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Exhibit 99.1

 

Global Cash Access Reports Fourth Quarter and Full Year 2013 Results

 

Las Vegas, NV – March 11, 2014 – Global Cash Access Holdings, Inc. (the “Company”) (NYSE:GCA) announced today financial results for the fourth quarter and year ended December 31, 2013.

 

Fourth Quarter 2013 Highlights

 

·                  Revenues increased 3% to $140.5 million

·                  Operating income increased 15% to $11.2 million

·                  Diluted EPS increased 33% to $0.08

·                  Adjusted EBITDA increased 4% to $17.1 million

·                  Cash EPS increased 12% to $0.19

 

Fourth Quarter 2013 Results

 

Revenues increased by $4.4 million, or 3%, to $140.5 million for the fourth quarter 2013, as compared to the same period last year.  Operating income increased by $1.5 million, or 15%, to $11.2 million for the fourth quarter 2013, as compared to the same period last year.  Adjusted earnings before interest, taxes, depreciation and amortization and non-cash compensation expense (“Adjusted EBITDA”) (see Non-GAAP Financial Information below) increased by $0.7 million, or 4%, to $17.1 million for the fourth quarter 2013, as compared to the same period last year.  These increases were primarily due to higher kiosk sales in the fourth quarter 2013, as compared to the same period last year.

 

Income from operations before income tax provision increased by $2.8 million, or 44%, to $9.1 million for the fourth quarter 2013, as compared to the same period last year. Diluted earnings per share from continuing operations increased by $0.02, or 33%, to $0.08 for the fourth quarter 2013 (on 67.4 million diluted shares), as compared to the same period last year.  Cash earnings per share (“Cash EPS”), (see Non-GAAP Financial Information below) increased by $0.02, or 12%, to $0.19 for the fourth quarter 2013, as compared to the same period last year.

 

Full Year 2013 Results

 

Revenues decreased by $2.0 million, or less than 1%, to $582.4 million for the full year 2013, as compared to the same period last year.  Operating income decreased by $6.8 million, or 12%, to $49.2 million for the full year 2013, as compared to the same period last year.  Adjusted EBITDA decreased by $8.1 million, or 10%, to $71.2 million for the full year 2013, as compared to the same period last year.  The decreases in operating income and Adjusted EBITDA were primarily due to lower results in our core cash access segments, partially offset by the growth in kiosk sales.

 

Income from operations before income tax provision decreased by $1.6 million, or 4%, to $38.9 million for the full year 2013, as compared to the same period last year.  Diluted earnings per share from continuing operations decreased by $0.02, or 5%, to $0.36 for the full year 2013 (on 67.2 million diluted shares), as compared to the same period last year.  Cash EPS decreased by $0.06, or 7%, to $0.78 for the full year 2013, as compared to the same period last year.

 

2014 Outlook

 

For the full year ending December 31, 2014, the Company estimates that Cash EPS will be between approximately $0.82 and $0.87 (on diluted shares of approximately 67.1 million) and Adjusted EBITDA will be between $73.0 million and $76.0 million. This outlook is based primarily upon the combination of the following assumptions: (a) growth in our kiosk sales and services business in 2014; (b) flat to low growth in the domestic gaming industry; (c) the anticipated impact of less favorable pricing terms associated with several customer contract renewals in 2013 and 2014; and (d) the reduced interest rates paid on our credit facility.

 

1



 

Investor Conference Call and Webcast

 

The Company will host an investor conference call to discuss its fourth quarter and full year 2013 results today at 5:00 p.m. ET. The conference call can be accessed live over the phone by dialing (877) 941-2068 or for international callers by dialing (480) 629-9712.  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 4671370.  The replay will be available until March 18, 2014. 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. We present Adjusted EBITDA and Cash EPS because we consider these measures to be supplemental to our operating performance. We also make certain compensation decisions based, in part, on our operating performance, as measured by Adjusted EBITDA; and our credit facility requires us to comply with covenants that include performance metrics substantially similar to Adjusted EBITDA. 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 2014 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, if any; our ability to replace revenue associated with terminated contracts; margin degradation from contract renewals; our ability to introduce new products and services; our ability to execute on mergers, acquisitions and/or strategic alliances; 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 11, 2014, 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 services and related equipment and services to the gaming industry. GCA’s products and services: (a) provide gaming establishment patrons access to cash through a variety of methods, including Automated Teller Machine (“ATM”) cash withdrawals, credit card cash access transactions, point-of-sale (“POS”) debit card transactions, check verification and warranty services and money transfers; (b) provide cash access devices and related services, such as slot machine ticket redemption and jackpot kiosks to the gaming industry; (c) provide products and services that improve credit decision making, automate cashier operations and enhance patron marketing activities for gaming establishments; and (d) provide online payment processing solutions for gaming operators in States that offer intra-state, Internet-based gaming and lottery activities. More information is available at GCA’s website at www.gcainc.com.

 

2



 

Contacts

 

Investor Relations

Investor Relations

Don Duffy, ICR

William Maina, ICR

(203) 682-8215

(646) 277-1236

ir@gcamail.com

ir@gcamail.com

 

Media Relations

Phil Denning, ICR

(646) 277-1258

ir@gcamail.com

 

Source

 

Global Cash Access Holdings, Inc.

 

3



 

GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(In thousands, except earnings per share amounts)

 

 

 

Year Ended December 31,

 

 

 

2013

 

2012

 

2011

 

 

 

 

 

 

 

 

 

Revenues

 

$

582,444

 

$

584,486

 

$

544,063

 

 

 

 

 

 

 

 

 

Costs and expenses

 

 

 

 

 

 

 

Cost of revenues (exclusive of depreciation and amortization)

 

439,794

 

436,059

 

419,606

 

Operating expenses

 

76,562

 

75,806

 

69,517

 

Depreciation

 

7,350

 

6,843

 

7,971

 

Amortization

 

9,588

 

9,796

 

8,673

 

Total costs and expenses

 

533,294

 

528,504

 

505,767

 

 

 

 

 

 

 

 

 

Operating income

 

49,150

 

55,982

 

38,296

 

 

 

 

 

 

 

 

 

Other expenses

 

 

 

 

 

 

 

Interest expense, net of interest income

 

10,265

 

15,519

 

18,638

 

Loss on early extinguishment of debt

 

-

 

-

 

943

 

Total other expenses

 

10,265

 

15,519

 

19,581

 

 

 

 

 

 

 

 

 

Income from operations before tax

 

38,885

 

40,463

 

18,715

 

 

 

 

 

 

 

 

 

Income tax provision

 

14,487

 

14,774

 

9,586

 

 

 

 

 

 

 

 

 

Net income

 

24,398

 

25,689

 

9,129

 

 

 

 

 

 

 

 

 

Foreign currency translation

 

269

 

218

 

(247)

 

 

 

 

 

 

 

 

 

Comprehensive income

 

$

24,667

 

$

25,907

 

$

8,882

 

 

 

 

 

 

 

 

 

Earnings per share

 

 

 

 

 

 

 

Basic

 

$

0.37

 

$

0.39

 

$

0.14

 

Diluted

 

$

0.36

 

$

0.38

 

$

0.14

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

 

 

 

 

 

Basic

 

66,014

 

65,933

 

64,673

 

Diluted

 

67,205

 

67,337

 

64,859

 

 

4



 

GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except par value amounts)

 

 

 

At December 31,

 

 

 

2013

 

2012

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

114,254

 

$

153,020

 

Restricted cash and cash equivalents

 

290

 

200

 

Settlement receivables

 

38,265

 

29,484

 

Other receivables, net of allowances for doubtful accounts of $2.8 million and $6.9 million, respectively

 

16,962

 

11,571

 

Inventory

 

9,413

 

7,126

 

Prepaid expenses and other assets

 

26,770

 

18,254

 

Property, equipment and leasehold improvements, net

 

18,710

 

15,441

 

Goodwill

 

180,084

 

180,141

 

Other intangible assets, net

 

31,535

 

33,994

 

Deferred income taxes, net

 

91,044

 

104,664

 

 

 

 

 

 

 

Total assets

 

$

527,327

 

$

553,895

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

Settlement liabilities

 

$

145,022

 

$

182,446

 

Accounts payable and accrued expenses

 

60,701

 

51,190

 

Borrowings

 

103,000

 

121,500

 

 

 

 

 

 

 

Total liabilities

 

308,723

 

355,136

 

 

 

 

 

 

 

Stockholders’ Equity

 

 

 

 

 

Common stock, $0.001 par value, 500,000 shares authorized and 89,233 and 87,545 shares issued at December 31, 2013 and December 31, 2012, respectively

 

89

 

87

 

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

 

-

 

-

 

Additional paid-in capital

 

231,516

 

217,990

 

Retained earnings

 

148,012

 

123,614

 

Accumulated other comprehensive income

 

2,827

 

2,558

 

Treasury stock, at cost, 23,303 and 20,724 shares at December 31, 2013 and December 31, 2012, respectively

 

(163,840)

 

(145,490)

 

 

 

 

 

 

 

Total stockholders’ equity

 

218,604

 

198,759

 

 

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

527,327

 

$

553,895

 

 

5



 

GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

 

 

 

Year Ended December 31,

 

 

 

2013

 

 

 

2012

 

 

 

2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

$

24,398

 

 

 

$

25,689

 

 

 

$

9,129

 

Adjustments to reconcile net income to cash provided

 

 

 

 

 

 

 

 

 

 

 

 

 by operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

 

7,350

 

 

 

6,843

 

 

 

7,971

 

Amortization of intangibles

 

 

9,588

 

 

 

9,796

 

 

 

8,673

 

Amortization of financing costs

 

 

1,793

 

 

 

1,485

 

 

 

1,343

 

Loss on sale or disposal of assets

 

 

178

 

 

 

95

 

 

 

991

 

Provision for bad debts

 

 

7,874

 

 

 

5,182

 

 

 

5,959

 

Loss on early extinguishment of debt

 

 

-    

 

 

 

-    

 

 

 

943

 

Stock-based compensation

 

 

5,078

 

 

 

6,655

 

 

 

6,809

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Settlement receivables

 

 

(8,793

)

 

 

50,823

 

 

 

(69,881

)

Other receivables, net

 

 

(13,335

)

 

 

1,196

 

 

 

(8,125

)

Inventory

 

 

(2,286

)

 

 

134

 

 

 

(3,146

)

Prepaid and other assets

 

 

(9,482

)

 

 

(3,425

)

 

 

(2,323

)

Deferred income taxes

 

 

13,643

 

 

 

14,376

 

 

 

9,252

 

Settlement liabilities

 

 

(37,200

)

 

 

40,530

 

 

 

82,125

 

Accounts payable and accrued expenses

 

 

5,528

 

 

 

(1,891

)

 

 

4,532

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

 

 

4,334

 

 

 

157,488

 

 

 

54,252

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

 

 

 

 

Acquisitions, net of cash acquired

 

 

-    

 

 

 

-    

 

 

 

(10,763

)

Capital expenditures

 

 

(13,986

)

 

 

(13,654

)

 

 

(7,420

)

Proceeds from sale of fixed assets

 

 

86

 

 

 

868

 

 

 

-    

 

Changes in restricted cash and cash equivalents

 

 

(90

)

 

 

255

 

 

 

-    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash used in investing activities

 

 

(13,990

)

 

 

(12,531

)

 

 

(18,183

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

 

 

 

 

Repayments against prior credit facility

 

 

-    

 

 

 

-    

 

 

 

(208,750

)

Securing of credit facility

 

 

-    

 

 

 

-    

 

 

 

214,000

 

Issuance costs of amended credit facility

 

 

(764

)

 

 

(676

)

 

 

(7,099

)

Repayments against credit facility

 

 

(18,500

)

 

 

(52,500

)

 

 

(40,000

)

Proceeds from exercise of stock options

 

 

8,431

 

 

 

6,655

 

 

 

812

 

Purchase of treasury stock

 

 

(18,350

)

 

 

(262

)

 

 

(190

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash used in financing activities

 

 

(29,183

)

 

 

(46,783

)

 

 

(41,227

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Effect of exchange rates on cash

 

 

73

 

 

 

(689

)

 

 

57

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

Net (decrease)/increase for the period

 

 

(38,766

)

 

 

97,485

 

 

 

(5,101

)

Balance, beginning of the period

 

 

153,020

 

 

 

55,535

 

 

 

60,636

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, end of the period

 

 

$

114,254

 

 

 

$

153,020

 

 

 

$

55,535

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental cash flow disclosures

 

 

 

 

 

 

 

 

 

 

 

 

   Cash paid for interest

 

 

$

8,634

 

 

 

$

15,494

 

 

 

$

19,166

 

   Cash paid for income tax, net of refunds

 

 

$

711

 

 

 

$

665

 

 

 

$

366

 

Non-cash tenant improvements paid by landlord

 

 

$

2,930

 

 

 

$

-    

 

 

 

$

-    

 

Accrued and unpaid capital expenditures

 

 

$

1,073

 

 

 

$

-    

 

 

 

$

-    

 

 

6



 

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 December 31,

 

Twelve months ended December 31,

 

 

 

2013

 

2012

 

2013

 

2012

 

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

 

 

 

 

 

 

 

 

 

Net income

 

  $

5,704

 

  $

4,399

 

  $

24,398

 

  $

25,689

 

Equity compensation expense

 

1,376

 

2,704

 

5,078

 

6,655

 

Deferred income tax

 

3,308

 

1,820

 

13,643

 

14,376

 

Amortization

 

2,614

 

2,479

 

9,588

 

9,796

 

 

 

 

 

 

 

 

 

 

 

Cash earnings

 

  $

13,002

 

  $

11,402

 

  $

52,707

 

  $

56,516

 

 

 

 

 

 

 

 

 

 

 

Diluted weighted average number of common shares outstanding

 

67,394

 

67,996

 

67,205

 

67,337

 

 

 

 

 

 

 

 

 

 

 

Diluted cash earnings per share (“Cash EPS”)

 

  $

0.19

 

  $

0.17

 

  $

0.78

 

  $

0.84

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of operating income to EBITDA and Adjusted EBITDA

 

 

 

 

 

 

 

 

 

Operating income

 

  $

11,196

 

  $

9,681

 

  $

49,150

 

  $

55,982

 

Plus: depreciation and amortization

 

4,543

 

4,062

 

16,938

 

16,639

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

  $

15,739

 

  $

13,743

 

  $

66,088

 

  $

72,621

 

 

 

 

 

 

 

 

 

 

 

Equity compensation expense

 

1,376

 

2,704

 

5,078

 

6,655

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

  $

17,115

 

  $

16,447

 

  $

71,166

 

  $

79,276

 

 

7



 

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 YEAR ENDING DECEMBER 31, 2014

 

 

 

2014 Guidance Range1

 

 

 

Low

 

High

 

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

 

 

 

 

 

Projected net income

 

  $

24,700

 

  $

26,600

 

Projected equity compensation expense

 

5,800

 

5,800

 

Projected deferred income tax

 

14,000

 

15,100

 

Projected amortization

 

10,600

 

10,600

 

 

 

 

 

 

 

Projected cash earnings

 

  $

55,100

 

  $

58,100

 

 

 

 

 

 

 

Projected diluted weighted average number of common shares outstanding

 

67,100

 

67,100

 

 

 

 

 

 

 

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

 

  $

0.82

 

  $

0.87

 

 

 

 

 

 

 

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

 

 

 

 

 

Projected operating income

 

  $

48,100

 

  $

51,100

 

Plus: projected depreciation and projected amortization

 

19,100

 

19,100

 

 

 

 

 

 

 

Projected EBITDA

 

  $

67,200

 

  $

70,200

 

 

 

 

 

 

 

Projected equity compensation expense

 

5,800

 

5,800

 

 

 

 

 

 

 

Projected Adjusted EBITDA

 

  $

73,000

 

  $

76,000

 

 

Note:

1. All figures presented are projected estimates for the year ending December 31, 2014.

 

8



 

GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES

OTHER INFORMATION AND DATA

(unaudited)

(amounts in thousands, unless otherwise noted)

 

 

 

For and At the Year Ended December 31,

 

 

 

2013

 

2012

 

2011

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

Cash advance

 

  $

231,134

 

 

  $

227,517

 

 

  $

203,869

 

ATM

 

286,049

 

 

303,159

 

 

283,727

 

Check services

 

21,611

 

 

25,401

 

 

26,269

 

Other

 

43,650

 

 

28,409

 

 

30,198

 

Corporate

 

-

 

 

-

 

 

-

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

  $

582,444

 

 

  $

584,486

 

 

  $

544,063

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

 

 

 

 

 

 

 

Cash advance

 

  $

60,977

 

 

  $

63,785

 

 

  $

38,468

 

ATM

 

25,347

 

 

32,333

 

 

34,832

 

Check services

 

12,365

 

 

13,930

 

 

14,197

 

Other

 

19,631

 

 

14,457

 

 

14,808

 

Corporate

 

(69,170

)

 

(68,523

)

 

(64,009

)

 

 

 

 

 

 

 

 

 

 

Total operating income

 

  $

49,150

 

 

  $

55,982

 

 

  $

38,296

 

 

 

 

 

For the Year Ended December 31,

 

 

 

2013

 

2012

 

2011

 

 

 

 

 

 

 

 

 

Other data

 

 

 

 

 

 

 

Aggregate dollar amount processed (in billions)

 

 

 

 

 

 

 

Cash advance

 

$

4.9

 

$

4.8

 

$

4.3

 

ATM

 

$

12.9

 

$

13.6

 

$

12.2

 

Check warranty

 

$

1.1

 

$

1.2

 

$

1.1

 

Number of transactions completed (in millions)

 

 

 

 

 

 

 

Cash advance

 

8.8

 

9.0

 

8.4

 

ATM

 

66.2

 

72.3

 

68.8

 

Check warranty

 

3.7

 

4.3

 

4.4

 

 

9