contained in this earnings release, which speak only as of the date of this earnings release. The Company undertakes no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events, or otherwise.

 

DISCLOSURE OF NON-GAAP FINANCIAL INFORMATION

 

EBITDA, Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income per diluted share, Free Cash Flow, and certain GAAP as well as non-GAAP measures on a constant-currency basis represent non-GAAP financial measures provided as a complement to financial results prepared in accordance with GAAP and may not be comparable to similarly-titled measures reported by other companies. The Company uses these non-GAAP financial measures in managing and measuring the performance of its business, including setting and measuring incentive based compensation for management. Management believes that the presentation of these measures and the identification of notable, non-cash, and/or (if applicable in a particular period) certain costs not anticipated to occur in future periods enhance an investor’s understanding of the underlying trends in the Company’s business and provide for better comparability between periods in different years.

 

Adjusted EBITDA excludes depreciation, accretion, and amortization of intangible assets as these amounts can vary substantially from company to company within the Company’s industry depending upon accounting methods and book values of assets, capital structures, and the methods by which the assets were acquired. Adjusted EBITDA also excludes share-based compensation expense, acquisition and divestiture-related expenses, certain non-operating expenses, (if applicable in a particular period) certain costs not anticipated to occur in future periods, gains or losses on disposal and impairment of assets, the Company’s obligations for the payment of income taxes, interest expense, and other obligations such as capital expenditures, and includes an adjustment for noncontrolling interests. Adjusted Net Income represents net income computed in accordance with GAAP, before amortization of intangible assets, gains or losses on disposal and impairment of assets, share-based compensation expense, certain other expense amounts, acquisition and divestiture-related expenses, certain non-operating expenses, and (if applicable in a particular period) certain costs not anticipated to occur in future periods (together, the “Adjustments”). Prior to and for the three and six months ended June 30, 2016, Adjusted Net Income was calculated using an estimated long-term, cross-jurisdictional effective cash tax rate of 32%. Subsequent to the redomicile of the Company’s parent company to the U.K., the Company revised the process for determining its non-GAAP tax rate and now utilizes a non-GAAP tax rate derived from the GAAP tax rate adjusted for the net tax effects of the Adjustments, based on the nature and geography of the Adjustments. For the three and six months ended June 30, 2017, the non-GAAP tax rate used to calculate Adjusted Net Income was approximately 27.7% and 27.9%, respectively. Adjusted Net Income per diluted share is calculated by dividing Adjusted Net Income by weighted average diluted shares outstanding. Free Cash Flow is defined as cash provided by operating activities less payments for capital expenditures, including those financed through direct debt, but excluding acquisitions. The Free Cash Flow measure does not take into consideration certain other non-discretionary cash requirements such as mandatory principal payments on portions of the Company’s long-term debt. Management calculates certain GAAP as well as non-GAAP measures on a constant-currency basis using the average foreign currency exchange rates applicable in the corresponding period of the previous year and applying these rates to the measures in the current reporting period. Management uses GAAP as well as non-GAAP measures on a constant-currency basis to assess performance and eliminate the effect foreign currency exchange rates have on comparability between periods.

 

The non-GAAP financial measures presented herein should not be considered in isolation or as a substitute for operating income, net income, cash flows from operating, investing, or financing activities, or other income or cash flow measures prepared in accordance with GAAP. Reconciliations of the non-GAAP financial measures used herein to the most directly comparable GAAP financial measures are presented in tabular form at the end of this earnings release.

 

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Consolidated Statements of Operations

For the Three and Six Months Ended June 30, 2017 and 2016

(In thousands, excluding share, per share amounts, and percentages)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30, 

 

June 30, 

 

 

 

2017

 

% Change

 

2016

 

2017

 

% Change

 

2016

 

 

 

(Unaudited)

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

ATM operating revenues

 

$

373,260

 

19.9%

 

$

311,331

 

$

715,048

 

18.5%

 

$

603,419

 

ATM product sales and other revenues

 

11,852

 

(6.2)

 

12,630

 

27,636

 

16.2

 

23,789

 

Total revenues

 

385,112

 

18.9

 

323,961

 

742,684

 

18.4

 

627,208

 

Cost of revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of ATM operating revenues (excludes depreciation, accretion, and amortization of intangible assets reported separately below.)

 

246,484

 

24.0

 

198,843

 

478,411

 

24.3

 

384,783

 

Cost of ATM product sales and other revenues

 

11,116

 

(3.2)

 

11,487

 

25,751

 

20.2

 

21,420

 

Total cost of revenues

 

257,600

 

22.5

 

210,330

 

504,162

 

24.1

 

406,203

 

Gross profit

 

127,512

 

12.2

 

113,631

 

238,522

 

7.9

 

221,005

 

Gross profit %

 

33.1

%

 

 

35.1

%

32.1

%

 

 

35.2

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general, and administrative expenses

 

43,470

 

14.7

 

37,912

 

85,419

 

13.4

 

75,311

 

Redomicile-related expenses

 

 

(100.0)

 

5,214

 

760

 

(93.2)

 

11,250

 

Restructuring expenses

 

 

n/m

 

 

8,243

 

n/m

 

 

Acquisition and divestiture-related expenses

 

3,993

 

492.4

 

674

 

12,449

 

451.3

 

2,258

 

Depreciation and accretion expense

 

29,755

 

28.8

 

23,100

 

58,876

 

28.6

 

45,777

 

Amortization of intangible assets

 

15,247

 

57.3

 

9,691

 

30,427

 

60.5

 

18,954

 

Loss (gain) on disposal and impairment of assets

 

669

 

n/m

 

(1,326

)

3,863

 

n/m

 

(944

)

Total operating expenses

 

93,134

 

23.7

 

75,265

 

200,037

 

31.1

 

152,606

 

Income from operations

 

34,378

 

(10.4)

 

38,366

 

38,485

 

(43.7)

 

68,399

 

Other expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

9,460

 

111.8

 

4,466

 

16,017

 

78.8

 

8,958

 

Amortization of deferred financing costs and note discount

 

3,146

 

5.5

 

2,982

 

6,122

 

6.2

 

5,764

 

Other expense

 

1,945

 

106.3

 

943

 

365

 

(5.9)

 

388

 

Total other expense

 

14,551

 

73.4

 

8,391

 

22,504

 

48.9

 

15,110

 

Income before income taxes

 

19,827

 

(33.9)

 

29,975

 

15,981

 

(70.0)

 

53,289

 

Income tax expense

 

4,670

 

(52.6)

 

9,861

 

1,718

 

(90.4)

 

17,816

 

Effective tax rate

 

23.6

%

 

 

32.9

%

10.8

%

 

 

33.4

%

Net income

 

15,157

 

(24.6)

 

20,114

 

14,263

 

(59.8)

 

35,473

 

Net (loss) income attributable to noncontrolling interests

 

(1

)

(97.1)

 

(34

)

6

 

n/m

 

(59

)

Net income attributable to controlling interests and available to common shareholders

 

$

15,158

 

(24.8)%

 

$

20,148

 

$

14,257

 

(59.9)%

 

$

35,532

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per common share — basic

 

$

0.33

 

 

 

$

0.45

 

$

0.31

 

 

 

$

0.79

 

Net income per common share — diluted

 

$

0.33

 

 

 

$

0.44

 

$

0.31

 

 

 

$

0.78

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding — basic

 

45,637,778

 

 

 

45,199,450

 

45,564,527

 

 

 

45,136,553

 

Weighted average shares outstanding — diluted

 

46,222,112

 

 

 

45,748,570

 

46,272,191

 

 

 

45,704,474

 

 

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Condensed Consolidated Balance Sheets

As of June 30, 2017 and December 31, 2016

(In thousands)

 

 

 

June 30, 2017

 

December 31, 2016

 

 

 

(Unaudited)

 

 

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

53,177

 

$

73,534

 

Accounts and notes receivable, net

 

98,751

 

84,156

 

Inventory, net

 

14,232

 

12,527

 

Restricted cash

 

46,909

 

32,213

 

Prepaid expenses, deferred costs, and other current assets

 

86,329

 

67,107

 

Total current assets

 

299,398

 

269,537

 

Property and equipment, net

 

505,454

 

392,735

 

Intangible assets, net

 

278,471

 

121,230

 

Goodwill

 

903,101

 

533,075

 

Deferred tax asset, net

 

9,727

 

13,004

 

Prepaid expenses, deferred costs, and other noncurrent assets

 

38,881

 

35,115

 

Total assets

 

$

2,035,032

 

$

1,364,696

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Current portion of other long-term liabilities

 

$

32,793

 

$

28,237

 

Accounts payable and other accrued and current liabilities

 

345,395

 

285,583

 

Total current liabilities

 

378,188

 

313,820

 

Long-term liabilities:

 

 

 

 

 

Long-term debt

 

973,339

 

502,539

 

Asset retirement obligations

 

57,096

 

45,086

 

Deferred tax liability, net

 

49,915

 

27,625

 

Other long-term liabilities

 

68,421

 

18,691

 

Total liabilities

 

1,526,959

 

907,761

 

Shareholders’ equity

 

508,073

 

456,935

 

Total liabilities and shareholders’ equity

 

$

2,035,032

 

$

1,364,696

 

 

7



 

SELECTED STATEMENT OF OPERATIONS DETAIL:

(Unaudited)

 

Total revenues by segment:

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30, 

 

June 30, 

 

 

 

2017

 

% Change

 

2016

 

2017

 

% Change

 

2016

 

 

 

(In thousands, excluding percentages)

 

North America

 

 

 

 

 

 

 

 

 

 

 

 

 

ATM operating revenues

 

$

242,189

 

10.9%

 

$

218,449

 

$

469,377

 

10.1%

 

$

426,454

 

ATM product sales and other revenues

 

9,667

 

(13.9)

 

11,228

 

23,536

 

12.1

 

20,992

 

North America total revenues

 

251,856

 

9.7

 

229,677

 

492,913

 

10.2

 

447,446

 

Europe & Africa

 

 

 

 

 

 

 

 

 

 

 

 

 

ATM operating revenues

 

100,946

 

5.5

 

95,713

 

186,330

 

2.2

 

182,298

 

ATM product sales and other revenues

 

2,208

 

57.5

 

1,402

 

4,071

 

45.5

 

2,797

 

Europe & Africa total revenues

 

103,154

 

6.2

 

97,115

 

190,401

 

2.9

 

185,095

 

Australia & New Zealand

 

 

 

 

 

 

 

 

 

 

 

 

 

ATM operating revenues

 

32,891

 

n/m

 

 

64,384

 

n/m

 

 

ATM product sales and other revenues

 

74

 

n/m

 

 

159

 

n/m

 

 

Australia & New Zealand total revenues

 

32,965

 

n/m

 

 

64,543

 

n/m

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Eliminations

 

(2,863

)

1.1

 

(2,831

)

(5,173

)

(3.0)

 

(5,333

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total ATM operating revenues

 

373,260

 

19.9

 

311,331

 

715,048

 

18.5

 

603,419

 

Total ATM product sales and other revenues

 

11,852

 

(6.2)

 

12,630

 

27,636

 

16.2

 

23,789

 

Total revenues

 

$

385,112

 

18.9%

 

$

323,961

 

$

742,684

 

18.4%

 

$

627,208

 

 

Breakout of ATM operating revenues:

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30, 

 

June 30, 

 

 

 

2017

 

% Change

 

2016

 

2017

 

% Change

 

2016

 

 

 

(In thousands, excluding percentages)

 

Surcharge revenues

 

$

169,794

 

34.4%

 

$

126,317

 

$

324,049

 

33.3%

 

$

243,154

 

Interchange revenues

 

123,248

 

4.5

 

117,917

 

236,899

 

5.3

 

224,959

 

Bank-branding and surcharge-free network revenues

 

47,933

 

4.4

 

45,934

 

94,340

 

1.6

 

92,897

 

Managed services revenues

 

15,434

 

73.7

 

8,885

 

31,050

 

75.2

 

17,724

 

Other revenues

 

16,851

 

37.2

 

12,278

 

28,710

 

16.3

 

24,685

 

Total ATM operating revenues

 

$

373,260

 

19.9%

 

$

311,331

 

$

715,048

 

18.5%

 

$

603,419

 

 

Total gross profit by segment:

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30, 

 

June 30, 

 

 

 

2017

 

% Change

 

2016

 

2017

 

% Change

 

2016

 

 

 

(In thousands, excluding percentages)

 

North America

 

$

81,712

 

4.0%

 

$

78,570

 

$

156,906

 

0.6%

 

$

155,946

 

Europe & Africa

 

38,092

 

7.8

 

35,331

 

66,701

 

1.9

 

65,446

 

Australia & New Zealand

 

8,850

 

n/m

 

 

17,050

 

n/m

 

 

Corporate & Eliminations

 

(1,142

)

n/m

 

(270

)

(2,135

)

n/m

 

(387

)

Total gross profit

 

$

127,512

 

12.2%

 

$

113,631

 

$

238,522

 

7.9%

 

$

221,005

 

 

8



 

Breakout of cost of ATM operating revenues (exclusive of depreciation, accretion, and amortization of intangible assets):

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30, 

 

June 30, 

 

 

 

2017

 

% Change

 

2016

 

2017

 

% Change

 

2016

 

 

 

(In thousands, excluding percentages)

 

Merchant commissions

 

$

123,471

 

30.6%

 

$

94,557

 

$

237,578

 

29.9%

 

$

182,952

 

Vault cash rental

 

18,426

 

(0.9)

 

18,587

 

37,078

 

3.4

 

35,860

 

Other costs of cash

 

26,951

 

30.6

 

20,631

 

55,522

 

35.8

 

40,900

 

Repairs and maintenance

 

22,096

 

16.6

 

18,948

 

43,405

 

19.7

 

36,251

 

Communications

 

9,681

 

21.0

 

7,999

 

18,825

 

20.6

 

15,611

 

Transaction processing

 

5,728

 

38.3

 

4,143

 

11,334

 

46.3

 

7,745

 

Employee costs

 

19,858

 

17.2

 

16,939

 

38,805

 

13.7

 

34,141

 

Other expenses

 

20,273

 

19.0

 

17,039

 

35,864

 

14.5

 

31,323

 

Total cost of ATM operating revenues

 

$

246,484

 

24.0%

 

$

198,843

 

$

478,411

 

24.3%

 

$

384,783

 

 

Breakout of selling, general, and administrative expenses:

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30, 

 

June 30, 

 

 

 

2017

 

% Change

 

2016

 

2017

 

% Change

 

2016

 

 

 

(In thousands, excluding percentages)

 

Employee costs

 

$

22,459

 

14.9%

 

$

19,547

 

$

47,274

 

17.6%

 

$

40,212

 

Share-based compensation expense

 

3,440

 

(39.6)

 

5,700

 

5,680

 

(35.1)

 

8,751

 

Professional fees

 

5,803

 

43.4

 

4,047

 

11,750

 

20.4

 

9,761

 

Other expenses

 

11,768

 

36.6

 

8,618

 

20,715

 

24.9

 

16,587

 

Total selling, general, and administrative expenses

 

$

43,470

 

14.7%

 

$

37,912

 

$

85,419

 

13.4%

 

$

75,311

 

 

Depreciation and accretion expense by segment:

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30, 

 

June 30, 

 

 

 

2017

 

% Change

 

2016

 

2017

 

% Change

 

2016

 

 

 

(In thousands, excluding percentages)

 

North America

 

$

17,404

 

26.7%

 

$

13,739

 

$

34,559

 

26.5%

 

$

27,320

 

Europe & Africa

 

10,782

 

15.2

 

9,361

 

20,617

 

11.7

 

18,457

 

Australia & New Zealand

 

1,569

 

n/m

 

 

3,700

 

n/m

 

 

Total depreciation and accretion expense

 

$

29,755

 

28.8%

 

$

23,100

 

$

58,876

 

28.6%

 

$

45,777

 

 

9



 

SELECTED BALANCE SHEET DETAIL:

(Unaudited, excluding December 31, 2016)

 

Long-term debt:

 

 

 

June 30, 2017

 

December 31, 2016

 

 

 

(In thousands)

 

Revolving credit facility

 

$

184,234

 

$

14,100

 

1.00% Convertible senior notes (1)

 

246,444

 

241,068

 

5.125% Senior notes (1)

 

247,701

 

247,371

 

5.50% Senior notes (1)

 

294,960

 

 

Total long-term debt

 

$

973,339

 

$

502,539

 

 


(1)             The 1.00% Convertible Senior Notes due 2020 with a face value of $287.5 million are presented net of the unamortized discount and capitalized debt issuance costs of $41.1 million and $46.4 million as of June 30, 2017 and December 31, 2016, respectively. In accordance with GAAP, the estimated fair value of the conversion feature within the Convertible Senior Notes was recorded as additional paid-in capital within equity at issuance. The Convertible Senior Notes are being accreted over the term of the notes to the full principal amount ($287.5 million). The 5.125% Senior Notes due 2022 with a face value of $250.0 million are presented net of capitalized debt issuance costs of $2.3 million and $2.6 million as of June 30, 2017 and December 31, 2016, respectively. The 5.50% Senior Notes due 2025 with a face value of $300.0 million are presented net of capitalized debt issuance costs of $5.0 million as of June 30, 2017.

 

Share count rollforward:

 

Total shares outstanding as of December 31, 2016

 

45,326,430

 

Shares issued — stock options exercised

 

12,200

 

Shares vested — restricted stock units

 

311,672

 

Total shares outstanding as of June 30, 2017

 

45,650,302

 

 

SELECTED CASH FLOW DETAIL:

(Unaudited)

 

Selected cash flow statement amounts:

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30, 

 

June 30, 

 

 

 

2017

 

2016

 

2017

 

2016

 

 

 

(In thousands)

 

Cash provided by operating activities

 

$

74,130

 

$

79,932

 

$

84,579

 

$

124,587

 

Cash used in investing activities

 

(31,307

)

(33,011

)

(556,945

)

(44,767

)

Net cash (used in) provided by financing activities

 

(26,864

)

(51,809

)

456,337

 

(85,850

)

Effect of exchange rate changes on cash

 

(3,027

)

(509

)

(4,328

)

(615

)

Net increase (decrease) in cash and cash equivalents

 

12,932

 

(5,397

)

(20,357

)

(6,645

)

Cash and cash equivalents as of beginning of period

 

40,245

 

25,049

 

73,534

 

26,297

 

Cash and cash equivalents as of end of period

 

$

53,177

 

$

19,652

 

$

53,177

 

$

19,652

 

 

10



 

Key Operating Metrics — Including Acquisitions in All Periods Presented

For the Three and Six Months Ended June 30, 2017 and 2016

(Unaudited)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30, 

 

June 30, 

 

 

 

2017

 

% Change

 

2016

 

2017

 

% Change

 

2016

 

Average number of transacting ATMs:

 

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

45,207

 

9.1%

 

41,450

 

45,196

 

11.8%

 

40,413

 

United Kingdom and Ireland

 

21,574

 

34.3

 

16,063

 

21,416

 

34.4

 

15,936

 

Australia and New Zealand

 

8,816

 

n/m

 

 

8,913

 

n/m

 

 

Canada

 

6,053

 

225.3

 

1,861

 

6,126

 

230.1

 

1,856

 

South Africa

 

2,368

 

n/m

 

 

2,352

 

n/m

 

 

Germany, Poland, and Spain

 

1,535

 

32.9

 

1,155

 

1,478

 

29.4

 

1,142

 

Mexico

 

957

 

(30.7)

 

1,381

 

1,117

 

(19.5)

 

1,387

 

Total Company-owned

 

86,510

 

39.7

 

61,910

 

86,598

 

42.6

 

60,734

 

United States (1)

 

12,363

 

(25.6)

 

16,613

 

12,499

 

(26.7)

 

17,063

 

Canada

 

2,974

 

n/m

 

 

2,919

 

n/m

 

 

United Kingdom and Ireland

 

635

 

n/m

 

 

616

 

n/m

 

 

Australia and New Zealand

 

103

 

n/m

 

 

103

 

n/m

 

 

Total Merchant-owned

 

16,075

 

(3.2)

 

16,613

 

16,137

 

(5.4)

 

17,063

 

Average number of transacting ATMs — ATM operations

 

102,585

 

30.6

 

78,523

 

102,735

 

32.1

 

77,797

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Managed Services and Processing:

 

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

127,435

 

8.3

 

117,696

 

125,493

 

8.8

 

115,327

 

Canada

 

3,411

 

99.8

 

1,707

 

3,385

 

110.1

 

1,611

 

Australia and New Zealand

 

1,857

 

n/m

 

 

1,776

 

n/m

 

 

Average number of transacting ATMs — Managed services and processing

 

132,703

 

11.1

 

119,403

 

130,654

 

11.7

 

116,938

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total average number of transacting ATMs

 

235,288

 

18.9

 

197,926

 

233,389

 

19.8

 

194,735

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total transactions (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

ATM operations

 

390,094

 

14.1

 

341,941

 

752,408

 

14.9

 

655,072

 

Managed services and processing, net

 

261,293

 

47.6

 

176,998

 

507,874

 

46.0

 

347,877

 

Total transactions

 

651,387

 

25.5

 

518,939

 

1,260,282

 

25.7

 

1,002,949

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total cash withdrawal transactions (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

ATM operations

 

248,166

 

14.8

 

216,197

 

482,411

 

18.2

 

408,283

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per ATM per month amounts (excludes managed services and processing):

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash withdrawal transactions

 

806

 

(12.2)

 

918

 

783

 

(10.5)

 

875

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ATM operating revenues (2)

 

$

1,136

 

(9.1)

 

$

1,250

 

$

1,084

 

(11.1)

 

$

1,220

 

Cost of ATM operating revenues (2)(3)

 

767

 

(4.5)

 

803

 

737

 

(6.0)

 

784

 

ATM operating gross profit (2) (3)

 

$

369

 

(17.4)%

 

$

447

 

$

347

 

(20.4)%

 

$

436

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ATM operating gross profit margin (2) (3)

 

32.5

%

 

 

35.8

%

32.0

%

 

 

35.7

%

 


(1)             Certain ATMs previously reported in this category are now included in the United States: Managed services and processing or United States: Company-owned categories.

(2)             ATM operating revenues and Cost of ATM operating revenues relating to managed services, processing, ATM equipment sales, and other ATM-related services are not included in this calculation.

(3)             Amounts presented exclude the effect of depreciation, accretion, and amortization of intangible assets, which is reported separately in the Company’s Consolidated Statements of Operations.

 

11



 

Key Operating Metrics — Excluding Acquisitions in All Periods Presented

For the Three and Six Months Ended June 30, 2017 and 2016

(Unaudited)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30, 

 

June 30, 

 

 

 

2017

 

% Change

 

2016

 

2017

 

% Change

 

2016

 

Average number of transacting ATMs:

 

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

45,207

 

9.1%

 

41,450

 

42,816

 

5.9%

 

40,413

 

United Kingdom and Ireland

 

16,567

 

3.1

 

16,063

 

16,451

 

3.2

 

15,936

 

Canada

 

1,835

 

(1.4)

 

1,861

 

1,813

 

(2.3)

 

1,856

 

Germany, Poland, and Spain

 

1,535

 

32.9

 

1,155

 

1,478

 

29.4

 

1,142

 

Mexico

 

523

 

(62.1)

 

1,381

 

699

 

(49.6)

 

1,387

 

Total Company-owned

 

65,667

 

6.1

 

61,910

 

63,257

 

4.2

 

60,734

 

United States (1)

 

12,363

 

(25.6)

 

16,613

 

12,499

 

(26.7)

 

17,063

 

Total Merchant-owned

 

12,363

 

(25.6)

 

16,613

 

12,499

 

(26.7)

 

17,063

 

Average number of transacting ATMs — ATM operations

 

78,030

 

(0.6)

 

78,523

 

75,756

 

(2.6)

 

77,797

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Managed Services and Processing:

 

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

127,435

 

8.3

 

117,696

 

125,493

 

8.8

 

115,327

 

Canada

 

2,033

 

19.1

 

1,707

 

2,009

 

24.7

 

1,611

 

Average number of transacting ATMs — Managed services and processing

 

129,468

 

8.4

 

119,403

 

127,502

 

9.0

 

116,938

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total average number of transacting ATMs

 

207,498

 

4.8

 

197,926

 

203,258

 

4.4

 

194,735

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total transactions (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

ATM operations

 

345,912

 

1.2

 

341,941

 

658,416

 

0.5

 

655,072

 

Managed services and processing, net

 

166,643

 

(5.9)

 

176,998

 

330,086

 

(5.1)

 

347,877

 

Total transactions

 

512,555

 

(1.2)

 

518,939

 

988,502

 

(1.4)

 

1,002,949

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total cash withdrawal transactions (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

ATM operations

 

212,919

 

(1.5)

 

216,197

 

408,207

 

 

408,283

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per ATM per month amounts (excludes managed services and processing):

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash withdrawal transactions

 

910

 

(0.9)

 

918

 

898

 

2.6

 

875

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ATM operating revenues (2)

 

$

1,192

 

(4.6)

 

$

1,250

 

$

1,181

 

(3.2)

 

$

1,220

 

Cost of ATM operating revenues (2)(3)

 

791

 

(1.5)

 

803

 

784

 

 

784

 

ATM operating gross profit (2) (3)

 

$

401

 

(10.3)%

 

$

447

 

$

397

 

(8.9)%

 

$

436

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ATM operating gross profit margin (2) (3)

 

33.6

%

 

 

35.8

%

33.6

%

 

 

35.7

%

 


(1)             Certain ATMs previously reported in this category are now included in the United States: Managed services and processing or United States: Company-owned categories.

(2)             ATM operating revenues and Cost of ATM operating revenues relating to managed services, processing, ATM equipment sales, and other ATM-related services are not included in this calculation.

(3)             Amounts presented exclude the effect of depreciation, accretion, and amortization of intangible assets, which is reported separately in the Company’s Consolidated Statements of Operations.

 

12



 

Key Operating Metrics — Ending Machine Count

As of June 30, 2017 and 2016

(Unaudited)

 

 

 

June 30, 2017

 

June 30, 2016

 

Ending number of transacting ATMs:

 

 

 

 

 

United States

 

45,195

 

42,097

 

United Kingdom and Ireland

 

21,682

 

16,203

 

Australia and New Zealand

 

8,784

 

 

Canada

 

6,146

 

1,833

 

South Africa

 

2,389

 

 

Germany, Poland, and Spain

 

1,604

 

1,193

 

Mexico

 

947

 

1,364

 

Total Company-owned

 

86,747

 

62,690

 

United States

 

12,278

 

16,353

 

Canada

 

3,001

 

 

United Kingdom and Ireland

 

718

 

 

Australia and New Zealand

 

103

 

 

Total Merchant-owned

 

16,100

 

16,353

 

Ending number of transacting ATMs — ATM operations

 

102,847

 

79,043

 

 

 

 

 

 

 

United States

 

128,716

 

119,309

 

Canada

 

3,335

 

1,724

 

Australia and New Zealand

 

1,992

 

 

Ending number of transacting ATMs — Managed services and processing

 

134,043

 

121,033

 

 

 

 

 

 

 

Total ending number of transacting ATMs

 

236,890

 

200,076

 

 

13



 

Reconciliation of Net Income Attributable to Controlling Interests and Available to Common Shareholders to EBITDA, Adjusted EBITDA, and Adjusted Net Income

For the Three and Six Months Ended June 30, 2017 and 2016

(Unaudited)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30, 

 

June 30, 

 

 

 

2017

 

2016

 

2017

 

2016

 

 

 

(In thousands, excluding share and per share amounts)

 

Net income attributable to controlling interests and available to common shareholders

 

$

15,158

 

$

20,148

 

$

14,257

 

$

35,532

 

Adjustments:

 

 

 

 

 

 

 

 

 

Interest expense, net

 

9,460

 

4,466

 

16,017

 

8,958

 

Amortization of deferred financing costs and note discount

 

3,146

 

2,982

 

6,122

 

5,764

 

Income tax expense

 

4,670

 

9,861

 

1,718

 

17,816

 

Depreciation and accretion expense

 

29,755

 

23,100

 

58,876

 

45,777

 

Amortization of intangible assets

 

15,247

 

9,691

 

30,427

 

18,954

 

EBITDA 

 

$

77,436

 

$

70,248

 

$

127,417

 

$

132,801

 

 

 

 

 

 

 

 

 

 

 

Add back:

 

 

 

 

 

 

 

 

 

Loss (gain) on disposal and impairment of assets

 

669

 

(1,326

)

3,863

 

(944

)

Other expense (1)

 

1,945

 

943

 

365

 

388

 

Noncontrolling interests (2)

 

(6

)

(17

)

(10

)

(35

)

Share-based compensation expense

 

3,623

 

5,970

 

5,820

 

9,138

 

Acquisition and divestiture-related expenses (3)

 

3,993

 

674

 

12,449

 

2,258

 

Redomicile-related expenses (4)

 

 

5,214

 

760

 

11,250

 

Restructuring expenses (5)

 

 

 

8,243

 

 

Adjusted EBITDA

 

$

87,660

 

$

81,706

 

$

158,907

 

$

154,856

 

Less:

 

 

 

 

 

 

 

 

 

Interest expense, net

 

9,460

 

4,466

 

16,017

 

8,958

 

Depreciation and accretion expense (6)

 

29,754

 

23,093

 

58,872

 

45,762

 

Adjusted pre-tax income

 

$

48,446

 

$

54,147

 

$

84,018

 

$

100,136

 

Income tax expense (7)

 

13,418

 

17,327

 

23,449

 

32,043

 

Adjusted Net Income

 

$

35,028

 

$

36,820

 

$

60,569

 

$

68,093

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net Income per basic share

 

$

0.77

 

$

0.81

 

$

1.33

 

$

1.51

 

Adjusted Net Income per diluted share

 

$

0.76

 

$

0.80

 

$

1.31

 

$

1.49

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding — basic

 

45,637,778

 

45,199,450

 

45,564,527

 

45,136,553

 

Weighted average shares outstanding — diluted

 

46,222,112

 

45,748,570

 

46,272,191

 

45,704,474

 

 


(1)             Includes foreign currency translation gains/losses, the revaluation of the estimated acquisition-related contingent consideration payable, and other non-operating costs.

(2)             Noncontrolling interests adjustment made such that Adjusted EBITDA includes only the Company’s ownership interest in the Adjusted EBITDA of one of its Mexican subsidiaries.

(3)             Acquisition and divestiture-related expenses include costs incurred for professional and legal fees and certain other transition and integration-related costs.

(4)             Expenses associated with the Company’s redomicile of its parent company to the U.K., which was completed on July 1, 2016.

(5)             Restructuring expenses primarily related to employee severance costs associated with a corporate reorganization and broad initiative to reduce costs implemented in the first quarter of 2017.

(6)             Amounts exclude a portion of the expenses incurred by one of the Company’s Mexican subsidiaries to account for the amounts allocable to the noncontrolling interest shareholders.

(7)             For the three and six months ended June 30, 2017, calculated using an effective tax rate of approximately 27.7% and 27.9%, respectively, which represents the Company’s GAAP tax rate as adjusted for the net tax effects related to the items excluded from Adjusted Net Income. For the three and six months ended June 30, 2016, the Company used its previous estimated long-term cross-jurisdictional tax rate of 32%. See Disclosure of Non-GAAP Financial Information in this earnings release for further discussion.

 

14



 

Reconciliation of GAAP Revenue to Constant-Currency Revenue

For the Three and Six Months Ended June 30, 2017 and 2016

(Unaudited)

 

Europe & Africa revenue:

 

 

 

Three Months Ended

 

 

 

June 30, 

 

 

 

2017

 

2016

 

% Change

 

 

 

U.S.
GAAP

 

Foreign
Currency
Impact

 

Constant -
Currency

 

U.S.
GAAP

 

U.S.
GAAP

 

Constant -
Currency

 

 

 

 

 

(In thousands)

 

 

 

 

 

 

 

ATM operating revenues

 

$

100,946

 

$

10,474

 

$

111,420

 

$

95,713

 

5.5%

 

16.4%

 

ATM product sales and other revenues

 

2,208

 

195

 

2,403

 

1,402

 

57.5

 

71.4

 

Total revenues

 

$

103,154

 

$

10,669

 

$

113,823

 

$

97,115

 

6.2%

 

17.2%

 

 

 

 

Six Months Ended

 

 

 

June 30, 

 

 

 

2017

 

2016

 

% Change

 

 

 

U.S.
GAAP

 

Foreign
Currency
Impact

 

Constant -
Currency

 

U.S.
GAAP

 

U.S.
GAAP

 

Constant -
Currency

 

 

 

 

 

(In thousands)

 

 

 

 

 

 

 

ATM operating revenues

 

$

186,330

 

$

21,909

 

$

208,239

 

$

182,298

 

2.2%

 

14.2%

 

ATM product sales and other revenues

 

4,071

 

394

 

4,465

 

2,797

 

45.5

 

59.6

 

Total revenues

 

$

190,401

 

$

22,303

 

$

212,704

 

$

185,095

 

2.9%

 

14.9%

 

 

Consolidated revenue:

 

 

 

Three Months Ended

 

 

 

June 30, 

 

 

 

2017

 

2016

 

% Change

 

 

 

U.S.
GAAP

 

Foreign
Currency
Impact

 

Constant -

Currency

 

U.S.
GAAP

 

U.S.
GAAP

 

Constant -
Currency

 

 

 

 

 

(In thousands)

 

 

 

 

 

 

 

ATM operating revenues

 

$

373,260

 

$

10,849

 

$

384,109

 

$

311,331

 

19.9%

 

23.4%

 

ATM product sales and other revenues

 

11,852

 

195

 

12,047

 

12,630

 

(6.2)

 

(4.6)

 

Total revenues

 

$

385,112

 

$

11,044

 

$

396,156

 

$

323,961

 

18.9%

 

22.3%

 

 

 

 

Six Months Ended

 

 

 

June 30, 

 

 

 

2017

 

2016

 

% Change

 

 

 

U.S.
GAAP

 

Foreign
Currency
Impact

 

Constant -
Currency

 

U.S.
GAAP

 

U.S.
GAAP

 

Constant -
Currency

 

 

 

 

 

(In thousands)

 

 

 

 

 

 

 

ATM operating revenues

 

$

715,048

 

$

22,300

 

$

737,348

 

$

603,419

 

18.5%

 

22.2%

 

ATM product sales and other revenues

 

27,636

 

375

 

28,011

 

23,789

 

16.2

 

17.7

 

Total revenues

 

$

742,684

 

$

22,675

 

$

765,359

 

$

627,208

 

18.4%

 

22.0%

 

 

15



 

Reconciliation of Adjusted EBITDA, Adjusted Net Income, and Adjusted Net Income per diluted share on a Non-GAAP basis to Constant-Currency

For the Three and Six Months Ended June 30, 2017 and 2016

(Unaudited)

 

 

 

Three Months Ended

 

 

 

June 30, 

 

 

 

2017

 

2016

 

% Change

 

 

 

Non -
GAAP 
(1)

 

Foreign
Currency
Impact

 

Constant -
Currency

 

Non -
GAAP 
(1)

 

Non -
GAAP 
(1)

 

Constant -
Currency

 

 

 

 

 

(In thousands)

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

87,660

 

$

3,214

 

$

90,874

 

$

81,706

 

7.3%

 

11.2%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net Income

 

$

35,028

 

$

1,495

 

$

36,523

 

$

36,820

 

(4.9)%

 

(0.8)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net Income per diluted share (2)

 

$

0.76

 

$

0.03

 

$

0.79

 

$

0.80

 

(5.0)%

 

(1.3)%

 

 

 

 

Six Months Ended

 

 

 

June 30, 

 

 

 

2017

 

2016

 

% Change

 

 

 

Non -
GAAP 
(1)

 

Foreign
Currency
Impact

 

Constant -
Currency

 

Non -
GAAP 
(1)

 

Non -
GAAP 
(1)

 

Constant -
Currency

 

 

 

 

 

(In thousands)

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

158,907

 

$

5,941

 

$

164,848

 

$

154,856

 

2.6%

 

6.5%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net Income

 

$

60,569

 

$

2,527

 

$

63,096

 

$

68,093

 

(11.0)%

 

(7.3)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net Income per diluted share (2)

 

$

1.31

 

$

0.05

 

$

1.36

 

$

1.49

 

(12.1)%

 

(8.7)%

 

 


(1)             As reported on the Company’s Reconciliation of Net Income Attributable to Controlling Interests and Available to Common Shareholders to EBITDA, Adjusted EBITDA, and Adjusted Net Income, see Disclosure of Non-GAAP Financial Information in this earnings release for further discussion.

(2)             Adjusted Net Income per diluted share is calculated by dividing Adjusted Net Income by the weighted average diluted shares outstanding of 46,222,112 and 45,748,570 for the three months ended June 30, 2017 and 2016, respectively, and 46,272,191 and 45,704,474 for the six months ended June 30, 2017 and 2016, respectively.

 

Reconciliation of Free Cash Flow

For the Three and Six Months Ended June 30, 2017 and 2016

(Unaudited)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30, 

 

June 30, 

 

 

 

2017

 

2016

 

2017

 

2016

 

 

 

(In thousands)

 

Cash provided by operating activities

 

$

74,130

 

$

79,932

 

$

84,579

 

$

124,587

 

Payments for capital expenditures:

 

 

 

 

 

 

 

 

 

Cash used in investing activities, excluding acquisitions and divestitures

 

(31,307

)

(23,120

)

(69,868

)

(39,571

)

Free cash flow

 

$

42,823

 

$

56,812

 

$

14,711

 

$

85,016

 

 

16



 

Reconciliation of Estimated Net Income to EBITDA, Adjusted EBITDA, and Adjusted Net Income

For the Year Ending December 31, 2017

(In millions, excluding per share amounts)

(Unaudited)

 

 

 

Estimated Range
Full Year 2017 
(1)

 

Net Income

 

$

47.0

 

$

54.0

 

Adjustments:

 

 

 

 

 

Interest expense, net

 

35.0

 

34.0

 

Amortization of deferred financing costs and note discount

 

13.0

 

13.0

 

Income tax expense

 

15.0

 

17.0

 

Depreciation and accretion expense

 

112.0

 

115.0

 

Amortization of intangible assets

 

63.0

 

62.0

 

EBITDA 

 

$

285.0

 

$

295.0

 

 

 

 

 

 

 

Add Back:

 

 

 

 

 

Share-based compensation expense

 

13.0

 

16.5

 

Restructuring expenses

 

8.2

 

8.2

 

Redomicile-related expenses

 

0.8

 

0.8

 

Acquisition-related expenses

 

13.0

 

14.0

 

Loss on disposal and impairment of assets

 

5.0

 

5.5

 

Adjusted EBITDA

 

$

325.0

 

$

340.0

 

Less:

 

 

 

 

 

Interest expense, net

 

35.0

 

34.0

 

Depreciation and accretion expense

 

112.0

 

115.0

 

Income tax expense (2)

 

48.4

 

52.0

 

Adjusted Net Income

 

$

129.6

 

$

139.0

 

 

 

 

 

 

 

Adjusted Net Income per diluted share

 

$

2.80

 

$

3.00

 

 

 

 

 

 

 

Weighted average shares outstanding — diluted

 

46.3

 

46.3

 

 


(1)             See Disclosure of Non-GAAP Financial Information in this earnings release for definitions of the non-GAAP measures included in this table.

(2)             Calculated using the Company’s estimated non-GAAP tax rate of approximately 27.2%, as adjusted for items excluded from Adjusted Net Income, see Disclosure of Non-GAAP Financial Information in this earnings release for further discussion.

 

Cardtronics is a registered trademark of Cardtronics plc and its subsidiaries.

All other trademarks are the property of their respective owners.

 

###

 

17