UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): May 7, 2013
 
GLOBAL CASH ACCESS HOLDINGS, INC.
(Exact name of registrant as specified in its charter)

Delaware	001-32622	20-0723270	
(State or other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)	

7250 S. Tenaya Way, Suite 100
Las Vegas, Nevada	 	89113	
(Address of Principal Executive Offices)	 	(Zip Code)	
 
Registrant’s telephone number, including area code: (800) 833-7110

(Former name or former address if changed since last report.)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
o             Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o             Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o             Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o             Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 
Item 2.02.  Results Of Operations And Financial Condition.
 
On May 7, 2013, Global Cash Access Holdings, Inc. issued a press release announcing its results of operations for the three months ended March 31, 2013.  A copy of the press release is attached hereto as Exhibit 99.1.
 
Item 9.01.  Financial Statements and Exhibits.
 
(d)           Exhibits

Exhibit No.	 	Document	
 	 	 	
99.1	 	Press Release announcing results of operations for the three months ended March 31, 2013.	
 
This Form 8-K and the attached exhibit are furnished to, but not filed with, the Securities and Exchange Commission.  The information contained herein and in the accompanying exhibit shall not be incorporated by reference into any filing of the registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference into such filing.
 
2 

 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

GLOBAL CASH ACCESS HOLDINGS, INC.	 	
 	 	
Date: May 7, 2013	 	
 	 	
By:    /s/ Mary E. Higgins	 	
 	 	
Mary E. Higgins	 	
 	 	
Chief Financial Officer	 	
 
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Exhibit 99.1

 
Global Cash Access Reports First Quarter 2013 Results
 
Las Vegas, NV – May 7, 2013 – Global Cash Access Holdings, Inc. (the “Company”) (NYSE:GCA) announced today financial results for the first quarter ended March 31, 2013.
 
“We are pleased with our first quarter 2013 results as they were right on target to meet our full year 2013 guidance expectations.  We are also excited about the momentum of our kiosk business, where its performance and sales pipeline continue to improve.  Our team continues to stay focused on product development with a goal of providing our customers the most complete cash access delivery system available in the marketplace,” said David Lopez, President and CEO of GCA.
 
Fiscal First Quarter 2013 Results
 
Revenues were $146.8 million for the first quarter 2013, as compared to $151.1 million for the same period in 2012.  Operating income was $12.9 million for the first quarter 2013, as compared to $15.7 million for the same period in 2012.  Adjusted earnings before interest, taxes, depreciation and amortization and non-cash compensation expense (“Adjusted EBITDA”) (see Non-GAAP Financial Information below) were $17.9 million for the first quarter 2013, as compared to $20.6 million for the same period in 2012.  These decreases were primarily due to lower revenues and operating income in our ATM segment and higher payroll and related expenses, including non-cash stock compensation expense, partially offset by higher kiosk sales in the first quarter 2013, as compared to the same period in 2012.
 
Income from operations before income tax provision was $9.7 million for the first quarter 2013, as compared to $11.2 million for the same period in 2012.  Diluted earnings per share from continuing operations were $0.09 for the first quarter 2013 (on 67.9 million diluted shares), as compared to $0.11 for the same period in 2012 (on 66.2 million diluted shares).  Cash earnings per share (“Cash EPS”) (see Non-GAAP Financial Information below) were $0.19 for the first quarter 2013, as compared to $0.21 for the same period in 2012.
 
2013 Outlook
 
The Company reaffirms its estimates that for the fiscal year ending December 31, 2013, Cash EPS will be between approximately $0.74 and $0.83 (on diluted shares of approximately 67.2 million) and Adjusted EBITDA will be between $70 million and $74 million.  This estimated outlook is based primarily upon the combination of the following factors: (a) the anticipated impact of less favorable pricing terms associated with several customer contract renewals in 2013; (b) the anticipated impact of certain large customers not renewing their contracts; (c) flat to low growth in the domestic gaming industry; (d) no significant casino openings in 2013; (e) a projected increase in our kiosk sales and services business in 2013; and (f) continued investment with respect to the Company’s technology infrastructure and personnel.
 
Investor Conference Call and Webcast
 
The Company will host an investor conference call to discuss its first quarter 2013 results today at 5:00 p.m. ET. The conference call can be accessed live over the phone by dialing (877) 941-8416 or for international callers by dialing (480) 629-9856.  A replay will be available at 8:00 p.m. ET and can be accessed by dialing (877) 870-5176 or (858) 384-5517 for international callers; the pin number is 4615839.  The replay will be available until May 14, 2013. The call will be webcast live from the Company’s website at www.gcainc.com under the Investor Relations section.
 
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 EBITDA, Adjusted EBITDA, Cash Earnings and Cash EPS on a supplemental basis. Reconciliations between GAAP measures and Non-GAAP measures and between actual results and adjusted results are provided at the end of this press release. EBITDA, Adjusted EBITDA, Cash Earnings and Cash EPS are not measures of financial performance under United States Generally Accepted Accounting Principles (“GAAP”). Accordingly, they should not be considered a substitute for net income, operating income, basic or diluted earnings per share or cash flow data prepared in accordance with GAAP.

 
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: (a) our estimates of 2013 cash earnings per share and Adjusted EBITDA and the assumptions and factors upon which they are based; and (b) our belief that cash earnings per share and Adjusted EBITDA are widely-referenced financial measures in the financial markets and that references to the foregoing are helpful to investors.
 
These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected or assumed, including but not limited to the following: the timing and the extent of a recovery in the gaming industry; our ability to replace revenue associated with terminated contracts; our ability to introduce new products and services; gaming establishment and patron preferences; national and international economic conditions; changes in gaming regulatory, card association and statutory requirements; regulatory and licensing difficulties; competitive pressures; operational limitations; gaming market contraction; changes to tax laws; uncertainty of litigation outcomes; interest rate fluctuations; inaccuracies in underlying operating assumptions; unanticipated expenses or capital needs; technological obsolescence; and employee turnover.  If any of these assumptions prove to be incorrect, the results contemplated by the forward-looking statements regarding our future results of operations are unlikely to be realized.
 
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 Annual Report filed on Form 10-K on March 12, 2013, and subsequent periodic reports 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, Inc. (“GCA”), a wholly owned subsidiary of Global Cash Access Holdings, Inc., is a leading provider of cash access products and related services to over 1,000 casinos and other gaming properties in the United States, Europe, Canada, the Caribbean, Central America and Asia. GCA’s products and services provide gaming patrons access to cash through a variety of methods, including ATM cash withdrawals, point-of-sale debit card transactions, credit card transactions, check verification and warranty services, and Western Union money transfers. GCA is a leading manufacturer and distributor of cash handling devices and related software. GCA also provides products and services that improve credit decision-making, automate cashier operations and enhance patron marketing activities for gaming establishments. With its proprietary database of gaming patron credit history and transaction data on millions of gaming patrons worldwide, GCA is recognized for successfully developing and deploying technological innovations that increase client profitability, operational efficiency and customer loyalty. More information is available at GCA’s website at www.gcainc.com.
 
Contacts

Investor Relations	Media Relations	
Don Duffy, ICR	Cory Ziskind, ICR	
(203) 682-8215	(646) 277-1232	
IR@gcamail.com	cziskind@icrinc.com	

SOURCE: Global Cash Access Holdings, Inc.
 
2 

 
GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
( In thousands, except earnings per share amounts )
(Unaudited)

 	 	Three Months Ended March 31,	 	
 	 	2013	 	2012	 	
 	 	 	 	 	 	
Revenues	 	$	146,822	 	$	151,065	 	
 	 	 	 	 	 	
Costs and expenses	 	 	 	 	 	
Cost of revenues (exclusive of depreciation and amortization)	 	111,099	 	113,815	 	
Operating expenses	 	18,984	 	17,488	 	
Depreciation	 	1,568	 	1,745	 	
Amortization	 	2,270	 	2,321	 	
Total costs and expenses	 	133,921	 	135,369	 	
 	 	 	 	 	 	
Operating income	 	12,901	 	15,696	 	
 	 	 	 	 	 	
Other expenses	 	 	 	 	 	
Interest expense, net of interest income	 	3,163	 	4,483	 	
Total other expenses	 	3,163	 	4,483	 	
 	 	 	 	 	 	
Income from operations before tax	 	9,738	 	11,213	 	
 	 	 	 	 	 	
Income tax provision	 	3,602	 	4,085	 	
 	 	 	 	 	 	
Net income	 	6,136	 	7,128	 	
 	 	 	 	 	 	
Foreign currency translation	 	(415)	 	145	 	
 	 	 	 	 	 	
Comprehensive income	 	$	5,721	 	$	7,273	 	
 	 	 	 	 	 	
Earnings per share	 	 	 	 	 	
Basic	 	$	0.09	 	$	0.11	 	
Diluted	 	$	0.09	 	$	0.11	 	
 	 	 	 	 	 	
Weighted average common shares outstanding	 	 	 	 	 	
Basic	 	66,697	 	65,134	 	
Diluted	 	67,882	 	66,190	 	
 
3 

 
GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
( In thousands, except par value amounts )
(Unaudited)

 	 	At March 31,	 	At December 31,	 	
 	 	2013	 	2012	 	
ASSETS	 	 	 	 	 	
 	 	 	 	 	 	
Cash and cash equivalents	 	$	70,702	 	$	153,020	 	
Restricted cash and cash equivalents	 	200	 	200	 	
Settlement receivables	 	118,886	 	29,484	 	
Other receivables, net of allowances for doubtful accounts of $6.2 million and $6.9 million, respectively	 	11,123	 	11,571	 	
Inventory	 	7,029	 	7,126	 	
Prepaid expenses and other assets	 	18,143	 	18,254	 	
Property, equipment and leasehold improvements, net	 	15,459	 	15,441	 	
Goodwill	 	180,124	 	180,141	 	
Other intangible assets, net	 	33,022	 	33,994	 	
Deferred income taxes, net	 	101,265	 	104,664	 	
 	 	 	 	 	 	
Total assets	 	$	555,953	 	$	553,895	 	
 	 	 	 	 	 	
LIABILITIES AND STOCKHOLDERS’ EQUITY	 	 	 	 	 	
 	 	 	 	 	 	
Liabilities	 	 	 	 	 	
Settlement liabilities	 	$	180,903	 	$	182,446	 	
Accounts payable and accrued expenses	 	55,697	 	51,190	 	
Borrowings	 	117,500	 	121,500	 	
 	 	 	 	 	 	
Total liabilities	 	354,100	 	355,136	 	
 	 	 	 	 	 	
Commitments and Contingencies	 	 	 	 	 	
 	 	 	 	 	 	
Stockholders’ Equity	 	 	 	 	 	
Common stock, $0.001 par value, 500,000 shares authorized and 87,786 and 87,545 shares issued at March 31, 2013 and December 31, 2012, respectively	 	88	 	87	 	
Convertible preferred stock, $0.001 par value, 50,000 shares authorized and 0 shares outstanding at March 31, 2013 and December 31, 2012, respectively	 	-	 	-	 	
Additional paid-in capital	 	220,090	 	217,990	 	
Retained earnings	 	129,750	 	123,614	 	
Accumulated other comprehensive income	 	2,143	 	2,558	 	
Treasury stock, at cost, 21,380 and 20,724 shares at March 31, 2013 and December 31, 2012, respectively	 	(150,218)	 	(145,490)	 	
 	 	 	 	 	 	
Total stockholders’ equity	 	201,853	 	198,759	 	
 	 	 	 	 	 	
Total liabilities and stockholders’ equity	 	$	555,953	 	$	553,895	 	
 
4 

 
GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(I n thousands )
(Unaudited)

 	 	Three Months Ended March 31,	 	
 	 	2013	 	2012	 	
 	 	 	 	 	 	
Cash flows from operating activities	 	 	 	 	 	
Net income	 	$	6,136	 	$	7,128	 	
Adjustments to reconcile net income to cash (used in)/provided by operating activities:	 	 	 	 	 	
Depreciation	 	1,568	 	1,745	 	
Amortization of intangibles	 	2,270	 	2,321	 	
Amortization of financing costs	 	403	 	355	 	
Gain on sale or disposal of assets	 	(9)	 	(57)	 	
Provision for bad debts	 	2,110	 	1,190	 	
Stock-based compensation	 	1,171	 	843	 	
Changes in operating assets and liabilities:	 	 	 	 	 	
Settlement receivables	 	(89,490)	 	7,115	 	
Other receivables, net	 	(1,694)	 	5,246	 	
Inventory	 	97	 	(843)	 	
Prepaid and other assets	 	(542)	 	687	 	
Deferred income taxes	 	3,399	 	3,935	 	
Settlement liabilities	 	(1,373)	 	(17,241)	 	
Accounts payable and accrued expenses	 	4,390	 	5,857	 	
 	 	 	 	 	 	
Net cash (used in)/provided by operating activities	 	(71,564)	 	18,281	 	
 	 	 	 	 	 	
Cash flows from investing activities	 	 	 	 	 	
Capital expenditures	 	(2,934)	 	(1,800)	 	
Proceeds from sale of fixed assets	 	31	 	-	 	
Changes in restricted cash and cash equivalents	 	-	 	255	 	
 	 	 	 	 	 	
Net cash used in investing activities	 	(2,903)	 	(1,545)	 	
 	 	 	 	 	 	
Cash flows from financing activities	 	 	 	 	 	
Repayments against credit facility	 	(4,000)	 	(32,000)	 	
Proceeds from exercise of stock options	 	962	 	1,005	 	
Purchase of treasury stock	 	(4,587)	 	(55)	 	
 	 	 	 	 	 	
Net cash used in financing activities	 	(7,625)	 	(31,050)	 	
 	 	 	 	 	 	
Effect of exchange rates on cash	 	(226)	 	(655)	 	
 	 	 	 	 	 	
Cash and cash equivalents	 	 	 	 	 	
Net decrease for the period	 	(82,318)	 	(14,969)	 	
Balance, beginning of the period	 	153,020	 	55,535	 	
 	 	 	 	 	 	
Balance, end of the period	 	$	70,702	 	$	40,566	 	
 	 	 	 	 	 	
Supplemental cash flow disclosures	 	 	 	 	 	
Cash paid for interest	 	$	2,777	 	$	3,955	 	
Cash paid for income tax, net of refunds	 	$	85	 	$	191	 	
 
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GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF NET INCOME TO CASH EARNINGS
AND OPERATING INCOME TO EBITDA AND ADJUSTED EBITDA
(Unaudited)

 	 	Three Months Ended March 31,	 	
 	 	2013	 	2012	 	
Reconciliation of net income to cash earnings (amounts in thousands, except earnings per share amounts)	 	 	 	 	 	
Net income	 	$	6,136	 	$	7,128	 	
Equity compensation expense	 	1,171	 	843	 	
Deferred income tax	 	3,399	 	3,935	 	
Amortization	 	2,270	 	2,321	 	
 	 	 	 	 	 	
Cash earnings	 	$	12,976	 	$	14,227	 	
 	 	 	 	 	 	
Diluted weighted average number of common shares outstanding	 	67,882	 	66,190	 	
 	 	 	 	 	 	
Diluted cash earnings per share (“Cash EPS”)	 	$	0.19	 	$	0.21	 	
 	 	 	 	 	 	
Reconciliation of operating income to EBITDA and Adjusted EBITDA	 	 	 	 	 	
Operating income	 	$	12,901	 	$	15,696	 	
Plus: depreciation and amortization	 	3,838	 	4,066	 	
 	 	 	 	 	 	
EBITDA	 	$	16,739	 	$	19,762	 	
 	 	 	 	 	 	
Equity compensation expense	 	1,171	 	843	 	
 	 	 	 	 	 	
Adjusted EBITDA	 	$	17,910	 	$	20,605	 	
 
6 

 
GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF PROJECTED NET INCOME TO PROJECTED CASH EARNINGS
AND PROJECTED OPERATING INCOME TO PROJECTED EBITDA AND PROJECTED ADJUSTED EBITDA
FOR THE PROJECTED YEAR ENDING DECEMBER 31, 2013
(Unaudited)

 	 	2013 Guidance Range 1	 	
 	 	Low	 	High	 	
Reconciliation of projected net income to projected cash earnings (amounts in thousands, except earnings per share amounts)	 	 	 	 	 	
Projected net income	 	$	23,000	 	$	27,000	 	
Projected equity compensation expense	 	5,000	 	5,000	 	
Projected deferred income tax	 	13,000	 	15,000	 	
Projected amortization	 	9,000	 	9,000	 	
 	 	 	 	 	 	
Projected cash earnings	 	$	50,000	 	$	56,000	 	
 	 	 	 	 	 	
Projected diluted weighted average number of common shares outstanding	 	67,200	 	67,200	 	
 	 	 	 	 	 	
Projected diluted cash earnings per share (“Cash EPS”)	 	$	0.74	 	$	0.83	 	
 	 	 	 	 	 	
Reconciliation of projected operating income to projected EBITDA and projected Adjusted EBITDA	 	 	 	 	 	
Projected operating income	 	$	48,000	 	$	52,000	 	
Plus: projected depreciation and projected amortization	 	17,000	 	17,000	 	
 	 	 	 	 	 	
Projected EBITDA	 	$	65,000	 	$	69,000	 	
 	 	 	 	 	 	
Projected equity compensation expense	 	5,000	 	5,000	 	
 	 	 	 	 	 	
Projected Adjusted EBITDA	 	$	70,000	 	$	74,000	 	
 
Note:
1.  All figures presented are estimates for the year ending December 31, 2013.
 
7 

 
GLOBAL CASH ACCESS HOLDINGS, INC. AND SUBSIDIARIES
SELECTED SEGMENT INFORMATION AND OTHER DATA
(Amounts in thousands, unless otherwise noted)
(Unaudited)

 	 	For the Three Months Ended March 31,	 	
 	 	2013	 	2012	 	
 	 	 	 	 	 	
Revenues	 	 	 	 	 	
Cash advance	 	$	58,695	 	$	58,361	 	
ATM	 	75,276	 	80,347	 	
Check services	 	5,871	 	6,516	 	
Other	 	6,980	 	5,841	 	
Corporate	 	-	 	-	 	
Total revenues	 	$	146,822	 	$	151,065	 	
 	 	 	 	 	 	
Operating income	 	 	 	 	 	
Cash advance	 	$	15,745	 	$	15,847	 	
ATM	 	6,979	 	8,956	 	
Check services	 	3,396	 	3,413	 	
Other	 	3,444	 	3,111	 	
Corporate	 	(16,663)	 	(15,631)	 	
Total operating income	 	$	12,901	 	$	15,696	 	

 	 	Three Months Ended March 31,	 	
 	 	2013	 	2012	 	
 	 	 	 	 	 	
Other data	 	 	 	 	 	
Aggregate dollar amount processed (in billions)	 	 	 	 	 	
Cash advance	 	$	1.2	 	$	1.2	 	
ATM	 	$	3.4	 	$	3.5	 	
Check warranty	 	$	0.3	 	$	0.3	 	
 	 	 	 	 	 	
Number of transactions completed (in millions)	 	 	 	 	 	
Cash advance	 	2.3	 	2.3	 	
ATM	 	17.8	 	19.3	 	
Check warranty	 	1.0	 	1.1	 	
 
8