Concentration Risk

12 Months Ended

Dec. 31, 2017

Concentration Risk

Concentration Risk

(19) Concentration Risk

Significant supplier. For the years ended December 31, 2017 and 2016, the Company purchased ATM and ATM-related equipment from one supplier thataccounted for 73.7% and 60.0%, respectively, of the Company’s total ATM purchases for those years.

Significant customers. For the years ended December 31, 2017 and 2016, the Company derived approximately 30.9% and 39.2%, respectively, of its total revenues from ATMs placed at the locations of its top five merchant customers. The Company’s top five merchant customers for the years ended December 31, 2017 and 2016 were 7-Eleven, Inc. (“7-Eleven”), CVS Caremark Corporation (“CVS”), Co-op Food (in the U.K.), Walgreens Boots Alliance, Inc. (“Walgreens”), and Speedway LLC (“Speedway”).7-Eleven in the U.S. is currently the largest merchant customer in the Company’s portfolio, representing 12.5% and 18% of the Company’s total revenues for the years ended December 31, 2017 and 2016, respectively. The next four largest merchant customers together comprised 18.4% and 21.0% of the Company’s total revenues for the years ended December 31, 2017 and 2016, 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. The 7-Eleven ATM placement agreement in the U.S. expired in July 2017, and most of the ATM operations in the U.S. were transitioned to the new service provider as of December 31, 2017. We expect the transition to be complete during the first quarter of 2018. As a result, the loss of the 7-Eleven relationship in the U.S., has had and will most likely continue to have, a significant negative impact on our income from operations and cash flows relative to prior periods.