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Delaware | 6199 | 20-0723270 | ||
(State or other jurisdiction of incorporation or organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification Number) |
Paul “Chip” L. Lion III Timothy J. Harris Morrison & Foerster LLP 755 Page Mill Road Palo Alto, California 94304-1018 | Kathryn S. Lever General Counsel Global Cash Access Holdings, Inc. 3525 East Post Road, Suite 120 Las Vegas, Nevada 89120 | Patrick A. Pohlen Andrew S. Williamson Latham & Watkins LLP 140 Scott Drive Menlo Park, California 94025 |
Proposed Maximum | Proposed Maximum | Amount of | ||||||||||
Title of Each Class of | Amount to be | Offering Price | Aggregate | Registration | ||||||||
Securities to be Registered | Registered(1) | Per Share | Offering Price(2) | Fee(3) | ||||||||
Common Stock, $0.001 par value | 11,960,000 shares | $17.10 | $204,516,000 | $21,883.21(4) | ||||||||
(1) | Includes 1,560,000 shares of common stock subject to the underwriters’ over-allotment option to purchase additional shares. |
(2) | Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(a) under the Securities Act of 1933, as amended. |
(3) | Calculated pursuant to Rule 457(c) under the Securities Act of 1933, as amended, based on the average of the high and low trading prices for the common stock on the New York Stock Exchange on May 9, 2006. |
(4) | Previously paid. |
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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities in any jurisdiction where the offer or sale is not permitted. |
Underwriting | Proceeds to | |||||||||||
discounts and | the selling | |||||||||||
Price to public | commissions | stockholders | ||||||||||
Per Share | $ | $ | $ | |||||||||
Total | $ | $ | $ | |||||||||
Bear, Stearns & Co. Inc. | Cowen and Company | Deutsche Bank Securities |
Banc of America Securities LLC | Citigroup | Wachovia Securities |
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F-1 | ||||||||
EXHIBIT 1.1 | ||||||||
EXHIBIT 5.1 | ||||||||
EXHIBIT 23.1 |
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Common stock offered by the selling stockholders | 10,400,000 shares(1) | |
Common stock outstanding after this offering | 82,184,965 shares | |
Use of proceeds | We will not receive any proceeds from the sale of our common stock by the selling stockholders in the offering. | |
New York Stock Exchange symbol | GCA | |
Risk Factors | See “Risk factors” beginning on page 7 of this prospectus for a discussion of factors that you should carefully consider before deciding to invest in shares of our common stock. | |
Dividend policy | We do not anticipate paying any dividends on our common stock in the foreseeable future. |
• | based this information on the shares outstanding as of March 31, 2006, excluding: |
• | 4,119,995 shares of common stock issuable upon exercise of outstanding options; and | |
• | 1,536,830 shares of common stock available for future issuance pursuant to our stock incentive plan; |
• | assumed no grant or exercise of options after March 31, 2006; and |
• | assumed no exercise of the underwriters’ option to purchase additional shares. |
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For three months | |||||||||||||||||||||||||||||
For the years ended December 31, | ended March 31, | ||||||||||||||||||||||||||||
(in thousands except per share) | 2001(1) | 2002 | 2003 | 2004 | 2005 | 2005 | 2006 | ||||||||||||||||||||||
Income statement data: | |||||||||||||||||||||||||||||
Revenues | |||||||||||||||||||||||||||||
Cash advance | $ | 174,787 | $ | 182,754 | $ | 186,547 | $ | 209,962 | $ | 235,055 | $ | 56,778 | $ | 67,055 | |||||||||||||||
ATM | 110,074 | 119,424 | 132,341 | 158,433 | 182,291 | 43,773 | 53,160 | ||||||||||||||||||||||
Check services | 26,614 | 29,412 | 26,326 | 23,768 | 26,376 | 6,309 | 7,244 | ||||||||||||||||||||||
Central credit and other | 10,152 | 10,303 | 10,500 | 10,840 | 10,358 | 2,806 | 2,376 | ||||||||||||||||||||||
Total revenues | 321,627 | 341,893 | 355,714 | 403,003 | 454,080 | 109,666 | 129,835 | ||||||||||||||||||||||
Cost of revenues (exclusive of depreciation and amortization) | (203,274 | ) | (216,658 | ) | (232,463 | ) | (270,112 | ) | (309,002 | ) | (72,465 | ) | (91,351 | ) | |||||||||||||||
Operating expenses | (54,270 | ) | (57,649 | ) | (45,430 | ) | (45,322 | ) | (50,685 | ) | (12,013 | ) | (15,290 | ) | |||||||||||||||
Depreciation and amortization | (16,838 | ) | (11,820 | ) | (14,061 | ) | (13,548 | ) | (12,109 | ) | (3,316 | ) | (2,567 | ) | |||||||||||||||
Operating income | 47,245 | 55,766 | 63,760 | 74,021 | 82,284 | 21,872 | 20,627 | ||||||||||||||||||||||
Interest expense, net(2) | (5,082 | ) | (4,933 | ) | (5,450 | ) | (32,025 | ) | (51,879 | ) | (10,481 | ) | (9,693 | ) | |||||||||||||||
Income before income tax (provision) benefit and minority ownership loss | 42,163 | 50,833 | 58,310 | 41,996 | 30,405 | 11,391 | 10,934 | ||||||||||||||||||||||
Income tax (provision) benefit | (442 | ) | (1,451 | ) | (321 | ) | 212,346 | (8,032 | ) | (4,083 | ) | (4,007 | ) | ||||||||||||||||
Income before minority ownership loss | 41,721 | 49,382 | 57,989 | 254,342 | 22,373 | 7,308 | 6,927 | ||||||||||||||||||||||
Minority ownership loss, net of tax(3) | 420 | 1,040 | 400 | 213 | 218 | 32 | 36 | ||||||||||||||||||||||
Net income | $ | 42,141 | $ | 50,422 | $ | 58,389 | $ | 254,555 | $ | 22,591 | $ | 7,340 | $ | 6,963 | |||||||||||||||
Earnings per share: | |||||||||||||||||||||||||||||
Basic | $ | 1.30 | $ | 1.57 | $ | 1.81 | $ | 7.91 | $ | 0.49 | $ | 0.23 | $ | 0.09 | |||||||||||||||
Diluted | $ | 0.58 | $ | 0.71 | $ | 0.82 | $ | 3.56 | $ | 0.30 | $ | 0.10 | $ | 0.09 | |||||||||||||||
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For three months | |||||||||||||||||||||||||||||
For the years ended December 31, | ended March 31, | ||||||||||||||||||||||||||||
(in thousands except per share) | 2001(1) | 2002 | 2003 | 2004 | 2005 | 2005 | 2006 | ||||||||||||||||||||||
Weighted average number of common shares outstanding: | |||||||||||||||||||||||||||||
Basic | 32,175 | 32,175 | 32,175 | 32,175 | 45,643 | 32,175 | 81,556 | ||||||||||||||||||||||
Diluted | 71,500 | 71,500 | 71,500 | 71,566 | 74,486 | 71,699 | 81,556 | ||||||||||||||||||||||
For the years ended December 31, | |||||||||||||||||
(in thousands except per share) | 2001(1) | 2002 | 2003 | 2004 | |||||||||||||
Pro forma computation related to conversion to corporation for tax purposes: | |||||||||||||||||
Income before provision for income taxes and minority ownership loss — historical | $ | 42,163 | $ | 50,833 | $ | 58,310 | $ | 41,996 | |||||||||
Income tax provision — historical, exclusive of one-time tax benefit(4) | (442 | ) | (1,451 | ) | (321 | ) | (10,519 | ) | |||||||||
Pro forma income tax provision — unaudited(5) | (16,154 | ) | (16,940 | ) | (20,741 | ) | (4,600 | ) | |||||||||
Minority ownership loss — historical | 420 | 1,040 | 400 | 213 | |||||||||||||
Pro forma net income | $ | 25,987 | $ | 33,482 | $ | 37,648 | $ | 27,090 | |||||||||
Pro forma earnings per share: | |||||||||||||||||
Basic | $ | 0.81 | $ | 1.04 | $ | 1.17 | $ | 0.84 | |||||||||
Diluted | $ | 0.36 | $ | 0.47 | $ | 0.53 | $ | 0.38 | |||||||||
Weighted average number of common shares outstanding: | |||||||||||||||||
Basic | 32,175 | 32,175 | 32,175 | 32,175 | |||||||||||||
Diluted | 71,500 | 71,500 | 71,500 | 71,566 | |||||||||||||
As of December 31, | As of March 31, | ||||||||||||||||||||||||
(in thousands) | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | |||||||||||||||||||
Balance Sheet Data: (at end of period) | |||||||||||||||||||||||||
Cash and cash equivalents | $ | 37,500 | $ | 57,584 | $ | 23,423 | $ | 49,577 | $ | 35,123 | $ | 47,247 | |||||||||||||
Total assets | 276,207 | 287,039 | 243,627 | 496,625 | 510,418 | 483,279 | |||||||||||||||||||
Total borrowings | — | — | — | 478,250 | 321,412 | 319,101 | |||||||||||||||||||
Stockholders’ (deficiency) equity and members’ capital | 205,202 | 202,271 | 199,247 | (56,779 | ) | 94,484 | 103,612 | ||||||||||||||||||
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For the years ended | |||||||||||||||||||||
December 31, | Three months ended | ||||||||||||||||||||
March 31, | March 31, | ||||||||||||||||||||
2003 | 2004 | 2005 | 2005 | 2006 | |||||||||||||||||
Other data: | |||||||||||||||||||||
Aggregate dollar amount processed (in billions): | |||||||||||||||||||||
Cash advance | $ | 3.8 | $ | 4.2 | $ | 4.7 | $ | 1.1 | $ | 1.4 | |||||||||||
ATM | $ | 6.9 | $ | 8.4 | $ | 9.9 | 2.4 | 2.9 | |||||||||||||
Check warranty | $ | 1.0 | $ | 0.9 | $ | 1.1 | $ | 0.3 | $ | 0.3 | |||||||||||
Number of transactions completed (in millions): | |||||||||||||||||||||
Cash advance | 8.1 | 8.8 | 9.1 | 2.3 | 2.5 | ||||||||||||||||
ATM | 45.7 | 53.2 | 58.9 | 14.3 | 16.7 | ||||||||||||||||
Check warranty | 4.9 | 4.3 | 4.7 | 1.1 | 1.3 | ||||||||||||||||
For the years ended December 31, | 2001 | 2002 | 2003 | 2004 | ||||||||||||
Income before income taxes, as reported | $ | 42,163 | $ | 50,833 | $ | 58,310 | $ | 41,996 | ||||||||
Effective pro forma income tax rate | 39.36% | 36.18% | 36.12% | 36.00% | ||||||||||||
Pro forma income tax expense | $ | 16,596 | $ | 18,391 | $ | 21,062 | $ | 15,119 | ||||||||
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• | makes it more difficult for us to satisfy our obligations with respect to either our senior secured debt or our senior subordinated notes, which, if we fail to do, could result in the acceleration of all of our debt; |
• | increases our vulnerability to general adverse economic and industry conditions; |
• | requires us to dedicate a substantial portion (in the case of our senior secured debt, up to 75% of our excess cash flow, depending upon our total leverage ratio) of our cash flow from operations to payments on our indebtedness, which would reduce the availability of our cash flow to fund working capital, capital expenditures, expansion efforts and other general corporate purposes; |
• | limits our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; |
• | restricts our ability to pay dividends or repurchase our common stock; |
• | places us at a competitive disadvantage compared to our competitors that have less debt; |
• | prohibits us from acquiring businesses or technologies that would benefit our business; |
• | restricts our ability to engage in transactions with affiliates or create liens or guarantees; and |
• | limits, along with the financial and other restrictive covenants in our other indebtedness, among other things, our ability to borrow additional funds. |
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• | difficulty integrating the technologies, operations and personnel from the acquired business; |
• | overestimation of potential synergies or a delay in realizing those synergies; |
• | disruption to our ongoing business, including the diversion of management’s attention and of resources from our principal business; |
• | inability to obtain the desired financial and strategic benefits from the acquisition or investment; |
• | loss of customers of an acquired business; |
• | assumption of unanticipated liabilities; |
• | loss of key employees of an acquired business; and |
• | entering into new markets in which we have limited prior experience. |
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• | our failure to maintain our current customers, including because of consolidation in the gaming industry; |
• | increases in commissions paid to gaming establishments as a result of competition; |
• | increases in interchange rates or processing or other fees paid by us or decreases in reverse interchange rates; |
• | actual or anticipated fluctuations in our or our competitors’ revenue, operating results or growth rate; |
• | our inability to adequately protect or enforce our intellectual property rights; |
• | any adverse results in litigation initiated by us or by other against us; |
• | our inability to make payments on our outstanding indebtedness as they become due or our inability to undertake actions that might otherwise benefit us based on the financial and other restrictive covenants contained in our senior secured credit facilities and the indenture for our senior subordinated notes; |
• | the loss of a significant supplier or strategic partner, or the failure of a significant supplier or strategic partner to provide the goods or services that we rely on them for; |
• | our inability to introduce successful, new products and services in a timely manner or the introduction of new products or services by our competitors that reduce the demand for our products and services; |
• | our failure to successfully enter new markets or the failure or new markets to develop in the time and manner that we anticipate; |
• | announcements by our competitors of significant new contracts or contract renewals or of new products or services; |
• | changes in general economic conditions, financial markets, the gaming industry or the payments processing industry; |
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• | the trading volume of our common stock; |
• | sales of common stock or other actions by our current officers, directors and stockholders; |
• | acquisitions, strategic alliances or joint ventures involving us or our competitors; |
• | future sales of our common stock or other securities; |
• | the failure of securities analysts to cover our common stock after this offering or changes in financial estimates or recommendations by analysts; |
• | our failure to meet the revenue, net income or earnings per share estimates of securities analysts or investors; |
• | additions or departures of key personnel; |
• | terrorist acts, theft, vandalism, fires, floods or other natural disasters; and |
• | rumors or speculation as to any of the above which we may be unable to confirm or deny due to disclosure restrictions imposed on us by law or which we otherwise deem imprudent to comment upon. |
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• | divide our board of directors into three separate classes serving staggered three-year terms, which will have the effect of requiring at least two annual stockholder meetings instead of one, to replace a majority of our directors, which could have the effect of delaying of preventing a change in our control or management; |
• | provide that special meetings of stockholders can only be called by our Board of Directors, chairman of the board or chief executive officer. In addition, the business permitted to be conducted at any special meeting of stockholders is limited to the business specified in the notice of such meeting to the stockholders; |
• | provide for an advance notice procedure with regard to business to be brought before a meeting of stockholders which may delay or preclude stockholders from bringing matters before a meeting of stockholders or from making nominations for directors at a meeting of stockholders, which could delay or deter takeover attempts or changes in management; |
• | eliminate the right of stockholders to act by written consent so that all stockholder actions must be effected at a duly called meeting; |
• | provide that directors may only be removed for cause with the approval of stockholders holding a majority of our outstanding voting stock; |
• | provide that vacancies on our Board of Directors may be filled by a majority, although less than a quorum, of directors in office and that our Board of Directors may fix the number of directors by resolution; |
• | allow our Board of Directors to issue shares of preferred stock with rights senior to those of the common stock and that otherwise could adversely affect the rights and powers, including voting rights and the right to approve or not to approve an acquisition or other change in control, of the holders of common stock, without any further vote or action by the stockholders; and |
• | do not provide for cumulative voting for our directors, which may make it more difficult for stockholders owning less than a majority of our stock to elect any directors to our Board of |
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Directors. In addition, we are also subject to Section 203 of the Delaware General Corporation Law, which provides, subject to enumerated exceptions, that if a person acquires 15% or more of our voting stock, the person is an “interested stockholder” and may not engage in “business combinations” with us for a period of three years from the time the person acquired 15% or more of our voting stock. |
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Year ended | ||||||||
December 31, 2005 | ||||||||
High | Low | |||||||
Third Quarter (commencing September 23, 2005) | $ | 15.74 | $ | 14.00 | ||||
Fourth Quarter | 15.13 | 12.25 | ||||||
Year ending | ||||||||
December 31, 2006 | ||||||||
High | Low | |||||||
First Quarter | $ | 17.90 | $ | 13.91 | ||||
Second Quarter (through May 23, 2006) | 19.75 | 16.20 | ||||||
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(in thousands except shares) (unaudited) | March 31, 2006 | ||||||
Long-term debt, including current portion: | |||||||
Senior secured credit facilities: | |||||||
Revolving credit facility | $ | — | |||||
Term loan | 166,351 | ||||||
Senior subordinated notes | 152,750 | ||||||
Total long-term debt, including current portion: | 319,101 | ||||||
Stockholders’ equity: | |||||||
Preferred stock, 50,000,000 shares authorized; no shares issued and outstanding | — | ||||||
Common stock, 500,000,000 shares authorized; 82,184,965 shares issued and outstanding | 82 | ||||||
Additional paid in capital | 130,998 | ||||||
Accumulated other comprehensive income | 1,779 | ||||||
Accumulated deficit | (29,247 | ) | |||||
Total stockholders’ equity | 103,612 | ||||||
Total capitalization | $ | 422,713 | |||||
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For three months | |||||||||||||||||||||||||||||
For the years ended December 31, | ended March 31, | ||||||||||||||||||||||||||||
(in thousands | |||||||||||||||||||||||||||||
except per share) | 2001(1) | 2002 | 2003 | 2004 | 2005 | 2005 | 2006 | ||||||||||||||||||||||
Income statement data: | |||||||||||||||||||||||||||||
Revenues | |||||||||||||||||||||||||||||
Cash advance | $ | 174,787 | $ | 182,754 | $ | 186,547 | $ | 209,962 | $ | 235,055 | $ | 56,778 | $ | 67,055 | |||||||||||||||
ATM | 110,074 | 119,424 | 132,341 | 158,433 | 182,291 | 43,773 | 53,160 | ||||||||||||||||||||||
Check services | 26,614 | 29,412 | 26,326 | 23,768 | 26,376 | 6,309 | 7,244 | ||||||||||||||||||||||
Central Credit and other | 10,152 | 10,303 | 10,500 | 10,840 | 10,358 | 2,806 | 2,376 | ||||||||||||||||||||||
Total revenues | 321,627 | 341,893 | 355,714 | 403,003 | 454,080 | 109,666 | 129,835 | ||||||||||||||||||||||
Cost of revenues (exclusive of depreciation and amortization) | (203,274 | ) | (216,658 | ) | (232,463 | ) | (270,112 | ) | (309,002 | ) | (72,465 | ) | (91,351 | ) | |||||||||||||||
Operating expenses | (54,270 | ) | (57,649 | ) | (45,430 | ) | (45,322 | ) | (50,685 | ) | (12,013 | ) | (15,290 | ) | |||||||||||||||
Depreciation and amortization | (16,838 | ) | (11,820 | ) | (14,061 | ) | (13,548 | ) | (12,109 | ) | (3,316 | ) | (2,567 | ) | |||||||||||||||
Operating income | 47,245 | 55,766 | 63,760 | 74,021 | 82,284 | 21,872 | 20,627 | ||||||||||||||||||||||
Interest expense, net(2) | (5,082 | ) | (4,933 | ) | (5,450 | ) | (32,025 | ) | (51,879 | ) | (10,481 | ) | (9,693 | ) | |||||||||||||||
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For three months | |||||||||||||||||||||||||||||
For the years ended December 31, | ended March 31, | ||||||||||||||||||||||||||||
(in thousands | |||||||||||||||||||||||||||||
except per share) | 2001(1) | 2002 | 2003 | 2004 | 2005 | 2005 | 2006 | ||||||||||||||||||||||
Income before income tax (provision) benefit and minority ownership loss | 42,163 | 50,833 | 58,310 | 41,996 | 30,405 | 11,391 | 10,934 | ||||||||||||||||||||||
Income tax (provision) benefit | (442 | ) | (1,451 | ) | (321 | ) | 212,346 | (8,032 | ) | (4,083 | ) | (4,007 | ) | ||||||||||||||||
Income before minority ownership loss | 41,721 | 49,382 | 57,989 | 254,342 | 22,373 | 7,308 | 6,927 | ||||||||||||||||||||||
Minority ownership loss, net of tax(3) | 420 | 1,040 | 400 | 213 | 218 | 32 | 36 | ||||||||||||||||||||||
Net income | $ | 42,141 | $ | 50,422 | $ | 58,389 | $ | 254,555 | $ | 22,591 | $ | 7,340 | $ | 6,963 | |||||||||||||||
Earnings per share: | |||||||||||||||||||||||||||||
Basic | $ | 1.30 | $ | 1.57 | $ | 1.81 | $ | 7.91 | $ | 0.49 | $ | 0.23 | $ | 0.09 | |||||||||||||||
Diluted | $ | 0.58 | $ | 0.71 | $ | 0.82 | $ | 3.56 | $ | 0.30 | $ | 0.10 | $ | 0.09 | |||||||||||||||
Weighted average number of common shares outstanding: | |||||||||||||||||||||||||||||
Basic | 32,175 | 32,175 | 32,175 | 32,175 | 45,643 | 32,175 | 81,556 | ||||||||||||||||||||||
Diluted | 71,500 | 71,500 | 71,500 | 71,566 | 74,486 | 71,699 | 81,556 | ||||||||||||||||||||||
Other data: | |||||||||||||||||||||||||||||
Net cash provided by operating activities | $ | 73,610 | $ | 81,964 | $ | 33,471 | $ | 75,212 | $ | 38,585 | $ | 7,773 | $ | 16,599 | |||||||||||||||
Net cash used in investing activities(6) | (6,295 | ) | (9,750 | ) | (7,047 | ) | (4,861 | ) | (17,860 | ) | (2,421 | ) | (2,495 | ) | |||||||||||||||
Net cash used in financing activities | (56,812 | ) | (52,333 | ) | (63,067 | ) | (43,950 | ) | (35,190 | ) | (31,220 | ) | (2,012 | ) | |||||||||||||||
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For the years ended December 31, | |||||||||||||||||
(in thousands except per share) | 2001(1) | 2002 | 2003 | 2004 | |||||||||||||
Pro forma computation related to conversion to corporation for tax purposes | |||||||||||||||||
Income before provision for income taxes and minority ownership loss— historical | $ | 42,163 | $ | 50,833 | $ | 58,310 | $ | 41,996 | |||||||||
Income tax provision— historical, exclusive of one-time tax benefit(4) | (442 | ) | (1,451 | ) | (321 | ) | (10,519 | ) | |||||||||
Pro forma income tax provision— unaudited(5) | (16,154 | ) | (16,940 | ) | (20,741 | ) | (4,600 | ) | |||||||||
Minority ownership loss— historical | 420 | 1,040 | 400 | 213 | |||||||||||||
Pro forma net income | $ | 25,987 | $ | 33,482 | $ | 37,648 | $ | 27,090 | |||||||||
Pro forma earnings per share: | |||||||||||||||||
Basic | $ | 0.81 | $ | 1.04 | $ | 1.17 | $ | 0.84 | |||||||||
Diluted | $ | 0.36 | $ | 0.47 | $ | 0.53 | $ | 0.38 | |||||||||
Weighted average number of common shares outstanding: | |||||||||||||||||
Basic | 32,175 | 32,175 | 32,175 | 32,175 | |||||||||||||
Diluted | 71,500 | 71,500 | 71,500 | 71,566 | |||||||||||||
As of December 31, | As of March 31, | ||||||||||||||||||||||||
(in thousands) | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | |||||||||||||||||||
Balance sheet data: | |||||||||||||||||||||||||
(at end of period) | |||||||||||||||||||||||||
Cash and cash equivalents | $ | 37,500 | $ | 57,584 | $ | 23,423 | $ | 49,577 | $ | 35,123 | $ | 47,247 | |||||||||||||
Total assets | 276,207 | 287,039 | 243,627 | 496,625 | 510,418 | 483,279 | |||||||||||||||||||
Total borrowings | — | — | — | 478,250 | 321,412 | 319,101 | |||||||||||||||||||
Stockholders’ (deficiency) equity and members’ capital | 205,202 | 202,271 | 199,247 | (56,779 | ) | 94,484 | 103,612 | ||||||||||||||||||
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For the years ended December 31, | ||||||||||||||||
2001 | 2002 | 2003 | 2004 | |||||||||||||
Income before income taxes, as reported | $ | 42,163 | $ | 50,833 | $ | 58,310 | $ | 41,996 | ||||||||
Effective pro forma income tax rate | 39.36% | 36.18% | 36.12% | 36.00% | ||||||||||||
Pro forma income tax expense | $ | 16,596 | $ | 18,391 | $ | 21,062 | $ | 15,119 | ||||||||
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Three Months Ended | ||||||||||||||||||
March 31, 2006 | March 31, 2005 | |||||||||||||||||
$ | % | $ | % | |||||||||||||||
REVENUES: | ||||||||||||||||||
Cash advance | $ | 67,055 | 51.6% | $ | 56,778 | 51.8% | ||||||||||||
ATM | 53,160 | 40.9% | 43,773 | 39.9% | ||||||||||||||
Check services | 7,244 | 5.6% | 6,309 | 5.8% | ||||||||||||||
Central Credit and other revenues | 2,376 | 1.8% | 2,806 | 2.6% | ||||||||||||||
Total revenues | 129,835 | 100.0% | 109,666 | 100.0% | ||||||||||||||
Cost of revenues (exclusive of depreciation and amortization) | (91,351 | ) | 70.4% | (72,465 | ) | 66.1% | ||||||||||||
Operating expenses | (15,290 | ) | 11.8% | (12,013 | ) | 11.0% | ||||||||||||
Amortization | (1,502 | ) | 1.2% | (1,364 | ) | 1.2% | ||||||||||||
Depreciation | (1,065 | ) | 0.8% | (1,952 | ) | 1.8% | ||||||||||||
OPERATING INCOME | 20,627 | 15.9% | 21,872 | 19.9% | ||||||||||||||
INTEREST INCOME (EXPENSE), NET | ||||||||||||||||||
Interest income | 555 | 0.4% | 451 | 0.4% | ||||||||||||||
Interest expense | (10,248 | ) | 7.9% | (10,932 | ) | 10.0% | ||||||||||||
Total interest income (expense), net | (9,693 | ) | 7.5% | (10,481 | ) | 9.6% | ||||||||||||
INCOME BEFORE INCOME TAX PROVISION AND MINORITY OWNERSHIP LOSS | 10,934 | 8.4% | 11,391 | 10.4% | ||||||||||||||
INCOME TAX PROVISION | (4,007 | ) | 3.1% | (4,083 | ) | 3.7% | ||||||||||||
INCOME BEFORE MINORITY OWNERSHIP LOSS | 6,927 | 5.3% | 7,308 | 6.7% | ||||||||||||||
MINORITY OWNERSHIP LOSS, net of tax | 36 | 0.0% | 32 | 0.0% | ||||||||||||||
NET INCOME | $ | 6,963 | 5.4% | $ | 7,340 | 6.7% | ||||||||||||
OTHER DATA: | ||||||||||||||||||
Aggregate dollar amount processed (in billions): | ||||||||||||||||||
Cash advance | $ | 1.4 | — | $ | 1.1 | — | ||||||||||||
ATM | 2.9 | — | 2.4 | — | ||||||||||||||
Check warranty | $ | 0.3 | — | $ | 0.3 | — | ||||||||||||
Number of transactions completed (in millions): | ||||||||||||||||||
Cash advance | 2.5 | — | 2.3 | — | ||||||||||||||
ATM | 16.7 | — | 14.3 | — | ||||||||||||||
Check warranty | 1.3 | — | 1.1 | — |
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December 31, 2005 | December 31, 2004 | |||||||||||||||||
$ | % | $ | % | |||||||||||||||
Revenues | ||||||||||||||||||
Cash advance | $ | 235,055 | 51.8% | $ | 209,962 | 52.1% | ||||||||||||
ATM | 182,291 | 40.1 | 158,433 | 39.3 | ||||||||||||||
Check services | 26,376 | 5.8 | 23,768 | 5.9 | ||||||||||||||
Central Credit and other revenues | 10,358 | 2.3 | 10,840 | 2.7 | ||||||||||||||
Total revenues | 454,080 | 100.0 | 403,003 | 100.0 | ||||||||||||||
Cost of revenues (exclusive of depreciation and amortization) | (309,002 | ) | (68.1 | ) | (270,112 | ) | (67.0 | ) | ||||||||||
Operating expenses | (50,685 | ) | (11.2 | ) | (45,322 | ) | (11.2 | ) | ||||||||||
Depreciation and amortization | (12,109 | ) | (2.7 | ) | (13,548 | ) | (3.4 | ) | ||||||||||
Operating income | 82,284 | 18.1 | 74,021 | 18.4 | ||||||||||||||
Interest income (expense), net | (51,879 | ) | (11.4 | ) | (32,025 | ) | (7.9 | ) | ||||||||||
Income before income tax (provision) benefit and minority ownership loss | 30,405 | 6.7 | 41,996 | 10.4 | ||||||||||||||
Income tax (provision) benefit | (8,032 | ) | (1.8 | ) | 212,346 | 52.7 | ||||||||||||
Income before minority ownership loss | 22,373 | 4.9 | 254,342 | 63.1 | ||||||||||||||
Minority ownership loss, net of tax | 218 | 0.0 | 213 | 0.1 | ||||||||||||||
Net income | $ | 22,591 | 5.0% | $ | 254,555 | 63.2% | ||||||||||||
Income before income tax (provision) benefit and minority ownership loss | $ | 41,996 | 10.4% | |||||||||||||||
Pro forma provision for income taxes | (15,119 | ) | (3.8 | ) | ||||||||||||||
Minority ownership loss, net of tax | 213 | 0.1 | ||||||||||||||||
Pro forma net income | $ | 27,090 | 6.7% | |||||||||||||||
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December 31, 2004 | December 31, 2003 | |||||||||||||||
$ | % | $ | % | |||||||||||||
Revenues | ||||||||||||||||
Cash advance | $ | 209,962 | 52.1% | $ | 186,547 | 52.4% | ||||||||||
ATM | 158,433 | 39.3 | 132,341 | 37.2 | ||||||||||||
Check services | 23,768 | 5.9 | 26,326 | 7.4 | ||||||||||||
Central Credit and other revenues | 10,840 | 2.7 | 10,500 | 3.0 | ||||||||||||
Total revenues | 403,003 | 100.0 | 355,714 | 100.0 | ||||||||||||
Cost of revenues (exclusive of depreciation and amortization) | (270,112 | ) | (67.0 | ) | (232,463 | ) | (65.4 | ) | ||||||||
Operating expenses | (45,322 | ) | (11.2 | ) | (45,430 | ) | (12.8 | ) | ||||||||
Depreciation and amortization | (13,548 | ) | (3.4 | ) | (14,061 | ) | (4.0 | ) | ||||||||
Operating income | 74,021 | 18.4 | 63,760 | 17.9 | ||||||||||||
Interest income (expense), net | (32,025 | ) | (7.9 | ) | (5,450 | ) | (1.5 | ) | ||||||||
Income before income tax benefit (provision) and minority ownership loss | 41,996 | 10.4 | 58,310 | 16.4 | ||||||||||||
Income tax benefit (provision) | 212,346 | 52.7 | (321 | ) | (0.1 | ) | ||||||||||
Income before minority ownership loss | 254,342 | 63.1 | 57,989 | 16.3 | ||||||||||||
Minority ownership loss, net of tax | 213 | 0.1 | 400 | 0.1 | ||||||||||||
Net income | $ | 254,555 | 63.2% | $ | 58,389 | 16.4% | ||||||||||
Income before income tax benefit (provision) and minority ownership loss | $ | 41,996 | 10.4% | $ | 58,310 | 16.4% | ||||||||||
Pro forma provision for income taxes | (15,119 | ) | (3.8 | ) | (21,062 | ) | (5.9 | ) | ||||||||
Minority ownership loss | 213 | 0.1 | 400 | 0.1 | ||||||||||||
Pro forma net income | $ | 27,090 | 6.7% | $ | 37,648 | 10.6% | ||||||||||
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Years ended | For three months | |||||||||||||||
December 31, | ended March 31, | |||||||||||||||
2005 | 2004 | 2006 | 2005 | |||||||||||||
Net cash provided by operating activities | $ | 38,585 | $ | 75,212 | $ | 16,599 | $ | 7,773 | ||||||||
Net cash used in investing activities | (17,860 | ) | (4,861 | ) | (2,495 | ) | (2,421 | ) | ||||||||
Net cash used in financing activities | (35,190 | ) | (43,950 | ) | (2,012 | ) | (31,220 | ) | ||||||||
Net effect of exchange rates on cash and cash equivalents | 11 | (247 | ) | 32 | 11 | |||||||||||
Net (decrease) increase in cash and cash equivalents | (14,454 | ) | 26,154 | 12,124 | (25,857 | ) | ||||||||||
Cash and cash equivalents— beginning of period | 49,577 | 23,423 | 35,123 | 49,577 | ||||||||||||
Cash and cash equivalents— end of period | $ | 35,123 | $ | 49,577 | $ | 47,247 | $ | 23,720 | ||||||||
As of | ||||||||||||
December 31, | March 31, | |||||||||||
2005 | 2004 | 2006 | ||||||||||
Cash and cash equivalents | $ | 35,123 | $ | 49,577 | $ | 47,247 | ||||||
Settlement receivables | 60,164 | 30,357 | 23,922 | |||||||||
Settlement liabilities | (59,782 | ) | (42,192 | ) | (23,997 | ) | ||||||
Net cash position | $ | 35,505 | $ | 37,742 | $ | 47,172 | ||||||
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• | the Applicable Margin over LIBOR on which our interest expense is based was reduced from 275 basis points to 225 basis points, with further reductions possible dependent on our leverage ratio and credit ratings. Based upon our leverage ratio at December 31, 2005 and an upgrade of our debt ratings by Moody’s Investors Service in January 2006, the Applicable Margin was reduced to 175 basis points as of April 7, 2006. Until April 14, 2006, we will be required to pay as a fee to Banc of America Securities, our agent with respect to the Amended Agreement, 50% of the savings in interest expense between what we would have paid under the terms of the original credit facility and what we actually pay. This fee for issuance costs will be paid monthly and is capitalized as part prepaid expenses, and amortized to interest expense in our financial statements; |
• | the Excess Cash Flow Sweep percentage reduces from 75% to 50% at leverage levels below 4.25x and is eliminated at leverage levels below 3.0x; |
• | the requirement to devote 50% of the net proceeds from our initial public offering to prepay borrowings under the Term Loan was eliminated; |
• | we became obligated to use a portion of the net proceeds from our initial public offering to redeem 35% of the senior subordinated notes at the redemption price specified in the Indenture governing the notes; and |
• | capital expenditures may not exceed $8 million per annum. |
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Contractual cash obligations | ||||||||||||||||||||
(amounts in thousands) | Total | 1 year | 2-3 years | 4-5 years | After 5 years | |||||||||||||||
Long-term debt | $ | 321,412 | $ | 9,242 | $ | 18,483 | $ | 140,937 | $ | 152,750 | ||||||||||
Estimated interest payments(1) | 143,402 | 28,420 | 55,037 | 39,897 | 20,048 | |||||||||||||||
Operating leases | 2,236 | 522 | 1,001 | 713 | 0 | |||||||||||||||
Purchase commitments(2) | 19,313 | 2,341 | 4,682 | 4,682 | 7,608 | |||||||||||||||
Total cash obligations | $ | 486,363 | $ | 40,525 | $ | 79,203 | $ | 186,229 | $ | 180,406 | ||||||||||
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Cash access products and services | Information services | Cashless gaming products | ||
• Casino Cash Plus 3-in-1 ATM | • Central Credit | • TODD | ||
• QuikCash | • QuikCash Plus Web | • EDITH | ||
• Automated Cashier Machine | • QuikReports | • 3-in-1 Enabled QuickJack Plus | ||
• Arriva Card | • QuikMarketing | |||
• Check verification and warranty | ||||
• QuikCredit | ||||
• Money transfers | ||||
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Name | Age | Position | ||
Karim Maskatiya | 53 | Co-Founder, Co-Chairman and Director | ||
Robert Cucinotta | 45 | Co-Founder and Director | ||
Kirk Sanford | 39 | President, Chief Executive Officer and Director | ||
Harry C. Hagerty | 45 | Executive Vice President, Chief Financial Officer and Secretary | ||
Diran Kludjian | 49 | Executive Vice President, Sales | ||
Kathryn S. Lever | 37 | Executive Vice President and General Counsel | ||
Kurt Sullivan | 54 | Executive Vice President, Check Services and Central Credit | ||
Thomas Sears | 47 | Executive Vice President, Card Services and Cashless Gaming | ||
Walter G. Kortschak | 47 | Co-Chairman and Director | ||
Charles J. Fitzgerald | 39 | Director | ||
E. Miles Kilburn | 43 | Director | ||
William H. Harris | 50 | Director | ||
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• | Class I, whose term will expire at the annual meeting of the stockholders to be held in 2009, which is comprised of Messrs. Sanford, Kilburn and Harris; |
• | Class II, whose term will expire at the annual meeting of the stockholders to be held in 2007, which is comprised of Messrs. Cucinotta and Fitzgerald; and |
• | Class III, whose term will expire at the annual meeting of stockholders to be held in 2008, which is comprised of Messrs. Maskatiya and Kortschak. |
• | reviewing policies and procedures adopted by management regarding fair and accurate presentation of financial statements in accordance with generally accepted accounting principles and applicable rules and regulations of the SEC; |
• | overseeing our accounting and financial reporting processes, overseeing audits of our financial statements and reviewing the Company’s audited financial statements with management, including a review of major issues regarding accounting and auditing principles and practices, and evaluating the adequacy and effectiveness of internal controls that could significantly affect the Company’s financial statements, as well as the adequacy and effectiveness of the Company’s disclosure controls and procedures and management’s reports thereon; |
• | reviewing and discussing reports from our independent auditor regarding: (a) all critical accounting policies and practices to be used by the Company; (b) all alternative treatments of |
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financial information within GAAP that have been discussed with management; and (c) other material written communications between our independent auditor and management; | |
• | reviewing major changes to the Company’s auditing and accounting principles and practices as suggested by the our independent auditor, internal auditors or management, and reviewing the significant reports to management prepared by the Company’s internal auditing department and management’s responses; |
• | establishing procedures for: (a) the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters; and (b) the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters; |
• | advising the board of directors with respect to the Company’s policies and procedures regarding compliance with applicable laws and regulations; and |
• | overseeing the work of the registered public accounting firm engaged in audit, review or attest services for the Company, overseeing the appointment, compensation and retention of the registered public accounting firm, and overseeing and ensuring the independence of our independent auditor, and reviewing and pre-approving of all audit services and permissible non-audit services to be performed by our independent auditor. |
• | assisting the board of directors in discharging its responsibilities relating to compensation of our directors and executive officers; |
• | reviewing and approving goals and objectives for Chief Executive Officer compensation and recommending to the board of directors non-Chief Executive Officer compensation and incentive compensation plans and equity based plans that are subject to board of directors approval; |
• | administering our incentive compensation plans and equity based plans, approving new equity compensation plan or material changes to an existing plan where stockholder approval has not been obtained, and approving awards as determined by the board of directors; and |
• | ensuring corporate performance measures and goals are set and determining the extent that established goals have been achieved and any related compensation earned. |
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• | developing and recommending to the board of directors, and implementing a set of corporate governance principles and procedures; |
• | developing and recommending to the board of directors, and implementing and monitoring compliance with, a code of business conduct and ethics for directors, officers and employees, and promptly disclosing and waivers for directors or executive officers; |
• | assessing the adequacy of the code of business conduct and ethics and recommending any changes; |
• | assisting the board of directors in assessing board of directors composition, selecting nominees for election to the board of directors consistent with criteria approved by the board of directors, and advising the board of directors on each committee of the board of directors regarding member qualifications, committee appointments and removals, committee structure and operations and committee reporting; |
• | determining the compensation of members of the board and its committees; |
• | advising the board of directors on candidates for executive offices, and advising the board of directors on candidates for the position of Chairman of the Board and Chief Executive Officer; and |
• | establishing and monitoring a process of assessing the board of directors’ effectiveness and overseeing the evaluation of the board of directors and management. |
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Long-term | |||||||||||||||||||||||||
compensation | |||||||||||||||||||||||||
Annual compensation | |||||||||||||||||||||||||
Securities | |||||||||||||||||||||||||
Other annual | underlying | All other | |||||||||||||||||||||||
Salary | Bonus | compensation | options | compensation | |||||||||||||||||||||
Name and position | Year | ($) | ($) | ($)(2) | (#) | ($) | |||||||||||||||||||
Kirk Sanford | 2005 | $ | 285,586 | $ | 300,000 | (11) | $ | — | 1,444,430 | $ | 22,282 | (12)(3) | |||||||||||||
Chief Executive | 2004 | 286,532 | 150,000 | — | — | 9,662 | (3)(4) | ||||||||||||||||||
Officer(1) | 2003 | 297,500 | 150,000 | — | — | 6,077 | (3) | ||||||||||||||||||
Harry Hagerty | 2005 | 307,175 | 300,000 | (11) | — | — | 13,655 | (13)(6) | |||||||||||||||||
Chief Financial | 2004 | 126,923 | 94,247 | — | 722,215 | 234 | (4) | ||||||||||||||||||
Officer(5) | 2003 | — | — | — | — | — | |||||||||||||||||||
Diran Kludjian | 2005 | 214,627 | 234,535 | (14) | — | 200,000 | 11,088 | (15) | |||||||||||||||||
Executive Vice President | 2004 | 230,058 | 186,227 | — | — | 39,968 | (3)(4)(7) | ||||||||||||||||||
of North American and | 2003 | 200,000 | 123,100 | — | — | 6,970 | (3) | ||||||||||||||||||
International Sales(6) | |||||||||||||||||||||||||
Thomas Sears | 2005 | 205,301 | 85,000 | — | 100,000 | 20,741 | (16) | ||||||||||||||||||
Executive Vice President | 2004 | 171,538 | 78,000 | — | — | 13,178 | (3)(4) | ||||||||||||||||||
of Business Development(6) | 2003 | 199,750 | 37,500 | — | — | 8,000 | (3) | ||||||||||||||||||
Kurt Sullivan | 2005 | 179,063 | 75,000 | — | 100,000 | 22,610 | (17)(14) | ||||||||||||||||||
Executive Vice President | 2004 | 174,186 | 34,000 | — | — | 10,934 | (3)(4) | ||||||||||||||||||
2003 | 215,954 | 12,500 | — | — | 8,170 | (3) | |||||||||||||||||||
Robert C. Fry(8) | 2005 | — | — | — | — | — | |||||||||||||||||||
2004 | 111,756 | 37,500 | — | — | 515,328 | (3)(4)(9) | |||||||||||||||||||
2003 | 212,500 | 75,000 | 26,432 | — | 6,057 | (3) | |||||||||||||||||||
Pamela Shinkle(10) | 2005 | — | — | — | — | ||||||||||||||||||||
2004 | 100,002 | 37,500 | — | — | 516,779 | (3)(4)(9) | |||||||||||||||||||
2003 | 168,846 | 37,500 | 55,703 | — | 6,127 | (3) | |||||||||||||||||||
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Percent of | Potential realizable value at | |||||||||||||||||||||||
Number of | total options | assumed annual rates of | ||||||||||||||||||||||
shares of | granted to | stock price appreciation | ||||||||||||||||||||||
common stock | employees | Exercise | for option term(4)(5) | |||||||||||||||||||||
underlying | in fiscal year | price per | Expiration | |||||||||||||||||||||
Name | options(1) | 2005(2) | share(3) | date | 5%($) | 10%($) | ||||||||||||||||||
Kirk Sanford | 1,444,430 | 41.22% | $ | 13.99 | 1/7/2015 | $ | 12,708,436 | $ | 32,205,671 | |||||||||||||||
Harry Hagerty | — | |||||||||||||||||||||||
Diran Kludjian | 100,000 | 2.85% | 13.99 | 1/7/2015 | 879,824 | 2,229,646 | ||||||||||||||||||
100,000 | 2.85% | 14.00 | 9/22/2015 | 880,452 | 2,231,239 | |||||||||||||||||||
Thomas Sears | 100,000 | 2.85% | 13.99 | 1/7/2015 | 879,824 | 2,229,646 | ||||||||||||||||||
Kurt Sullivan | 100,000 | 2.85% | 13.99 | 1/7/2015 | 879,824 | 2,229,646 | ||||||||||||||||||
Robert C. Fry | — | — | — | — | — | — | ||||||||||||||||||
Pamela Shinkle | — | — | — | — | — | — | ||||||||||||||||||
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Number of securities | Value of unexercised | |||||||||||||||||||||||
underlying unexercised | in-the-money options at | |||||||||||||||||||||||
options at fiscal | fiscal | |||||||||||||||||||||||
Shares | year-end(#) | year-end($) | ||||||||||||||||||||||
acquired on | Value | |||||||||||||||||||||||
Name | exercise(#) | realized($) | Exercisable | Unexercisable | Exercisable | Unexercisable | ||||||||||||||||||
Kirk Sanford | — | — | — | 1,444,430 | — | $ | 866,658 | |||||||||||||||||
Harry Hagerty | — | — | 255,784 | 466,431 | $ | 1,672,827 | 3,050,459 | |||||||||||||||||
Diran Kludjian | — | — | — | 100,000 | — | 60,000 | ||||||||||||||||||
100,000 | — | 59,000 | ||||||||||||||||||||||
Thomas Sears | — | — | — | 100,000 | — | 60,000 | ||||||||||||||||||
Kurt Sullivan | — | — | — | 100,000 | — | 60,000 | ||||||||||||||||||
Robert C. Fry | — | — | — | — | — | — | ||||||||||||||||||
Pamela Shinkle | — | — | — | — | — | — | ||||||||||||||||||
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MEMBERS OF THE COMPENSATION COMMITTEE | |
Walter G. Kortschak | |
Charles J. Fitzgerald | |
E. Miles Kilburn |
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• | each of our directors; |
• | each of the executive officers listed in the Summary Compensation Table above; |
• | our directors and the executive officers listed in the Summary Compensation Table, as a group; |
• | persons owning more than 5% of a class of our common stock; and |
• | each of the selling stockholders. |
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Shares beneficially | Shares beneficially | Total shares | ||||||||||||||||||||||
owned prior to | owned after | offered if | ||||||||||||||||||||||
the offering | Number | the offering | over-allotment | |||||||||||||||||||||
Name and address | of shares | option is | ||||||||||||||||||||||
of beneficial owner | Number | Percent | offered | Number | Percent | exercised | ||||||||||||||||||
Current directors | ||||||||||||||||||||||||
Karim Maskatiya(1) | 24,537,960 | 29.9% | 4,215,810 | 20,322,150 | 24.7% | 4,873,476 | ||||||||||||||||||
Robert Cucinotta(2) | 24,537,960 | 29.9% | 4,215,810 | 20,322,150 | 24.7% | 4,873,476 | ||||||||||||||||||
Walter G. Kortschak(3) | 22,143,393 | 26.9% | 4,215,810 | 17,927,583 | 21.8% | 4,873,476 | ||||||||||||||||||
Charles J. Fitzgerald(4) | 22,143,393 | 26.9% | 4,215,810 | 17,927,583 | 21.8% | 4,873,476 | ||||||||||||||||||
Kirk Sanford(5) | 1,556,593 | 1.9% | 300,000 | 1,256,593 | 1.5% | 300,000 | ||||||||||||||||||
E. Miles Kilburn(6) | 44,166 | * | — | 44,166 | * | — | ||||||||||||||||||
William H. Harris(7) | 42,083 | * | — | 42,083 | * | — | ||||||||||||||||||
Named officers who are not directors | ||||||||||||||||||||||||
Harry C. Hagerty(8) | 439,347 | * | 100,000 | 339,347 | * | 100,000 | ||||||||||||||||||
Diran Kludjian(9) | 75,533 | * | — | 75,533 | * | — | ||||||||||||||||||
Thomas Sears(10) | 50,333 | * | — | 50,333 | * | — | ||||||||||||||||||
Kurt Sullivan(10) | 48,333 | * | — | 48,333 | * | — | ||||||||||||||||||
Robert C. Fry | — | — | — | — | — | — | ||||||||||||||||||
Pamela Shinkle | — | — | — | — | — | — | ||||||||||||||||||
Directors and officers as a group (12 persons)(11) | 48,937,741 | 59.5% | 8,831,620 | 40,091,651 | 48.8% | 10,146,952 | ||||||||||||||||||
Persons owning more than 5% of a class of our equity securities | ||||||||||||||||||||||||
M&C International(12) | 24,537,960 | 29.9% | 4,215,810 | 20,322,150 | 24.7% | 4,873,476 | ||||||||||||||||||
Summit Partners(13) | 22,143,393 | 26.9% | 4,215,810 | 17,927,583 | 21.8% | 4,873,476 | ||||||||||||||||||
Entities affiliated with Tudor Investment Corporation(14) | 8,237,863 | 10.0% | 1,568,380 | 6,669,483 | 8.1% | 1,813,048 | ||||||||||||||||||
FMR Corp(15) | 4,819,246 | 5.9% | — | 4,819,246 | 5.9% | — |
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• | Prior to such date, the board of directors of the corporation approved either the business, combination or the transaction which resulted in the stockholder becoming an interested stockholder; |
• | Upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder), those shares owned (1) by persons who are directors and also officers and (2) by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or |
• | On or after such date, the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 662/3% of the outstanding voting stock which is not owned by the interested stockholder. |
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• | divide our board of directors into three separate classes serving staggered three-year terms, which will have the effect of requiring at least two annual stockholder meetings instead of one, to replace a majority of our directors, which could have the effect of delaying of preventing a change in our control or management; |
• | provide that special meetings of stockholders can only be called by our board of directors, chairman of the board, chief executive officer or president (in the absence of a chief executive officer). In addition, the business permitted to be conducted at any special meeting of stockholders is limited to the business specified in the notice of such meeting to the stockholders; |
• | provide for an advance notice procedure with regard to business to be brought before a meeting of stockholders which may delay or preclude stockholders from bringing matters before a meeting of stockholders or from making nominations for directors at a meeting of stockholders, which could delay or deter takeover attempts or changes in management; |
• | eliminate the right of stockholders to act by written consent so that all stockholder actions must be effected at a duly called meeting; |
• | provide that directors may only be removed for cause with the approval of stockholders holding a majority of our outstanding voting stock; |
• | provide that vacancies on our board of directors may be filled by a majority of directors in office, although less than a quorum and that our board of directors may fix the number of directors by resolution; |
• | allow our board of directors to issue shares of preferred stock with rights senior to those of the common stock and that otherwise could adversely affect the rights and powers, including voting rights and the right to approve or not to approve an acquisition or other change in control, of the holders of common stock, without any further vote or action by the stockholders; and |
• | not provide for cumulative voting for our directors, which may make it more difficult for stockholders owning less than a majority of our stock to elect any directors to our board of directors. |
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• | beginning on the effective date of the offering, 29,775,354 shares (including the 10,400,000 shares sold by the selling stockholders in the offering, plus any shares issued upon exercise of the underwriters’ option to purchase additional shares) will be immediately available for sale in the public market; |
• | approximately 6,676,946 shares will be immediately eligible for sale pursuant to Rule 144 subject to volume restrictions as described below; |
• | 354,997 shares will become freely tradable beginning 90 days after the date of this prospectus; and |
• | 45,477,668 shares will become eligible for sale pursuant to Rule 144, subject to volume restrictions as described below, beginning 90 days after the date of this prospectus. |
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• | a citizen or resident of the United States; |
• | a corporation, or other entity taxable as a corporation created or organized in, or under the laws of, the United States or any political subdivision of the United States; |
• | an estate, the income of which is subject to United States Federal income taxation regardless of its source; |
• | a trust, if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust; or |
• | a trust that existed on August 20, 1996, was treated as a United States person on August 19, 1996, and elected to be treated as a United States person. |
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• | the gain is effectively connected with your conduct of a trade or business within the United States (and, under applicable income tax treaties, is attributable to a United States permanent establishment you maintain); |
• | you are an individual, you hold your shares of common stock as capital assets, you are present in the United States for 183 days or more in the taxable year of disposition and you meet other conditions, and you are not eligible for relief under an applicable income tax treaty; or |
• | we are or have been a “United States real property holding corporation” for United States Federal income tax purposes (which we believe we are not and have never been, and do not anticipate we will become) at any time within the shorter of the five-year period preceding disposition or your holding period for your shares of common stock, and so long as our common stock is regularly traded on an established securities market, you actually or constructively hold or have held (at any time during the shorter of the five-year period preceding disposition or your holding period for your shares of common stock) more than 5% of our common stock. |
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Underwriters | Number of shares | |
J.P. Morgan Securities Inc. | ||
Bear, Stearns & Co. Inc. | ||
Cowen and Company, LLC | ||
Deutsche Bank Securities | ||
Banc of America Securities LLC | ||
Citigroup Global Markets Inc. | ||
Wachovia Capital Markets, LLC | ||
Total | 10,400,000 | |
Paid by the selling stockholders | No exercise | Full exercise | ||
Per share | $ | $ | ||
Total | $ | $ | ||
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(a) it has not made or will not make an offer of shares to the public in the United Kingdom within the meaning of section 102B of the Financial Services and Markets Act 2000 (as amended) (FSMA) except to legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised or regulated, whose corporate purpose is solely to invest in securities or otherwise in circumstances which do not require the publication by us of a prospectus pursuant to the Prospectus Rules of the Financial Services Authority (FSA); | |
(b) it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) to persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 or in circumstances in which section 21 of FSMA does not apply to us; and | |
(c) it has complied with, and will comply with all applicable provisions of FSMA with respect to anything done by it in relation to the shares in, from or otherwise involving the United Kingdom. |
(a) to legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised or regulated, whose corporate purpose is solely to invest in securities; | |
(b) to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than€43,000,000 and (3) an annual net turnover of more than€50,000,000, as shown in its last annual or consolidated accounts; or | |
(c) in any other circumstances which do not require the publication by us of a prospectus pursuant to Article 3 of the Prospectus Directive. |
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Page | ||||
Consolidated Financial Statements (Audited) | ||||
F-2 | ||||
F-3 | ||||
F-4 | ||||
F-6 | ||||
F-7 | ||||
F-9 | ||||
Condensed Consolidated Financial Statements | ||||
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F-48 | ||||
F-49 | ||||
F-50 |
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December 31, | |||||||||
(amounts in thousands, except par value) | 2005 | 2004 | |||||||
Assets | |||||||||
Cash and cash equivalents | $ | 35,123 | $ | 49,577 | |||||
Settlement receivables | 60,164 | 30,357 | |||||||
Receivables, other | 7,355 | 4,641 | |||||||
Prepaid and other assets | 10,959 | 13,725 | |||||||
Property, equipment and leasehold improvements, net | 10,579 | 10,341 | |||||||
Goodwill, net | 156,756 | 156,733 | |||||||
Other intangibles, net | 22,006 | 16,546 | |||||||
Deferred income taxes, net | 207,476 | 214,705 | |||||||
Total assets | $ | 510,418 | $ | 496,625 | |||||
Liabilities and stockholders’ equity (deficiency) | |||||||||
Liabilities: | |||||||||
Settlement liabilities | $ | 59,782 | $ | 42,192 | |||||
Accounts payable | 20,413 | 20,617 | |||||||
Accrued expenses | 14,178 | 12,258 | |||||||
Borrowings | 321,412 | 478,250 | |||||||
Total liabilities | 415,785 | 553,317 | |||||||
Commitments and contingencies (Note 6) | |||||||||
Minority interest | 149 | 87 | |||||||
Stockholders’ equity (deficiency): | |||||||||
Common stock - series A, $0.001 par value, 500,000 and 97,500 shares authorized and 81,554 and 31,775 shares outstanding at December 31, 2005 and 2004, respectively | 82 | 32 | |||||||
Common stock - series B, $0.001 par value, 0 and 13,000 shares authorized and 0 and 400 shares outstanding at December 31, 2005 and 2004, respectively | — | — | |||||||
Convertible preferred stock - series A, $0.001 par value, 50,000 and 39,325 shares authorized and 0 and 31,720 shares outstanding at December 31, 2005 and 2004, respectively | — | 32 | |||||||
Convertible preferred stock - series B, $0.001 par value, 0 and 13,000 shares authorized and 0 and 7,605 shares outstanding at December 31, 2005 and 2004, respectively | — | 8 | |||||||
Additional paid in capital | 128,886 | — | |||||||
Accumulated deficit | (36,210 | ) | (58,801 | ) | |||||
Accumulated other comprehensive income | 1,726 | 1,950 | |||||||
Total stockholders’ equity (deficiency) | 94,484 | (56,779 | ) | ||||||
Total liabilities and stockholders’ equity (deficiency) | $ | 510,418 | $ | 496,625 | |||||
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Years ended December 31, | ||||||||||||||
(amounts in thousands, except earnings per share) | 2005 | 2004 | 2003 | |||||||||||
Revenues: | ||||||||||||||
Cash advance | $ | 235,055 | $ | 209,962 | $ | 186,547 | ||||||||
ATM | 182,291 | 158,433 | 132,341 | |||||||||||
Check services | 26,376 | 23,768 | 26,326 | |||||||||||
Central credit and other revenues | 10,358 | 10,840 | 10,500 | |||||||||||
Total revenues | 454,080 | 403,003 | 355,714 | |||||||||||
Cost of revenues (exclusive of depreciation and amortization) | (309,002 | ) | (270,112 | ) | (232,463 | ) | ||||||||
Operating expenses | (50,685 | ) | (45,322 | ) | (45,430 | ) | ||||||||
Amortization | (5,295 | ) | (5,672 | ) | (6,508 | ) | ||||||||
Depreciation | (6,814 | ) | (7,876 | ) | (7,553 | ) | ||||||||
Operating income | 82,284 | 74,021 | 63,760 | |||||||||||
Interest income (expense), net: | ||||||||||||||
Interest income | 1,815 | 1,318 | 1,312 | |||||||||||
Interest expense | (44,165 | ) | (33,343 | ) | (6,762 | ) | ||||||||
Loss on early extinguishment of debt | (9,529 | ) | — | — | ||||||||||
Total interest income (expense), net | (51,879 | ) | (32,025 | ) | (5,450 | ) | ||||||||
Income before income tax (provision) benefit and minority ownership loss | 30,405 | 41,996 | 58,310 | |||||||||||
Income tax (provision) benefit | (8,032 | ) | 212,346 | (321 | ) | |||||||||
Income before minority ownership loss | 22,373 | 254,342 | 57,989 | |||||||||||
Minority ownership loss | 218 | 213 | 400 | |||||||||||
Net income | 22,591 | 254,555 | 58,389 | |||||||||||
Foreign currency translation | (224 | ) | 209 | 2,054 | ||||||||||
Comprehensive income | $ | 22,367 | $ | 254,764 | $ | 60,443 | ||||||||
Earnings per share | ||||||||||||||
Basic | $0.49 | $7.91 | $1.81 | |||||||||||
Diluted | $0.30 | $3.56 | $0.82 | |||||||||||
Weighted average number of common shares outstanding: | ||||||||||||||
Basic | 45,643 | 32,175 | 32,175 | |||||||||||
Diluted | 74,486 | 71,566 | 71,500 | |||||||||||
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Years ended | |||||||||
December 31, | |||||||||
(amounts in thousands, except earnings per share) | 2004 | 2003 | |||||||
Pro forma computation related to conversion to corporation for income tax purposes | |||||||||
Income before income tax benefit (provision) and minority ownership loss - historical | $ | 41,996 | $ | 58,310 | |||||
Income tax provision - historical, exclusive of tax benefit, net | (10,519 | ) | (321 | ) | |||||
Pro forma income tax provision (unaudited) | (4,600 | ) | (20,741 | ) | |||||
Minority ownership loss - historical | 213 | 400 | |||||||
Pro forma net income (unaudited) | $ | 27,090 | $ | 37,648 | |||||
Pro forma earnings per share: | |||||||||
Basic | $0.84 | $1.17 | |||||||
Diluted | $0.38 | $0.53 | |||||||
Pro forma weighted average number of common shares outstanding | |||||||||
Basic | 32,175 | 32,175 | |||||||
Diluted | 71,566 | 71,500 | |||||||
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Common Stock — | Common Stock — | Preferred Stock — | Preferred Stock — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Series A | Series B | Series A | Series B | Accumulated | |||||||||||||||||||||||||||||||||||||||||||||||||
(amounts in | Additional | other | |||||||||||||||||||||||||||||||||||||||||||||||||||
thousands, | Number of | Number of | Number of | Number of | paid in | Accumulated | comprehensive | Members’ | |||||||||||||||||||||||||||||||||||||||||||||
except shares) | shares | Amount | shares | Amount | shares | Amount | shares | Amount | capital | deficit | income | capital | Total | ||||||||||||||||||||||||||||||||||||||||
BALANCE — January 1, 2003 | — | $ | — | — | $ | — | — | $ | — | — | $ | — | $ | — | $ | — | $ | (313 | ) | $ | 202,584 | $ | 202,271 | ||||||||||||||||||||||||||||||
Net income | 58,389 | 58,389 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation | 2,054 | 2,054 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions to members | (63,467 | ) | (63,467 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE — December 31, 2003 | — | — | — | — | — | — | — | — | — | — | 1,741 | 197,506 | 199,247 | ||||||||||||||||||||||||||||||||||||||||
Net income before change in tax status | 227,121 | 227,121 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation | 209 | 209 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions to members | (73,028 | ) | (73,028 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
Deemed distributions to members | (3,166 | ) | (3,166 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
Deemed contributions from members | 964 | 964 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Redemption of membership units | (435,560 | ) | (435,560 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
Change in tax status from a limited liability company to a corporation on May 14, 2004 | 31,775,250 | 32 | 399,750 | — | 31,720,000 | 32 | 7,605,000 | 8 | — | (86,235 | ) | 86,163 | — | ||||||||||||||||||||||||||||||||||||||||
Net income after change in tax status | — | — | — | — | — | — | — | — | — | 27,434 | — | — | 27,434 | ||||||||||||||||||||||||||||||||||||||||
BALANCE — December 31, 2004 | 31,775,250 | $ | 32 | 399,750 | $ | — | 31,720,000 | $ | 32 | 7,605,000 | $ | 8 | $ | — | $ | (58,801 | ) | $ | 1,950 | $ | — | $ | (56,779 | ) | |||||||||||||||||||||||||||||
Net income | 22,591 | 22,591 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation | (224 | ) | (224 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of all series shares into common A shares | 39,724,750 | 40 | (399,750 | ) | — | (31,720,000 | ) | (32 | ) | (7,605,000 | ) | (8 | ) | — | |||||||||||||||||||||||||||||||||||||||
Offering of common stock | 10,053,568 | 10 | — | — | — | — | — | — | 128,886 | — | — | — | 128,896 | ||||||||||||||||||||||||||||||||||||||||
BALANCE — December 31, 2005 | 81,553,568 | $ | 82 | — | $ | — | — | $ | — | — | $ | — | $ | 128,886 | $ | (36,210 | ) | $ | 1,726 | $ | — | $ | 94,484 | ||||||||||||||||||||||||||||||
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Years ended December 31, | ||||||||||||||||
(amounts in thousands) | 2005 | 2004 | 2003 | |||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net income | $ | 22,591 | $ | 254,555 | $ | 58,389 | ||||||||||
Adjustments to reconcile net income to cash provided by operating activities: | ||||||||||||||||
Amortization of financing costs | 1,942 | 1,618 | — | |||||||||||||
Amortization of intangibles | 5,295 | 5,672 | 6,508 | |||||||||||||
Depreciation | 6,814 | 7,876 | 7,553 | |||||||||||||
Loss on sale or disposal of assets | 47 | 179 | 458 | |||||||||||||
Loss on early extinguishment of debt | 9,529 | — | — | |||||||||||||
Provision for bad debts | 1,100 | — | — | |||||||||||||
Deferred income taxes | 7,228 | (214,665 | ) | — | ||||||||||||
Minority ownership loss | (218 | ) | (213 | ) | (400 | ) | ||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||
Settlement receivables | (30,029 | ) | (9,815 | ) | 795 | |||||||||||
Receivables, other | (4,129 | ) | (659 | ) | (2,710 | ) | ||||||||||
Prepaid and other assets | (1,093 | ) | (475 | ) | 44 | |||||||||||
Settlement liabilities | 17,837 | 18,995 | (34,289 | ) | ||||||||||||
Accounts payable | (178 | ) | 2,588 | 1,031 | ||||||||||||
Accrued expenses | 1,849 | 9,556 | (3,908 | ) | ||||||||||||
Net cash provided by operating activities | 38,585 | 75,212 | 33,471 | |||||||||||||
Cash flows from investing activities: | ||||||||||||||||
Purchase of property, equipment and leasehold improvements | (7,098 | ) | (3,261 | ) | (6,012 | ) | ||||||||||
Purchase of other intangibles | (10,762 | ) | (1,600 | ) | (1,035 | ) | ||||||||||
Net cash used in investing activities | (17,860 | ) | (4,861 | ) | (7,047 | ) | ||||||||||
Cash flows from financing activities: | ||||||||||||||||
Borrowings under credit facility | — | 484,087 | — | |||||||||||||
Repayments under credit facility | (74,588 | ) | (16,750 | ) | — | |||||||||||
Repayments from early retirement of senior subordinated notes | (89,446 | ) | — | — | ||||||||||||
Debt issuance costs | (331 | ) | (3,000 | ) | — | |||||||||||
Net proceeds from public equity offerings | 128,895 | — | — | |||||||||||||
Minority capital contributions | 280 | 300 | 400 | |||||||||||||
Redemption of membership interests and distributions to partners | — | (508,587 | ) | (63,467 | ) | |||||||||||
Net cash used in financing activities | (35,190 | ) | (43,950 | ) | (63,067 | ) | ||||||||||
Net effect of exchange rate changes on cash and cash equivalents | $ | 11 | $ | (247 | ) | $ | 2,482 | |||||||||
Net (decrease) increase in cash and cash equivalents | (14,454 | ) | 26,154 | (34,161 | ) | |||||||||||
Cash and cash equivalents — beginning of period | 49,577 | 23,423 | 57,584 | |||||||||||||
Cash and cash equivalents — end of period | $ | 35,123 | $ | 49,577 | $ | 23,423 | ||||||||||
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Years ended December 31, | ||||||||||||||
(amounts in thousands) | 2005 | 2004 | 2003 | |||||||||||
Supplemental disclosure of cash flow information: | ||||||||||||||
Cash paid during year for: | ||||||||||||||
Interest | $ | 43,610 | $ | 25,689 | $ | 6,839 | ||||||||
Income taxes | $ | 2,334 | $ | 407 | $ | 1,636 | ||||||||
Supplemental schedule of non-cash investing and financing activities: | ||||||||||||||
Contribution related to forgiveness of related party payable | $ | 964 | ||||||||||||
Distribution related to forgiveness of related party receivable | $ | 3,166 | ||||||||||||
Debt issuance costs treated as a reduction of credit facility proceeds | $ | 10,913 | ||||||||||||
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F-12
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Balance, December 31, 2003 | $ | — | ||
Warranty expense provision | 30 | |||
Charge offs against reserve | $ | — | ||
Balance, December 31, 2004 | $ | 30 | ||
Warranty expense provision | 2,968 | |||
Charge offs against reserve | $ | — | ||
Balance, December 31, 2005 | $ | 2,998 | ||
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2005 | 2004 | |||||||
Cash advance | $ | 93,253 | $ | 93,230 | ||||
Credit reporting | 39,470 | 39,470 | ||||||
ATM | 24,033 | 24,033 | ||||||
Total | $ | 156,756 | $ | 156,733 | ||||
2005 | 2004 | ||||||||
Customer contracts | $ | 34,516 | $ | 34,516 | |||||
Computer software | 12,342 | 11,767 | |||||||
Patents | 10,000 | — | |||||||
Covenants not to compete | 1,180 | 1,000 | |||||||
58,038 | 47,283 | ||||||||
Less accumulated amortization | (36,032 | ) | (30,737 | ) | |||||
Total | $ | 22,006 | $ | 16,546 | |||||
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2006 | $ | 5,176 | ||
2007 | 4,685 | |||
2008 | 2,689 | |||
2009 | 1,961 | |||
2010 | 1,674 | |||
Thereafter | 5,821 | |||
Total | $ | 22,006 | ||
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Fair | Carrying | |||||||
Value | value | |||||||
December 31, 2005: | ||||||||
Senior secured credit facility | $ | 170,770 | $ | 168,662 | ||||
Senior subordinated notes | $ | 162,488 | $ | 152,750 | ||||
December 31, 2004: | ||||||||
Senior secured credit facility | $ | 246,595 | $ | 243,250 | ||||
Senior subordinated notes | $ | 252,331 | $ | 235,000 | ||||
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F-17
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2005 | 2004 | 2003 | ||||||||||
Weighted average number of common shares outstanding — basic | 45,643 | 32,175 | 32,175 | |||||||||
Potential dilution from conversion of preferred shares | 28,551 | 39,325 | 39,325 | |||||||||
Potential dilution from equity grants | 292 | 66 | — | |||||||||
Weighted average number of common shares outstanding — diluted | 74,486 | 71,566 | 71,500 | |||||||||
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2005 | 2004 | 2003 | ||||||||||
Net income, as reported | $ | 22,591 | $ | 254,555 | $ | 58,389 | ||||||
Less: total stock-based compensation determined under fair-value based method for all awards, net of tax | 3,870 | 206 | — | |||||||||
Pro forma net income | $ | 18,721 | $ | 254,349 | $ | 58,389 | ||||||
Earnings per share: | ||||||||||||
Basic, as reported | $ | 0.49 | $ | 7.91 | $ | 1.81 | ||||||
Basic, pro forma | $ | 0.41 | $ | 7.91 | $ | 1.81 | ||||||
Diluted, as reported | $ | 0.30 | $ | 3.56 | $ | 0.82 | ||||||
Diluted, pro forma | $ | 0.25 | $ | 3.56 | $ | 0.82 | ||||||
2005 | 2004 | |||||||
Risk-free interest rate | 3.8% | 4.4% | ||||||
Expected life of options (in years) | 6 | 6 | ||||||
Expected volatility of Holdings stock price | 50.0% | 50.0% | ||||||
Expected dividend yield | 0.0% | 0.0% | ||||||
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F-20
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2005 | 2004 | ||||||||
ATM equipment | $ | 32,505 | $ | 26,764 | |||||
Cash advance equipment | 5,405 | 4,760 | |||||||
Office and computer equipment | 2,274 | 1,769 | |||||||
Leasehold and building improvements | 2,150 | 2,115 | |||||||
42,334 | 35,408 | ||||||||
Less accumulated depreciation | (31,755 | ) | (25,067 | ) | |||||
Total | $ | 10,579 | $ | 10,341 | |||||
F-21
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Number of common shares | ||||||||||||
Weighted avg. | ||||||||||||
exercise price | Number of | Available | ||||||||||
(per share) | common shares | for grant | ||||||||||
Adoption of 2005 Plan — January 6, 2005 | N/A | — | 3,841,615 | |||||||||
Granted | $ | 13.99 | 3,504,430 | (3,504,430 | ) | |||||||
Exercised | N/A | — | — | |||||||||
Canceled | $ | 13.99 | (147,500 | ) | 147,500 | |||||||
Balance — December 31, 2005 | $ | 13.99 | 3,356,930 | 484,685 | ||||||||
2005 | 2004 | 2003 | ||||||||||
Options exercisable at December 31, | 291,200 | — | — | |||||||||
Weighted average fair value per share of options granted per year | $ | 13.99 | $ | 8.05 | — | |||||||
F-22
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Options outstanding | Options exercisable | |||||||||||||||||||
Weighted | Weighted | Weighted | ||||||||||||||||||
average | average | average | ||||||||||||||||||
Number | remaining | exercise | Number | exercise | ||||||||||||||||
Range of exercise prices | outstanding | contract life | prices | exercisable | price | |||||||||||||||
$8.05 | 722,215 | 8.7 years | $ | 8.05 | 255,784 | $ | 8.05 | |||||||||||||
$13.00 – $14.00 | 3,356,930 | 9.1 years | 13.99 | 35,416 | 13.99 | |||||||||||||||
4,079,145 | 291,200 | |||||||||||||||||||
2006 | $ | 522 | ||
2007 | 508 | |||
2008 | 493 | |||
2009 | 475 | |||
2010 | 238 | |||
Thereafter | $ | — | ||
Total | $ | 2,236 | ||
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Registration agreement |
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2006 | $ | 9,242 | ||
2007 | 9,242 | |||
2008 | 9,242 | |||
2009 | 106,280 | |||
2010 | 34,656 | |||
Thereafter | 152,750 | |||
Total | $ | 321,412 | ||
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Related party | Description of transaction | 2005 | 2004 | 2003 | ||||||||||
First Data and Subsidiaries: | ||||||||||||||
IPS | Invoices paid by IPS passed through as capitalized items to GCA | $ | 229 | $ | 284 | $ | 215 | |||||||
IPS | Invoices paid by IPS passed through and expensed in operating expenses by GCA | 76 | 196 | 732 | ||||||||||
IPS | Check clearing & imaging charges operated by IPS | 783 | 583 | 526 | ||||||||||
First Data | Other support services including tax, accounting and licensing departments, corporate insurance coverage and credit card rewards processing | — | 35 | 208 | ||||||||||
IPS | Interest income earned by GCA on outstanding checks and short- term cash deposits | (963 | ) | (1,128 | ) | (983 | ) | |||||||
FDFS Holdings, LLC | Interest expense recorded by GCA on bailment of ATM cash | — | — | 6,213 | ||||||||||
TeleCheck | Check guarantee revenue included in check services revenue | (21,350 | ) | (22,591 | ) | (25,449 | ) | |||||||
TeleCheck | Check cashing warranties | 10,779 | 10,144 | 9,848 | ||||||||||
TeleCheck | Operating expenses | 2,816 | 2,959 | 6,212 | ||||||||||
Western Union | Money transfer commissions earned | (459 | ) | (355 | ) | (371 | ) |
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Related party | Description of transaction | 2005 | 2004 | 2003 | ||||||||||
M&C Subsidiaries: | ||||||||||||||
Infonox on the Web | Software development costs and maintenance expense | 1,588 | 1,624 | 3,643 | ||||||||||
USA Payments | Transaction processing charges | 2,835 | 2,513 | 3,016 | ||||||||||
USA Payments | Pass through billing related to gateway fees, telecom and other items | 1,206 | 1,533 | 1,986 | ||||||||||
USA Payments | Sublease income earned for leasing out corporate office space for backup servers | (18 | ) | (18 | ) | (51 | ) | |||||||
USA Payments | Acquisition of 3-in-1 Patent | 10,000 | — | — | ||||||||||
Bank of America and Subsidiaries: | ||||||||||||||
Bank of America, N.A. | Bank fees and cash preparation fees for cash accounts maintained | 1,524 | 982 | 311 | ||||||||||
Bank of America, N.A. | Cash usage fee | 10,225 | 3,145 | — | ||||||||||
2005 | 2004 | ||||||||
First Data and Subsidiaries | $ | 1,993 | $ | 2,454 | |||||
M&C and related companies | 11 | 45 | |||||||
Bank of America | 3 | 6 | |||||||
Total included within receivables, other | $ | 2,007 | $ | 2,505 | |||||
First Data and Subsidiaries | $ | — | $ | (3 | ) | ||||
USA Payment Systems | (345 | ) | (325 | ) | |||||
Infonox on the Web | (171 | ) | (52 | ) | |||||
Bank of America | (150 | ) | (137 | ) | |||||
Total included within accounts payable and accrued expenses | $ | (666 | ) | $ | (517 | ) | |||
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10. | Income taxes |
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2005 | 2004 | 2003 | ||||||||||||
Components of pretax income: | ||||||||||||||
Domestic | $ | 24,967 | $ | 37,690 | $ | 53,123 | ||||||||
Foreign | 5,438 | 4,306 | 5,187 | |||||||||||
Consolidated | $ | 30,405 | $ | 41,996 | $ | 58,310 | ||||||||
Benefit (provision) for income taxes: | ||||||||||||||
Domestic | $ | (6,770 | ) | $ | 214,084 | $ | — | |||||||
Foreign | (1,262 | ) | (1,738 | ) | (321 | ) | ||||||||
Consolidated | $ | (8,032 | ) | $ | 212,346 | $ | (321 | ) | ||||||
2005 | ||||||
Federal statutory rate | 35.00% | |||||
Effect of: | ||||||
Foreign provision | (0.51 | ) | ||||
State/Province income tax | 0.98 | |||||
Final adjustment to 2004 incorporation tax asset | (9.95 | ) | ||||
Non-deductible expenses and other items | 0.75 | |||||
Effective tax rate | 26.27% | |||||
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2005 | 2004 | ||||||||||
Deferred tax assets related to: | |||||||||||
Property, equipment and leasehold improvements | $ | 991 | $ | (815 | ) | ||||||
Sales allowances | 1,198 | 609 | |||||||||
Foreign tax credits | 3,158 | 1,976 | |||||||||
Net operating losses | 7,690 | 4,228 | |||||||||
Intangibles | 195,793 | 208,979 | |||||||||
Total deferred income tax assets | 208,830 | 214,977 | |||||||||
Deferred tax liabilities related to: | |||||||||||
Accrued expenses | 347 | (494 | ) | ||||||||
Other | 1,007 | 766 | |||||||||
Total deferred income tax liabilities | 1,354 | 272 | |||||||||
Deferred income taxes, net | $ | 207,476 | $ | 214,705 | |||||||
11. | Pro forma income tax information (unaudited) |
2004 | 2003 | |||||||
Income before income taxes, as reported | $ | 41,996 | $ | 58,310 | ||||
Effective pro forma income tax rate | 36.00% | 36.12% | ||||||
Pro forma income tax expense | $ | 15,119 | $ | 21,062 | ||||
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12. | Segment information |
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Cash | Check | Credit | ||||||||||||||||||||||
advance | ATM | services | reporting | Other | Total | |||||||||||||||||||
December 31, 2005 | ||||||||||||||||||||||||
Revenues | $ | 235,055 | $ | 182,291 | $ | 26,376 | $ | 8,867 | $ | 1,491 | $ | 454,080 | ||||||||||||
Depreciation and amortization | (4,283 | ) | (7,191 | ) | (36 | ) | (103 | ) | (496 | ) | (12,109 | ) | ||||||||||||
Operating income | 41,246 | 28,579 | 7,437 | 4,959 | 63 | 82,284 | ||||||||||||||||||
Interest income | 1,815 | — | — | — | — | 1,815 | ||||||||||||||||||
Interest expense | (17,569 | ) | (33,380 | ) | (1,971 | ) | (663 | ) | (111 | ) | (53,694 | ) | ||||||||||||
Income taxes | (7,401 | ) | 2,865 | (1,968 | ) | (1,547 | ) | 19 | (8,032 | ) | ||||||||||||||
Minority ownership loss | $ | — | — | — | — | 218 | 218 | |||||||||||||||||
Net income | $ | 18,091 | $ | (1,936 | ) | $ | 3,498 | $ | 2,749 | $ | 189 | $ | 22,591 | |||||||||||
December 31, 2004 | ||||||||||||||||||||||||
Revenues | $ | 209,962 | $ | 158,433 | $ | 23,768 | $ | 9,368 | $ | 1,472 | $ | 403,003 | ||||||||||||
Depreciation and amortization | (4,803 | ) | (7,869 | ) | (17 | ) | (364 | ) | (495 | ) | (13,548 | ) | ||||||||||||
Operating income | 39,981 | 20,256 | 9,681 | 4,100 | 3 | 74,021 | ||||||||||||||||||
Interest income | 1,318 | — | — | — | — | 1,318 | ||||||||||||||||||
Interest expense | (14,394 | ) | (16,576 | ) | (1,630 | ) | (642 | ) | (101 | ) | (33,343 | ) | ||||||||||||
Income taxes | 129,020 | 87,434 | (2,899 | ) | (1,245 | ) | 36 | 212,346 | ||||||||||||||||
Minority ownership loss | $ | — | — | — | — | 213 | 213 | |||||||||||||||||
Net income | $ | 155,925 | $ | 91,114 | $ | 5,152 | $ | 2,213 | $ | 151 | $ | 254,555 | ||||||||||||
December 31, 2003 | ||||||||||||||||||||||||
Revenues | $ | 186,547 | $ | 132,341 | $ | 26,326 | $ | 9,289 | $ | 1,211 | $ | 355,714 | ||||||||||||
Depreciation and amortization | (5,872 | ) | (7,290 | ) | — | (364 | ) | (535 | ) | (14,061 | ) | |||||||||||||
Operating income (loss) | 37,611 | 15,186 | 9,208 | 3,557 | (1,802 | ) | 63,760 | |||||||||||||||||
Interest income | 1,312 | — | — | — | — | 1,312 | ||||||||||||||||||
Interest expense | $ | — | (6,673 | ) | — | — | (89 | ) | (6,762 | ) | ||||||||||||||
Income taxes | (321 | ) | — | — | — | — | (321 | ) | ||||||||||||||||
Minority ownership loss | $ | — | — | — | — | 400 | 400 | |||||||||||||||||
Net income (loss) | $ | 38,602 | $ | 8,513 | $ | 9,208 | $ | 3,557 | $ | (1,491 | ) | $ | 58,389 |
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December 31, | ||||||||
Total assets | 2005 | |||||||
Cash advance | $ | 320,688 | $ | 317,604 | ||||
ATM | 142,626 | 133,005 | ||||||
Check services | 3,886 | 4,223 | ||||||
Credit reporting | 43,162 | 41,263 | ||||||
Other | 56 | 530 | ||||||
Total assets | $ | 510,418 | $ | 496,625 | ||||
13. | Subsequent events |
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14. | Quarterly results of operations (unaudited) |
(amounts in thousands, | First | Second | Third | Fourth | ||||||||||||||||
except earnings per share) | quarter | quarter | quarter | quarter | Year | |||||||||||||||
2005 | ||||||||||||||||||||
Revenue | $ | 109,666 | $ | 112,460 | $ | 116,595 | $ | 115,359 | $ | 454,080 | ||||||||||
Operating income | 21,872 | 20,958 | 18,170 | 21,284 | 82,284 | |||||||||||||||
Net income | 7,340 | 6,643 | 4,486 | 4,122 | 22,591 | |||||||||||||||
Earnings per share:(1) | ||||||||||||||||||||
Basic | $ | 0.23 | $ | 0.21 | $ | 0.12 | $ | 0.05 | $ | 0.49 | ||||||||||
Diluted | $ | 0.10 | $ | 0.09 | $ | 0.06 | $ | 0.05 | $ | 0.30 | ||||||||||
2004 | ||||||||||||||||||||
Revenue | $ | 97,370 | $ | 97,711 | $ | 106,170 | $ | 101,752 | $ | 403,003 | ||||||||||
Operating income | 18,069 | 14,944 | 21,645 | 19,363 | 74,021 | |||||||||||||||
Net income | 14,103 | 214,462 | 6,694 | 19,296 | 254,555 | |||||||||||||||
Earnings per share:(1) | ||||||||||||||||||||
Basic | $ | 0.44 | $ | 6.67 | $ | 0.21 | $ | 0.60 | $ | 7.91 | ||||||||||
Diluted | $ | 0.20 | $ | 3.00 | $ | 0.09 | $ | 0.27 | $ | 3.56 | ||||||||||
15. | Guarantor information |
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December 31, 2005 | ||||||||||||||||||||||||||
Combined | ||||||||||||||||||||||||||
Combined | non- | Elimination | ||||||||||||||||||||||||
(amounts in thousands) | Parent | Issuer | guarantors | guarantors | entries* | Consolidated | ||||||||||||||||||||
Assets | ||||||||||||||||||||||||||
Cash and cash equivalents | $ | — | $ | 32,237 | $ | 276 | $ | 2,610 | $ | — | $ | 35,123 | ||||||||||||||
Settlement receivables | — | 59,236 | — | 928 | — | 60,164 | ||||||||||||||||||||
Receivables, other | — | 136,213 | 22,737 | 37 | (151,632 | ) | 7,355 | |||||||||||||||||||
Prepaid and other assets | — | 10,946 | 1 | 12 | — | 10,959 | ||||||||||||||||||||
Investment in subsidiaries | 223,378 | 66,707 | — | — | (290,085 | ) | — | |||||||||||||||||||
Property, equipment and leasehold improvements, net | — | 10,485 | 3 | 91 | — | 10,579 | ||||||||||||||||||||
Goodwill, net | — | 116,574 | 39,471 | 711 | — | 156,756 | ||||||||||||||||||||
Other intangibles, net | — | 21,714 | 128 | 164 | — | 22,006 | ||||||||||||||||||||
Deferred income taxes, net | — | 207,476 | — | — | — | 207,476 | ||||||||||||||||||||
Total | $ | 223,378 | $ | 661,588 | $ | 62,616 | $ | 4,553 | $ | (441,717 | ) | $ | 510,418 | |||||||||||||
Liabilities and stockholders’ equity (deficit) | ||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||
Settlement liabilities | $ | — | $ | 59,017 | $ | — | $ | 765 | $ | — | $ | 59,782 | ||||||||||||||
Accounts payable | — | 20,103 | 70 | 240 | — | 20,413 | ||||||||||||||||||||
Accrued expenses | — | 37,529 | 58 | (671 | ) | (22,738 | ) | 14,178 | ||||||||||||||||||
Borrowings | — | 321,412 | — | — | — | 321,412 | ||||||||||||||||||||
Total liabilities | — | 438,061 | 128 | 334 | (22,738 | ) | 415,785 | |||||||||||||||||||
Commitments and contingencies | ||||||||||||||||||||||||||
Minority interest | — | 149 | — | — | — | 149 | ||||||||||||||||||||
Stockholders’ equity (deficit) | 223,378 | 223,378 | 62,488 | 4,219 | (418,979 | ) | 94,484 | |||||||||||||||||||
Total | $ | 223,378 | $ | 661,588 | $ | 62,616 | $ | 4,553 | $ | (441,717 | ) | $ | 510,418 | |||||||||||||
* | Eliminations include intercompany investments and management fees |
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December 31, 2004 | ||||||||||||||||||||||||||
Combined | ||||||||||||||||||||||||||
Combined | non- | Elimination | ||||||||||||||||||||||||
(amounts in thousands) | Parent | Issuer | guarantors | guarantors | entries* | Consolidated | ||||||||||||||||||||
Assets | ||||||||||||||||||||||||||
Cash and cash equivalents | $ | 700 | $ | 45,037 | $ | 662 | $ | 3,178 | $ | — | $ | 49,577 | ||||||||||||||
Settlement receivables | — | 29,787 | — | 570 | — | 30,357 | ||||||||||||||||||||
Receivables, other | — | 6,915 | 16,952 | 19 | (19,245 | ) | 4,641 | |||||||||||||||||||
Prepaid and other assets | — | 13,713 | — | 12 | — | 13,725 | ||||||||||||||||||||
Investment in subsidiaries | (57,479 | ) | 59,719 | — | — | (2,240 | ) | — | ||||||||||||||||||
Property, equipment and leasehold improvements, net | — | 10,341 | — | — | — | 10,341 | ||||||||||||||||||||
Goodwill, net | — | 116,575 | 39,470 | 688 | — | 156,733 | ||||||||||||||||||||
Other intangibles, net | — | 16,512 | 34 | — | — | 16,546 | ||||||||||||||||||||
Deferred income taxes, net | — | 214,121 | — | 584 | — | 214,705 | ||||||||||||||||||||
Total | $ | (56,779 | ) | $ | 512,720 | $ | 57,118 | $ | 5,051 | $ | (21,485 | ) | $ | 496,625 | ||||||||||||
Liabilities and stockholders’ (deficit) equity | ||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||
Settlement liabilities | $ | — | $ | 41,583 | $ | — | $ | 609 | $ | — | $ | 42,192 | ||||||||||||||
Accounts payable | — | 19,929 | 375 | 313 | — | 20,617 | ||||||||||||||||||||
Accrued expenses | — | 30,350 | — | 1,153 | (19,245 | ) | 12,258 | |||||||||||||||||||
Borrowings | — | 478,250 | — | — | — | 478,250 | ||||||||||||||||||||
Total liabilities | — | 570,112 | 375 | 2,075 | (19,245 | ) | 553,317 | |||||||||||||||||||
Commitments and contingencies | ||||||||||||||||||||||||||
Minority interest | — | 87 | — | — | — | 87 | ||||||||||||||||||||
Stockholders’ (deficit) equity | (56,779 | ) | (57,479 | ) | 56,743 | 2,976 | (2,240 | ) | (56,779 | ) | ||||||||||||||||
Total | $ | (56,779 | ) | $ | 512,720 | $ | 57,118 | $ | 5,051 | $ | (21,485 | ) | $ | 496,625 | ||||||||||||
* | Eliminations include intercompany investments and management fees |
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Year ended December 31, 2005 | ||||||||||||||||||||||||||
Combined | ||||||||||||||||||||||||||
Combined | non- | |||||||||||||||||||||||||
(amounts in thousands) | Parent | Issuer | guarantors | guarantors | Elimination* | Consolidated | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||
Cash advance | $ | — | $ | 230,157 | $ | — | $ | 4,898 | $ | — | $ | 235,055 | ||||||||||||||
ATM | — | 182,291 | — | — | — | 182,291 | ||||||||||||||||||||
Check services | — | 22,716 | 3,660 | — | — | 26,376 | ||||||||||||||||||||
Central credit and other revenues | 22,591 | 8,193 | 8,867 | 85 | (29,378 | ) | 10,358 | |||||||||||||||||||
Total revenues | 22,591 | 443,357 | 12,527 | 4,983 | (29,378 | ) | 454,080 | |||||||||||||||||||
Cost of revenues (exclusive of depreciation and amortization) | — | (302,625 | ) | (3,287 | ) | (3,090 | ) | — | (309,002 | ) | ||||||||||||||||
Operating expenses | — | (46,450 | ) | (3,404 | ) | (1,449 | ) | 618 | (50,685 | ) | ||||||||||||||||
Amortization | — | (5,167 | ) | (90 | ) | (38 | ) | — | (5,295 | ) | ||||||||||||||||
Depreciation | — | (6,788 | ) | (1 | ) | (25 | ) | — | (6,814 | ) | ||||||||||||||||
Operating income (loss) | 22,591 | 82,327 | 5,745 | 381 | (28,760 | ) | 82,284 | |||||||||||||||||||
Interest income (expense), net | ||||||||||||||||||||||||||
Interest income | — | 1,713 | — | 102 | — | 1,815 | ||||||||||||||||||||
Interest expense | — | (44,165 | ) | — | — | — | (44,165 | ) | ||||||||||||||||||
Loss on early extinguishment of debt | — | (9,529 | ) | — | — | — | (9,529 | ) | ||||||||||||||||||
Total interest income (expense), net | — | (51,981 | ) | — | 102 | — | (51,879 | ) | ||||||||||||||||||
Income (loss) before income tax provision and minority ownership loss | 22,591 | 30,346 | 5,745 | 483 | (28,760 | ) | 30,405 | |||||||||||||||||||
Income tax provision | — | (7,973 | ) | — | (59 | ) | — | (8,032 | ) | |||||||||||||||||
Income (loss) before minority ownership loss | 22,591 | 22,373 | 5,745 | 424 | (28,760 | ) | 22,373 | |||||||||||||||||||
Minority ownership loss | — | 218 | — | — | — | 218 | ||||||||||||||||||||
Net income (loss) | $ | 22,591 | $ | 22,591 | $ | 5,745 | $ | 424 | $ | (28,760 | ) | $ | 22,591 | |||||||||||||
* | Eliminations include earnings on subsidiaries and management fees |
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Year ended December 31, 2004 | ||||||||||||||||||||||||||
Combined | ||||||||||||||||||||||||||
Combined | non- | |||||||||||||||||||||||||
(amounts in thousands) | Parent | Issuer | guarantors | guarantors | Elimination* | Consolidated | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||
Cash advance | $ | — | $ | 205,677 | $ | — | $ | 4,285 | $ | — | $ | 209,962 | ||||||||||||||
ATM | — | 158,433 | — | — | — | 158,433 | ||||||||||||||||||||
Check services | — | 23,768 | — | — | — | 23,768 | ||||||||||||||||||||
Central credit and other revenues | 254,555 | 6,081 | 10,519 | 72 | (260,387 | ) | 10,840 | |||||||||||||||||||
Total revenues | 254,555 | 393,959 | 10,519 | 4,357 | (260,387 | ) | 403,003 | |||||||||||||||||||
Cost of revenues (exclusive of depreciation and amortization) | — | (267,150 | ) | (276 | ) | (2,686 | ) | — | (270,112 | ) | ||||||||||||||||
Operating expenses | — | (39,249 | ) | (3,657 | ) | (2,971 | ) | 555 | (45,322 | ) | ||||||||||||||||
Amortization | — | (5,337 | ) | (335 | ) | — | — | (5,672 | ) | |||||||||||||||||
Depreciation | — | (7,855 | ) | (21 | ) | — | — | (7,876 | ) | |||||||||||||||||
Operating income (loss) | 254,555 | 74,368 | 6,230 | (1,300 | ) | (259,832 | ) | 74,021 | ||||||||||||||||||
Interest income (expense), net | ||||||||||||||||||||||||||
Interest income | — | 1,210 | — | 108 | — | 1,318 | ||||||||||||||||||||
Interest expense | — | (33,343 | ) | — | — | — | (33,343 | ) | ||||||||||||||||||
Loss on early extinguishment of debt | — | — | — | — | — | — | ||||||||||||||||||||
Total interest income (expense), net | — | (32,133 | ) | — | 108 | — | (32,025 | ) | ||||||||||||||||||
Income (loss) before income tax provision and minority ownership loss | 254,555 | 42,235 | 6,230 | (1,192 | ) | (259,832 | ) | 41,996 | ||||||||||||||||||
Income tax provision | — | 212,107 | — | 239 | — | 212,346 | ||||||||||||||||||||
Income (loss) before minority ownership loss | 254,555 | 254,342 | 6,230 | (953 | ) | (259,832 | ) | 254,342 | ||||||||||||||||||
Minority ownership loss | — | 213 | — | — | — | 213 | ||||||||||||||||||||
Net income (loss) | $ | 254,555 | $ | 254,555 | $ | 6,230 | $ | (953 | ) | $ | (259,832 | ) | $ | 254,555 | ||||||||||||
* | Eliminations include earnings on subsidiaries and management fees |
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Year ended December 31, 2005 | ||||||||||||||||||||||||||
Combined | ||||||||||||||||||||||||||
Combined | non- | |||||||||||||||||||||||||
(amounts in thousands) | Parent | Issuer | guarantors | guarantors | Elimination* | Consolidated | ||||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||||||||
Net income (loss) | $ | 22,591 | $ | 22,591 | $ | 5,745 | $ | 424 | $ | (28,760 | ) | $ | 22,591 | |||||||||||||
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities: | ||||||||||||||||||||||||||
Amortization of financing costs | — | 1,942 | — | — | — | 1,942 | ||||||||||||||||||||
Amortization of intangibles | — | 5,167 | 90 | 38 | — | 5,295 | ||||||||||||||||||||
Depreciation | — | 6,788 | 1 | 25 | — | 6,814 | ||||||||||||||||||||
Loss (gain) on sale or disposal of assets | — | 47 | — | — | — | 47 | ||||||||||||||||||||
Loss on early extinguishment of debt | — | 9,529 | — | — | — | 9,529 | ||||||||||||||||||||
Write-off of bad debt | — | 1,100 | — | — | — | 1,100 | ||||||||||||||||||||
Deferred income taxes | — | 6,645 | — | 583 | — | 7,228 | ||||||||||||||||||||
Equity (income) loss | (22,591 | ) | (6,169 | ) | — | — | 28,760 | — | ||||||||||||||||||
Minority ownership loss | — | (218 | ) | — | — | — | (218 | ) | ||||||||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||||||||||||
Settlement receivables | — | (29,681 | ) | — | (348 | ) | — | (30,029 | ) | |||||||||||||||||
Receivables, other | (1,138 | ) | (679 | ) | (5,786 | ) | (18 | ) | 3,492 | (4,129 | ) | |||||||||||||||
Prepaid and other assets | — | (1,092 | ) | (1 | ) | — | — | (1,093 | ) | |||||||||||||||||
Settlement liabilities | — | 17,685 | — | 152 | — | 17,837 | ||||||||||||||||||||
Accounts payable | — | 202 | (306 | ) | (74 | ) | — | (178 | ) | |||||||||||||||||
Accrued expenses | — | 7,161 | 58 | (1,878 | ) | (3,492 | ) | 1,849 | ||||||||||||||||||
F-42
Table of Contents
Year ended December 31, 2005 | |||||||||||||||||||||||||||
Combined | |||||||||||||||||||||||||||
Combined | non- | ||||||||||||||||||||||||||
(amounts in thousands) | Parent | Issuer | guarantors | guarantors | Elimination* | Consolidated | |||||||||||||||||||||
Net cash provided by (used in) operating activities | (1,138 | ) | 41,018 | (199 | ) | (1,096 | ) | — | 38,585 | ||||||||||||||||||
Cash flows from investing activities: | |||||||||||||||||||||||||||
Purchase of property, equipment and leasehold improvements | — | (6,962 | ) | (4 | ) | (132 | ) | — | (7,098 | ) | |||||||||||||||||
Purchase of other intangibles | — | (10,393 | ) | (183 | ) | (186 | ) | — | (10,762 | ) | |||||||||||||||||
Investments in subsidiaries | (128,457 | ) | (700 | ) | — | — | 129,157 | — | |||||||||||||||||||
Net cash used in investing activities | (128,457 | ) | (18,055 | ) | (187 | ) | (318 | ) | 129,157 | (17,860 | ) | ||||||||||||||||
Cash flows from financing activities: | |||||||||||||||||||||||||||
Repayments under credit facility | — | (74,588 | ) | — | — | — | (74,588 | ) | |||||||||||||||||||
Repayments from early retirement of senior subordinated notes | — | (89,446 | ) | — | — | — | (89,446 | ) | |||||||||||||||||||
Debt issuance costs | — | (331 | ) | — | — | — | (331 | ) | |||||||||||||||||||
Proceeds from equity offering | 128,895 | — | — | — | — | 128,895 | |||||||||||||||||||||
Minority capital contributions | — | 280 | — | — | — | 280 | |||||||||||||||||||||
Capital contributions | — | 128,457 | — | 700 | (129,157 | ) | — | ||||||||||||||||||||
Net cash (used in) provided by financing activities | 128,895 | (35,628 | ) | — | 700 | (129,157 | ) | (35,190 | ) | ||||||||||||||||||
Net effect of exchange rate changes on cash and cash equivalents | — | (135 | ) | — | 146 | — | 11 | ||||||||||||||||||||
Net (decrease) increase in cash and cash equivalents | (700 | ) | (12,800 | ) | (386 | ) | (568 | ) | — | (14,454 | ) | ||||||||||||||||
Cash and cash equivalents — beginning of period | 700 | 45,037 | 662 | 3,178 | — | 49,577 | |||||||||||||||||||||
Cash and cash equivalents — end of period | $ | — | $ | 32,237 | $ | 276 | $ | 2,610 | $ | — | $ | 35,123 | |||||||||||||||
* | Eliminations include intercompany investments and management fees |
F-43
Table of Contents
Year ended December 31, 2004 | ||||||||||||||||||||||||||
Combined | ||||||||||||||||||||||||||
Combined | non- | |||||||||||||||||||||||||
(amounts in thousands) | Parent | Issuer | guarantors | guarantors | Elimination* | Consolidated | ||||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||||||||
Net income (loss) | $ | 254,555 | $ | 254,555 | $ | 6,230 | $ | (953 | ) | $ | (259,832 | ) | $ | 254,555 | ||||||||||||
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities: | ||||||||||||||||||||||||||
Amortization of financing costs | — | 1,618 | — | — | — | 1,618 | ||||||||||||||||||||
Amortization of intangibles | — | 5,337 | 335 | — | — | 5,672 | ||||||||||||||||||||
Depreciation | — | 7,855 | 21 | — | — | 7,876 | ||||||||||||||||||||
Equity (income) loss | (254,555 | ) | (5,277 | ) | — | — | 259,832 | — | ||||||||||||||||||
Loss (gain) on sale or disposal of assets | — | 179 | — | — | — | 179 | ||||||||||||||||||||
Deferred income taxes | — | (214,121 | ) | — | (544 | ) | — | (214,665 | ) | |||||||||||||||||
Minority ownership loss | — | (213 | ) | — | — | — | (213 | ) | ||||||||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||||||||||||
Settlement receivables | — | (9,683 | ) | — | (132 | ) | — | (9,815 | ) | |||||||||||||||||
Receivables, other | — | 7,959 | (6,123 | ) | (2,337 | ) | (158 | ) | (659 | ) | ||||||||||||||||
Prepaid and other assets | — | (464 | ) | — | (11 | ) | — | (475 | ) | |||||||||||||||||
Settlement liabilities | — | 18,699 | — | 296 | — | 18,995 | ||||||||||||||||||||
Accounts payable | — | 1,887 | 4 | 142 | 555 | 2,588 | ||||||||||||||||||||
Accrued expenses | — | 8,571 | — | 985 | — | 9,556 | ||||||||||||||||||||
F-44
Table of Contents
Year ended December 31, 2004 | |||||||||||||||||||||||||||
Combined | |||||||||||||||||||||||||||
Combined | non- | ||||||||||||||||||||||||||
(amounts in thousands) | Parent | Issuer | guarantors | guarantors | Elimination* | Consolidated | |||||||||||||||||||||
Net cash provided by (used in) operating activities | — | 76,902 | 467 | (2,554 | ) | 397 | 75,212 | ||||||||||||||||||||
Cash flows from investing activities: | |||||||||||||||||||||||||||
Purchase of property, equipment and leasehold improvements | — | (3,261 | ) | — | — | — | (3,261 | ) | |||||||||||||||||||
Purchase of other intangibles | — | (1,600 | ) | — | — | — | (1,600 | ) | |||||||||||||||||||
Investments in subsidiaries | — | (750 | ) | — | — | 750 | — | ||||||||||||||||||||
Net cash used in investing activities | — | (5,611 | ) | — | — | 750 | (4,861 | ) | |||||||||||||||||||
Cash flows from financing activities: | |||||||||||||||||||||||||||
Borrowings under credit facility | — | 484,087 | — | — | — | 484,087 | |||||||||||||||||||||
Repayments under credit facility | — | (16,750 | ) | — | — | — | (16,750 | ) | |||||||||||||||||||
Debt issuance costs | — | (3,000 | ) | — | — | — | (3,000 | ) | |||||||||||||||||||
Minority capital contributions | — | 300 | — | — | — | 300 | |||||||||||||||||||||
Capital contributions | 700 | — | — | 750 | (1,450 | ) | — | ||||||||||||||||||||
Redemption of membership interests and distributions to partners | — | (505,157 | ) | — | (4,130 | ) | 700 | (508,587 | ) | ||||||||||||||||||
Net cash used in financing activities | 700 | (40,520 | ) | — | (3,380 | ) | (750 | ) | (43,950 | ) | |||||||||||||||||
Net effect of exchange rate changes on cash and cash equivalents | — | (399 | ) | — | 549 | (397 | ) | (247 | ) | ||||||||||||||||||
Net decrease in cash and cash equivalents | 700 | 30,372 | 467 | (5,385 | ) | — | 26,154 |
F-45
Table of Contents
Year ended December 31, 2004 | ||||||||||||||||||||||||
Combined | ||||||||||||||||||||||||
Combined | non- | |||||||||||||||||||||||
(amounts in thousands) | Parent | Issuer | guarantors | guarantors | Elimination* | Consolidated | ||||||||||||||||||
Cash and cash equivalents — beginning of period | — | 14,665 | 195 | 8,563 | — | 23,423 | ||||||||||||||||||
Cash and cash equivalents — end of period | $ | 700 | $ | 45,037 | $ | 662 | $ | 3,178 | $ | — | $ | 49,577 | ||||||||||||
* | Eliminations include intercompany investments and management fees |
F-46
Table of Contents
March 31, | December 31, | ||||||||
2006 | 2005 | ||||||||
(Amounts in thousands, | |||||||||
except par value) | |||||||||
(Unaudited) | |||||||||
ASSETS | |||||||||
Cash and cash equivalents | $ | 47,247 | $ | 35,123 | |||||
Settlement receivables | 23,922 | 60,164 | |||||||
Receivables, other | 6,390 | 7,355 | |||||||
Prepaid and other assets | 10,873 | 10,959 | |||||||
Property, equipment and leasehold improvements, net | 13,632 | 10,579 | |||||||
Goodwill, net | 156,755 | 156,756 | |||||||
Other intangibles, net | 20,747 | 22,006 | |||||||
Deferred income taxes, net | 203,713 | 207,476 | |||||||
Total assets | $ | 483,279 | $ | 510,418 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||
LIABILITIES: | |||||||||
Settlement liabilities | $ | 23,997 | $ | 59,782 | |||||
Accounts payable | 22,731 | 20,413 | |||||||
Accrued expenses | 13,505 | 14,178 | |||||||
Borrowings | 319,101 | 321,412 | |||||||
Total liabilities | 379,334 | 415,785 | |||||||
COMMITMENTS AND CONTINGENCIES | |||||||||
MINORITY INTEREST | 333 | 149 | |||||||
STOCKHOLDERS’ EQUITY | |||||||||
Common stock, $0.001 par value, 500,000 shares authorized and 82,185 and 81,554 shares outstanding at March 31, 2006 and December 31, 2005, respectively | 82 | 82 | |||||||
Preferred stock, $0.001 par value, 50,000 shares authorized and 0 shares shares outstanding at March 31, 2006 and December 31, 2005, respectively | — | — | |||||||
Additional paid in capital | 130,998 | 128,886 | |||||||
Accumulated deficit | (29,247 | ) | (36,210 | ) | |||||
Accumulated other comprehensive income | 1,779 | 1,726 | |||||||
Total stockholders’ equity | 103,612 | 94,484 | |||||||
Total liabilities and stockholders’ equity | $ | 483,279 | $ | 510,418 | |||||
F-47
Table of Contents
Three Months Ended | ||||||||||
March 31, | ||||||||||
2006 | 2005 | |||||||||
(Amounts in thousands, | ||||||||||
except per share) | ||||||||||
(Unaudited) | ||||||||||
REVENUES: | ||||||||||
Cash advance | $ | 67,055 | $ | 56,778 | ||||||
ATM | 53,160 | 43,773 | ||||||||
Check services | 7,244 | 6,309 | ||||||||
Central Credit and other revenues | 2,376 | 2,806 | ||||||||
Total revenues | 129,835 | 109,666 | ||||||||
Cost of revenues (exclusive of depreciation and amortization) | (91,351 | ) | (72,465 | ) | ||||||
Operating expenses | (15,290 | ) | (12,013 | ) | ||||||
Amortization | (1,502 | ) | (1,364 | ) | ||||||
Depreciation | (1,065 | ) | (1,952 | ) | ||||||
OPERATING INCOME | 20,627 | 21,872 | ||||||||
INTEREST INCOME (EXPENSE), NET | ||||||||||
Interest income | 555 | 451 | ||||||||
Interest expense | (10,248 | ) | (10,932 | ) | ||||||
Total interest income (expense), net | (9,693 | ) | (10,481 | ) | ||||||
INCOME BEFORE INCOME TAX PROVISION AND MINORITY OWNERSHIP LOSS | 10,934 | 11,391 | ||||||||
INCOME TAX PROVISION | (4,007 | ) | (4,083 | ) | ||||||
INCOME BEFORE MINORITY OWNERSHIP LOSS | 6,927 | 7,308 | ||||||||
MINORITY OWNERSHIP LOSS, NET OF TAX | 36 | 32 | ||||||||
NET INCOME | 6,963 | 7,340 | ||||||||
Foreign currency translation, net of tax | 53 | (135 | ) | |||||||
COMPREHENSIVE INCOME | $ | 7,016 | $ | 7,205 | ||||||
Earnings per share | ||||||||||
Basic | $ | 0.09 | $ | 0.23 | ||||||
Diluted | $ | 0.09 | $ | 0.10 | ||||||
Weighted average number of common shares outstanding | ||||||||||
Basic | 81,556 | 32,175 | ||||||||
Diluted | 81,556 | 71,699 |
F-48
Table of Contents
Three Months Ended | ||||||||||||
March 31, | ||||||||||||
2006 | 2005 | |||||||||||
(Amounts in thousands) | ||||||||||||
(Unaudited) | ||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||
Net income | $ | 6,963 | $ | 7,340 | ||||||||
Adjustments to reconcile net income to cash provided by operating activities: | ||||||||||||
Amortization of financing costs | 424 | 494 | ||||||||||
Amortization of intangibles | 1,502 | 1,364 | ||||||||||
Depreciation | 1,065 | 1,952 | ||||||||||
Provision for bad debts | 1,500 | — | ||||||||||
Deferred income taxes | 3,763 | 3,625 | ||||||||||
Minority ownership loss | (57 | ) | (50 | ) | ||||||||
Stock-based compensation | 1,961 | — | ||||||||||
Changes in operating assets and liabilities: | ||||||||||||
Settlement receivables | 36,269 | 7,184 | ||||||||||
Receivables, other | (498 | ) | 962 | |||||||||
Prepaid and other assets | (226 | ) | (2,098 | ) | ||||||||
Settlement liabilities | (35,833 | ) | (6,300 | ) | ||||||||
Accounts payable | 2,259 | (1,513 | ) | |||||||||
Accrued expenses | (2,493 | ) | (5,187 | ) | ||||||||
Net cash provided by operating activities | 16,599 | 7,773 | ||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||
Purchase of property, equipment and leasehold improvements | (2,252 | ) | (2,068 | ) | ||||||||
Purchase of other intangibles | (243 | ) | (353 | ) | ||||||||
Net cash used in investing activities | (2,495 | ) | (2,421 | ) | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||
Repayments under credit facility | (2,310 | ) | (31,500 | ) | ||||||||
Debt issuance costs | (105 | ) | — | |||||||||
Proceeds from exercise of stock options | 163 | — | ||||||||||
Minority capital contributions | 240 | 280 | ||||||||||
Net cash used in financing activities | (2,012 | ) | (31,220 | ) | ||||||||
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | $ | 32 | $ | 11 | ||||||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | 12,124 | (25,857 | ) | |||||||||
CASH AND CASH EQUIVALENTS — Beginning of period | 35,123 | 49,577 | ||||||||||
CASH AND CASH EQUIVALENTS — End of period | $ | 47,247 | $ | 23,720 | ||||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||||||
Cash paid for interest | $ | 13,008 | $ | 15,489 | ||||||||
Cash paid for income taxes, net of refunds | $ | 621 | $ | 1,450 | ||||||||
Property acquired with current accounts payable | $ | 1,864 | $ | — | ||||||||
F-49
Table of Contents
1. | BUSINESS AND BASIS OF PRESENTATION |
F-50
Table of Contents
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Three Months | ||||||||
Ended | ||||||||
March 31, | ||||||||
2006 | 2005 | |||||||
Weighted average common shares outstanding — basic | 81,556 | 32,175 | ||||||
Potential dilution from conversion of preferred shares | — | 39,325 | ||||||
Potential dilution from equity grants(1) | — | 199 | ||||||
Weighted average common shares outstanding — diluted | 81,556 | 71,699 | ||||||
(1) | The potential dilution excludes 619,747 and 0 shares of non-vested time-based restricted shares and stock options to acquire 4,119,995 and 3,046,930 shares of common stock at March 31, 2006 and March 31, 2005, respectively, as the application of the treasury stock method, as required by SFAS No. 128, makes them anti-dilutive. |
F-51
Table of Contents
Three Months | |||||
Ended | |||||
March 31, | |||||
2005 | |||||
Net income, as reported | $ | 7,340 | |||
Less: total stock-based compensation determined under fair-value based method for all awards, net of tax | (881 | ) | |||
Pro forma net income | $ | 6,459 | |||
Pro forma earnings per share | |||||
Basic | $ | 0.20 | |||
Diluted | $ | 0.09 | |||
Pro forma weighted average number of common shares outstanding | |||||
Basic | 32,175 | ||||
Diluted | 71,699 |
3. | ATM FUNDING AGREEMENTS |
F-52
Table of Contents
4. | COMMITMENTS AND CONTINGENCIES |
Litigation Claims and Assessments |
F-53
Table of Contents
Registration Agreement |
Arriva Origination Commitments |
5. | BORROWINGS |
F-54
Table of Contents
6. | BENEFIT PLANS |
Three Months | ||||||||
Ended | ||||||||
March 31, | ||||||||
2006 | 2005 | |||||||
Expected dividend yield | 0.0 | % | 0.0 | % | ||||
Expected volatility | 50.0 | % | 50.0 | % | ||||
Risk-free interest rate | 4.5 | % | 3.7 | % | ||||
Expected life of stock options (in years) | 6.3 | 6.0 |
F-55
Table of Contents
Weighted | Weighted | |||||||||||||||
Average | Average | |||||||||||||||
Exercise | Life | Aggregate | ||||||||||||||
Options | Prices | Remaining | Intrinsic Value | |||||||||||||
(In thousands) | ||||||||||||||||
Outstanding — December 31, 2005 | 4,079,145 | $ | 12.94 | |||||||||||||
Granted | 55,000 | 15.79 | ||||||||||||||
Exercised | (11,650 | ) | 13.99 | |||||||||||||
Forfieted | (2,500 | ) | 13.99 | |||||||||||||
Outstanding — March 31, 2006 | 4,119,995 | $ | 12.97 | 8.8 years | $ | 27,871 | ||||||||||
Exercisable — March 31, 2006 | 1,148,690 | $ | 12.43 | 8.7 years | $ | 7,447 | ||||||||||
Shares | ||||
Outstanding | ||||
Balance — December 31, 2005 | — | |||
Granted | 619,747 | |||
Vested | — | |||
Forfieted | — | |||
Balance — March 31, 2006 | 619,747 | |||
7. | RELATED PARTY TRANSACTIONS |
F-56
Table of Contents
F-57
Table of Contents
Three Months | ||||||||||
Ended | ||||||||||
March 31, | ||||||||||
Name of | ||||||||||
Related Party | Description of Transaction | 2006 | 2005 | |||||||
M&C Affiliates: | ||||||||||
Infonox on the Web | Software development costs and maintenance expense | $ | 412 | $ | 440 | |||||
USA Payments | Transaction processing charges | 853 | 714 | |||||||
USA Payments | Pass through billing related to gateway fees, | |||||||||
telecom and other items | 275 | 294 | ||||||||
Bank of America, N.A.: | ||||||||||
Bank of America, N.A. | Bank fees and cash preparation fees for cash | |||||||||
accounts maintained | 401 | 435 | ||||||||
Bank of America, N.A. | Cash usage fee | $ | 3,527 | $ | 1,982 |
March 31, | December 31, | ||||||||
2006 | 2005 | ||||||||
M&C and related companies | $ | 31 | $ | 11 | |||||
Bank of America, N.A. | 28 | 3 | |||||||
Total included within receivables, other | $ | 59 | $ | 14 | |||||
USA Payments | $ | (386 | ) | $ | (345 | ) | |||
Infonox on the Web | (128 | ) | (171 | ) | |||||
Bank of America, N.A. | (192 | ) | (150 | ) | |||||
Total included within accounts payable and accrued expenses | $ | (706 | ) | $ | (666 | ) | |||
8. | SEGMENT INFORMATION |
F-58
Table of Contents
Cash | Check | Credit | ||||||||||||||||||||||
Advance | ATM | Services | Reporting | Other | Total | |||||||||||||||||||
Three Months Ended March 31, 2006 | ||||||||||||||||||||||||
Revenues | $ | 67,055 | $ | 53,160 | $ | 7,244 | $ | 2,075 | $ | 301 | $ | 129,835 | ||||||||||||
Depreciation and amortization | (972 | ) | (1,456 | ) | (9 | ) | (20 | ) | (110 | ) | (2,567 | ) | ||||||||||||
Operating income (loss) | 10,253 | 7,183 | 2,531 | 1,075 | (415 | ) | 20,627 | |||||||||||||||||
Interest income | 555 | — | — | — | — | 555 | ||||||||||||||||||
Interest expense | (3,471 | ) | (6,279 | ) | (375 | ) | (107 | ) | (16 | ) | (10,248 | ) | ||||||||||||
Income taxes | (2,701 | ) | (339 | ) | (790 | ) | (355 | ) | 178 | (4,007 | ) | |||||||||||||
Minority ownership loss | — | — | — | — | 36 | 36 | ||||||||||||||||||
Net income (loss) | $ | 4,636 | $ | 565 | $ | 1,366 | $ | 613 | $ | (217 | ) | $ | 6,963 | |||||||||||
Three Months Ended March 31, 2005 | ||||||||||||||||||||||||
Revenues | $ | 56,778 | $ | 43,773 | $ | 6,309 | $ | 2,354 | $ | 452 | $ | 109,666 | ||||||||||||
Depreciation and amortization | (1,182 | ) | (2,001 | ) | (9 | ) | (3 | ) | (121 | ) | (3,316 | ) | ||||||||||||
Operating income | 11,310 | 6,804 | 2,351 | 1,292 | 115 | 21,872 | ||||||||||||||||||
Interest income | 451 | — | — | — | — | 451 | ||||||||||||||||||
Interest expense | (4,634 | ) | (5,554 | ) | (515 | ) | (192 | ) | (37 | ) | (10,932 | ) | ||||||||||||
Income taxes | (2,566 | ) | (450 | ) | (661 | ) | (396 | ) | (10 | ) | (4,083 | ) | ||||||||||||
Minority ownership loss | — | — | — | — | 32 | 32 | ||||||||||||||||||
Net income | $ | 4,561 | $ | 800 | $ | 1,175 | $ | 704 | $ | 100 | $ | 7,340 |
F-59
Table of Contents
March 31, | December 31, | |||||||
Total Assets | 2006 | 2005 | ||||||
Cash advance | $ | 298,606 | $ | 320,688 | ||||
ATM | 138,573 | 142,626 | ||||||
Check services | 2,518 | 3,886 | ||||||
Credit reporting | 43,551 | 43,162 | ||||||
Other | 31 | 56 | ||||||
Total assets | $ | 483,279 | $ | 510,418 | ||||
9. | SUBSEQUENT EVENTS |
Money Transmitter Licenses |
Registration Statement |
10. | GUARANTOR INFORMATION |
F-60
Table of Contents
Combined | |||||||||||||||||||||||||||
Combined | Non- | Elimination | |||||||||||||||||||||||||
Parent | Issuer | Guarantors | Guarantors | Entries* | Consolidated | ||||||||||||||||||||||
(Amounts in thousands) | |||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||
ASSETS | |||||||||||||||||||||||||||
Cash and cash equivalents | $ | — | $ | 43,531 | $ | 45 | $ | 3,671 | $ | — | $ | 47,247 | |||||||||||||||
Settlement receivables | — | 23,429 | — | 493 | — | 23,922 | |||||||||||||||||||||
Receivables, other | 10 | 7,709 | 24,891 | 250 | (26,470 | ) | 6,390 | ||||||||||||||||||||
Prepaid and other assets | — | 10,865 | 4 | 4 | — | 10,873 | |||||||||||||||||||||
Investment in subsidiaries | 138,026 | 69,117 | — | — | (207,143 | ) | — | ||||||||||||||||||||
Property, equipment and leasehold improvements, net | — | 13,505 | 21 | 106 | — | 13,632 | |||||||||||||||||||||
Goodwill, net | — | 116,574 | 39,470 | 711 | — | 156,755 | |||||||||||||||||||||
Other intangibles, net | — | 20,417 | 183 | 147 | — | 20,747 | |||||||||||||||||||||
Deferred income taxes, net | — | 203,713 | — | — | — | 203,713 | |||||||||||||||||||||
TOTAL | $ | 138,036 | $ | 508,860 | $ | 64,614 | $ | 5,382 | $ | (233,613 | ) | $ | 483,279 | ||||||||||||||
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY | |||||||||||||||||||||||||||
LIABILITIES: | |||||||||||||||||||||||||||
Settlement liabilities | $ | — | $ | 23,641 | $ | — | $ | 356 | $ | — | $ | 23,997 | |||||||||||||||
Accounts payable | — | 22,524 | 14 | 193 | — | 22,731 | |||||||||||||||||||||
Accrued expenses | — | 42,862 | 316 | — | (29,673 | ) | 13,505 | ||||||||||||||||||||
Borrowings | — | 319,101 | — | — | — | 319,101 | |||||||||||||||||||||
Total liabilities | — | 408,128 | 330 | 549 | (29,673 | ) | 379,334 | ||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES | |||||||||||||||||||||||||||
MINORITY INTEREST | — | 333 | — | — | — | 333 | |||||||||||||||||||||
STOCKHOLDERS’ EQUITY | 138,036 | 100,399 | 64,284 | 4,833 | (203,940 | ) | 103,612 | ||||||||||||||||||||
TOTAL | $ | 138,036 | $ | 508,860 | $ | 64,614 | $ | 5,382 | $ | (233,613 | ) | $ | 483,279 | ||||||||||||||
* | Eliminations include intercompany investments and management fees |
F-61
Table of Contents
Combined | |||||||||||||||||||||||||||
Combined | Non- | Elimination | |||||||||||||||||||||||||
Parent | Issuer | Guarantors | Guarantors | Entries* | Consolidated | ||||||||||||||||||||||
(Amounts in thousands) | |||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||
ASSETS | |||||||||||||||||||||||||||
Cash and cash equivalents | $ | — | $ | 32,237 | $ | 276 | $ | 2,610 | $ | — | $ | 35,123 | |||||||||||||||
Settlement receivables | — | 59,236 | — | 928 | — | 60,164 | |||||||||||||||||||||
Receivables, other | — | 136,213 | 22,737 | 37 | (151,632 | ) | 7,355 | ||||||||||||||||||||
Prepaid and other assets | — | 10,946 | 1 | 12 | — | 10,959 | |||||||||||||||||||||
Investment in subsidiaries | 223,378 | 66,707 | — | — | (290,085 | ) | — | ||||||||||||||||||||
Property, equipment and leasehold improvements, net | — | 10,485 | 3 | 91 | — | 10,579 | |||||||||||||||||||||
Goodwill, net | — | 116,574 | 39,471 | 711 | — | 156,756 | |||||||||||||||||||||
Other intangibles, net | — | 21,714 | 128 | 164 | — | 22,006 | |||||||||||||||||||||
Deferred income taxes, net | — | 207,476 | — | — | — | 207,476 | |||||||||||||||||||||
TOTAL | $ | 223,378 | $ | 661,588 | $ | 62,616 | $ | 4,553 | $ | (441,717 | ) | $ | 510,418 | ||||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||||||||||||||
LIABILITIES: | |||||||||||||||||||||||||||
Settlement liabilities | $ | — | $ | 59,017 | $ | — | $ | 765 | $ | — | $ | 59,782 | |||||||||||||||
Accounts payable | — | 20,103 | 70 | 240 | — | 20,413 | |||||||||||||||||||||
Accrued expenses | — | 37,529 | 58 | (671 | ) | (22,738 | ) | 14,178 | |||||||||||||||||||
Borrowings | — | 321,412 | — | — | — | 321,412 | |||||||||||||||||||||
Total liabilities | — | 438,061 | 128 | 334 | (22,738 | ) | 415,785 | ||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES MINORITY INTEREST | — | 149 | — | — | — | 149 | |||||||||||||||||||||
STOCKHOLDERS’ EQUITY | 223,378 | 223,378 | 62,488 | 4,219 | (418,979 | ) | 94,484 | ||||||||||||||||||||
TOTAL | $ | 223,378 | $ | 661,588 | $ | 62,616 | $ | 4,553 | $ | (441,717 | ) | $ | 510,418 | ||||||||||||||
* | Eliminations include intercompany investments and management fees |
F-62
Table of Contents
Combined | ||||||||||||||||||||||||||
Combined | Non- | |||||||||||||||||||||||||
Parent | Issuer | Guarantors | Guarantors | Eliminations* | Consolidated | |||||||||||||||||||||
(Amounts in thousands) | ||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||
REVENUES: | ||||||||||||||||||||||||||
Cash advance | $ | — | $ | 65,774 | $ | — | $ | 1,281 | $ | — | $ | 67,055 | ||||||||||||||
ATM | — | 53,160 | — | — | — | 53,160 | ||||||||||||||||||||
Check services | — | 4,913 | 2,331 | — | — | 7,244 | ||||||||||||||||||||
Central Credit and other revenues | 7,028 | 2,345 | 2,075 | 23 | (9,095 | ) | 2,376 | |||||||||||||||||||
Total revenues | 7,028 | 126,192 | 4,406 | 1,304 | (9,095 | ) | 129,835 | |||||||||||||||||||
Cost of revenues (exclusive of depreciation and amortization) | — | (89,000 | ) | (1,565 | ) | (786 | ) | — | (91,351 | ) | ||||||||||||||||
Operating expenses | — | (13,974 | ) | (1,028 | ) | (439 | ) | 151 | (15,290 | ) | ||||||||||||||||
Amortization | — | (1,468 | ) | (17 | ) | (17 | ) | — | (1,502 | ) | ||||||||||||||||
Depreciation | — | (1,054 | ) | (1 | ) | (10 | ) | — | (1,065 | ) | ||||||||||||||||
OPERATING INCOME | 7,028 | 20,696 | 1,795 | 52 | (8,944 | ) | 20,627 | |||||||||||||||||||
INTEREST INCOME (EXPENSE), NET | ||||||||||||||||||||||||||
Interest income | — | 527 | — | 28 | — | 555 | ||||||||||||||||||||
Interest expense | — | (10,248 | ) | — | — | — | (10,248 | ) | ||||||||||||||||||
Total interest income (expense), net | — | (9,721 | ) | — | 28 | — | (9,693 | ) | ||||||||||||||||||
INCOME BEFORE INCOME TAX PROVISION AND MINORITY OWNERSHIP LOSS | 7,028 | 10,975 | 1,795 | 80 | (8,944 | ) | 10,934 | |||||||||||||||||||
INCOME TAX PROVISION | — | (3,949 | ) | — | (58 | ) | — | (4,007 | ) | |||||||||||||||||
INCOME BEFORE MINORITY OWNERSHIP LOSS | 7,028 | 7,026 | 1,795 | 22 | (8,944 | ) | 6,927 | |||||||||||||||||||
MINORITY OWNERSHIP LOSS, NET OF TAX | — | 36 | — | — | — | 36 | ||||||||||||||||||||
NET INCOME | $ | 7,028 | $ | 7,062 | $ | 1,795 | $ | 22 | $ | (8,944 | ) | $ | 6,963 | |||||||||||||
* | Eliminations include earnings on subsidiaries and management fees |
F-63
Table of Contents
Combined | ||||||||||||||||||||||||||
Combined | Non- | |||||||||||||||||||||||||
Parent | Issuer | Guarantors | Guarantors | Eliminations* | Consolidated | |||||||||||||||||||||
(Amounts in thousands) | ||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||
REVENUES: | ||||||||||||||||||||||||||
Cash advance | $ | — | $ | 55,584 | $ | — | $ | 1,194 | $ | — | $ | 56,778 | ||||||||||||||
ATM | — | 43,773 | — | — | — | 43,773 | ||||||||||||||||||||
Check services | — | 6,217 | 92 | — | — | 6,309 | ||||||||||||||||||||
Central Credit and other revenues | 7,340 | 1,924 | 2,354 | 21 | (8,833 | ) | 2,806 | |||||||||||||||||||
Total revenues | 7,340 | 107,498 | 2,446 | 1,215 | (8,833 | ) | 109,666 | |||||||||||||||||||
Cost of revenues (exclusive of depreciation and amortization) | — | (71,648 | ) | (50 | ) | (767 | ) | — | (72,465 | ) | ||||||||||||||||
Operating expenses | — | (10,785 | ) | (1,040 | ) | (312 | ) | 124 | (12,013 | ) | ||||||||||||||||
Amortization | — | (1,324 | ) | (40 | ) | — | — | (1,364 | ) | |||||||||||||||||
Depreciation | — | (1,949 | ) | — | (3 | ) | — | (1,952 | ) | |||||||||||||||||
OPERATING INCOME | 7,340 | 21,792 | 1,316 | 133 | (8,709 | ) | 21,872 | |||||||||||||||||||
INTEREST INCOME (EXPENSE), NET | ||||||||||||||||||||||||||
Interest income | — | 427 | — | 24 | — | 451 | ||||||||||||||||||||
Interest expense | — | (10,932 | ) | — | — | — | (10,932 | ) | ||||||||||||||||||
Total interest income (expense), net | — | (10,505 | ) | — | 24 | — | (10,481 | ) | ||||||||||||||||||
INCOME BEFORE INCOME TAX PROVISION AND MINORITY OWNERSHIP LOSS | 7,340 | 11,287 | 1,316 | 157 | (8,709 | ) | 11,391 | |||||||||||||||||||
INCOME TAX PROVISION | — | (3,979 | ) | — | (104 | ) | — | (4,083 | ) | |||||||||||||||||
INCOME BEFORE MINORITY OWNERSHIP LOSS, NET OF TAX | 7,340 | 7,308 | 1,316 | 53 | (8,709 | ) | 7,308 | |||||||||||||||||||
MINORITY OWNERSHIP LOSS, NET OF TAX | — | 32 | — | — | — | 32 | ||||||||||||||||||||
NET INCOME | $ | 7,340 | $ | 7,340 | $ | 1,316 | $ | 53 | $ | (8,709 | ) | $ | 7,340 | |||||||||||||
* | Eliminations include earnings on subsidiaries and management fees |
F-64
Table of Contents
Combined | ||||||||||||||||||||||||||||
Combined | Non- | |||||||||||||||||||||||||||
Parent | Issuer | Guarantors | Guarantors | Eliminations* | Consolidated | |||||||||||||||||||||||
(Amounts in thousands) | ||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||||||||||||||||
Net income | $ | 7,028 | $ | 7,062 | $ | 1,795 | $ | 22 | $ | (8,944 | ) | $ | 6,963 | |||||||||||||||
Adjustments to reconcile net income to cash provided by (used in) operating activities: | ||||||||||||||||||||||||||||
Amortization of financing costs | — | 424 | — | — | — | 424 | ||||||||||||||||||||||
Amortization of intangibles | — | 1,468 | 17 | 17 | — | 1,502 | ||||||||||||||||||||||
Depreciation | — | 1,054 | 1 | 10 | — | 1,065 | ||||||||||||||||||||||
Write-off of bad debt | — | — | 1,500 | — | — | 1,500 | ||||||||||||||||||||||
Deferred income taxes | — | 3,763 | — | — | — | 3,763 | ||||||||||||||||||||||
Equity income in subsidiaries | (7,028 | ) | (1,916 | ) | — | — | 8,944 | — | ||||||||||||||||||||
Minority ownership loss | — | (57 | ) | — | — | — | (57 | ) | ||||||||||||||||||||
Stock-based compensation | — | 1,961 | — | — | — | 1,961 | ||||||||||||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||||||||||||||
Settlement receivables | — | 35,833 | — | 436 | — | 36,269 | ||||||||||||||||||||||
Receivables, other | — | (2,767 | ) | (3,655 | ) | 273 | 5,651 | (498 | ) | |||||||||||||||||||
Prepaid and other assets | — | (231 | ) | (2 | ) | 7 | — | (226 | ) | |||||||||||||||||||
Settlement liabilities | — | (35,423 | ) | — | (410 | ) | — | (35,833 | ) | |||||||||||||||||||
Accounts payable | — | 2,362 | (55 | ) | (48 | ) | — | 2,259 | ||||||||||||||||||||
Accrued expenses | — | 2,714 | 258 | 186 | (5,651 | ) | (2,493 | ) | ||||||||||||||||||||
Net cash provided by (used in) operating activities | — | 16,247 | (141 | ) | 493 | — | 16,599 | |||||||||||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||||||||||||||
Purchase of property, equipment and leasehold improvements | $ | — | $ | (2,208 | ) | $ | (19 | ) | $ | (25 | ) | $ | — | $ | (2,252 | ) | ||||||||||||
Purchase of other intangibles | — | (172 | ) | (71 | ) | — | — | (243 | ) | |||||||||||||||||||
Investments in subsidiaries | (163 | ) | (360 | ) | — | — | 523 | — | ||||||||||||||||||||
Net cash used in investing activities | (163 | ) | (2,740 | ) | (90 | ) | (25 | ) | 523 | (2,495 | ) | |||||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||||||||||||||
Repayments under credit facility | — | (2,310 | ) | — | — | — | (2,310 | ) | ||||||||||||||||||||
Debt issuance costs | — | (105 | ) | — | — | — | (105 | ) | ||||||||||||||||||||
Proceeds from equity offering | — | — | — | — | — | — | ||||||||||||||||||||||
Exercise of stock options | 163 | — | — | — | — | 163 | ||||||||||||||||||||||
Minority capital contributions | — | — | — | — | 240 | 240 | ||||||||||||||||||||||
Capital contributions | — | 163 | — | 600 | (763 | ) | — | |||||||||||||||||||||
Net cash (used in) provided by financing activities | 163 | (2,252 | ) | — | 600 | (523 | ) | (2,012 | ) | |||||||||||||||||||
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | — | 39 | — | (7 | ) | — | 32 | |||||||||||||||||||||
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | — | 11,294 | (231 | ) | 1,061 | — | 12,124 | |||||||||||||||||||||
CASH AND CASH EQUIVALENTS — Beginning of period | — | 32,237 | 276 | 2,610 | — | 35,123 | ||||||||||||||||||||||
CASH AND CASH EQUIVALENTS — End of period | $ | — | $ | 43,531 | $ | 45 | $ | 3,671 | $ | — | $ | 47,247 | ||||||||||||||||
* | Eliminations include intercompany investments and management fees |
F-65
Table of Contents
Combined | ||||||||||||||||||||||||||||
Combined | Non- | |||||||||||||||||||||||||||
Parent | Issuer | Guarantors | Guarantors | Eliminations* | Consolidated | |||||||||||||||||||||||
(Amounts in thousands) | ||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||||||||||||||||
Net income | $ | 7,340 | $ | 7,340 | $ | 1,316 | $ | 53 | $ | (8,709 | ) | $ | 7,340 | |||||||||||||||
Adjustments to reconcile net income to cash provided by (used in) operating activities: | ||||||||||||||||||||||||||||
Amortization of financing costs | — | 494 | — | — | — | 494 | ||||||||||||||||||||||
Amortization of intangibles | — | 1,324 | 40 | — | — | 1,364 | ||||||||||||||||||||||
Depreciation | — | 1,949 | — | 3 | — | 1,952 | ||||||||||||||||||||||
Deferred income taxes | — | 3,625 | — | — | — | 3,625 | ||||||||||||||||||||||
Equity loss in subsidiaries | (7,340 | ) | (1,369 | ) | — | — | 8,709 | — | ||||||||||||||||||||
Minority ownership loss | — | (50 | ) | — | — | — | (50 | ) | ||||||||||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||||||||||||||
Settlement receivables | — | 6,947 | — | 237 | — | 7,184 | ||||||||||||||||||||||
Receivables, other | — | (476 | ) | (2,001 | ) | 3 | 3,436 | 962 | ||||||||||||||||||||
Prepaid and other assets | — | (2,101 | ) | (4 | ) | 7 | — | (2,098 | ) | |||||||||||||||||||
Settlement liabilities | — | (5,938 | ) | — | (362 | ) | — | (6,300 | ) | |||||||||||||||||||
Accounts payable | — | (1,816 | ) | 389 | (86 | ) | — | (1,513 | ) | |||||||||||||||||||
Accrued expenses | — | (1,964 | ) | 31 | 182 | (3,436 | ) | (5,187 | ) | |||||||||||||||||||
Net cash provided by (used in) operating activities | — | 7,965 | (229 | ) | 37 | — | 7,773 | |||||||||||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||||||||||||||
Purchase of property, equipment and leasehold improvements | — | (2,016 | ) | (4 | ) | (48 | ) | — | (2,068 | ) | ||||||||||||||||||
Purchase of other intangibles | — | (90 | ) | (183 | ) | (80 | ) | — | (353 | ) | ||||||||||||||||||
Investments in subsidiaries | (700 | ) | (700 | ) | — | — | 1,400 | — | ||||||||||||||||||||
Net cash used in investing activities | (700 | ) | (2,806 | ) | (187 | ) | (128 | ) | 1,400 | (2,421 | ) | |||||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||||||||||||||
Repayments under credit facility | $ | — | $ | (31,500 | ) | $ | — | $ | — | $ | — | $ | (31,500 | ) | ||||||||||||||
Minority capital contributions | — | 280 | — | — | — | 280 | ||||||||||||||||||||||
Capital contributions | — | 700 | — | 700 | (1,400 | ) | — | |||||||||||||||||||||
Net cash (used in) provided by financing activities | — | (30,520 | ) | — | 700 | (1,400 | ) | (31,220 | ) | |||||||||||||||||||
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | — | 45 | — | (34 | ) | — | 11 | |||||||||||||||||||||
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (700 | ) | (25,316 | ) | (416 | ) | 575 | — | (25,857 | ) | ||||||||||||||||||
CASH AND CASH EQUIVALENTS — Beginning of period | 700 | 45,037 | 662 | 3,178 | — | 49,577 | ||||||||||||||||||||||
CASH AND CASH EQUIVALENTS — End of period | $ | — | $ | 19,721 | $ | 246 | $ | 3,753 | $ | — | $ | 23,720 | ||||||||||||||||
* | Eliminations include intercompany investments and management fees |
F-66
Table of Contents
Bear, Stearns & Co. Inc. | Cowen and Company | Deutsche Bank Securities |
Banc of America Securities LLC | Citigroup | Wachovia Securities |
Table of Contents
SEC registration fee | $ | 21,883 | ||
Printing and engraving | 125,000 | |||
Legal fees and expenses | 275,000 | |||
Accounting fees and expenses | 100,000 | |||
Blue sky fees and expenses (including legal fees) | 10,000 | |||
Transfer agent and registrar fees | 3,500 | |||
Miscellaneous | 149,617 | |||
Total | $ | 685,000 | ||
II-1
Table of Contents
II-2
Table of Contents
II-3
Table of Contents
(1) For purposes of determining any liability under the Securities Act, the information omitted from the form of Prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of Prospectus filed by us pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective; | |
(2) For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
II-4
Table of Contents
GLOBAL CASH ACCESS HOLDINGS, INC. |
By | /s/ KIRK SANFORD |
Kirk Sanford | |
President and Chief Executive Officer |
Signature | Title | Date | ||||
/s/ KIRK SANFORD | President, Chief Executive Officer (Principal Executive Officer) and Director | May 24, 2006 | ||||
/s/ KARIM MASKATIYA* | Director | May 24, 2006 | ||||
/s/ ROBERT CUCINOTTA* | Director | May 24, 2006 | ||||
/s/ WALTER G. KORTSCHAK* | Director | May 24, 2006 | ||||
/s/ CHARLES J. FITZGERALD* | Director | May 24, 2006 | ||||
/s/ E. MILES KILBURN* | Director | May 24, 2006 |
II-5
Table of Contents
Signature | Title | Date | ||||
/s/ WILLIAM H. HARRIS* | Director | May 24, 2006 | ||||
/s/ HARRY C. HAGERTY | Chief Financial Officer (Principal Financial and Accounting Officer) | May 24, 2006 | ||||
*By: | /s/ KIRK SANFORD Attorney-in-Fact | May 24, 2006 |
II-6
Table of Contents
Exhibit | ||||
number | Description | |||
1 | .1 | Form of Underwriting Agreement by and among Global Cash Access Holdings, Inc., Karim Maskatiya and Walter Kortschak as Attorneys-in-Fact acting on behalf of each of the Selling Stockholders named therein, and J.P. Morgan Securities Inc. on behalf of each of the Underwriters named therein | ||
3 | .1(1) | Amended and Restated Certificate of Incorporation | ||
3 | .2(2) | Amended and Restated Bylaws | ||
4 | .1(3) | Specimen stock certificate of Global Cash Access Holdings, Inc. | ||
4 | .2(4) | Indenture relating to $235,000,000 aggregate principal amount of 83/4% Senior Subordinated Notes due 2012 | ||
4 | .3(4) | Form of 83/4% Senior Subordinated Notes due 2012 | ||
4 | .4(4) | Assumption Agreement, dated as of June 7, 2004, by Global Cash Access, Inc. and the Subsidiary Guarantors named therein | ||
4 | .5(1) | Supplemental Indenture by and among Global Cash Access Holdings, Inc., Global Cash Access, Inc., GCA Access Card, Inc., Central Credit, LLC and The Bank of New York Trust Company, N.A. and form of notation of Guarantee by Global Cash Access Holdings, Inc. | ||
4 | .6(3) | Supplemental Indenture by and among Global Cash Access, Inc., GCA Access Card, Inc., Central Credit, LLC and The Bank of New York Trust Company, N.A. and notation of Guarantee by GCA Access Card, Inc. | ||
5 | .1 | Opinion of Morrison & Foerster LLP | ||
10 | .1(4) | Lease Agreement, dated as of March 8, 2000, by and between Global Cash Access, L.L.C. and American Pacific Capital Gateway Bldg D Co., L.L.C. | ||
10 | .4(4) | Guaranty, dated as of March 10, 2004, among GCA Holdings, L.L.C., the guarantors from time to time party hereto and Bank of America, N.A., as Administrative Agent. | ||
10 | .5(4) | Security Agreement, dated as of March 10, 2004, among the loan parties from time to time party thereto and Bank of America, N.A., as Collateral Agent. | ||
10 | .6(4) | Pledge Agreement, dated as of March 10, 2004, among the loan parties from time to time party thereto and Bank of America, N.A., as Collateral Agent. | ||
10 | .8(4) | Sponsorship Agreement, dated as of November 1999, by and between BA Merchant Services, Inc. and Global Cash Access, L.L.C., as amended by Amendment Number 1 to the Sponsorship Agreement, dated as of September 2000, among BA Merchant Services, Global Cash Access, L.L.C. and First Data Corporation. | ||
10 | .9(4) | Sponsorship Indemnification Agreement, dated as of March 10, 2004, by and between Global Cash Access, L.L.C. and First Data Corporation. | ||
10 | .10(4) | Amended and Restated Software License Agreement, dated as of March 10, 2004, between Infonox on the Web and Global Cash Access, L.L.C. | ||
10 | .11(4) | Professional Services Agreement, dated as of March 10, 2004, between Infonox on the Web and Global Cash Access, L.L.C. | ||
10 | .13(4) | Amended and Restated Electronic Payment Processing Agreement, dated as of March 10, 2004, between Global Cash Access, L.L.C., USA Payments Inc. and USA Payment Systems, Inc. | ||
10 | .14(4) | Letter Agreement Relating to Technology, dated May 13, 2004, among Global Cash Access, L.L.C., USA Payments, USA Payment Systems and Infonox on the web. | ||
10 | .15(4) | Automated Teller Machine Sponsorship Agreement by and between Global Cash Access, L.L.C. and Western Union Bank, dated as of November 12, 2002, and First Amendment to Automated Teller Machine Sponsorship Agreement, dated as of March 10, 2004, between Global Cash Access, L.L.C. and First Financial Bank. | ||
10 | .17(4) | Amendment to Treasury Services Terms and Conditions Booklet — ATM Cash Services, dated as of March 8, 2004, by and between Global Cash Access, L.L.C. and Bank of America, N.A. | ||
10 | .18(4) | Limited Liability Company Agreement of QuikPlay, LLC, dated as of December 6, 2000, between Global Cash Access, L.L.C. and IGT. |
Table of Contents
Exhibit | ||||
number | Description | |||
10 | .19(4) | Registration Agreement, dated as of May 13, 2004, by and among GCA Holdings, L.L.C., the Investors named therein, M&C International and Bank of America Corporation | ||
10 | .20(4) | Stockholders Agreement, dated as of May 13, 2004, by and among GCA Holdings, L.L.C., the Investors named therein, M&C International and Bank of America Corporation | ||
10 | .21(4) | Investor Rights Agreement, dated as of May 13, 2004, by and among GCA Holdings, L.L.C., the Investors named therein and M&C International | ||
10 | .22(4) | Noncompete Agreement, dated as of May 14, 2004, by and between GCA Holdings, Inc. and Kirk Sanford | ||
10 | .23(5) | Employment Agreement, dated as of July 12, 2004, by and between Global Cash Access, Inc. and Harry C. Hagerty | ||
10 | .24(5) | Notice of Stock Option Award and Stock Option Award Agreement, dated as of September 1, 2004, by and between GCA Holdings, Inc. and Harry C. Hagerty | ||
10 | .25(6) | Global Cash Access Holdings, Inc. 2005 Stock Incentive Plan | ||
10 | .26(2) | Employment Agreement, dated as of March 22, 2005, by and between Global Cash Access, Inc. and Kirk Sanford | ||
10 | .27(2) | Form of Indemnification Agreement between Global Cash Access Holdings, Inc. and each of its executive officers and directors | ||
10 | .28(2) | Patent Purchase and License Agreement, dated as of March 22, 2005, by and between Global Cash Access, Inc. and USA Payments | ||
10 | .29(2) | Termination and Consent, dated as of March 16, 2005, by and among Global Cash Access Holdings, Inc. and the other parties thereto | ||
10 | .30(7) | Amended and Restated Credit Agreement, dated as of April 13, 2005, by and among Global Cash Access Holdings, Inc., Global Cash Access, Inc., the banks and other financial institutions from time to time party thereto, and Bank of America, N.A., as Administrative Agent, Swingline Lender and L/ C Issuer, as amended by Amendment No. 1 thereto | ||
10 | .31(8) | Consent and Waiver, dated as of April 11, 2005, by and among Global Cash Access Holdings, Inc., Global Cash Access, Inc., the banks and other financial institutions from time to time party thereto, and Bank of America, N.A., as Administrative Agent | ||
10 | .32(9) | Employment Agreement, dated as of September 12, 2005, by and between Global Cash Access, Inc. and Kathryn S. Lever | ||
10 | .33(10) | Amendment No. 1 to Employment Agreement, dated as of March 16, 2006, by and between Global Cash Access, Inc. and Kirk E. Sanford | ||
10 | .34(11) | Amendment No. 1 to Employment Agreement, dated as of March 16, 2006, by and between Global Cash Access, Inc. and Harry C. Hagerty | ||
10 | .35(12) | Amendment No. 1 to Employment Agreement, dated as of March 16, 2006, by and between Global Cash Access, Inc. and Kathryn S. Lever | ||
10 | .36(14) | Amendment No. 1 to Registration Agreement, dated as of May 17, 2006, by and among Global Cash Access Holdings, Inc. and the other parties thereto | ||
12 | .1(13) | Computation of ratio of earnings to fixed charges | ||
21 | .1† | Subsidiaries of the Registrant | ||
23 | .1 | Consent of Deloitte & Touche LLP | ||
23 | .2 | Consent of Morrison & Foerster LLP (included in Exhibit 5.1) | ||
24 | .1† | Power of Attorney (included in Part II to this Registration Statement) |