CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Tables)

3 Months Ended

Mar. 31, 2017

CONDENSED CONSOLIDATING FINANCIAL INFORMATION

Schedule of condensed consolidating statements of income and comprehensive income

	Three Months Ended March 31, 2017
	Parent		Subsidiary Issuer		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Total
Revenues
Games	$	—	$	—	$	55,518	$	440	$	(682)	$	55,276
Payments		—		166,673		7,688		8,050		(150)		182,261
Total revenues		—		166,673		63,206		8,490		(832)		237,537
Costs and expenses
Games cost of revenue (exclusive of depreciation and amortization)		—		—		12,919		207		(682)		12,444
Payments cost of revenue (exclusive of depreciation and amortization)		—		133,100		2,181		5,518		—		140,799
Operating expenses		—		17,543		11,058		542		(150)		28,993
Research and development		—		—		4,538		5		—		4,543
Depreciation		—		1,763		8,951		116		—		10,830
Amortization		—		2,880		13,962		483		—		17,325
Total costs and expenses		—		155,286		53,609		6,871		(832)		214,934
Operating income		—		11,387		9,597		1,619		—		22,603
Other expenses (income)
Interest expense, net of interest income		—		1,996		22,896		165		—		25,057
Equity in loss (income) of subsidiaries		3,508		(4,181)		(103)		—		776		—
Total other expenses (income)		3,508		(2,185)		22,793		165		776		25,057
(Loss) income before income tax		(3,508)		13,572		(13,196)		1,454		(776)		(2,454)
Income tax provision (benefit)		—		(1,060)		1,730		384		—		1,054
Net (loss) income		(3,508)		14,632		(14,926)		1,070		(776)		(3,508)
Foreign currency translation		272		—		—		272		(272)		272
Comprehensive (loss) income	$	(3,236)	$	14,632	$	(14,926)	$	1,342	$	(1,048)	$	(3,236)

	Three Months Ended March 31, 2016
	Parent		Subsidiary Issuer		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Total
Revenues
Games	$	—	$	—	$	48,178	$	—	$	—	$	48,178
Payments		—		146,386		7,418		4,158		(371)		157,591
Total revenues		—		146,386		55,596		4,158		(371)		205,769
Costs and expenses
Games cost of revenue (exclusive of depreciation and amortization)		—		—		8,436		—		—		8,436
Payments cost of revenue (exclusive of depreciation and amortization)		—		118,064		2,342		2,251		—		122,657
Operating expenses		—		20,925		8,974		477		(371)		30,005
Research and development		—		—		5,368		—		—		5,368
Depreciation		—		2,519		9,786		30		—		12,335
Amortization		—		3,100		19,503		580		—		23,183
Total costs and expenses		—		144,608		54,409		3,338		(371)		201,984
Operating income		—		1,778		1,187		820		—		3,785
Other expense  (income)
Interest expense, net of interest income		—		1,933		22,998		61		—		24,992
Equity in loss (income) of subsidiaries		13,151		(3,294)		—		—		(9,857)		—
Total other expense (income)		13,151		(1,361)		22,998		61		(9,857)		24,992
(Loss) income before income tax		(13,151)		3,139		(21,811)		759		9,857		(21,207)
Income tax provision (benefit)		—		113		(8,422)		253		—		(8,056)
Net (loss) income		(13,151)		3,026		(13,389)		506		9,857		(13,151)
Foreign currency translation		(485)		—		—		(485)		485		(485)
Comprehensive (loss) income	$	(13,636)	$	3,026	$	(13,389)	$	21	$	10,342	$	(13,636)

Schedule of condensed consolidating balance sheets

	At March 31, 2017
	Parent		Subsidiary Issuer		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Total
ASSETS
Current assets
Cash and cash equivalents	$	—	$	101,319	$	8,597	$	17,945	$	—	$	127,861
Settlement receivables		—		38,271		—		4,172		—		42,443
Trade and other receivables, net		—		7,971		37,198		2,705		—		47,874
Inventory		—		6,257		16,129		—		—		22,386
Prepaid expenses and other assets		—		5,800		5,023		10,732		—		21,555
Intercompany balances		—		112,547		196,137		1,452		(310,136)		—
Total current assets		—		272,165		263,084		37,006		(310,136)		262,119
Non-current assets
Property, equipment and leased assets, net		—		13,674		82,410		1,219		—		97,303
Goodwill		—		151,417		488,512		622		—		640,551
Other intangible assets, net		—		21,829		283,359		4,262		—		309,450
Other receivables		—		1,626		1,827		—		—		3,453
Investment in subsidiaries		(109,582)		176,399		990		86		(67,893)		—
Deferred tax asset		—		36,933		—		—		(36,933)		—
Other assets		—		5,097		2,237		264		—		7,598
Intercompany balances		—		1,144,846		—		—		(1,144,846)		—
Total non-current assets		(109,582)		1,551,821		859,335		6,453		(1,249,672)		1,058,355
Total assets	$	(109,582)	$	1,823,986	$	1,122,419	$	43,459	$	(1,559,808)	$	1,320,474
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EARNINGS
Current liabilities
Settlement liabilities	$	—	$	120,415	$	105	$	7,115	$	—	$	127,635
Accounts payable and accrued expenses		—		85,324		31,749		3,275		—		120,348
Current portion of long-term debt		—		10,000		—		—		—		10,000
Intercompany balances		—		194,086		107,257		8,793		(310,136)		—
Total current liabilities		—		409,825		139,111		19,183		(310,136)		257,983
Non-current liabilities
Deferred tax liability		—		—		95,171		—		(36,933)		58,238
Long-term debt, less current portion		—		1,110,995		—		—		—		1,110,995
Other accrued expenses and liabilities		—		2,524		350		—		—		2,874
Intercompany balances		—		—		1,144,846		—		(1,144,846)		—
Total non-current liabilities		—		1,113,519		1,240,367		—		(1,181,779)		1,172,107
Total liabilities		—		1,523,344		1,379,478		19,183		(1,491,915)		1,430,090
Stockholders’ (deficit) equity
Common stock		91		—		—		—		—		91
Additional paid-in capital		266,175		86,498		5,728		21,103		(113,329)		266,175
(Accumulated deficit) retained earnings		(197,806)		215,948		(262,186)		5,832		40,406		(197,806)
Accumulated other comprehensive loss		(1,804)		(1,804)		(601)		(2,659)		5,030		(1,838)
Treasury stock, at cost		(176,238)		—		—		—		—		(176,238)
Total stockholders’ (deficit) equity		(109,582)		300,642		(257,059)		24,276		(67,893)		(109,616)
Total liabilities and stockholders’ (deficit) equity	$	(109,582)	$	1,823,986	$	1,122,419	$	43,459	$	(1,559,808)	$	1,320,474

	At December 31, 2016
	Parent		Subsidiary Issuer		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Total
ASSETS
Current assets
Cash and cash equivalents	$	—	$	88,648	$	9,103	$	21,300	$	—	$	119,051
Settlement receivables		—		122,222		—		6,599		—		128,821
Trade and other receivables, net		—		9,001		41,743		5,907		—		56,651
Inventory		—		6,009		13,059		—		—		19,068
Prepaid expenses and other assets		—		5,359		3,807		8,882		—		18,048
Intercompany balances		—		106,729		188,028		1,461		(296,218)		—
Total current assets		—		337,968		255,740		44,149		(296,218)		341,639
Non-current assets
Property, equipment and leased assets, net		—		15,144		81,993		1,302		—		98,439
Goodwill		—		151,417		488,512		617		—		640,546
Other intangible assets, net		—		23,901		289,338		4,758		—		317,997
Other receivables		—		2,019		—		1		—		2,020
Investment in subsidiaries		(107,751)		171,979		1,293		86		(65,607)		—
Deferred tax asset		—		37,578		—		—		(37,578)		—
Other assets		—		4,940		2,286		296		—		7,522
Intercompany balances		—		1,143,115		7,851		—		(1,150,966)		—
Total non-current assets		(107,751)		1,550,093		871,273		7,060		(1,254,151)		1,066,524
Total assets	$	(107,751)	$	1,888,061	$	1,127,013	$	51,209	$	(1,550,369)	$	1,408,163
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
Current liabilities
Settlement liabilities	$	—	$	225,170	$	268	$	13,685	$	—	$	239,123
Accounts payable and accrued expenses		—		64,192		28,970		1,229		—		94,391
Current portion of long-term debt		—		10,000		—		—		—		10,000
Intercompany balances		—		189,488		101,387		5,343		(296,218)		—
Total current liabilities		—		488,850		130,625		20,257		(296,218)		343,514
Non-current liabilities
Deferred tax liability		—		—		95,189		—		(37,578)		57,611
Long-term debt, less current portion		—		1,111,880		—		—		—		1,111,880
Other accrued expenses and liabilities		—		2,583		368		—		—		2,951
Intercompany balances		—		—		1,143,116		7,850		(1,150,966)		—
Total non-current liabilities		—		1,114,463		1,238,673		7,850		(1,188,544)		1,172,442
Total liabilities		—		1,603,313		1,369,298		28,107		(1,484,762)		1,515,956
Stockholders’ deficit
Common stock		91		—		—		—		—		91
Additional paid-in capital		264,755		85,499		5,314		21,093		(111,906)		264,755
(Accumulated deficit) retained earnings		(194,299)		201,316		(247,273)		5,168		40,789		(194,299)
Accumulated other comprehensive loss		(2,067)		(2,067)		(326)		(3,159)		5,510		(2,109)
Treasury stock, at cost		(176,231)		—		—		—		—		(176,231)
Total stockholders’ (deficit) equity		(107,751)		284,748		(242,285)		23,102		(65,607)		(107,793)
Total liabilities and stockholders’ (deficit) equity	$	(107,751)	$	1,888,061	$	1,127,013	$	51,209	$	(1,550,369)	$	1,408,163

Schedule of condensed consolidating cash flows

	Three Months Ended March 31, 2017
	Parent		Subsidiary Issuer		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Total
Cash flows from operating activities
Net loss	$	(3,508)	$	14,632	$	(14,926)	$	1,070	$	(776)	$	(3,508)
Adjustments to reconcile net loss to cash provided by operating activities:
Depreciation and amortization		—		4,643		22,913		599		—		28,155
Amortization of financing costs		—		1,672		—		—		—		1,672
Loss on sale or disposal of assets		—		27		409		—		—		436
Accretion of contract rights		—		—		2,002		—		—		2,002
Provision for bad debts		—		27		2,790		—		—		2,817
Reserve for obsolescence		—		140		268		—		—		408
Equity in loss (income) of subsidiaries		3,508		(4,181)		(103)		—		776		—
Stock-based compensation		—		998		414		—		—		1,412
Changes in operating assets and liabilities:
Net settlement receivables and liabilities		—		(20,802)		(164)		(4,132)		—		(25,098)
Other changes in operating assets and liabilities		4		19,002		4,878		(822)		—		23,062
Net cash provided by (used in) operating activities		4		16,158		18,481		(3,285)		—		31,358
Cash flows from investing activities
Capital expenditures		—		(1,227)		(15,938)		(19)		—		(17,184)
Placement fee agreements		—		—		(3,044)		—		—		(3,044)
Changes in restricted cash and cash equivalents		—		25		(150)		—		—		(125)
Intercompany investing activities		(2)		179		145		(26)		(296)		—
Net cash used in investing activities		(2)		(1,023)		(18,987)		(45)		(296)		(20,353)
Cash flows from financing activities
Repayments of credit facility		—		(2,500)		—		—		—		(2,500)
Proceeds from exercise of stock options		5		—		—		—		—		5
Purchase of treasury stock		(7)		—		—		—		—		(7)
Intercompany financing activities		—		36		—		(332)		296		—
Net cash provided by (used in) financing activities		(2)		(2,464)		—		(332)		296		(2,502)
Effect of exchange rates on cash		—		—		—		307		—		307
Cash and cash equivalents
Net increase (decrease) for the period		—		12,671		(506)		(3,355)		—		8,810
Balance, beginning of the period		—		88,648		9,103		21,300		—		119,051
Balance, end of the period	$	—	$	101,319	$	8,597	$	17,945	$	—	$	127,861

	Three Months Ended March 31, 2016
	Parent		Subsidiary Issuer		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations		Total
Cash flows from operating activities
Net (loss) income	$	(13,151)	$	3,026	$	(13,389)	$	506	$	9,857	$	(13,151)
Adjustments to reconcile net (loss) income to cash (used in) provided by operating activities:
Depreciation and amortization		—		5,619		29,289		610		—		35,518
Amortization of financing costs		—		1,672		—		—		—		1,672
Loss on sale or disposal of assets		—		21		590		—		—		611
Accretion of contract rights		—		—		2,097		—		—		2,097
Provision for bad debts		—		—		2,444		—		—		2,444
Reserve for obsolescence		—		60		59		—		—		119
Equity in loss (income) of subsidiaries		13,151		(3,294)		—		—		(9,857)		—
Stock-based compensation		—		699		362		—		—		1,061
Changes in operating assets and liabilities:
Net settlement receivables and liabilities		—		(17,373)		39		4,365		—		(12,969)
Other changes in operating assets and liabilities		1		3,788		3,408		105		—		7,302
Net cash provided by (used in) operating activities		1		(5,782)		24,899		5,586		—		24,704
Cash flows from investing activities
Capital expenditures		—		(3,150)		(20,362)		(101)		—		(23,613)
Proceeds from sale of fixed assets		—		10		—		—		—		10
Placement fee agreements		—		—		(1,000)		—		—		(1,000)
Changes in restricted cash and cash equivalents		—		44		—		—		—		44
Intercompany investing activities		2		148		(8)		(52)		(90)		—
Net cash provided by (used in) investing activities		2		(2,948)		(21,370)		(153)		(90)		(24,559)
Cash flows from financing activities
Repayments of credit facility		—		(2,500)		—		—		—		(2,500)
Debt issuance costs		—		(480)		—		—		—		(480)
Purchase of treasury stock		(9)		—		—		—		—		(9)
Intercompany financing activities		—		54		—		(144)		90		—
Net cash used in financing activities		(9)		(2,926)		—		(144)		90		(2,989)
Effect of exchange rates on cash		—		—		—		148		—		148
Cash and cash equivalents
Net(decrease)  increase for the period		(6)		(11,656)		3,529		5,437		—		(2,696)
Balance, beginning of the period		6		87,078		3,900		11,046		—		102,030
Balance, end of the period	$	—	$	75,422	$	7,429	$	16,483	$	—	$	99,334