Exhibit 99.1
Global Cash Access Reports Fourth Quarter and Fiscal Year 2009 Results
Announces $25 Million Share Repurchase Program
Announces $25 Million Share Repurchase Program
Las Vegas, NV — February 23, 2010 — Global Cash Access Holdings, Inc. (the “Company”) (NYSE:GCA) today announced financial results for the quarter and year ended December 31, 2009.
Fiscal Fourth Quarter 2009 Results
For the quarter ended December 31, 2009, revenues were $148.8 million, a decrease of 15.6% over the $176.3 million in revenues recorded in the same quarter last year. Revenues during the quarter were adversely impacted by the continued weakness in the gaming sector and consumer revolving credit. As a result of the weaker than expected revenue, operating income and cash earnings per share from continuing operations (“Cash EPS”) (see Non-GAAP Financial Information below) were down 13% and 11%, respectively.
The results for the quarter and the year include the receipt of $2.75 million related to the Visa Check/MasterMoney Antitrust Litigation which has been included in our operating results as a reduction in operating expense. The recognition of these proceeds contributed approximately $0.02 per share to the quarter on a GAAP basis. The fourth quarter of 2008 results of operations included approximately $0.4 million related to the same matter.
Fiscal Year 2009 Results
For the year ended December 31, 2009, revenues were $667.7 million, a decrease of 0.6% from the $671.6 million in revenues recorded in fiscal year 2008 while GAAP EPS and Cash EPS grew on a year over year basis by 25% and 7.6%, respectively.
“Clearly, conditions in the gaming industry remain challenging. While navigating through these difficult business conditions, we are very proud of our accomplishments in 2009 and are very excited about the future. We were able to maintain revenue near 2008 levels and grow earnings per share from continuing operations 25% through cost control and capital allocation measures. We believe that the Company’s regulatory and legal issues are now behind us, including a settlement of the securities class action litigation which is pending court approval. We now can refocus our attention on our pipeline of innovation, including product and service enhancements that will further strengthen our position as the leading provider of cash access solutions to the gaming industry,” said Scott Betts, President and Chief Executive Officer of Global Cash Access.
“We believe our recent client renewals and wins, including Wynn Resorts, are indicative of not only our unique offerings, strong service and value proposition, but our thought leadership and commitment to technological innovation. In 2009, we provided almost $22 billion in disbursements to gaming patrons and we are working diligently to transform the cash access relationship into a cashless gaming environment,” added Mr. Betts. “Given the continued cash generating capabilities of the Company, we are pleased to announce our Board of Directors recently authorized an additional $25 million share repurchase program.”
2010 Outlook
The Company continues to believe the timing and the extent of a recovery, if any, in the markets it serves remains unclear and further believes that this uncertainty will continue for the foreseeable future. The Company expects that revenue will be approximately flat to slightly down from the revenue reported in 2009. Diluted earnings per share from continuing operations are expected to be approximately comparable to the $0.45 reported in 2009 and cash earnings per share are expected to be $0.02 to $0.04 better than the $0.71 reported in 2009.
The foregoing expectations reflect the following assumptions:
• | An effective tax rate for the full year of approximately 38%; | ||
• | Cash outlays for capital expenditures of approximately $7 to $9 million; | ||
• | Fully diluted shares outstanding for the full year of approximately 69 to 71 million; and | ||
• | The acquisition of Western Money Systems will close towards the middle of the year. |
Investor Conference Call and Webcast
The Company will host an investor conference call to discuss its fourth quarter and fiscal year 2009 results today at 5:00 p.m. ET. The conference call can be accessed live over the phone by dialing (866) 788-0543 or for international callers (857) 350-1681; the conference ID is 76202378. 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 51240577. The call will be webcast live from the Company’s website atwww.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 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 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 all of the Company’s regulatory and legal issues are behind us; (b) our belief that refocusing our attention on our pipeline of innovation including product and service enhancements will further strengthen our position as the leading provider of cash access solutions to the gaming industry; (c) our belief that our recent client renewals and wins, including Wynn Resorts, are indicative of our unique offerings, strong service and value proposition, thought leadership and technological innovation, (d) our belief that timing and the extent of a recovery, if any, in the markets we serve remains unclear and that this uncertainty will continue for the foreseeable future; (e) our 2010 revenue, diluted earnings per share, and cash earnings per share expectations and the assumptions upon which they are based; (f) our expectation that our effective tax rate for the full year 2010 will be approximately 38%; (g) our expectation that cash outlays for capital expenditures will be between approximately $7 and $9 million; (h) our assumption that there will be approximately 69 to 71 million diluted shares outstanding; (i) our belief that our acquisition of Western Money Systems will close towards the middle of the year and (j) our belief that EBITDA, adjusted EBITDA, and Cash EPS are widely-referenced financial measures in the financial markets and our belief that references to the foregoing is 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 delay or prohibit a final settlement of the securities class action litigation; (b) unexpected events that may delay or prohibit our proposed technology, including licensing and regulatory issues or unexpected changes in the market place,; (c) unexpected changes in the market and economic conditions; (d) reduced demand for or increased competition with our products and services that affects our 2010 revenue, diluted earnings per share, cash earnings per share and EBITDA;
(e) unexpected events that may require us to incur additional expense investment in our platforms; (f) unexpected adjustments to average 30-day LIBOR or the amount of outstanding balances subject to 30-day LIBOR; (g) with respect to our expectation that our effective tax rate will be approximately 38% for the full year 2010 (i) incurrence of expenses that are not deductible for tax purposes, and (ii) the entry into business lines or foreign countries with tax structures different from the ones we are currently subject to; (h) unexpected events that may require capital expenditures to materially differ from those expected; and (i) unanticipated share issuances or redemptions, and (i) inaccuracies in our assumptions as to the financial measures that investors use or the manner in which such financial measures 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) on March 13, 2009 and our subsequent 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., 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, Central America 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 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 Web site atwww.gcainc.com.
CONTACT:
Investor Relations | Media Relations | |
Don Duffy, ICR | Liz Brady, ICR | |
203-682-8215 | 646-277-1226 | |
IR@gcamail.com | lbrady@icrinc.com |
GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except par value)
(unaudited)
CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except par value)
(unaudited)
12/31/2009 | 12/31/2008 | |||||||
ASSETS | ||||||||
Cash | $ | 84,768 | $ | 77,148 | ||||
Restricted cash and cash equivalents | 369 | 388 | ||||||
Settlement receivables | 11,001 | 51,604 | ||||||
Other receivables, net | 24,523 | 16,759 | ||||||
Prepaid and other assets | 10,415 | 11,867 | ||||||
Assets held for sale | — | 1,540 | ||||||
Property, equipment and leasehold improvements, net | 19,419 | 24,419 | ||||||
Goodwill, net | 174,354 | 183,929 | ||||||
Other intangibles, net | 28,154 | 34,982 | ||||||
Deferred income taxes, net | 148,764 | 156,514 | ||||||
Total assets | $ | 501,767 | $ | 559,150 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY | ||||||||
LIABILITIES | ||||||||
Settlement liabilities | $ | 61,313 | $ | 79,150 | ||||
Accounts payable | 28,482 | 35,561 | ||||||
Accrued expenses | 16,813 | 17,811 | ||||||
Borrowings | 249,750 | 265,750 | ||||||
Total liabilities | 356,358 | 398,272 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
STOCKHOLDERS’ EQUITY | ||||||||
Common stock, $0.001 par value, 500,000 shares authorized and 68,981 and 74,944 shares issued at December 31, 2009 and 2008, respectively | 83 | 83 | ||||||
Preferred stock, $0.001 par value, 50,000 shares authorized and 0 shares outstanding at December 31, 2009 and 2008, respectively. | — | — | ||||||
Additional paid in capital | 183,486 | 172,119 | ||||||
Retained earnings | 71,302 | 37,659 | ||||||
Accumulated other comprehensive income | 2,190 | 1,243 | ||||||
Treasury stock, at cost, 15,404 and 6,017 shares at December 31, 2009 and 2008, respectively. | (111,564 | ) | (50,226 | ) | ||||
Total Global Cash Access Holdings, Inc. stockholders’ equity | 145,497 | 160,878 | ||||||
Minority interest | (88 | ) | — | |||||
Total stockholders’ equity | 145,409 | 160,878 | ||||||
Total liabilities and stockholders’ equity | $ | 501,767 | $ | 559,150 | ||||
GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(amounts in thousands, except per share)
(unaudited)
CONSOLIDATED STATEMENTS OF INCOME
(amounts in thousands, except per share)
(unaudited)
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
REVENUES: | ||||||||||||||||
Cash advance | $ | 63,415 | $ | 82,156 | $ | 289,314 | $ | 326,476 | ||||||||
ATM | 73,368 | 78,452 | 325,953 | 289,122 | ||||||||||||
Check services | 7,734 | 10,887 | 38,525 | 42,366 | ||||||||||||
Central Credit and other revenues | 4,239 | 4,761 | 13,928 | 13,644 | ||||||||||||
Total revenues | 148,756 | 176,256 | 667,720 | 671,608 | ||||||||||||
Cost of revenue | 111,147 | 130,748 | 501,810 | 492,974 | ||||||||||||
Operating expenses | 17,283 | 22,281 | 76,005 | 83,962 | ||||||||||||
Amortization | 1,901 | 2,605 | 8,113 | 7,151 | ||||||||||||
Depreciation | 2,400 | 2,173 | 9,738 | 8,875 | ||||||||||||
OPERATING INCOME | 16,025 | 18,449 | 72,054 | 78,646 | ||||||||||||
INTEREST INCOME (EXPENSE), NET | ||||||||||||||||
Interest income | 41 | 494 | 303 | 2,229 | ||||||||||||
Interest expense | (4,378 | ) | (7,083 | ) | (18,263 | ) | (30,117 | ) | ||||||||
Total interest income (expense), net | (4,337 | ) | (6,589 | ) | (17,960 | ) | (27,888 | ) | ||||||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAX PROVISION | 11,688 | 11,860 | 54,094 | 50,758 | ||||||||||||
INCOME TAX PROVISION | 4,442 | 7,373 | 20,556 | 23,349 | ||||||||||||
INCOME FROM CONTINUING OPERATIONS, NET OF TAX BEFORE MINORITY OWNERSHIP LOSS | 7,246 | 4,487 | 33,538 | 27,409 | ||||||||||||
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX | — | 67 | 44 | (3,939 | ) | |||||||||||
NET INCOME ATTRIBUTABLE TO GCA HOLDINGS, INC. | 7,246 | 4,554 | 33,582 | 23,470 | ||||||||||||
MINORITY OWNERSHIP LOSS, NET OF TAX | 11 | — | 56 | 86 | ||||||||||||
NET INCOME | 7,257 | 4,554 | 33,638 | 23,556 | ||||||||||||
Foreign currency translation, net of tax | 151 | (1,058 | ) | 947 | (1,465 | ) | ||||||||||
COMPREHENSIVE INCOME | $ | 7,408 | $ | 3,496 | $ | 34,585 | $ | 22,091 | ||||||||
Basic net income per share of common stock | ||||||||||||||||
Continuing operations | $ | 0.10 | $ | 0.06 | $ | 0.45 | $ | 0.36 | ||||||||
Discontinued operations | $ | — | $ | — | $ | — | $ | (0.05 | ) | |||||||
Basic net income per share of common stock | $ | 0.10 | $ | 0.06 | $ | 0.45 | $ | 0.31 | ||||||||
Diluted net income per share of common stock | ||||||||||||||||
Continuing operations | $ | 0.10 | $ | 0.06 | $ | 0.45 | $ | 0.36 | ||||||||
Discontinued operations | $ | — | $ | — | $ | — | $ | (0.05 | ) | |||||||
Diluted net income per share of common stock | $ | 0.10 | $ | 0.06 | $ | 0.45 | $ | 0.31 | ||||||||
Weighted average number of common shares outstanding | ||||||||||||||||
Basic | 69,800 | 76,745 | 74,232 | 76,787 | ||||||||||||
Diluted | 71,353 | 76,755 | 75,356 | 76,796 |
GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands, except per share)
(unaudited)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands, except per share)
(unaudited)
Three months ended | Twelve months ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||||
Net income | $ | 7,246 | $ | 4,603 | $ | 33,582 | $ | 23,470 | ||||||||
Adjustments to reconcile net income to cash provided by operating activities: | ||||||||||||||||
Amortization of financing costs | 244 | 244 | 973 | 973 | ||||||||||||
Amortization of intangibles | 1,900 | 2,256 | 8,196 | 6,802 | ||||||||||||
Depreciation | 2,402 | 2,716 | 9,740 | 9,418 | ||||||||||||
Loss on sale of or disposal of assets | 113 | — | 139 | |||||||||||||
Provision for bad debt | 2,003 | 3,367 | 7,955 | 17,565 | ||||||||||||
Deferred income taxes | 7,220 | 7,194 | 19,578 | 20,677 | ||||||||||||
Stock-based compensation | 2,251 | 2,360 | 8,454 | 9,050 | ||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||
Settlement receivables | (37,584 | ) | (12,777 | ) | 9,220 | 16,425 | ||||||||||
Receivables other, net | (9,596 | ) | 13,515 | (11,850 | ) | 4,281 | ||||||||||
Prepaid and other assets | 490 | (474 | ) | 577 | (1,400 | ) | ||||||||||
Settlement liabilities | 55,588 | 29,953 | 13,505 | (30,649 | ) | |||||||||||
Accounts payable | (3,517 | ) | (267 | ) | (7,528 | ) | 8,393 | |||||||||
Accrued expenses | 3,377 | (6,423 | ) | (1,578 | ) | (13,681 | ) | |||||||||
Net cash provided by operating activities | 32,137 | 46,267 | 90,963 | 71,324 | ||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||
Certegy Gaming acquisition, net of cash | — | 4,036 | — | (20,783 | ) | |||||||||||
Cash Systems, Inc. acquisition, net of cash | (38 | ) | (182 | ) | (38 | ) | (30,098 | ) | ||||||||
Purchase of property, equipment and leasehold improvements and other intangibles | (1,919 | ) | (1,283 | ) | (7,216 | ) | (8,819 | ) | ||||||||
Change in restricted cash and cash equivalents | 37 | (2 | ) | 19 | 992 | |||||||||||
Net cash used in investing activities | (1,920 | ) | 2,569 | (7,235 | ) | (58,708 | ) | |||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||
Borrowings under credit facility | — | — | — | 121,000 | ||||||||||||
Repayments under credit facility | (250 | ) | (30,250 | ) | (16,000 | ) | (118,730 | ) | ||||||||
Proceeds from exercise of stock options | 292 | — | 2,913 | |||||||||||||
Purchase of treasury stock | (19,310 | ) | (25 | ) | (61,338 | ) | (9,487 | ) | ||||||||
Cash flow from financing activities | (19,268 | ) | (30,275 | ) | (74,425 | ) | (7,217 | ) | ||||||||
Exchange rate impact | 107 | (806 | ) | (1,683 | ) | 686 | ||||||||||
Change in cash | 11,056 | 17,755 | 7,620 | 6,085 | ||||||||||||
Cash beginning of period | 73,712 | 59,393 | 77,148 | 71,063 | ||||||||||||
Cash end of period | $ | 84,768 | $ | 77,148 | $ | 84,768 | $ | 77,148 | ||||||||
GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES
Reconciliation of Diluted Cash Earnings Per Share to Diluted Earnings Per Share
from Continuing Operations, and Operating Income to EBITDA
(amounts in thousands)
(unaudited)
Reconciliation of Diluted Cash Earnings Per Share to Diluted Earnings Per Share
from Continuing Operations, and Operating Income to EBITDA
(amounts in thousands)
(unaudited)
Three months ended | Twelve months ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Reconciliation of income from continuing operations to diluted cash earning | ||||||||||||||||
Income from continuing operations | $ | 7,246 | $ | 4,487 | $ | 33,538 | $ | 27,409 | ||||||||
Plus: deferred tax amortization related to acquired goodwill | 4,969 | 10,246 | 19,874 | 23,349 | ||||||||||||
Cash earnings | $ | 12,215 | $ | 14,733 | $ | 53,412 | $ | 50,758 | ||||||||
Diluted cash earnings per share from continuing operations | $ | 0.17 | $ | 0.19 | $ | 0.71 | $ | 0.66 | ||||||||
Reconciliation of operating income to EBITDA Operating income | $ | 16,025 | $ | 18,449 | $ | 72,054 | $ | 78,646 | ||||||||
Plus: amortization | 1,901 | 2,605 | 8,113 | 7,151 | ||||||||||||
depreciation | 2,400 | 2,173 | 9,738 | 8,875 | ||||||||||||
EBITDA | $ | 20,326 | $ | 23,227 | $ | 89,905 | $ | 94,672 | ||||||||
Equity compensation expense | 2,251 | 2,360 | 8,454 | 9,050 | ||||||||||||
Adjusted EBITDA | $ | 22,577 | $ | 25,587 | $ | 98,359 | $ | 103,722 | ||||||||
Weighted average number of common shares outstanding | ||||||||||||||||
Diluted | 71,353 | 76,755 | 75,356 | 76,796 | ||||||||||||
Other Data (unaudited) | ||||||||||||||||
Aggregate dollar amount processed (in billions) | ||||||||||||||||
Cash advance | $ | 1.3 | $ | 1.6 | $ | 5.7 | $ | 6.5 | ||||||||
ATM | $ | 3.2 | $ | 3.6 | $ | 14.5 | $ | 14.0 | ||||||||
Check warranty | $ | 0.3 | $ | 0.5 | $ | 1.5 | $ | 1.8 | ||||||||
Number of transactions completed (in millions) | ||||||||||||||||
Cash advance | 2.6 | 3.1 | 11.7 | 12.2 | ||||||||||||
ATM | 18.7 | 20.6 | 83.4 | 77.4 | ||||||||||||
Check warranty | 1.3 | 1.7 | 6.3 | 6.5 |