Concentration Risk

3 Months Ended

Mar. 31, 2017

Concentration Risk

Concentration Risk

(17) Concentration Risk

Significant customers. 7-Eleven, Inc. (“7-Eleven”) in the U.S. is currently the largest merchant customer in the Company’s portfolio, representing approximately 18% of the Company’s total revenues for the year ended December 31, 2016. 7-Eleven did not renew its ATM placement agreement with the Company, which expires in July 2017, but has instead entered into a new ATM placement agreement with a related entity of 7-Eleven’s parent company. The Company is currently in the process of coordinating the transition of ATM operations at 7-Eleven locations in the U.S. to the new service provider. The transition is expected to begin shortly after the scheduled termination date of the agreement in July 2017 and largely occur over the latter part of 2017, with a small percentage of ATMs expected to be removed during the first quarter of 2018. As a result, the Company expects that its revenues and operating profits associated with this relationship will begin to decline during the third quarter of 2017. The Company expects that the loss of 7-Eleven will likely have a higher negative impact (in percentage terms) on its income from operations relative to the revenue impact, particularly as the Company transitions to the new service provider and the infrastructure required to support the relationship adjusts during the transition period. As a result, the Company expects that the loss of 7-Eleven will have a significant negative impact on its income from operations and cash flows in 2017 and 2018.

The deinstallation of the 7-Eleven ATMs in the U.S., which the Company expects to start in the third quarter of 2017, will have a significant impact on many elements of the Company’s business operations. Due to the anticipated loss of revenues and profits associated with this relationship, the Company has taken measures to manage the business to partially offset the loss of profits associated with this relationship. For additional information, seeNote 1. General and Basis of Presentation - (e) Restructuring Expenses.