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Exhibit 99.1

 

GRAPHIC

 

Global Cash Access Reports Second Quarter 2013 Results

 

Las Vegas, NV – August 6, 2013 – Global Cash Access Holdings, Inc. (the “Company”) (NYSE:GCA) announced today financial results for the second quarter ended June 30, 2013.

 

Key Highlights

 

·                  Other Revenue increased 75% due to Kiosk Sales and Service Revenues, which increased 111% year-over-year

·                  Cash Advance Revenue increased 1% primarily due to stronger international revenues year-over-year

·                  GCA to provide Scientific Games a Digital Wallet for iLottery

 

“The second quarter was exciting on many fronts as we continued to execute on our plans to become the leading kiosk provider, to deliver excellent customer service and to become the most complete provider of cash management and payment solutions available to land-based and online gaming operators. Results were in line with expectations and we are pleased to remain on target to meet our full year 2013 guidance expectations. We are especially proud of our recently announced agreement with Scientific Games to provide cash access and wallet services for their iLottery customers,” said David Lopez, President and CEO of GCA.

 

Fiscal Second Quarter 2013 Results

 

Revenues were $149.1 million for the second quarter 2013, as compared to $147.5 million for the same period in 2012.  Operating income was $13.6 million for the second quarter 2013, as compared to $16.0 million for the same period in 2012.  Adjusted earnings before interest, taxes, depreciation and amortization and non-cash compensation expense (“Adjusted EBITDA”) (see Non-GAAP Financial Information below) were $19.1 million for the second quarter 2013, as compared to $21.4 million for the same period in 2012.  The decreases in operating income and Adjusted EBITDA were primarily due to lower operating income in our ATM segment and higher payroll and related expenses and occupancy related expenses, partially offset by higher kiosk sales in the second quarter 2013, as compared to the same period in 2012.

 

Income from operations before income tax provision was $10.9 million for the second quarter 2013, as compared to $11.9 million for the same period in 2012.  Diluted earnings per share from continuing operations were $0.10 for the second quarter 2013 (on 67.0 million diluted shares), as compared to $0.11 for the same period in 2012 (on 67.4 million diluted shares).  Diluted shares outstanding for the quarter ended June 30, 2013 include the impact of our stock repurchase program.  We repurchased approximately 1.0 million shares and 1.7 million shares of common stock for cash of $7.0 million and $11.7 million, respectively, during the three and six months ended June 30, 2013.  Cash earnings per share (“Cash EPS”) (see Non-GAAP Financial Information below) were $0.21 for the second quarter 2013, as compared to $0.23 for the same period in 2012.

 

2013 Outlook

 

The Company reaffirms its estimates that for the fiscal year ending December 31, 2013, Cash EPS will be between approximately $0.74 and $0.83 (on diluted shares of approximately 67.2 million) and Adjusted EBITDA will be between $70 million and $74 million.  This estimated outlook is based primarily upon the combination of the following assumptions: (a) the anticipated impact of less favorable pricing terms associated with several customer contract renewals in 2013; (b) the anticipated impact of certain large customers not renewing their contracts; (c) flat to low growth in the domestic gaming industry; (d) limited new casino openings in 2013; (e) an increase in our kiosk sales and services business in 2013; and (f) continued investment with respect to the Company’s technology infrastructure and personnel.

 

Investor Conference Call and Webcast

 

The Company will host an investor conference call to discuss its second quarter 2013 results today at 5:00 p.m. ET. The conference call can be accessed live over the phone by dialing (877) 941-8410 or for international callers by dialing (480) 629-9856.  A replay will be available at 8:00 p.m. ET and can be accessed by dialing (877) 870-5176 or (858) 384-5517 for international callers; the pin number is 4631205.  The replay will be available until August 13, 2013 at 11:59pm ET. The call will be webcast live from the Company’s website at www.gcainc.com under the Investor Relations section.

 



 

Non-GAAP Financial Information

 

In order to enhance investor understanding of the underlying trends in our business and to provide for better comparability between periods in different years, the Company is providing EBITDA, Adjusted EBITDA, Cash Earnings and Cash EPS on a supplemental basis. Reconciliations between GAAP measures and Non-GAAP measures and between actual results and adjusted results are provided at the end of this press release. EBITDA, Adjusted EBITDA, Cash Earnings and Cash EPS are not measures of financial performance under United States Generally Accepted Accounting Principles (“GAAP”). Accordingly, they should not be considered a substitute for net income, operating income, basic or diluted earnings per share or cash flow data prepared in accordance with GAAP.

 

Cautionary Note Regarding Forward-Looking Statements

 

This press release contains forward-looking statements within the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. All statements included in this press release, other than statements that are purely historical, are forward-looking statements. Words such as “going forward,” “believes,” “intends,” “expects,” “forecasts,” “anticipate,” “plan,” “seek,” “estimate” and similar expressions also identify forward-looking statements. Forward-looking statements in this press release include, without limitation: (a) our estimates of 2013 cash earnings per share and Adjusted EBITDA and the assumptions and factors upon which they are based; and (b) our belief that cash earnings per share and Adjusted EBITDA are widely-referenced financial measures in the financial markets and that references to the foregoing are helpful to investors.

 

These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected or assumed, including but not limited to the following: the timing and the extent of a recovery in the gaming industry; our ability to replace revenue associated with terminated contracts; our ability to introduce new products and services; gaming establishment and patron preferences; national and international economic conditions; changes in gaming regulatory, card association and statutory requirements; regulatory and licensing difficulties; competitive pressures; operational limitations; gaming market contraction; changes to tax laws; uncertainty of litigation outcomes; interest rate fluctuations; inaccuracies in underlying operating assumptions; unanticipated expenses or capital needs; technological obsolescence; and employee turnover.  If any of these assumptions prove to be incorrect, the results contemplated by the forward-looking statements regarding our future results of operations are unlikely to be realized.

 

The forward-looking statements in this press release are subject to additional risks and uncertainties set forth under the heading “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our filings with the Securities and Exchange Commission, including, without limitation, our Annual Report filed on Form 10-K on March 12, 2013, and subsequent periodic reports and are based on information available to us on the date hereof. We do not intend, and assume no obligation, to update any forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this press release.

 

About Global Cash Access Holdings, Inc.

 

Las Vegas-based Global Cash Access, Inc. (“GCA”), a wholly owned subsidiary of Global Cash Access Holdings, Inc., is a leading provider of cash access products and related services to approximately 1,000 casinos and other gaming properties in the United States, Europe, Canada, the Caribbean, Central America and Asia. GCA’s products and services provide gaming patrons access to cash through a variety of methods, including ATM cash withdrawals, point-of-sale debit card transactions, credit card transactions, check verification and warranty services, and Western Union money transfers. GCA is a leading manufacturer and distributor of cash handling devices and related software. GCA also provides products and services that improve credit decision-making, automate cashier operations and enhance patron marketing activities for gaming establishments. With its proprietary database of gaming patron credit history and transaction data on millions of gaming patrons worldwide, GCA is recognized for successfully developing and deploying technological innovations that increase client profitability, operational efficiency and customer loyalty. More information is available at GCA’s website at www.gcainc.com.

 

Contacts

 

Investor Relations

702-855-3006

ir@gcamail.com

 

 

SOURCE: Global Cash Access Holdings, Inc.

 

 

2



 

GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(In thousands, except earnings per share amounts)

(Unaudited)

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

  $

149,066

 

  $

147,465

 

    $

295,887

 

  $

298,530

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues (exclusive of depreciation and amortization)

 

111,724

 

108,378

 

222,822

 

222,193

 

Operating expenses

 

19,479

 

18,958

 

38,463

 

36,446

 

Depreciation

 

1,945

 

1,820

 

3,513

 

3,564

 

Amortization

 

2,285

 

2,346

 

4,555

 

4,667

 

Total costs and expenses

 

135,433

 

131,502

 

269,353

 

266,870

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

13,633

 

15,963

 

26,534

 

31,660

 

 

 

 

 

 

 

 

 

 

 

Other expenses

 

 

 

 

 

 

 

 

 

Interest expense, net of interest income

 

2,733

 

4,063

 

5,896

 

8,547

 

Total other expenses

 

2,733

 

4,063

 

5,896

 

8,547

 

 

 

 

 

 

 

 

 

 

 

Income from operations before tax

 

10,900

 

11,900

 

20,638

 

23,113

 

 

 

 

 

 

 

 

 

 

 

Income tax provision

 

4,124

 

4,816

 

7,726

 

8,901

 

 

 

 

 

 

 

 

 

 

 

Net income

 

6,776

 

7,084

 

12,912

 

14,212

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation

 

(97)

 

(217)

 

(512)

 

(72)

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income

 

  $

6,679

 

  $

6,867

 

    $

12,400

 

  $

14,140

 

 

 

 

 

 

 

 

 

 

 

Earnings per share

 

 

 

 

 

 

 

 

 

Basic

 

  $

0.10

 

  $

0.11

 

    $

0.19

 

  $

0.22

 

Diluted

 

  $

0.10

 

  $

0.11

 

    $

0.19

 

  $

0.21

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

 

 

 

 

 

 

 

Basic

 

66,116

 

65,774

 

66,401

 

65,470

 

Diluted

 

66,993

 

67,383

 

67,425

 

66,786

 

 

 

3



 

GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value amounts)

(Unaudited)

 

 

 

At June 30,

 

At December 31,

 

 

 

2013

 

2012

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

  $

65,448

 

  $

153,020

 

Restricted cash and cash equivalents

 

200

 

200

 

Settlement receivables

 

123,283

 

29,484

 

Other receivables, net of allowances for doubtful accounts of $5.1 million and $6.9 million, respectively

 

14,102

 

11,571

 

Inventory

 

7,567

 

7,126

 

Prepaid expenses and other assets

 

19,157

 

18,254

 

Property, equipment and leasehold improvements, net

 

19,491

 

15,441

 

Goodwill

 

180,097

 

180,141

 

Other intangible assets, net

 

31,821

 

33,994

 

Deferred income taxes, net

 

97,453

 

104,664

 

 

 

 

 

 

 

Total assets

 

  $

558,619

 

  $

553,895

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

Settlement liabilities

 

  $

186,557

 

  $

182,446

 

Accounts payable and accrued expenses

 

55,870

 

51,190

 

Borrowings

 

112,000

 

121,500

 

 

 

 

 

 

 

Total liabilities

 

354,427

 

355,136

 

 

 

 

 

 

 

Stockholders’ Equity

 

 

 

 

 

Common stock, $0.001 par value, 500,000 shares authorized and 88,561 and 87,545 shares issued at June 30, 2013 and December 31, 2012, respectively

 

88

 

87

 

Convertible preferred stock, $0.001 par value, 50,000 shares authorized and 0 shares outstanding at June 30, 2013 and December 31, 2012, respectively

 

-

 

-

 

Additional paid-in capital

 

222,797

 

217,990

 

Retained earnings

 

136,526

 

123,614

 

Accumulated other comprehensive income

 

2,046

 

2,558

 

Treasury stock, at cost, 22,425 and 20,724 shares at June 30, 2013 and December 31, 2012, respectively

 

(157,265)

 

(145,490)

 

 

 

 

 

 

 

Total stockholders’ equity

 

204,192

 

198,759

 

 

 

 

 

 

 

Total liabilities and stockholders’ equity

 

  $

558,619

 

  $

553,895

 

 

 

4



 

GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

Six Months Ended June 30,

 

 

 

2013

 

2012

 

 

 

 

 

 

 

Cash flows from operating activities

 

 

 

 

 

Net income

 

  $

12,912

 

  $

14,212

 

Adjustments to reconcile net income to cash (used in)/provided by operating activities:

 

 

 

 

 

Depreciation

 

3,513

 

3,564

 

Amortization of intangibles

 

4,555

 

4,667

 

Amortization of financing costs

 

852

 

710

 

Loss on sale or disposal of assets

 

115

 

177

 

Provision for bad debts

 

3,971

 

2,027

 

Stock-based compensation

 

2,455

 

2,109

 

Changes in operating assets and liabilities:

 

 

 

 

 

Settlement receivables

 

(93,902)

 

12,838

 

Other receivables, net

 

(6,286)

 

3,150

 

Inventory

 

(441)

 

(837)

 

Prepaid and other assets

 

(1,238)

 

(1,445)

 

Deferred income taxes

 

7,211

 

8,678

 

Settlement liabilities

 

4,396

 

(25,198)

 

Accounts payable and accrued expenses

 

1,665

 

1,117

 

 

 

 

 

 

 

Net cash (used in)/provided by operating activities

 

(60,222)

 

25,769

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

Capital expenditures

 

(7,194)

 

(5,001)

 

Proceeds from sale of fixed assets

 

35

 

-    

 

Changes in restricted cash and cash equivalents

 

-    

 

255

 

 

 

 

 

 

 

Net cash used in investing activities

 

(7,159)

 

(4,746)

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

Issuance costs of amended credit facility

 

(764)

 

-    

 

Repayments against credit facility

 

(9,500)

 

(40,000)

 

Proceeds from exercise of stock options

 

2,382

 

3,602

 

Purchase of treasury stock

 

(11,654)

 

(123)

 

 

 

 

 

 

 

Net cash used in financing activities

 

(19,536)

 

(36,521)

 

 

 

 

 

 

 

Effect of exchange rates on cash

 

(655)

 

(76)

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

Net decrease for the period

 

(87,572)

 

(15,574)

 

Balance, beginning of the period

 

153,020

 

55,535

 

 

 

 

 

 

 

Balance, end of the period

 

  $

65,448

 

  $

39,961

 

 

 

 

 

 

 

Supplemental cash flow disclosures

 

 

 

 

 

Cash paid for interest

 

  $

5,184

 

  $

5,821

 

Cash paid for income tax, net of refunds

 

  $

181

 

  $

201

 

Non-cash tenant improvements paid by landlord

 

  $

2,930

 

  $

-    

 

 

 

5



 

GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES

RECONCILIATION OF NET INCOME TO CASH EARNINGS

AND OPERATING INCOME TO EBITDA AND ADJUSTED EBITDA

(Unaudited)

 

 

 

Three Months Ended June 30,

 

Six months ended June 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

2013

 

2012

 

2013

 

2012

 

Reconciliation of net income to cash earnings (amounts in thousands, except earnings per share amounts)

 

 

 

 

 

 

 

 

 

Net income

 

$

6,776

 

$

7,084

 

$

12,912

 

$

14,212

 

Equity compensation expense

 

1,284

 

1,266

 

2,455

 

2,109

 

Deferred income tax

 

3,812

 

4,743

 

7,211

 

8,678

 

Amortization

 

2,285

 

2,346

 

4,555

 

4,667

 

 

 

 

 

 

 

 

 

 

 

Cash earnings

 

$

14,157

 

$

15,439

 

$

27,133

 

$

29,666

 

 

 

 

 

 

 

 

 

 

 

Diluted weighted average number of common shares outstanding

 

66,993

 

67,383

 

67,425

 

66,786

 

 

 

 

 

 

 

 

 

 

 

Diluted cash earnings per share (“Cash EPS”)

 

$

0.21

 

$

0.23

 

$

0.40

 

$

0.44

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of operating income to EBITDA and Adjusted EBITDA

 

 

 

 

 

 

 

 

 

Operating income

 

$

13,633

 

$

15,963

 

$

26,534

 

$

31,660

 

Plus: depreciation and amortization

 

4,230

 

4,166

 

8,068

 

8,231

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

$

17,863

 

$

20,129

 

$

34,602

 

$

39,891

 

 

 

 

 

 

 

 

 

 

 

Equity compensation expense

 

1,284

 

1,266

 

2,455

 

2,109

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

19,147

 

$

21,395

 

$

37,057

 

$

42,000

 

 

 

6



 

GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES

RECONCILIATION OF PROJECTED NET INCOME TO PROJECTED CASH EARNINGS

AND PROJECTED OPERATING INCOME TO PROJECTED EBITDA AND PROJECTED ADJUSTED EBITDA

FOR THE PROJECTED YEAR ENDING DECEMBER 31, 2013

(Unaudited)

 

 

 

2013 Guidance Range1

 

 

 

Low

 

High

 

Reconciliation of projected net income to projected cash earnings (amounts in thousands, except earnings per share amounts)

 

 

 

 

 

Projected net income

 

$

23,000

 

$

27,000

 

Projected equity compensation expense

 

5,000

 

5,000

 

Projected deferred income tax

 

13,000

 

15,000

 

Projected amortization

 

9,000

 

9,000

 

 

 

 

 

 

 

Projected cash earnings

 

$

50,000

 

$

56,000

 

 

 

 

 

 

 

Projected diluted weighted average number of common shares outstanding

 

67,200

 

67,200

 

 

 

 

 

 

 

Projected diluted cash earnings per share (“Cash EPS”)

 

$

0.74

 

$

0.83

 

 

 

 

 

 

 

Reconciliation of projected operating income to projected EBITDA and projected Adjusted EBITDA

 

 

 

 

 

Projected operating income

 

$

48,000

 

$

52,000

 

Plus: projected depreciation and projected amortization

 

17,000

 

17,000

 

 

 

 

 

 

 

Projected EBITDA

 

$

65,000

 

$

69,000

 

 

 

 

 

 

 

Projected equity compensation expense

 

5,000

 

5,000

 

 

 

 

 

 

 

Projected Adjusted EBITDA

 

$

70,000

 

$

74,000

 

 

Note:

1.  All figures presented are estimates for the year ending December 31, 2013.

 

 

7



 

GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES

SELECTED SEGMENT INFORMATION AND OTHER DATA

(Amounts in thousands, unless otherwise noted)

(Unaudited)

 

 

 

For the Three Months Ended June 30,

 

For the Six Months Ended June 30,

 

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

Cash advance

 

$

57,292 

 

$

56,675 

 

$

115,987 

 

$

115,036

 

ATM

 

72,972 

 

76,603 

 

148,247 

 

156,950

 

Check services

 

5,530 

 

6,605 

 

11,401 

 

13,121

 

Other

 

13,272 

 

7,582 

 

20,252 

 

13,423

 

Corporate

 

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

$

149,066 

 

$

147,465 

 

$

295,887 

 

$

298,530

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

 

 

 

 

 

 

 

Cash advance

 

$

15,568 

 

$

16,755 

 

$

31,313 

 

$

32,602

 

ATM

 

6,230 

 

8,715 

 

13,211 

 

17,669

 

Check services

 

3,403 

 

3,781 

 

6,799 

 

7,196

 

Other

 

6,350 

 

3,778 

 

9,796 

 

6,890

 

Corporate

 

(17,918) 

 

(17,066) 

 

(34,585) 

 

(32,697)

 

 

 

 

 

 

 

 

 

 

 

Total operating income

 

$

13,633 

 

$

15,963 

 

$

26,534 

 

$

31,660

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

Other data

 

 

 

 

 

 

 

 

 

Aggregate dollar amount processed (in billions)

 

 

 

 

 

 

 

 

 

Cash advance

 

$

1.2

 

$

1.2

 

$

2.4

 

$

2.4

 

ATM

 

$

3.3

 

$

3.5

 

$

6.7

 

$

7.0

 

Check warranty

 

$

0.3

 

$

0.3

 

$

0.6

 

$

0.6

 

 

 

 

 

 

 

 

 

 

 

Number of transactions completed (in millions)

 

 

 

 

 

 

 

 

 

Cash advance

 

2.2

 

2.3

 

4.5

 

4.6

 

ATM

 

16.8

 

18.6

 

34.3

 

37.9

 

Check warranty

 

1.0

 

1.1

 

1.9

 

2.2

 

 

 

8