Concentration Risk

12 Months Ended

Dec. 31, 2013

Concentration Risk [Abstract]

Concentration Risk

(19)  Concentration Risk

Significant Supplier.  For the years ended December 31, 2013 and 2012, the Company’s U.S., U.K., and Canada operations purchased equipment from one supplier that accounted for 63.5% and 70.3%, respectively, of the Company’s total ATM purchases for those years.

Significant Vendors.  The Company obtains the cash to fill a substantial portion of its domestic Company-owned, and, in some cases, merchant-owned, ATMs from Bank of America and Wells Fargo.  For the quarter ended December 31, 2013, the Company had an average of$2.0 billion in cash in its domestic ATMs, of which 31.7% was provided by Bank of America and 29.7% was provided by Wells Fargo. The Company’s existing vault cash rental agreements expire at various times from March 2014 to December 2016.  However, each provider has the right to demand the return of all or any portion of its cash at any time upon the occurrence of certain events beyond the Company’s control, including certain bankruptcy events of the Company or its subsidiaries, or a breach of the terms of the Company’s cash provider agreements.  Other key terms of the agreements include the requirement that the cash providers provide written notice of their intent not to renew.  Such notice provisions typically require a minimum of 180 to 360 days’ notice prior to the actual termination date.  If such notice is not received, then the contracts will typically automatically renew for an additional one-year period.  Additionally, the Company’s contract with one of its vault cash providers contains a provision that allows the provider to modify the pricing terms contained within the agreement at any time with 90 days prior written notice.  However, in the event both parties do not agree to the pricing modifications, then either party may provide 180 days prior written notice of its intent to terminate.  In the U.K., the Company obtains the majority of its vault cash from Santander, for which the existing vault cash rental agreement expires in December 2014.  

In addition to the above, the Company had concentration risks in significant vendors for the provision of on-site maintenance services and armored courier services in the U.S. for the years ended December 31, 2013 and 2012. 

Significant Customers.  For the years ended December 31, 2013 and 2012, the Company derived 40.8% and 45.2%, respectively, of its unaudited pro forma revenues from ATMs placed at the locations of its five largest merchants. The Company’s top five merchants (based on its total revenues) were 7-Eleven, Inc. (“7-Eleven”), CVS Caremark Corporation (“CVS”), Walgreen Co. (“Walgreens”), Speedway LLC (“Speedway”), and Valero Energy Corporation (“Valero”)for the year ended December 31, 2013 and were 7-Eleven, CVS, Walgreens, Speedway, and The Pantry, Inc.for the year ended December 31, 2012. Unaudited pro forma revenues arethe Company’s actual total revenues for 2013 and the proforma effect of the Cardpoint acquisition for the entire year of 2013.  7-Eleven, which represents the single largest merchant customer in the Company’s portfolio, comprised 24.0% and 26.9% of the Company’s unaudited pro forma revenues for the years ended December 31, 2013 and 2012, respectively. Accordingly, a significant percentage of the Company’s future revenues and operating income will be dependent upon the successful continuation of its relationship with these merchants.