DirectCash believes it is well positioned with a strong balance sheet and a steady cash flow stream based on long term contracts. The Company's focus for 2013 will be to continue to integrate the acquisitions of Customers Limited ("Customers") and InfoCash Holdings Limited ("InfoCash"), driving efficiencies as well as to continue to grow the business in a reasonable and sustainable manner by maintaining current customer relationships and managing our cost structures. In the ATM business, emphasis continues to be on the streamlining of DirectCash's operations as well as continuing to pursue quality accretive acquisitions and additional organic growth within DirectCash's international operations. With the completion of regulatory mandated security upgrade changes in Canada, DirectCash will be positioned to refocus its efforts on growth in Canada.
As a result of the acquisition of Customers, the largest deployer of ATMs in Australia, a total of approximately 6,600 ATM sites and related contracts were acquired by DirectCash in Australia and New Zealand. DirectCash has rationalized its New Zealand business, removing unprofitable ATMs. As at December 31, 2012 DirectCash had 6,432 ATMs in Australia and New Zealand. The acquisition provides the opportunity to grow the Customers ATM business platform in Australia and capitalize on the less mature Australian market, where transactions and gross profits per ATM are significantly greater than in the mature Canadian ATM market.
As a result of the acquisition of InfoCash, a total of 4,700 ATM sites and related contracts were acquired by DirectCash in the United Kingdom. Since the acquisition, DirectCash has grown organically, adding 798 ATMs for a total of 5,489 as at December 31, 2012. This growth positions DirectCash as the second largest deployer of ATMs in the United Kingdom. DirectCash's focus in this market moving forward is to continue to grow the ATM business in Europe through quality accretive acquisitions and organic growth, while adding other product offerings to InfoCash.
In the prepaid products line of business DirectCash will strive to increase diversification, both in terms of product offerings such as MasterCard prepaid cards, bank accounts and related financial services through DirectCash's strategic alliance with DirectCash Bank ("DC Bank"), and in terms of the number of customers DirectCash serves in order to reduce DirectCash's dependence on a small group of large volume customers in certain market segments.
On November 9, 2012, DirectCash in addition to The CashStore Financial Services Inc. ("CashStore") and DC Bank were named in a class action lawsuit as it relates to payday loans and related fees in the province of Manitoba. DirectCash is indemnified by CashStore and in turn has indemnified DC Bank. DirectCash has retained counsel on this matter.
Additional GAAP Measure:
DirectCash has presented earnings before interest, taxes, depreciation and amortization ("EBITDA") as a subtotal in its consolidated statement of operations. EBITDA is an important measure utilized by management in assessing the financial performance of the Company relative to its operating plans and budgets. It is also the primary measurement utilized by the holders of our long term debt. The Company has presented EBITDA prior to the deduction for acquisition- related expenses. These expenses relate to the acquisitions of Customers and InfoCash, which resulted in the expansion of the Company into two new primary geographical segments and are non-recurring expenditures. The Company has also presented EBITDA prior to non-recurring other gains and unrealized foreign exchange gains and losses which is consistent with the Company's financial covenants. The Company's EBITDA may differ from similar computations as reported by other issuers and, accordingly, may not be comparable to EBITDA as reported by such issuers. EBITDA is reconciled to net income in the Company's MD&A for the three months and years ended December 31, 2012 and 2011.
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