Cardtronics CEO Discusses Q3 2010 - Earnings Call Transcript
Cardtronics, Inc. (
)
Q3 2010 Earnings Call
November 2, 2010 05:00 pm ET
Executives
Steve Rathgaber - Chief Executive Officer
Mike Clinard - President of Global Services
Rick Updyke - President of Global Development
Chris Brewster - Chief Financial Officer
Mitzi Pierce - Investor Relations
Analysts
Chris Mammone - Deutsche Bank
Bob Napoli - Piper Jaffray
Chris Shutler - William Blair
Reggie Smith – JPMorgan
Gary Prestopino - Barrington Research
Presentation
Operator
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Cardtronics, Inc. Q3 2009 Earnings Call Transcript
Good day, ladies and gentlemen, and welcome to Cardtronics Third Quarter Earnings Conference Call. (Operator instructions). As a reminder, this conference call is being recorded. I would now like to turn the conference over to Ms. Mitzi Pierce. Ma'am, you may begin.
Mitzi Pierce
Thanks, Operator. Good afternoon everyone, and welcome to Cardtronics Third Quarter Conference Call. Presenting on the call today, we have Steve Rathgaber, our Chief Executive Officer, and Chris Brewster, our Chief Financial Officer. Also on the call today and available for questions we have Mike Clinard, President, Global Service, and Rick Updyke, President, US Business Group.
Steve will begin today’s call with an overview of our Q3 results, and an update on some of our key initiatives. Following Steve, Chris will provide additional details on our quarterly results, and an update on our expectations for the remainder of 2010 and some high level guidance for 2011. Our prepared remarks are scheduled to run for about 25 minutes, at which point we’ll open up the call for any questions.
Before we get started I'd like to make the following cautionary statement regarding forward-looking information. During the course of this call, we will make certain forward-looking statements regarding future events, results or performance. Any forward-looking statements made on this call are subject to risks and uncertainties including but not limited to those outlined in our reports filed with the SEC. Actual events, results or performance may differ materially. Any forward-looking statements are based on current information only and we assume no obligation to update those statements.
In addition, during the course of this call we will reference certain non-GAAP financial performance measures. Our opinion regarding the usefulness of such measures together with the reconciliation of such measures is included in the press release issued this afternoon.
Now, I would like to turn the call over to Steve Rathgaber, our CEO.
Steve Rathgaber
Thanks, Mitzi, and thanks to all the listeners who have joined us today, and I guess happy election day to everybody. Once again, I am pleased to be able to report that Cardtronics had a very solid quarter, which modestly exceeded our expectations. The quarter produced record revenues, EBITDA, and earnings per share. From a top line perspective, our revenue increased over 6% from the same quarter in the prior year to $136.6 million. Adjusted EBITDA for the quarter totaled $3.9 million, presenting an 8% increase over the prior year.
As we noted in the press release, the record levels of revenue and adjusted net income per share generated during the quarter, as well as the year over year growth and adjusted EBITDA were driven by the successful execution of key growth initiatives. As you may recall, I outlined six growth tracks for Cardtronics during our Q1 call, and have repeated our focus on these in our subsequent secondary offerings and investor meetings. These growth tracks remain the foundation for creating and delivering value to our shareholders.
This quarter is characterized by solid performance across four of these growth tracks, specifically we continue to enjoy the unique value created by our Allpoints surcharge fee network offerings. We continue to benefit from the matchless strength of our ATM placements and key national retail locations, which in turn drives our finance institution branding strategy. We have experienced new revenue growth in our still youthful managed services offerings, and finally, we remain the beneficiary of the continuing contribution of old reliable, our convenience fee implementation strategy.
Let me offer a little more color on each of these. Perhaps the most exciting milestones for the quarter involve our Allpoints surcharge free network. You may recall that the Allpoint network delivers value to our shareholders because of its margins, and the key fact that we set the interchange pricing. This interchange model is totally under our control. That translates to revenue stability, which of course translates to shareholder value. A key long term goal for Cardtronics remains the ability to price all of our own products and services and to continue to reduce any reliance on pricing models or in fact, other network interchange outside of our control.
Our march toward this goal continued in September. We announced that we entered in an agreement with MasterCard worldwide, under which we will provide holders of MasterCard prepaid cards, surcharge free access to the 40,000 plus ATMS in Allpoint. As we noted on our last call, prepaid cards continue to flourish and prosper as evidenced by two recent and quite successful IPOs of prepaid issuer icons, and we continue to believe that our Allpoint network is a very valuable asset in the prepaid world.
Specifically, through Allpoint we provide card issuers and prepaid program managers the ability to expand their ATM footprint, allowing them to provide their customers with access to over 40,000 ATMS located in the very places where people shop and perform their daily activities. Additionally, the surcharge free aspect of Allpoint allows prepaid program managers to not only meet but actually exceed the surcharge free requirements of certain government programs. Additionally, the surcharge free networks bring new foot traffic to the retailer, and that ultimately facilitates retailer sales.
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