Exhibit 99.1
Global Cash Access Announces First
Quarter 2007 Financial Results
Revenue of $148.7 million and Adjusted Diluted Cash EPS of $0.17
($0.15 including stock-based compensation)
LAS VEGAS--(BUSINESS WIRE)--May 9, 2007--Global Cash Access
Holdings, Inc. (NYSE:GCA) ("GCA" or the "Company") today announced
unaudited financial results for the quarter ended March 31, 2007.
Summary Non-GAAP Results
For the quarter ended March 31, 2007, revenues were $148.7
million, an increase of 14.6% over the $129.8 million in revenues
recorded in the same quarter last year. Adjusted Cash Earnings, which
exclude stock-based compensation, were $14.1 million in Q1 2007, an
increase of 14.1% over Q1 2006. Adjusted Cash Earnings per diluted
share were $0.17 in Q1 2007 as compared to $0.15 in Q1 2006. Cash
Earnings, which include stock-based compensation, were $12.2 million
in Q1 2007 as compared to $11.1 million in Q1 2006, an increase of
10.5%. Cash Earnings per diluted share were $0.15 in Q1 2007 as
compared to $0.14 in Q1 2006. EBITDA (which excludes stock-based
compensation) was $27.0 million in Q1 2007, an increase of 7.4% from
Q1 2006.
"In the first quarter of 2007, we maintained strength in our core
business while gaining momentum in our new initiatives," commented
Kirk Sanford, President and Chief Executive Officer of GCA. "We had
double-digit revenue growth in our Cash Advance and ATM business while
also getting ready for operations in Macau and adding to our Arriva
Card cardholder base."
Recent Highlights
- -- Recorded revenue of $148.7 million, the highest quarterly total
ever recorded by the Company.
- -- Significant increases in key metrics:
-- Same store surcharge revenue up 9.9%
-- Cash advance dollars disbursed up 14.1%
-- ATM transaction volume up 13.1%.
- -- 3-in-1 Enabled QuickJack(TM) Plus Redemption Kiosk installations
reached 467 as of March 31, 2007
- -- Arriva Card rollout continued (statistics as of March 31, 2007):
-- 5,234 accounts
-- $21.5 million in Arriva Card transaction volume since the launch
of the Arriva Card, with $9.2 million in volume in Q1 2007
-- Charge-offs to date of $0.2 million
-- Q1 average cash advance transaction amount of $871 vs. $630 on
non-Arriva cards.
- -- Established $50 million common stock repurchase authorization
- -- Interest rate on senior secured borrowings declined to
LIBOR +112.5bp as of April 5, 2007.
GAAP Results
For the first quarter of 2007, total revenues were $148.7 million,
an increase of 14.6% over the first quarter of 2006. Operating Income
in the first quarter of 2007 was $21.3 million, an increase of 3.4%
from the same period in 2006. Net income in the first quarter of 2007
was $7.9 million, up 13.5% from the first quarter of 2006. Diluted
earnings per share were $0.10 in the first quarter of 2007 as compared
to $0.09 in the first quarter of 2006.
First Quarter Results of Operations
Total revenues in the first quarter of 2007 were $148.7 million,
an increase of 14.6% from revenues of $129.8 million in the first
quarter of 2006. Same store revenues for cash advance and ATM
surcharge increased 9.9% in the first quarter of 2007.
The following is a comparison of selected revenue components for
the first quarter of 2007 to the same period in 2006:
-- Cash advance revenues were up 15.4%, from $67.1 million to
$77.4 million. Cash disbursed increased 14.1%, from $1.35
billion to $1.54 billion. The number of transactions increased
10.2%, from 2.5 million to 2.8 million. The average
transaction amount increased from $536.25 to $555.31. The
average fee increased from 4.97% to 5.02%. Average revenue per
transaction increased 4.8% from $26.63 to $27.90.
-- ATM revenues increased 14.3% to $60.8 million. The number of
transactions increased 13.1% from 16.7 million to 18.9
million. Cash disbursed was $3.40 billion compared to $2.92
billion, an increase of 16.2%. Average revenue per transaction
increased 0.9% from $3.19 to $3.22.
-- Check services revenues were $7.4 million, an increase of
1.5%. The face amount of checks warranted increased by 5.3%,
from $322.8 million to $340.0 million. The number of check
warranty transactions grew 2.5%, from 1.26 million to 1.29
million. The average face amount per check warranted grew from
$256.08 to $263.12. The average check warranty fee decreased
from 2.02% to 1.98%. Average check warranty revenue per
transaction increased from $5.17 to $5.21.
-- Central Credit and other revenues increased 35.3%, from $2.4
million to $3.2 million. Most of the increase is attributable
to $0.6 million of interest and fee revenue from the Arriva
Card in Q1 2007 vs. $0 in the comparable 2006 quarter.
Cost of revenues (exclusive of depreciation and amortization)
increased 16.8% in the first quarter of 2007 to $106.7 million from
$91.4 million in the first quarter of 2006. Commissions, the largest
component of cost of revenues, increased 17.2%. Interchange increased
15.5%, driven largely by the increase in cash advance volumes.
Operating expenses in the first quarter of 2007 were $17.9
million, an increase of 17.3% over the same period in 2006. Operating
expenses, excluding non-cash compensation expense, were $15.0 million
in the current quarter, an increase of 12.5% from operating expenses
of $13.3 million in the first quarter of 2006. Of the $1.7 million
increase in operating expenses (excluding non-cash compensation
expense), $0.5 million relates to increases in professional service
fees for financial statement audit and Sarbanes-Oxley Section 404
compliance expenses and $0.2 million relates to increases in operating
expenses related to the Arriva Card.
Depreciation and amortization expense was $2.8 million in the
first quarter of 2007, an increase of 7.4% from $2.6 million in the
first quarter of 2006.
Interest income was $0.9 million in the first quarter of 2007, an
increase of 61.4% from the comparable 2006 period.
Interest expense in the first quarter of 2007 was $9.6 million as
compared to $10.2 million in the first quarter of 2006. Interest
expense on the Company's borrowings declined $1.0 million due to the
lower level of outstanding indebtedness and lower interest rates on
the floating rate portion of that indebtedness in the first quarter of
2007. Interest expense on the Company's ATM funds increased 10.9% from
$3.5 million in Q1 2006 to $3.9 million in Q1 2007, due primarily to
increases in the LIBOR rate on which those funds are priced and offset
by lower average ATM funds outstanding.
Income tax expense in the first quarter of 2007 was $4.7 million.
The Company's provision in the first quarter of 2007 is based on an
expected effective rate for all of 2007 of 38.0%.
Arriva Card
Revenues from the Arriva Card in the first quarter of 2007 were
$0.6 million. Cost of revenues (exclusive of depreciation and
amortization) in the first quarter of 2007 were $1.0 million and
operating expenses for Arriva in the quarter were $0.5 million.
Operating loss from Arriva operations was $1.0 million.
Receivables held by the Company's financing partner were $7.4
million at March 31, 2007. Total receivables at March 31, 2007 were
$12.8 million, of which $5.4 million were held by Arriva.
Balance Sheet
At March 31, 2007, the Company had unrestricted cash and cash
equivalents of $52.6 million. Settlement receivables were $72.5
million and settlement liabilities were $76.9 million.
Total borrowings at March 31, 2007, were $274.2 million,
consisting of $121.5 million of borrowings under the Company's senior
secured credit facilities and $152.8 million face amount of 8 3/4%
senior subordinated notes.
The Company made investments in property, equipment and intangible
assets of $2.4 million during the three months ended March 31, 2007,
which include ATM and other casino floor equipment as well as
purchases of computer and communications hardware and software.
During the quarter ended March 31, 2007, the Company repurchased
137 thousand shares of common stock at an average price per share of
$15.60 for a total investment of $2.1 million. As of May 4, 2007,
repurchases stood at 176 thousand shares at an average price of $15.69
and a total investment of $2.8 million.
Financial Guidance
For the full year of fiscal 2007, the Company currently expects
revenues in a range of $643 million to $652 million, adjusted diluted
cash EPS in a range of $0.75 to $0.77 per share, and diluted Cash
Earnings (including stock compensation expense) in a range of $0.66 to
$0.68 per share..
For the second quarter of fiscal 2007, the Company currently
expects revenues in a range of $154 to $157 million and adjusted
diluted cash EPS of approximately $0.18 and Cash Earnings (including
stock compensation expense) of approximately $0.16.
This financial guidance is given as of the date hereof and is
based on factors and circumstances known to the Company at this time.
Such factors and circumstances may change, and such changes may have
an impact on the Company's financial outlook.
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 adjusted results
on a supplemental basis. Adjusted results in the first quarter of 2007
and 2006 exclude $2.9 million and $2.0 million, respectively, of
stock-based compensation expense. In addition, the Company uses
certain non-GAAP measures of financial performance. Reconciliations
between GAAP measures and non-GAAP measures and between actual results
and adjusted results are provided at the end of this press release.
None of EBITDA (which excludes stock-based compensation), Cash
Earnings or Adjusted Cash Earnings is a measure of financial
performance under United States generally accepted accounting
principles ("GAAP"). Accordingly, none of them should be considered a
substitute for net income, operating income or other income or cash
flow data prepared in accordance with GAAP. The Company believes that
EBITDA (which excludes stock-based compensation), Cash Earnings and
Adjusted Cash Earnings are widely-referenced financial measures in the
financial markets. In addition, the Company has identified certain
adjustments to its financial results that address income or expenses
that the Company believes are unusual or non-recurring in nature. The
Company believes that referencing EBITDA (which excludes stock-based
compensation), Cash Earnings and Adjusted Cash Earnings and
identifying unusual or non-recurring items is helpful to investors.
Reconciliations between GAAP and non-GAAP measures and between actual
and adjusted financial results are presented elsewhere in this press
release.
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, our
expectation that our effective tax rate for the full year 2007 will be
38.0% and all of the statements in the section of this release
entitled "Financial Guidance."
Our beliefs, expectations, forecasts, objectives, anticipations,
intentions and strategies regarding the future, including without
limitation those concerning expected operating results, revenues and
earnings are not guarantees of future performance and are subject to
risks and uncertainties that could cause actual results to differ
materially from results contemplated by the forward-looking
statements, including but not limited to:
- -- with respect to our expectation that our effective tax rate will be
38.0% for the full year 2007:
-- changes in financial results from the expectations identified
under "Financial Guidance";
-- incurrence of expenses that are not deductible for tax purposes;
and
-- the entry into business lines or foreign countries with tax
structures different from the ones we are currently subject to.
- -- with respect to our Financial Guidance:
-- our failure to correctly predict increases in revenue due to
inaccuracies in our assumptions, our inability to execute on
business opportunities or other reasons;
-- our failure to correctly predict future gross margins and
operating expenses due to inaccuracies in our assumptions, our
inability to control expenses or other reasons;
-- our failure to correctly anticipate our capital spending in
2007, which would affect the level of depreciation expense and
the level of cash available for debt repayment or share
repurchases;
-- our failure to anticipate other uses of our cash which could
prevent us from repaying debt as anticipated;
-- our inability to correctly predict the future levels of interest
rates;
-- changes in income tax rates in the jurisdictions in which we
operate;
-- challenges by the Internal Revenue Service to the tax step-ups
that contribute to the bulk of our deferred tax asset;
-- unanticipated changes in the amount of our diluted common shares
outstanding; and
-- unanticipated expenses or other contingencies incurred in
connection with our compliance with Section 404 of the
Sarbanes-Oxley Act of 2002.
The forward-looking statements in this press release are subject
to additional risks and uncertainties set forth under the heading
"Risk Factors" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in our filings with the
Securities and Exchange Commission, including, without limitation, our
registration statement on Form S-1 (No. 333-133996), our Annual Report
filed on Form 10-K (No. 001-32622) and our quarterly reports on Form
10-Q, and are based on information available to us on the date hereof.
We do not intend, and assume no obligation, to update any
forward-looking statements. Readers are cautioned not to place undue
reliance on forward-looking statements, which speak only as of the
date of this press release.
About Global Cash Access Holdings, Inc.
Las Vegas-based Global Cash Access Holdings, Inc. is a holding
company whose principal asset is the stock of Global Cash Access,
Inc., a leading provider of cash access systems and related marketing
services to the gaming industry. For more information, please visit
the Company's Web site at www.globalcashaccess.com.
GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(amounts in thousands, except per share)
(unaudited)
- ----------------------------------------------------------------------
Three Months Ended
March 31,
------------------
2007 2006
--------- --------
REVENUES:
Cash advance $77,412 $67,055
ATM 60,766 53,160
Check services 7,351 7,244
Central Credit and other revenues 3,215 2,376
--------- --------
Total revenues 148,744 129,835
Cost of revenues (exclusive of depreciation and
amortization) (106,729) (91,351)
Operating expenses (17,932) (15,290)
Amortization (1,326) (1,502)
Depreciation (1,431) (1,065)
--------- --------
OPERATING INCOME 21,326 20,627
--------- --------
INTEREST INCOME (EXPENSE), NET
Interest income 896 555
Interest expense (9,642) (10,248)
--------- --------
Total interest income (expense), net (8,746) (9,693)
--------- --------
INCOME BEFORE INCOME TAX PROVISION AND MINORITY
OWNERSHIP LOSS 12,580 10,934
INCOME TAX PROVISION (4,744) (4,007)
--------- --------
INCOME BEFORE MINORITY OWNERSHIP LOSS 7,836 6,927
MINORITY OWNERSHIP LOSS, net of tax 64 36
--------- --------
NET INCOME $7,900 $6,963
========= ========
Earnings per share
Basic $0.10 $0.09
========= ========
Diluted $0.10 $0.09
========= ========
Weighted average number of common shares
outstanding
Basic 81,764 81,556
Diluted 82,044 81,556
GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES
Reconciliation of Adjusted Cash Earnings and Cash Earnings to Net
Income, and EBITDA (which excludes stock-based compensation) to Net
Income
(amounts in thousands)
(unaudited)
- ----------------------------------------------------------------------
Three Months Ended
March 31,
------------------
2007 2006
--------- --------
EBITDA (which excludes stock-based compensation) $27,019 $25,155
Minus:
Stock-based compensation expense (2,936) (1,961)
Depreciation (1,431) (1,065)
Amortization (1,326) (1,502)
Interest expense (9,642) (10,248)
Income tax provision (4,744) (4,007)
Plus:
Interest income 896 555
Minority ownership loss, net of tax 64 36
--------- --------
Net Income $7,900 $6,963
========= ========
Plus:
Deferred tax amortization related to
acquired goodwill 4,345 4,116
--------- --------
Cash Earnings $12,245 $11,079
========= ========
Plus:
Non-cash compensation expense, net of tax 1,820 1,243
--------- --------
Adjusted Cash Earnings $14,065 $12,322
========= ========
Weighted average number of common shares
outstanding
Basic 81,764 81,556
Diluted 82,044 81,556
Cash Earnings per share
Diluted $0.15 $0.14
========= ========
Adjusted Cash Earnings per share
Diluted $0.17 $0.15
========= ========
CONTACT: Global Cash Access Holdings, Inc.
Investor Contact:
Harry Hagerty, CFO, 702-262-5003
or
Media Contact:
Todd A. Smith, SVP Marketing, 702-855-3000