EXHIBIT 99.1
CASH SYSTEMS, INC. ANNOUNCES SECOND QUARTER 2004
FINANCIAL RESULTS AND INCREASES GUIDANCE
MINNEAPOLIS, August 10, 2004 - Cash Systems, Inc. (Amex: CKN), a provider of
cash access solutions for the gaming industry, today announced financial results
for the second quarter 2004.
SECOND QUARTER FINANCIAL RESULTS
Revenue for the second quarter increased 49.4% to $11.8 million from $7.9
million in the second quarter of fiscal 2003. Income from operations increased
78% to $1.0 million from $562,000 in the second quarter of last year. Operating
margin in the second quarter of 2004 was 8.7%, up from 7.1% last year,
reflecting higher revenue.
Income before tax increased to $987,000, compared to $415,000 in the prior
year's period. Net income for the second quarter was $592,000, or $0.04 per
diluted share, compared to $415,000, or $0.03 per diluted share in the prior
year period. Net income in the second quarter of 2004 includes a 40% income tax
provision compared to no income tax provision in the second quarter of 2003.
Also, second quarter results were based on 16 million shares outstanding, versus
13 million shares outstanding in the prior year period.
Craig Potts, President and Chief Executive Officer of Cash Systems, Inc. stated,
"This was the best quarter in our Company's history. We achieved record revenue
and operating income levels, and we successfully entered new gaming and
geographical markets. We also signed several large, new clients during the
quarter and we are pleased to be working with premier casinos such as Casino
Queen in St. Louis, Missouri."
Liquidity
As of June 30, 2004, the Company had $12.5 million of cash, up significantly
from $3.0 million as of December 31, 2003. The Company currently has no
long-term debt.
GUIDANCE
Cash Systems expects revenue for fiscal year 2004 to be $47 million to $48
million, up from the previously announced revenue guidance of $46 million to $47
million. Also, the Company anticipates EBITDA of $4.0 million to $4.5 million,
up from previously announced EBITDA guidance of $3.5 million to $4.0 million.
Earnings Conference Call
The Company will hold a conference call today at 5:00 PM EDT. The call can be
accessed live by dialing (877) 691-0879. The conference call will also be
simultaneously webcast at http://www.cashsystemsinc.com/ir/companyoverview.asp.
A replay will be available one hour after the call and can be accessed by
dialing (973) 341-3080, password 5047754.
ABOUT CASH SYSTEMS, INC.
Minneapolis-based Cash Systems, Inc. has grown from a regional ATM provider to
one of four cash access companies serving the North American gaming industry.
Cash Systems' products include its proprietary cash advance systems, ATMs and
check cashing solutions. Cash Systems' gaming clients are comprised of both
Native American and commercial entities. Please visit
http://www.cashsystemsinc.com for more information.
This press release may contain forward-looking statements, including the
Company's beliefs about its business prospects and future results of operations.
These statements involve risks and uncertainties. Among the important additional
factors that could cause actual results to differ materially from those
forward-looking statements are risks associated with the overall economic
environment, the successful execution of the Company's plan of operation,
changes in the Company's anticipated earnings, continuation of current
contracts, gaming and other applicable regulations, and other factors detailed
in the Company's filings with the Securities and Exchange Commission, including
its most recent Form 10-KSB. In addition, the factors underlying Company
forecasts are dynamic and subject to change and therefore those forecasts speak
only as of the date they are given. The Company does not undertake to update any
forecasts that it may make available to the investing public.
Contacts:
Cash Systems
Chris Larson
952-895-8399
Don Duffy or Ashley Ammon
Integrated Corporate Relations
203-222-9013
CASH SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30, 2004 (Unaudited) and December 31, 2003 (Audited)
ASSETS
2004 2003
(unaudited) (audited)
CURRENT ASSETS
Cash $ 12,487,576 $ 3,035,747
Due from officer -- 25,000
Prepaid commissions 1,098,363 362,000
Other receivable 628,643 617,739
Deferred income taxes 263,000 299,000
Other current assets 1,248,529 1,052,623
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Total Current Assets 15,726,111 5,392,109
PROPERTY AND EQUIPMENT, NET 2,454,050 1,855,791
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OTHER ASSETS
Deposits and other 1,154 1,154
Long-term receivable -- 453,295
------------ ------------
Total Other Assets 1,154 454,449
TOTAL ASSETS $ 18,181,315 $ 7,702,349
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Checks issued in excess of cash in bank $ -- $ 686,118
Current portion of long-term debt -- 631,434
Accounts payable - trade 414,653 1,734,653
Credit card cash advance fees payable 791,340 743,423
ATM Commissions payable 486,117 331,944
Check cashing commissions payable 136,562 91,146
Credit cash chargebacks payable 131,618 103,957
Other accrued expenses 708,031 221,357
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Total Current Liabilities 2,668,321 4,544,032
LONG-TERM LIABILITIES
Long-term debt, net -- 81,601
Deferred income taxes 354,000 354,000
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Total Liabilities 3,022,321 4,979,633
STOCKHOLDERS' EQUITY
Common stock, par value of $0.001, 50,000,000 shares
authorized, 15,512,908 and 12,892,735 shares issued
and outstanding 15,513 12,893
Additional paid-in capital 13,342,238 1,872,747
Warrants 1,341,057 1,341,057
Deferred consulting services (139,179) (207,359)
Accumulated earnings 599,365 (296,622)
------------ ------------
Total Stockholders' Equity 15,158,994 2,722,716
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 18,174,315 $ 7,702,349
============ ============
CASH SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
June 30, 2004 (Unaudited) and December 31, 2003 (Audited)
THREE MONTHS ENDED SIX MONTHS ENDED
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JUNE 30, 2004 JUNE 30, 2003 JUNE 30, 2004 JUNE 30, 2003
------------- ------------- ------------- -------------
COMMISSIONS $ 11,840,293 $ 7,872,149 $ 22,846,927 $ 14,873,574
COSTS AND EXPENSES
Commissions 5,663,557 4,066,358 10,812,776 7,781,404
Processing costs 2,126,273 1,532,563 4,234,488 2,893,191
Check cashing costs 654,171 189,609 1,273,164 288,681
Armored carrier services 95,931 115,199 200,210 221,784
Payroll and related services 1,210,555 616,801 2,296,842 1,108,272
Other 908,580 605,524 2,037,889 1,042,339
Compensation expense related to options and 23,196 61,702 68,180 101,616
warrants
Depreciation and amortization 125,494 122,249 250,988 244,498
Total Operating Expenses 10,807,757 7,310,005 21,174,537 13,681,785
Income from Operations 1,032,536 562,144 1,672,390 1,191,789
OTHER INCOME (EXPENSE)
Interest expense (46,853) (110,713) (179,659) (221,823)
Amortization of original issue discount (36,501) (73,005)
Interest income 1,161 1,256
99 394
Total Other Income (Expense) (45,692) (147,115) (178,403) (294,434)
Income Before Income Taxes 986,844 415,029 1,493,987 897,355
Provision for Income Taxes 395,000 598,000
NET INCOME $ 591,844 $ 415,029 $ 895,987 $ 897,355
INCOME PER COMMON SHARE
BASIC $ 0.04 $ 0.03 $ 0.06 $ 0.07
DILUTED $ 0.04 $ 0.03 $ 0.06 $ 0.07
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
BASIC 15,396,353 12,713,833 14,408,792 12,679,167
DILUTED 16,487,811 13,425,491 15,620,035 13,222,820