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Global Cash Access Holdings Inc. Reports Operating Results (10-Q)

August 06, 2010 | About:
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10qk

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Global Cash Access Holdings Inc. (GCA) filed Quarterly Report for the period ended 2010-06-30.

Global Cash Access Holdings Inc. has a market cap of $257.4 million; its shares were traded at around $3.91 with a P/E ratio of 5.6 and P/S ratio of 0.4. Global Cash Access Holdings Inc. had an annual average earning growth of 1.8% over the past 5 years.GCA is in the portfolios of Jim Simons of Renaissance Technologies LLC, Jeremy Grantham of GMO LLC.

Highlight of Business Operations:

ATM revenues for the three and six months ended June 30, 2010 were $80.6 million and $162.4 million, a decrease of $4.0 million and $8.6 million, or 4.7% and 5.0%, respectively, as compared to the three and six months ended June 30, 2009. This decrease was primarily due to the continued decline in attendance by patrons to gaming establishments. The number of ATM transactions declined by approximately 1.5 million and 3.3 million, or 6.9% and 7.5%, respectively, while revenue per ATM transaction was up modestly due to a slightly higher average surcharge assessed per ATM transaction, for the three and six months ended June 30, 2010 as compared to the same period of 2009.

Depreciation and amortization expenses for the three and six months ended June 30, 2010 were $4.1 million and $8.4 million, a decrease of approximately $0.4 million and $0.9 million, or 8.9% and 9.7%, respectively, as compared to the three and six months ended June 30, 2009. This decrease was primarily due to a decrease in amortization due to the run-off of amortization.

Interest expense, net for the three and six months ended June 30, 2010 was $4.1 million and $8.5 million, a decrease of $0.5 million and $0.7 million, or 10.9% and 7.6% as compared to the three and six months ended June 30, 2009. This decrease is primarily due to lower interest rates on lower average outstanding borrowings as well as a lower average draw on the Treasury Services Agreement of $357.5 million and $342.6 million for the three and six months ended June 30, 2010 as compared to $382.8 million and $376.2 million for the three and six months ended June 30, 2009. Interest income was also lower due to lower interest rates earned on invested cash balances during the three and six months ended June 30, 2010 as compared to the three and six months ended June 30, 2009.

Our principal source of liquidity is cash flows from operating activities, which were $42.9 million and $24.2 million for the six months ended June 30, 2010 and 2009, respectively. Changes in operating assets and liabilities accounted for net increases of $16.0 million and $18.1 million in cash flow from operating activities for the six months ended June 30, 2010 and 2009, which includes $12.9 million and approximately $14.0 million in non-cash expenses for the six months ended June 30, 2010, and $18.2 million of net income partially offset by $14.0 million of non-cash expenses for the six months ended June 30, 2009.

Net cash used in investing activities was $20.3 million and $3.8 million for the six months ended June 30, 2010 and 2009, respectively. Included in net cash used in investing activities for the six months ended June 30, 2010 and 2009, respectively, is $15.4 million and $0 for acquisitions, and $4.8 million and $3.5 million for capital investments and $0.1 million and $0.3 million for other, respectively.

Net cash used in financing activities was $45.6 million for the six months ended June 30, 2010 compared to $51.5 million provided for the six months ended June 30, 2009. For the six months ended June 30, 2010, we made payments totaling $25.0 million against our senior subordinate debt and payments of $0.5 million against our credit facility as compared to payments made of $15.5 million against our credit facility for the same period of 2009. We repurchased $25.7 million of shares pursuant to negotiated private transactions during the six months ended June 30, 2010 as compared to $36.2 million of shares purchased in open-market transaction during the six months ended June 30, 2009. We also had proceeds from the exercise of stock options of $5.5 million during the six months ended June 30, 2010 as compared to proceeds from the exercise of stock options of $0.2 million during the six months ended June 30, 2009.

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