EX-99.1 2 a14-11925_1ex99d1.htm EX-99.1

Exhibit 99.1

 

Global Cash Access Reports First Quarter 2014 Results

 

Las Vegas, NV – May 6, 2014 – Global Cash Access Holdings, Inc. (the “Company”) (NYSE:GCA) announced today financial results for the first quarter ended March 31, 2014.

 

First Quarter 2014 Highlights

 

·                  Revenues increased by 3% and Cash Advance revenues increased by 6%

·                  Diluted EPS increased by 22% to $0.11

·                  Cash EPS increased by 16% to $0.22 and Adjusted EBITDA increased by 8% to $19.4 million

·                  2014 Outlook updated - Cash EPS $0.87 to $0.91 and Adjusted EBITDA $76 million to $79 million

·                  GCA renewed its agreements to provide cash access services to The Seminole Tribe of Florida

·                  GCA renewed its agreements to provide cash access services to Pinnacle Entertainment, including the Ameristar locations

 

“The underlying foundation of our business continues to improve and position us well for growth.  The full-year outlook reflects the differentiated competitive advantage that our integrated solutions drive for our clients,” said Ram V. Chary, President and CEO of GCA.

 

First Quarter 2014 Results

 

Revenues increased by $3.7 million, or 3%, to $150.6 million for the first quarter 2014, as compared to the same period last year.  Operating income increased by $0.1 million, or 1%, to $13.0 million for the first quarter 2014, 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 $1.4 million, or 8%, to $19.4 million for the first quarter 2014, as compared to the same period last year.

 

Income from operations before income tax provision increased by $1.7 million, or 18%, to $11.5 million for the first quarter 2014, as compared to the same period last year. Diluted earnings per share from continuing operations increased by $0.02, or 22%, to $0.11 for the first quarter 2014 (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 $0.03, or 16%, to $0.22 for the first quarter 2014, as compared to the same period last year.

 

2014 Outlook

 

The Company is updating its 2014 outlook and now estimates that Cash EPS will be between approximately $0.87 and $0.91 (on diluted shares of approximately 67.1 million) and Adjusted EBITDA will be between $76.0 million and $79.0 million. This updated outlook is based primarily upon the combination of the following assumptions: (a) modest improvement in the Company’s overall operating margins; and (b) modest growth in the domestic gaming industry and operating income from our cash advance segment.

 

Investor Conference Call and Webcast

 

The Company will host an investor conference call to discuss its first quarter 2014 results today at 5:00 p.m. ET. The conference call can be accessed live over the phone by dialing (877) 941-8416 or for international callers by dialing (480) 629-9808.  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 4680672.  The replay will be available until May 13, 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 as 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 overall growth of 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; our ability to integrate and operate such acquisitions consistent with our forecasts; 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 integrated 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.

 

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

(Amounts in thousands, except per share amounts)

(Unaudited)

 

 

 

Three Months Ended March 31,

 

 

2014

 

2013

 

 

 

 

 

Revenues

 

  $

150,571

 

  $

146,822

 

 

 

 

 

Costs and expenses

 

 

 

 

Cost of revenues (exclusive of depreciation and amortization)

 

113,238

 

111,099

Operating expenses

 

20,039

 

18,984

Depreciation

 

1,927

 

1,568

Amortization

 

2,354

 

2,270

Total costs and expenses

 

137,558

 

133,921

 

 

 

 

 

Operating income

 

13,013

 

12,901

 

 

 

 

 

Other expenses

 

 

 

 

Interest expense, net of interest income

 

1,546

 

3,163

Total other expenses

 

1,546

 

3,163

 

 

 

 

 

Income from operations before tax

 

11,467

 

9,738

 

 

 

 

 

Income tax provision

 

3,978

 

3,602

 

 

 

 

 

Net income

 

7,489

 

6,136

 

 

 

 

 

Foreign currency translation

 

1

 

(415)

 

 

 

 

 

Comprehensive income

 

  $

7,490

 

  $

5,721

 

 

 

 

 

Earnings per share

 

 

 

 

Basic

 

  $

0.11

 

  $

0.09

Diluted

 

  $

0.11

 

  $

0.09

 

 

 

 

 

Weighted average common shares outstanding

 

 

 

 

Basic

 

65,910

 

66,697

Diluted

 

67,370

 

67,882

 

3


 

GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except par value amounts)

(Unaudited)

 

 

 

At March 31,

 

At December 31,

 

 

2014

 

2013

ASSETS

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

  $

194,566

 

  $

114,254

Restricted cash and cash equivalents

 

336

 

290

Settlement receivables

 

29,963

 

38,265

Other receivables, net of allowances for doubtful accounts of $2.6 million and $2.8 million, respectively

 

15,850

 

16,962

Inventory

 

11,247

 

9,413

Prepaid expenses and other assets

 

27,706

 

26,770

Property, equipment and leasehold improvements, net

 

18,746

 

18,710

Goodwill

 

180,059

 

180,084

Other intangible assets, net

 

32,161

 

31,535

Deferred income taxes, net

 

88,011

 

91,044

 

 

 

 

 

Total assets

 

  $

598,645

 

  $

527,327

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

Settlement liabilities

 

  $

199,805

 

  $

145,022

Accounts payable and accrued expenses

 

71,067

 

60,701

Borrowings

 

100,000

 

103,000

 

 

 

 

 

Total liabilities

 

370,872

 

308,723

 

 

 

 

 

Stockholders’ Equity

 

 

 

 

Common stock, $0.001 par value, 500,000 shares authorized and 89,825 and 89,233 shares issued at March 31, 2014 and December 31, 2013, respectively

 

90

 

89

Convertible preferred stock, $0.001 par value, 50,000 shares authorized and 0 shares outstanding at March 31, 2014 and December 31, 2013

 

-

 

-

Additional paid-in capital

 

235,961

 

231,516

Retained earnings

 

155,501

 

148,012

Accumulated other comprehensive income

 

2,828

 

2,827

Treasury stock, at cost, 23,636 and 23,303 shares at March 31, 2014 and December 31, 2013, respectively

 

(166,607)

 

(163,840)

 

 

 

 

 

Total stockholders’ equity

 

227,773

 

218,604

 

 

 

 

 

Total liabilities and stockholders’ equity

 

  $

598,645

 

  $

527,327

 

4


 

GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

(Amounts in thousands)

(Unaudited)

 

 

 

Three Months Ended March 31,

 

 

 

2014

 

2013

 

 

 

 

 

 

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

 

 

 

Net income

 

  $

7,489

 

  $

6,136

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

1,927

 

1,568

 

 

 

 

 

 

 

Amortization of intangibles

 

2,354

 

2,270

 

 

 

 

 

 

 

Amortization of financing costs

 

471

 

403

 

 

 

 

 

 

 

Loss/(gain) on sale or disposal of assets

 

124

 

(9)

 

 

 

 

 

 

 

Provision for bad debts

 

2,014

 

2,110

 

 

 

 

 

 

 

Stock-based compensation

 

2,057

 

1,171

 

 

 

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

Settlement receivables

 

8,285

 

(89,490)

 

 

 

 

 

 

 

Other receivables, net

 

(1,008)

 

(1,694)

 

 

 

 

 

 

 

Inventory

 

(1,835)

 

97

 

 

 

 

 

 

 

Prepaid and other assets

 

(1,357)

 

(542)

 

 

 

 

 

 

 

Deferred income taxes

 

3,033

 

3,399

 

 

 

 

 

 

 

Settlement liabilities

 

54,904

 

(1,373)

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

8,139

 

4,390

 

 

 

 

 

 

 

Net cash provided by/(used in) operating activities

 

86,597

 

(71,564)

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

(3,025)

 

(2,934)

 

 

 

 

 

 

 

Proceeds from sale of fixed assets

 

192

 

31

 

 

 

 

 

 

 

Changes in restricted cash and cash equivalents

 

(46)

 

-

 

 

 

 

 

 

 

Net cash used in investing activities

 

(2,879)

 

(2,903)

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

 

 

 

Repayments against credit facility

 

(3,000)

 

(4,000)

 

 

 

 

 

 

 

Proceeds from exercise of stock options

 

2,440

 

962

 

 

 

 

 

 

 

Purchase of treasury stock

 

(2,767)

 

(4,587)

 

 

 

 

 

 

 

Net cash used in financing activities

 

(3,327)

 

(7,625)

 

 

 

 

 

 

 

Effect of exchange rates on cash

 

(79)

 

(226)

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

 

Net increase/(decrease) for the period

 

80,312

 

(82,318)

 

 

 

 

 

 

 

Balance, beginning of the period

 

114,254

 

153,020

 

 

 

 

 

 

 

Balance, end of the period

 

  $

194,566

 

  $

70,702

 

 

 

 

 

 

 

Supplemental cash flow disclosures

 

 

 

 

 

 

 

 

 

 

 

Cash paid for interest

 

  $

1,690

 

  $

2,777

 

 

 

 

 

 

 

Cash paid for income tax, net of refunds

 

  $

303

 

  $

85

 

 

 

 

 

 

 

Accrued and unpaid capital expenditures

 

  $

2,233

 

  $

-

 

 

5


 

GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES

RECONCILIATION OF NET INCOME TO CASH EARNINGS

AND OPERATING INCOME TO EBITDA AND ADJUSTED EBITDA

 (Amounts in thousands, except per share amounts)

(Unaudited)

 

 

 

Three Months Ended March 31,

 

 

 

 

 

 

 

 

 

2014

 

2013

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 $

7,489

 

 $

6,136

 

 

 

 

 

 

 

 

 

Equity compensation expense

 

2,057

 

1,171

 

 

 

 

 

 

 

Deferred income tax

 

3,033

 

3,399

 

 

 

 

 

 

 

Amortization

 

2,354

 

2,270

 

 

 

 

 

 

 

Cash earnings

 

 $

14,933

 

 $

12,976

 

 

 

 

 

 

 

Diluted weighted average number of common shares outstanding

 

67,370

 

67,882

 

 

 

 

 

 

 

Diluted cash earnings per share (“Cash EPS”)

 

 $

0.22

 

 $

0.19

 

 

 

 

 

 

 

 

 

Reconciliation of operating income to EBITDA and Adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 $

13,013

 

 $

12,901

 

 

 

 

 

 

 

 

 

Plus: depreciation and amortization

 

4,281

 

3,838

 

 

 

 

 

 

 

EBITDA

 

 $

17,294

 

 $

16,739

 

 

 

 

 

 

 

Equity compensation expense

 

2,057

 

1,171

 

 

 

 

 

 

 

Adjusted EBITDA

 

 $

19,351

 

 $

17,910

 

 

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 YEAR ENDING DECEMBER 31, 2014

(Amounts in thousands, except per share amounts)

 

 

 

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

 

 $

25,000

 

 $

26,800

 

 

 

 

 

 

 

Projected equity compensation expense

 

9,800

 

9,800

 

 

 

 

 

 

 

Projected deferred income tax

 

12,700

 

13,800

 

 

 

 

 

 

 

Projected amortization

 

10,600

 

10,600

 

 

 

 

 

 

 

Projected cash earnings

 

 $

58,100

 

 $

61,000

 

 

 

 

 

 

 

Projected diluted weighted average number of common shares outstanding

 

67,100

 

67,100

 

 

 

 

 

 

 

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

 

 $

0.87

 

 $

0.91

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

Projected operating income

 

 $

47,200

 

 $

50,200

 

 

 

 

 

 

 

Plus: projected depreciation and projected amortization

 

19,000

 

19,000

 

 

 

 

 

 

 

Projected EBITDA

 

 $

66,200

 

 $

69,200

 

 

 

 

 

 

 

Projected equity compensation expense

 

9,800

 

9,800

 

 

 

 

 

 

 

Projected Adjusted EBITDA

 

 $

76,000

 

 $

79,000

 

 

Note:

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

 

7


 

GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES

OTHER INFORMATION AND DATA

(Amounts in thousands, unless otherwise noted)

(Unaudited)

 

 

 

For the Three Months Ended March 31,

 

 

 

 

 

 

 

2014

 

2013

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

Cash advance

 

 $

62,029

 

 $

58,695

 

 

 

 

 

 

 

ATM

 

73,330

 

75,276

 

 

 

 

 

 

 

Check services

 

5,264

 

5,871

 

 

 

 

 

 

 

Other

 

9,948

 

6,980

 

 

 

 

 

 

 

Total revenues

 

 $

150,571

 

 $

146,822

 

 

 

 

 

 

 

Operating income

 

 

 

 

 

 

 

 

 

 

 

Cash advance

 

 $

18,113

 

 $

15,745

 

 

 

 

 

 

 

ATM

 

6,264

 

6,979

 

 

 

 

 

 

 

Check services

 

2,872

 

3,396

 

 

 

 

 

 

 

Other

 

3,996

 

3,444

 

 

 

 

 

 

 

Corporate

 

(18,232)

 

(16,663)

 

 

 

 

 

 

 

Total operating income

 

 $

13,013

 

 $

12,901

 

 

 

 

 

 

Three Months Ended March 31,

 

 

 

2014

 

2013

 

 

 

 

 

 

 

Other data

 

 

 

 

 

 

 

 

 

 

 

Aggregate dollar amount processed (in billions)

 

 

 

 

 

 

 

 

 

 

 

Cash advance

 

 $

1.3

 

 $

1.2

 

 

 

 

 

 

 

ATM

 

 $

3.3

 

 $

3.4

 

 

 

 

 

 

 

Check warranty

 

 $

0.3

 

 $

0.3

 

 

 

 

 

 

 

Number of transactions completed (in millions)

 

 

 

 

 

 

 

 

 

 

 

Cash advance

 

2.3

 

2.3

 

 

 

 

 

 

 

ATM

 

16.8

 

17.8

 

 

 

 

 

 

 

Check warranty

 

0.9

 

1.0

 

 

8