Exhibit 99.5
PRO FORMA FINANCIAL INFORMATION
CONDENSED CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 2008 (Unaudited)
(All amounts in thousands)
CONDENSED CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 2008 (Unaudited)
(All amounts in thousands)
Pro Forma | ||||||||||||||||||||||||
GCA | CSI | Historical | Adjustments | Pro Forma | ||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Cash | 163,234 | 13,408 | 176,642 | (11,793 | ) | (1 | ) | 164,849 | ||||||||||||||||
Restricted Cash | 1,383 | 1,027 | 2,410 | 2,410 | ||||||||||||||||||||
Settlement receivables | 40,606 | 18,055 | 58,661 | 58,661 | ||||||||||||||||||||
Receivables other | 8,483 | 1,634 | 10,117 | 10,117 | ||||||||||||||||||||
Prepaid and other assets | 7,545 | 8,910 | 16,455 | 16,455 | ||||||||||||||||||||
Assets held for sale | 6,053 | — | 6,053 | 6,053 | ||||||||||||||||||||
Property, equipment and leasehold improvements, net | 23,617 | 7,099 | 30,716 | (4,073 | ) | (2 | ) | 26,643 | ||||||||||||||||
Goodwill, net | 156,855 | 4,078 | 160,933 | 10,668 | (2 | ) | 171,601 | |||||||||||||||||
Other intangibles, net | 12,307 | 4,024 | 16,331 | 9,176 | (2 | ) | 25,507 | |||||||||||||||||
(693 | ) | (3 | ) | (693 | ) | |||||||||||||||||||
Deferred tax assets | 174,282 | — | 174,282 | (4,752 | ) | (3 | ) | 169,530 | ||||||||||||||||
Total assets | 594,365 | 58,235 | 652,600 | (1,467 | ) | 651,133 | ||||||||||||||||||
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY | ||||||||||||||||||||||||
Settlement liabilities, due to related party | 71,158 | 9,728 | 80,886 | 80,886 | ||||||||||||||||||||
Accounts payable | 26,993 | 1,923 | 28,916 | 28,916 | ||||||||||||||||||||
Accrued expenses and other liabilities | 15,438 | 23,810 | 39,248 | 39,248 | ||||||||||||||||||||
172 | (4 | ) | 172 | |||||||||||||||||||||
(67 | ) | (5 | ) | (67 | ) | |||||||||||||||||||
Deferred revenue | — | 460 | 460 | (460 | ) | (2 | ) | — | ||||||||||||||||
Borrowings | 347,230 | 24,200 | 371,430 | (2,200 | ) | (1 | ) | 369,230 | ||||||||||||||||
Total liabilities | 460,819 | 60,121 | 520,940 | (2,555 | ) | 518,385 | ||||||||||||||||||
MINORITY INTEREST | 62 | — | 62 | — | 62 | |||||||||||||||||||
Common stock | 83 | 18 | 101 | (18.00 | ) | (2 | ) | 83 | ||||||||||||||||
Additional paid-in capital | 165,015 | 30,022 | 195,037 | (30,022 | ) | (2 | ) | 165,015 | ||||||||||||||||
Accumulated Deficit | 15,849 | (31,926 | ) | (16,077 | ) | 31,233 | (2 | )(3) | 15,156 | |||||||||||||||
(172 | ) | (4 | ) | (172 | ) | |||||||||||||||||||
67 | (5 | ) | 67 | |||||||||||||||||||||
Accumulated other comprehensive income | 2,623 | — | 2,623 | — | 2,623 | |||||||||||||||||||
Treasury Stocks | (50,086 | ) | — | (50,086 | ) | — | (50,086 | ) | ||||||||||||||||
Total stockholders’ (deficit) equity | 133,484 | (1,886 | ) | 131,598 | 1,088 | 132,686 | ||||||||||||||||||
Total liabilities and stockholders’ (deficit) equity | 594,365 | 58,235 | 652,600 | (1,467 | ) | 651,133 | ||||||||||||||||||
CONDENSED CONSOLIDATED INCOME STATEMENT FOR THE PERIOD ENDED MARCH 31, 2008 (Unaudited)
(All amounts are in thousands, except share data)
(All amounts are in thousands, except share data)
Pro Forma | ||||||||||||||||||||||||
GCA | CSI | Historical | Adjustments | Pro Forma | ||||||||||||||||||||
Revenues | 143,485 | 27,066 | 170,551 | — | 170,551 | |||||||||||||||||||
Cost of revenues | 103,374 | — | 103,374 | — | 103,374 | |||||||||||||||||||
Operating expenses | 18,640 | 27,083 | 45,723 | — | 45,723 | |||||||||||||||||||
Depreciation | 1,855 | 847 | 2,702 | — | 2,702 | |||||||||||||||||||
Amortization | 1,362 | — | 1,362 | 693 | (3 | ) | 2,055 | |||||||||||||||||
Operating income | 18,254 | (864 | ) | 17,390 | 16,697 | |||||||||||||||||||
Interest and other income | 942 | 41 | 983 | — | 983 | |||||||||||||||||||
Interest expense | (7,664 | ) | (1,207 | ) | (8,871 | ) | (172 | ) | (4 | ) | (9,043 | ) | ||||||||||||
Loss on early extinguishment of debt | — | (2,615 | ) | (2,615 | ) | — | (2,615 | ) | ||||||||||||||||
Income before taxes and minority interest loss | 11,532 | (4,645 | ) | 6,887 | 6,022 | |||||||||||||||||||
Provision for income taxes | (5,431 | ) | — | (5,431 | ) | 67 | (5 | ) | (5,364 | ) | ||||||||||||||
Income before minority interest loss | 6,101 | (4,645 | ) | 1,456 | 658 | |||||||||||||||||||
Minority ownership | 47 | — | 47 | — | 47 | |||||||||||||||||||
Income from continuing operations | 6,148 | (4,645 | ) | 1,503 | — | 705 | ||||||||||||||||||
Loss from discontinued operations | (4,403 | ) | — | (4,403 | ) | — | (4,403 | ) | ||||||||||||||||
Net income | 1,745 | (4,645 | ) | (2,900 | ) | (798 | ) | (3,698 | ) | |||||||||||||||
Loss per share: | ||||||||||||||||||||||||
Basic | $ | (0.04 | ) | $ | (0.01 | ) | $ | (0.05 | ) | |||||||||||||||
Diluted | $ | (0.04 | ) | $ | (0.01 | ) | $ | (0.05 | ) | |||||||||||||||
Outstanding shares: | ||||||||||||||||||||||||
Basic | 76,979 | — | 76,979 | |||||||||||||||||||||
Diluted | 76,979 | — | 76,979 |
CONDENSED CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2007
(Unaudited)
(All amounts are in thousands, except share data)
(Unaudited)
(All amounts are in thousands, except share data)
Pro Forma | ||||||||||||||||||||
GCA | CSI | Historical | Adjustments | PRO FORMA | ||||||||||||||||
Revenues | 597,940 | 104,857 | $ | 702,797 | — | $ | 702,797 | |||||||||||||
Cost of revenues | 428,508 | 0 | 428,508 | — | 428,508 | |||||||||||||||
Operating expenses | 79,614 | 107,128 | 186,742 | — | 186,742 | |||||||||||||||
Depreciation | 6,299 | 3,570 | 9,869 | — | 9,869 | |||||||||||||||
Amortization | 5,301 | 0 | 5,301 | 2,772 | (3) | 8,073 | ||||||||||||||
Operating income | 78,218 | (5,841 | ) | 16,573 | 69,605 | |||||||||||||||
Interest and other income | 3,631 | 79 | 3,710 | — | 3,710 | |||||||||||||||
Interest expense | (38,146 | ) | (5,283 | ) | (43,429 | ) | (805 | ) (4) | (44,234 | ) | ||||||||||
Loss on early extinguishment of debt | — | (4,338 | ) | (4,338 | ) | — | (4,338 | ) | ||||||||||||
Income before taxes and minority interest loss | 43,703 | (15,383 | ) | 28,320 | 24,743 | |||||||||||||||
Provision for income taxes | (16,709 | ) | 0 | (16,709 | ) | 314 | (5) | (16,395 | ) | |||||||||||
Income before minority interest loss | 26,994 | (15,383 | ) | 11,611 | 8,348 | |||||||||||||||
Minority ownership | 236 | 0 | 236 | — | 236 | |||||||||||||||
Income from continuing operations | 27,230 | (15,383 | ) | 11,847 | — | 8,584 | ||||||||||||||
Loss from discontinued operations | (3,525 | ) | 0 | (3,525 | ) | — | (3,525 | ) | ||||||||||||
Net income | 23,705 | (15,383 | ) | $ | 8,322 | $ | (3,263 | ) | $ | 5,059 | ||||||||||
Loss per share: | ||||||||||||||||||||
Basic | $ | (0.10 | ) | $ | (0.04 | ) | $ | 0.06 | ||||||||||||
Diluted | $ | (0.10 | ) | $ | (0.04 | ) | $ | 0.06 | ||||||||||||
Shares outstanding: | ||||||||||||||||||||
Basic | 81,108 | — | 81,377 | |||||||||||||||||
Diluted | 81,377 | — | 81,377 |
Notes to Pro Forma Information:
(All amounts are in thousands, except share data)
(All amounts are in thousands, except share data)
(1) | Global Cash Access, Inc. drew 22 million on our senior secured credit facility to assist in funding the purchase of CSI. | |
(2) | The merger will be accounted for as a purchase under the Statement of Financial Accounting Standards No. 141 “Business Combinations.” The estimated purchase price and purchase price allocation are noted below (in thousands except shares and per share amounts): |
Estimated Purchase Price: | ||||
Shares of CSI common stock outstanding at March 31, 2008 | 14,454,603 | |||
Price GCA paid per share | $ | 0.50 | ||
Consideration for CSI outstanding common stock | 7,227 | |||
Cash to CSI to pay off debt | 24,200 | |||
Estimated transaction costs | 2,366 | |||
Estimated purchase price | $ | 33,793 | ||
Purchase Price Allocation: | ||||
Estimated fair value adjustments relating to: | ||||
Property and equipment | 3,026 | |||
Working capital | 7,594 | |||
Intangible assets with finite lives | 13,200 | |||
Goodwill | 9,973 | |||
Net assets acquired | $ | 33,793 | ||
Total purchase price | $ | 33,793 |
The above adjustments include a deferred tax liability of $4,752 established related to intangible assets with finite lives and an assumed effective tax rate of 39%. Amortizable intangible assets with finite lives of $13,200 have been assigned a useful life of 9 years. | ||
The above purchase price allocation and the lives assigned to the assets are preliminary and have been made solely for the purpose of developing the GCA Pro Forma Financial Statements. After the closing of the merger, GCA, with the assistance of valuation consultants, will complete its evaluation of the fair value and the lives of the assets acquired. Accordingly, the allocation of the purchase price and the lives of the assets acquired, and resulting amortization expense which is based on preliminary estimates may differ from the final purchase price allocation and the final lives assigned to the assets. Any change in the fair value or lives assigned to amortizable or depreciable assets would impact the results of future operations. | ||
(3) | Amortizable intangible assets with finite lives of $13,200 have been assigned a useful life of 9 years. The increase in amortization of identifiable intangible assets with finite lives totaled $2,772 and $692 for the twelve months ended December 31, 2007 and the three months ended March 31, 2008, respectively. | |
(4) | Adjustment to record interest of $805 for the twelve months ended December 31, 2007, and $172 for the three months ended March 31, 2008 on $22 million at 1.125% + LIBOR borrowed to fund the acquisition of CSI. | |
(5) | Adjustment to record tax benefit of $314 for the twelve months ended December 31, 2007 and $67 for the three months ended March 31, 2008 on the net pro forma interest expense at GCA’s effective tax rate of 39%. |