England and Wales | 001-37820 | 98-1304627 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification Number) |
2050 West Sam Houston Parkway South, Suite 1300, Houston, Texas | 77042 | |
(Address of principal executive offices) | Zip Code |
Exhibit | |||
Number | Description of the Exhibit | ||
99.1 |
CARDTRONICS PLC | ||
By: | /s/ Paul A. Gullo | |
Paul A. Gullo | ||
Chief Accounting Officer | ||
May 2, 2019 |
• | Total revenues of $318.3 million, down 5% from $336.2 million in the prior year and down 2% on a constant currency basis primarily due to decreases in LINK interchange rates in the United Kingdom. |
• | ATM operating revenues of $302.6 million, down 5% from $319.7 million in the prior year and down 2% on a constant-currency basis primarily due to decreases in LINK interchange rates in the United Kingdom. |
• | GAAP net income of $4.3 million, or $0.09 per diluted share, compared to GAAP net loss of $(2.8) million, or $(0.06) per diluted share in the prior year. |
• | Adjusted EBITDA of $61.0 million, down 11% from $68.7 million in the prior year primarily driven by the decreases in LINK interchange rates and the non-recurring property tax benefit included in the prior year. |
• | Adjusted net income per diluted share of $0.35 compared to $0.46 in the prior year. |
• | Agreements executed to brand over 1,000 ATMs in the U.S. |
• | Launched Allpoint+ deposit network in the U.S., targeting nearly 1,000 deployments by the end of 2019. |
• | Announced cardless cash access at ATMs in the U.S. with approximately 11,000 ATMs currently enabled. |
• | Announced $50 million opportunistic share repurchase authorization. |
• | Revenues of $1.32 billion to $1.36 billion; |
• | GAAP net income of $32 million to $34 million; |
• | Adjusted EBITDA of $290 million to $300 million; |
• | Depreciation and accretion expense of $140 million to $142 million; |
• | Cash interest expense of $26 million to $27 million; |
• | Adjusted net income of $94 million to $100 million; |
• | Adjusted net income per diluted share of $2.01 to $2.12 based on approximately 46.9 million average diluted shares outstanding; and |
• | Capital expenditures of approximately $135 million. |
Dial in: | (877) 303-9205 | |
Alternate dial-in: | (760) 536-5226 |
EVP - Treasurer Brad Conrad 832-308-4000 ir@cardtronics.com | Corporate Communications Manager Susannah Moore Griffin 832-308-4392 sgriffin@cardtronics.com |
Three Months Ended | |||||||||
March 31, | |||||||||
2019 | 2018 | % Change | |||||||
Revenues: | (Unaudited) | (Unaudited) | |||||||
ATM operating revenues | $ | 302,602 | $ | 319,731 | (5.4)% | ||||
ATM product sales and other revenues | 15,668 | 16,453 | (4.8) | ||||||
Total revenues | 318,270 | 336,184 | (5.3) | ||||||
Cost of revenues: | |||||||||
Cost of ATM operating revenues (excludes depreciation, accretion, and amortization of intangible assets reported separately below) | 206,158 | 215,490 | (4.3) | ||||||
Cost of ATM product sales and other revenues | 11,925 | 12,762 | (6.6) | ||||||
Total cost of revenues | 218,083 | 228,252 | (4.5) | ||||||
Operating expenses: | |||||||||
Selling, general, and administrative expenses | 43,660 | 41,740 | 4.6 | ||||||
Restructuring expenses | — | 2,413 | n/m | ||||||
Acquisition related expenses | — | 1,720 | n/m | ||||||
Depreciation and accretion expense | 32,973 | 31,042 | 6.2 | ||||||
Amortization of intangible assets | 12,412 | 13,771 | (9.9) | ||||||
Loss on disposal and impairment of assets | 968 | 5,420 | (82.1) | ||||||
Total operating expenses | 90,013 | 96,106 | (6.3) | ||||||
Income from operations | 10,174 | 11,826 | (14.0) | ||||||
Other expenses: | |||||||||
Interest expense, net | 6,643 | 9,174 | (27.6) | ||||||
Amortization of deferred financing costs and note discount | 3,292 | 3,308 | (0.5) | ||||||
Other (income) expense | (7,207 | ) | 2,160 | n/m | |||||
Total other expenses | 2,728 | 14,642 | (81.4) | ||||||
Income (loss) before income taxes | 7,446 | (2,816 | ) | n/m | |||||
Income tax expense (benefit) | 3,129 | (31 | ) | n/m | |||||
Effective tax rate | 42.0 | % | 1.1 | % | |||||
Net income (loss) | 4,317 | (2,785 | ) | n/m | |||||
Net loss attributable to noncontrolling interests | (2 | ) | (17 | ) | (88.2) | ||||
Net income (loss) attributable to controlling interests and available to common shareholders | $ | 4,319 | $ | (2,768 | ) | n/m | |||
Net income (loss) per common share – basic | $ | 0.09 | $ | (0.06 | ) | ||||
Net income (loss) per common share – diluted | $ | 0.09 | $ | (0.06 | ) | ||||
Weighted average shares outstanding – basic | 46,223,764 | 45,833,070 | |||||||
Weighted average shares outstanding – diluted | 46,635,033 | 45,833,070 |
March 31, 2019 | December 31, 2018 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 35,444 | $ | 39,940 | ||||
Accounts and notes receivable, net | 80,277 | 75,643 | ||||||
Inventory, net | 12,773 | 11,392 | ||||||
Restricted cash | 84,790 | 155,470 | ||||||
Prepaid expenses, deferred costs, and other current assets | 102,884 | 84,386 | ||||||
Total current assets | 316,168 | 366,831 | ||||||
Property and equipment, net | 458,067 | 460,187 | ||||||
Intangible assets, net | 140,091 | 150,847 | ||||||
Goodwill | 754,084 | 749,144 | ||||||
Operating lease assets | 81,973 | — | ||||||
Deferred tax asset, net | 10,311 | 8,658 | ||||||
Prepaid expenses, deferred costs, and other noncurrent assets | 41,516 | 51,677 | ||||||
Total assets | $ | 1,802,210 | $ | 1,787,344 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Current portion of other long-term liabilities | $ | 50,492 | $ | 20,266 | ||||
Accounts payable and other accrued and current liabilities | 357,737 | 408,470 | ||||||
Total current liabilities | 408,229 | 428,736 | ||||||
Long-term liabilities: | ||||||||
Long-term debt | 802,719 | 818,485 | ||||||
Asset retirement obligations | 54,946 | 54,413 | ||||||
Noncurrent operating lease liabilities | 72,482 | — | ||||||
Deferred tax liability, net | 39,630 | 41,198 | ||||||
Other long-term liabilities | 48,375 | 67,740 | ||||||
Total liabilities | 1,426,381 | 1,410,572 | ||||||
Shareholders' equity | 375,829 | 376,772 | ||||||
Total liabilities and shareholders’ equity | $ | 1,802,210 | $ | 1,787,344 |
Long-term debt: | March 31, 2019 | December 31, 2018 | ||||||
(In thousands) | ||||||||
(Unaudited) | ||||||||
Revolving credit facility | $ | 240,167 | $ | 259,081 | ||||
1.00% Convertible senior notes (1) | 266,492 | 263,507 | ||||||
5.50% Senior notes (1) | 296,060 | 295,897 | ||||||
Total long-term debt | $ | 802,719 | $ | 818,485 |
(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 $21.0 million and $24.0 million as of March 31, 2019 and December 31, 2018, 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 5.50% Senior Notes due 2025 with a face value of $300.0 million are presented net of capitalized debt issuance costs of $3.9 million and $4.1 million as of March 31, 2019 and December 31, 2018, respectively. |
Three Months Ended | ||||||||
March 31, | ||||||||
2019 | 2018 | |||||||
Net income (loss) attributable to controlling interests and available to common shareholders | $ | 4,319 | $ | (2,768 | ) | |||
Adjustments: | ||||||||
Interest expense, net | 6,643 | 9,174 | ||||||
Amortization of deferred financing costs and note discount | 3,292 | 3,308 | ||||||
Income tax expense (benefit) | 3,129 | (31 | ) | |||||
Depreciation and accretion expense | 32,973 | 31,042 | ||||||
Amortization of intangible assets | 12,412 | 13,771 | ||||||
EBITDA | $ | 62,768 | $ | 54,496 | ||||
Add back: | ||||||||
Loss on disposal and impairment of assets | 968 | 5,420 | ||||||
Other (income) expense (1) | (7,207 | ) | 2,160 | |||||
Noncontrolling interests (2) | 15 | 1 | ||||||
Share-based compensation expense | 4,484 | 2,445 | ||||||
Restructuring expenses (3) | — | 2,413 | ||||||
Acquisition related expenses (4) | — | 1,720 | ||||||
Adjusted EBITDA | $ | 61,028 | $ | 68,655 | ||||
Less: | ||||||||
Interest expense, net | 6,643 | 9,174 | ||||||
Depreciation and accretion expense (5) | 32,973 | 31,041 | ||||||
Adjusted pre-tax income | 21,412 | 28,440 | ||||||
Income tax expense (6) | 5,181 | 7,338 | ||||||
Adjusted Net Income | $ | 16,231 | $ | 21,102 | ||||
Adjusted Net Income per share – basic | $ | 0.35 | $ | 0.46 | ||||
Adjusted Net Income per share – diluted | $ | 0.35 | $ | 0.46 | ||||
Weighted average shares outstanding – basic | 46,223,764 | 45,833,070 | ||||||
Weighted average shares outstanding – diluted (7) | 46,635,033 | 46,332,629 |
(1) | Includes foreign currency translation gains/losses, the revaluation of the estimated acquisition related contingent consideration, and other non-operating costs. |
(2) | Noncontrolling interest 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 include employee severance and other costs incurred in conjunction with a corporate reorganization and cost reduction initiative. |
(4) | Expenses primarily include employee severance cost and lease termination costs related to DCPayments. |
(5) | Amounts exclude a portion of the expenses incurred by one of its Mexican subsidiaries to account for the amounts allocable to the noncontrolling interest shareholders. |
(6) | For the three months ended March 31, 2019 and 2018, the non-GAAP tax rate used to calculate Adjusted Net Income was 24.2% and 25.8%, 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. |
(7) | 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. |
Consolidated revenue: | ||||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||
March 31, | ||||||||||||||||||||||||
2019 | 2018 | % Change | ||||||||||||||||||||||
U.S. GAAP | Foreign Currency Impact | Constant - Currency | U.S. GAAP | U.S. GAAP | Constant - Currency | |||||||||||||||||||
ATM operating revenues | $ | 302,602 | $ | 10,914 | $ | 313,516 | $ | 319,731 | (5.4 | ) | % | (1.9 | ) | % | ||||||||||
ATM product sales and other revenues | 15,668 | 289 | 15,957 | 16,453 | (4.8 | ) | (3.0 | ) | ||||||||||||||||
Total revenues | $ | 318,270 | $ | 11,203 | $ | 329,473 | $ | 336,184 | (5.3 | ) | % | (2.0 | ) | % |
Three Months Ended | ||||||||
March 31, | ||||||||
2019 | 2018 | |||||||
Total revenues | $ | 318,270 | $ | 336,184 | ||||
Total cost of revenues (1) | 218,083 | 228,252 | ||||||
Total depreciation, accretion, and amortization of intangible assets excluded from total cost of revenues | 37,019 | 37,146 | ||||||
Gross profit inclusive of depreciation, accretion, and amortization of intangible assets | $ | 63,168 | $ | 70,786 | ||||
Gross Margin (inclusive of depreciation, accretion, and amortization of intangible assets) | 19.8 | % | 21.1 | % | ||||
Total depreciation, accretion, and amortization of intangible assets excluded from gross profit | $ | 37,019 | $ | 37,146 | ||||
Adjusted Gross Profit exclusive of depreciation, accretion, and amortization of intangible assets | $ | 100,187 | $ | 107,932 | ||||
Adjusted Gross Margin (exclusive of depreciation, accretion, and amortization of intangible assets) | 31.5 | % | 32.1 | % |
(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. |
Three Months Ended | ||||||||||||||||||||||
March 31, | ||||||||||||||||||||||
2019 | 2018 | % Change | ||||||||||||||||||||
Non - GAAP (1) | Foreign Currency Impact | Constant - Currency | Non - GAAP (1) | Non - GAAP (1) | Constant - Currency | |||||||||||||||||
Adjusted EBITDA | $ | 61,028 | $ | 1,876 | $ | 62,905 | $ | 68,655 | (11.1 | )% | (8.4 | )% | ||||||||||
Adjusted Net Income | $ | 16,231 | $ | 373 | $ | 16,603 | $ | 21,102 | (23.1 | )% | (21.3 | )% | ||||||||||
Adjusted Net Income per share – diluted (2) | $ | 0.35 | $ | 0.01 | $ | 0.36 | $ | 0.46 | (23.9 | )% | (21.7 | )% |
(1) | As reported on the Company’s Reconciliation of Net Income (Loss) 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 46,635,033 and 46,332,629 for the three months ended March 31, 2019 and 2018, 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. |
Three Months Ended | ||||||||
March 31, | ||||||||
2019 | 2018 | |||||||
Net cash (used in) provided by operating activities | $ | (21,805 | ) | $ | 49,433 | |||
Restricted cash settlement activity (1) | 71,521 | (24,238 | ) | |||||
Adjusted net cash provided by operating activities | 49,716 | 25,195 | ||||||
Net cash used in investing activities, excluding acquisitions (2) | (29,307 | ) | (20,739 | ) | ||||
Adjusted free cash flow | $ | 20,409 | $ | 4,456 |
(1) | Restricted cash settlement activity represents the change in our restricted cash excluding the portion of the change that is attributable to foreign exchange and disclosed as part of the effect of exchange rate changes on cash, cash equivalents, and restricted cash in our Consolidated Statements of Cash Flows. Restricted cash largely consists of amounts collected on behalf of, but not yet remitted to, certain of the Company’s merchant customers or third-party service providers that are pledged for a particular use or restricted to support these obligations. |
(2) | Capital expenditure amounts include payments made for exclusive license agreements, site acquisition costs, and other assets. Additionally, capital expenditure amounts for one of our Mexican subsidiaries are reflected gross of any noncontrolling interest amounts. |
Estimated Range | ||||||||
Full Year 2019 (1) | ||||||||
Net Income | $ | 32.2 | $ | 33.7 | ||||
Adjustments: | ||||||||
Interest expense, net | 25.9 | 27.0 | ||||||
Amortization of deferred financing costs and note discount | 13.0 | 13.0 | ||||||
Income tax expense | 16.6 | 21.5 | ||||||
Depreciation and accretion expense | 140.0 | 142.0 | ||||||
Amortization of intangible assets | 49.0 | 49.0 | ||||||
EBITDA | $ | 276.7 | $ | 286.2 | ||||
Add Back: | ||||||||
Loss on disposal of assets and other, net | 1.0 | 1.0 | ||||||
Other income | (7.2 | ) | (7.2 | ) | ||||
Share-based compensation expense | 19.5 | 20.0 | ||||||
Adjusted EBITDA | $ | 290.0 | $ | 300.0 | ||||
Less: | ||||||||
Interest expense, net | 25.9 | 27.0 | ||||||
Depreciation and accretion expense | 140.0 | 142.0 | ||||||
Income tax expense (2) | 29.8 | 31.4 | ||||||
Adjusted Net Income | $ | 94.3 | $ | 99.6 | ||||
Adjusted Net Income per share – diluted | $ | 2.01 | $ | 2.12 | ||||
Weighted average shares outstanding – diluted | 46.9 | 46.9 |
(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 24% as adjusted for items excluded from Adjusted Net Income, see Disclosure of Non-GAAP Financial Information in this earnings release for further discussion. |