Concentration Risk

9 Months Ended

Sep. 30, 2017

Concentration Risk

Concentration Risk

(17) Concentration Risk

Significant merchants. 7-Eleven, Inc. (“7-Eleven”) in the U.S. was the largest merchant 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 expired in July 2017, but 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 transitioning the ATM operations at 7-Eleven locations in the U.S. to the new service provider. The Company expects the transition to continue over the remainder of 2017, with a small percentage of ATMs expected to be removed during the first quarter of 2018. As a result, revenues and operating profits associated with this relationship have begun to decline during the third quarter of 2017. The loss of 7-Eleven has had, and is expected to continue to have, a higher negative impact (in percentage terms) on the Company’s income from operations relative to the revenue impact, particularly as the Company continues to transition to the new service provider and adjusts the infrastructure required to support the relationship during the transition period. As a result, the Company expects the loss of 7-Eleven to have a significant negative impact on its income from operations and cash flows for the remainder of 2017 and into the first quarter of 2018.

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