JACKSONVILLE, Fla., March 3, 2010 /PRNewswire-FirstCall/ -- Global
Axcess Corp (OTC Bulletin Board: GAXC; the "Company"), an
independent provider of self-service kiosk solutions, today
announced the financial results for the fourth quarter and fiscal
year ended December 31, 2009. Financial highlights for the fourth
quarter ended December 31, 2009 included: -- Revenue $5.4 million
-- EBITDA from continuing operations (See Reconciliation) $1.1
million -- Adjusted EBITDA** from continuing operations (See
Reconciliation) $1.1 million -- Income from continuing operations*
$404,500 -- Net income $1.7 million -- Diluted earnings per share
$0.07 Financial highlights for the fiscal year ended December 31,
2009 included: -- Revenue $21.5 million -- EBITDA from continuing
operations (See Reconciliation) $4.1 million -- Adjusted EBITDA**
from continuing operations (See Reconciliation) $4.7 million --
Income from continuing operations* $1.5 million -- Net income $2.8
million -- Diluted earnings per share $0.12 *excluding recognition
of deferred tax asset **EBITDA before stock compensation expense
and loss on early extinguishment of debt Mr. George McQuain, Chief
Executive Officer of the Company, stated, "This was a year of
tremendous progress, as we position the Company for continued
revenue and net income growth in 2010. During 2009, we increased
our gross margin and operating income, and reported a new record
net income for the year, demonstrating our ability to expand the
Company's profitability. We believe our focus on higher volume
locations and managing our expenses, particularly our interest
expense, has positioned us for additional acceleration of net
income in 2010." Fourth Quarter 2009 Financial Results The Company
reported revenues from continuing operations of $5.4 million for
the fourth quarter ended December 31, 2009, compared to $5.1
million for the fourth quarter ended December 31, 2008. This 4.9%
increase was mainly due to increased focus on higher volume
locations. Gross profit from continuing operations was $2.5
million, or 47.0% gross margin, for the fourth quarter ended
December 31, 2009, compared to $2.4 million, or 46.2% gross margin,
for the same period of 2008. The recognition of deferred tax assets
added $1.3 million of net income to the pre-tax operating profit of
$404,481 and $1.5 million for the fourth quarter and fiscal year
ended December 31, 2009, respectively. Deferred tax assets
represent future potential tax deductions, which are a result of
timing differences between tax laws and generally accepted
accounting principles ("GAAP"). In order to recognize a deferred
tax asset, GAAP requires evidence of sufficient future taxable
income. Accounting practice typically views a history of
profitability of eight to 12 consecutive quarters as sufficient
evidence. In addition, a loss on the extinguishment of debt of
$7,569 was recognized in the fourth quarter. Operating income from
continuing operations, excluding interest, the recognition of a
deferred tax asset and the loss on the extinguishment of debt, was
$548,019 for the fourth quarter ended December 31, 2009, compared
to $571,102 for the same period of 2008. During the fourth quarter
of 2009, the Company recorded net interest expense of $135,969,
compared to net interest expense of $264,006 for the same period of
2008. The decrease was mainly due to a decrease in debt and
refinancing outstanding debt at a lower interest rate. EBITDA
(earnings before net interest, taxes, depreciation and
amortization) for the fourth quarter of 2009 was $1.1 million,
compared to $1.1 million for the fourth quarter of 2008. Adjusted
EBITDA (EBITDA before stock compensation expenses and loss on early
extinguishment of debt) was $1.1 million for the fourth quarter of
2009 from $1.1 million for the fourth quarter of 2008. EBITDA and
adjusted EBITDA represent non-GAAP (Generally Accepted Accounting
Principles) financial measures. A table reconciling these measures
to the appropriate GAAP measures is included in this release.
Inclusive of the recognition of deferred tax assets, net income for
the fourth quarter ended December 31, 2009 was $1.7 million, or
$0.08 and $0.07 per basic and diluted share, respectively (based on
21.9 and 23.6 million basic and diluted weighted average shares
outstanding, respectively), which compares to net income of
$330,968, or $0.02 per share (based on 21.0 million basic and
diluted weighted average shares outstanding, respectively), for the
same period of 2008. The tax benefit represented $0.06 in earnings
per share and, excluding the tax benefit, net income would have
been $404,481. Mr. McQuain added, "We continued to strengthen our
operating metrics and increased net income for the quarter by 22%,
compared to the same period of 2008, excluding the income tax
benefit, on a revenue increase of 4.9%. Also key to increasing
profitability was the refinancing of our debt which resulted in a
48% reduction in interest expense compared to the fourth quarter
last year. As a result of our ongoing efforts to minimize expenses
and focus on higher margin opportunities, we have achieved 13
continuous quarters of net income. During the fourth quarter of
2009, we continued to expand our ATM customer base, providing a
larger base of predictable revenue as we move into 2010. We believe
this positions us to deliver consistent profitability and allows us
to move aggressively into the DVD kiosk marketplace, where revenue,
gross margin and growth opportunities are substantially higher. As
part of this move, we reached an agreement with self-service kiosk
industry consultant Michelle Macpherson to help us define and
implement our strategy to drive our national DVD kiosk expansion."
Mr. McQuain continued, "We are firmly focused on leveraging our
expertise in the self-service kiosk segment to capture market share
in the emerging DVD kiosk marketplace. We have established
InstaFlix, a Nationwide Ntertainment Services Inc. business line
and a subsidiary of the Company, to solidify our growing presence.
To date, we have deployed 24 DVD kiosk locations. We will have
another 10 of our InstaFlix-branded DVD kiosk locations installed
by mid-March of 2010 and expect to have another 18 kiosks delivered
and installed during April and May of 2010. This schedule is
consistent with our expectation of rolling out between five and 10
per month through the first half of 2010, and accelerating to 15 to
20 in the second half of the year. Along with this deployment
schedule, we will also be opportunistic and aggressive in going
after larger deals in the DVD kiosk marketplace should they present
themselves. Our growing presence in this marketplace is being
applauded and embraced by retailers and other potential partners
that are eager to participate in the rapidly expanding
self-service, on-demand model, but have been frustrated by current
service options. They recognize that our reputation for superior
operational excellence, industry leading customer service, and
up-time and on-time residual payments will help them generate
additional traffic and revenues in their retail locations with a
DVD self-service kiosk opportunity." Fiscal Year 2009 Financial
Results For the fiscal year ended December 31, 2009, total revenue
was $21.5 million, a decrease of 3.0%, compared to $22.2 million
for the same period of 2008. Gross profit for the fiscal year ended
December 31, 2009 was $10.2 million, reflecting a gross margin of
47.4%, compared to gross profit of $9.8 million, or a gross margin
of 44.3%, for the comparable 2008 period. Operating income from
continuing operations for the year, excluding interest, loss on
early extinguishment of debt and the recognition of the deferred
tax asset, was $2.7 million, compared to $2.2 million for the same
period of 2008. Net income for the fiscal year ended December 31,
2009 was $2.8 million, or $0.13 and $0.12 per basic and diluted
share (based on 21.7 and 22.8 million basic and diluted weighted
average shares outstanding, respectively), compared to net income
for the same period of 2008 of $1.2 million, or $0.06 per share
(based on 21.0 million basic and diluted weighted average shares
outstanding). Excluding a $1.3 million income tax benefit, net
income would have been $1.5 million for the fiscal year. EBITDA
decreased to $4.1 million for the fiscal year ended December 31,
2009 from $4.4 million for the fiscal year ended December 31, 2008.
Adjusted EBITDA increased to $4.7 million for the fiscal year ended
December 31, 2009 from $4.6 million for the fiscal year ended
December 31, 2008. Mr. McQuain continued, "We increased the
profitability during 2009 and positioned the Company for further
acceleration of net income in 2010. During 2009, the Company
generated $4.4 million in net cash by continuing operating
activities, an increase of 49.2% compared to 2008. We also
generated adjusted EBITDA of $4.7 million and $1.5 million of net
income. We completed 2009 with more than $2 million in cash and
reduced our working capital requirements for 2010 by refinancing
outstanding debt at a lower interest rate, without any pre-payment
penalty. As a result, we expect approximately $40,000 in 2010
interest savings due to the lower interest rate of the loan. We
have significantly reduced our working capital requirements and
improved our resources, positioning the Company for continued
revenue growth and expanded profitability in 2010." Balance Sheet
and Cash Flows Net cash provided by continuing operating activities
during the fiscal year ended December 31, 2009 was $4.4 million,
compared to net cash provided by continuing operating activities of
$3.0 million during the fiscal year ended December 31, 2008,
representing a 49.2% increase. Shareholders' equity increased 23.0%
to $16.6 million from $13.5 million at December 31, 2008. Michael
J. Loiacono, Chief Financial Officer of the Company, stated, "We
continued to expand our profitability and significantly increased
our cash flow from continuing operations for 2009. As a result of
our profitability, we believed the timing was right to recognize
deferred tax assets, which is reflected in our fourth quarter and
fiscal year results. As we completed our analysis of deferred tax
assets in connection with filing of the Company's Form 10-K for
2009, we realized we met the standards for recognition of these
assets in the fourth quarter of 2009. GAAP requires evidence of
sufficient future profitability, taxable income, to realize the
benefit of the deferred tax asset. We delayed recognition of this
tax benefit for as long as was appropriate." Outlook: "Assuming
similar transaction levels in 2010 compared to 2009, and based on
what we believe to be is a stable base of predictable revenue, we
are targeting 5% to 10% organic growth from our ATM business," Mr.
McQuain concluded. "Our DVD kiosk business will provide upside to
this guidance, and we expect this new and emerging segment to add
5% to 10% in incremental revenue for calendar 2010. As we continue
to carefully manage our expenses and focus on higher volume
locations and higher margin opportunities, we anticipate
accelerating our profitability in 2010 compared to 2009."
Conference Call Information Anyone interested in participating
should call 888-215-6899 and enter pass code 7617144 if calling
within the United States, or 913-312-0945 and pass code 7617144 if
calling internationally, approximately 5 to 10 minutes prior to 10
a.m. today. There will be a playback available until March 11,
2010. To listen to the playback, please call 888-203-1112 if
calling within the United States or 719-457-0820 if calling
internationally. Please use pass code 7617144 for the replay. A
transcription of the call can be accessed at the Company's website
at http://www.globalaxcess.biz/. About Global Axcess Corp
Headquartered in Jacksonville, Florida, Global Axcess Corp was
founded in 2001 with a mission to emerge as the leading independent
provider of self-service kiosk services in the United States. The
Company provides turnkey ATM and other self-service kiosk
management solutions that include cash and inventory management,
project and account management services. Global Axcess Corp
currently owns, manages or operates more than 4,500 ATMs and other
self-service kiosks in its national network spanning 43 states. �
For more information on the Company, please visit
http://www.globalaxcess.biz/. This press release may contain
forward-looking statements. Such forward-looking statements may be
identified by, among other things, the use of forward-looking
terminology such as: "believes," "expects," "may," "will,"
"should," or "anticipates," or the negative thereof or other
variations thereon or comparable terminology, or by discussions of
strategy that involve risks and uncertainties. Various important
risks and uncertainties may cause the Company's actual results to
differ materially from the results indicated by these
forward-looking statements. For a list and description of the risks
and uncertainties the Company faces, please refer to Part I, Item
1A of the Company's Annual Report on Form 10-K, filed with the
Securities and Exchange Commission on March 3, 2009, and other
filings that have been filed with the Securities and Exchange
Commission. The Company assumes no obligation to update any
forward-looking statements, whether as a result of new information,
future events or otherwise, and such statements are current only as
of the date they are made. - tables follow - GLOBAL AXCESS CORP AND
SUBSIDIARIES CONSOLIDATED BALANCE SHEETS As of December 31,
------------------------ 2009 2008 ------ ------ ASSETS Current
assets Cash and cash equivalents $2,007,860 $1,560,910 Automated
teller machine vault cash 250,000 - Accounts receivable, net of
allowance of $12,616 in 2009 and $9,799 in 2008 845,000 848,373
Inventory, net of allowance for obsolescence of $94,572 in 2009 and
$54,033 in 2008 308,031 276,731 Deferred tax asset - current
868,848 615,332 Prepaid expenses and other current assets 132,100
164,968 ------- ------- Total current assets 4,411,839 3,466,314
Fixed assets, net 5,299,661 4,723,138 Other assets Merchant
contracts, net 10,665,613 11,331,126 Intangible assets, net
4,095,911 4,118,426 Deferred tax asset - non-current 813,618 -
Restricted cash 800,000 - Other assets 30,307 9,232 ------- -------
Total assets $26,116,949 $23,648,236 =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts
payable and accrued liabilities $2,983,583 $2,527,396 Automated
teller machine vault cash payable 250,000 - Notes payable - related
parties - current portion, net 26,722 24,010 Notes payable -
current portion 19,803 - Senior lenders' notes payable - current
portion, net 1,828,572 606,705 Capital lease obligations - current
portion 667,233 779,990 ------- ------- Total current liabilities
5,775,913 3,938,101 Long-term liabilities Notes payable - related
parties - long-term portion, net 72,690 1,304,595 Notes payable -
long-term portion 73,120 - Senior lenders' notes payable -
long-term portion, net 3,300,000 4,240,086 Capital lease
obligations - long-term portion 329,314 425,582 Deferred tax
liability - long-term portion - 275,532 ------- ------- Total
liabilities 9,551,037 10,183,896 --------- ---------- Stockholders'
equity Preferred stock; $0.001 par value; 5,000,000 shares
authorized, no shares issued and outstanding - - Common stock;
$0.001 par value; 45,000,000 shares authorized, 21,931,786 and
21,021,786 shares issued and 21,883,924 and 20,973,924 shares
outstanding at 12/31/09 and 12/31/08, respectively 21,932 21,022
Additional paid-in capital 22,900,880 22,613,424 Accumulated
deficit (6,344,934) (9,158,140) Treasury stock; 47,862 shares of
common stock at cost (11,966) (11,966) ------- ------- Total
stockholders' equity 16,565,912 13,464,340 ---------- ----------
Total liabilities and stockholders' equity $26,116,949 $23,648,236
=========== =========== GLOBAL AXCESS CORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS For the Fiscal Years Ended
December 31, -------------------------- 2009 2008 ------ ------
Revenues $21,494,867 $22,171,072 Cost of revenues 11,316,919
12,347,991 ---------- ---------- Gross profit 10,177,948 9,823,081
---------- ---------- Operating expenses Depreciation expense
1,178,927 1,411,360 Amortization of intangible merchant contracts
786,173 770,270 Selling, general and administrative 5,437,624
5,288,959 Stock compensation expense 120,188 159,840 ----------
---------- Total operating expenses 7,522,912 7,630,429 ----------
---------- Operating income from continuing operations before items
shown below 2,655,036 2,192,652 ---------- ---------- Interest
expense, net (645,758) (1,046,287) Gain (loss) on sale or disposal
of assets - 23,872 Loss on early extinguishment of debt (474,960) -
---------- ---------- Income from continuing operations before
income tax benefit 1,534,318 1,170,237 Income tax benefit 1,278,888
- ---------- ---------- Income from continuing operations
$2,813,206 $1,170,237 ---------- ---------- Net Income $2,813,206
$1,170,237 ========== ========== Income per common share - basic:
Income from continuing operations $0.13 $0.06 Income from
discontinued operations $- $- ---------- ---------- Net Income per
common share $0.13 $0.06 ========== ========== Income per common
share - diluted: Income from continuing operations $0.12 $0.06
Income from discontinued operations $- $- ---------- ---------- Net
Income per common share $0.12 $0.06 ========== ========== Weighted
average common shares outstanding: Basic 21,654,554 20,973,924
Diluted 22,845,241 20,973,924 GLOBAL AXCESS CORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) For the Three
Months Ended December 31, December 31, 2009 2008 ------------
------------ Revenues $5,396,168 $5,144,607 Cost of revenues
2,859,397 2,769,439 --------- --------- Gross profit 2,536,771
2,375,168 --------- --------- Operating expenses Depreciation
expense 315,721 303,042 Amortization of intangible merchant
contracts 195,699 192,768 Selling, general and administrative
1,443,208 1,300,981 Stock compensation expense 34,124 7,276
--------- --------- Total operating expenses 1,988,752 1,804,067
--------- --------- Operating income from continuing operations
before items shown below 548,019 571,101 --------- ---------
Interest expense, net (135,969) (264,006) Gain on sale or disposal
of assets - 23,872 Loss on early extinguishment of debt (7,569) -
--------- --------- Income from continuing operations before
provision for income taxes 404,481 330,967 Income tax benefit
1,278,888 - --------- --------- Net Income $1,683,369 $330,967
========== ========= Income per common share - basic: ---------
--------- Net Income per common share $0.08 $0.02 =========
========= Income per common share - diluted: --------- ---------
Net Income per common share $0.07 $0.02 ========= =========
Weighted average common shares outstanding: Basic 21,883,924
20,973,924 Diluted 23,606,552 20,973,924 GLOBAL AXCESS CORP AND
SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the Fiscal
Years Ended December 31, -------------------------- 2009 2008
------ ------ Cash flows from operating activities: Income from
continuing operations $2,813,206 $1,170,237 Adjustments to
reconcile net income from continuing operations to net cash
provided by continuing operating activities: Stock based
compensation 120,188 159,840 Stock options issued to consultants in
lieu of cash compensation 23,999 - Loss on early extinguishment of
debt 474,960 - Depreciation expense 1,178,927 1,411,360
Amortization of intangible merchant contracts 786,173 770,270
Amortization of capitalized loan fees 26,756 46,431 Allowance for
doubtful accounts 2,883 (14,201) Allowance for inventory
obsolescence 40,539 54,033 Non-cash interest expense (income) on
swap agreement with senior lender (7,921) 40,985 Accretion of
discount on notes payable 50,066 165,988 (Gain) loss on sale or
disposal of assets - (23,872) Changes in operating assets and
liabilities: Change in automated teller machine vault cash
(250,000) - Change in accounts receivable 490 90,457 Change in
inventory (112,270) 116 Change in prepaid expenses and other
current assets 26,468 (23,620) Change in other assets (21,075)
5,907 Change in intangible assets, net (80,734) 634 Change in
deferred taxes (1,342,666) - Change in accounts payable and accrued
liabilities 464,108 (875,224) Change in automated teller machine
vault cash payable 250,000 - --------- --------- Net cash provided
by continuing operating activities 4,444,097 2,979,341 ---------
--------- Cash flows from investing activities: Insurance proceeds
on disposal of fixed assets - 72,681 Costs of acquiring merchant
contracts (120,660) (43,758) Purchase of property and equipment
(1,051,494) (290,304) --------- --------- Net cash used in
investing activities (1,172,154) (261,381) --------- --------- Cash
flows from financing activities: Proceeds from issuance of common
stock 9,100 - Proceeds from senior lenders' notes payable 6,200,000
39,028 Proceeds from notes payable 69,905 - Change in restricted
cash (800,000) - Principal payments on senior lenders' notes
payable (6,171,429) (704,177) Principal payments on notes payable
(11,833) (25,000) Principal payments on notes payable - related
parties (1,248,186) (20,695) Principal payments on capital lease
obligations (872,550) (986,367) --------- --------- Net cash used
in financing activities (2,824,993) (1,697,211) --------- ---------
Increase in cash 446,950 1,020,749 Cash, beginning of period
1,560,910 540,161 --------- --------- Cash, end of the period
$2,007,860 $1,560,910 ========== ========== Cash paid for interest
$555,969 $786,697 The following table sets forth a reconciliation
of net income from continuing operations to EBITDA from continuing
operations for the fourth quarter ended December 31, 2009 and 2008:
For the Three Months Ended December 31, December 31, 2009 2008
------------ ----------- Net income from continuing operations
$1,683,369 $330,967 Income tax benefit (1,278,888) - Interest
expense, net 135,969 264,006 Depreciation expense 315,721 303,042
Amortization of intangible merchant contracts 195,699 192,768
------- ------- EBITDA from continuing operations $1,051,870
$1,090,783 ========== ========== The following table sets forth a
reconciliation of net income from continuing operations to EBITDA
from continuing operations for the fiscal year ended December 31,
2009 and 2008: For the Twelve Months Ended December 31, December
31, 2009 2008 ------------ ----------- Net income from continuing
operations $2,813,206 $1,170,237 Income tax benefit (1,278,888) -
Interest expense, net 645,758 1,046,287 Depreciation expense
1,178,927 1,411,360 Amortization of intangible merchant contracts
786,173 770,270 ------- ------- EBITDA from continuing operations
$4,145,176 $4,398,154 ========== ========== The following table
sets forth a reconciliation of net income from continuing
operations to EBITDA from continuing operations before stock
compensation expense and loss on early extinguishment of debt
("Adjusted EBITDA") for the fourth quarter ended December 31, 2009
and 2008: For the Three Months Ended December 31, December 31, 2009
2008 ------------ ----------- Net income from continuing operations
$1,683,369 $330,967 Income tax benefit (1,278,888) - Interest
expense, net 135,969 264,006 Depreciation expense 315,721 303,042
Amortization of intangible merchant contracts 195,699 192,768 Stock
compensation expense 34,124 7,276 Loss on early extinguishment of
debt 7,569 - ------- ------- Adjusted EBITDA $1,093,563 $1,098,059
========== ========== The following table sets forth a
reconciliation of net income from continuing operations to EBITDA
from continuing operations before stock compensation expense and
loss on early extinguishment of debt ("Adjusted EBITDA") for the
fiscal year ended December 31, 2009 and 2008: For the Twelve Months
Ended December 31, December 31, 2009 2008 ------------ -----------
Net income from continuing operations $2,813,206 $1,170,237 Income
tax benefit (1,278,888) - Interest expense, net 645,758 1,046,287
Depreciation expense 1,178,927 1,411,360 Amortization of intangible
merchant contracts 786,173 770,270 Stock compensation expense
120,188 159,840 Loss on early extinguishment of debt 474,960 -
------- ------- Adjusted EBITDA $4,740,324 $4,557,994 ==========
========== DATASOURCE: Global Axcess Corp CONTACT: Sharon Jackson
of Global Axcess Corp, +1-904-395-1149,IR@GAXC.biz; or Brett Maas,
Brett@haydenir.com, or Jeff Stanlis,Jeff@haydenir.com, both of
Hayden IR, +1-646-536-7331, for Global Axcess Corp Web Site:
http://www.globalaxcess.biz/
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