HOUSTON, 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:
- Total revenues of $402.0 million, up 22% from $328.3 million and driven by the DCPayments and Spark acquisitions completed during January 2017.
- ATM operating revenues of $390.1 million, up 24% from $314.8 million.
- GAAP Net Loss of $(175.6) million, or $(3.84) per diluted share, compared to GAAP Net Income of $27.5 million, or $0.60 per diluted share. During the third quarter of 2017, the Company recognized asset impairments in its Australia & New Zealand segment totaling in the aggregate $216.0 million ($193.5 million net of tax).
- Adjusted EBITDA of $99.9 million, up 15% from $86.6 million in the prior year.
- Adjusted Net Income per diluted share of $0.96 down from $0.98, impacted by the additional interest and depreciation expense from the acquisitions completed during January 2017.
“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
- Secured ATM operating contracts representing approximately 1,800 locations.
- Expanded our Allpoint Network to include 1,500 additional ATMs in Speedway convenience stores.
- The U.K. Competition and Markets Authority approved the Company to maintain its ownership of the U.K. operations of DCPayments.
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:
- Revenues of $1.47 billion to $1.5 billion;
- GAAP Net Loss of $(156) million to $(150) million;
- Adjusted EBITDA of $330 million to $340 million;
- Depreciation and accretion expense of approximately $115.5 million;
- Cash interest expense of $34 million to $35 million;
- Adjusted Net Income of $131 million to $139 million;
- Adjusted Net Income per diluted share of $2.83 to $3.00, based on approximately 46.25 million weighted average diluted shares outstanding; and
- Capital expenditures of $130 million to $140 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. 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:
| 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 Third Quarter 2017 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, November 16, 2017, and can be accessed by calling (855) 859-2056 or (404) 537-3406 and entering 95425707 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 November 30, 2017.
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 238,000 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.
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 | |
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 2016 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, 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”). 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 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 Adjustments, based on the nature and geography of the Adjustments. For the three and nine months ended September 30, 2017, the non-GAAP tax rate used to calculate Adjusted Net Income was approximately 26.8% and 27.4%, respectively. For the three months ended September 30, 2016, the non-GAAP tax rate used to calculate Adjusted Net Income was approximately 24.2%. For the nine months ended September 30, 2016, the Company used 24.2% for the quarter ended September 30, 2016, and for the six months ended June 30, 2016, the Company used its previously 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 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.
Consolidated Statements of Operations
For the Three and Nine Months Ended September 30, 2017 and 2016
(In thousands, excluding share, per share amounts, and percentages)
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||
| 2017 | % Change | 2016 | 2017 | % Change | 2016 | |||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||
| ATM operating revenues | $ | 390,143 | 23.9 | % | $ | 314,788 | $ | 1,105,191 | 20.4 | % | $ | 918,207 | ||||||||||||
| ATM product sales and other revenues | 11,807 | (12.8 | ) | 13,546 | 39,443 | 5.6 | 37,335 | |||||||||||||||||
| Total revenues | 401,950 | 22.4 | 328,334 | 1,144,634 | 19.8 | 955,542 | ||||||||||||||||||
| Cost of revenues: | ||||||||||||||||||||||||
| Cost of ATM operating revenues (excludes depreciation, accretion, and amortization of intangible assets reported separately below.) | 251,136 | 28.3 | 195,737 | 729,547 | 25.7 | 580,520 | ||||||||||||||||||
| Cost of ATM product sales and other revenues | 8,920 | (28.4 | ) | 12,453 | 34,671 | 2.4 | 33,873 | |||||||||||||||||
| Total cost of revenues | 260,056 | 24.9 | 208,190 | 764,218 | 24.4 | 614,393 | ||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||
| Selling, general, and administrative expenses | 46,132 | 14.8 | 40,194 | 131,551 | 13.9 | 115,505 | ||||||||||||||||||
| Redomicile-related expenses | 22 | (97.7 | ) | 951 | 782 | (93.6 | ) | 12,201 | ||||||||||||||||
| Restructuring expenses | — | n/m | — | 8,243 | n/m | — | ||||||||||||||||||
| Acquisition and divestiture-related expenses | 2,889 | 7.8 | 2,680 | 15,338 | 210.6 | 4,938 | ||||||||||||||||||
| Goodwill and intangible asset impairment | 194,521 | n/m | — | 194,521 | n/m | — | ||||||||||||||||||
| Depreciation and accretion expense | 29,807 | 27.9 | 23,308 | 88,683 | 28.4 | 69,085 | ||||||||||||||||||
| Amortization of intangible assets | 14,996 | 63.4 | 9,175 | 45,423 | 61.5 | 28,129 | ||||||||||||||||||
| Loss (gain) on disposal and impairment of assets | 22,307 | n/m | 469 | 26,170 | n/m | (475 | ) | |||||||||||||||||
| Total operating expenses | 310,674 | n/m | 76,777 | 510,711 | n/m | 229,383 | ||||||||||||||||||
| (Loss) income from operations | (168,780 | ) | n/m | 43,367 | (130,295 | ) | n/m | 111,766 | ||||||||||||||||
| Other expense: | ||||||||||||||||||||||||
| Interest expense, net | 9,743 | 128.2 | 4,269 | 25,760 | 94.8 | 13,227 | ||||||||||||||||||
| Amortization of deferred financing costs and note discount | 3,195 | 11.2 | 2,872 | 9,317 | 7.9 | 8,636 | ||||||||||||||||||
| Other (income) expense | (2,095 | ) | n/m | 360 | (1,730 | ) | n/m | 748 | ||||||||||||||||
| Total other expense | 10,843 | 44.6 | 7,501 | 33,347 | 47.5 | 22,611 | ||||||||||||||||||
| (Loss) income before income taxes | (179,623 | ) | n/m | 35,866 | (163,642 | ) | n/m | 89,155 | ||||||||||||||||
| Income tax (benefit) expense | (4,053 | ) | n/m | 8,388 | (2,335 | ) | n/m | 26,204 | ||||||||||||||||
| Effective tax rate | 2.3 | % | 23.4 | % | 1.4 | % | 29.4 | % | ||||||||||||||||
| Net (loss) income | (175,570 | ) | n/m | 27,478 | (161,307 | ) | n/m | 62,951 | ||||||||||||||||
| Net (loss) income attributable to noncontrolling interests | (9 | ) | (25.0 | ) | (12 | ) | (3 | ) | (95.8 | ) | (71 | ) | ||||||||||||
| Net (loss) income attributable to controlling interests and available to common shareholders | $ | (175,561 | ) | n/m | % | $ | 27,490 | $ | (161,304 | ) | n/m | % | $ | 63,022 | ||||||||||
| Net (loss) income per common share – basic | $ | (3.84 | ) | $ | 0.61 | $ | (3.54 | ) | $ | 1.39 | ||||||||||||||
| Net (loss) income per common share – diluted | $ | (3.84 | ) | $ | 0.60 | $ | (3.54 | ) | $ | 1.38 | ||||||||||||||
| Weighted average shares outstanding – basic | 45,662,543 | 45,252,869 | 45,597,558 | 45,175,604 | ||||||||||||||||||||
| Weighted average shares outstanding – diluted | 45,662,543 | 45,850,061 | 45,597,558 | 45,765,235 | ||||||||||||||||||||
Condensed Consolidated Balance Sheets
As of September 30, 2017 and December 31, 2016
(In thousands)
| September 30, 2017 | December 31, 2016 | |||||
| (Unaudited) | ||||||
| ASSETS | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 61,498 | $ | 73,534 | ||
| Accounts and notes receivable, net | 112,392 | 84,156 | ||||
| Inventory, net | 16,387 | 12,527 | ||||
| Restricted cash | 43,646 | 32,213 | ||||
| Prepaid expenses, deferred costs, and other current assets | 100,450 | 67,107 | ||||
| Total current assets | 334,373 | 269,537 | ||||
| Property and equipment, net | 504,395 | 392,735 | ||||
| Intangible assets, net | 220,233 | 121,230 | ||||
| Goodwill | 771,152 | 533,075 | ||||
| Deferred tax asset, net | 7,260 | 13,004 | ||||
| Prepaid expenses, deferred costs, and other noncurrent assets | 51,868 | 35,115 | ||||
| Total assets | $ | 1,889,281 | $ | 1,364,696 | ||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||
| Current liabilities: | ||||||
| Current portion of other long-term liabilities | $ | 31,540 | $ | 28,237 | ||
| Accounts payable and other accrued and current liabilities | 375,320 | 285,583 | ||||
| Total current liabilities | 406,860 | 313,820 | ||||
| Long-term liabilities: | ||||||
| Long-term debt | 949,775 | 502,539 | ||||
| Asset retirement obligations | 58,425 | 45,086 | ||||
| Deferred tax liability, net | 43,287 | 27,625 | ||||
| Other long-term liabilities | 71,761 | 18,691 | ||||
| Total liabilities | 1,530,108 | 907,761 | ||||
| Shareholders' equity | 359,173 | 456,935 | ||||
| Total liabilities and shareholders’ equity | $ | 1,889,281 | $ | 1,364,696 | ||
SELECTED STATEMENT OF OPERATIONS DETAIL:
(Unaudited)
| Total revenues by segment: | Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||||||||
| 2017 | % Change | 2016 | 2017 | % Change | 2016 | ||||||||||||||||||||
| (In thousands, excluding percentages) | |||||||||||||||||||||||||
| North America | |||||||||||||||||||||||||
| ATM operating revenues | $ | 249,964 | 11.9 | % | $ | 223,285 | $ | 719,341 | 10.7 | % | $ | 649,739 | |||||||||||||
| ATM product sales and other revenues | 9,654 | (20.5 | ) | 12,137 | 33,191 | 0.2 | 33,129 | ||||||||||||||||||
| North America total revenues | 259,618 | 10.3 | 235,422 | 752,532 | 10.2 | 682,868 | |||||||||||||||||||
| Europe & Africa | |||||||||||||||||||||||||
| ATM operating revenues | 107,497 | 14.2 | 94,154 | 293,827 | 6.3 | 276,452 | |||||||||||||||||||
| ATM product sales and other revenues | 2,088 | 48.2 | 1,409 | 6,159 | 46.4 | 4,206 | |||||||||||||||||||
| Europe & Africa total revenues | 109,585 | 14.7 | 95,563 | 299,986 | 6.9 | 280,658 | |||||||||||||||||||
| Australia & New Zealand | |||||||||||||||||||||||||
| ATM operating revenues | 35,368 | n/m | — | 99,752 | n/m | — | |||||||||||||||||||
| ATM product sales and other revenues | 65 | n/m | — | 224 | n/m | — | |||||||||||||||||||
| Australia & New Zealand total revenues | 35,433 | n/m | — | 99,976 | n/m | — | |||||||||||||||||||
| Eliminations | (2,686 | ) | 1.3 | (2,651 | ) | (7,860 | ) | (1.6 | ) | (7,984 | ) | ||||||||||||||
| Total ATM operating revenues | 390,143 | 23.9 | 314,788 | 1,105,191 | 20.4 | 918,207 | |||||||||||||||||||
| Total ATM product sales and other revenues | 11,807 | (12.8 | ) | 13,546 | 39,443 | 5.6 | 37,335 | ||||||||||||||||||
| Total revenues | $ | 401,950 | 22.4 | % | $ | 328,334 | $ | 1,144,634 | 19.8 | % | $ | 955,542 | |||||||||||||
| Breakout of ATM operating revenues: | Three Months Ended | Nine Months Ended | |||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||
| 2017 | % Change | 2016 | 2017 | % Change | 2016 | ||||||||||||||
| (In thousands, excluding percentages) | |||||||||||||||||||
| Surcharge revenues | $ | 185,395 | 46.6 | % | $ | 126,504 | $ | 509,444 | 37.8 | % | $ | 369,658 | |||||||
| Interchange revenues | 124,259 | 5.2 | 118,162 | 361,158 | 5.3 | 343,121 | |||||||||||||
| Bank-branding and surcharge-free network revenues | 48,916 | 0.2 | 48,802 | 143,256 | 1.1 | 141,699 | |||||||||||||
| Managed services revenues | 17,096 | 100.6 | 8,522 | 48,146 | 83.4 | 26,246 | |||||||||||||
| Other revenues | 14,477 | 13.1 | 12,798 | 43,187 | 15.2 | 37,483 | |||||||||||||
| Total ATM operating revenues | $ | 390,143 | 23.9 | % | $ | 314,788 | $ | 1,105,191 | 20.4 | % | $ | 918,207 | |||||||
| Adjusted gross profit and margin by segment: | Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||||||||||
| 2017 | Gross Margin | 2016 | Gross Margin | 2017 | Gross Margin | 2016 | Gross Margin | ||||||||||||||||||||
| (In thousands, excluding percentages) | |||||||||||||||||||||||||||
| North America | $ | 88,670 | 34.2 | % | $ | 83,737 | 35.6 | % | $ | 245,576 | 32.6 | % | $ | 239,683 | 35.1 | % | |||||||||||
| Europe & Africa | 44,396 | 40.5 | 36,656 | 38.4 | 111,097 | 37.0 | 102,102 | 36.4 | |||||||||||||||||||
| Australia & New Zealand | 10,526 | 29.7 | — | n/m | 27,576 | 27.6 | — | n/m | |||||||||||||||||||
| Corporate & Eliminations | (1,698 | ) | n/m | (249 | ) | n/m | (3,833 | ) | n/m | (636 | ) | n/m | |||||||||||||||
| Adjusted Gross Profit (1) | $ | 141,894 | 35.3 | % | $ | 120,144 | 36.6 | % | $ | 380,416 | 33.2 | % | $ | 341,149 | 35.7 | % | |||||||||||
| (1) As reported on the Company’s Reconciliation of Gross Profit Inclusive of Depreciation, Accretion, and Amortization of Intangible Assets to Adjusted Gross Profit, see Disclosure of Non-GAAP Financial Information in this earnings release for further discussion. | |||||||||||||||||||||||||||
| Breakout of cost of ATM operating | |||||||||||||||||||||
| revenues (exclusive of depreciation, | |||||||||||||||||||||
| accretion, and amortization of | |||||||||||||||||||||
| intangible assets): | Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||||
| 2017 | % Change | 2016 | 2017 | % Change | 2016 | ||||||||||||||||
| (In thousands, excluding percentages) | |||||||||||||||||||||
| Merchant commissions | $ | 130,859 | 39.0 | % | $ | 94,136 | $ | 368,435 | 33.0 | % | $ | 277,088 | |||||||||
| Vault cash rental | 18,994 | 6.1 | 17,904 | 56,072 | 4.3 | 53,764 | |||||||||||||||
| Other costs of cash | 23,541 | 27.8 | 18,421 | 79,064 | 33.3 | 59,321 | |||||||||||||||
| Repairs and maintenance | 20,733 | 4.5 | 19,846 | 64,138 | 14.3 | 56,097 | |||||||||||||||
| Communications | 9,833 | 27.8 | 7,694 | 28,660 | 23.0 | 23,305 | |||||||||||||||
| Transaction processing | 5,684 | 42.7 | 3,982 | 17,022 | 45.2 | 11,727 | |||||||||||||||
| Share-based compensation | 197 | (20.9 | ) | 249 | 336 | (47.2 | ) | 636 | |||||||||||||
| Employee costs | 20,463 | 23.8 | 16,525 | 59,271 | 17.0 | 50,666 | |||||||||||||||
| Other expenses | 20,832 | 22.7 | 16,980 | 56,549 | 18.0 | 47,916 | |||||||||||||||
| Total cost of ATM operating revenues | $ | 251,136 | 28.3 | % | $ | 195,737 | $ | 729,547 | 25.7 | % | $ | 580,520 | |||||||||
| Breakout of selling, general, | |||||||||||||||||||||
| and administrative expenses: | Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||||
| 2017 | % Change | 2016 | 2017 | % Change | 2016 | ||||||||||||||||
| (In thousands, excluding percentages) | |||||||||||||||||||||
| Employee costs | $ | 24,073 | 14.5 | % | $ | 21,022 | $ | 71,347 | 16.5 | % | $ | 61,234 | |||||||||
| Share-based compensation expense | 3,955 | (38.1 | ) | 6,393 | 9,635 | (36.4 | ) | 15,144 | |||||||||||||
| Professional fees | 8,108 | 76.6 | 4,592 | 19,858 | 38.4 | 14,353 | |||||||||||||||
| Other expenses | 9,996 | 22.1 | 8,187 | 30,711 | 24.0 | 24,774 | |||||||||||||||
| Total selling, general, and administrative expenses | $ | 46,132 | 14.8 | % | $ | 40,194 | $ | 131,551 | 13.9 | % | $ | 115,505 | |||||||||
| Depreciation and accretion expense | |||||||||||||||||||
| by segment: | Three Months Ended | Nine Months Ended | |||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||
| 2017 | % Change | 2016 | 2017 | % Change | 2016 | ||||||||||||||
| (In thousands, excluding percentages) | |||||||||||||||||||
| North America | $ | 16,415 | 15.9 | % | $ | 14,160 | $ | 50,973 | 22.9 | % | $ | 41,480 | |||||||
| Europe & Africa | 11,476 | 25.4 | 9,148 | 32,093 | 16.3 | 27,605 | |||||||||||||
| Australia & New Zealand | 1,916 | n/m | — | 5,617 | n/m | — | |||||||||||||
| Total depreciation and accretion expense | $ | 29,807 | 27.9 | % | $ | 23,308 | $ | 88,683 | 28.4 | % | $ | 69,085 | |||||||
SELECTED BALANCE SHEET DETAIL:
(Unaudited, excluding December 31, 2016)
| Long-term debt: | September 30, 2017 | December 31, 2016 | |||
| (In thousands) | |||||
| Revolving credit facility | $ | 157,630 | $ | 14,100 | |
| 1.00% Convertible senior notes (1) | 249,189 | 241,068 | |||
| 5.125% Senior notes (1) | 247,869 | 247,371 | |||
| 5.50% Senior notes (1) | 295,087 | — | |||
| Total long-term debt | $ | 949,775 | $ | 502,539 | |
| (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 $38.3 million and $46.4 million as of September 30, 2017 and December 31, 2016, 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 $2.1 million and $2.6 million as of September 30, 2017 and December 31, 2016, 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 $4.9 million as of September 30, 2017. | |||||
Share count rollforward:
| Total shares outstanding as of December 31, 2016 | 45,326,430 | |
| Shares issued – stock options exercised | 12,200 | |
| Shares vested – restricted stock units | 341,691 | |
| Total shares outstanding as of September 30, 2017 | 45,680,321 | |
SELECTED CASH FLOW DETAIL:
(Unaudited)
| Selected cash flow statement amounts: | Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| (In thousands) | ||||||||||||||||
| Net cash provided by operating activities | $ | 79,706 | $ | 89,346 | $ | 164,284 | $ | 213,931 | ||||||||
| Net cash used in investing activities | (41,556 | ) | (41,635 | ) | (598,501 | ) | (86,403 | ) | ||||||||
| Net cash (used in) provided by financing activities | (29,052 | ) | (7,285 | ) | 427,284 | (93,135 | ) | |||||||||
| Effect of exchange rate changes on cash | (777 | ) | (557 | ) | (5,103 | ) | (1,169 | ) | ||||||||
| Net increase (decrease) in cash and cash equivalents | 8,321 | 39,869 | (12,036 | ) | 33,224 | |||||||||||
| Cash and cash equivalents as of beginning of period | 53,177 | 19,652 | 73,534 | 26,297 | ||||||||||||
| Cash and cash equivalents as of end of period | $ | 61,498 | $ | 59,521 | $ | 61,498 | $ | 59,521 | ||||||||
Key Operating Metrics – Including Acquisitions in All Periods Presented
For the Three and Nine Months Ended September 30, 2017 and 2016
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||
| 2017 | % Change | 2016 | 2017 | % Change | 2016 | |||||||||||||||||||
| Average number of transacting ATMs: | ||||||||||||||||||||||||
| United States | 45,092 | 4.3 | % | 43,216 | 45,155 | 9.2 | % | 41,366 | ||||||||||||||||
| United Kingdom and Ireland | 21,688 | 31.1 | 16,540 | 21,498 | 33.1 | 16,151 | ||||||||||||||||||
| Australia and New Zealand | 8,717 | n/m | — | 8,848 | n/m | — | ||||||||||||||||||
| Canada | 6,197 | 239.6 | 1,825 | 6,152 | 233.3 | 1,846 | ||||||||||||||||||
| South Africa | 2,606 | n/m | — | 2,460 | n/m | — | ||||||||||||||||||
| Germany, Poland, and Spain | 1,627 | 31.0 | 1,242 | 1,526 | 29.7 | 1,177 | ||||||||||||||||||
| Mexico | 978 | (26.4 | ) | 1,329 | 1,078 | (21.1 | ) | 1,366 | ||||||||||||||||
| Total Company-owned | 86,905 | 35.5 | 64,152 | 86,717 | 40.1 | 61,906 | ||||||||||||||||||
| United States (1) | 12,175 | (18.7 | ) | 14,970 | 12,392 | (24.0 | ) | 16,297 | ||||||||||||||||
| Canada | 2,974 | n/m | — | 2,932 | n/m | — | ||||||||||||||||||
| United Kingdom and Ireland | 682 | n/m | — | 632 | n/m | — | ||||||||||||||||||
| Australia and New Zealand | 103 | n/m | — | 103 | n/m | — | ||||||||||||||||||
| Total Merchant-owned | 15,934 | 6.4 | 14,970 | 16,059 | (1.5 | ) | 16,297 | |||||||||||||||||
| Average number of transacting ATMs – ATM operations | 102,839 | 30.0 | 79,122 | 102,776 | 31.4 | 78,203 | ||||||||||||||||||
| Managed Services and Processing: | ||||||||||||||||||||||||
| United States | 129,228 | 7.0 | 120,773 | 126,664 | 8.2 | 117,107 | ||||||||||||||||||
| Canada | 3,259 | 85.1 | 1,761 | 3,339 | 101.3 | 1,659 | ||||||||||||||||||
| Australia and New Zealand | 2,000 | n/m | — | 1,844 | n/m | — | ||||||||||||||||||
| Average number of transacting ATMs – Managed services and processing | 134,487 | 9.8 | 122,534 | 131,847 | 11.0 | 118,766 | ||||||||||||||||||
| Total average number of transacting ATMs | 237,326 | 17.7 | 201,656 | 234,623 | 19.1 | 196,969 | ||||||||||||||||||
| Total transactions (in thousands): | ||||||||||||||||||||||||
| ATM operations | 388,736 | 8.1 | 359,731 | 1,141,144 | 12.4 | 1,014,803 | ||||||||||||||||||
| Managed services and processing, net | 281,054 | 57.0 | 179,072 | 788,928 | 49.7 | 526,949 | ||||||||||||||||||
| Total transactions | 669,790 | 24.3 | 538,803 | 1,930,072 | 25.2 | 1,541,752 | ||||||||||||||||||
| Total cash withdrawal transactions (in thousands): | ||||||||||||||||||||||||
| ATM operations | 247,903 | 10.1 | 225,178 | 730,313 | 15.3 | 633,461 | ||||||||||||||||||
| Per ATM per month amounts (excludes managed services and processing): | ||||||||||||||||||||||||
| Cash withdrawal transactions | 804 | (15.3 | ) | 949 | 790 | (12.2 | ) | 900 | ||||||||||||||||
| ATM operating revenues (2) | $ | 1,180 | (6.2 | ) | $ | 1,258 | $ | 1,116 | (9.6 | ) | $ | 1,235 | ||||||||||||
| Cost of ATM operating revenues (2) (3) | 774 | (1.3 | ) | 784 | 749 | (4.5 | ) | 784 | ||||||||||||||||
| ATM adjusted operating gross profit (2) (3) | $ | 406 | (14.3 | ) | % | $ | 474 | $ | 367 | (18.6 | ) | % | $ | 451 | ||||||||||
| ATM adjusted operating gross profit margin (2) (3) | 34.4 | % | 37.7 | % | 32.9 | % | 36.5 | % | ||||||||||||||||
| (1) Certain ATMs previously reported in this category are now included in the United States: Managed services and processing or United States: Company-owned categories. | ||||||||||||||||||||||||
| (2) ATM operating revenues and Cost of ATM operating revenues relating to managed services, processing, ATM equipment sales, and other ATM-related services are not included in this calculation. | ||||||||||||||||||||||||
| (3) Amounts presented exclude the effect of depreciation, accretion, and amortization of intangible assets. See Disclosure of Non-GAAP Financial Information in this earnings release for further discussion. | ||||||||||||||||||||||||
Key Operating Metrics – Excluding Acquisitions in All Periods Presented
For the Three and Nine Months Ended September 30, 2017 and 2016
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||
| 2017 | % Change | 2016 | 2017 | % Change | 2016 | |||||||||||||||||||
| Average number of transacting ATMs: | ||||||||||||||||||||||||
| United States | 45,092 | 4.3 | % | 43,216 | 42,775 | 3.4 | % | 41,366 | ||||||||||||||||
| United Kingdom and Ireland | 16,819 | 1.7 | 16,540 | 16,571 | 2.6 | 16,151 | ||||||||||||||||||
| Canada | 1,899 | 4.1 | 1,825 | 1,837 | (0.5 | ) | 1,846 | |||||||||||||||||
| Germany, Poland, and Spain | 1,627 | 31.0 | 1,242 | 1,526 | 29.7 | 1,177 | ||||||||||||||||||
| Mexico | 486 | (63.4 | ) | 1,329 | 635 | (53.5 | ) | 1,366 | ||||||||||||||||
| Total Company-owned | 65,923 | 2.8 | 64,152 | 63,344 | 2.3 | 61,906 | ||||||||||||||||||
| United States (1) | 12,175 | (18.7 | ) | 14,970 | 12,392 | (24.0 | ) | 16,297 | ||||||||||||||||
| Total Merchant-owned | 12,175 | (18.7 | ) | 14,970 | 12,392 | (24.0 | ) | 16,297 | ||||||||||||||||
| Average number of transacting ATMs – ATM operations | 78,098 | (1.3 | ) | 79,122 | 75,736 | (3.2 | ) | 78,203 | ||||||||||||||||
| Managed Services and Processing: | ||||||||||||||||||||||||
| United States | 129,228 | 7.0 | 120,773 | 126,664 | 8.2 | 117,107 | ||||||||||||||||||
| Canada | 1,943 | 10.3 | 1,761 | 1,984 | 19.6 | 1,659 | ||||||||||||||||||
| Average number of transacting ATMs – Managed services and processing | 131,171 | 7.0 | 122,534 | 128,648 | 8.3 | 118,766 | ||||||||||||||||||
| Total average number of transacting ATMs | 209,269 | 3.8 | 201,656 | 204,384 | 3.8 | 196,969 | ||||||||||||||||||
| Total transactions (in thousands): | ||||||||||||||||||||||||
| ATM operations | 345,825 | (3.9 | ) | 359,731 | 1,004,241 | (1.0 | ) | 1,014,803 | ||||||||||||||||
| Managed services and processing, net | 185,276 | 3.5 | 179,072 | 515,362 | (2.2 | ) | 526,949 | |||||||||||||||||
| Total transactions | 531,101 | (1.4 | ) | 538,803 | 1,519,603 | (1.4 | ) | 1,541,752 | ||||||||||||||||
| Total cash withdrawal transactions (in thousands): | ||||||||||||||||||||||||
| ATM operations | 212,957 | (5.4 | ) | 225,178 | 621,164 | (1.9 | ) | 633,461 | ||||||||||||||||
| Per ATM per month amounts (excludes managed services and processing): | ||||||||||||||||||||||||
| Cash withdrawal transactions | 909 | (4.2 | ) | 949 | 911 | 1.2 | 900 | |||||||||||||||||
| ATM operating revenues (2) | $ | 1,243 | (1.2 | ) | $ | 1,258 | $ | 1,230 | (0.4 | ) | $ | 1,235 | ||||||||||||
| Cost of ATM operating revenues (2) (3) | 798 | 1.8 | 784 | 806 | 2.8 | 784 | ||||||||||||||||||
| ATM adjusted operating gross profit (2) (3) | $ | 445 | (6.1 | ) | % | $ | 474 | $ | 424 | (6.0 | ) | % | $ | 451 | ||||||||||
| ATM adjusted operating gross profit margin (2) (3) | 35.8 | % | 37.7 | % | 34.5 | % | 36.5 | % | ||||||||||||||||
| (1) Certain ATMs previously reported in this category are now included in the United States: Managed services and processing or United States: Company-owned categories. | ||||||||||||||||||||||||
| (2) ATM operating revenues and Cost of ATM operating revenues relating to managed services, processing, ATM equipment sales, and other ATM-related services are not included in this calculation. | ||||||||||||||||||||||||
| (3) Amounts presented exclude the effect of depreciation, accretion, and amortization of intangible assets. See Disclosure of Non-GAAP Financial Information in this earnings release for further discussion. | ||||||||||||||||||||||||
Key Operating Metrics – Ending Machine Count
As of September 30, 2017 and 2016
(Unaudited)
| September 30, 2017 | September 30, 2016 | |||
| Ending number of transacting ATMs: | ||||
| United States | 44,738 | 44,688 | ||
| United Kingdom and Ireland | 21,748 | 16,665 | ||
| Australia and New Zealand | 8,636 | — | ||
| Canada | 6,235 | 1,835 | ||
| South Africa | 2,767 | — | ||
| Germany, Poland, and Spain | 1,653 | 1,279 | ||
| Mexico | 989 | 1,267 | ||
| Total Company-owned | 86,766 | 65,734 | ||
| United States | 12,083 | 13,961 | ||
| Canada | 2,962 | — | ||
| United Kingdom and Ireland | 613 | — | ||
| Australia and New Zealand | 103 | — | ||
| Total Merchant-owned | 15,761 | 13,961 | ||
| Ending number of transacting ATMs – ATM operations | 102,527 | 79,695 | ||
| United States | 130,215 | 121,791 | ||
| Canada | 3,255 | 1,832 | ||
| Australia and New Zealand | 2,002 | — | ||
| Ending number of transacting ATMs – Managed services and processing | 135,472 | 123,623 | ||
| Total ending number of transacting ATMs | 237,999 | 203,318 | ||
Reconciliation of Net Income Attributable to Controlling Interests and Available to Common Shareholders to
EBITDA, Adjusted EBITDA, and Adjusted Net Income
For the Three and Nine Months Ended September 30, 2017 and 2016
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| (In thousands, excluding share and per share amounts) | ||||||||||||||||
| Net (loss) income attributable to controlling interests and available to common shareholders | $ | (175,561 | ) | $ | 27,490 | $ | (161,304 | ) | $ | 63,022 | ||||||
| Adjustments: | ||||||||||||||||
| Interest expense, net | 9,743 | 4,269 | 25,760 | 13,227 | ||||||||||||
| Amortization of deferred financing costs and note discount | 3,195 | 2,872 | 9,317 | 8,636 | ||||||||||||
| Income tax (benefit) expense | (4,053 | ) | 8,388 | (2,335 | ) | 26,204 | ||||||||||
| Depreciation and accretion expense | 29,807 | 23,308 | 88,683 | 69,085 | ||||||||||||
| Amortization of intangible assets | 14,996 | 9,175 | 45,423 | 28,129 | ||||||||||||
| EBITDA | $ | (121,873 | ) | $ | 75,502 | $ | 5,544 | $ | 208,303 | |||||||
| Add back: | ||||||||||||||||
| Loss (gain) on disposal and impairment of assets | 22,307 | 469 | 26,170 | (475 | ) | |||||||||||
| Other (income) expense (1) | (2,095 | ) | 360 | (1,730 | ) | 748 | ||||||||||
| Noncontrolling interests (2) | (9 | ) | (15 | ) | (19 | ) | (50 | ) | ||||||||
| Share-based compensation expense | 4,151 | 6,642 | 9,971 | 15,780 | ||||||||||||
| Redomicile-related expenses (3) | 22 | 951 | 782 | 12,201 | ||||||||||||
| Restructuring expenses (4) | — | — | 8,243 | — | ||||||||||||
| Acquisition and divestiture-related expenses (5) | 2,889 | 2,680 | 15,338 | 4,938 | ||||||||||||
| Goodwill and intangible asset impairment (6) | 194,521 | — | 194,521 | — | ||||||||||||
| Adjusted EBITDA | $ | 99,913 | $ | 86,589 | $ | 258,820 | $ | 241,445 | ||||||||
| Less: | ||||||||||||||||
| Interest expense, net | 9,743 | 4,269 | 25,760 | 13,227 | ||||||||||||
| Depreciation and accretion expense (7) | 29,805 | 23,301 | 88,677 | 69,063 | ||||||||||||
| Adjusted pre-tax income | $ | 60,365 | $ | 59,019 | $ | 144,383 | $ | 159,155 | ||||||||
| Income tax expense (8) | 16,178 | 14,271 | 39,595 | 46,314 | ||||||||||||
| Adjusted Net Income | $ | 44,187 | $ | 44,748 | $ | 104,788 | $ | 112,841 | ||||||||
| Adjusted Net Income per share – basic | $ | 0.97 | $ | 0.99 | $ | 2.30 | $ | 2.50 | ||||||||
| Adjusted Net Income per share – diluted | $ | 0.96 | $ | 0.98 | $ | 2.27 | $ | 2.47 | ||||||||
| Weighted average shares outstanding – basic | 45,662,543 | 45,252,869 | 45,597,558 | 45,175,604 | ||||||||||||
| Weighted average shares outstanding – diluted (9) | 46,197,178 | 45,850,061 | 46,238,070 | 45,765,235 | ||||||||||||
| (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) Restructuring expenses primarily related to employee severance costs associated with a corporate reorganization and broad initiative to reduce costs implemented in the first quarter of 2017. | ||||||||||||||||
| (5) Acquisition and divestiture-related expenses include costs incurred for professional and legal fees and certain other transition and integration-related costs. | ||||||||||||||||
| (6) Goodwill and intangible asset impairments related to the Company’s Australia & New Zealand segment. | ||||||||||||||||
| (7) Amounts exclude a portion of the expenses incurred by one of the Company’s Mexican subsidiaries to account for the amounts allocable to the noncontrolling interest shareholders. | ||||||||||||||||
| (8) For the three and nine months ended September 30, 2017, calculated using an effective tax rate of approximately 26.8% and 27.4%, 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. For the three months ended September 30, 2016, the non-GAAP tax rate used to calculate Adjusted Net Income was approximately 24.2%. For the nine months ended September 30, 2016, the Company used 24.2% for the quarter ended September 30, 2016, and for the six months ended June 30, 2016, the Company’s previously estimated long-term cross jurisdictional tax rate of 32%. See Disclosure of Non-GAAP Financial Information in this earnings release for further discussion. | ||||||||||||||||
| (9) 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. | ||||||||||||||||
Reconciliation of GAAP Revenue to Constant-Currency Revenue
For the Three and Nine Months Ended September 30, 2017 and 2016
(Unaudited)
| Europe & Africa revenue: | Three Months Ended | ||||||||||||||||||
| September 30, | |||||||||||||||||||
| 2017 | 2016 | % Change | |||||||||||||||||
| U.S. GAAP | Foreign Currency Impact | Constant - Currency | U.S. GAAP | U.S. GAAP | Constant - Currency | ||||||||||||||
| (In thousands) | |||||||||||||||||||
| ATM operating revenues | $ | 107,497 | $ | (231 | ) | $ | 107,266 | $ | 94,154 | 14.2 | % | 13.9 | % | ||||||
| ATM product sales and other revenues | 2,088 | (2 | ) | 2,086 | 1,409 | 48.2 | 48.0 | ||||||||||||
| Total revenues | $ | 109,585 | $ | (233 | ) | $ | 109,352 | $ | 95,563 | 14.7 | % | 14.4 | % | ||||||
| Nine Months Ended | ||||||||||||||||||
| September 30, | ||||||||||||||||||
| 2017 | 2016 | % Change | ||||||||||||||||
| U.S. GAAP | Foreign Currency Impact | Constant - Currency | U.S. GAAP | U.S. GAAP | Constant - Currency | |||||||||||||
| (In thousands) | ||||||||||||||||||
| ATM operating revenues | $ | 293,827 | $ | 22,190 | $ | 316,017 | $ | 276,452 | 6.3 | % | 14.3 | % | ||||||
| ATM product sales and other revenues | 6,159 | 380 | 6,539 | 4,206 | 46.4 | 55.5 | ||||||||||||
| Total revenues | $ | 299,986 | $ | 22,570 | $ | 322,556 | $ | 280,658 | 6.9 | % | 14.9 | % | ||||||
| Consolidated revenue: | Three Months Ended | ||||||||||||||||||||
| September 30, | |||||||||||||||||||||
| 2017 | 2016 | % Change | |||||||||||||||||||
| U.S. GAAP | Foreign Currency Impact | Constant - Currency | U.S. GAAP | U.S. GAAP | Constant - Currency | ||||||||||||||||
| (In thousands) | |||||||||||||||||||||
| ATM operating revenues | $ | 390,143 | $ | (623 | ) | $ | 389,520 | $ | 314,788 | 23.9 | % | 23.7 | % | ||||||||
| ATM product sales and other revenues | 11,807 | (6 | ) | 11,801 | 13,546 | (12.8 | ) | (12.9 | ) | ||||||||||||
| Total revenues | $ | 401,950 | $ | (629 | ) | $ | 401,321 | $ | 328,334 | 22.4 | % | 22.2 | % | ||||||||
| Nine Months Ended | ||||||||||||||||||
| September 30, | ||||||||||||||||||
| 2017 | 2016 | % Change | ||||||||||||||||
| U.S. GAAP | Foreign Currency Impact | Constant - Currency | U.S. GAAP | U.S. GAAP | Constant - Currency | |||||||||||||
| (In thousands) | ||||||||||||||||||
| ATM operating revenues | $ | 1,105,191 | $ | 22,022 | $ | 1,127,213 | $ | 918,207 | 20.4 | % | 22.8 | % | ||||||
| ATM product sales and other revenues | 39,443 | 355 | 39,798 | 37,335 | 5.6 | 6.6 | ||||||||||||
| Total revenues | $ | 1,144,634 | $ | 22,377 | $ | 1,167,011 | $ | 955,542 | 19.8 | % | 22.1 | % | ||||||
Reconciliation of Gross Profit Inclusive of Depreciation, Accretion, and Amortization of Intangible Assets to
Adjusted Gross Profit
For the Three and Nine Months Ended September 30, 2017 and 2016
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| (In thousands, excluding percentages) | ||||||||||||||||
| Total revenues | $ | 401,950 | $ | 328,334 | $ | 1,144,634 | $ | 955,542 | ||||||||
| Total cost of revenues (1) | 260,056 | 208,190 | 764,218 | 614,393 | ||||||||||||
| Total depreciation, accretion, and amortization of intangible assets excluded from Total cost of revenues | 37,176 | 27,108 | 111,911 | 82,419 | ||||||||||||
| Gross profit inclusive of depreciation, accretion, and amortization of intangible assets | $ | 104,718 | $ | 93,036 | $ | 268,505 | $ | 258,730 | ||||||||
| Gross profit % (inclusive of depreciation, accretion, and amortization of intangible assets) | 26.1 | % | 28.3 | % | 23.5 | % | 27.1 | % | ||||||||
| Total depreciation, accretion, and amortization of intangible assets excluded from gross profit | $ | 37,176 | $ | 27,108 | $ | 111,911 | $ | 82,419 | ||||||||
| Adjusted Gross Profit exclusive of depreciation, accretion, and amortization of intangible assets | $ | 141,894 | $ | 120,144 | $ | 380,416 | $ | 341,149 | ||||||||
| Adjusted Gross Profit % (exclusive of depreciation, accretion, and amortization of intangible assets) | 35.3 | % | 36.6 | % | 33.2 | % | 35.7 | % | ||||||||
| (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 and Nine Months Ended September 30, 2017 and 2016
(Unaudited)
| Three Months Ended | |||||||||||||||||||||
| September 30, | |||||||||||||||||||||
| 2017 | 2016 | % Change | |||||||||||||||||||
| Non - GAAP (1) | Foreign Currency Impact | Constant - Currency | Non - GAAP (1) | Non - GAAP (1) | Constant - Currency | ||||||||||||||||
| (In thousands) | |||||||||||||||||||||
| Adjusted EBITDA | $ | 99,913 | $ | (91 | ) | $ | 99,822 | $ | 86,589 | 15.4 | % | 15.3 | % | ||||||||
| Adjusted Net Income | $ | 44,187 | $ | (14 | ) | $ | 44,173 | $ | 44,748 | (1.3 | )% | (1.3 | )% | ||||||||
| Adjusted Net Income per share – diluted (2) | $ | 0.96 | $ | — | $ | 0.96 | $ | 0.98 | (2.0 | )% | (2.0 | )% | |||||||||
| Nine Months Ended | ||||||||||||||||||||
| September 30, | ||||||||||||||||||||
| 2017 | 2016 | % Change | ||||||||||||||||||
| Non - GAAP (1) | Foreign Currency Impact | Constant - Currency | Non - GAAP (1) | Non - GAAP (1) | Constant - Currency | |||||||||||||||
| (In thousands) | ||||||||||||||||||||
| Adjusted EBITDA | $ | 258,820 | $ | 6,311 | $ | 265,131 | $ | 241,445 | 7.2 | % | 9.8 | % | ||||||||
| Adjusted Net Income | $ | 104,788 | $ | 2,860 | $ | 107,648 | $ | 112,841 | (7.1 | )% | (4.6 | )% | ||||||||
| Adjusted Net Income per share – diluted (2) | $ | 2.27 | $ | 0.06 | $ | 2.33 | $ | 2.47 | (8.1 | )% | (5.7 | )% | ||||||||
| (1) As reported on the Company’s Reconciliation of Net Income 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 46,197,178 and 45,850,061 for the three months ended September 30, 2017 and 2016, respectively, and 46,238,070 and 45,765,235 for the nine months ended September 30, 2017 and 2016, 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. | ||||||||||||||||||||
Reconciliation of Free Cash Flow
For the Three and Nine Months Ended September 30, 2017 and 2016
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| (In thousands) | ||||||||||||||||
| Net cash provided by operating activities | $ | 79,706 | $ | 89,346 | $ | 164,284 | $ | 213,931 | ||||||||
| Payments for capital expenditures: | ||||||||||||||||
| Net cash used in investing activities, excluding acquisitions and divestitures | (41,556 | ) | (36,479 | ) | (111,424 | ) | (76,050 | ) | ||||||||
| Free cash flow | $ | 38,150 | $ | 52,867 | $ | 52,860 | $ | 137,881 | ||||||||
Reconciliation of Estimated Net Income to EBITDA, Adjusted EBITDA, and Adjusted Net Income
For the Year Ending December 31, 2017
(In millions, excluding per share amounts)
(Unaudited)
| Estimated Range Full Year 2017 (1) | ||||||||
| Net Income | $ | (155.9 | ) | $ | (150.0 | ) | ||
| Adjustments: | ||||||||
| Interest expense, net | 35.0 | 34.0 | ||||||
| Amortization of deferred financing costs and note discount | 13.0 | 13.0 | ||||||
| Income tax expense | (0.4 | ) | 1.7 | |||||
| Depreciation and accretion expense | 115.0 | 117.0 | ||||||
| Goodwill and intangible impairment | 194.5 | 194.5 | ||||||
| Amortization expense | 60.0 | 60.0 | ||||||
| EBITDA | $ | 261.2 | $ | 270.2 | ||||
| Add Back: | ||||||||
| Loss on disposal and impairment of assets | 27.0 | 27.0 | ||||||
| Share-based compensation expense | 15.0 | 15.0 | ||||||
| Acquisition-related expenses | 16.0 | 17.0 | ||||||
| Redomicile-related expenses | 0.8 | 0.8 | ||||||
| Restructuring expenses | 10.0 | 10.0 | ||||||
| Adjusted EBITDA | $ | 330.0 | $ | 340.0 | ||||
| Less: | ||||||||
| Interest expense, net | 35.0 | 34.0 | ||||||
| Depreciation and accretion expense | 115.5 | 115.5 | ||||||
| Income tax expense (2) | 48.8 | 51.8 | ||||||
| Adjusted Net Income | $ | 130.7 | $ | 138.7 | ||||
| Adjusted Net Income per share – diluted | $ | 2.83 | $ | 3.00 | ||||
| Weighted average shares outstanding – diluted | 46.25 | 46.25 | ||||||
| (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 27.2%, as adjusted for items excluded from Adjusted Net Income, see Disclosure of Non-GAAP Financial Information in this earnings release for further discussion. | ||||||||
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