With Antonini’s Abrupt Departure, Cardtronics Looks for a New Boss

Cardtronics Inc. chief executive Jack M. Antonini has left the company, the big non-bank ATM network operator announced on Wednesday. The company didn't give a reason for the sudden departure of Antonini, who has been its top officer since 2003, though a short press release indicated its board of directors wants someone with a “fresh perspective.” Chairman Fred R. Lummis will serve as interim CEO while the board searches for a permanent successor. “Jack has made a significant contribution over the past six years as Cardtronics' CEO, taking the company from a small private company to the largest non-bank operator of ATMs in the world,” Lummis said in the release. “Jack and the board have mutually decided that it would be in the best interests of the company to bring in a new CEO with a fresh perspective on how to capitalize on our many strengths and further develop our strategic direction. The board wishes him well in his future endeavors and will immediately begin searching for a new CEO who can come in and continue building upon the successful growth that Cardtronics has achieved during Mr. Antonini's tenure.” Neither a Cardtronics executive, a board member, nor Antonini returned calls or e-mails from Digital Transactions News March 18. David Lott, a senior vice president with Atlanta-based consultancy Speer & Associates who follows the debit industry, says he doesn't have direct knowledge of Cardtronics' leadership change, but suggests it's related to the company's losses and stock-price declines in recent years despite the growth of its ATM network. Cardtronics went public in December 2007; its share price is down about 86% since then. “Reading between the lines on the press release it was clear it was not a happy situation, I would guess,” Lott says. Cardtronics has steadily increased its revenues since 2004, when revenues were $192.9 million, to $493 million in 2008. But it has lost money every year since 2005, including $70 million last year. The company took a $50 million write-down in the fourth quarter on its operations in the United Kingdom, where Cardtronics runs about 2,500 ATMs (Digital Transactions News, Feb. 27). Cardtronics owns or operates 32,950 machines in all, including about 2,100 in Mexico. Banks and non-bank operators such as Cardtronics all are struggling against headwinds such as market saturation and competition from stores that accept PIN-debit cards, enabling consumers to avoid ATM surcharges when they get cash. “That segment of the industry has been under a lot of pressure over the last five years in terms of shrinking margins, volumes, and such,” says Lott. Still, Cardtronics has had some recent success in improving its operating metrics, according to its 2008 annual report and fourth-quarter earnings report. Total transactions processed rose 43% last year to 354.4 million from 247.3 million in 2007. The average number of monthly cash-withdrawal transactions per ATM rose to 579 in 2008, up 18% from 490 in 2007. Monthly ATM revenues and gross profits also rose from 2007's levels. Cardtronics also says the money-losing, advanced-function Vcom machines that it bought in 2007 as part of 7-Eleven Inc.'s ATM fleet are on the road to profitability, and the total 5,000-plus-machine 7-Eleven portfolio made a big contribution to higher U.S. revenues last year. Offsetting some of the gains were lower surcharge and interchange revenues in the U.S. from merchant-owned ATMs. Cardtronics operated 10,681 ATMs for merchants last year, down from 11,632 in 2007. Many merchants opted out of the ATM business because of higher costs to upgrade ATMs to the so-called Triple-DES security standard.