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Exhibit 99.1

 

CARDTRONICS ANNOUNCES THIRD QUARTER 2017 RESULTS

 

HOUSTON, November 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 September 30, 2017.

 

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

 

·                  Total revenues of $402.0 million, up 22% from $328.3 million and driven by the DCPayments and Spark acquisitions completed during January 2017.

·                  ATM operating revenues of $390.1 million, up 24% from $314.8 million.

·                  GAAP Net Loss of $(175.6) million, or $(3.84) per diluted share, compared to GAAP Net Income of $27.5 million, or $0.60 per diluted share. During the third quarter of 2017, the Company recognized asset impairments in its Australia & New Zealand segment totaling in the aggregate $216.0 million ($193.5 million net of tax).

·                  Adjusted EBITDA of $99.9 million, up 15% from $86.6 million in the prior year.

·                  Adjusted Net Income per diluted share of $0.96 down from $0.98, impacted by the additional interest and depreciation expense from the acquisitions completed during January 2017.

 

“The third quarter was a dynamic quarter where we performed well operationally under the challenges of several hurricanes and earthquakes. This quarter also marks my last earnings call as I retire at year’s end. I believe I leave behind two great assets. The first is the unique, increasingly global “neighborhood ATM” platform delivering a critical service in payments — convenient access to cash. It is a unique infrastructure platform designed for growth. The second great asset is the team now in place to lead Cardtronics to the next stage of growth. I am truly privileged to have led Cardtronics for nearly eight years. Under the leadership of my successor, Ed West, I am confident that the great potential of the Cardtronics platform will be realized for our shareholders,” commented Steve Rathgaber, Cardtronics’ chief executive officer.

 

RECENT HIGHLIGHTS

 

·                  Secured ATM operating contracts representing approximately 1,800 locations.

·                  Expanded our Allpoint Network to include 1,500 additional ATMs in Speedway convenience stores.

·                  The U.K. Competition and Markets Authority approved the Company to maintain its ownership of the U.K. operations of DCPayments.

 

Changes in currency exchange rates had an insignificant impact relative to our results in the third quarter of 2016. See Disclosure of Non-GAAP Financial Information in this earnings release for definitions of Adjusted Gross Profit, Adjusted Gross Margin, EBITDA, 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.

 

THIRD QUARTER RESULTS

 

Consolidated revenues totaled $402.0 million for the third quarter of 2017, representing a 22% increase from $328.3 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 third quarter of 2017 were up 24% from the same period of 2016.

 

Driven primarily by the acquisitions completed during January 2017, ATM operating revenues in North America increased 12% and ATM operating revenues in Europe & Africa increased 14% from the same period of 2016. ATM operating revenues in our Australia & New Zealand segment totaled $35.4 million during the third quarter of 2017. The Company acquired the Australia & New Zealand segment via the DCPayments acquisition, completed in January 2017, and as a result, there were no comparable revenues in the third quarter of 2016.

 

GAAP Net Loss for the third quarter of 2017 totaled $175.6 million compared to GAAP Net Income of $27.5 million in the same period of 2016. The GAAP Net Loss was the result of asset impairments in the Australia & New Zealand

 

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segment of $216.0 million ($193.5 million net of tax). See Asset Impairments in the Australia & New Zealand Segment in this earnings release for further discussion. Additionally, the Company incurred incremental interest, depreciation, and intangible asset amortization expenses associated with the acquisitions completed during January 2017, as well as incremental professional services and other costs associated with the Company’s integration of the acquisitions. The Company’s GAAP tax rate was 2.3% for the third quarter of 2017 compared to 23.4% in the same period of 2016.

 

Adjusted EBITDA for the third quarter of 2017 totaled $99.9 million compared to $86.6 million of Adjusted EBITDA in the same period of 2016. The increase in Adjusted EBITDA was primarily driven by the acquisitions completed during January 2017. Adjusted Net Income totaled $44.2 million ($0.96 per diluted share) for the third quarter of 2017, compared to $44.7 million ($0.98 per diluted share) in the same period of 2016.

 

NINE MONTH RESULTS

 

Consolidated revenues totaled $1.14 billion for the nine months ended September 30, 2017, representing a 20% increase from $955.5 million from the same period of 2016. This increase was driven by the acquisitions completed during January 2017. ATM operating revenues for the nine months ended September 30, 2017 were also 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 by the acquisitions completed during January 2017, ATM operating revenues in North America increased 11% and ATM operating revenues in Europe & Africa increased 6% (14% on a constant-currency basis) compared to the same period of 2016. ATM operating revenues in Australia & New Zealand totaled $99.8 million during the nine months ended September 30, 2017.

 

GAAP Net Loss for the nine months ended September 30, 2017 totaled $161.3 million compared to GAAP Net Income of $63.0 million in the same period of 2016. The GAAP Net Loss is attributable to asset impairments in the Australia & New Zealand segment of $216.0 million recognized during the three months ended September 30, 2017. See Asset Impairments in the Australia & New Zealand Segment in this earnings release for further discussion. The Company also incurred $15.3 million of professional services and other costs associated with the completion and integration of the acquisitions completed during January 2017 and additionally recorded $8.2 million in restructuring costs. The Company’s intangible asset amortization expense was up $17.3 million compared to the same period of 2016 due to the Company’s recently completed acquisitions.

 

Adjusted EBITDA for the nine months ended September 30, 2017 totaled $258.8 million ($265.1 million on a constant-currency basis) compared to $241.4 million of Adjusted EBITDA in the same period of 2016. The increase in Adjusted EBITDA was primarily driven by the acquisitions completed during January 2017, partially offset by slightly 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. Adjusted Net Income totaled $104.8 million ($2.27 per diluted share or $2.33 on a constant-currency basis) for the nine months ended September 30, 2017, compared to $112.8 million ($2.47 per diluted share) from the same period of 2016. The decrease in Adjusted Net Income is attributable to higher depreciation and interest expense as a result of the completion of the DCPayments and Spark acquisitions.

 

ASSET IMPAIRMENTS IN THE AUSTRALIA & NEW ZEALAND SEGMENT

 

During the third quarter of 2017, the four largest banks in Australia announced that they would remove direct charges on domestic transactions at their ATMs. As a result of this unexpected market shift, the Company analyzed the anticipated impact to its Australian business which resulted in impairment charges of $140.0 million and $54.5 million to reduce the carrying values of its goodwill and intangible assets, respectively, associated with the Australia & New Zealand segment. Additionally, the Company recognized $21.5 million within the Loss (gain) on disposal and impairment of assets line item to recognize the impairment of certain ATM related assets. The Company acquired the business in Australia with its acquisition of DCPayments on January 6, 2017.

 

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BORROWINGS AND LIQUIDITY

 

As of September 30, 2017, the Company had outstanding borrowings of approximately $158 million and had approximately $242 million in available borrowing capacity under its $400 million revolving credit facility due in 2021. Additionally, the Company had $61 million in cash as of September 30, 2017. The Company’s other outstanding indebtedness as of September 30, 2017 included $288 million in Convertible Senior Notes due 2020, $250 million in Senior Notes due 2022, and $300 million in Senior Notes due 2025. The Convertible Senior Notes due 2020, Senior Notes due 2022, and Senior Notes due 2025 had carrying balances of $249 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.

 

On October 3, 2017, the Company entered into an amendment to its revolving credit facility. Pursuant to the amendment, the Company expanded the currencies in which the total commitments can be borrowed.

 

2017 GUIDANCE

 

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

 

·                  Revenues of $1.47 billion to $1.5 billion;

·                  GAAP Net Loss of $(156) million to $(150) million;

·                  Adjusted EBITDA of $330 million to $340 million;

·                  Depreciation and accretion expense of approximately $115.5 million;

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

·                  Adjusted Net Income of $131 million to $139 million;

·                  Adjusted Net Income per diluted share of $2.83 to $3.00, based on approximately 46.25 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. See Disclosure of Non-GAAP Financial Information in this earnings release for definitions of these Non-GAAP measures. This guidance is based on average foreign currency exchange rates for the year of £1.00 U.K. to $1.29 U.S., $20.00 Mexican pesos to $1.00 U.S., $1.00 Canadian dollar to $0.80 U.S., €1.00 Euros to $1.15 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 27.2% for 2017.

 

Included in the guidance above is the assumption that the deinstallations of the ATMs at 7-Eleven locations in the U.S., which began during the three months ended September 30, 2017, will 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. is expected to account for approximately 12% of the Company’s consolidated revenues for the year ending 2017, based on the midpoint of revenue guidance. The Company estimates that the incremental gross margin for these ATMs during 2017 will be approximately 40%. The ATM deinstallation schedule continues to remain subject to change as of the date of this earnings release.

 

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CONFERENCE CALL INFORMATION

 

The Company will host a conference call today, Thursday, November 2, 2017, at 4:00 p.m. Central Time (5:00 p.m. Eastern Time) to discuss its financial results for the quarter ended September 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 Third 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 Thursday, November 16, 2017, and can be accessed by calling (855) 859-2056 or (404) 537-3406 and entering 95425707 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 November 30, 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 238,000 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

 

Investor Relations

Nick Pappathopoulos

 

Phillip Chin

Director — Public Relations

 

EVP — Corporate Development & Investor Relations

832-308-4396

 

832-308-4975

npappathopoulos@cardtronics.com

 

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

 

Adjusted Gross Profit, Adjusted Gross Margin, 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 Gross Profit represents total revenues less the total cost of revenues, excluding depreciation, accretion, and amortization of intangible assets. Adjusted Gross Margin is calculated by dividing Adjusted Gross Profit by total revenues. 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 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 nine months ended September 30, 2017, the non-GAAP tax rate used to calculate Adjusted Net Income was approximately 26.8% and 27.4%, respectively. For the three months ended September 30, 2016, the non-GAAP tax rate used to calculate Adjusted Net Income was approximately 24.2%. For the nine months ended September 30, 2016, the Company used 24.2% for the quarter ended September 30, 2016, and for the six months ended June 30, 2016, the Company used its previously estimated long-term cross-jurisdictional tax rate of 32%. 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-

 

5



 

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 Nine Months Ended September 30, 2017 and 2016

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

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30, 

 

September 30, 

 

 

 

2017

 

% Change

 

2016

 

2017

 

% Change

 

2016

 

 

 

(Unaudited)

 

Revenues: 

 

 

 

 

 

 

 

 

 

 

 

 

 

ATM operating revenues

 

$

390,143

 

23.9

%

$

314,788

 

$

1,105,191

 

20.4

%

$

918,207

 

ATM product sales and other revenues

 

11,807

 

(12.8

)

13,546

 

39,443

 

5.6

 

37,335

 

Total revenues

 

401,950

 

22.4

 

328,334

 

1,144,634

 

19.8

 

955,542

 

Cost of revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

251,136

 

28.3

 

195,737

 

729,547

 

25.7

 

580,520

 

Cost of ATM product sales and other revenues

 

8,920

 

(28.4

)

12,453

 

34,671

 

2.4

 

33,873

 

Total cost of revenues

 

260,056

 

24.9

 

208,190

 

764,218

 

24.4

 

614,393

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general, and administrative expenses

 

46,132

 

14.8

 

40,194

 

131,551

 

13.9

 

115,505

 

Redomicile-related expenses

 

22

 

(97.7

)

951

 

782

 

(93.6

)

12,201

 

Restructuring expenses

 

 

n/m

 

 

8,243

 

n/m

 

 

Acquisition and divestiture-related expenses

 

2,889

 

7.8

 

2,680

 

15,338

 

210.6

 

4,938

 

Goodwill and intangible asset impairment

 

194,521

 

n/m

 

 

194,521

 

n/m

 

 

Depreciation and accretion expense

 

29,807

 

27.9

 

23,308

 

88,683

 

28.4

 

69,085

 

Amortization of intangible assets

 

14,996

 

63.4

 

9,175

 

45,423

 

61.5

 

28,129

 

Loss (gain) on disposal and impairment of assets

 

22,307

 

n/m

 

469

 

26,170

 

n/m

 

(475

)

Total operating expenses

 

310,674

 

n/m

 

76,777

 

510,711

 

n/m

 

229,383

 

(Loss) income from operations

 

(168,780

)

n/m

 

43,367

 

(130,295

)

n/m

 

111,766

 

Other expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

9,743

 

128.2

 

4,269

 

25,760

 

94.8

 

13,227

 

Amortization of deferred financing costs and note discount

 

3,195

 

11.2

 

2,872

 

9,317

 

7.9

 

8,636

 

Other (income) expense

 

(2,095

)

n/m

 

360

 

(1,730

)

n/m

 

748

 

Total other expense

 

10,843

 

44.6

 

7,501

 

33,347

 

47.5

 

22,611

 

(Loss) income before income taxes

 

(179,623

)

n/m

 

35,866

 

(163,642

)

n/m

 

89,155

 

Income tax (benefit) expense

 

(4,053

)

n/m

 

8,388

 

(2,335

)

n/m

 

26,204

 

Effective tax rate

 

2.3

%

 

 

23.4

%

1.4

%

 

 

29.4

%

Net (loss) income

 

(175,570

)

n/m

 

27,478

 

(161,307

)

n/m

 

62,951

 

Net (loss) income attributable to noncontrolling interests

 

(9

)

(25.0

)

(12

)

(3

)

(95.8

)

(71

)

Net (loss) income attributable to controlling interests and available to common shareholders

 

$

(175,561

)

n/m%

 

$

27,490

 

$

(161,304

)

n/m

%

$

63,022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income per common share — basic

 

$

(3.84

)

 

 

$

0.61

 

$

(3.54

)

 

 

$

1.39

 

Net (loss) income per common share — diluted

 

$

(3.84

)

 

 

$

0.60

 

$

(3.54

)

 

 

$

1.38

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding — basic

 

45,662,543

 

 

 

45,252,869

 

45,597,558

 

 

 

45,175,604

 

Weighted average shares outstanding — diluted

 

45,662,543

 

 

 

45,850,061

 

45,597,558

 

 

 

45,765,235

 

 

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Condensed Consolidated Balance Sheets

As of September 30, 2017 and December 31, 2016

(In thousands)

 

 

 

September 30, 2017

 

December 31, 2016

 

 

 

(Unaudited)

 

 

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

61,498

 

$

73,534

 

Accounts and notes receivable, net

 

112,392

 

84,156

 

Inventory, net

 

16,387

 

12,527

 

Restricted cash

 

43,646

 

32,213

 

Prepaid expenses, deferred costs, and other current assets

 

100,450

 

67,107

 

Total current assets

 

334,373

 

269,537

 

Property and equipment, net

 

504,395

 

392,735

 

Intangible assets, net

 

220,233

 

121,230

 

Goodwill

 

771,152

 

533,075

 

Deferred tax asset, net

 

7,260

 

13,004

 

Prepaid expenses, deferred costs, and other noncurrent assets

 

51,868

 

35,115

 

Total assets

 

$

1,889,281

 

$

1,364,696

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Current portion of other long-term liabilities

 

$

31,540

 

$

28,237

 

Accounts payable and other accrued and current liabilities

 

375,320

 

285,583

 

Total current liabilities

 

406,860

 

313,820

 

Long-term liabilities:

 

 

 

 

 

Long-term debt

 

949,775

 

502,539

 

Asset retirement obligations

 

58,425

 

45,086

 

Deferred tax liability, net

 

43,287

 

27,625

 

Other long-term liabilities

 

71,761

 

18,691

 

Total liabilities

 

1,530,108

 

907,761

 

Shareholders’ equity

 

359,173

 

456,935

 

Total liabilities and shareholders’ equity

 

$

1,889,281

 

$

1,364,696

 

 

8



 

SELECTED STATEMENT OF OPERATIONS DETAIL:

(Unaudited)

 

Total revenues by segment:

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30, 

 

September 30, 

 

 

 

2017

 

% Change

 

2016

 

2017

 

% Change

 

2016

 

 

 

(In thousands, excluding percentages)

 

North America

 

 

 

 

 

 

 

 

 

 

 

 

 

ATM operating revenues

 

$

249,964

 

11.9

%

$

223,285

 

$

719,341

 

10.7

%

$

649,739

 

ATM product sales and other revenues

 

9,654

 

(20.5

)

12,137

 

33,191

 

0.2

 

33,129

 

North America total revenues

 

259,618

 

10.3

 

235,422

 

752,532

 

10.2

 

682,868

 

Europe & Africa

 

 

 

 

 

 

 

 

 

 

 

 

 

ATM operating revenues

 

107,497

 

14.2

 

94,154

 

293,827

 

6.3

 

276,452

 

ATM product sales and other revenues

 

2,088

 

48.2

 

1,409

 

6,159

 

46.4

 

4,206

 

Europe & Africa total revenues

 

109,585

 

14.7

 

95,563

 

299,986

 

6.9

 

280,658

 

Australia & New Zealand

 

 

 

 

 

 

 

 

 

 

 

 

 

ATM operating revenues

 

35,368

 

n/m

 

 

99,752

 

n/m

 

 

ATM product sales and other revenues

 

65

 

n/m

 

 

224

 

n/m

 

 

Australia & New Zealand total revenues

 

35,433

 

n/m

 

 

99,976

 

n/m

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Eliminations

 

(2,686

)

1.3

 

(2,651

)

(7,860

)

(1.6

)

(7,984

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total ATM operating revenues

 

390,143

 

23.9

 

314,788

 

1,105,191

 

20.4

 

918,207

 

Total ATM product sales and other revenues

 

11,807

 

(12.8

)

13,546

 

39,443

 

5.6

 

37,335

 

Total revenues

 

$

401,950

 

22.4

%

$

328,334

 

$

1,144,634

 

19.8

%

$

955,542

 

 

Breakout of ATM operating revenues:

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30, 

 

September 30, 

 

 

 

2017

 

% Change

 

2016

 

2017

 

% Change

 

2016

 

 

 

(In thousands, excluding percentages)

 

Surcharge revenues

 

$

185,395

 

46.6

%

$

126,504

 

$

509,444

 

37.8

%

$

369,658

 

Interchange revenues

 

124,259

 

5.2

 

118,162

 

361,158

 

5.3

 

343,121

 

Bank-branding and surcharge-free network revenues

 

48,916

 

0.2

 

48,802

 

143,256

 

1.1

 

141,699

 

Managed services revenues

 

17,096

 

100.6

 

8,522

 

48,146

 

83.4

 

26,246

 

Other revenues

 

14,477

 

13.1

 

12,798

 

43,187

 

15.2

 

37,483

 

Total ATM operating revenues

 

$

390,143

 

23.9

%

$

314,788

 

$

1,105,191

 

20.4

%

$

918,207

 

 

Adjusted gross profit and margin by segment:

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30, 

 

September 30, 

 

 

 

2017

 

Gross
Margin

 

2016

 

Gross
Margin

 

2017

 

Gross
Margin

 

2016

 

Gross
Margin

 

 

 

(In thousands, excluding percentages)

 

North America

 

$

88,670

 

34.2

%

$

83,737

 

35.6

%

$

245,576

 

32.6

%

$

239,683

 

35.1

%

Europe & Africa

 

44,396

 

40.5

 

36,656

 

38.4

 

111,097

 

37.0

 

102,102

 

36.4

 

Australia & New Zealand

 

10,526

 

29.7

 

 

n/m

 

27,576

 

27.6

 

 

n/m

 

Corporate & Eliminations

 

(1,698

)

n/m

 

(249

)

n/m

 

(3,833

)

n/m

 

(636

)

n/m

 

Adjusted Gross Profit (1)

 

$

141,894

 

35.3

%

$

120,144

 

36.6

%

$

380,416

 

33.2

%

$

341,149

 

35.7

%

 


(1)         As reported on the Company’s Reconciliation of Gross Profit Inclusive of Depreciation, Accretion, and Amortization of Intangible Assets to Adjusted Gross Profit, see Disclosure of Non-GAAP Financial Information in this earnings release for further discussion.

 

9



 

Breakout of cost of ATM operating

revenues (exclusive of depreciation,

accretion, and amortization of

intangible assets):

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30, 

 

September 30, 

 

 

 

2017

 

% Change

 

2016

 

2017

 

% Change

 

2016

 

 

 

(In thousands, excluding percentages)

 

Merchant commissions

 

$

130,859

 

39.0

%

$

94,136

 

$

368,435

 

33.0

%

$

277,088

 

Vault cash rental

 

18,994

 

6.1

 

17,904

 

56,072

 

4.3

 

53,764

 

Other costs of cash

 

23,541

 

27.8

 

18,421

 

79,064

 

33.3

 

59,321

 

Repairs and maintenance

 

20,733

 

4.5

 

19,846

 

64,138

 

14.3

 

56,097

 

Communications

 

9,833

 

27.8

 

7,694

 

28,660

 

23.0

 

23,305

 

Transaction processing

 

5,684

 

42.7

 

3,982

 

17,022

 

45.2

 

11,727

 

Share-based compensation

 

197

 

(20.9

)

249

 

336

 

(47.2

)

636

 

Employee costs

 

20,463

 

23.8

 

16,525

 

59,271

 

17.0

 

50,666

 

Other expenses

 

20,832

 

22.7

 

16,980

 

56,549

 

18.0

 

47,916

 

Total cost of ATM operating revenues

 

$

251,136

 

28.3

%

$

195,737

 

$

729,547

 

25.7

%

$

580,520

 

 

Breakout of selling, general,

and administrative expenses:

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30, 

 

September 30, 

 

 

 

2017

 

% Change

 

2016

 

2017

 

% Change

 

2016

 

 

 

(In thousands, excluding percentages)

 

Employee costs

 

$

24,073

 

14.5

%

$

21,022

 

$

71,347

 

16.5

%

$

61,234

 

Share-based compensation expense

 

3,955

 

(38.1

)

6,393

 

9,635

 

(36.4

)

15,144

 

Professional fees

 

8,108

 

76.6

 

4,592

 

19,858

 

38.4

 

14,353

 

Other expenses

 

9,996

 

22.1

 

8,187

 

30,711

 

24.0

 

24,774

 

Total selling, general, and administrative expenses

 

$

46,132

 

14.8

%

$

40,194

 

$

131,551

 

13.9

%

$

115,505

 

 

Depreciation and accretion expense

by segment:

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30, 

 

September 30, 

 

 

 

2017

 

% Change

 

2016

 

2017

 

% Change

 

2016

 

 

 

(In thousands, excluding percentages)

 

North America

 

$

16,415

 

15.9

%

$

14,160

 

$

50,973

 

22.9

%

$

41,480

 

Europe & Africa

 

11,476

 

25.4

 

9,148

 

32,093

 

16.3

 

27,605

 

Australia & New Zealand

 

1,916

 

n/m

 

 

5,617

 

n/m

 

 

Total depreciation and accretion expense

 

$

29,807

 

27.9

%

$

23,308

 

$

88,683

 

28.4

%

$

69,085

 

 

10



 

SELECTED BALANCE SHEET DETAIL:

(Unaudited, excluding December 31, 2016)

 

Long-term debt:

 

 

 

September 30, 2017

 

December 31, 2016

 

 

 

(In thousands)

 

Revolving credit facility

 

$

157,630

 

$

14,100

 

1.00% Convertible senior notes (1)

 

249,189

 

241,068

 

5.125% Senior notes (1)

 

247,869

 

247,371

 

5.50% Senior notes (1)

 

295,087

 

 

Total long-term debt

 

$

949,775

 

$

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 $38.3 million and $46.4 million as of September 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 $2.1 million and $2.6 million as of September 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 $4.9 million as of September 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

 

341,691

 

Total shares outstanding as of September 30, 2017

 

45,680,321

 

 

SELECTED CASH FLOW DETAIL:

(Unaudited)

 

Selected cash flow statement amounts:

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30, 

 

September 30, 

 

 

 

2017

 

2016

 

2017

 

2016

 

 

 

(In thousands)

 

Net cash provided by operating activities

 

$

79,706

 

$

89,346

 

$

164,284

 

$

213,931

 

Net cash used in investing activities

 

(41,556

)

(41,635

)

(598,501

)

(86,403

)

Net cash (used in) provided by financing activities

 

(29,052

)

(7,285

)

427,284

 

(93,135

)

Effect of exchange rate changes on cash

 

(777

)

(557

)

(5,103

)

(1,169

)

Net increase (decrease) in cash and cash equivalents

 

8,321

 

39,869

 

(12,036

)

33,224

 

Cash and cash equivalents as of beginning of period

 

53,177

 

19,652

 

73,534

 

26,297

 

Cash and cash equivalents as of end of period

 

$

61,498

 

$

59,521

 

$

61,498

 

$

59,521

 

 

11



 

Key Operating Metrics — Including Acquisitions in All Periods Presented

For the Three and Nine Months Ended September 30, 2017 and 2016

(Unaudited)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30, 

 

September 30, 

 

 

 

2017

 

% Change

 

2016

 

2017

 

% Change

 

2016

 

Average number of transacting ATMs:

 

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

45,092

 

4.3

%

43,216

 

45,155

 

9.2

%

41,366

 

United Kingdom and Ireland

 

21,688

 

31.1

 

16,540

 

21,498

 

33.1

 

16,151

 

Australia and New Zealand

 

8,717

 

n/m

 

 

8,848

 

n/m

 

 

Canada

 

6,197

 

239.6

 

1,825

 

6,152

 

233.3

 

1,846

 

South Africa

 

2,606

 

n/m

 

 

2,460

 

n/m

 

 

Germany, Poland, and Spain

 

1,627

 

31.0

 

1,242

 

1,526

 

29.7

 

1,177

 

Mexico

 

978

 

(26.4

)

1,329

 

1,078

 

(21.1

)

1,366

 

Total Company-owned

 

86,905

 

35.5

 

64,152

 

86,717

 

40.1

 

61,906

 

United States (1)

 

12,175

 

(18.7

)

14,970

 

12,392

 

(24.0

)

16,297

 

Canada

 

2,974

 

n/m

 

 

2,932

 

n/m

 

 

United Kingdom and Ireland

 

682

 

n/m

 

 

632

 

n/m

 

 

Australia and New Zealand

 

103

 

n/m

 

 

103

 

n/m

 

 

Total Merchant-owned

 

15,934

 

6.4

 

14,970

 

16,059

 

(1.5

)

16,297

 

Average number of transacting ATMs — ATM operations

 

102,839

 

30.0

 

79,122

 

102,776

 

31.4

 

78,203

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Managed Services and Processing:

 

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

129,228

 

7.0

 

120,773

 

126,664

 

8.2

 

117,107

 

Canada

 

3,259

 

85.1

 

1,761

 

3,339

 

101.3

 

1,659

 

Australia and New Zealand

 

2,000

 

n/m

 

 

1,844

 

n/m

 

 

Average number of transacting ATMs — Managed services and processing

 

134,487

 

9.8

 

122,534

 

131,847

 

11.0

 

118,766

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total average number of transacting ATMs

 

237,326

 

17.7

 

201,656

 

234,623

 

19.1

 

196,969

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total transactions (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

ATM operations

 

388,736

 

8.1

 

359,731

 

1,141,144

 

12.4

 

1,014,803

 

Managed services and processing, net

 

281,054

 

57.0

 

179,072

 

788,928

 

49.7

 

526,949

 

Total transactions

 

669,790

 

24.3

 

538,803

 

1,930,072

 

25.2

 

1,541,752

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total cash withdrawal transactions (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

ATM operations

 

247,903

 

10.1

 

225,178

 

730,313

 

15.3

 

633,461

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash withdrawal transactions

 

804

 

(15.3

)

949

 

790

 

(12.2

)

900

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ATM operating revenues (2)

 

$

1,180

 

(6.2

)

$

1,258

 

$

1,116

 

(9.6

)

$

1,235

 

Cost of ATM operating revenues (2) (3)

 

774

 

(1.3

)

784

 

749

 

(4.5

)

784

 

ATM adjusted operating gross profit (2) (3)

 

$

406

 

(14.3

)%

$

474

 

$

367

 

(18.6

)%

$

451

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ATM adjusted operating gross profit margin (2) (3)

 

34.4

%

 

 

37.7

%

32.9

%

 

 

36.5

%

 


(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. See Disclosure of Non-GAAP Financial Information in this earnings release for further discussion.

 

12



 

Key Operating Metrics — Excluding Acquisitions in All Periods Presented

For the Three and Nine Months Ended September 30, 2017 and 2016

(Unaudited)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2017

 

% Change

 

2016

 

2017

 

% Change

 

2016

 

Average number of transacting ATMs:

 

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

45,092

 

4.3

%

43,216

 

42,775

 

3.4

%

41,366

 

United Kingdom and Ireland

 

16,819

 

1.7

 

16,540

 

16,571

 

2.6

 

16,151

 

Canada

 

1,899

 

4.1

 

1,825

 

1,837

 

(0.5

)

1,846

 

Germany, Poland, and Spain

 

1,627

 

31.0

 

1,242

 

1,526

 

29.7

 

1,177

 

Mexico

 

486

 

(63.4

)

1,329

 

635

 

(53.5

)

1,366

 

Total Company-owned

 

65,923

 

2.8

 

64,152

 

63,344

 

2.3

 

61,906

 

United States (1)

 

12,175

 

(18.7

)

14,970

 

12,392

 

(24.0

)

16,297

 

Total Merchant-owned

 

12,175

 

(18.7

)

14,970

 

12,392

 

(24.0

)

16,297

 

Average number of transacting ATMs — ATM operations

 

78,098

 

(1.3

)

79,122

 

75,736

 

(3.2

)

78,203

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Managed Services and Processing:

 

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

129,228

 

7.0

 

120,773

 

126,664

 

8.2

 

117,107

 

Canada

 

1,943

 

10.3

 

1,761

 

1,984

 

19.6

 

1,659

 

Average number of transacting ATMs — Managed services and processing

 

131,171

 

7.0

 

122,534

 

128,648

 

8.3

 

118,766

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total average number of transacting ATMs

 

209,269

 

3.8

 

201,656

 

204,384

 

3.8

 

196,969

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total transactions (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

ATM operations

 

345,825

 

(3.9

)

359,731

 

1,004,241

 

(1.0

)

1,014,803

 

Managed services and processing, net

 

185,276

 

3.5

 

179,072

 

515,362

 

(2.2

)

526,949

 

Total transactions

 

531,101

 

(1.4

)

538,803

 

1,519,603

 

(1.4

)

1,541,752

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total cash withdrawal transactions (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

ATM operations

 

212,957

 

(5.4

)

225,178

 

621,164

 

(1.9

)

633,461

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash withdrawal transactions

 

909

 

(4.2

)

949

 

911

 

1.2

 

900

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ATM operating revenues (2)

 

$

1,243

 

(1.2

)

$

1,258

 

$

1,230

 

(0.4

)

$

1,235

 

Cost of ATM operating revenues (2) (3)

 

798

 

1.8

 

784

 

806

 

2.8

 

784

 

ATM adjusted operating gross profit (2) (3)

 

$

445

 

(6.1

)%

$

474

 

$

424

 

(6.0

)%

$

451

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ATM adjusted operating gross profit margin (2) (3)

 

35.8

%

 

 

37.7

%

34.5

%

 

 

36.5

%

 


(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. See Disclosure of Non-GAAP Financial Information in this earnings release for further discussion.

 

13



 

Key Operating Metrics — Ending Machine Count

As of September 30, 2017 and 2016

(Unaudited)

 

 

 

September 30, 2017

 

September 30, 2016

 

Ending number of transacting ATMs:

 

 

 

 

 

United States

 

44,738

 

44,688

 

United Kingdom and Ireland

 

21,748

 

16,665

 

Australia and New Zealand

 

8,636

 

 

Canada

 

6,235

 

1,835

 

South Africa

 

2,767

 

 

Germany, Poland, and Spain

 

1,653

 

1,279

 

Mexico

 

989

 

1,267

 

Total Company-owned

 

86,766

 

65,734

 

United States

 

12,083

 

13,961

 

Canada

 

2,962

 

 

United Kingdom and Ireland

 

613

 

 

Australia and New Zealand

 

103

 

 

Total Merchant-owned

 

15,761

 

13,961

 

Ending number of transacting ATMs — ATM operations

 

102,527

 

79,695

 

 

 

 

 

 

 

United States

 

130,215

 

121,791

 

Canada

 

3,255

 

1,832

 

Australia and New Zealand

 

2,002

 

 

Ending number of transacting ATMs — Managed services and processing

 

135,472

 

123,623

 

 

 

 

 

 

 

Total ending number of transacting ATMs

 

237,999

 

203,318

 

 

14



 

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 Nine Months Ended September 30, 2017 and 2016

(Unaudited)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30, 

 

September 30, 

 

 

 

2017

 

2016

 

2017

 

2016

 

 

 

(In thousands, excluding share and per share amounts)

 

Net (loss) income attributable to controlling interests and available to common shareholders

 

$

(175,561

)

$

27,490

 

$

(161,304

)

$

63,022

 

Adjustments:

 

 

 

 

 

 

 

 

 

Interest expense, net

 

9,743

 

4,269

 

25,760

 

13,227

 

Amortization of deferred financing costs and note discount

 

3,195

 

2,872

 

9,317

 

8,636

 

Income tax (benefit) expense

 

(4,053

)

8,388

 

(2,335

)

26,204

 

Depreciation and accretion expense

 

29,807

 

23,308

 

88,683

 

69,085

 

Amortization of intangible assets

 

14,996

 

9,175

 

45,423

 

28,129

 

EBITDA 

 

$

(121,873

)

$

75,502

 

$

5,544

 

$

208,303

 

 

 

 

 

 

 

 

 

 

 

Add back:

 

 

 

 

 

 

 

 

 

Loss (gain) on disposal and impairment of assets

 

22,307

 

469

 

26,170

 

(475

)

Other (income) expense (1)

 

(2,095

)

360

 

(1,730

)

748

 

Noncontrolling interests (2)

 

(9

)

(15

)

(19

)

(50

)

Share-based compensation expense

 

4,151

 

6,642

 

9,971

 

15,780

 

Redomicile-related expenses (3)

 

22

 

951

 

782

 

12,201

 

Restructuring expenses (4)

 

 

 

8,243

 

 

Acquisition and divestiture-related expenses (5)

 

2,889

 

2,680

 

15,338

 

4,938

 

Goodwill and intangible asset impairment (6)

 

194,521

 

 

194,521

 

 

Adjusted EBITDA

 

$

99,913

 

$

86,589

 

$

258,820

 

$

241,445

 

Less:

 

 

 

 

 

 

 

 

 

Interest expense, net

 

9,743

 

4,269

 

25,760

 

13,227

 

Depreciation and accretion expense (7)

 

29,805

 

23,301

 

88,677

 

69,063

 

Adjusted pre-tax income

 

$

60,365

 

$

59,019

 

$

144,383

 

$

159,155

 

Income tax expense (8)

 

16,178

 

14,271

 

39,595

 

46,314

 

Adjusted Net Income

 

$

44,187

 

$

44,748

 

$

104,788

 

$

112,841

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net Income per share — basic

 

$

0.97

 

$

0.99

 

$

2.30

 

$

2.50

 

Adjusted Net Income per share — diluted

 

$

0.96

 

$

0.98

 

$

2.27

 

$

2.47

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding — basic

 

45,662,543

 

45,252,869

 

45,597,558

 

45,175,604

 

Weighted average shares outstanding — diluted (9)

 

46,197,178

 

45,850,061

 

46,238,070

 

45,765,235

 

 


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

(4)         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.

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

(6)         Goodwill and intangible asset impairments related to the Company’s Australia & New Zealand segment.

(7)         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.

(8)         For the three and nine months ended September 30, 2017, calculated using an effective tax rate of approximately 26.8% and 27.4%, 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 months ended September 30, 2016, the non-GAAP tax rate used to calculate Adjusted Net Income was approximately 24.2%. For the nine months ended September 30, 2016, the Company used 24.2% for the quarter ended September 30, 2016, and for the six months ended June 30, 2016, the Company’s previously estimated long-term cross jurisdictional tax rate of 32%. See Disclosure of Non-GAAP Financial Information in this earnings release for further discussion.

(9)         Consistent with the positive Adjusted Net Income, the Adjusted Net Income per diluted share amounts have been calculated using the diluted shares outstanding that would have resulted from positive GAAP Net Income.

 

15



 

Reconciliation of GAAP Revenue to Constant-Currency Revenue

For the Three and Nine Months Ended September 30, 2017 and 2016

(Unaudited)

 

Europe & Africa revenue:

 

 

 

Three Months Ended

 

 

 

September 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

 

$

107,497

 

$

(231

)

$

107,266

 

$

94,154

 

14.2

%

13.9

%

ATM product sales and other revenues

 

2,088

 

(2

)

2,086

 

1,409

 

48.2

 

48.0

 

Total revenues

 

$

109,585

 

$

(233

)

$

109,352

 

$

95,563

 

14.7

%

14.4

%

 

 

 

Nine Months Ended

 

 

 

September 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

 

$

293,827

 

$

22,190

 

$

316,017

 

$

276,452

 

6.3

%

14.3

%

ATM product sales and other revenues

 

6,159

 

380

 

6,539

 

4,206

 

46.4

 

55.5

 

Total revenues

 

$

299,986

 

$

22,570

 

$

322,556

 

$

280,658

 

6.9

%

14.9

%

 

Consolidated revenue:

 

 

 

Three Months Ended

 

 

 

September 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

 

$

390,143

 

$

(623

)

$

389,520

 

$

314,788

 

23.9

%

23.7

%

ATM product sales and other revenues

 

11,807

 

(6

)

11,801

 

13,546

 

(12.8

)

(12.9

)

Total revenues

 

$

401,950

 

$

(629

)

$

401,321

 

$

328,334

 

22.4

%

22.2

%

 

 

 

 

Nine Months Ended

 

 

 

September 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

 

$

1,105,191

 

$

22,022

 

$

1,127,213

 

$

918,207

 

20.4

%

22.8

%

ATM product sales and other revenues

 

39,443

 

355

 

39,798

 

37,335

 

5.6

 

6.6

 

Total revenues

 

$

1,144,634

 

$

22,377

 

$

1,167,011

 

$

955,542

 

19.8

%

22.1

%

 

16



 

Reconciliation of Gross Profit Inclusive of Depreciation, Accretion, and Amortization of Intangible Assets to Adjusted Gross Profit

For the Three and Nine Months Ended September 30, 2017 and 2016

(Unaudited)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30, 

 

September 30, 

 

 

 

2017

 

2016

 

2017

 

2016

 

 

 

(In thousands, excluding percentages)

 

Total revenues

 

$

401,950

 

$

328,334

 

$

1,144,634

 

$

955,542

 

Total cost of revenues (1)

 

260,056

 

208,190

 

764,218

 

614,393

 

Total depreciation, accretion, and amortization of intangible assets excluded from Total cost of revenues

 

37,176

 

27,108

 

111,911

 

82,419

 

Gross profit inclusive of depreciation, accretion, and amortization of intangible assets

 

$

104,718

 

$

93,036

 

$

268,505

 

$

258,730

 

Gross profit % (inclusive of depreciation, accretion, and amortization of intangible assets)

 

26.1

%

28.3

%

23.5

%

27.1

%

Total depreciation, accretion, and amortization of intangible assets excluded from gross profit

 

$

37,176

 

$

27,108

 

$

111,911

 

$

82,419

 

Adjusted Gross Profit exclusive of depreciation, accretion, and amortization of intangible assets

 

$

141,894

 

$

120,144

 

$

380,416

 

$

341,149

 

Adjusted Gross Profit % (exclusive of depreciation, accretion, and amortization of intangible assets)

 

35.3

%

36.6

%

33.2

%

35.7

%

 


(1)         The Company presents the Total cost of revenues in the Company’s Consolidated Statements of Operations exclusive of depreciation, accretion, and amortization of intangible assets.

 

17



 

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 Nine Months Ended September 30, 2017 and 2016

(Unaudited)

 

 

 

Three Months Ended

 

 

 

September 30, 

 

 

 

2017

 

2016

 

% Change

 

 

 

Non -
GAAP 
(1)

 

Foreign
Currency
Impact

 

Constant -
Currency

 

Non -
GAAP 
(1)

 

Non -
GAAP 
(1)

 

Constant -
Currency

 

 

 

(In thousands)

 

 

 

 

 

Adjusted EBITDA

 

$

99,913

 

$

(91

)

$

99,822

 

$

86,589

 

15.4

%

15.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net Income

 

$

44,187

 

$

(14

)

$

44,173

 

$

44,748

 

(1.3

)%

(1.3

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net Income per share — diluted (2)

 

$

0.96

 

$

 

$

0.96

 

$

0.98

 

(2.0

)%

(2.0

)%

 

 

 

Nine Months Ended

 

 

 

September 30, 

 

 

 

2017

 

2016

 

% Change

 

 

 

Non -
GAAP 
(1)

 

Foreign
Currency
Impact

 

Constant -
Currency

 

Non -
GAAP 
(1)

 

Non -
GAAP 
(1)

 

Constant -
Currency

 

 

 

(In thousands)

 

 

 

 

 

Adjusted EBITDA

 

$

258,820

 

$

6,311

 

$

265,131

 

$

241,445

 

7.2

%

9.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net Income

 

$

104,788

 

$

2,860

 

$

107,648

 

$

112,841

 

(7.1

)%

(4.6

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net Income per share — diluted (2)

 

$

2.27

 

$

0.06

 

$

2.33

 

$

2.47

 

(8.1

)%

(5.7

)%

 


(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 46,197,178 and 45,850,061 for the three months ended September 30, 2017 and 2016, respectively, and 46,238,070 and 45,765,235 for the nine months ended September 30, 2017 and 2016, respectively. Consistent with the positive Adjusted Net Income, the Adjusted Net Income per diluted share amounts have been calculated using the diluted shares outstanding that would have resulted from positive GAAP Net Income.

 

Reconciliation of Free Cash Flow

For the Three and Nine Months Ended September 30, 2017 and 2016

(Unaudited)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30, 

 

September 30, 

 

 

 

2017

 

2016

 

2017

 

2016

 

 

 

(In thousands)

 

Net cash provided by operating activities

 

$

79,706

 

$

89,346

 

$

164,284

 

$

213,931

 

Payments for capital expenditures:

 

 

 

 

 

 

 

 

 

Net cash used in investing activities, excluding acquisitions and divestitures

 

(41,556

)

(36,479

)

(111,424

)

(76,050

)

Free cash flow

 

$

38,150

 

$

52,867

 

$

52,860

 

$

137,881

 

 

18



 

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

 

$

(155.9

)

$

(150.0

)

Adjustments:

 

 

 

 

 

Interest expense, net

 

35.0

 

34.0

 

Amortization of deferred financing costs and note discount

 

13.0

 

13.0

 

Income tax expense

 

(0.4

)

1.7

 

Depreciation and accretion expense

 

115.0

 

117.0

 

Goodwill and intangible impairment

 

194.5

 

194.5

 

Amortization expense

 

60.0

 

60.0

 

EBITDA 

 

$

261.2

 

$

270.2

 

 

 

 

 

 

 

Add Back:

 

 

 

 

 

Loss on disposal and impairment of assets

 

27.0

 

27.0

 

Share-based compensation expense

 

15.0

 

15.0

 

Acquisition-related expenses

 

16.0

 

17.0

 

Redomicile-related expenses

 

0.8

 

0.8

 

Restructuring expenses

 

10.0

 

10.0

 

Adjusted EBITDA

 

$

330.0

 

$

340.0

 

Less:

 

 

 

 

 

Interest expense, net

 

35.0

 

34.0

 

Depreciation and accretion expense

 

115.5

 

115.5

 

Income tax expense (2)

 

48.8

 

51.8

 

Adjusted Net Income

 

$

130.7

 

$

138.7

 

 

 

 

 

 

 

Adjusted Net Income per share — diluted

 

$

2.83

 

$

3.00

 

 

 

 

 

 

 

Weighted average shares outstanding — diluted

 

46.25

 

46.25

 

 


(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.

 

###

 

19