Cardtronics Casts Doubts on 7-Eleven Vcoms

HOUSTON – As it prepares to acquire the financial services operations of 7-Eleven Stores, Cardtronics is expressing doubts about the financial viability of 2,000 self-service Vcom machines, which are about to be connected to Financial Services Centers Cooperative and its shared branching network. Cardtronics, now the nation’s largest provider of ATM services, said it expects losses from the Vcom operations to continue, but may discontinue their operations if they cannot improve the underlying financial results, according to a filing with the Securities and Exchange Commission in connection with the 7-Eleven deal. The Cardtronics filing came just before Sara Canepa-Bang, president of FSSC was telling members at the group’s annual meeting that they are on schedule for a roll-out of the 7-Eleven Vcoms later this summer and expect them to be a big hit with credit union members. The filing shows the company is counting on the FSSC deal to turn things around for the Vcom operations. “In the event we are not able to improve the operating results and we incur cumulative losses of $10.0 million on the Vcom business, including $1.8 million in contract termination costs, our current intent is to exit the Vcom business and utilize the Vcom machines to provide traditional ATM services,” said Cardtronics. Cardtronics said 7-Eleven’s Vcom operations incurred an operating loss of $6.3 million for 2006 and $2.3 million for the first quarter of 2007. FSSC is planning to connect its shared branch network to as many as 1,700 of the 7-Eleven Vcoms as early as this month, and another 300 or so Vcoms by year-end. The connection will gives the California-based network more than 4,000 touchpoints nationwide.