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Exhibit 99.1

 

GRAPHIC

 

Global Cash Access Reports Fourth Quarter and Full Year 2012 Results

 

Las Vegas, NV March 12, 2013 Global Cash Access Holdings, Inc. (the “Company”) (NYSE:GCA) announced today financial results for the fourth quarter and year ended December 31, 2012.

 

2012 Highlights

 

·                  The fourth quarter and full year 2012 results were consistent with prior guidance

·                  Operating income increased 46% year-over-year to $56.0 million

·                  Adjusted EBITDA increased 29% year-over-year to $79.3 million

·                  Cash EPS increased 62% year-over-year to $0.84

 

“We are pleased with our full year 2012 results, and in 2013, we will continue to focus on our people, enhancing our existing products and services, and developing additional cash access products to provide our customers with fully integrated, end-to-end solutions for their operational needs,” said David Lopez, President and CEO of GCA.

 

Fourth Quarter 2012 Results

 

Revenues were $136.1 million for the fourth quarter 2012, a decrease of 1%, as compared to $137.7 million for the same period in 2011.  Operating income was $9.7 million for the fourth quarter 2012, a decrease of 32%, as compared to $14.2 million for the same period in 2011.  Adjusted earnings before interest, taxes, depreciation and amortization and non-cash compensation expense (“Adjusted EBITDA”) (see Non-GAAP Financial Information below) were $16.4 million for the fourth quarter 2012, a decrease of 18%, as compared to $20.0 million for the same period in 2011.  These decreases were primarily due to higher kiosk sales in the fourth quarter 2011, as compared to the fourth quarter 2012, associated with certain large casino openings and higher payroll and related expenses.

 

Income from operations before income tax provision was $6.3 million for the fourth quarter 2012, a decrease of 36%, as compared to $9.8 million for the same period in 2011.  Diluted earnings per share from continuing operations were $0.06 for the fourth quarter 2012 (on 68.0 million diluted shares), as compared to $0.07 for the same period in 2011 (on 65.2 million diluted shares).  Cash EPS (see Non-GAAP Financial Information below) was $0.17 for the fourth quarter 2012, a decrease of 19%, from the $0.21 for the same period in 2011.

 

Fiscal Year 2012 Results

 

Revenues were $584.5 million for the fiscal year 2012, an increase of 7%, as compared to $544.1 million for the fiscal year 2011.  Operating income was $56.0 million for the fiscal year 2012, an increase of 46%, as compared to $38.3 million for the fiscal year 2011.  Adjusted EBITDA (see Non-GAAP Financial Information below) were $79.3 million for the fiscal year 2012, an increase of 29%, as compared to $61.7 million for the fiscal year 2011.  These increases were primarily due to the reduced amount of interchange expenses paid by the Company on its debit card transactions as a result of the implementation of the Durbin Amendment in October 2011, and the acquisition of substantially all the assets of MCA Processing LLC (“MCA”) completed in November 2011.

 

Income from operations before income tax provision was $40.5 million for the fiscal year 2012, an increase of 117%, as compared to $18.7 million for the same period in 2011.  Diluted earnings per share from continuing operations were $0.38 for the fiscal year 2012 (on 67.3 million diluted shares), as compared to $0.14 for the same period in 2011 (on 64.9 million diluted shares).  Cash EPS (see Non-GAAP Financial Information below) was $0.84 for the fiscal year 2012, an increase of 62%, from the $0.52 for the same period in 2011.

 



 

2013 Outlook

 

For the fiscal year ending December 31, 2013, the Company estimates that cash earnings per share 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 factors: (a) the anticipated impact of less favorable pricing terms associated with several customer contract renewals in 2012 and 2013; (b) the anticipated impact of certain large customers not renewing their contracts; (c) flat to low growth in the domestic gaming industry; (d) no significant casino openings in 2013; (e) a projected 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 fourth quarter and fiscal year 2012 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 4603882.  The replay will be available until March 19, 2013. 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 over 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

 

2



 

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.

 

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,

 

 

 

2012

 

2011

 

2010

 

 

 

 

 

 

 

 

 

Revenues

 

  $

584,486

 

  $

544,063

 

  $

605,590

 

 

 

 

 

 

 

 

 

Costs and expenses

 

 

 

 

 

 

 

Cost of revenues (exclusive of depreciation and amortization)

 

436,059

 

419,606

 

463,045

 

Operating expenses

 

75,806

 

69,517

 

73,720

 

Depreciation

 

6,843

 

7,971

 

9,323

 

Amortization

 

9,796

 

8,673

 

6,872

 

Total costs and expenses

 

528,504

 

505,767

 

552,960

 

 

 

 

 

 

 

 

 

Operating income

 

55,982

 

38,296

 

52,630

 

 

 

 

 

 

 

 

 

Other expenses

 

 

 

 

 

 

 

Interest expense, net of interest income

 

15,519

 

18,638

 

16,329

 

Loss on early extinguishment of debt

 

-

 

943

 

-

 

Total other expenses

 

15,519

 

19,581

 

16,329

 

 

 

 

 

 

 

 

 

Income from operations before tax

 

40,463

 

18,715

 

36,301

 

 

 

 

 

 

 

 

 

Income tax provision

 

14,774

 

9,586

 

18,751

 

 

 

 

 

 

 

 

 

Net income

 

25,689

 

9,129

 

17,550

 

 

 

 

 

 

 

 

 

Plus: net loss attributable to non-controlling interest

 

-

 

-

 

(56)

 

 

 

 

 

 

 

 

 

Net income attributable to Global Cash Access Holdings, Inc. and Subsidiaries

 

25,689

 

9,129

 

17,494

 

 

 

 

 

 

 

 

 

Foreign currency translation

 

218

 

(247)

 

397

 

 

 

 

 

 

 

 

 

Comprehensive income

 

  $

25,907

 

  $

8,882

 

  $

17,891

 

 

 

 

 

 

 

 

 

Earnings per share

 

 

 

 

 

 

 

Basic

 

  $

0.39

 

  $

0.14

 

  $

0.27

 

Diluted

 

  $

0.38

 

  $

0.14

 

  $

0.26

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

 

 

 

 

 

Basic

 

65,933

 

64,673

 

65,903

 

Diluted

 

67,337

 

64,859

 

67,272

 

 

4



 

GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except par value amounts)

 

 

 

At December 31,

 

 

 

2012

 

2011

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

  $

153,020

 

  $

55,535

 

Restricted cash and cash equivalents

 

200

 

455

 

Settlement receivables

 

29,484

 

80,246

 

Other receivables, net

 

11,571

 

16,885

 

Inventory

 

7,126

 

7,087

 

Prepaid expenses and other assets

 

18,254

 

15,406

 

Property, equipment and leasehold improvements, net

 

15,441

 

15,577

 

Goodwill

 

180,141

 

180,122

 

Other intangible assets, net

 

33,994

 

38,216

 

Deferred income taxes, net

 

104,664

 

119,538

 

 

 

 

 

 

 

Total assets

 

  $

553,895

 

  $

529,067

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

Settlement liabilities

 

  $

182,446

 

  $

141,827

 

Accounts payable

 

35,374

 

32,223

 

Accrued expenses

 

15,816

 

21,159

 

Borrowings

 

121,500

 

174,000

 

 

 

 

 

 

 

Total liabilities

 

355,136

 

369,209

 

 

 

 

 

 

 

Stockholders’ Equity

 

 

 

 

 

Common stock, $0.001 par value, 500,000 shares authorized and 87,545 and 85,651 shares issued at December 31, 2012 and December 31, 2011, respectively

 

87

 

86

 

Convertible preferred stock, $0.001 par value, 50,000 shares authorized and 0 shares outstanding at December 31, 2012 and December 31, 2011, respectively

 

-

 

-

 

Additional paid-in capital

 

217,990

 

204,735

 

Retained earnings

 

123,614

 

97,925

 

Accumulated other comprehensive income

 

2,558

 

2,340

 

Treasury stock, at cost, 20,724 and 20,686 shares at December 31, 2012 and December 31, 2011, respectively

 

(145,490)

 

(145,228)

 

 

 

 

 

 

 

Total stockholders’ equity

 

198,759

 

159,858

 

 

 

 

 

 

 

Total liabilities and stockholders’ equity

 

  $

553,895

 

  $

529,067

 

 

5



 

GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

 

 

 

Year Ended December 31,

 

 

 

2012

 

2011

 

2010

 

 

 

 

 

 

 

 

 

Cash flows from operating activities

 

 

 

 

 

 

 

Net income

 

  $

25,689

 

  $

9,129

 

  $

17,550

 

Adjustments to reconcile net income to cash provided

 

 

 

 

 

 

 

by operating activities:

 

 

 

 

 

 

 

Depreciation

 

6,843

 

7,971

 

9,323

 

Amortization of intangibles

 

9,796

 

8,673

 

6,872

 

Amortization of financing costs

 

1,485

 

1,343

 

973

 

Loss/(gain) on sale or disposal of assets

 

95

 

991

 

(366)

 

Provision for bad debts

 

5,182

 

5,959

 

5,908

 

Loss on early extinguishment of debt

 

-

 

943

 

-

 

Stock-based compensation

 

6,655

 

6,809

 

7,935

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Settlement receivables

 

50,823

 

(69,881)

 

1,660

 

Other receivables, net

 

1,196

 

(8,125)

 

2,757

 

Inventory

 

134

 

(3,146)

 

814

 

Prepaid and other assets

 

(3,425)

 

(2,323)

 

1,567

 

Deferred income taxes

 

14,376

 

9,252

 

17,505

 

Settlement liabilities

 

40,530

 

82,125

 

(2,655)

 

Accounts payable

 

3,148

 

3,658

 

(715)

 

Accrued expenses

 

(5,039)

 

874

 

(230)

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

 

157,488

 

54,252

 

68,898

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

Acquisitions, net of cash acquired

 

-

 

(10,763)

 

(15,354)

 

Capital expenditures

 

(13,654)

 

(7,420)

 

(9,051)

 

Proceeds from sale of fixed assets

 

868

 

-

 

-

 

Changes in restricted cash and cash equivalents

 

255

 

-

 

(87)

 

 

 

 

 

 

 

 

 

Net cash used in investing activities

 

(12,531)

 

(18,183)

 

(24,492)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

Repayments against old credit facility

 

-

 

(208,750)

 

(41,000)

 

Securing of new credit facility

 

-

 

214,000

 

-

 

Issuance costs of new credit facility

 

(676)

 

(7,099)

 

-

 

Repayments against new credit facility

 

(52,500)

 

(40,000)

 

-

 

Proceeds from exercise of stock options

 

6,655

 

812

 

5,629

 

Purchase of treasury stock

 

(262)

 

(190)

 

(33,474)

 

 

 

 

 

 

 

 

 

Net cash used in financing activities

 

(46,783)

 

(41,227)

 

(68,845)

 

 

 

 

 

 

 

 

 

Effect of exchange rates on cash

 

(689)

 

57

 

307

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

Net increase/(decrease) for the period

 

97,485

 

(5,101)

 

(24,132)

 

Balance, beginning of the period

 

55,535

 

60,636

 

84,768

 

 

 

 

 

 

 

 

 

Balance, end of the period

 

  $

153,020

 

  $

55,535

 

  $

60,636

 

 

 

 

 

 

 

 

 

Supplemental cash flow disclosures

 

 

 

 

 

 

 

Cash paid for interest

 

  $

15,494

 

  $

19,166

 

  $

15,922

 

Cash paid for income tax, net of refunds

 

  $

665

 

  $

366

 

  $

689

 

 

 

 

 

 

 

 

 

Non-cash activities

 

 

 

 

 

 

 

Purchase of other intangibles

 

  $

-

 

  $

-

 

  $

1,500

 

 

6



 

GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES

RECONCILIATION OF NET INCOME TO CASH EARNINGS

AND OPERATING INCOME TO EBITDA AND ADJUSTED EBITDA

FOR THE QUARTERS ENDED AND FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011

(unaudited)

 

 

 

Three months ended December 31,

 

Twelve months ended December 31,

 

 

2012

 

2011

 

2012

 

2011

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

 

 

 

 

 

 

 

 

Net income

 

  $

  4,399

 

  $

  4,539

 

  $

  25,689

 

  $

  9,129

Equity compensation expense

 

2,704

 

1,572

 

6,655

 

6,809

Deferred income tax

 

1,820

 

5,160

 

14,376

 

9,252

Amortization

 

2,479

 

2,423

 

9,796

 

8,673

 

 

 

 

 

 

 

 

 

Cash earnings

 

  $

  11,402

 

  $

  13,694

 

  $

  56,516

 

  $

  33,863

 

 

 

 

 

 

 

 

 

Diluted weighted average number of common shares outstanding

 

67,996

 

65,227

 

67,337

 

64,859

 

 

 

 

 

 

 

 

 

Diluted cash earnings per share (“Cash EPS”)1

 

  $

  0.17

 

  $

  0.21

 

  $

  0.84

 

  $

  0.52

 

 

 

 

 

 

 

 

 

Reconciliation of operating income to EBITDA and Adjusted EBITDA

 

 

 

 

 

 

 

 

Operating income

 

  $

  9,681

 

  $

  14,240

 

  $

  55,982

 

  $

  38,296

Plus: depreciation and amortization

 

4,062

 

4,194

 

16,639

 

16,644

 

 

 

 

 

 

 

 

 

EBITDA

 

  $

  13,743

 

  $

  18,434

 

  $

  72,621

 

  $

  54,940

 

 

 

 

 

 

 

 

 

Equity compensation expense

 

2,704

 

1,572

 

6,655

 

6,809

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

  $

  16,447

 

  $

  20,006

 

  $

  79,276

 

  $

  61,749

 

Note:

1.  For the year ended December 31, 2011, there were approximately $4.2 million of non-recurring expenses that impacted Cash EPS by approximately $0.06.

 

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 PROJECTED YEAR ENDING DECEMBER 31, 2013

 

 

 

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.

 

8



 

GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES

OTHER INFORMATION AND DATA

FOR THE YEARS ENDED DECEMBER 31, 2012, 2011, AND 2010

(unaudited)

(amounts in thousands, unless otherwise noted)

 

 

 

For and At the Year Ended December 31,

 

 

2012

 

2011

 

2010

 

 

 

 

 

 

 

Selected segment information:

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

Cash advance

 

  $

227,517

 

  $

203,869

 

  $

244,139

ATM

 

303,159

 

283,727

 

314,627

Check services

 

25,401

 

26,269

 

28,357

Other

 

28,409

 

30,198

 

18,467

Corporate

 

-

 

-

 

-

Total revenues

 

  $

584,486

 

  $

544,063

 

  $

605,590

 

 

 

 

 

 

 

Operating income

 

 

 

 

 

 

Cash advance

 

  $

63,785

 

  $

38,468

 

  $

49,439

ATM

 

32,333

 

34,832

 

41,102

Check services

 

13,930

 

14,197

 

15,798

Other

 

14,457

 

14,808

 

11,398

Corporate

 

(68,523)

 

(64,009)

 

(65,107)

Total operating income

 

  $

55,982

 

  $

38,296

 

  $

52,630

 

 

 

At and For the Year Ended December 31,

 

 

2012

 

2011

 

2010

 

 

 

 

 

 

 

Other data (unaudited)

 

 

 

 

 

 

Aggregate dollar amount processed (in billions)

 

 

 

 

 

 

Cash advance

 

  $

4.8

 

  $

4.3

 

  $

5.0

ATM

 

  $

13.6

 

  $

12.2

 

  $

13.6

Check warranty

 

  $

1.2

 

  $

1.1

 

  $

1.1

Number of transactions completed (in millions)

 

 

 

 

 

 

Cash advance

 

9.0

 

8.4

 

10.1

ATM

 

72.3

 

68.8

 

78.3

Check warranty

 

4.3

 

4.4

 

4.9

 

9