LAS VEGAS--(BUSINESS WIRE)--Nov. 5, 2008--Global Cash Access Holdings, Inc. (NYSE:GCA) (the "Company") today announced preliminary, unaudited financial results for the quarter ended September 30, 2008.
Fiscal Third Quarter 2008 Results
For the quarter ended September 30, 2008, revenues were $185.1 million, an increase of 19% over the $155.8 million in revenues recorded in the same quarter last year. Operating income was $21.3 million, an increase of 12% over the $19.0 million recognized in the prior year. Earnings before interest, taxes, depreciation and amortization (see Non-GAAP Financial Information below) increased to $26.1 million from $21.9 million, a 19% increase.
The Company's results for the quarter include the operations of Certegy Gaming Services, Inc., which was acquired in April of 2008 and Cash Systems, Inc., which was acquired in August of 2008.
"We are quite pleased with these results," said Scott Betts, President and Chief Executive Officer of the Company. "Despite the turbulence in the gaming sector, our strategy is yielding growth on the top and bottom line. Our strong financial position has allowed us to make two important acquisitions that we believe will continue to drive growth in this tough market. Additionally, we remain focused on execution by making investments in operational improvements, cost savings and product innovation with the objective of providing our customers with new and better products and positioning the Company to compete in markets around the globe."
Forward Looking Statements
The Company expects full-year revenues in 2008 to be between $670 and $673 million. Earnings before interest, taxes, depreciation and amortization ("EBITDA") are expected to be between $94 and $96 million. Diluted earnings per share from continuing operations are expected to fall towards the low end of the range of our previously issued guidance of between $0.39 and $0.42 per share.
The foregoing expectations reflect the following assumptions:
-- An effective tax rate for the full year of approximately 42%;
-- Cash outlays for capital expenditures approximating those amounts disbursed in 2007; and
-- Diluted shares of approximately 77,000,000.
Investor Conference Call and Webcast
The Company will host an investor conference call to discuss its fiscal third quarter 2008 results today at 5:00 p.m. ET. The conference call can be accessed live over the phone by dialing (800) 561-2718 or for international callers (617) 614-3525; the conference ID is 61838696. A replay will be available one hour after the call and can be accessed by dialing (888) 286-8010 or (617) 801-6888 for international callers; the conference ID is 54270461. 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 and Cash Earnings Per Share from Continuing Operations ("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 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 or other income 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 belief that our recent acquisitions will drive growth; (b) our expectation that our effective tax rate for the full year 2008 will be approximately 42%; (c) our expectation that cash outlays for capital expenditures to be somewhat lower than those amounts disbursed in 2007; (d) our assumption that there are approximately 77,000,000 diluted shares issued; and (e) our belief that EBITDA and Cash EPS are widely-referenced financial measures in the financial markets and our belief that references to the foregoing are helpful to investors.
Our beliefs, expectations, forecasts, objectives, anticipations, intentions and strategies regarding the future, including without limitation those concerning expected operating results, revenues and earnings are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from results contemplated by the forward-looking statements, including but not limited to: (a) unexpected events that may impact our ability to drive growth; (b) with respect to our expectation that our effective tax rate will be approximately 42% for the full year 2008 (i) incurrence of expenses that are not deductible for tax purposes, (ii) the entry into business lines or foreign countries with tax structures different from the ones we are currently subject to; (c) unexpected events that may require capital expenditures to materially differ from those amounts disbursed in 2007; and (d) inaccuracies in our assumptions as to the financial measurers that investors use or the manner in which such financial measurers may be used by such investors.
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 registration statement on Form S-1 (No. 333-133996), our Annual Report filed on Form 10-K (No. 001-32622) and our quarterly reports on Form 10-Q, 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. (NYSE: GCA), is a leading provider of cash access products and related services to over 1,100 casinos and other gaming properties in the United States, Europe, Canada, the Caribbean 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 cash advances, check verification and warranty services and Western Union money transfers. GCA 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 Web site at www.gcainc.com.
GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except par value)
(unaudited)
----------------------------------------------------------------------
September 30, December 31,
2008 2007
------------- ------------
ASSETS
Cash and cash equivalents $ 59,393 $ 71,063
Restricted cash and cash equivalents 386 1,380
Settlement receivables 41,833 61,066
Receivables other, net 25,238 14,424
Prepaid and other assets 11,605 6,905
Assets held for sale 2,343 12,180
Property, equipment and leasehold
improvements, net 26,497 23,516
Goodwill, net 187,367 156,889
Other intangibles, net 37,319 13,652
Deferred income taxes, net 163,757 177,227
------------- ------------
Total assets $555,738 $538,302
============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Settlement liabilities $ 48,957 $ 93,727
Accounts payable 34,294 22,402
Accrued expenses 21,441 20,262
Borrowings 296,000 263,480
------------- ------------
Total liabilities 400,692 399,871
COMMITMENTS AND CONTINGENCIES
MINORITY INTEREST - 135
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value, 500,000
shares authorized and 82,972 and
82,981 shares issued at September 30,
2008 and December 31, 2007,
respectively 83 83
Preferred stock, $0.001 par value,
50,000 shares authorized and 0 shares
outstanding at September 30, 2008 and
December 31, 2007, respectively. - -
Additional paid in capital 169,759 163,070
Retained earnings 33,105 14,103
Accumulated other comprehensive income 2,301 2,708
Treasury stock, at cost, 6,010 and
4,563 shares at September 30, 2008 and
December 31, 2007, respectively. (50,202) (41,668)
------------- ------------
Total stockholders' equity 155,046 138,296
------------- ------------
Total liabilities and
stockholders' equity $555,738 $538,302
============= ============
See notes to unaudited condensed consolidated financial statements.
GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
(unaudited)
----------------------------------------------------------------------
Nine Months Ended
September 30,
-------------------
2008 2007
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 19,002 $ 21,791
Adjustments to reconcile net income to cash
provided by operating activities:
Amortization of financing costs 729 729
Amortization of intangibles 4,546 4,084
Depreciation 6,702 4,561
Loss on sale of or disposal of assets - 139
Provision for bad debts 14,198 5,806
Deferred income taxes 13,483 12,482
Minority ownership loss (135) (294)
Stock-based compensation 6,690 12,467
Changes in operating assets and liabilities:
Settlement receivables 29,202 21,386
Receivables other, net (9,234) (12,597)
Prepaid and other assets (926) 629
Settlement liabilities (60,602) (12,436)
Accounts payable 8,660 (747)
Accrued expenses (7,258) 265
--------- ---------
Net cash provided by operating
activities 25,057 58,265
CASH FLOWS FROM INVESTING ACTIVITIES:
Certegy Gaming Acquisition, net of cash (24,819) -
Cash Systems, Inc. Acquisition, net of cash (29,916) -
Purchase of property, equipment and leasehold
improvements (7,405) (8,289)
Purchase of other intangibles (131) (1,348)
Changes in restricted cash and cash equivalents 994 (26)
--------- ---------
Net cash used in investing activities (61,277) (9,663)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under credit facility 121,000 -
Repayments under credit facility (88,480) (10,750)
Debt issuance costs - (23)
Proceeds from exercise of stock options - 1,201
Purchase of treasury stock (9,462) (16,843)
Minority capital contributions - 400
--------- ---------
Net cash provided by (used in)
financing activities 23,058 (26,015)
--------- ---------
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND
CASH EQUIVALENTS $ 1,492 $ (742)
--------- ---------
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS (11,670) 21,845
CASH AND CASH EQUIVALENTS--Beginning of period 71,063 40,919
--------- ---------
CASH AND CASH EQUIVALENTS--End of period $ 59,393 $ 62,764
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest $ 25,371 $ 31,459
========= =========
Cash paid for income taxes, net of refunds $ 575 $ 1,381
========= =========
See notes to unaudited condensed consolidated financial statements.
GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES
Reconciliation of Diluted Cash Earnings Per Share from Continuing
Operations to Diluted Earnings Per Share from Continuing Operations,
and Operating Income to EBITDA
(amounts in thousands)
(unaudited)
----------------------------------------------------------------------
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
2008 2007 2008 2007
---------- ------- --------- -------
Reconciliation of Income from
Continuing Operations to Diluted
Cash Earnings
Income from Continuing Operations $ 8,404 $ 6,498 $23,008 $24,373
Plus:
Deferred tax amortization
related to acquired goodwill 4,455 4,427 14,077 13,083
---------- ------- --------- -------
Cash Earnings $12,859 $10,925 $37,085 $37,456
========== ======= ========= =======
Diluted Cash Earnings Per Share
from Continuing Operations $ 0.17 $ 0.13 $ 0.48 $ 0.46
========== ======= ========= =======
Reconciliation of Operating
Income to EBITDA
Operating Income $21,316 $19,027 $60,197 $65,095
Amortization 1,955 1,358 4,546 3,945
Depreciation 2,865 1,602 6,702 4,558
---------- ------- --------- -------
EBITDA $26,136 $21,987 $71,445 $73,598
========== ======= ========= =======
Weighted average number of common
shares outstanding
Diluted 76,724 81,705 76,801 81,967
========== ======= ========= =======