Exhibit 99.1
Global Cash Access Reports Fourth Quarter and Full Year 2012 Results
Las Vegas, NV – March 12, 2013 – Global Cash Access Holdings, Inc. (the “Company”) (NYSE:GCA) announced today financial results for the fourth quarter and year ended December 31, 2012.
2012 Highlights
· The fourth quarter and full year 2012 results were consistent with prior guidance
· Operating income increased 46% year-over-year to $56.0 million
· Adjusted EBITDA increased 29% year-over-year to $79.3 million
· Cash EPS increased 62% year-over-year to $0.84
“We are pleased with our full year 2012 results, and in 2013, we will continue to focus on our people, enhancing our existing products and services, and developing additional cash access products to provide our customers with fully integrated, end-to-end solutions for their operational needs,” said David Lopez, President and CEO of GCA.
Fourth Quarter 2012 Results
Revenues were $136.1 million for the fourth quarter 2012, a decrease of 1%, as compared to $137.7 million for the same period in 2011. Operating income was $9.7 million for the fourth quarter 2012, a decrease of 32%, as compared to $14.2 million for the same period in 2011. Adjusted earnings before interest, taxes, depreciation and amortization and non-cash compensation expense (“Adjusted EBITDA”) (see Non-GAAP Financial Information below) were $16.4 million for the fourth quarter 2012, a decrease of 18%, as compared to $20.0 million for the same period in 2011. These decreases were primarily due to higher kiosk sales in the fourth quarter 2011, as compared to the fourth quarter 2012, associated with certain large casino openings and higher payroll and related expenses.
Income from operations before income tax provision was $6.3 million for the fourth quarter 2012, a decrease of 36%, as compared to $9.8 million for the same period in 2011. Diluted earnings per share from continuing operations were $0.06 for the fourth quarter 2012 (on 68.0 million diluted shares), as compared to $0.07 for the same period in 2011 (on 65.2 million diluted shares). Cash EPS (see Non-GAAP Financial Information below) was $0.17 for the fourth quarter 2012, a decrease of 19%, from the $0.21 for the same period in 2011.
Fiscal Year 2012 Results
Revenues were $584.5 million for the fiscal year 2012, an increase of 7%, as compared to $544.1 million for the fiscal year 2011. Operating income was $56.0 million for the fiscal year 2012, an increase of 46%, as compared to $38.3 million for the fiscal year 2011. Adjusted EBITDA (see Non-GAAP Financial Information below) were $79.3 million for the fiscal year 2012, an increase of 29%, as compared to $61.7 million for the fiscal year 2011. These increases were primarily due to the reduced amount of interchange expenses paid by the Company on its debit card transactions as a result of the implementation of the Durbin Amendment in October 2011, and the acquisition of substantially all the assets of MCA Processing LLC (“MCA”) completed in November 2011.
Income from operations before income tax provision was $40.5 million for the fiscal year 2012, an increase of 117%, as compared to $18.7 million for the same period in 2011. Diluted earnings per share from continuing operations were $0.38 for the fiscal year 2012 (on 67.3 million diluted shares), as compared to $0.14 for the same period in 2011 (on 64.9 million diluted shares). Cash EPS (see Non-GAAP Financial Information below) was $0.84 for the fiscal year 2012, an increase of 62%, from the $0.52 for the same period in 2011.
2013 Outlook
For the fiscal year ending December 31, 2013, the Company estimates that cash earnings per share will be between approximately $0.74 and $0.83 (on diluted shares of approximately 67.2 million) and Adjusted EBITDA will be between $70 million and $74 million. This estimated outlook is based primarily upon the combination of the following factors: (a) the anticipated impact of less favorable pricing terms associated with several customer contract renewals in 2012 and 2013; (b) the anticipated impact of certain large customers not renewing their contracts; (c) flat to low growth in the domestic gaming industry; (d) no significant casino openings in 2013; (e) a projected increase in our kiosk sales and services business in 2013; and (f) continued investment with respect to the Company’s technology infrastructure and personnel.
Investor Conference Call and Webcast
The Company will host an investor conference call to discuss its fourth quarter and fiscal year 2012 results today at 5:00 p.m. ET. The conference call can be accessed live over the phone by dialing (877) 941-2068 or for international callers by dialing (480) 629-9712. A replay will be available at 8:00 p.m. ET and can be accessed by dialing (877) 870-5176 or (858) 384-5517 for international callers; the pin number is 4603882. The replay will be available until March 19, 2013. The call will be webcast live from the Company’s website at www.gcainc.com under the Investor Relations section.
Non-GAAP Financial Information
In order to enhance investor understanding of the underlying trends in our business and to provide for better comparability between periods in different years, the Company is providing EBITDA, Adjusted EBITDA, Cash Earnings and Cash EPS on a supplemental basis. Reconciliations between GAAP measures and Non-GAAP measures and between actual results and adjusted results are provided at the end of this press release. EBITDA, Adjusted EBITDA, Cash Earnings and Cash EPS are not measures of financial performance under United States Generally Accepted Accounting Principles (“GAAP”). Accordingly, they should not be considered a substitute for net income, operating income, basic or diluted earnings per share or cash flow data prepared in accordance with GAAP.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. All statements included in this press release, other than statements that are purely historical, are forward-looking statements. Words such as “going forward,” “believes,” “intends,” “expects,” “forecasts,” “anticipate,” “plan,” “seek,” “estimate” and similar expressions also identify forward-looking statements. Forward-looking statements in this press release include, without limitation: (a) our estimates of 2013 cash earnings per share and Adjusted EBITDA and the assumptions and factors upon which they are based; and (b) our belief that cash earnings per share and Adjusted EBITDA are widely-referenced financial measures in the financial markets and that references to the foregoing are helpful to investors.
These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected or assumed, including but not limited to the following: the timing and the extent of a recovery in the gaming industry; our ability to replace revenue associated with terminated contracts; our ability to introduce new products and services; gaming establishment and patron preferences; national and international economic conditions; changes in gaming regulatory, card association and statutory requirements; regulatory and licensing difficulties; competitive pressures; operational limitations; gaming market contraction; changes to tax laws; uncertainty of litigation outcomes; interest rate fluctuations; inaccuracies in underlying operating assumptions; unanticipated expenses or capital needs; technological obsolescence; and employee turnover. If any of these assumptions prove to be incorrect, the results contemplated by the forward-looking statements regarding our future results of operations are unlikely to be realized.
The forward-looking statements in this press release are subject to additional risks and uncertainties set forth under the heading “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our filings with the Securities and Exchange Commission, including, without limitation, our Annual Report filed on Form 10-K on March 12, 2013, and subsequent periodic reports and are based on information available to us on the date hereof. We do not intend, and assume no obligation, to update any forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this press release.
About Global Cash Access Holdings, Inc.
Las Vegas-based Global Cash Access, Inc. (“GCA”), a wholly owned subsidiary of Global Cash Access Holdings, Inc., is a leading provider of cash access products and related services to over 1,000 casinos and other gaming properties in the United States, Europe, Canada, the Caribbean, Central America and Asia. GCA’s products and services provide gaming patrons access to cash through a
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variety of methods, including ATM cash withdrawals, point-of-sale debit card transactions, credit card transactions, check verification and warranty services, and Western Union money transfers. GCA is a leading manufacturer and distributor of cash handling devices and related software. GCA also provides products and services that improve credit decision-making, automate cashier operations and enhance patron marketing activities for gaming establishments. With its proprietary database of gaming patron credit history and transaction data on millions of gaming patrons worldwide, GCA is recognized for successfully developing and deploying technological innovations that increase client profitability, operational efficiency and customer loyalty. More information is available at GCA’s website at www.gcainc.com.
SOURCE: Global Cash Access Holdings, Inc.
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GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(In thousands, except earnings per share amounts)
| | Year Ended December 31, | |
| | 2012 | | 2011 | | 2010 | |
| | | | | | | |
Revenues | | $ | 584,486 | | $ | 544,063 | | $ | 605,590 | |
| | | | | | | |
Costs and expenses | | | | | | | |
Cost of revenues (exclusive of depreciation and amortization) | | 436,059 | | 419,606 | | 463,045 | |
Operating expenses | | 75,806 | | 69,517 | | 73,720 | |
Depreciation | | 6,843 | | 7,971 | | 9,323 | |
Amortization | | 9,796 | | 8,673 | | 6,872 | |
Total costs and expenses | | 528,504 | | 505,767 | | 552,960 | |
| | | | | | | |
Operating income | | 55,982 | | 38,296 | | 52,630 | |
| | | | | | | |
Other expenses | | | | | | | |
Interest expense, net of interest income | | 15,519 | | 18,638 | | 16,329 | |
Loss on early extinguishment of debt | | - | | 943 | | - | |
Total other expenses | | 15,519 | | 19,581 | | 16,329 | |
| | | | | | | |
Income from operations before tax | | 40,463 | | 18,715 | | 36,301 | |
| | | | | | | |
Income tax provision | | 14,774 | | 9,586 | | 18,751 | |
| | | | | | | |
Net income | | 25,689 | | 9,129 | | 17,550 | |
| | | | | | | |
Plus: net loss attributable to non-controlling interest | | - | | - | | (56) | |
| | | | | | | |
Net income attributable to Global Cash Access Holdings, Inc. and Subsidiaries | | 25,689 | | 9,129 | | 17,494 | |
| | | | | | | |
Foreign currency translation | | 218 | | (247) | | 397 | |
| | | | | | | |
Comprehensive income | | $ | 25,907 | | $ | 8,882 | | $ | 17,891 | |
| | | | | | | |
Earnings per share | | | | | | | |
Basic | | $ | 0.39 | | $ | 0.14 | | $ | 0.27 | |
Diluted | | $ | 0.38 | | $ | 0.14 | | $ | 0.26 | |
| | | | | | | |
Weighted average common shares outstanding | | | | | | | |
Basic | | 65,933 | | 64,673 | | 65,903 | |
Diluted | | 67,337 | | 64,859 | | 67,272 | |
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GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except par value amounts)
| | At December 31, | |
| | 2012 | | 2011 | |
ASSETS | | | | | |
| | | | | |
Cash and cash equivalents | | $ | 153,020 | | $ | 55,535 | |
Restricted cash and cash equivalents | | 200 | | 455 | |
Settlement receivables | | 29,484 | | 80,246 | |
Other receivables, net | | 11,571 | | 16,885 | |
Inventory | | 7,126 | | 7,087 | |
Prepaid expenses and other assets | | 18,254 | | 15,406 | |
Property, equipment and leasehold improvements, net | | 15,441 | | 15,577 | |
Goodwill | | 180,141 | | 180,122 | |
Other intangible assets, net | | 33,994 | | 38,216 | |
Deferred income taxes, net | | 104,664 | | 119,538 | |
| | | | | |
Total assets | | $ | 553,895 | | $ | 529,067 | |
| | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | |
| | | | | |
Liabilities | | | | | |
Settlement liabilities | | $ | 182,446 | | $ | 141,827 | |
Accounts payable | | 35,374 | | 32,223 | |
Accrued expenses | | 15,816 | | 21,159 | |
Borrowings | | 121,500 | | 174,000 | |
| | | | | |
Total liabilities | | 355,136 | | 369,209 | |
| | | | | |
Stockholders’ Equity | | | | | |
Common stock, $0.001 par value, 500,000 shares authorized and 87,545 and 85,651 shares issued at December 31, 2012 and December 31, 2011, respectively | | 87 | | 86 | |
Convertible preferred stock, $0.001 par value, 50,000 shares authorized and 0 shares outstanding at December 31, 2012 and December 31, 2011, respectively | | - | | - | |
Additional paid-in capital | | 217,990 | | 204,735 | |
Retained earnings | | 123,614 | | 97,925 | |
Accumulated other comprehensive income | | 2,558 | | 2,340 | |
Treasury stock, at cost, 20,724 and 20,686 shares at December 31, 2012 and December 31, 2011, respectively | | (145,490) | | (145,228) | |
| | | | | |
Total stockholders’ equity | | 198,759 | | 159,858 | |
| | | | | |
Total liabilities and stockholders’ equity | | $ | 553,895 | | $ | 529,067 | |
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GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
| | Year Ended December 31, | |
| | 2012 | | 2011 | | 2010 | |
| | | | | | | |
Cash flows from operating activities | | | | | | | |
Net income | | $ | 25,689 | | $ | 9,129 | | $ | 17,550 | |
Adjustments to reconcile net income to cash provided | | | | | | | |
by operating activities: | | | | | | | |
Depreciation | | 6,843 | | 7,971 | | 9,323 | |
Amortization of intangibles | | 9,796 | | 8,673 | | 6,872 | |
Amortization of financing costs | | 1,485 | | 1,343 | | 973 | |
Loss/(gain) on sale or disposal of assets | | 95 | | 991 | | (366) | |
Provision for bad debts | | 5,182 | | 5,959 | | 5,908 | |
Loss on early extinguishment of debt | | - | | 943 | | - | |
Stock-based compensation | | 6,655 | | 6,809 | | 7,935 | |
Changes in operating assets and liabilities: | | | | | | | |
Settlement receivables | | 50,823 | | (69,881) | | 1,660 | |
Other receivables, net | | 1,196 | | (8,125) | | 2,757 | |
Inventory | | 134 | | (3,146) | | 814 | |
Prepaid and other assets | | (3,425) | | (2,323) | | 1,567 | |
Deferred income taxes | | 14,376 | | 9,252 | | 17,505 | |
Settlement liabilities | | 40,530 | | 82,125 | | (2,655) | |
Accounts payable | | 3,148 | | 3,658 | | (715) | |
Accrued expenses | | (5,039) | | 874 | | (230) | |
| | | | | | | |
Net cash provided by operating activities | | 157,488 | | 54,252 | | 68,898 | |
| | | | | | | |
| | | | | | | |
Cash flows from investing activities | | | | | | | |
Acquisitions, net of cash acquired | | - | | (10,763) | | (15,354) | |
Capital expenditures | | (13,654) | | (7,420) | | (9,051) | |
Proceeds from sale of fixed assets | | 868 | | - | | - | |
Changes in restricted cash and cash equivalents | | 255 | | - | | (87) | |
| | | | | | | |
Net cash used in investing activities | | (12,531) | | (18,183) | | (24,492) | |
| | | | | | | |
| | | | | | | |
Cash flows from financing activities | | | | | | | |
Repayments against old credit facility | | - | | (208,750) | | (41,000) | |
Securing of new credit facility | | - | | 214,000 | | - | |
Issuance costs of new credit facility | | (676) | | (7,099) | | - | |
Repayments against new credit facility | | (52,500) | | (40,000) | | - | |
Proceeds from exercise of stock options | | 6,655 | | 812 | | 5,629 | |
Purchase of treasury stock | | (262) | | (190) | | (33,474) | |
| | | | | | | |
Net cash used in financing activities | | (46,783) | | (41,227) | | (68,845) | |
| | | | | | | |
Effect of exchange rates on cash | | (689) | | 57 | | 307 | |
| | | | | | | |
Cash and cash equivalents | | | | | | | |
Net increase/(decrease) for the period | | 97,485 | | (5,101) | | (24,132) | |
Balance, beginning of the period | | 55,535 | | 60,636 | | 84,768 | |
| | | | | | | |
Balance, end of the period | | $ | 153,020 | | $ | 55,535 | | $ | 60,636 | |
| | | | | | | |
Supplemental cash flow disclosures | | | | | | | |
Cash paid for interest | | $ | 15,494 | | $ | 19,166 | | $ | 15,922 | |
Cash paid for income tax, net of refunds | | $ | 665 | | $ | 366 | | $ | 689 | |
| | | | | | | |
Non-cash activities | | | | | | | |
Purchase of other intangibles | | $ | - | | $ | - | | $ | 1,500 | |
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GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF NET INCOME TO CASH EARNINGS
AND OPERATING INCOME TO EBITDA AND ADJUSTED EBITDA
FOR THE QUARTERS ENDED AND FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011
(unaudited)
| | Three months ended December 31, | | Twelve months ended December 31, |
| | 2012 | | 2011 | | 2012 | | 2011 |
Reconciliation of net income to cash earnings (amounts in thousands, except earnings per share amounts) | | | | | | | | |
Net income | | $ | 4,399 | | $ | 4,539 | | $ | 25,689 | | $ | 9,129 |
Equity compensation expense | | 2,704 | | 1,572 | | 6,655 | | 6,809 |
Deferred income tax | | 1,820 | | 5,160 | | 14,376 | | 9,252 |
Amortization | | 2,479 | | 2,423 | | 9,796 | | 8,673 |
| | | | | | | | |
Cash earnings | | $ | 11,402 | | $ | 13,694 | | $ | 56,516 | | $ | 33,863 |
| | | | | | | | |
Diluted weighted average number of common shares outstanding | | 67,996 | | 65,227 | | 67,337 | | 64,859 |
| | | | | | | | |
Diluted cash earnings per share (“Cash EPS”)1 | | $ | 0.17 | | $ | 0.21 | | $ | 0.84 | | $ | 0.52 |
| | | | | | | | |
Reconciliation of operating income to EBITDA and Adjusted EBITDA | | | | | | | | |
Operating income | | $ | 9,681 | | $ | 14,240 | | $ | 55,982 | | $ | 38,296 |
Plus: depreciation and amortization | | 4,062 | | 4,194 | | 16,639 | | 16,644 |
| | | | | | | | |
EBITDA | | $ | 13,743 | | $ | 18,434 | | $ | 72,621 | | $ | 54,940 |
| | | | | | | | |
Equity compensation expense | | 2,704 | | 1,572 | | 6,655 | | 6,809 |
| | | | | | | | |
Adjusted EBITDA | | $ | 16,447 | | $ | 20,006 | | $ | 79,276 | | $ | 61,749 |
Note:
1. For the year ended December 31, 2011, there were approximately $4.2 million of non-recurring expenses that impacted Cash EPS by approximately $0.06.
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GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF PROJECTED NET INCOME TO PROJECTED CASH EARNINGS
AND PROJECTED OPERATING INCOME TO PROJECTED EBITDA AND PROJECTED ADJUSTED EBITDA
FOR THE PROJECTED YEAR ENDING DECEMBER 31, 2013
| | 2013 Guidance Range1 |
| | Low | | High |
Reconciliation of projected net income to projected cash earnings (amounts in thousands, except earnings per share amounts) | | | | |
Projected net income | | $ | 23,000 | | $ | 27,000 |
Projected equity compensation expense | | 5,000 | | 5,000 |
Projected deferred income tax | | 13,000 | | 15,000 |
Projected amortization | | 9,000 | | 9,000 |
| | | | |
Projected cash earnings | | $ | 50,000 | | $ | 56,000 |
| | | | |
Projected diluted weighted average number of common shares outstanding | | 67,200 | | 67,200 |
| | | | |
Projected diluted cash earnings per share (“Cash EPS”) | | $ | 0.74 | | $ | 0.83 |
| | | | |
Reconciliation of projected operating income to projected EBITDA and projected Adjusted EBITDA | | | | |
Projected operating income | | $ | 48,000 | | $ | 52,000 |
Plus: projected depreciation and projected amortization | | 17,000 | | 17,000 |
| | | | |
Projected EBITDA | | $ | 65,000 | | $ | 69,000 |
| | | | |
Projected equity compensation expense | | 5,000 | | 5,000 |
| | | | |
Projected Adjusted EBITDA | | $ | 70,000 | | $ | 74,000 |
Note:
1. All figures presented are estimates for the year ending December 31, 2013.
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GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES
OTHER INFORMATION AND DATA
FOR THE YEARS ENDED DECEMBER 31, 2012, 2011, AND 2010
(unaudited)
(amounts in thousands, unless otherwise noted)
| | For and At the Year Ended December 31, |
| | 2012 | | 2011 | | 2010 |
| | | | | | |
Selected segment information: | | | | | | |
| | | | | | |
Revenues | | | | | | |
Cash advance | | $ | 227,517 | | $ | 203,869 | | $ | 244,139 |
ATM | | 303,159 | | 283,727 | | 314,627 |
Check services | | 25,401 | | 26,269 | | 28,357 |
Other | | 28,409 | | 30,198 | | 18,467 |
Corporate | | - | | - | | - |
Total revenues | | $ | 584,486 | | $ | 544,063 | | $ | 605,590 |
| | | | | | |
Operating income | | | | | | |
Cash advance | | $ | 63,785 | | $ | 38,468 | | $ | 49,439 |
ATM | | 32,333 | | 34,832 | | 41,102 |
Check services | | 13,930 | | 14,197 | | 15,798 |
Other | | 14,457 | | 14,808 | | 11,398 |
Corporate | | (68,523) | | (64,009) | | (65,107) |
Total operating income | | $ | 55,982 | | $ | 38,296 | | $ | 52,630 |
| | At and For the Year Ended December 31, |
| | 2012 | | 2011 | | 2010 |
| | | | | | |
Other data (unaudited) | | | | | | |
Aggregate dollar amount processed (in billions) | | | | | | |
Cash advance | | $ | 4.8 | | $ | 4.3 | | $ | 5.0 |
ATM | | $ | 13.6 | | $ | 12.2 | | $ | 13.6 |
Check warranty | | $ | 1.2 | | $ | 1.1 | | $ | 1.1 |
Number of transactions completed (in millions) | | | | | | |
Cash advance | | 9.0 | | 8.4 | | 10.1 |
ATM | | 72.3 | | 68.8 | | 78.3 |
Check warranty | | 4.3 | | 4.4 | | 4.9 |
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