International ATM deployer TRM Corporation today announced that its German subsidiary, TRM ATM Deutschland GmbH, has signed a contract to provide cash machine services to HBG Heimbetriebsgesellschaft mbH & Co throughout Germany.
The contract awards TRM exclusive installation of ATMs at up to 334 German military barracks over the following 12 months. All major military barracks offer canteen and retail facilities to soldiers, military personnel, and visitors. Site by site viability assessments are now underway with the first installations expected within two months.
"This contract is a positive step for our operations in Germany and we are pleased to enhance our overall global presence. We look forward to pursuing this attractive market and geographic opportunity," said Jeff Brotman, President and CEO of TRM Corporation.
TRM ATM Deutschland GmbH also deploys ATMs in a variety of other off-premise locations and market sectors. The German ATM market is the second largest in Europe with a relatively undeveloped off-premise sector and few independent deployers.
Separately, TRM Corporation (Nasdaq: TRMM) today reported financial results for the second quarter ended June 30, 2006.
During Q2 2006 consolidated sales were $52.8 million, 2% greater than $51.9 million in Q1 2006 and 12% less than sales of $60.1 million in Q2 2005. Compared to Q1 2006, sales reflect reduced attrition rates and increased withdrawal transactions in the ATM business.
Consolidated net sales were $27.5 million in Q2 2006, a 2% decrease from $28.1 million in Q1 2006, and a 14% decrease from $32.1 million in the prior year period. The year over year decline in net sales reflects a net decline in ATM unit count and cash withdrawals in the ATM business, as well as a decline in the average number of photocopies per machine.
Adjusted EBITDA in Q2 2006 was $6.8 million compared to adjusted EBITDA in Q1 2006 of $5.5 million. Adjusted EBITDA in Q2 2006 includes the gain of $2.2 million related to the sale of TRM Copy Centres (U.K.) Limited. (See Attachment: Adjusted EBITDA Reconciliation).
In Q2 2006, gross profit was $9.5 million, a sequential decline from $11.5 million during Q1 2006, and compared to $15.9 million in Q2 2005. The Company reported an operating loss of $2.2 million in Q2 2006, compared to operating income of $226,000 in Q1 2006 and compared to operating income of $5.1 million in Q2 2005.
Net loss was $4.5 million, or $0.26 per diluted share in Q2 2006, compared to a net loss of $1.5 million, or $0.09 per diluted share in Q1 2006, and compared to net income of $2.9 million, or $0.19 per diluted share in Q2 2005.
Interest expense increased to $3.6 million in Q2 2006 from $2.3 million in Q1 2006 and from $2.7 million in Q2 2005. The increase reflects the Company's debt refinancing in Q2 2006.
TRM Corporation had 17.0 million diluted shares outstanding in Q2 2006 compared to 14.8 million in Q2 2005.
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