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8-K - 8-K - Cardtronics plca18-12715_18k.htm

Exhibit 99.1

 

CARDTRONICS ANNOUNCES FIRST QUARTER 2018 RESULTS

 

ATM operating revenues down 6% for the quarter

ATM operating revenues up 9% for the quarter excluding the impact of 7-Eleven

Increases Outlook for 2018

 

HOUSTON, May 3, 2018 — 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 March 31, 2018.

 

First Quarter 2018 Financial Highlights:

 

·                  Total revenues of $336.2 million, down 6% from $357.6 million in the prior year and up 9% after excluding the impact from the removal of ATMs at 7-Eleven locations in the U.S.

·                  ATM operating revenues of $319.7 million, down 6% from $341.8 million in the prior year and up 9% after excluding the impact from the removal of ATMs at 7-Eleven locations in the U.S.

·                  GAAP Net Loss of $(2.8) million, or $(0.06) per diluted share, compared to $(0.9) million, or $(0.02) per diluted share in the prior year.

·                  Adjusted gross margin of 32.1%, up 110 basis points compared to the prior year.

·                  Adjusted EBITDA of $68.7 million, down 4% from $71.2 million in the prior year, impacted by the removal of ATMs at 7-Eleven locations in the U.S.

·                  Adjusted Net Income per diluted share of $0.46 compared to $0.55 in the prior year, impacted by the removal of ATMs at 7-Eleven locations in the U.S. and higher interest expense associated with permanent financing related to the DCPayments acquisition.

 

“We had a great start to 2018, with a first quarter that demonstrated the strength and durability of our business and strong operational execution resulting in margin expansion over the prior year. As we moved past the 7-Eleven deconversion, we delivered solid organic revenue growth in North America, driven by improved transaction levels. In addition to delivering value for our premier retailers, we continue to focus on becoming an increasingly important strategic partner to financial institutions, and our efforts are gaining momentum. We’re excited about the year ahead and our ability to execute on our strategic priorities,” commented Edward H. West, Cardtronics’ chief executive officer.

 

Note Regarding First Quarter 2018 Results Compared to Prior Year:

 

The Company had a long-standing relationship with 7-Eleven in the U.S. that ended during the quarter ended March 31, 2018. In previous periods, this relationship accounted for a material portion of the Company’s consolidated revenues and profits. The Company began a transition to 7-Eleven’s new service provider during the third quarter of 2017 and that transition was completed in February 2018. The Company estimates that 7-Eleven accounted for approximately 15% of the Company’s total revenues during the first quarter of 2017 and had an incremental adjusted gross margin of approximately 40%. During the first quarter of 2018, 7-Eleven in the U.S. accounted for less than 2% of the Company’s total revenues. 7-Eleven in the U.S. accounted for approximately 12.5% of the Company’s consolidated revenues for the year ended 2017 and the Company expects that 7-Eleven in the U.S. will account for less than 1% of consolidated revenues in 2018.

 

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, Adjusted 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 generally accepted accounting principles in the U.S. (“U.S. GAAP” or “GAAP”), see the supplemental schedules of selected financial information in this earnings release.

 

1



 

The Company may also refer to revenue or profit growth as being organic. When providing growth measures on an organic basis, the Company attempts to exclude the estimated impact from any acquired or divested businesses that may be included or partially included in one period but not another. The Company may further adjust organic performance measures for the impacts of currency movements, in order to have a consistent performance comparison across periods for the business, excluding movements in exchange rates. Due to the significance of the Company’s 7-Eleven relationship in the U.S., which accounted for 12.5% of consolidated revenues in 2017 and is expected to account for less than 1% of consolidated revenues in 2018, the Company may also report certain performance measures excluding the estimated contribution of this relationship to enable more comparable analysis of the business across periods excluding this relationship.

 

2018 OUTLOOK

 

Below is the Company’s financial outlook for the full year 2018:

 

·                  Revenues of $1.26 billion to $1.30 billion;

·                  GAAP Net Income of $1.0 million to $6.0 million;

·                  Adjusted EBITDA of $255 million to $265 million;

·                  Depreciation and accretion expense of $126 million to $128 million;

·                  Cash interest expense of $36 million;

·                  Adjusted Net Income of $67 million to $77 million;

·                  Adjusted Net Income per diluted share of $1.45 to $1.65, based on approximately 46.5 million weighted average diluted shares outstanding; and

·                  Capital expenditures of $110 million.

 

The Adjusted EBITDA and Adjusted Net Income outlook 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 outlook is based on average foreign currency exchange rates for the year of £1.00 U.K. to $1.35 U.S., $20.00 Mexican pesos to $1.00 U.S., $1.00 Canadian dollar to $0.80 U.S., €1.00 Euros to $1.24 U.S., $1.00 Australian dollar to $0.80 U.S., and R13 South African Rand to $1.00 U.S.

 

CONFERENCE CALL INFORMATION

 

The Company will host a conference call today, Thursday, May 3, 2018, at 4:00 p.m. Central Time (5:00 p.m. Eastern Time) to discuss its financial results for the quarter ended March 31, 2018. To access the call, please call the conference call operator at:

 

Dial in:

 

(877) 303-9205

Alternate dial-in:

 

(760) 536-5226

 

Please call in 15 minutes prior to the scheduled start time and request to be connected to the “Cardtronics First Quarter 2018 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, May 10, 2018, and can be accessed by calling (855) 859-2056 or (404) 537-3406 and entering 4096764 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 May 31, 2018. Prior to the conference call, the Company will post supplemental financial information to its website at www.cardtronics.com.

 

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 230,000 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.

 

2



 

CONTACT INFORMATION

 

Media Relations
Brad Nolan
832-308-4975
bnolan@cardtronics.com

 

Investor Relations
Dara Dierks
832-308-4975
ir@cardtronics.com

 

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 2017 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, Adjusted 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”). For the three months ended March 31, 2018 and 2017, the non-GAAP tax rate used to calculate Adjusted Net Income was approximately 25.8% and 28.2%, respectively, representing the GAAP tax rate for the period as adjusted by the estimated tax impact of the items adjusted from the measure. Adjusted Net Income per diluted share is calculated by dividing Adjusted Net Income by weighted average diluted shares outstanding. Adjusted Free Cash Flow is defined as cash provided by operating activities less the impact of changes in restricted cash due to the timing of settlements and less payments for capital expenditures, including those financed through direct debt, but excluding acquisitions. The Adjusted 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

 

3



 

measures in the current 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.

 

4



 

Consolidated Statements of Operations

For the Three Months Ended March 31, 2018 and 2017

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

 

 

 

Three Months Ended

 

 

 

March 31, 

 

 

 

2018

 

% Change

 

2017

 

 

 

(Unaudited)

 

 

 

 

 

Revenues: 

 

 

 

 

 

 

 

ATM operating revenues

 

$

319,731

 

(6.5

)%

$

341,788

 

ATM product sales and other revenues

 

16,453

 

4.2

 

15,784

 

Total revenues

 

336,184

 

(6.0

)

357,572

 

Cost of revenues:

 

 

 

 

 

 

 

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

 

215,490

 

(7.1

)

231,927

 

Cost of ATM product sales and other revenues

 

12,762

 

(12.8

)

14,635

 

Total cost of revenues

 

228,252

 

(7.4

)

246,562

 

Operating expenses:

 

 

 

 

 

 

 

Selling, general, and administrative expenses

 

41,740

 

(0.5

)

41,949

 

Redomicile-related expenses

 

 

n/m

 

760

 

Restructuring expenses

 

2,413

 

(70.7

)

8,243

 

Acquisition and divestiture-related expenses

 

1,720

 

(79.7

)

8,456

 

Depreciation and accretion expense

 

31,042

 

6.6

 

29,121

 

Amortization of intangible assets

 

13,771

 

(9.3

)

15,180

 

Loss on disposal and impairment of assets

 

5,420

 

69.7

 

3,194

 

Total operating expenses

 

96,106

 

(10.1

)

106,903

 

Income from operations

 

11,826

 

187.9

 

4,107

 

Other expense:

 

 

 

 

 

 

 

Interest expense, net

 

9,174

 

39.9

 

6,557

 

Amortization of deferred financing costs and note discount

 

3,308

 

11.2

 

2,976

 

Other expense (income)

 

2,160

 

n/m

 

(1,580

)

Total other expense

 

14,642

 

84.1

 

7,953

 

Loss before income taxes

 

(2,816

)

(26.8

)

(3,846

)

Income tax benefit

 

(31

)

(98.9

)

(2,952

)

Effective tax rate

 

1.1

%

 

 

76.8

%

Net loss

 

(2,785

)

211.5

 

(894

)

Net (loss) income attributable to noncontrolling interests

 

(17

)

n/m

 

7

 

Net loss attributable to controlling interests and available to common shareholders

 

$

(2,768

)

207.2

%

$

(901

)

 

 

 

 

 

 

 

 

Net loss per common share — basic

 

$

(0.06

)

 

 

$

(0.02

)

Net loss per common share — diluted

 

$

(0.06

)

 

 

$

(0.02

)

 

 

 

 

 

 

 

 

Weighted average shares outstanding — basic

 

45,833,070

 

 

 

45,490,461

 

Weighted average shares outstanding — diluted

 

45,833,070

 

 

 

45,490,461

 

 

5



 

Condensed Consolidated Balance Sheets

As of March 31, 2018 and December 31, 2017

(In thousands)

 

 

 

March 31, 2018

 

December 31, 2017

 

 

 

(Unaudited)

 

 

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

46,673

 

$

51,370

 

Accounts and notes receivable, net

 

94,345

 

105,245

 

Inventory, net

 

15,529

 

14,283

 

Restricted cash

 

73,003

 

48,328

 

Prepaid expenses, deferred costs, and other current assets

 

121,298

 

96,106

 

Total current assets

 

350,848

 

315,332

 

Property and equipment, net

 

487,695

 

497,902

 

Intangible assets, net

 

195,378

 

209,862

 

Goodwill

 

779,394

 

774,939

 

Deferred tax asset, net

 

5,948

 

6,925

 

Prepaid expenses, deferred costs, and other noncurrent assets

 

75,245

 

57,756

 

Total assets

 

$

1,894,508

 

$

1,862,716

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Current portion of other long-term liabilities

 

$

22,877

 

$

31,370

 

Accounts payable and other accrued and current liabilities

 

362,756

 

351,180

 

Total current liabilities

 

385,633

 

382,550

 

Long-term liabilities:

 

 

 

 

 

Long-term debt

 

915,586

 

917,721

 

Asset retirement obligations

 

61,392

 

59,920

 

Deferred tax liability, net

 

42,394

 

37,130

 

Other long-term liabilities

 

70,921

 

75,002

 

Total liabilities

 

1,475,926

 

1,472,323

 

Shareholders’ equity

 

418,582

 

390,393

 

Total liabilities and shareholders’ equity

 

$

1,894,508

 

$

1,862,716

 

 

6



 

SELECTED BALANCE SHEET DETAIL:

 

 

 

March 31, 2018

 

December 31, 2017

 

 

 

(In thousands)

 

 

 

(Unaudited)

 

 

 

Long-term debt:

 

 

 

 

 

Revolving credit facility

 

$

117,168

 

$

122,461

 

1.00% Convertible senior notes (1)

 

254,797

 

251,973

 

5.125% Senior notes (1)

 

248,210

 

248,038

 

5.50% Senior notes (1)

 

295,411

 

295,249

 

Total long-term debt

 

$

915,586

 

$

917,721

 

 


(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 $32.7 million and $35.5 million as of March 31, 2018 and December 31, 2017, 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 $1.8 million and $2.0 million as of March 31, 2018 and December 31, 2017, 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 $4.6 million and $4.8 million as of March 31, 2018 and December 31, 2017, respectively.

 

SELECTED CASH FLOW DETAIL (Unaudited):

 

 

 

Three Months Ended

 

 

 

March 31, 

 

 

 

2018

 

2017

 

 

 

(In thousands)

 

Selected cash flow statement amounts:

 

 

 

 

 

Net cash provided by operating activities

 

$

49,433

 

$

22,708

 

Net cash used in investing activities

 

(20,739

)

(523,163

)

Net cash (used in) provided by financing activities

 

(9,395

)

483,201

 

Effect of exchange rate changes on cash

 

684

 

(1,163

)

Net (decrease) increase in cash, cash equivalents, and restricted cash

 

19,983

 

(18,417

)

Cash, cash equivalents, and restricted cash as of beginning of period

 

99,817

 

105,747

 

Cash, cash equivalents, and restricted cash as of end of period

 

$

119,800

 

$

87,330

 

 

7



 

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

For the Three Months Ended March 31, 2018 and 2017

(In thousands, excluding share and per share amounts)

(Unaudited)

 

 

 

Three Months Ended

 

 

 

March 31, 

 

 

 

2018

 

2017

 

Net loss attributable to controlling interests and available to common shareholders

 

$

(2,768

)

$

(901

)

Adjustments:

 

 

 

 

 

Interest expense, net

 

9,174

 

6,557

 

Amortization of deferred financing costs and note discount

 

3,308

 

2,976

 

Income tax benefit

 

(31

)

(2,952

)

Depreciation and accretion expense

 

31,042

 

29,121

 

Amortization of intangible assets

 

13,771

 

15,180

 

EBITDA 

 

$

54,496

 

$

49,981

 

 

 

 

 

 

 

Add back:

 

 

 

 

 

Loss on disposal and impairment of assets

 

5,420

 

3,194

 

Other expense (income) (1)

 

2,160

 

(1,580

)

Noncontrolling interests (2)

 

1

 

(4

)

Share-based compensation expense

 

2,445

 

2,197

 

Redomicile-related expenses (3)

 

 

760

 

Restructuring expenses (4)

 

2,413

 

8,243

 

Acquisition and divestiture-related expenses (5)

 

1,720

 

8,456

 

Adjusted EBITDA

 

$

68,655

 

$

71,247

 

Less:

 

 

 

 

 

Interest expense, net

 

9,174

 

6,557

 

Depreciation and accretion expense (6)

 

31,041

 

29,118

 

Adjusted pre-tax income

 

$

28,440

 

$

35,572

 

Income tax expense (7)

 

7,338

 

10,031

 

Adjusted Net Income

 

$

21,102

 

$

25,541

 

 

 

 

 

 

 

Adjusted Net Income per share — basic

 

$

0.46

 

$

0.56

 

Adjusted Net Income per share — diluted

 

$

0.46

 

$

0.55

 

 

 

 

 

 

 

Weighted average shares outstanding — basic

 

45,833,070

 

45,490,461

 

Weighted average shares outstanding — diluted (8)

 

46,332,629

 

46,226,190

 

 


(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)         Employee severance and other costs incurred in conjunction with a corporate reorganization and cost reduction initiative.

 

(5)         Acquisition and divestiture-related expenses include costs incurred for professional and legal fees and certain other transition and integration-related costs. Expenses include employee severance costs and lease termination costs related to DCPayments in the three months ended March 31, 2018.

 

(6)         Amounts exclude a portion of the expenses incurred by one of its Mexican subsidiaries to account for the amounts allocable to the noncontrolling interest shareholders.

 

(7)         For the three months ended March 31, 2018 and 2017, the non-GAAP tax rate used to calculate Adjusted Net Income was approximately 25.8% and 28.2%, 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.

 

(8)         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.

 

8



 

Reconciliation of GAAP Revenue to Constant-Currency Revenue

For the Three Months Ended March 31, 2018 and 2017

(In thousands, excluding percentages)

(Unaudited)

 

 

 

Three Months Ended

 

 

 

March 31, 

 

 

 

2018

 

2017

 

% Change

 

 

 

U.S.
GAAP

 

Foreign
Currency
Impact

 

Constant -
Currency

 

U.S.
GAAP

 

U.S.
GAAP

 

Constant -
Currency

 

Consolidated revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ATM operating revenues

 

$

319,731

 

$

(13,402

)

$

306,329

 

$

341,788

 

(6.5

)%

(10.4

)%

ATM product sales and other revenues

 

16,453

 

(324

)

16,129

 

15,784

 

4.2

 

2.2

 

Total revenues

 

$

336,184

 

$

(13,726

)

$

322,458

 

$

357,572

 

(6.0

)%

(9.8

)%

 

 

 

Three Months Ended

 

 

 

March 31, 

 

 

 

2018

 

2017

 

% Change

 

 

 

U.S.
GAAP

 

Foreign
Currency
Impact

 

Constant -
Currency

 

U.S.
GAAP

 

U.S.
GAAP

 

Constant -
Currency

 

Europe & Africa revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ATM operating revenues

 

$

96,182

 

$

(10,740

)

$

85,442

 

$

85,384

 

12.6

%

0.1

%

ATM product sales and other revenues

 

2,263

 

(246

)

2,017

 

1,863

 

21.5

 

8.3

 

Total revenues

 

$

98,445

 

$

(10,986

)

$

87,459

 

$

87,247

 

12.8

%

0.2

%

 

 

 

Three Months Ended

 

 

 

March 31, 

 

 

 

2018

 

2017

 

% Change

 

 

 

U.S.
GAAP

 

Foreign
Currency
Impact

 

Constant -
Currency

 

U.S.
GAAP

 

U.S.
GAAP

 

Constant -
Currency

 

Australia & New Zealand revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ATM operating revenues

 

$

30,638

 

$

(1,089

)

$

29,549

 

$

31,493

 

(2.7

)%

(6.2

)%

ATM product sales and other revenues

 

58

 

(1

)

57

 

85

 

(31.8

)

(33.0

)

Total revenues

 

$

30,696

 

$

(1,090

)

$

29,606

 

$

31,578

 

(2.8

)%

(6.2

)%

 

9



 

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

For the Three Months Ended March 31, 2018 and 2017

(In thousands, excluding percentages)

(Unaudited)

 

 

 

Three Months Ended

 

 

 

March 31, 

 

 

 

2018

 

2017

 

Total revenues

 

$

336,184

 

$

357,572

 

Total cost of revenues (1)

 

228,252

 

246,562

 

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

 

37,146

 

37,164

 

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

 

$

70,786

 

$

73,846

 

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

 

21.1

%

20.7

%

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

 

$

37,146

 

$

37,164

 

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

 

$

107,932

 

$

111,010

 

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

 

32.1

%

31.0

%

 


(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.

 

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 Months Ended March 31, 2018 and 2017

(In thousands, excluding percentages)

(Unaudited)

 

 

 

Three Months Ended

 

 

 

March 31, 

 

 

 

2018

 

2017

 

% Change

 

 

 

Non -
GAAP
(1)

 

Foreign
Currency
Impact

 

Constant -
Currency

 

Non -
GAAP
(1)

 

Non -
GAAP
(1)

 

Constant -
Currency

 

Adjusted EBITDA

 

$

68,655

 

$

(3,072

)

$

65,583

 

$

71,247

 

(3.6

)%

(7.9

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net Income

 

$

21,102

 

$

(1,122

)

$

19,980

 

$

25,541

 

(17.4

)%

(21.8

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net Income per share — diluted (2)

 

$

0.46

 

$

(0.03

)

$

0.43

 

$

0.55

 

(16.4

)%

(21.8

)%

 


(1)         As reported on the Company’s Reconciliation of Net Loss 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 46,332,629 and 46,226,190 for the three months ended March 31, 2018 and 2017, 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.

 

10



 

Reconciliation of Adjusted Free Cash Flow

For the Three Months Ended March 31, 2018 and 2017

(In thousands)

(Unaudited)

 

 

 

Three Months Ended

 

 

 

March 31, 

 

 

 

2018

 

2017

 

Net cash provided by operating activities

 

$

49,433

 

$

22,708

 

Restricted cash settlement activity

 

(24,238

)

(12,259

)

Adjusted net cash provided by operating activities

 

25,195

 

10,449

 

Net cash used in investing activities, excluding acquisitions and divestitures

 

(20,739

)

(38,561

)

Adjusted free cash flow

 

$

4,456

 

$

(28,112

)

 

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

For the Year Ending December 31, 2018

(In millions, excluding per share amounts)

(Unaudited)

 

 

 

Estimated Range
Full Year 2018
(1)

 

Net Income

 

$

1.0

 

$

6.0

 

Adjustments:

 

 

 

 

 

Interest expense, net

 

36.0

 

36.0

 

Amortization of deferred financing costs and note discount

 

14.0

 

14.0

 

Income tax expense

 

1.0

 

5.0

 

Depreciation and accretion expense

 

128.0

 

126.0

 

Amortization of intangible assets

 

50.0

 

50.0

 

EBITDA 

 

$

230.0

 

$

237.0

 

 

 

 

 

 

 

Add Back:

 

 

 

 

 

Loss on disposal and impairment of assets

 

5.0

 

6.0

 

Share-based compensation expense

 

14.0

 

16.0

 

Acquisition-related expenses

 

2.0

 

2.0

 

Restructuring expenses

 

4.0

 

4.0

 

Adjusted EBITDA

 

$

255.0

 

$

265.0

 

Less:

 

 

 

 

 

Interest expense, net

 

36.0

 

36.0

 

Depreciation and accretion expense

 

128.0

 

126.0

 

Income tax expense (2)

 

23.7

 

26.3

 

Adjusted Net Income

 

$

67.3

 

$

76.7

 

 

 

 

 

 

 

Adjusted Net Income per share — diluted

 

$

1.45

 

$

1.65

 

 

 

 

 

 

 

Weighted average shares outstanding — diluted

 

46.5

 

46.5

 

 


(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 26% to 28%, 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.

 

###

 

11