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Exhibit 99.1

 

 

CARDTRONICS ANNOUNCES FOURTH QUARTER AND FULL-YEAR 2016 RESULTS

 

HOUSTON, February 9, 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 and year ended December 31, 2016.

 

Key financial statistics in the fourth quarter of 2016 as compared to the fourth quarter of 2015 include:

 

·                  Total revenues of $309.8 million, up 2% from $303.3 million (up 8% on a constant-currency basis).

·                  ATM operating revenues of $294.7 million, up 1% from $291.7 million (up 7% on a constant-currency basis).

·                  Gross margin of 35.5%, consistent with the fourth quarter of 2015.

·                  GAAP Net Income of $25.0 million, or $0.54 per diluted share, up from $14.8 million, or $0.33 per diluted share, positively impacted by a non-recurring tax benefit.

·                  Adjusted Net Income per diluted share of $0.79, up 11% from $0.71 (up 20% on a constant-currency basis).

·                  Adjusted EBITDA of $77.5 million, up 6% from $73.2 million (up 13% on a constant-currency basis).

 

“The fourth quarter results capped another year of double-digit growth on the top and bottom line, adjusting for currency movements. We are proud of this track record of consistent delivery of strong financial performance. Looking ahead, 2017 will be a transitional year for Cardtronics with the addition of the DCPayments business and our withdrawal from the 7-Eleven locations in the U.S.,” commented Steve Rathgaber, Cardtronics’ chief executive officer.

 

RECENT HIGHLIGHTS

 

·                  Renewed and expanded our relationship with Walgreens, entering into a long-term extension to continue serving approximately 6,700 Walgreens and Duane Reade locations throughout the U.S. and the opportunity to service additional sites later in 2017.

·                  Secured ATM operating contracts representing nearly 900 locations in North America and Europe. These wins included placements at various retail and transit locations, including over 300 Allsup’s Convenience Store locations in the U.S.

·                  Secured an agreement with Citibank to brand over 1,900 ATMs in key U.S. markets and to provide surcharge-free ATM access for Citibank’s customers at over 30,000 ATMs.

·                  Acquired approximately 300 ATMs and the associated ATM operating contracts from Travelex Currency Services Inc. These ATMs are located in various shopping centers throughout the U.S.

·                  Added a total of 31 new financial institutions as participants in our Allpoint Network, adding over 1.1 million cards that will have surcharge-free ATM access to our network.

·                  Renewed a long-term placement agreement with 7-Eleven Canada for approximately 500 ATMs and a long-term agreement with Scotiabank to brand those ATMs.

·                  Completed the acquisition of DirectCash Payments Inc. (“DCPayments”), a leading operator of approximately 25,000 ATMs with primary operations in Australia, Canada, the U.K., New Zealand, and Mexico. Through the acquisition of DCPayments, we have entered Australia and New Zealand as a leading ATM service provider, with approximately 11,200 ATMs.

·                  Completed the acquisition of Spark ATM Systems (“Spark”), an independent ATM deployer in South Africa, with a growing network of approximately 2,600 ATMs.

 

See the Disclosure of Non-GAAP Financial Information later 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 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.

 

FOURTH QUARTER RESULTS

 

Consolidated revenues totaled $309.8 million for the fourth quarter of 2016, representing a 2% increase from $303.3 million in the fourth quarter of 2015. ATM operating revenues were up 1% from the fourth quarter of 2015. Adjusting for movements in currency exchange rates, ATM operating revenues were up approximately 7% from the fourth quarter of 2015, driven by a combination of acquisition-related and organic growth.

 

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ATM operating revenues in North America were up 4% in the fourth quarter of 2016 while ATM operating revenues in Europe decreased 6% compared to the same period in 2015, adversely impacted by movements in foreign currency exchange rates. On a constant-currency basis, ATM operating revenues in Europe increased 13%, driven primarily by organic growth. The recent appreciation in the U.S. dollar relative to the British pound significantly impacted the Company’s reported revenues and profits in the fourth quarter. The British pound was on average 16% weaker relative to the U.S. dollar during the fourth quarter of 2016 compared to the same period a year ago.

 

GAAP Net Income in the fourth quarter of 2016 totaled $25.0 million, compared to GAAP Net Income of $14.8 million during the fourth quarter of 2015. The increase in GAAP Net Income for the fourth quarter of 2016 was the result of continued revenue growth and a lower tax rate, partially offset by incremental professional services costs of $4.6 million associated with the Company’s acquisition activities and $1.5 million associated with the Company’s redomicile of its parent company to the U.K. These costs are reported in the acquisition and divestiture-related expenses and redomicile-related expenses line items, respectively, in the Company’s results from operations and have been excluded from the Company’s calculation of Adjusted EBITDA, Adjusted Net Income, and Adjusted Net Income per diluted share in the fourth quarter of 2016. The Company’s GAAP tax rate was 1.6% for the fourth quarter of 2016 compared to 39.1% in the same period in 2015, with the decrease mostly attributable to the release of an $8.2 million valuation allowance on deferred tax assets related to the Company’s U.K. business as the Company now expects to fully utilize the tax asset. Additionally, the Company realized tax benefits from its recently completed redomicile to the U.K.

 

Adjusted EBITDA for the fourth quarter of 2016 totaled $77.5 million, representing a 6% increase (13% on a constant-currency basis) over the $73.2 million of Adjusted EBITDA during the fourth quarter of 2015. Adjusted Net Income totaled $36.5 million ($0.79 per diluted share or $0.85 on a constant-currency basis) for the fourth quarter of 2016, compared to $32.2 million ($0.71 per diluted share) during the fourth quarter of 2015. The increases in Adjusted EBITDA and Adjusted Net Income were both driven by the Company’s revenue growth. Adjusted Net Income was also higher as a result of a lower non-GAAP tax rate.

 

FULL-YEAR RESULTS

 

Consolidated revenues totaled $1.265 billion for the year ended December 31, 2016, representing a 5% increase from 2015 (9% on a constant-currency basis). ATM operating revenues were up 7% from the year ended December 31, 2015. Adjusting for movements in currency exchange rates, ATM operating revenues were up approximately 11% for the year ended December 31, 2016, driven by organic growth and contributions from acquisitions. The $13.8 million decrease in ATM product sales and other revenues in the year ended December 31, 2016 was attributable to the Company’s 2015 divestiture of the retail cash-in-transit component of its previously acquired Sunwin business in the U.K. This business was included in the Company’s 2015 results for over half of the year. Cost of ATM product sales and other revenues decreased by $16.1 million from the same period in 2015, driven by the divestiture and the cost optimization activities in conjunction with the acquisition and divestiture.

 

ATM operating revenues in North America were up 7% for the year ended December 31, 2016, driven by a combination of recent acquisitions and organic growth. ATM operating revenues in Europe were up 4% for the year ended December 31, 2016 (16% on a constant-currency basis), driven by strong organic growth, and to a lesser extent, acquisition-related growth.

 

GAAP Net Income for the year ended December 31, 2016 totaled $88.0 million, compared to GAAP Net Income of $67.1 million during the same period in 2015. The increase in GAAP Net Income for the year 2016 was the result of continued revenue growth and margin expansion, partially offset by incremental professional services costs of $9.5 million associated with the Company’s acquisition activities and $13.7 million associated with the Company’s redomicile of its parent company to the U.K. These costs are reported in the acquisition and divestiture-related expenses and redomicile-related expenses line items, respectively, in the Company’s results from operations and have been excluded from the Company’s calculation of Adjusted EBITDA, Adjusted Net Income, and Adjusted Net Income per diluted share in the year ended December 31, 2016. Additionally, the 2016 results were positively impacted by a lower overall tax rate for the year, impacted by the redomicile transaction and release of a valuation allowance on deferred tax assets.

 

Adjusted EBITDA for the year ended December 31, 2016 totaled $318.9 million, representing an 8% increase (12% on a constant-currency basis) from the same period in 2015. Adjusted Net Income totaled $149.3 million ($3.26 per diluted share or $3.38 on a constant-currency basis) for the year ended December 31, 2016, compared to $130.8 million ($2.88 per

 

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diluted share) during the same period in 2015. The increases in Adjusted EBITDA and Adjusted Net Income were primarily due to the same factors discussed above, including the Company’s revenue growth and margin improvement relative to the year ended December 31, 2015. For the year ended December 31, 2016, cash flows from operating activities were $270.3 million, up 5% from $256.6 million.

 

DCPAYMENTS ACQUISITION COMPLETED SUBSEQUENT TO YEAR END

 

On January 6, 2017, the Company completed the previously announced acquisition of DCPayments. In connection with the closing of the acquisition, each holder of DCPayments common shares received purchase consideration equal to Canadian Dollars (“CAD”) $19.00 in cash per common share and it repaid third party indebtedness of DCPayments, the combined aggregate of which represented a total transaction value of approximately $464 million USD, net of estimated cash acquired and excluding transaction-related costs. DCPayments has its primary operations in Australia, Canada, the U.K., New Zealand, and Mexico and adds approximately 25,000 ATMs to Cardtronics’ global ATM count.

 

2017 GUIDANCE

 

Below is the Company’s financial guidance for the year ending December 31, 2017:

 

·                  Revenues of $1.45 billion to $1.5 billion;

·                  Gross profit margin of 33% to 34%;

·                  GAAP Net Income of $60 million to $69 million;

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

·                  Depreciation and accretion expense of $110 million to $112 million;

·                  Cash interest expense of $32 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 46.4 million weighted average diluted shares outstanding; and

·                  Capital expenditures of $140 million to $150 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 $1.20 U.S., $20.00 Mexican pesos to $1.00 U.S., $1.00 Canadian dollar to $0.76 U.S., €1.00 Euros to $1.05 U.S., $1.00 Australian dollar to $0.74 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 28% to 29% for the year ending December 31, 2017.

 

Included in the guidance above is the assumption that the deinstallations of the ATMs at 7-Eleven locations in the U.S. will begin during the third quarter of 2017 and conclude by the end of the year. Additionally, the guidance assumes that Allpoint and the Citibank brand will come off the ATMs during the second half of 2017. 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 uncertain as of the date of this earnings release, the Company currently estimates that the approximate revenue impact associated with the deinstallations is approximately $50 million to $70 million and the approximate impact to gross margin will be approximately $30 million to $35 million in 2017.

 

LIQUIDITY

 

The Company had $361 million in available borrowing capacity under its $375 million revolving credit facility due in 2021 and $74 million in cash on hand as of December 31, 2016. The revolving credit facility was amended January 3, 2017 to increase the borrowing capacity from $375 million to $600 million. The increased borrowing capacity, along with cash on hand, was used to fund the DCPayments acquisition, which closed on January 6, 2017. The Company’s outstanding indebtedness as of December 31, 2016 included $250 million in Senior Notes due 2022 and $288 million Convertible Senior Notes due 2020. The Senior Notes and Convertible Senior Notes have carrying balances of $247 million and $241 million, respectively, and are reflected as long-term debt on the balance sheet, net of unamortized discount and capitalized debt issuance costs. The Company’s total indebtedness increased by approximately $470 million in connection

 

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with completing the DCPayments acquisition in early January 2017. As a result, the available borrowing capacity under the expanded revolving credit facility was approximately $100 million as of the end of January 2017.

 

CONFERENCE CALL INFORMATION

 

The Company will host a conference call today, Thursday, February 9, 2017, at 4:00 p.m. Central Time (5:00 p.m. Eastern Time) to discuss its financial results for the fourth quarter and year ended December 31, 2016. 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 Fourth Quarter 2016 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, February 23, 2017, and can be accessed by calling (855) 859-2056 or (404) 537-3406 and entering 48347889 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 February 28, 2017.

 

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 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 stock-based compensation expense, acquisition and divestiture-related expenses, certain non-operating expenses, certain costs not anticipated to occur in future periods (if applicable in a particular period), gains or losses on disposal 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 of assets, stock-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 has 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 identified Adjustments, based on the nature and geography of the Adjustments. For the quarter ended December 31, 2016, the non-GAAP tax rate used to calculate Adjusted Net Income was approximately 29.2%, which excludes a non-recurring benefit of $8.2 million related to the release of a valuation allowance on deferred tax assets in the U.K., which is included in the GAAP tax rate. For the year ended December 31, 2016, the non-GAAP tax rate of 29.1% is a result of 29.2% for the quarter ended December 31, 2016, 24% for the quarter ended September 30, 2016, and for the six months ended June 30, 2016, the previous estimated long-term cross-jurisdictional tax rate of 32%. For the quarter and year ended December 31, 2015, the Company used its previous 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

 

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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.

 

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 225,000 ATMs in North America, Europe, and Asia-Pacific. 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.

 

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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, Section 27A of the Securities Act of 1933. Forward-looking statements can be identified by words such as “project,” “believe,” “estimate,” “expect,” “future,” “anticipate,” “intend,” “contemplate,” “foresee,” “would,” “could,” “plan,” and similar expressions that are intended to identify forward-looking statements, which are generally not historical in nature. These forward-looking statements are based on management’s current expectations and beliefs concerning future developments and their potential effect on the Company. While management believes that these forward-looking statements are reasonable as and when made, 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 the Company’s 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 the Company’s control) and assumptions that could cause actual results to differ materially from the Company’s historical experience and present expectations or projections. Known material factors that could cause actual results to differ materially from those in the forward-looking statements include:

 

·                  the Company’s financial outlook and the financial outlook of the ATM industry and the continued usage of cash by consumers at rates near historical patterns;

·                  the Company’s ability to respond to recent and future network and regulatory changes, including requirements surrounding Europay, MasterCard, and Visa (“EMV”) security standards;

·                  the Company’s ability to renew its existing customer relationships on comparable economic terms and add new customers;

·                  the Company’s ability to pursue, complete, and successfully integrate acquisitions, including the acquisition of DCPayments;

·                  changes in interest rates and foreign currency rates;

·                  the Company’s ability to successfully manage its existing international operations and to continue to expand internationally;

·                  the Company’s ability to manage concentration risks with key customers, vendors, and service providers;

·                  the Company’s ability to prevent thefts of cash;

·                  the Company’s ability to manage cybersecurity risks and prevent data breaches;

·                  the Company’s ability to respond to potential reductions in the amount of net interchange fees that it receives from global and regional debit networks for transactions conducted on its ATMs due to pricing changes implemented by those networks as well as changes in how issuers route their ATM transactions over those networks;

·                  the Company’s ability to provide new ATM solutions to retailers and financial institutions including placing additional banks’ brands on ATMs currently deployed;

·                  the Company’s ATM vault cash rental needs, including potential liquidity issues with its vault cash providers and its ability to continue to secure vault cash rental agreements in the future;

·                  the Company’s ability to manage the risks associated with its third-party service providers failing to perform their contractual obligations;

·                  the Company’s ability to successfully implement and evolve its corporate strategy;

·                  the Company’s ability to compete successfully with new and existing competitors;

·                  the Company’s ability to meet the service levels required by its service level agreements with its customers;

·                  the additional risks the Company is exposed to in its U.K. armored transport business;

·                  the impact of changes in U.S. or non-U.S. laws, including tax laws, that could reduce or eliminate the benefits expected to be achieved from the Company’s recent change of its parent company from the U.S. to the U.K.;

·                  the impact of, or uncertainty related to, the U.K.’s planned exit from the European Union, including any material adverse effect on the tax, tax treaty, currency, operational, legal, and regulatory regime and macro-economic environment to which the Company will be subject to as a U.K. company; and

·                  the Company’s ability to retain its key employees and maintain good relations with its employees.

 

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Forward-looking statements also are affected by the risk factors described in the Company’s Annual Report on Form 10- K for the year ended December 31, 2015, the information set forth under Risk Factors in the Company’s Proxy Statement, dated May 19, 2016, 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.

 

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Consolidated Statements of Operations

For the Three and Twelve Months Ended December 31, 2016 and 2015

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

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

 

December 31, 

 

December 31, 

 

 

 

2016

 

% Change

 

2015

 

2016

 

% Change

 

2015

 

 

 

(Unaudited)

 

 

 

(Unaudited)

 

(Unaudited)

 

 

 

 

 

Revenues: 

 

 

 

 

 

 

 

 

 

 

 

 

 

ATM operating revenues

 

$

294,656

 

1.0

%

$

291,726

 

$

1,212,863

 

7.0

%

$

1,134,021

 

ATM product sales and other revenues

 

15,166

 

31.0

 

11,578

 

52,501

 

(20.8

)

66,280

 

Total revenues

 

309,822

 

2.1

 

303,304

 

1,265,364

 

5.4

 

1,200,301

 

Cost of revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

187,680

 

2.1

 

183,742

 

768,200

 

6.6

 

720,925

 

Cost of ATM product sales and other revenues

 

12,014

 

1.6

 

11,819

 

45,887

 

(26.0

)

62,012

 

Total cost of revenues

 

199,694

 

2.1

 

195,561

 

814,087

 

4.0

 

782,937

 

Gross profit

 

110,128

 

2.2

 

107,743

 

451,277

 

8.1

 

417,364

 

Gross profit %

 

35.5

%

 

 

35.5

%

35.7

%

 

 

34.8

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general, and administrative expenses

 

38,277

 

(3.5

)

39,664

 

153,782

 

9.5

 

140,501

 

Redomicile-related expenses

 

1,546

 

n/m

 

 

13,747

 

n/m

 

 

Acquisition and divestiture-related expenses

 

4,575

 

(22.8

)

5,929

 

9,513

 

(64.9

)

27,127

 

Depreciation and accretion expense

 

21,868

 

4.7

 

20,888

 

90,953

 

7.0

 

85,030

 

Amortization of intangible assets

 

8,693

 

(10.9

)

9,758

 

36,822

 

(5.1

)

38,799

 

Loss (gain) on disposal of assets

 

556

 

n/m

 

(1,585

)

81

 

n/m

 

(14,010

)

Total operating expenses

 

75,515

 

1.2

 

74,654

 

304,898

 

9.9

 

277,447

 

Income from operations

 

34,613

 

4.6

 

33,089

 

146,379

 

4.6

 

139,917

 

Other expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

4,133

 

(16.6

)

4,955

 

17,360

 

(10.8

)

19,451

 

Amortization of deferred financing costs and note discount

 

2,893

 

(0.5

)

2,908

 

11,529

 

1.5

 

11,363

 

Other expense

 

2,210

 

146.1

 

898

 

2,958

 

(21.7

)

3,780

 

Total other expense

 

9,236

 

5.4

 

8,761

 

31,847

 

(7.9

)

34,594

 

Income before income taxes

 

25,377

 

4.3

 

24,328

 

114,532

 

8.7

 

105,323

 

Income tax expense

 

418

 

(95.6

)

9,505

 

26,622

 

(32.3

)

39,342

 

Effective tax rate

 

1.6

%

 

 

39.1

%

23.2

%

 

 

37.4

%

Net income

 

24,959

 

68.4

 

14,823

 

87,910

 

33.2

 

65,981

 

Net loss attributable to noncontrolling interests

 

(10

)

n/m

 

(18

)

(81

)

n/m

 

(1,099

)

Net income attributable to controlling interests and available to common stockholders

 

$

24,969

 

68.2

%

$

14,841

 

$

87,991

 

31.2

%

$

67,080

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per common share — basic

 

$

0.55

 

 

 

$

0.33

 

$

1.95

 

 

 

$

1.50

 

Net income per common share — diluted

 

$

0.54

 

 

 

$

0.33

 

$

1.92

 

 

 

$

1.48

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding — basic

 

45,292,386

 

 

 

44,876,922

 

45,206,119

 

 

 

44,796,701

 

Weighted average shares outstanding — diluted

 

45,935,367

 

 

 

45,496,524

 

45,821,527

 

 

 

45,368,687

 

 

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Condensed Consolidated Balance Sheets

As of December 31, 2016 and December 31, 2015

(In thousands)

 

 

 

December 31, 2016

 

December 31, 2015

 

 

 

(Unaudited)

 

 

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

73,534

 

$

26,297

 

Accounts and notes receivable, net

 

84,156

 

72,009

 

Inventory, net

 

12,527

 

10,675

 

Restricted cash

 

32,213

 

31,565

 

Current portion of deferred tax asset, net

 

 

16,300

 

Prepaid expenses, deferred costs, and other current assets

 

67,107

 

56,678

 

Total current assets

 

269,537

 

213,524

 

Property and equipment, net

 

392,735

 

375,488

 

Intangible assets, net

 

121,230

 

150,780

 

Goodwill

 

533,075

 

548,936

 

Deferred tax asset, net

 

13,004

 

11,950

 

Prepaid expenses, deferred costs, and other noncurrent assets

 

35,115

 

19,257

 

Total assets

 

$

1,364,696

 

$

1,319,935

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Current portion of other long-term liabilities

 

$

28,237

 

$

32,732

 

Accounts payable and other accrued and current liabilities

 

285,583

 

244,908

 

Total current liabilities

 

313,820

 

277,640

 

Long-term liabilities:

 

 

 

 

 

Long-term debt

 

502,539

 

568,331

 

Asset retirement obligations

 

45,086

 

51,685

 

Deferred tax liability, net

 

27,625

 

21,829

 

Other long-term liabilities

 

18,691

 

30,657

 

Total liabilities

 

907,761

 

950,142

 

Stockholders’ equity

 

456,935

 

369,793

 

Total liabilities and stockholders’ equity

 

$

1,364,696

 

$

1,319,935

 

 

9



 

SELECTED INCOME STATEMENT DETAIL:

(Unaudited, excluding the twelve months ended December 31, 2015)

 

Total revenues by segment:

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

 

December 31, 

 

December 31,

 

 

 

2016

 

% Change

 

2015

 

2016

 

% Change

 

2015

 

 

 

(In thousands, excluding percentages)

 

North America

 

 

 

 

 

 

 

 

 

 

 

 

 

ATM operating revenues

 

$

203,266

 

3.9

%

$

195,622

 

$

828,982

 

6.8

%

$

776,191

 

ATM product sales and other revenues

 

13,505

 

38.8

 

9,727

 

45,309

 

22.6

 

36,955

 

North America total revenues

 

216,771

 

5.6

 

205,349

 

874,291

 

7.5

 

813,146

 

Europe

 

 

 

 

 

 

 

 

 

 

 

 

 

ATM operating revenues

 

85,515

 

(6.2

)

91,125

 

361,967

 

3.8

 

348,674

 

ATM product sales and other revenues

 

1,237

 

(8.7

)

1,355

 

5,443

 

(81.1

)

28,739

 

Europe total revenues

 

86,752

 

(6.2

)

92,480

 

367,410

 

(2.7

)

377,413

 

Corporate & Other

 

 

 

 

 

 

 

 

 

 

 

 

 

ATM operating revenues

 

12,127

 

10.1

 

11,017

 

46,871

 

43.8

 

32,584

 

ATM product sales and other revenues

 

424

 

(14.5

)

496

 

1,749

 

198.5

 

586

 

Corporate & Other total revenues

 

12,551

 

9.0

 

11,513

 

48,620

 

46.6

 

33,170

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Eliminations

 

(6,252

)

3.5

 

(6,038

)

(24,957

)

6.5

 

(23,428

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total ATM operating revenues

 

294,656

 

1.0

 

291,726

 

1,212,863

 

7.0

 

1,134,021

 

Total ATM product sales and other revenues

 

15,166

 

31.0

 

11,578

 

52,501

 

(20.8

)

66,280

 

Total revenues

 

$

309,822

 

2.1

%

$

303,304

 

$

1,265,364

 

5.4

%

$

1,200,301

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Breakout of ATM operating revenues:

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

 

December 31,

 

December 31, 

 

 

 

2016

 

% Change

 

2015

 

2016

 

% Change

 

2015

 

 

 

(In thousands, excluding percentages)

 

Surcharge revenues

 

$

116,571

 

0.4

%

$

116,063

 

$

486,229

 

4.7

%

$

464,318

 

Interchange revenues

 

109,615

 

(0.2

)

109,882

 

452,736

 

7.1

 

422,845

 

Bank-branding and surcharge-free network revenues

 

48,507

 

8.4

 

44,760

 

190,206

 

10.0

 

172,965

 

Managed services revenues

 

7,245

 

(17.1

)

8,739

 

33,491

 

(2.7

)

34,432

 

Other revenues

 

12,718

 

3.5

 

12,282

 

50,201

 

27.2

 

39,461

 

Total ATM operating revenues

 

$

294,656

 

1.0

%

$

291,726

 

$

1,212,863

 

7.0

%

$

1,134,021

 

 

Total gross profit by segment:

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

 

December 31, 

 

 

 

December 31,

 

 

 

 

 

2016

 

% Change

 

2015

 

2016

 

% Change

 

2015

 

 

 

(In thousands, excluding percentages)

 

North America

 

$

72,486

 

(1.0

)%

$

73,254

 

$

301,449

 

3.5

%

$

291,328

 

Europe

 

33,844

 

10.1

 

30,750

 

135,946

 

15.7

 

117,524

 

Corporate & Other

 

3,798

 

1.6

 

3,739

 

13,882

 

63.1

 

8,512

 

Total gross profit

 

$

110,128

 

2.2

%

$

107,743

 

$

451,277

 

8.1

%

$

417,364

 

 

10


 


 

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

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

 

December 31, 

 

December 31,

 

 

 

2016

 

% Change

 

2015

 

2016

 

% Change

 

2015

 

 

 

(In thousands, excluding percentages)

 

Merchant commissions

 

$

86,573

 

(0.7

)%

$

87,177

 

$

363,661

 

5.9

%

$

343,539

 

Vault cash rental

 

17,309

 

(0.8

)

17,442

 

71,073

 

2.9

 

69,064

 

Other costs of cash

 

19,536

 

12.5

 

17,366

 

78,857

 

10.0

 

71,687

 

Repairs and maintenance

 

18,206

 

9.3

 

16,651

 

74,303

 

7.8

 

68,903

 

Communications

 

8,074

 

0.7

 

8,015

 

31,379

 

1.2

 

30,992

 

Transaction processing

 

4,084

 

10.0

 

3,713

 

15,811

 

3.0

 

15,349

 

Stock-based compensation

 

239

 

(26.7

)

326

 

875

 

(28.2

)

1,218

 

Employee costs

 

16,398

 

(2.0

)

16,727

 

67,064

 

9.9

 

61,036

 

Other expenses

 

17,261

 

5.7

 

16,325

 

65,177

 

10.2

 

59,137

 

Total cost of ATM operating revenues

 

$

187,680

 

2.1

%

$

183,742

 

$

768,200

 

6.6

%

$

720,925

 

 

Breakout of selling, general, and administrative expenses:

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

 

December 31, 

 

December 31,

 

 

 

2016

 

% Change

 

2015

 

2016

 

% Change

 

2015

 

 

 

(In thousands, excluding percentages)

 

Employee costs

 

$

19,565

 

3.6

%

$

18,883

 

$

80,799

 

12.4

%

$

71,883

 

Stock-based compensation

 

5,411

 

14.0

 

4,748

 

20,555

 

12.7

 

18,236

 

Professional fees

 

4,864

 

(28.1

)

6,768

 

19,217

 

6.9

 

17,974

 

Other expenses

 

8,437

 

(8.9

)

9,265

 

33,211

 

2.5

 

32,408

 

Total selling, general, and administrative expenses

 

$

38,277

 

(3.5

)%

$

39,664

 

$

153,782

 

9.5

%

$

140,501

 

 

Depreciation and accretion expense by segment:

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

 

December 31, 

 

December 31, 

 

 

 

2016

 

% Change

 

2015

 

2016

 

% Change

 

2015

 

 

 

(In thousands, excluding percentages)

 

North America

 

$

11,324

 

1.6

%

$

11,147

 

$

47,667

 

2.8

%

$

46,386

 

Europe

 

8,751

 

4.5

 

8,375

 

36,356

 

6.5

 

34,134

 

Corporate & Other

 

1,793

 

31.3

 

1,366

 

6,930

 

53.7

 

4,510

 

Total depreciation and accretion expense

 

$

21,868

 

4.7

%

$

20,888

 

$

90,953

 

7.0

%

$

85,030

 

 

11



 

SELECTED BALANCE SHEET DETAIL:

(Unaudited, excluding December 31, 2015)

 

Long-term debt:

 

 

 

December 31, 2016

 

December 31, 2015

 

 

 

(In thousands)

 

Revolving credit facility

 

$

14,100

 

$

90,835

 

5.125% Senior notes (1)

 

247,371

 

246,742

 

1.00% Convertible senior notes (1)

 

241,068

 

230,754

 

Total long-term debt

 

$

502,539

 

$

568,331

 

 


(1)         The Company’s 5.125% Senior Notes due 2022 with a face value of $250.0 million are presented net of capitalized debt issuance costs of $2.6 million and $3.3 million as of December 31, 2016 and December 31, 2015, respectively. The Company’s 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 $46.4 million and $56.7 million as of December 31, 2016 and December 31, 2015, 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).

 

Share count rollforward:

 

Total shares outstanding as of December 31, 2015

 

44,953,620

 

Shares repurchased

 

(128,405

)

Shares forfeited

 

(5,842

)

Shares issued — stock options exercised

 

64,451

 

Shares vested — restricted stock units

 

442,606

 

Total shares outstanding as of December 31, 2016

 

45,326,430

 

 

SELECTED CASH FLOW DETAIL:

(Unaudited, excluding the twelve months ended December 31, 2015)

 

Selected cash flow statement amounts:

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

 

December 31, 

 

December 31, 

 

 

 

2016

 

2015

 

2016

 

2015

 

 

 

(In thousands)

 

Cash provided by operating activities

 

$

56,343

 

$

109,442

 

$

270,275

 

$

256,553

 

Cash used in investing activities

 

(52,801

)

(38,473

)

(139,203

)

(209,562

)

Cash provided by (used in) financing activities

 

14,193

 

(61,818

)

(78,942

)

(48,520

)

Effect of exchange rate changes on cash

 

(3,722

)

(1,337

)

(4,893

)

(4,049

)

Net increase (decrease) in cash and cash equivalents

 

14,013

 

7,814

 

47,237

 

(5,578

)

Cash and cash equivalents as of beginning of period

 

59,521

 

18,483

 

26,297

 

31,875

 

Cash and cash equivalents as of end of period

 

$

73,534

 

$

26,297

 

$

73,534

 

$

26,297

 

 

12



 

Key Operating Metrics — Including Acquisitions in All Periods Presented

For Three and Twelve Months Ended December 31, 2016 and 2015

(Unaudited)

 

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

 

December 31, 

 

December 31, 

 

 

 

2016

 

 

 

  2015

 

2016

 

 

 

 2015

 

Average number of transacting ATMs:

 

 

 

 

 

 

 

 

 

 

 

 

 

United States: Company-owned

 

44,891

 

 

 

38,821

 

42,195

 

 

 

38,440

 

United Kingdom and Ireland

 

16,538

 

 

 

15,737

 

16,230

 

 

 

14,991

 

Mexico

 

1,064

 

 

 

1,417

 

1,281

 

 

 

1,524

 

Canada

 

1,808

 

 

 

1,875

 

1,835

 

 

 

1,781

 

Germany and Poland

 

1,324

 

 

 

1,088

 

1,215

 

 

 

1,012

 

Total Company-owned

 

65,625

 

 

 

58,938

 

62,756

 

 

 

57,748

 

United States: Merchant-owned (1)

 

13,368

 

 

 

18,757

 

15,575

 

 

 

19,905

 

Average number of transacting ATMs — ATM operations

 

78,993

 

 

 

77,695

 

78,331

 

 

 

77,653

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Managed Services and Processing:

 

 

 

 

 

 

 

 

 

 

 

 

 

United States: Managed services — Turnkey

 

1,037

 

 

 

2,202

 

1,834

 

 

 

2,189

 

United States: Managed services — Processing Plus and Processing operations

 

121,467

 

 

 

109,018

 

116,573

 

 

 

69,583

 

Canada: Managed services

 

1,875

 

 

 

1,318

 

1,712

 

 

 

1,089

 

Average number of transacting ATMs — Managed services and processing

 

124,379

 

 

 

112,538

 

120,119

 

 

 

72,861

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total average number of transacting ATMs

 

203,372

 

 

 

190,233

 

198,450

 

 

 

150,514

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total transactions (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

ATM operations

 

343,605

 

 

 

324,705

 

1,358,409

 

 

 

1,251,626

 

Managed services and processing, net

 

172,732

 

 

 

164,567

 

699,681

 

 

 

404,268

 

Total transactions

 

516,337

 

 

 

489,272

 

2,058,090

 

 

 

1,655,894

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash withdrawal transactions (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

ATM operations

 

214,932

 

 

 

195,335

 

848,394

 

 

 

759,408

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% Change

 

 

 

 

 

% Change

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash withdrawal transactions

 

907

 

8.2

%

838

 

903

 

10.8

%

815

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ATM operating revenues

 

$

1,177

 

(0.5

)%

$

1,183

 

$

1,221

 

5.2

%

$

1,161

 

Cost of ATM operating revenues (2)

 

752

 

0.0

%

752

 

777

 

4.7

%

742

 

ATM operating gross profit (2) (3)

 

$

425

 

(1.4

)%

$

431

 

$

444

 

6.0

%

$

419

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ATM operating gross profit margin (2) (3)

 

36.1

%

 

 

36.4

%

36.4

%

 

 

36.1

%

 


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

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

(3)         Revenues and expenses relating to managed services, processing, ATM equipment sales, and other ATM-related services are not included in this calculation.

 

13



 

Key Operating Metrics — Ending Machine Count

As of December 31, 2016 and 2015

(Unaudited)

 

 

 

December 31, 2016

 

December 31, 2015

 

Ending number of transacting ATMs:

 

 

 

 

 

United States: Company-owned

 

45,188

 

38,893

 

United Kingdom and Ireland

 

16,337

 

15,735

 

Mexico

 

984

 

1,406

 

Canada

 

1,792

 

1,850

 

Germany and Poland

 

1,392

 

1,121

 

Total Company-owned

 

65,693

 

59,005

 

United States: Merchant-owned

 

12,868

 

18,164

 

Ending number of transacting ATMs — ATM operations

 

78,561

 

77,169

 

 

 

 

 

 

 

United States: Managed services — Turnkey

 

837

 

2,196

 

United States: Managed services — Processing Plus and Processing operations

 

121,819

 

109,021

 

Canada: Managed services

 

1,916

 

1,405

 

Ending number of transacting ATMs — Managed services and processing

 

124,572

 

112,622

 

 

 

 

 

 

 

Total ending number of transacting ATMs

 

203,133

 

189,791

 

 

14



 

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

For the Three and Twelve Months Ended December 31, 2016 and 2015

(Unaudited)

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

 

December 31, 

 

December 31, 

 

 

 

2016

 

2015

 

2016

 

2015

 

 

 

(In thousands, excluding share and per share amounts)

 

Net income attributable to controlling interests and available to common stockholders

 

$

24,969

 

$

14,841

 

$

87,991

 

$

67,080

 

Adjustments:

 

 

 

 

 

 

 

 

 

Interest expense, net

 

4,133

 

4,955

 

17,360

 

19,451

 

Amortization of deferred financing costs and note discount

 

2,893

 

2,908

 

11,529

 

11,363

 

Income tax expense

 

418

 

9,505

 

26,622

 

39,342

 

Depreciation and accretion expense

 

21,868

 

20,888

 

90,953

 

85,030

 

Amortization of intangible assets

 

8,693

 

9,758

 

36,822

 

38,799

 

EBITDA 

 

$

62,974

 

$

62,855

 

$

271,277

 

$

261,065

 

 

 

 

 

 

 

 

 

 

 

Add back:

 

 

 

 

 

 

 

 

 

Loss (gain) on disposal of assets

 

556

 

(1,585

)

81

 

(14,010

)

Other expense (1)

 

2,210

 

898

 

2,958

 

3,780

 

Noncontrolling interests (2)

 

(17

)

42

 

(67

)

(996

)

Stock-based compensation expense (3)

 

5,650

 

5,062

 

21,430

 

19,421

 

Acquisition and divestiture-related expenses (4)

 

4,575

 

5,929

 

9,513

 

27,127

 

Redomicile-related expenses (5)

 

1,546

 

 

13,747

 

 

Adjusted EBITDA

 

$

77,494

 

$

73,201

 

$

318,939

 

$

296,387

 

Less:

 

 

 

 

 

 

 

 

 

Interest expense, net (3)

 

4,133

 

4,954

 

17,360

 

19,447

 

Depreciation and accretion expense (6)

 

21,864

 

20,840

 

90,927

 

84,608

 

  Adjusted pre-tax income

 

$

51,497

 

$

47,407

 

$

210,652

 

$

192,332

 

Income tax expense (7)

 

15,028

 

15,170

 

61,342

 

61,546

 

Adjusted Net Income

 

$

36,469

 

$

32,237

 

$

149,310

 

$

130,786

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net Income per share

 

$

0.81

 

$

0.72

 

$

3.30

 

$

2.92

 

Adjusted Net Income per diluted share

 

$

0.79

 

$

0.71

 

$

3.26

 

$

2.88

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding — basic

 

45,292,386

 

44,876,922

 

45,206,119

 

44,796,701

 

Weighted average shares outstanding — diluted

 

45,935,367

 

45,496,524

 

45,821,527

 

45,368,687

 

 


(1)         Includes foreign currency translation gains/losses 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 its Mexico subsidiary. In December 2015, the Company increased its ownership interest in its Mexico subsidiary.

(3)         For the three and twelve months ended December 31, 2015, amounts exclude a portion of the expenses incurred by the Company’s Mexico subsidiary to account for the amounts allocable to the noncontrolling interest stockholders. The Company’s Mexico subsidiary recognized no stock-based compensation expense or interest expense, net for the three and twelve months ended December 31, 2016.

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

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

(6)         Amounts exclude a portion of the expenses incurred by the Company’s Mexico subsidiary to account for the amounts allocable to the noncontrolling interest stockholders. In December 2015, the Company increased its ownership interest in its Mexico subsidiary.

(7)         Calculated using effective tax rates of approximately 29.2% and 29.1% for the three and twelve months ended December 31, 2016. These rates represent the Company’s GAAP tax rates as adjusted for the net tax effects related to the items excluded from Adjusted Net Income. Additionally, the Company excluded a non-recurring tax benefit of $8.2 million from the adjusted tax rate in the three and twelve months ended December 31, 2016. For the twelve months ended December 31, 2016, the tax rate is a result of 29.2% for the three months ended December 31, 2016, 24.2% for the three month ended September 30, 2016, and for the six months ended June 30, 2016, the previous estimated long-term cross-jurisdictional tax rate of 32%. For the three and twelve months ended December 31, 2015, 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.

 

15



 

Reconciliation of GAAP Revenue to Constant-Currency Revenue

For the Three and Twelve Months Ended December 31, 2016 and 2015

(Unaudited)

Europe revenue:

 

 

 

Three Months Ended

 

 

 

December 31, 

 

 

 

2016

 

2015

 

% Change

 

 

 

U.S.
GAAP

 

Foreign
Currency
Impact

 

Constant -
Currency

 

U.S.
GAAP

 

U.S.
GAAP

 

Constant -
Currency

 

 

 

 

 

(In thousands)

 

 

 

 

 

 

 

ATM operating revenues

 

$

85,515

 

$

17,389

 

$

102,904

 

$

91,125

 

(6.2

)%

12.9

%

ATM product sales and other revenues

 

1,237

 

263

 

1,500

 

1,355

 

(8.7

)

10.7

 

Total revenues

 

$

86,752

 

$

17,652

 

$

104,404

 

$

92,480

 

(6.2

)%

12.9

%

 

 

 

Twelve Months Ended

 

 

 

December 31, 

 

 

 

2016

 

2015

 

% Change

 

 

 

U.S.
GAAP

 

Foreign
Currency
Impact

 

Constant -
Currency

 

U.S.
GAAP

 

U.S.
GAAP

 

Constant -
Currency

 

 

 

 

 

(In thousands)

 

 

 

 

 

 

 

ATM operating revenues

 

$

361,967

 

$

43,579

 

$

405,546

 

$

348,674

 

3.8

%

16.3

%

ATM product sales and other revenues

 

5,443

 

657

 

6,100

 

28,739

 

(81.1

)

(78.8

)

Total revenues

 

$

367,410

 

$

44,236

 

$

411,646

 

$

377,413

 

(2.7

)%

9.1

%

 

Consolidated revenue:

 

 

 

Three Months Ended

 

 

 

December 31, 

 

 

 

2016

 

2015

 

% Change

 

 

 

U.S.
GAAP

 

Foreign
Currency
Impact

 

Constant -
Currency

 

U.S.
GAAP

 

U.S.
GAAP

 

Constant -
Currency

 

 

 

 

 

(In thousands)

 

 

 

 

 

 

 

ATM operating revenues

 

$

294,656

 

$

17,820

 

$

312,476

 

$

291,726

 

1.0

%

7.1

%

ATM product sales and other revenues

 

15,166

 

266

 

15,432

 

11,578

 

31.0

 

33.3

 

Total revenues

 

$

309,822

 

$

18,086

 

$

327,908

 

$

303,304

 

2.1

%

8.1

%

 

 

 

 

Twelve Months Ended

 

 

 

December 31, 

 

 

 

2016

 

2015

 

% Change

 

 

 

U.S.
GAAP

 

Foreign
Currency
Impact

 

Constant -
Currency

 

U.S.
GAAP

 

U.S.
GAAP

 

Constant -
Currency

 

 

 

 

 

(In thousands)

 

 

 

 

 

 

 

ATM operating revenues

 

$

1,212,863

 

$

46,439

 

$

1,259,302

 

$

1,134,021

 

7.0

%

11.0

%

ATM product sales and other revenues

 

52,501

 

717

 

53,218

 

66,280

 

(20.8

)

(19.7

)

Total revenues

 

$

1,265,364

 

$

47,156

 

$

1,312,520

 

$

1,200,301

 

5.4

%

9.3

%

 

16



 

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 Twelve Months Ended December 31, 2016 and 2015

(Unaudited)

 

 

 

Three Months Ended

 

 

 

December 31, 

 

 

 

2016

 

2015

 

% Change

 

 

 

Non -
GAAP 
(1)

 

Foreign
Currency
Impact

 

Constant -
Currency

 

Non -
GAAP 
(1)

 

Non -
GAAP 
(1)

 

Constant -
Currency

 

 

 

 

 

(In thousands)

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

77,494

 

$

5,375

 

$

82,869

 

$

73,201

 

5.9

%

13.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net Income

 

$

36,469

 

$

2,559

 

$

39,028

 

$

32,237

 

13.1

%

21.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net Income per diluted share (2)

 

$

0.79

 

$

0.06

 

$

0.85

 

$

0.71

 

11.3

%

19.7

%

 


(1)         As reported on the Company’s Reconciliation of Net Income Attributable to Controlling Interests and Available to Common Stockholders 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 45,935,367 and 45,496,524 for the three months ended December 31, 2016 and 2015, respectively.

 

 

 

Twelve Months Ended

 

 

 

December 31, 

 

 

 

2016

 

2015

 

% Change

 

 

 

Non -
GAAP 
(1)

 

Foreign
Currency
Impact

 

Constant -
Currency

 

Non -
GAAP 
(1)

 

Non -
GAAP 
(1)

 

Constant -
Currency

 

 

 

 

 

(In thousands)

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

318,939

 

$

12,854

 

$

331,793

 

$

296,387

 

7.6

%

11.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net Income

 

$

149,310

 

$

5,794

 

$

155,104

 

$

130,786

 

14.2

%

18.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net Income per diluted share (2)

 

$

3.26

 

$

0.12

 

$

3.38

 

$

2.88

 

13.2

%

17.4

%

 


(1)         As reported on the Company’s Reconciliation of Net Income Attributable to Controlling Interests and Available to Common Stockholders 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 45,821,527 and 45,368,687 for the year ended December 31, 2016 and 2015, respectively.

 

17



 

Reconciliation of Free Cash Flow

For the Three and Twelve Months Ended December 31, 2016 and 2015

(Unaudited)

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

 

December 31, 

 

December 31, 

 

 

 

2016

 

2015

 

2016

 

2015

 

 

 

(In thousands)

 

Cash provided by operating activities

 

$

56,343

 

$

109,442

 

$

270,275

 

$

256,553

 

Payments for capital expenditures:

 

 

 

 

 

 

 

 

 

Cash used in investing activities, excluding acquisitions and divestitures

 

(49,832

)

(38,473

)

(125,882

)

(142,349

)

Free cash flow

 

$

6,511

 

$

70,969

 

$

144,393

 

$

114,204

 

 

18



 

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

For the Year Ending December 31, 2017

(In millions, excluding share and per share amounts)

(Unaudited)

 

 

 

Estimated Range
Full Year 2017 
(1)

 

Net Income

 

$

60.0

 

$

69.0

 

Adjustments:

 

 

 

 

 

Interest expense, net

 

35.0

 

32.0

 

Amortization of deferred financing costs and note discount

 

12.5

 

12.5

 

Income tax expense

 

25.0

 

28.0

 

Depreciation and accretion expense (2)

 

110.0

 

112.0

 

Amortization of intangible assets

 

55.0

 

58.0

 

EBITDA 

 

$

297.5

 

$

311.5

 

 

 

 

 

 

 

Add Back:

 

 

 

 

 

Other

 

1.5

 

1.5

 

Stock-based compensation expense

 

21.0

 

22.0

 

Acquisition-related expenses

 

5.0

 

5.0

 

Adjusted EBITDA

 

$

325.0

 

$

340.0

 

Less:

 

 

 

 

 

Interest expense, net

 

35.0

 

32.0

 

Depreciation and accretion expense

 

110.0

 

112.0

 

Income tax expense (3)

 

50.0

 

56.8

 

Adjusted Net Income

 

$

130.0

 

$

139.2

 

 

 

 

 

 

 

Adjusted Net Income per diluted share

 

$

2.80

 

$

3.00

 

 

 

 

 

 

 

Weighted average shares outstanding — diluted

 

46.4

 

46.4

 

 


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

(2)         Noncontrolling interests adjustment made such that Adjusted EBITDA includes only the Company’s interest of its Mexico subsidiary.

(3)         Calculated using the Company’s estimated non-GAAP tax rate of approximately 28% to 29%, as adjusted for items excluded from Adjusted Net Income, see Disclosure of Non-GAAP Financial Information in this earnings release for further discussion.

 

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

 

Cardtronics is a registered trademark of Cardtronics plc

All other trademarks are the property of their respective owners.

 

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19