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Global Cash Access, Inc. to Acquire Cash Systems, Inc.
Acquisition to Give GCA Greater Scale to Compete in Electronic Payments Market
Jun 16, 2008 7:00:00 AM
Copyright Business Wire 2008
View Additional ProfilesLAS VEGAS--(BUSINESS WIRE)--
Global Cash Access, Inc. (GCA) (NYSE: GCA) and Cash Systems, Inc. (Cash Systems) (NASDAQ: CKNN) today jointly announced the execution of a definitive agreement whereby GCA will acquire Cash Systems for $0.50 per share (the "Transaction"). The Transaction has been approved by the boards of directors of both companies.
At the closing of the Transaction, all of Cash Systems' issued and outstanding shares of common stock will be converted into the right to receive cash in the amount of $0.50 per share and all of Cash Systems' outstanding convertible promissory notes and warrants will be redeemed for the sum of $21 million plus accrued but unpaid interest. The aggregate amount paid to Cash Systems' stockholders, note holders and warrant holders, together with Cash Systems' transaction expenses, is expected to be approximately $33 million.
GCA will gain approximately 120 new customers as a result of the acquisition. The closing is presently anticipated to occur at the end of July 2008, subject to the required approval of Cash Systems' stockholders and customary and other closing conditions. GCA expects the Transaction to have no material effect on GCA's 2008 operating income and to be modestly accretive in 2009.
GCA President and Chief Executive Officer Scott H. Betts said, "We are excited about the opportunities the acquisition of Cash Systems provides for the continuation of our strategy of having the scale required to compete effectively in the highly competitive electronic payments market. We believe this acquisition provides us with unique synergies within the gaming market and continues GCA's product innovation efforts, while providing the growth and cross-selling potential that our stockholders expect."
Cash Systems Chairman and Chief Executive Officer Michael Rumbolz said, "I believe that this acquisition is a great opportunity for Cash Systems and its customers. GCA will lend scale and resources to continue to drive innovative products in the market."
Goldman, Sachs & Co. acted as financial advisor to GCA and Morrison & Foerster LLP acted as legal advisor to GCA. Deutsche Bank Securities Inc. and Alpine Advisors LLC acted as financial advisors to Cash Systems and Manatt, Phelps & Phillips LLP acted as legal advisor to Cash Systems.
Additional Information and Where to Find It
In connection with the proposed transaction, a proxy statement of Cash Systems, Inc. and other materials will be filed with SEC. WE URGE INVESTORS TO READ THE PROXY STATEMENT AND THESE OTHER MATERIALS CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT CASH SYSTEMS, INC. AND THE PROPOSED TRANSACTION. Investors will be able to obtain free copies of the proxy statement (when available) as well as other filed documents containing information about Cash Systems, Inc. at http://www.sec.gov, the SEC's free internet site. Free copies of Cash Systems, Inc.'s SEC filings are also available at http://www.cashsystemsinc.com.
Participants in the Solicitation
Cash Systems, Inc. and its executive officers and directors may be deemed, under SEC rules, to be participants in the solicitation of proxies from stockholders with respect to the proposed transaction. Information regarding the officers and directors of Cash System is included in its Form 10-K/A filed with SEC on April 29, 2008. More detailed information regarding the identity of potential participants, and their direct or indirect interests, by securities, holdings or otherwise, will be set forth in the proxy statement and other materials to be filed with SEC in connection with the proposed transaction.
About Global Cash Access
Global Cash Access, Inc., a wholly owned subsidiary of Global Cash Access Holdings, Inc. (NYSE: GCA), is the leading provider of cash access and related services to the global gaming industry. Based in Las Vegas, GCA serves approximately 1,100 casinos and other clients in the U.S., Canada, Europe, the Caribbean and Asia. GCA provides proprietary technology that helps responsible patrons access cash via ATM, debit card, check cashing and credit card cash advance transactions for their casino entertainment. GCA also provides services that enhance casino marketing initiatives and credit decision-making through its wholly owned subsidiary Central Credit LLC, a credit decision-making tool that uses proprietary credit bureau databases. GCA is recognized with numerous gaming industry awards for developing technologies and services that enhance casino profitability and customer loyalty. For more information, please visit www.globalcashaccess.com.
About Cash Systems
Cash Systems, Inc., located in Las Vegas, with an additional office in Minneapolis, is a provider of cash-access and related services to the retail and gaming industries. Cash Systems' products include its proprietary cash advance systems, ATMs and check cashing solutions. Please visit www.cashsystemsinc.com for more information.
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. Forward-looking statements in this press release include, without limitation, GCA's intention to consummate the acquisition of Cash Systems; the impact such acquisition may have on GCA's business, on GCA's ability to compete in the electronic payments marketplace, or on growth and cross-selling potential; and GCA's intention to develop products and technology. These forward-looking statements are not guarantees of future performance and are subject to a number of risks and uncertainties that could cause actual results to differ materially from the results implied or contemplated by the forward-looking statements, including but not limited to the failure of Cash Systems to obtain required stockholder approval of the acquisition; failure to satisfy all conditions precedent to consummating the acquisition; difficulty integrating Cash Systems' operations into GCA's and the overestimation of potential synergies from the acquisition; the loss of Cash Systems' customers as a result of the acquisition; the assumption of unanticipated liabilities; and inaccuracies in assumptions as to gaming patron habits, the unwillingness or inability of either patrons or gaming establishment personnel to use new products and services and bear the economic costs of doing so, and regulatory impediments to the deployment of new products or technology. The forward-looking statements in this press release are subject to additional risks and uncertainties set forth under the heading "Risk Factors" in GCA's filings with the Securities and Exchange Commission, including, without limitation, its Quarterly Report on Form 10-Q filed on May 14, 2008, and are based on information available to GCA on the date hereof. Neither GCA nor Cash Systems intends, and neither GCA nor Cash Systems assumes any 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.
Source: Global Cash Access, Inc. and Cash Systems, Inc.
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Global Cash Access
Inc.
George Gresham
702-855-3005
or
Media:
Adria Greenberg
212-255-8386
or
Cash Systems
Inc.
Don Duffy
203-682-8215
GoldenZ
17 años hace
.<font color=black>** CKNN NEWS
Cash Systems, Inc. Announces First Quarter 2008 Financial Results
4:04p ET May 12, 2008 (Business Wire)
Cash Systems, Inc. (NASDAQ: CKNN), a provider of cash access solutions for the gaming industry, today announced first quarter 2008 financial results.
First quarter 2008 highlights include:
-- A multi-year contract extension with Choctaw Nation of Oklahoma for its Choctaw Casinos and the addition of another Choctaw Casino location where Cash Systems will provide its casinopc for cash advance services, ecash checking and full service booth operation.
-- A Letter of Intent to provide Cash Systems powercash product to American Gaming Group LLC's first casino project.
-- powercash compatibility with the Bally Technologies, Inc.'s (NYSE: BYI) new iVIEW(TM) Display Manager (DM)(TM).
-- A new multi-year contract to provide its full line of cash access services including all-in-1atm services, casinopc for cash advance services, and ecash checking at Gold River Casino.
-- A new multi-year contract with The Wildwood Casino where Cash Systems will provide its full line of cash access services including all-in-1atm, casinopc for cash advance services, and ecash checking.
Subsequent to the end of the first quarter of 2008 the Company also announced:
-- A new multi-year contract with Fantasy Springs Resort Casino, to provide casinopc for cash advance services, all-in-1atm services, ecash checking services for check guarantee and full service booth operation, in addition to powercash.
First Quarter Financial Results
Revenue for the first quarter was $27.1 million, an increase of 8%, compared to $25.2 million in the first quarter of 2007. The Company reported a loss from operations of ($864,031) in the first quarter of 2008 compared to loss from operations of ($268,021) in the prior year period. Net loss was ($4.6 million), or ($0.25) per diluted share, compared to net loss of ($1.4 million) or ($0.08) per diluted share, in the first quarter of 2007.
Michael Rumbolz, President and Chief Executive Officer of Cash Systems, Inc. stated, "We continue to see progress and positive customer feedback from our product offerings and we continue to make progress on powercash. We remain focused on providing outstanding service to our clients."
Second Amended and Restated Notes and Warrants
On March 14, 2008, the Company entered into a Second Amendment and Exchange Agreement with respect to its outstanding senior secured convertible notes. The Second Amended and Restated Notes differ from the First Amended and Restated Notes in certain material respects, including, without limitation, (i) the aggregate principal amount was increased from $22.0 million to $24.2 million, (ii) the conversion price was reduced from $8.00 per share to $2.51 per share, (iii) the aggregate amount that the note holders may require the Company to redeem, and the aggregate amount that the Company may elect to redeem, on October 10, 2008 was increased from $8 million to $12.1 million, (iv) and the financial covenants based on Consolidated Total Debt to EBITDA were eliminated and the financial covenants based on Consolidated Revenue and Consolidated EBITDA were modified to apply starting with the quarter ending March 31, 2009. The Second Amended and Restated Warrants to purchase common stock differ from the First Amended and Restated Warrants in certain material respects, including, without limitation, the exercise price was reduced from $7.38 per share to $2.49 per share. As a result of the note holder's failure to reduce the conversion price of the Second Amended and Restated Notes and the exercise price of the Second Amended and Restated Warrants to 120% of the arithmetic average of the weighted average price of the Company's common stock for each day during the period commencing on March 18, 2008 and ending on April 15, 2008, the conversion price of the Second Amended and Restated Notes continues to be $2.51 per share and the exercise price of the Second Amended and Restated Warrants continues to be $2.49 per share.
Strategic Alternatives
The Company previously announced that its Board of Directors decided to explore strategic alternatives to maximize shareholder value. This process is ongoing. There can be no assurances that this process will result in any specific transaction. The Company does not intend to disclose developments regarding its exploration of strategic alternatives unless and until the Board of Directors approve a definitive transaction.
Earnings Conference Call
The Company will conduct a conference call to discuss its first quarter 2008 financial results on Monday, May 12, 2008 at 5:00 p.m. ET. A webcast of the call will be available by visiting the investor relations section of the company's website at http://www.cashsystemsinc.com/ir. The call can also be accessed live over the phone by dialing 888-208-1427 or for international callers by dialing 913-312-1398. A replay of the call will be available one hour after the call and can be accessed by dialing 888-203-1112 or 719-457-0820 for international callers; the pin number is 6643217. The replay will be available from May 12, 2008 through May 19, 2008.
About Cash Systems, Inc.
Cash Systems, Inc., located in Las Vegas, with additional offices in San Diego and Minneapolis, is a provider of cash-access and related services to the retail and gaming industries. Cash Systems' products include its proprietary cash advance systems, ATMs and check cashing solutions. 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 Forms 10K and 10Q. 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.
CASH SYSTEMS, INC. CONSOLIDATED BALANCE SHEETS March 31, December 31, 2008 2007 (Unaudited) (Audited) ------------- ------------- ASSETS CURRENT ASSETS Cash $ 13,408,127 $ 16,617,643 Restricted cash 630,906 625,059 Current portion of prepaid commissions 428,908 394,096 Current portion of loans receivable 1,441,815 331,005 Settlements due from credit card processors 5,630,035 14,779,241 Settlements due from ATM processors 12,425,412 12,094,482 Other current assets 7,930,474 7,409,494 ------------- ------------- Total Current Assets 41,895,677 52,251,020 ------------- ------------- PROPERTY AND EQUIPMENT, NET 7,098,945 7,087,436 OTHER ASSETS Goodwill 4,077,700 4,077,700 Intangible assets, net 4,024,359 4,289,024 Long-term prepaid commissions, net of current portion 456,847 385,876 Long-term loans receivable, net of current portion 191,855 265,504 Restricted cash 396,158 211,317 Other 93,655 308,061 ------------- ------------- Total Other Assets 9,240,574 9,537,482 ------------- ------------- TOTAL ASSETS $ 58,235,196 $ 68,875,938 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Checks issued in excess of cash in bank $ 8,031,664 $ 15,205,390 Short-term debt, net 12,100,000 12,100,000 Accounts payable - trade 1,922,469 1,754,781 Credit card cash advance fees payable 1,696,789 1,667,462 ATM commissions payable 2,556,061 2,028,940 Credit card chargebacks payable 620,452 326,563 Check cashing commissions payable 235,117 223,785 Deferred Revenues 459,526 - Other accrued expenses 20,398,760 23,395,403 ------------- ------------- Total Current Liabilities 48,020,838 56,702,324 ------------- ------------- LONG-TERM LIABILITIES Long-term debt, net 12,100,000 9,900,000 ------------- ------------- Total Liabilities 60,120,838 66,602,324 ------------- ------------- STOCKHOLDERS' EQUITY Common stock, par value of $0.001, 50,000,000 shares authorized, 18,776,913 and 18,776,913 shares issued, 18,481,580 and 18,446,163 shares outstanding 18,483 18,447 Additional paid-in capital 30,022,124 29,535,292 Accumulated deficit (31,926,249) (27,280,125) ------------- ------------- Total Stockholders' Equity (1,885,642) 2,273,614 ------------- ------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 58,235,196 $ 68,875,938 ============= =============
CASH SYSTEMS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended March 31, ------------------------- 2008 2007 ------------ ------------ Commissions on credit card cash advances, ATMs and check cashing services $27,066,228 $25,156,145 Operating expenses Commissions 15,400,617 14,196,324 Processing costs 4,325,779 4,305,903 Check cashing costs 2,073,227 923,502 Armored carrier services 302,253 277,360 Payroll, benefits and related taxes 3,189,093 2,822,429 Professional fees 530,371 398,885 Other general and administrative expenses 1,261,678 1,654,609 Depreciation and amortization 847,241 845,154 ------------ ------------ Total operating expenses 27,930,259 25,424,166 ------------ ------------ Loss from operations (864,031) (268,021) ------------ ------------ Other income (expense) Interest expense (1,207,422) (1,169,180) Loss on extinguishment of debt (2,615,480) - Interest and other income 40,809 11,246 ------------ ------------ Total other income (expense) (3,782,093) (1,157,934) ------------ ------------ Loss before income taxes (4,646,124) (1,425,955) Provision for income taxes - - ------------ ------------ Net Loss $(4,646,124) $(1,425,955) ============ ============ Net Loss per common share: Basic $ (0.25) $ (0.08) Diluted $ (0.25) $ (0.08) Weighted average common shares outstanding: Basic 18,454,603 18,055,350 Diluted 18,454,603 18,055,350
SOURCE: Cash Systems, Inc.
Integrated Corporate Relations Don Duffy, 203-682-8200
Cash Systems: Review Of Strategic Alternatives Ongoing >CKNNLast update: 5/12/2008 4:04:46 PM(MORE TO FOLLOW) Dow Jones NewswiresMay 12, 2008 16:04 ET (20:04 GMT)
Cash Systems: Review Of Strategic Alternatives Ongoing >CKNNLast update: 5/12/2008 4:04:46 PM(MORE TO FOLLOW) Dow Jones NewswiresMay 12, 2008 16:04 ET (20:04 GMT)
Cash Systems: Review Of Strategic Alternatives Ongoing >CKNNLast update: 5/12/2008 4:04:46 PM(MORE TO FOLLOW) Dow Jones NewswiresMay 12, 2008 16:04 ET (20:04 GMT)
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