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Cardtronics Announces Third Quarter 2017 ResultsHOUSTON, Nov. 02, 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:
“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
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 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 all 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. 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:
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. 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:
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