Cardtronics Inc. cited six different factors that helped the ATM independent sales organization generate a second-quarter revenue boost to $147.3 million, up 10.8% from $132.9 million from the same period a year ago.
The Houston-based company saw growth from its existing merchant partners and ATM sales to new merchants. It also increased ATM branding agreements with financial institutions and saw growth in its Allpoint surcharge-free network, managed-services sales and international development.
“In the second quarter, we were quite simply firing on all cylinders,” Steve Rathgaber, Cardtronics chief executive officer, told analysts during an Aug. 5 earnings call. “The result was a smooth acceleration of revenue and earnings growth and the margin expansion consistently delivered by our model.”
Net income rose 4.8%, to $8.7 million from $8.3 million during the quarter ended June 30.
ATM operating revenues totaled $141.4 million, up 8.3% from $130.6 million, while ATM product sales and other revenues rose 146% to $5.9 million from $2.4 million.
As of June 30, the number of Cardtronics-transacting ATMs increased 5.3% to 37,505 machines worldwide from 35,594 a year earlier. Cardtronics operates ATMs in the United States, United Kingdom and Mexico.
Cardtronics’ ATMs handled 120.9 million transactions during the quarter, up 16.3% from 103.9 million during the same period in 2010. ATM cash withdrawals totaled 74.3 million, up 15.1% from 64.5 million.
In the U.S., Cardtronics added 600 new company-owned ATMs through new and existing merchants during the quarter. “We continue to receive flow from our pipeline as well as deploy to our existing retail client locations under contract where we have yet to place an ATM,” Rathgaber said.
Cardtronics deployed some 280 machines with bank branding, Rathgaber said. “Approximately one-third of that growth [came] from expansion of existing relationships and more importantly, two-thirds from new branding customers,” he added.
U.S. revenue was $115.7 million, up 9.4% from $105.7 million last year.
Allpoint transaction volume increased double digits in the second quarter as consumers used prepaid debit cards more on the network, Rathgaber said. Cardtronics did not reveal exact figures for that segment.
The UK led international growth despite changes in the country’s Link network made to per-transaction interchange rates. Link clears all UK ATM transactions and sets interchange fees using a cost-based methodology. Link had announced a 5-pence (8 U.S. cents) interchange-fee reduction for cash withdrawals.
UK revenue was $25 million, up 23.1% from $20.3 million last year.
Rathgaber cited the completed acquisition of its purchase of EDC ATM Subsidiary LLC and Efmark Deployment I Inc. as one of the quarter’s top highlights (
The EDC acquisition gives Cardtronics new merchant relationships with Cumberland Farms Inc., Sonoco Products Co. and Speedway LLC. Each merchant has a “significant remaining contract life,” Rathgaber said.
Cardtronics this week also acquired LocatorSearch LLC, a provider of location search technology financial institutions may offer to help customers find the nearest branch office, ATM, surcharge-free ATM network or any specific service (
Rathgaber noted he still believed any impact from the Durbin amendment will be neutral to potentially positive. “The unintended, yet potentially favorable consequences for Cardtronics could range from less debit [use] and more cash used by customers,” he said.
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