Cardtronics Makes A Second IPO Attempt

Dec. 2.07 | About: Cardtronics, Inc. (CATM)

Cardtronics (NASDAQ:CATM), the Houston-based owner and operator of 12,000 automated teller machines (ATMs) throughout the United States, is making a second attempt to issue a public offering of its stock this week. It first attempt was withdrawn in March 2005, after filing an initial S-1 in March 2004.

All quotations are from the companies' most recent S-1 filings with links provided.

CARDTRONICS(CATM) Business Overview (from prospectus)

Cardtronics, Inc. operates the world’s largest network of ATMs. Our network currently includes over 31,500 ATMs, principally in national and regional merchant locations throughout the United States, the United Kingdom, and Mexico. Approximately 19,600 of the ATMs we operate are Company-owned and 11,900 are merchant-owned. Our high-traffic retail locations and national footprint make us an attractive partner for regional and national financial institutions that are seeking to increase their market penetration. Over 9,500 of our Company-owned ATMs are under contract with well-known banks to place their logos on those machines and provide surcharge-free access to their customers, making us the largest non-bank owner and operator of bank-branded ATMs in the United States. We also operate the Allpoint network, which sells surcharge-free access to financial institutions that lack a significant ATM network. We believe that Allpoint is the largest surcharge-free network of ATMs in the United States based on the number of participating ATMs.

Offering: 16.7 million shares at $14.00 - $16.00 per share. Net proceeds of approximately $114.8 million will be used to repay debt, for working capital and general corporate purposes.

Lead Underwriters: Deutsche Bank, William Blair, Banc of America

Financial Highlights:

Total revenues for the year ended 2006 were $293,605,000, a 9.2% increase over 2005 revenues, which were $268,965,000... Cost of revenues for the year ended 2006 were $221,293,000, a 5.7% increase over 2005 cost of revenues, which were $209,448,000... The total gross profit margin (exclusive of depreciation, accretion, and amortization) earned for 2006 was 24.6%, representing an 11.3% increase over the 22.1% gross profit margin (exclusive of depreciation, accretion, and amortization) earned in 2005.

We compete with financial institutions and other independent ATM companies for additional ATM placements, new merchant accounts, and acquisitions. Several of our competitors, namely national financial institutions, are larger and more established. While these entities may have fewer ATMs than we do, they have greater financial and other resources than us. For example, our major domestic competitors include banks such as Bank of America (NYSE:BAC), US Bancorp (NYSE:USB), Wachovia (NASDAQ:WB), and PNC Corp. (NYSE:PNC) as well as independent ATM operators such as ATM Express, Innovus, and TRM Corp. (TRMM). In the United Kingdom, we compete with several large non-bank ATM operators, including Cardpoint, Notemachine, and Paypoint, as well as banks such as the Royal Bank of Scotland (NYSE:RBS), Barclays (NYSE:BCS), and Lloyds (NYSE:LYG), among others. In Mexico, we compete primarily with national and regional financial institutions, including Banamex, Bancomer, and HSBC (HBC). Although the independent ATM market is still relatively undeveloped in Mexico, we have recently seen a number of small ATM operators initiate operations. These operators, which are typically known by the names of their sponsoring banks, include Banco Inbursa, Afirme, and Bajio.

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