Cardtronics (NasdaqGM:CATM), the world's largest operator of ATMs, today announced its financial and operational results for the quarter ended March 31, 2008.
Highlights for the first quarter include:
Consolidated revenues of $120.6 million, up 62% from the first quarter of 2007
Adjusted EBITDA of $19.0 million, up 60% from the first quarter of 2007
Adjusted Net Income of $1.5 million, up from an Adjusted Net Loss of $0.3 million in the first quarter of 2007
Significant improvements in key operating metrics versus the first quarter of 2007:
- Average number of transacting ATMs increased by 29%
- Total transactions increased by 87%
- Total cash withdrawal transactions increased by 73%
- Cash withdrawal transactions per ATM per month increased by 34%
- ATM operating revenues per ATM per month increased by 25%
- ATM operating gross profit per ATM per month increased by 29%
The transitioning of our advanced-functionality "Vcom" ATMs and our United Kingdom ATM portfolio over to our electronic funds transfer ("EFT") processing platform. As of March 31, 2008, we were processing transactions for approximately 20,300 of our ATMs.
The public announcements of three significant processing, placement, and branding arrangements:
- On January 22, 2008, we announced that Circle K Stores, a subsidiary of Alimentation Couche-Tard Inc., one of the largest convenience store operators in the world, selected Cardtronics to be the transaction processor for domestic Circle K owned and operated ATMs across the Midwest and Great Lakes regions. As of March 31, 2008, our EFT processing operations were processing transactions for 675 Circle K ATMs.
- On January 31, 2008, we announced that Cardtronics had signed an eight-year agreement with Safeway Inc., one of the largest food and drug retailers in North America, under which Cardtronics will provide 650 Safeway locations with Cardtronics will provide 650 Safeway locations with comprehensive ATM services, including cash management, maintenance, customer service, monitoritoring and prd processing solutions.
- On March 13, 2008, Washington Mutual announced it will place its brand on over 425 Cardtronics-owned ATMs in CVS(r)/pharmacy drugstores throughout Arizona and California.
A significant factor in comparing Cardtronics' first quarter 2008 results with its first quarter 2007 results is the Company's acquisition of the financial services business of 7-Eleven, Inc. (the "7-Eleven ATM Transaction''), the results of which have been included in the Company's consolidated financial statements beginning on July 20, 2007.
"Cardtronics had a solid first quarter,'' commented Jack Antonini, Cardtronics' President and Chief Executive Officer. "While the first quarter of each year has historically been our softest due to seasonality, we were quite pleased with our most recent results. These results reinforced our ability to perform well in a troubled economy, and our performance is a tribute to the way we have positioned our company over the past several years, working to reshape our business from simply providing cash to becoming the preferred provider of financial self-service solutions to consumers, retailers, and financial institutions.''
FIRST QUARTER RESULTS
For the first quarter of 2008, revenues totaled $120.6 million, representing a 62% increase over the $74.5 million in revenues recorded during the first quarter of 2007. While our domestic and international operations generated higher revenues during the first quarter of 2008, the year-over-year increase was primarily attributable to the 7-Eleven ATM Transaction, which resulted in $37.2 million of incremental revenues.
Adjusted EBITDA totaled $19.0 million for the first quarter of 2008 compared to $11.9 million for the first quarter of 2007, and Adjusted Net Income totaled $1.5 million (or $0.04 per share) compared to an Adjusted Net Loss of $0.3 million (or a $0.02 loss per share) for the first quarter of 2007. This year-over-year increase was primarily attributable to the 7-Eleven ATM Transaction. Specific costs excluded from Adjusted EBITDA and Adjusted Net Income (Loss) are detailed in a reconciliation included at the end of this press release.
The GAAP net loss for the first quarter totaled $4.6 million, reflecting the incremental $4.7 million of depreciation, accretion, and amortization expense associated with the 7-Eleven ATM Acquisition and the increased number of machines in the Company's United Kingdom and Mexico operations, the additional $1.9 million of interest expense associated with slightly higher debt levels during the first quarter of 2008, and $1.3 million of losses related to the Company's advanced-functionality operations. The net loss for the quarter also includes a $1.2 million income tax charge associated with valuation allowances against the Company's various deferred tax assets. This charge is reflected in the "income tax expense (benefit)'' line item of our consolidated statement of operations.
The Company is reconfirming its expectations for the following financial measures for the year ending December 31, 2008:
- Revenues of $480.0 million to $505.0 million,
- Overall gross margins of approximately 24.5%,
- Adjusted EBITDA of $86.0 million to $90.0 million,
- Depreciation and accretion expense of $38.0 million to $39.0 million,
- Interest expense of $29.0 million to $30.0 million,
- Adjusted Net Income of $0.30 to $0.35 per diluted share, based on a range of 39.5 million to 40.0 million shares outstanding, and
- Capital expenditures of $48.0 million to $50.0 million, net of minority interest.
These amounts include the estimated revenues and losses associated with the Company's advanced-functionality operations. The Company anticipates that pre-tax losses from these operations will be in the range of $3.0 million to $5.0 million for 2008. Additionally, the guidance excludes the impact of certain one-time items as well as anticipated stock-based compensation expense and approximately $17.5 million of intangible asset amortization expense.
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