Registration Statement

RISK FACTORS

      Investing in our common stock involves risks. Before making an investment in our common stock, you should carefully consider the following risks, as well as the other information contained in this prospectus, including our consolidated financial statements and the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The risks described below are those which we believe are the material risks we face. Any of the risk factors described below could significantly and adversely affect our business, prospects, financial condition and results of operations. As a result, the trading price of our common stock could decline and you may lose all or part of your investment.

Risks Related to our Business

      We rely on agreements with Palm Desert National Bank and First Bank & Trust to provide us with all of the cash that we use in approximately 4,700 of our ATMs where cash is not provided by the merchant. This cash is referred to as “vault cash” under federal banking regulations, and throughout this prospectus we refer to our vault cash arrangement with these providers as our cash management program. As of December 31, 2003, the balance of cash from these providers held in our ATMs was $237.7 million, a substantial majority of which was from Palm Desert. We pay a fee for our usage of their cash based on the total amount of the cash that we are using at any given time. At all times during our use of this cash, it belongs to the cash providers, and the cash providers have the right to demand the return of all or any portion of their cash at any time upon the occurrence of certain events beyond our control. If these providers were to demand return of their cash or terminate their arrangement with us and remove their cash from our ATMs, or if they were to fail to provide us with cash as and when we need it for our ATM operations, our ability to operate these ATMs would be adversely affected, and we would need to locate alternative sources of cash in order to operate these ATMs. We can give no assurance that alternate sources would be available on reasonable terms or at all. Additionally, if our cash providers were to increase their fees to such an extent that our use of their services were no longer commercially feasible, we would need to seek alternate arrangements for cash provision and management. We are currently exploring supplemental and alternative arrangements for providing cash for use in our ATMs, but we have not entered into any such arrangements at this time. See “Business — Government Regulation.”

      The ATM industry involves the electronic transfer of funds. The Federal Electronic Funds Transfer Act provides the basic framework establishing the rights, liabilities and responsibilities of participants in electronic funds transfer, or EFT, systems. Additionally, some states have varying obligations such as notification or bank sponsorship requirements for the operation of an ATM within the state. In the event that these regulations are made more restrictive or new regulations are enacted, the cost of complying with such regulations could increase significantly, which would reduce or eliminate our operating income. Additionally, there have been various state and local efforts to ban or limit surcharge fees, which make up a large portion of our revenues. We can offer no assurance that surcharge fees will not be banned or limited in the future in the cities and states where we operate. The passage of legislation banning or limiting surcharge fees could result in a substantial loss of revenues or a total loss of our business.

      The Americans with Disabilities Act, or ADA, currently includes provisions regulating the amount of clear floor space required in front of each ATM, prescribing the maximum height and reach depth of each ATM, and mandating that instructions and all information for use of the ATM be made accessible to and independently usable by persons with vision impairments. The Department of Justice is currently in the process of issuing new accessibility guidelines under the ADA that will cover virtually all aspects of commercial activity vis-à-vis the disabled. We expect that these new guidelines will include provisions addressing ATMs and how to make them more accessible to the disabled. Under the current proposals, height and reach requirements would be shortened, keypads would be required to be laid out in the manner of telephone keypads, and ATMs would be required to possess speech capabilities. These new

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      In recent years, advances in data encryption have made ATMs more tamper-resistant. One of the more recently developed advanced data encryption standards is commonly referred to as Triple DES. Triple DES encryption helps to ensure the security of data transmitted in connection with ATM transactions. As of December 31, 2003, most of our ATMs, like the vast majority of ATMs across the nation, were not equipped with Triple DES encryption. We have adopted a policy that any new ATMs that we acquire from a manufacturer must be Triple DES compliant. We have budgeted $15.0 million to accomplish the Triple DES conversion of all of our ATMs by the end of 2007. Currently, MasterCard International, which is an operator of one of the nation’s largest EFT networks, has advised all ATM operators that any ATM using its network must be Triple DES compliant by March 31, 2005. We have requested an extension of this deadline. If the extension is not granted, we will either have to accelerate our conversion plan to meet MasterCard’s deadline, or we will use alternate network providers. We are unable at this time to determine whether, and to what extent, a failure to obtain an extension from MasterCard or the use of alternate network providers will impact our business.

      In addition, there have been reports in the press regarding the fraudulent use of ATMs. As a result, legislation currently is being considered that would require state or federal licensing and background checks of ATM operators. Some jurisdictions, including California, New York and New Jersey, have proposed requiring the licensing of non-financial institution ATM merchants, and other jurisdictions currently require such licensing. New license requirements could increase our cost of doing business in those markets. We cannot predict how we will be affected by the implementation of any such licensing requirements.

      For the year ended December 31, 2003, we derived approximately 30.1% of our total revenues from ATMs placed at the locations of our five largest merchants. We expect to continue to depend upon a relatively small number of merchants for a significant percentage of our revenues. The loss of any of our largest merchants, or a decision by any one of them to reduce the number of our ATMs placed in their locations, would decrease our revenues. In addition, our contract with one of our five largest merchants expires in October 2004. These merchants may elect not to renew their contracts when they expire. Even if such contracts are renewed, the renewal terms may be less favorable to us than the current contracts. If any of our five largest merchants fail to renew their contracts upon expiration, or if the renewal terms with any of them are less favorable to us than under our current contracts, this could have a material adverse impact on our business, growth, financial condition and results of operations.

      Furthermore, our third largest merchant, which accounted for 5.6% of our total revenues in 2003, has recently announced a restructuring of its operations in response to financial and operational difficulties. Though we are unable to predict what effect, if any, these difficulties will have on the revenues generated from our ATMs located in their stores, any negative effect could have a material adverse impact on our business, growth, financial condition and results of operations.

      The ATM business is and can be expected to remain highly competitive. While our principal competition comes from national and regional financial institutions, we also compete with other independent ATM companies. Some of these competitors offer services similar to ours. Several of these competitors are larger, more established and have greater financial and other resources than we do. Such competition could prevent us from obtaining or maintaining desirable locations for our ATMs, cause us to

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      The continued expansion and development of our business will depend on various factors, including the increases in demand for ATM services in the market, the ability to locate appropriate ATM sites and obtain necessary approvals for the installation and operation of ATMs, the ability to install ATMs in an efficient and timely manner, the expansion of our business into new markets as currently planned, the ability to obtain sufficient numbers of ATMs from manufacturers on a timely basis and the availability of financing for such expansion. In addition, such expansion may involve acquisitions which, if made, could involve other risks, including the following:

	•	the operations, technology and personnel of any acquired companies may be difficult to integrate;
	•	the allocation of management resources to consummate these transactions may disrupt our day-to-day business; and
	•	acquired networks may not achieve anticipated revenues, earnings or cash flow. Such a shortfall could require us to write down the carrying value of the intangible assets associated with any acquired company, which would adversely affect our reported earnings.

      Since May 2001, we have acquired eight ATM networks. To date, we have acquired the assets of deployed ATM networks, rather than companies and their related infrastructure. Although we anticipate that future acquisitions will be of the same nature, it is possible that we may elect to acquire an existing company or the operations, technology and personnel of another ATM provider. If we do so, we may assume some or all of the liabilities associated with the acquired company and face new and added challenges integrating this acquisition into our operations.

      In addition, our recent growth and any future growth may strain our management systems, information systems and resources. We will need to continue to invest in and improve our financial and managerial controls, reporting systems and procedures as we continue to grow and expand our business. As we grow, we must also continue to hire, train, supervise and manage new employees. We may not be able to hire, train, supervise and manage sufficient personnel or develop management and operating systems to manage our expansion effectively.

      Any inability on our part to manage effectively our past or future growth or to successfully grow the revenue and profitability of our business could have a material adverse effect on our business, growth, financial condition and results of operations. See “Business — Strategy.”

      Since May 2001, we have acquired eight ATM networks. These acquisitions contributed a substantial portion of our total revenues in the year ended December 31, 2003. The full impact of these acquisitions on our operating results is not fully reflected in our historical results of operations due to their recent nature and their varying degrees of integration during those periods. As a result, our historical results may not be indicative of results to be expected in future periods.

      Our interest expense and our cash management costs are based in part on floating interest rates. Therefore, these expenses are sensitive to changes in interest rates. Any rise in interest rates could have an

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      Our ability to provide reliable service largely depends on the efficient and uninterrupted operations of our transaction processors, telecommunications network systems and other service providers. Any significant interruptions could severely harm our business and reputation and result in a loss of revenue. Additionally, if any such interruption is caused by us, such interruption could result in the loss of the affected merchants or damage our relationships with such merchants. Our systems and operations and those of our transaction processors and our EFT network and other service providers, could be exposed to damage or interruption from fire, natural disaster, unlawful acts, terrorist attacks, power loss, telecommunications failure, unauthorized entry and computer viruses. We cannot be certain that any measures we and our service providers have taken to prevent system failures will be successful or that we will not experience service interruptions. Further, our property and business interruption insurance may not be adequate to compensate us for all losses or failures that may occur.

      Transaction fees charged to cardholders and their financial institutions for transactions processed on our ATMs, including surcharge and interchange transaction fees, have historically accounted for most of our revenues. We expect that revenues from ATM transaction fees will continue to account for a substantial majority of our revenues for the foreseeable future. Consequently, our future operating results will depend on (1) the continued market acceptance of our services in our target markets, (2) maintaining the level of transaction fees we receive, (3) our ability to install, acquire and operate more ATMs and (4) continued usage of our ATMs by cardholders. For example, increased acceptance of credit and debit cards by merchants and service providers or any loss of confidence by the consuming public in the safety and security of ATM transactions could result in decreased usage of our ATMs. In addition, it is possible that alternative technologies to our ATM services will be developed and implemented. If such alternatives are successful, we will likely experience a decline in the usage of our ATMs. A decline in usage of our ATMs by ATM cardholders or in the levels of fees received by us in connection with such usage would have a material adverse impact on our business, growth, financial condition and results of operations.

      Recently, there have been reports in the press regarding the use of ATMs to defraud cardholders and their financial institutions. We cannot assure you that we can prevent the unauthorized use of ATMs to defraud cardholders and financial institutions. Although the Electronic Funds Transfer Act and its implementing regulations generally place the risk of such fraud with regard to the consumer and the card issuer upon the card issuer, such fraudulent activity could nevertheless expose us to protracted and costly litigation.

      As new technology that increases ATM functionality is developed, our existing ATMs could become obsolete. We expect new uses of ATMs to continue to be developed by manufacturers and others, that will compete with, and may reduce the demand for, our products and services. Our products’ life cycles are difficult to estimate. Our future success may depend on our ability to enhance our current products and to introduce new products or services that keep pace with technological developments and emerging industry standards. We can offer no assurance that we will be successful in developing new services and marketing,

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      We rely on agreements with several EFT network providers, transaction processors and maintenance providers to enable us to provide card authorization, data capture, settlement and maintenance services to the merchants we serve. Although typically these agreements are for periods of up to two or three years each, some expire this year. Any inability on our part to renew these agreements with these or similar service providers or our failure to perform services efficiently and effectively may adversely affect our relationships with our merchants and may permit those merchants to terminate their agreements with us.

      Our success depends upon the continued services of our senior management and other key employees, including Jack Antonini, our President and Chief Executive Officer. In addition, our success depends in large part upon the reputation and influence within the industry of our senior management. The loss of the services of one or more of our key employees may have an adverse effect on our operations. Any damage to the reputation of our senior management may adversely affect our business. We do not maintain any key person life insurance on any of our employees.

      We conduct substantially all of our operations through our indirectly wholly owned subsidiary, Cardtronics, LP, a Delaware limited partnership. Because of widespread state budget deficits, several states are evaluating ways to subject partnerships to taxation through the implementation of state income, franchise or other forms of taxation. If any state were to impose a tax upon our operating subsidiary as a stand-alone entity, our consolidated net income, if any, may decrease.

Risks Related to the Offering

      Volatility in the market price of our common stock may prevent you from being able to sell your shares at or above the price you paid for your shares. The market price of our common stock could fluctuate significantly for various reasons which include:

	•	our quarterly or annual earnings or those of other companies in our industry;
	•	the public’s reaction to our press releases, our other public announcements and our filings with the SEC;
	•	changes in earnings estimates or recommendations by research analysts who track our common stock or the stocks of other companies in our industry;
	•	new laws or regulations or new interpretations of laws or regulations applicable to our business;
	•	changes in accounting standards, policies, guidance, interpretations or principles;
	•	changes in general conditions in the United States and global economies or financial markets, including those resulting from war, incidents of terrorism or responses to such events; and
	•	sales of common stock by our directors and executive officers.

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      In addition, in recent years, the stock market has experienced significant price and volume fluctuations. This volatility has had a significant impact on the market price of securities issued by many companies, including companies in our industry. The changes frequently appear to occur without regard to the operating performance of the affected companies. Hence, the price of our common stock could fluctuate based upon factors that have little or nothing to do with our company, and these fluctuations could materially reduce our share price.

      In the past, following periods of market volatility in the price of a company’s securities, security holders have often instituted class action litigation. If the market value of our common stock experiences adverse fluctuations and we become involved in this type of litigation, regardless of the outcome, we could incur substantial legal costs and our management’s attention could be diverted from the operation of our business, causing our business to suffer.

      As a public company, we will be subject to the reporting requirements of the Securities Exchange Act of 1934, or Exchange Act, and the Sarbanes-Oxley Act of 2002, or Sarbanes-Oxley Act. These requirements may place a strain on our systems and resources. The Exchange Act requires that we file annual, quarterly and current reports with respect to our business and financial condition. The Sarbanes-Oxley Act requires that we maintain effective disclosure controls and procedures and internal controls for financial reporting. We currently do not have an internal audit group. In order to maintain and improve the effectiveness of our disclosure controls and procedures and internal control over financial reporting, significant resources and management oversight will be required. This may divert management’s attention from other business concerns, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. In addition, we will need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge, and we cannot assure you that we will be able to do so in a timely or cost effective fashion.

      We do not plan to declare dividends on shares of our common stock in the foreseeable future. Consequently, your only opportunity to achieve a return on your investment in us will be if the market price of our common stock appreciates and you sell your shares at a profit. There is no guarantee that the price of our common stock that will prevail in the market after this offering will ever exceed the price that you pay.

      There has not been a public market for our common stock. We cannot predict the extent to which investor interest in us will lead to the development of an active trading market on The Nasdaq National Market or otherwise or how liquid that market might become. If an active trading market does not develop, you may have difficulty selling any of our common stock that you buy. The initial public offering price for the shares will be determined by negotiations between us and the representative of the underwriters and may not be indicative of prices that will prevail in the open market following this offering. Consequently, you may not be able to sell shares of our common stock at prices equal to or greater than the price paid by you in this offering.

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      We may sell additional shares of common stock in subsequent public offerings. We may also issue additional shares of common stock or convertible debt securities to finance future acquisitions. After the completion of this offering, we will have                     outstanding shares of common stock. This number includes                      shares that we are selling in this offering, which may be resold immediately in the public market. The remaining                     shares, or      % of our total outstanding shares, are restricted from immediate resale under the federal securities laws and the lock-up agreements between our current stockholders and the underwriters described in “Underwriting,” but may be sold into the market in the near future. These shares will become available for sale at various times following the expiration of the lock-up agreements which, without the prior consent of Credit Suisse First Boston LLC, is 180 days after the date of this prospectus, subject to volume limitations and manner-of-sale requirements under Rule 144 of the Securities Act of 1933, or the Securities Act.

      All of our existing stockholders are parties to a registration rights agreement with us. Under that agreement, these stockholders will have the right, after the expiration of the lock-up period, to require us to effect the registration of their shares. In addition, if we propose to register, or are required to register following the exercise of registration rights, any of our shares of common stock under the Securities Act, all the stockholders who are parties to the registration rights agreement will be entitled to include their shares of common stock in that registration.

      We cannot predict the size of future issuances of our common stock or the effect, if any, that future issuances and sales of shares of our common stock will have on the market price of our common stock. Sales of substantial amounts of our common stock (including shares issued in connection with an acquisition), or the perception that such sales could occur, may adversely affect prevailing market prices for our common stock.

      Provisions in our certificate of incorporation and our bylaws and applicable provisions of the Delaware General Corporation Law may make it more difficult and expensive for a third party to acquire control of us even if a change of control would be beneficial to the interests of our stockholders. These provisions could discourage potential takeover attempts and could adversely affect the market price of our common stock. Our amended and restated certificate of incorporation and amended and restated bylaws, which will be in effect at the time this offering is consummated, and the Delaware General Corporation Law will:

	•	authorize the issuance of blank check preferred stock that could be issued by our board of directors to thwart a takeover attempt;
	•	classify the board of directors into staggered, three-year terms, which may lengthen the time required by a third party to gain control of our board of directors;
	•	discourage, delay or prevent a change in control by prohibiting us from engaging in a business combination with an interested stockholder for a period of two years after the person becomes an interested stockholder, unless such a transaction has met certain fair market value requirements;
	•	prohibit cumulative voting in the election of directors, which would otherwise allow holders of less than a majority of stock to elect some directors;
	•	require super-majority voting to effect amendments to certain provisions of our certificate of incorporation or bylaws, including those provisions concerning the composition of the board of directors and certain business combinations;
	•	limit who may call special meetings of both the board of directors and stockholders;

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	•	prohibit stockholder action by written consent, requiring all actions to be taken at a meeting of the stockholders;
	•	establish advance notice requirements for nominating candidates for election to the board of directors or for proposing matters that can be acted upon by stockholders at stockholders’ meetings; and
	•	require that vacancies on the board of directors, including newly-created directorships, be filled only by a majority vote of directors then in office.

      Immediately after this offering, our executive officers, directors and principal stockholders will, in the aggregate, directly or indirectly hold approximately      % of our outstanding shares. Accordingly, in the event that all or some of these stockholders decided to act in concert, they could control us through their ability to determine the outcome of the election of our directors, to amend our certificate of incorporation and bylaws and to take other actions requiring the vote or consent of stockholders, including mergers, going private transactions and other extraordinary transactions, and the terms of any of these transactions. The CapStreet Group, LLC is the ultimate general partner of two of our stockholders, CapStreet II, L.P. and CapStreet Parallel II, L.P. We refer to The CapStreet Group, LLC, CapStreet II, L.P. and CapStreet Parallel II, L.P. collectively as The CapStreet Group in this prospectus. These two stockholders will, in the aggregate, hold approximately      % of our outstanding shares after the offering. Two of our directors, Fred R. Lummis and Frederick W. Brazelton, are officers of The CapStreet Group, LLC. The ownership positions of these stockholders may have the effect of delaying, deterring or preventing a change in control or a change in the composition of our board of directors.

      We have significant flexibility in applying the portion of the net proceeds we receive in the offering that will remain after the repayment of all outstanding indebtedness under our credit facility and the redemption of all of our preferred stock. As part of your investment decision, you will not be able to assess or direct how we apply that portion of the net proceeds. If we do not apply these funds effectively, we may lose significant business opportunities. Furthermore, our stock price could decline if the market does not view our use of the proceeds from the offering favorably.

      The initial public offering price per share is substantially higher than the pro forma net tangible book value per share immediately after the offering. As a result, you will pay a price per share that substantially exceeds the book value of our assets after subtracting our liabilities. At the offering price of $          , you will incur immediate and substantial dilution in the amount of $           per share. We also have outstanding stock options to purchase shares of our common stock at a weighted average exercise price of $           per share. To the extent these options are exercised, there will be further dilution.

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