HOUSTON, Aug. 02, 2017 (GLOBE NEWSWIRE) -- Cardtronics plc (Nasdaq:CATM) ("Cardtronics" or the "Company"), the world's largest ATM owner/operator, announced today its financial and operational results for the quarter ended June 30, 2017.

Key financial statistics in the second quarter of 2017 as compared to the second quarter of 2016 include:
  • Total revenues of $385.1 million, up 19% from $324.0 million (up 22% on a constant-currency basis), driven by the DCPayments and Spark acquisitions completed during January 2017.
  • ATM operating revenues of $373.3 million, up 20% from $311.3 million (up 23% on a constant-currency basis).
  • GAAP Net Income of $15.2 million, or $0.33 per diluted share, down from GAAP Net Income of $20.1 million, or $0.44 per diluted share.
  • Adjusted EBITDA of $87.7 million ($90.9 million on a constant-currency basis), up from $81.7 million in the prior year.
  • Adjusted Net Income per diluted share of $0.76 ($0.79 on a constant-currency basis), down from $0.80, impacted by the additional interest and depreciation expense from the acquisitions completed during January 2017.

"Our second quarter was marked by operational focus as we made significant progress on several key fronts, including the integration of DCPayments, software and EMV upgrades on a significant portion of our Company-owned U.S. ATM fleet, and the continued execution of our cost efficiency initiative. We made significant strides in the quarter to position ourselves for steady execution of the core business and focused pursuit of growth opportunities with financial institutions," commented Steve Rathgaber, Cardtronics' chief executive officer.

RECENT HIGHLIGHTS
  • Expanded the Citibank branding relationship to 100 ATMs in Rite Aid stores in the New York City area.
  • Secured ATM operating contracts representing over 1,000 locations across our regions.
  • Secured a surcharge-free access arrangement with Caixa d'Enginyers (Engineers Savings Bank), our first surcharge-free network relationship in Spain.
  • Extended our ATM placement agreement with Harris Teeter grocery stores. Harris Teeter, a subsidiary of The Kroger Co., operates over 240 stores across seven states.
  • Added 28 new financial institutions to our Allpoint Network and enabled over 500,000 cardholders with surcharge-free access to our ATM network.
  • Expanded the Allpoint Network to include 3,200 additional ATMs in Rite Aid and Kroger store locations.

See Disclosure of Non-GAAP Financial Information in this earnings release for definitions of Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income per diluted share, Free Cash Flow, and certain other non-GAAP measures on a constant-currency basis. For additional information, including reconciliations to the most directly comparable financial measure recognized under accounting principles generally accepted in the U.S. ("GAAP"), see the supplemental schedules of selected financial information in this earnings release.

SECOND QUARTER RESULTS

Consolidated revenues totaled $385.1 million for the second quarter of 2017, representing a 19% increase from $324.0 million from the same period of 2016, driven by the DirectCash Payments Inc. ("DCPayments") and Spark ATM Systems Pty Ltd. ("Spark") acquisitions completed during January 2017. ATM operating revenues for the second quarter of 2017 were up 20% from the same period of 2016. Adjusting for movements in currency exchange rates, ATM operating revenues were up 23% from the same period of 2016.

Driven primarily by the acquisitions completed during January 2017, ATM operating revenues in North America increased 11% and ATM operating revenues in Europe & Africa increased 6% (16% on a constant-currency basis) compared to the same period of 2016. The DCPayments operations in Australia & New Zealand contributed $32.9 million in ATM operating revenues and $8.9 million in gross profit during the second quarter of 2017. The appreciation of the U.S. dollar relative to the British pound adversely impacted the Company's reported revenues and profits in the second quarter of 2017. The British pound was on average 10% weaker relative to the U.S. dollar during the second quarter of 2017 compared to the same period of 2016.

GAAP Net Income for the second quarter of 2017 was $15.2 million compared to GAAP Net Income of $20.1 million during the same period of 2016. The decrease in GAAP Net Income was primarily the result of the incremental interest, depreciation, and intangible asset amortization expenses associated with the acquisitions completed during January 2017, as well as the incremental professional services and other costs associated with the Company's integration of the acquisitions. The Company's GAAP tax rate was 23.6% for the second quarter of 2017 compared to 32.9% for the same period of 2016.

Adjusted EBITDA for the second quarter of 2017 totaled $87.7 million ($90.9 million on a constant-currency basis) compared to $81.7 million of Adjusted EBITDA during the same period of 2016. The increase in Adjusted EBITDA was primarily driven by the acquisitions completed during January 2017, partially offset by changes in currency exchange rates and higher operating costs, primarily associated with the Company's U.S. ATM fleet upgrade to enable technology enhancements and comply with the EMV security standard and interim fraud loss exposure. Adjusted Net Income totaled $35.0 million ($0.76 per diluted share or $0.79 on a constant-currency basis) for the second quarter of 2017, compared to $36.8 million ($0.80 per diluted share) during the same period of 2016. The decrease in Adjusted Net Income is attributable to the factors discussed above and increased depreciation and interest expense associated with the acquisitions, as well as increased depreciation expense associated with the Company's U.S. ATM fleet upgrade.

SIX MONTH RESULTS

Consolidated revenues totaled $742.7 million for the six months ended June 30, 2017, representing an 18% increase from $627.2 million from the same period of 2016, driven by the acquisitions completed during January 2017. ATM operating revenues for the six months ended June 30, 2017 were up 19% from the same period of 2016. Adjusting for movements in currency exchange rates, ATM operating revenues were up 22% from the same period of 2016.

Driven by the acquisitions completed during January 2017, ATM operating revenues in North America increased 10% and ATM operating revenues in Europe & Africa increased 2% (14% on a constant-currency basis) compared to the same period of 2016. The DCPayments operations in Australia & New Zealand contributed $64.4 million in ATM operating revenues and $17.1 million in gross profit during the six months ended June 30, 2017. The appreciation of the U.S. dollar relative to the British pound adversely impacted the Company's reported revenues and profits in the six months ended June 30, 2017. The British pound was on average 12% weaker relative to the U.S. dollar during the six months ended June 30, 2017 compared to the same period of 2016.

GAAP Net Income for the six months ended June 30, 2017 was $14.3 million compared to GAAP Net Income of $35.5 million during the same period of 2016. The decrease in GAAP Net Income is partially attributable to $8.2 million of restructuring expenses recognized during the six months ended June 30, 2017, mostly related to employee severance costs in conjunction with the Company's cost reduction initiative. The Company also incurred $12.4 million of professional services and other costs associated with the completion and integration of the acquisitions completed during January 2017. Also, related to the recently completed acquisitions, the Company's intangible asset amortization expense was up $11.5 million compared to the same period of 2016. The Company's GAAP tax rate was 10.8% for the six months ended June 30, 2017 compared to 33.4% for the same period of 2016.

Adjusted EBITDA for the six months ended June 30, 2017 totaled $158.9 million ($164.8 million on a constant-currency basis) compared to $154.9 million of Adjusted EBITDA during the same period of 2016. The increase in Adjusted EBITDA was primarily driven by the acquisitions completed during January 2017, partially offset by lower revenue in the U.S., coupled with changes in currency exchange rates and higher operating costs, primarily associated with the Company's U.S. ATM fleet upgrade to comply with the EMV security standard and interim fraud loss exposure and to enable other technology enhancements. Adjusted Net Income totaled $60.6 million ($1.31 per diluted share or $1.36 on a constant-currency basis) for the six months ended June 30, 2017, compared to $68.1 million ($1.49 per diluted share) during the same period of 2016. The decrease in Adjusted Net Income is attributable to the factors discussed above and increased depreciation and interest expense associated with the acquisitions, as well as increased depreciation expense associated with the Company's U.S. ATM fleet upgrade.

BORROWINGS AND LIQUIDITY

On April 4, 2017, the Company issued $300 million in aggregate principal amount of 5.50% Senior Notes due 2025 (the "2025 Notes") in a private placement offering. The net proceeds after payment of the related expenses were used to repay a portion of the outstanding borrowings under the revolving credit facility. Subsequent to the issuance of the 2025 Notes, the revolving credit facility was amended to decrease the borrowing capacity from $600 million to $400 million. The revolving credit facility was also amended to include an accordion provision enabling an additional potential borrowing capacity of approximately $100 million under certain conditions.

As of June 30, 2017, the Company had outstanding borrowings of approximately $184 million and approximately $216 million in available borrowing capacity under its $400 million revolving credit facility due in 2021. Additionally, the Company had $53 million in cash as of June 30, 2017. The Company's other outstanding indebtedness as of June 30, 2017 included $288 million Convertible Senior Notes due 2020, $250 million in Senior Notes due 2022, and the $300 million 2025 Notes that were issued during the second quarter of 2017. The Convertible Senior Notes due 2020, Senior Notes due 2022, and 2025 Notes had carrying balances of $246 million, $248 million, and $295 million, respectively, and are reflected as long-term debt on the balance sheet, net of unamortized discount and capitalized debt issuance costs.

SEGMENT REPORTING CHANGE

During the second quarter of 2017, the DCPayments operations in Canada and Mexico were integrated into the Company's North America operations and are now reported in the North America segment. The Australia and New Zealand operations that were acquired in the DCPayments acquisition are now presented in a newly created Australia & New Zealand segment. The DCPayments operations in the U.K. are now reported within the Company's Europe & Africa segment. Additionally, the Company's transaction processing operations are now reported within the North America segment, having previously been reported in the Corporate & Other segment. Conforming changes to prior periods have been made, where applicable.

2017 GUIDANCE

Below is the Company's financial guidance for the full year 2017:
  • Revenues of $1.45 billion to $1.5 billion;
  • Gross profit margin of 33.1% to 33.3%;
  • GAAP Net Income of $47 million to $54 million;
  • Adjusted EBITDA of $325 million to $340 million;
  • Depreciation and accretion expense of $112 million to $115 million;
  • Cash interest expense of $34 million to $35 million;
  • Adjusted Net Income of $130 million to $139 million;
  • Adjusted Net Income per diluted share of $2.80 to $3.00, based on approximately 46.3 million weighted average diluted shares outstanding; and
  • Capital expenditures of $130 million to $140 million.

The Adjusted EBITDA and Adjusted Net Income guidance excludes the impact of certain expenses, as outlined in the reconciliation provided at the end of this earnings release. This guidance is based on average foreign currency exchange rates for the year of £1.00 U.K. to $1.25 U.S., $20.00 Mexican pesos to $1.00 U.S., $1.00 Canadian dollar to $0.77 U.S., €1.00 Euros to $1.10 U.S., $1.00 Australian dollar to $0.77 U.S., and R14.29 South African Rand to $1.00 U.S. Additionally, this guidance is based on an estimated non-GAAP tax rate of approximately 27% for the remainder of 2017.

Included in the guidance above is the assumption that the deinstallations of the ATMs at 7-Eleven locations in the U.S. will occur primarily throughout the next five months of 2017 and be substantially complete by the end of the year, with a small number of units expected to continue to operate into the first quarter of 2018. 7-Eleven in the U.S. accounted for approximately 18% of the Company's consolidated revenues for the year ended 2016. The Company estimates that the incremental gross margin associated with these revenues is approximately 45%, compared to the Company's reported consolidated gross margin of 36% in 2016. While the ATM deinstallation schedule remains subject to change as of the date of this earnings release, the Company currently estimates that the approximate revenue impact associated with the deinstallations is approximately $40 million to $60 million and the approximate impact to gross margin will be approximately $30 million to $35 million in 2017, relative to 2016, during which the Company had the contract in place for the full year.

CONFERENCE CALL INFORMATION

The Company will host a conference call today, Wednesday, August 2, 2017, at 4:00 p.m. Central Time (5:00 p.m. Eastern Time) to discuss its financial results for the quarter ended June 30, 2017. To access the call, please call the conference call operator at:
     
Dial in:   (877) 806-7890
Alternate dial-in:   (973) 935-8713
     

Please call in fifteen minutes prior to the scheduled start time and request to be connected to the "Cardtronics Second Quarter 2017 Earnings Conference Call." Additionally, a live audio webcast of the conference call will be available online through the investor relations section of the Company's website at www.cardtronics.com.

A digital replay of the conference call will be available through Wednesday, August 16, 2017, and can be accessed by calling (855) 859-2056 or (404) 537-3406 and entering 40593740 for the conference ID. A replay of the conference call will also be available online through the Company's website subsequent to the call through August 31, 2017.

ABOUT CARDTRONICS (NASDAQ:CATM)

Making ATM cash access convenient where people shop, work, and live, Cardtronics is at the convergence of retailers, financial institutions, prepaid card programs, and the customers they share. Cardtronics provides services to approximately 237,000 ATMs in North America, Europe, Asia-Pacific, and Africa. Whether Cardtronics is driving foot traffic for top retailers, enhancing ATM brand presence for card issuers or expanding card holders' surcharge-free cash access, Cardtronics is convenient access to cash, when and where consumers need it. Cardtronics is where cash meets commerce.

CONTACT INFORMATION

Media RelationsNick PappathopoulosDirector - Public Relations832-308-4396 npappathopoulos@cardtronics.com

Investor RelationsPhillip ChinEVP - Corporate Development & Investor Relations832-308-4975 ir@cardtronics.com

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This earnings release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and are intended to be covered by the safe harbor provisions thereof. These forward-looking statements are based on management's current expectations and beliefs concerning future developments and their potential effect on the Company and there can be no assurance that future developments affecting the Company will be those that are anticipated. All comments concerning the Company's expectations for future revenues and operating results are based on its estimates for its existing operations and do not include the potential impact of any future acquisitions. The Company's forward-looking statements involve significant risks and uncertainties (some of which are beyond its control) and assumptions that could cause actual results to differ materially from its historical experience and present expectations or projections. Risk factors are described in the Company's 2016 Form 10-K, and those set forth from time-to-time in other filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on forward-looking statements contained in this earnings release, which speak only as of the date of this earnings release. The Company undertakes no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events, or otherwise.

DISCLOSURE OF NON-GAAP FINANCIAL INFORMATION

EBITDA, Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income per diluted share, Free Cash Flow, and certain GAAP as well as non-GAAP measures on a constant-currency basis represent non-GAAP financial measures provided as a complement to financial results prepared in accordance with GAAP and may not be comparable to similarly-titled measures reported by other companies. The Company uses these non-GAAP financial measures in managing and measuring the performance of its business, including setting and measuring incentive based compensation for management. Management believes that the presentation of these measures and the identification of notable, non-cash, and/or (if applicable in a particular period) certain costs not anticipated to occur in future periods enhance an investor's understanding of the underlying trends in the Company's business and provide for better comparability between periods in different years.

Adjusted EBITDA excludes depreciation, accretion, and amortization of intangible assets as these amounts can vary substantially from company to company within the Company's industry depending upon accounting methods and book values of assets, capital structures, and the methods by which the assets were acquired. Adjusted EBITDA also excludes share-based compensation expense, acquisition and divestiture-related expenses, certain non-operating expenses, (if applicable in a particular period) certain costs not anticipated to occur in future periods, gains or losses on disposal and impairment of assets, the Company's obligations for the payment of income taxes, interest expense, and other obligations such as capital expenditures, and includes an adjustment for noncontrolling interests. Adjusted Net Income represents net income computed in accordance with GAAP, before amortization of intangible assets, gains or losses on disposal and impairment of assets, share-based compensation expense, certain other expense amounts, acquisition and divestiture-related expenses, certain non-operating expenses, and (if applicable in a particular period) certain costs not anticipated to occur in future periods (together, the "Adjustments"). Prior to and for the three and six months ended June 30, 2016, Adjusted Net Income was calculated using an estimated long-term, cross-jurisdictional effective cash tax rate of 32%. Subsequent to the redomicile of the Company's parent company to the U.K., the Company revised the process for determining its non-GAAP tax rate and now utilizes a non-GAAP tax rate derived from the GAAP tax rate adjusted for the net tax effects of the Adjustments, based on the nature and geography of the Adjustments. For the three and six months ended June 30, 2017, the non-GAAP tax rate used to calculate Adjusted Net Income was approximately 27.7% and 27.9%, respectively. Adjusted Net Income per diluted share is calculated by dividing Adjusted Net Income by weighted average diluted shares outstanding. Free Cash Flow is defined as cash provided by operating activities less payments for capital expenditures, including those financed through direct debt, but excluding acquisitions. The Free Cash Flow measure does not take into consideration certain other non-discretionary cash requirements such as mandatory principal payments on portions of the Company's long-term debt. Management calculates certain GAAP as well as non-GAAP measures on a constant-currency basis using the average foreign currency exchange rates applicable in the corresponding period of the previous year and applying these rates to the measures in the current reporting period. Management uses GAAP as well as non-GAAP measures on a constant-currency basis to assess performance and eliminate the effect foreign currency exchange rates have on comparability between periods.

The non-GAAP financial measures presented herein should not be considered in isolation or as a substitute for operating income, net income, cash flows from operating, investing, or financing activities, or other income or cash flow measures prepared in accordance with GAAP. Reconciliations of the non-GAAP financial measures used herein to the most directly comparable GAAP financial measures are presented in tabular form at the end of this earnings release.

 
Consolidated Statements of Operations ¿
For the Three and Six Months Ended June 30, 2017 and 2016
(In thousands, excluding share, per share amounts, and percentages)
 
    Three Months Ended   Six Months Ended
    June 30,    June 30, 
    2017     % Change   2016     2017     % Change   2016  
                                             
    (Unaudited)
Revenues:                                
ATM operating revenues   $ 373,260     19.9 %   $ 311,331     $ 715,048     18.5 %   $ 603,419  
ATM product sales and other revenues     11,852     (6.2 )     12,630       27,636     16.2       23,789  
Total revenues     385,112     18.9       323,961       742,684     18.4       627,208  
Cost of revenues:                                
Cost of ATM operating revenues (excludes depreciation, accretion, and amortization of intangible assets reported separately below.)     246,484     24.0       198,843       478,411     24.3       384,783  
Cost of ATM product sales and other revenues     11,116     (3.2 )     11,487       25,751     20.2       21,420  
Total cost of revenues     257,600     22.5       210,330       504,162     24.1       406,203  
Gross profit     127,512     12.2       113,631       238,522     7.9       221,005  
Gross profit %     33.1 %           35.1 %       32.1 %           35.2 %  
Operating expenses:                                
Selling, general, and administrative expenses     43,470     14.7       37,912       85,419     13.4       75,311  
Redomicile-related expenses          (100.0 )     5,214       760     (93.2 )     11,250  
Restructuring expenses         n/m           8,243     n/m      
Acquisition and divestiture-related expenses     3,993     492.4       674       12,449     451.3       2,258  
Depreciation and accretion expense     29,755     28.8       23,100       58,876     28.6       45,777  
Amortization of intangible assets     15,247     57.3       9,691       30,427     60.5       18,954  
Loss (gain) on disposal and impairment of assets     669     n/m     (1,326 )     3,863     n/m     (944 )
Total operating expenses     93,134     23.7       75,265       200,037     31.1       152,606  
Income from operations     34,378     (10.4 )     38,366       38,485     (43.7 )     68,399  
Other expense:                                
Interest expense, net     9,460     111.8       4,466       16,017     78.8       8,958  
Amortization of deferred financing costs and note discount     3,146     5.5       2,982       6,122     6.2       5,764  
Other expense     1,945     106.3       943       365     (5.9 )     388  
Total other expense     14,551     73.4       8,391       22,504     48.9       15,110  
Income before income taxes     19,827     (33.9 )     29,975       15,981     (70.0 )     53,289  
Income tax expense     4,670     (52.6 )     9,861       1,718     (90.4 )     17,816  
Effective tax rate     23.6 %           32.9 %       10.8 %           33.4 %  
Net income     15,157     (24.6 )     20,114       14,263     (59.8 )     35,473  
Net (loss) income attributable to noncontrolling interests     (1 )   (97.1 )     (34 )     6     n/m     (59 )
Net income attributable to controlling interests and available to common shareholders   $ 15,158      (24.8 %)   $ 20,148     $ 14,257      (59.9 %)   $ 35,532  
                                 
Net income per common share - basic   $ 0.33         $ 0.45     $ 0.31         $ 0.79  
Net income per common share - diluted   $ 0.33         $ 0.44     $ 0.31         $ 0.78  
                                 
Weighted average shares outstanding - basic     45,637,778           45,199,450       45,564,527           45,136,553  
Weighted average shares outstanding - diluted     46,222,112           45,748,570       46,272,191           45,704,474  
                                         

Condensed Consolidated Balance Sheets
As of June 30, 2017 and December 31, 2016
(In thousands)
 
    June 30, 2017   December 31, 2016
    (Unaudited)      
ASSETS            
Current assets:            
Cash and cash equivalents   $ 53,177   $ 73,534
Accounts and notes receivable, net     98,751     84,156
Inventory, net     14,232     12,527
Restricted cash     46,909     32,213
Prepaid expenses, deferred costs, and other current assets     86,329     67,107
Total current assets     299,398     269,537
Property and equipment, net     505,454     392,735
Intangible assets, net     278,471     121,230
Goodwill     903,101     533,075
Deferred tax asset, net     9,727     13,004
Prepaid expenses, deferred costs, and other noncurrent assets     38,881     35,115
Total assets   $ 2,035,032   $ 1,364,696
             
LIABILITIES AND SHAREHOLDERS' EQUITY            
Current liabilities:            
Current portion of other long-term liabilities   $ 32,793   $ 28,237
Accounts payable and other accrued and current liabilities     345,395     285,583
Total current liabilities     378,188     313,820
Long-term liabilities:            
Long-term debt     973,339     502,539
Asset retirement obligations     57,096     45,086
Deferred tax liability, net     49,915     27,625
Other long-term liabilities     68,421     18,691
Total liabilities     1,526,959     907,761
Shareholders' equity     508,073     456,935
Total liabilities and shareholders' equity   $ 2,035,032   $ 1,364,696
             
             

SELECTED STATEMENT OF OPERATIONS DETAIL: (Unaudited)
                                       
Total revenues by segment: Three Months Ended   Six Months Ended
  June 30,    June 30, 
  2017     % Change   2016     2017     % Change   2016  
                                                   
  (In thousands, excluding percentages)
North America                                      
ATM operating revenues $ 242,189        10.9   %   $ 218,449     $ 469,377        10.1   %   $ 426,454  
ATM product sales and other revenues   9,667        (13.9 )       11,228       23,536        12.1         20,992  
North America total revenues   251,856        9.7         229,677       492,913        10.2         447,446  
Europe & Africa                                      
ATM operating revenues   100,946        5.5         95,713       186,330        2.2         182,298  
ATM product sales and other revenues   2,208        57.5         1,402       4,071        45.5         2,797  
Europe & Africa total revenues   103,154        6.2         97,115       190,401        2.9         185,095  
Australia & New Zealand                                      
ATM operating revenues   32,891       n/m               64,384       n/m          
ATM product sales and other revenues   74       n/m               159       n/m          
Australia & New Zealand total revenues   32,965       n/m               64,543       n/m          
                                       
Eliminations   (2,863 )      1.1         (2,831 )     (5,173 )      (3.0 )       (5,333 )
                                       
Total ATM operating revenues   373,260        19.9         311,331       715,048        18.5         603,419  
Total ATM product sales and other revenues   11,852        (6.2 )       12,630       27,636        16.2         23,789  
Total revenues $ 385,112        18.9   %   $ 323,961     $ 742,684        18.4   %   $ 627,208  
                                                   

Breakout of ATM operating revenues: Three Months Ended   Six Months Ended
  June 30,    June 30, 
  2017   % Change   2016   2017   % Change   2016
                                       
  (In thousands, excluding percentages)
Surcharge revenues $ 169,794      34.4 %   $ 126,317   $ 324,049      33.3 %   $ 243,154
Interchange revenues   123,248      4.5       117,917     236,899      5.3       224,959
Bank-branding and surcharge-free network revenues   47,933      4.4       45,934     94,340      1.6       92,897
Managed services revenues   15,434      73.7       8,885     31,050      75.2       17,724
Other revenues   16,851      37.2       12,278     28,710      16.3       24,685
Total ATM operating revenues $ 373,260      19.9 %   $ 311,331   $ 715,048      18.5 %   $ 603,419
                                       

Total gross profit by segment: Three Months Ended   Six Months Ended
  June 30,    June 30, 
  2017     % Change   2016     2017     % Change   2016  
                                               
  (In thousands, excluding percentages)
North America $ 81,712        4.0 %   $ 78,570     $ 156,906        0.6 %   $ 155,946  
Europe & Africa   38,092        7.8       35,331       66,701        1.9       65,446  
Australia & New Zealand   8,850       n/m             17,050       n/m        
Corporate & Eliminations   (1,142 )     n/m       (270 )     (2,135 )     n/m       (387 )
Total gross profit $ 127,512        12.2 %   $ 113,631     $ 238,522        7.9 %   $ 221,005  
                                               

Breakout of cost of ATM operating                                      
revenues (exclusive of depreciation,                                      
accretion, and amortization of                                      
intangible assets): Three Months Ended   Six Months Ended
  June 30,    June 30, 
  2017   % Change   2016   2017   % Change   2016
                                         
  (In thousands, excluding percentages)
Merchant commissions $ 123,471      30.6   %   $ 94,557   $ 237,578      29.9 %   $ 182,952
Vault cash rental   18,426      (0.9 )       18,587     37,078      3.4       35,860
Other costs of cash   26,951      30.6         20,631     55,522      35.8       40,900
Repairs and maintenance   22,096      16.6         18,948     43,405      19.7       36,251
Communications   9,681      21.0         7,999     18,825      20.6       15,611
Transaction processing   5,728      38.3         4,143     11,334      46.3       7,745
Employee costs   19,858      17.2         16,939     38,805      13.7       34,141
Other expenses   20,273      19.0         17,039     35,864      14.5       31,323
Total cost of ATM operating revenues $ 246,484      24.0   %   $ 198,843   $ 478,411      24.3 %   $ 384,783
                                         

Breakout of selling, general,                                      
and administrative expenses: Three Months Ended   Six Months Ended
  June 30,    June 30, 
  2017   % Change   2016   2017   % Change   2016
                                           
  (In thousands, excluding percentages)
Employee costs $ 22,459      14.9   %   $ 19,547   $ 47,274      17.6   %   $ 40,212
Share-based compensation expense   3,440      (39.6 )       5,700     5,680      (35.1 )       8,751
Professional fees   5,803      43.4         4,047     11,750      20.4         9,761
Other expenses   11,768      36.6         8,618     20,715      24.9         16,587
Total selling, general, and administrative expenses $ 43,470      14.7   %   $ 37,912   $ 85,419      13.4   %   $ 75,311
                                           

Depreciation and accretion expense                                      
by segment: Three Months Ended   Six Months Ended
  June 30,    June 30, 
  2017   % Change   2016   2017   % Change   2016
                                       
  (In thousands, excluding percentages)
North America $ 17,404      26.7 %   $ 13,739   $ 34,559      26.5 %   $ 27,320
Europe & Africa   10,782      15.2       9,361     20,617      11.7       18,457
Australia & New Zealand   1,569     n/m           3,700     n/m      
Total depreciation and accretion expense $ 29,755      28.8 %   $ 23,100   $ 58,876      28.6 %   $ 45,777
                                       

SELECTED BALANCE SHEET DETAIL: (Unaudited, excluding December 31, 2016)
Long-term debt: June 30, 2017   December 31, 2016
           
  (In thousands)
Revolving credit facility $ 184,234   $ 14,100
1.00% Convertible senior notes (1)   246,444     241,068
5.125% Senior notes (1)   247,701     247,371
5.50% Senior notes (1)   294,960    
Total long-term debt $ 973,339   $ 502,539
           

(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 $41.1 million and $46.4 million as of June 30, 2017 and December 31, 2016, 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 5.125% Senior Notes due 2022 with a face value of $250.0 million are presented net of capitalized debt issuance costs of $2.3 million and $2.6 million as of June 30, 2017 and December 31, 2016, respectively. The 5.50% Senior Notes due 2025 with a face value of $300.0 million are presented net of capitalized debt issuance costs of $5.0 million as of June 30, 2017.

Share count rollforward:
Total shares outstanding as of December 31, 2016    45,326,430
Shares issued - stock options exercised    12,200
Shares vested - restricted stock units    311,672
Total shares outstanding as of June 30, 2017    45,650,302
     

SELECTED CASH FLOW DETAIL: (Unaudited)
Selected cash flow statement amounts:   Three Months Ended   Six Months Ended
    June 30,    June 30, 
    2017     2016     2017     2016  
                                 
    (In thousands)
Cash provided by operating activities   $  74,130     $  79,932     $  84,579     $  124,587  
Cash used in investing activities      (31,307 )      (33,011 )      (556,945 )      (44,767 )
Net cash (used in) provided by financing activities      (26,864 )      (51,809 )      456,337        (85,850 )
Effect of exchange rate changes on cash      (3,027 )      (509 )      (4,328 )      (615 )
Net increase (decrease) in cash and cash equivalents      12,932        (5,397 )      (20,357 )      (6,645 )
Cash and cash equivalents as of beginning of period      40,245        25,049        73,534        26,297  
Cash and cash equivalents as of end of period   $  53,177     $  19,652     $  53,177     $  19,652  
                                 

Key Operating Metrics - Including Acquisitions in All Periods Presented
For the Three and Six Months Ended June 30, 2017 and 2016
(Unaudited)
 
    Three Months Ended   Six Months Ended
    June 30,    June 30, 
    2017   % Change   2016   2017   % Change   2016
Average number of transacting ATMs:                                        
United States     45,207      9.1 %     41,450       45,196      11.8 %     40,413  
United Kingdom and Ireland     21,574      34.3       16,063       21,416      34.4       15,936  
Australia and New Zealand     8,816     n/m             8,913     n/m        
Canada     6,053      225.3       1,861       6,126      230.1       1,856  
South Africa     2,368     n/m           2,352     n/m        
Germany, Poland, and Spain     1,535      32.9       1,155       1,478      29.4       1,142  
Mexico     957      (30.7 )     1,381       1,117      (19.5 )     1,387  
Total Company-owned     86,510      39.7       61,910       86,598      42.6       60,734  
United States (1)     12,363      (25.6 )     16,613       12,499      (26.7 )     17,063  
Canada     2,974     n/m             2,919     n/m        
United Kingdom and Ireland     635     n/m             616     n/m        
Australia and New Zealand     103     n/m             103     n/m        
Total Merchant-owned     16,075      (3.2 )     16,613       16,137      (5.4 )     17,063  
Average number of transacting ATMs - ATM operations     102,585      30.6       78,523       102,735      32.1       77,797  
                                         
Managed Services and Processing:                                        
United States     127,435      8.3       117,696       125,493      8.8       115,327  
Canada     3,411      99.8       1,707       3,385      110.1       1,611  
Australia and New Zealand     1,857     n/m             1,776     n/m        
Average number of transacting ATMs - Managed services and processing     132,703      11.1       119,403       130,654      11.7       116,938  
                                         
Total average number of transacting ATMs     235,288      18.9       197,926       233,389      19.8       194,735  
                                         
Total transactions (in thousands):                                        
ATM operations     390,094      14.1       341,941       752,408      14.9       655,072  
Managed services and processing, net     261,293      47.6       176,998       507,874      46.0       347,877  
Total transactions     651,387      25.5       518,939       1,260,282      25.7       1,002,949  
                                         
Total cash withdrawal transactions (in thousands):                                        
ATM operations     248,166      14.8       216,197       482,411      18.2       408,283  
                                         
Per ATM per month amounts (excludes managed services and processing):                                        
Cash withdrawal transactions     806      (12.2 )     918       783      (10.5 )     875  
                                         
ATM operating revenues (2)   $ 1,136      (9.1 )   $ 1,250     $ 1,084      (11.1 )   $ 1,220  
Cost of ATM operating revenues (2)(3)     767      (4.5 )     803       737      (6.0 )     784  
ATM operating gross profit (2) (3)   $ 369      (17.4 %)   $ 447     $ 347      (20.4 %)   $ 436  
                                         
ATM operating gross profit margin (2) (3)     32.5 %         35.8 %     32.0 %         35.7 %

(1) Certain ATMs previously reported in this category are now included in the United States: Managed services and processing or United States: Company-owned categories. (2) ATM operating revenues and Cost of ATM operating revenues relating to managed services, processing, ATM equipment sales, and other ATM-related services are not included in this calculation. (3) Amounts presented exclude the effect of depreciation, accretion, and amortization of intangible assets, which is reported separately in the Company's Consolidated Statements of Operations.

Key Operating Metrics - Excluding Acquisitions in All Periods Presented
For the Three and Six Months Ended June 30, 2017 and 2016
(Unaudited)
 
    Three Months Ended   Six Months Ended
    June 30,    June 30, 
    2017   % Change   2016   2017   % Change   2016
Average number of transacting ATMs:                                        
United States     45,207      9.1 %     41,450       42,816      5.9 %     40,413  
United Kingdom and Ireland     16,567      3.1       16,063       16,451      3.2       15,936  
Canada     1,835      (1.4 )     1,861       1,813      (2.3 )     1,856  
Germany, Poland, and Spain     1,535      32.9       1,155       1,478      29.4       1,142  
Mexico     523      (62.1 )     1,381       699      (49.6 )     1,387  
Total Company-owned     65,667      6.1       61,910       63,257      4.2       60,734  
United States (1)     12,363      (25.6 )     16,613       12,499      (26.7 )     17,063  
Total Merchant-owned     12,363      (25.6 )     16,613       12,499      (26.7 )     17,063  
Average number of transacting ATMs - ATM operations     78,030      (0.6 )     78,523       75,756      (2.6 )     77,797  
                                         
Managed Services and Processing:                                        
United States     127,435      8.3       117,696       125,493      8.8       115,327  
Canada     2,033      19.1       1,707       2,009      24.7       1,611  
Average number of transacting ATMs - Managed services and processing     129,468      8.4       119,403       127,502      9.0       116,938  
                                         
Total average number of transacting ATMs     207,498      4.8       197,926       203,258      4.4       194,735  
                                         
Total transactions (in thousands):                                        
ATM operations     345,912      1.2       341,941       658,416      0.5       655,072  
Managed services and processing, net     166,643      (5.9 )     176,998       330,086      (5.1 )     347,877  
Total transactions     512,555      (1.2 )     518,939       988,502      (1.4 )     1,002,949  
                                         
Total cash withdrawal transactions (in thousands):                                        
ATM operations     212,919      (1.5 )     216,197       408,207      —       408,283  
                                         
Per ATM per month amounts (excludes managed services and processing):                                        
Cash withdrawal transactions     910      (0.9 )     918       898      2.6       875  
                                         
ATM operating revenues (2)   $ 1,192      (4.6 )   $ 1,250     $ 1,181      (3.2 )   $ 1,220  
Cost of ATM operating revenues (2)(3)     791      (1.5 )     803       784      —       784  
ATM operating gross profit (2) (3)   $ 401      (10.3 %)   $ 447     $ 397      (8.9 %)   $ 436  
                                         
ATM operating gross profit margin (2) (3)     33.6 %         35.8 %     33.6 %         35.7 %

(1) Certain ATMs previously reported in this category are now included in the United States: Managed services and processing or United States: Company-owned categories. (2) ATM operating revenues and Cost of ATM operating revenues relating to managed services, processing, ATM equipment sales, and other ATM-related services are not included in this calculation. (3) Amounts presented exclude the effect of depreciation, accretion, and amortization of intangible assets, which is reported separately in the Company's Consolidated Statements of Operations.

Key Operating Metrics - Ending Machine Count
As of June 30, 2017 and 2016 
(Unaudited)
 
    June 30, 2017   June 30, 2016
Ending number of transacting ATMs:        
United States   45,195   42,097
United Kingdom and Ireland   21,682   16,203
Australia and New Zealand   8,784  
Canada   6,146   1,833
South Africa   2,389  
Germany, Poland, and Spain   1,604   1,193
Mexico   947   1,364
Total Company-owned   86,747   62,690
United States   12,278   16,353
Canada   3,001  
United Kingdom and Ireland   718  
Australia and New Zealand   103  
Total Merchant-owned   16,100   16,353
Ending number of transacting ATMs - ATM operations   102,847   79,043
         
United States   128,716   119,309
Canada   3,335   1,724
Australia and New Zealand   1,992  
Ending number of transacting ATMs - Managed services and processing   134,043   121,033
         
Total ending number of transacting ATMs    236,890    200,076
         

Reconciliation of Net Income Attributable to Controlling Interests and Available to Common Shareholders to
EBITDA, Adjusted EBITDA, and Adjusted Net Income
For the Three and Six Months Ended June 30, 2017 and 2016
(Unaudited)
 
    Three Months Ended   Six Months Ended
    June 30,    June 30, 
    2017     2016     2017     2016  
                                 
    (In thousands, excluding share and per share amounts)
Net income attributable to controlling interests and available to common shareholders   $  15,158     $  20,148     $  14,257     $  35,532  
Adjustments:                        
Interest expense, net      9,460        4,466        16,017        8,958  
Amortization of deferred financing costs and note discount      3,146        2,982        6,122        5,764  
Income tax expense      4,670        9,861        1,718        17,816  
Depreciation and accretion expense      29,755        23,100        58,876        45,777  
Amortization of intangible assets      15,247        9,691        30,427        18,954  
EBITDA    $  77,436     $  70,248     $  127,417     $  132,801  
                         
Add back:                        
Loss (gain) on disposal and impairment of assets      669        (1,326 )      3,863        (944 )
Other expense (1)      1,945        943        365        388  
Noncontrolling interests (2)      (6 )      (17 )      (10 )      (35 )
Share-based compensation expense      3,623        5,970        5,820        9,138  
Acquisition and divestiture-related expenses (3)      3,993        674        12,449        2,258  
Redomicile-related expenses (4)      —        5,214        760        11,250  
Restructuring expenses (5)      —        —        8,243        —  
Adjusted EBITDA   $  87,660     $  81,706     $  158,907     $  154,856  
Less:                        
Interest expense, net      9,460        4,466        16,017        8,958  
Depreciation and accretion expense (6)      29,754        23,093        58,872        45,762  
 Adjusted pre-tax income   $  48,446     $  54,147     $  84,018     $  100,136  
Income tax expense (7)      13,418        17,327        23,449        32,043  
Adjusted Net Income   $  35,028     $  36,820     $  60,569     $  68,093  
                         
Adjusted Net Income per basic share   $  0.77     $  0.81     $  1.33     $  1.51  
Adjusted Net Income per diluted share   $  0.76     $  0.80     $  1.31     $  1.49  
                         
Weighted average shares outstanding - basic      45,637,778        45,199,450        45,564,527        45,136,553  
Weighted average shares outstanding - diluted      46,222,112        45,748,570        46,272,191        45,704,474  
                                 

(1) Includes foreign currency translation gains/losses, the revaluation of the estimated acquisition-related contingent consideration payable, and other non-operating costs. (2) Noncontrolling interests adjustment made such that Adjusted EBITDA includes only the Company's ownership interest in the Adjusted EBITDA of one of its Mexican subsidiaries. (3) Acquisition and divestiture-related expenses include costs incurred for professional and legal fees and certain other transition and integration-related costs. (4) Expenses associated with the Company's redomicile of its parent company to the U.K., which was completed on July 1, 2016. (5) Restructuring expenses primarily related to employee severance costs associated with a corporate reorganization and broad initiative to reduce costs implemented in the first quarter of 2017. (6) Amounts exclude a portion of the expenses incurred by one of the Company's Mexican subsidiaries to account for the amounts allocable to the noncontrolling interest shareholders. (7) For the three and six months ended June 30, 2017, calculated using an effective tax rate of approximately 27.7% and 27.9%, 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. For the three and six months ended June 30, 2016, the Company used its previous estimated long-term cross-jurisdictional tax rate of 32%. See Disclosure of Non-GAAP Financial Information in this earnings release for further discussion.

 
Reconciliation of GAAP Revenue to Constant-Currency Revenue
For the Three and Six Months Ended June 30, 2017 and 2016
(Unaudited)
 
Europe & Africa revenue:   Three Months Ended
    June 30, 
    2017   2016   % Change
    U.S. GAAP   Foreign Currency Impact   Constant - Currency   U.S. GAAP   U.S. GAAP   Constant - Currency
                                     
    (In thousands)            
ATM operating revenues   $ 100,946   $ 10,474   $ 111,420   $ 95,713   5.5 %   16.4 %
ATM product sales and other revenues     2,208     195     2,403     1,402   57.5     71.4  
Total revenues   $ 103,154   $ 10,669   $ 113,823   $ 97,115   6.2 %   17.2 %
                                     

    Six Months Ended
    June 30, 
    2017   2016   % Change
    U.S. GAAP   Foreign Currency Impact   Constant - Currency   U.S. GAAP   U.S. GAAP   Constant - Currency
                                     
    (In thousands)            
ATM operating revenues   $ 186,330   $ 21,909   $ 208,239   $ 182,298   2.2 %   14.2 %
ATM product sales and other revenues     4,071     394     4,465     2,797   45.5     59.6  
Total revenues   $ 190,401   $ 22,303   $ 212,704   $ 185,095   2.9 %   14.9 %
                                     

Consolidated revenue:   Three Months Ended
    June 30, 
    2017   2016   % Change
    U.S. GAAP   Foreign Currency Impact   Constant - Currency   U.S. GAAP   U.S. GAAP   Constant - Currency
                                     
    (In thousands)            
ATM operating revenues   $ 373,260   $ 10,849   $ 384,109   $ 311,331   19.9   %   23.4   %
ATM product sales and other revenues     11,852     195     12,047     12,630   (6.2 )     (4.6 )  
Total revenues   $ 385,112   $ 11,044   $ 396,156   $ 323,961   18.9   %   22.3   %
                                         

    Six Months Ended
    June 30, 
    2017   2016   % Change
    U.S. GAAP   Foreign Currency Impact   Constant - Currency   U.S. GAAP   U.S. GAAP   Constant - Currency
                                     
    (In thousands)            
ATM operating revenues   $ 715,048   $ 22,300   $ 737,348   $ 603,419   18.5 %   22.2 %
ATM product sales and other revenues     27,636     375     28,011     23,789   16.2     17.7  
Total revenues   $ 742,684   $ 22,675   $ 765,359   $ 627,208   18.4 %   22.0 %
                                     

Reconciliation of Adjusted EBITDA, Adjusted Net Income, and Adjusted Net Income per diluted share on a Non-
GAAP basis to Constant-Currency
For the Three and Six Months Ended June 30, 2017 and 2016
(Unaudited)
 
    Three Months Ended
    June 30, 
    2017   2016   % Change
    Non   - GAAP (1)   Foreign Currency Impact   Constant - Currency   Non   - GAAP (1)   Non   - GAAP (1)   Constant - Currency
                                     
    (In thousands)            
Adjusted EBITDA   $ 87,660   $ 3,214   $ 90,874   $ 81,706   7.3   %   11.2   %
                                     
Adjusted Net Income   $ 35,028   $ 1,495   $ 36,523   $ 36,820   (4.9 ) %   (0.8 ) %
                                     
Adjusted Net Income per diluted share (2)   $ 0.76   $ 0.03   $ 0.79   $ 0.80   (5.0 ) %   (1.3 ) %

    Six Months Ended
    June 30, 
    2017   2016   % Change
    Non   - GAAP (1)   Foreign Currency Impact   Constant - Currency   Non   - GAAP (1)   Non   - GAAP (1)   Constant - Currency
                                     
    (In thousands)            
Adjusted EBITDA   $ 158,907   $ 5,941   $ 164,848   $ 154,856   2.6   %   6.5   %
                                     
Adjusted Net Income   $ 60,569   $ 2,527   $ 63,096   $ 68,093   (11.0 ) %   (7.3 ) %
                                     
Adjusted Net Income per diluted share (2)   $ 1.31   $ 0.05   $ 1.36   $ 1.49   (12.1 ) %   (8.7 ) %

(1) As reported on the Company's Reconciliation of Net Income 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 46,222,112 and 45,748,570 for the three months ended June 30, 2017 and 2016, respectively, and 46,272,191 and 45,704,474 for the six months ended June 30, 2017 and 2016, respectively.

 
Reconciliation of Free Cash Flow
For the Three and Six Months Ended June 30, 2017 and 2016
(Unaudited)
 
    Three Months Ended   Six Months Ended
    June 30,    June 30, 
    2017     2016     2017     2016  
                                 
    (In thousands)
Cash provided by operating activities   $ 74,130     $ 79,932     $ 84,579     $ 124,587  
Payments for capital expenditures:                        
Cash used in investing activities, excluding acquisitions and divestitures     (31,307 )     (23,120 )     (69,868 )     (39,571 )
Free cash flow   $ 42,823     $ 56,812     $ 14,711     $ 85,016  
                                 

Reconciliation of Estimated Net Income to EBITDA, Adjusted EBITDA, and Adjusted Net Income
For the Year Ending December 31, 2017
(In millions, excluding per share amounts)
(Unaudited)
 
    Estimated Range Full Year 2017 (1)
Net Income   $ 47.0   $ 54.0
Adjustments:            
Interest expense, net     35.0     34.0
Amortization of deferred financing costs and note discount     13.0     13.0
Income tax expense     15.0     17.0
Depreciation and accretion expense     112.0     115.0
Amortization of intangible assets     63.0     62.0
EBITDA   $ 285.0   $ 295.0
             
Add Back:            
Share-based compensation expense     13.0     16.5
Restructuring expenses     8.2     8.2
Redomicile-related expenses     0.8     0.8
Acquisition-related expenses     13.0     14.0
Loss on disposal and impairment of assets     5.0     5.5
Adjusted EBITDA   $ 325.0   $ 340.0
Less:            
Interest expense, net     35.0     34.0
Depreciation and accretion expense     112.0     115.0
Income tax expense (2)     48.4     52.0
Adjusted Net Income   $ 129.6   $ 139.0
             
Adjusted Net Income per diluted share   $ 2.80   $ 3.00
             
Weighted average shares outstanding - diluted     46.3     46.3

(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 27.2%, as adjusted for items excluded from Adjusted Net Income, see Disclosure of Non-GAAP Financial Information in this earnings release for further discussion.

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