Global Axcess Corp Reports Record First Quarter 2012 Revenue

- Record Q1 2012 Revenues of $8.3 Million Exceeds Guidance of $8.0 Million -

- Fifth Consecutive Quarter of Record ATM Revenues -

- Q1 2012 Adjusted EBITDA of $925,000 Exceeds Guidance of $850,000 -

15 May, 2012, 08:00 ET from Global Axcess Corp

JACKSONVILLE, Fla., May 15, 2012 /PRNewswire/ -- Global Axcess Corp (OTC Bulletin Board: GAXC; the "Company"), an independent provider of self-service kiosk solutions, today announced financial results for the quarter ended March 31, 2012. The Company also provided an outlook for the second quarter of 2012.

"We exceeded our revenue and EBITDA guidance for the first quarter and generated a new record for quarterly revenues," commented Lock Ireland, Vice Chairman of the Board of Directors and Interim Chief Executive Officer. "The year-over-year increase was again due to strong ATM growth, both organic and acquisitive. We are benefitting from the strategic acquisitions made in the last year, as well as the additions of new ATMs installed during 2011 and the surcharge increase that we instituted in the first quarter of 2011."

Key financial and operational statistics in the first quarter of 2012 include:

ATM Business Line

  • First quarter 2012 surcharge transactions increased 12.2% compared to surcharge transactions for the fourth quarter of 2011 and increased by 11.5% compared to surcharge transactions for the first quarter of 2011.
  • First quarter 2012 ATM services revenue increased by 12.2% over ATM services revenue for the fourth quarter of 2011 and increased by 21.6% over ATM services revenue for the first quarter of 2011.
  • First quarter 2012 ATM services gross profit was $2.4 million compared to $2.6 million in the fourth quarter of 2011 and compared to $2.6 million for the first quarter of 2011.
  • First quarter 2012 ATM services adjusted EBITDA was $1.4 million, compared to $1.6 million for the fourth quarter of 2011 and $1.5 million for the first quarter of 2011.

DVD Business Line

  • First quarter 2012 consolidated DVD services revenue was $1.1 million, compared to $1.2 million for the fourth quarter of 2011 and compared to $2.0 million for the first quarter of 2011.
  • First quarter 2012 consolidated DVD services gross profit was $226,000 compared to $253,000 in the fourth quarter of 2011 and compared to $523,000 for the first quarter of 2011.
  • First quarter 2012 DVD services adjusted EBITDA was $41,000 compared to $23,500 for the fourth quarter of 2011 and compared to $40,000 for the first quarter of 2011.

SG&A

  • First quarter 2012 consolidated SG&A was $1.7 million or 20.9% of revenue, compared to $1.7 million or 22% of revenue for the fourth quarter of 2011 and $2.0 million or 24.4% of revenue for the first quarter of 2011.

Michael Loiacono, Chief Financial Officer commented, "As disclosed previously, we did experience some margin compression in the quarter due to changes in two of our multi-year ATMs renewal contracts and integration of our latest ATM transaction acquisitions to our system. Even as we generate additional revenue, we are controlling expenses. SG&A expenses are down approximately 11%, and total operating expenses are down 19%, year over year."

Mr. Ireland concluded, "Our pipeline of ATM opportunities has never been more robust. This includes acquisition opportunities as well as organic opportunities. We are also completing RFPs (Request for Proposals), which we will bid on in the next three to six months and longer term. We signed an agreement to be the exclusive provider of ATM services to an 8,000 C-store buying group and are seeing escalating interest from the buying group's clients. We continue to work closely with The Exchange and are deploying an additional 40 DVD kiosks in selected commissaries in the U.S. In addition, we are working on setting up our first overseas deployment of DVD kiosks for the Exchange. All of these provide substantial opportunities for ATM and DVD growth in 2012 and beyond."

First Quarter 2012 Financial Results

The Company reported consolidated revenues of $8.3 million for the first quarter ended March 31, 2012, which exceeded guidance of $8.0 million. This was up 8.6% sequentially from fourth quarter 2011 revenue of $7.6 million and up 4.4% compared to $8.0 million for the first quarter of 2011.

Gross profit was approximately $2.7 million, or 32.1% gross margin, for the first quarter 2012 compared sequentially to $2.9 million, or 37.5% gross margin in the fourth quarter of 2011 and compared to $3.1 million, or 38.7% gross margin, for the first quarter of 2011. Operating loss was ($35,000) compared sequentially to operating income of $133,000 in the fourth quarter of 2011 and compared to an operating loss of ($238,000) for the first quarter of 2011. During the first quarter of 2012, the Company recorded net interest expense of $255,000, compared sequentially to net interest expense of $199,000 for the fourth quarter of 2011 and compared to $171,000 for the same period of 2011. The increase was mainly due to an increase in debt.

EBITDA (earnings before net interest, taxes, depreciation and amortization) for the first quarter of 2012 was $928,000 compared sequentially to $1.1 million in the fourth quarter of 2011 and compared to $513,000 for the first quarter of 2011. Adjusted EBITDA (EBITDA before restructuring charges, stock compensation expense, gain on sale of assets and other non-operating expense) was $925,000 for the first quarter of 2012, which exceeded guidance of $850,000. This compared sequentially to $1.2 million for the fourth quarter of 2011 and compares to $1.1 million for the first quarter of 2011. 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.

Net loss for the first quarter was ($291,000) or a loss of ($0.01) per basic and diluted share. This compared sequentially to a net loss of ($126,000), or a loss of ($0.01) per basic and diluted share in the fourth quarter of 2011 and compared to a net loss of ($544,000), or a loss of ($0.02) per basic and diluted share, for the same period of 2011.

Balance Sheet and Cash Flows

As of March 31, 2012, the Company had $739,000 in cash compared to $975,000 as of December 31, 2011.

Net cash provided by operating activities during the quarter ended March 31, 2012 was $1,261,000, compared to net cash used in operating activities of $28,000 during the quarter ended March 31, 2011.

Second Quarter 2012 Outlook

  • Consolidated Revenue       
  • Consolidated Adjusted EBITDA

$8.4 million

$1.0 million

Disclosure of Non-GAAP Financial Information

EBITDA and Adjusted EBITDA are non-GAAP financial measures provided as a complement to results prepared in accordance with accounting principles generally accepted within the United States of America ("GAAP") and may not be comparable to similarly-titled measures reported by other companies. Management believes that the presentation of these measures and the identification of unusual, non-recurring, or non-cash items enhance an investor's understanding of the underlying trends in the Company's business and provide for better comparability between periods in different years.  However, non-GAAP net income should not be construed as an alternative to GAAP as an indicator of our operating performance because the items excluded from the non-GAAP measures often have a material impact on results of operations. Therefore, management uses - and investors should use - non-GAAP measures in conjunction with our reported GAAP results.

EBITDA excludes interest expense, tax benefit, depreciation expenses and amortization expenses.   Adjusted EBITDA excludes impairment of assets, restructuring charges, stock compensation expense,  gain on sale of assets, other non-operating expense and loss on early extinguishment of debt.  Since Adjusted EBITDA exclude certain non-recurring or non-cash items, these measures may not be comparable to similarly-titled measures employed by other companies. The non-GAAP financial measures presented herein should not be considered in isolation or as a substitute for operating income, net income, cash flows from operating, investing, or financing activities, or other income or cash flow statement data prepared in accordance with GAAP.

Conference Call Information

The Company has scheduled a conference call on Tuesday, May 15, 2012 at 10 a.m. ET to discuss financial results for the quarter ended March 31, 2012.

Anyone interested in participating should call 1-877-941-8416 (domestic) or 1-480-629-9808 (international), approximately 5 to 10 minutes prior to the start of the call. Investors will also have the opportunity to download a presentation, and to listen to the conference call and the replay on the "Events and Presentations" section of the Global Axcess website at: http://www.globalaxcess.biz/investors/events.php or at http://viavid.net/dce.aspx?sid=00009753.

There will be a playback available until May 22, 2012. To listen to the playback, please call 1-877-870-5176 if calling within the United States or 1-858-384-5517 if calling internationally. Please use pass code 4536685 for the replay. A transcript of the conference call will be available on the Company's website on Friday, May 18, 2012 or by calling Brett Maas of Hayden IR at 646-536-7331.

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 5,200 ATMs and DVD kiosks in its national network spanning 43 states.  For more information on the Company, please visit http://www.globalaxcess.biz.  For more information on Nationwide Money Services, please visit http://www.nationwidemoney.com.

Investor Relations Contacts: Michael Loiacono IR@GAXC.biz

Hayden IR: Brett Maas or Jeff Stanlis: (646) 536-7331 Brett@haydenir.com / Jeff@haydenir.com

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. 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.  Forward-looking statements give the Company's current expectations or forecasts of future events, future financial performance, strategies, expectations, competitive environment, regulation, and availability of resources. The forward-looking statements contained in this release include, among other things, statements concerning projections, predictions, expectations, estimates or forecasts as to the Company's business, financial and operational results and future economic performance, and statements of management's goals and objectives and other similar expressions concerning matters that are not historical facts. These statements are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements.

Other factors that could cause the Company's actual performance or results to differ from its projected results are described in its filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K. You should not read forward-looking statements as a guarantee of future performance or results. They will not necessarily be accurate indications of the times at or by which such performance or results will be achieved. Forward-looking statements speak only as of the date the statements are made and are based on information available at the time those statements are made and/or management's good faith belief as of that time with respect to future events. The Company assumes no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information.

- tables follow –

GLOBAL AXCESS CORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET

(Unaudited)

(Audited)

March 31, 2012

December 31, 2011

ASSETS

Current assets

Cash and cash equivalents

$          739,223

$                975,363

Accounts receivable, net of allowance of $28,740 in 2012 and $26,451 in 2011

1,140,023

1,034,938

Inventory, net of allowance for obsolescence of$182,572 in 2012 and 2011

1,821,118

1,898,732

Deferred tax asset - current

278,973

315,960

Prepaid expenses and other current assets

98,446

115,602

Total current assets

4,077,783

4,340,595

Fixed assets, net

9,964,345

9,241,824

Other assets

Merchant contracts, net

12,134,970

12,435,353

Intangible assets, net

4,417,345

4,459,334

Deferred tax asset - non-current

1,696,238

1,659,251

Other assets

113,949

692,027

Total assets

$     32,404,630

$           32,828,384

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

Accounts payable and accrued liabilities

$       5,176,964

$             5,704,245

Note payable - related party  - current portion, net

33,997

33,100

Notes payable - current portion

19,141

18,922

Senior lenders' notes payable - current portion, net

4,294,448

3,715,796

Capital lease obligations - current portion

295,871

316,377

Total current liabilities

9,820,421

9,788,440

Long-term liabilities

Interest rate swap contract

587,281

605,479

Note payable - related party - long-term portion

2,523

11,229

Notes payable - long-term portion

20,232

25,651

Senior lenders' notes payable - long-term portion

8,484,325

8,633,960

Capital lease obligations - long-term portion

24,046

46,979

Total liabilities

18,938,828

19,111,738

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,

   23,205,358 and 23,174,108 shares issued and 22,728,795 and 22,712,977 shares

   outstanding at March 31, 2012 and December 31, 2011, respectively

22,779

22,763

Additional paid-in capital

23,638,558

23,606,308

Accumulated other comprehensive loss

(587,281)

(605,479)

Accumulated deficit

(9,366,995)

(9,075,687)

Treasury stock; 476,563 and 461,131 shares of common stock at cost

   at March 31, 2012 and December 31, 2011, respectively

(241,259)

(231,259)

Total stockholders' equity

13,465,802

13,716,646

Total liabilities and stockholders' equity

$     32,404,630

$           32,828,384

GLOBAL AXCESS CORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

    For the Three Months Ended

March 31, 2012

March 31, 2011

Revenues

$               8,296,300

$               7,950,071

Cost of revenues

5,636,808

4,876,170

Gross profit

2,659,492

3,073,901

Operating expenses

Depreciation expense

615,185

575,324

Amortization of intangible merchant contracts

326,844

288,438

Selling, general and administrative

1,734,973

1,941,646

Restructuring charges

-

485,040

Stock compensation expense

17,195

21,700

Total operating expenses

2,694,197

3,312,148

Operating loss from operations

   before items shown below

(34,705)

(238,247)

Interest expense, net

(254,596)

(170,897)

Gain on sale of assets

20,493

-

Other non-operating expense

-

(112,500)

Loss from operations before income tax expense

(268,808)

(521,644)

Income tax expense

(22,500)

(22,000)

Net loss

$                (291,308)

$                (543,644)

Loss per common share - basic:

Net loss per common share

$                      (0.01)

$                      (0.02)

Loss per common share - diluted:

Net loss per common share

$                      (0.01)

$                      (0.02)

Weighted average common shares outstanding:

Basic

22,723,233

22,287,759

Diluted

22,723,233

22,287,759

GLOBAL AXCESS CORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

    For the Three Months Ended

March 31, 2012

March 31, 2011

Net loss

$                (291,308)

$                (543,644)

Other comprehensive income:

Unrealized gains on cash flow hedges

18,198

-

Total Other comprehensive income

18,198

-

Total Comprehensive loss

$                (273,110)

$                (543,644)

GLOBAL AXCESS CORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(audited)

For the Three Months Ended

March 31, 2012

March 31, 2011

Cash flows from operating activities:

Net loss

$ (291,308)

$ (543,644)

Adjustments to reconcile net loss from operations

to net cash provided by operating activities:

Stock based compensation

17,195

21,700

Stock options issued to consultants in lieu of cash compensation

5,071

-

Depreciation expense

615,185

575,324

Amortization of intangible merchant contracts

326,844

288,438

Amortization of capitalized loan fees

47,712

17,800

Allowance for doubtful accounts

(6,580)

(5,052)

Gain on sale of assets

(20,493)

-

Changes in operating assets and liabilities, net of effects of acquisitions:

Change in accounts receivable, net

(98,505)

(538,358)

Change in inventory, net

182,083

(459,607)

Change in prepaid expenses and other current assets

17,156

31,154

Change in other assets

-

(29,162)

Change in intangible assets, net

(5,723)

(7,877)

Change in accounts payable and accrued liabilities

472,719

621,061

Net cash provided by (used in) operating activities

1,261,356

(28,223)

Cash flows from investing activities:

Cash paid for Tejas acquisition

-

(875,000)

Cash paid for Kum and Go acquisition

(1,000,000)

-

Costs of acquiring merchant contracts

(26,461)

(55,596)

Purchase of fixed assets

(773,486)

(317,400)

Net cash used in investing activities

(1,799,947)

(1,247,996)

Cash flows from financing activities:

Proceeds from senior lenders' notes payable

1,196,964

1,907,775

Principal payments on senior lenders' notes payable

(767,947)

(586,485)

Principal payments on notes payable

(5,200)

(5,231)

Principal payments on note payable - related party

(7,809)

(6,969)

Principal payments on capital lease obligations

(113,557)

(119,583)

Net cash provided by financing activities

302,451

1,189,507

Decrease in cash and cash equivalents

(236,140)

(86,712)

Cash and cash equivalents, beginning of period

975,363

1,743,562

Cash and cash equivalents, end of the period

$ 739,223

$ 1,656,850

Cash paid for interest

$ 204,255

$ 151,302

The following table sets forth a reconciliation of net loss to EBITDA from operations for the three months ended March 31, 2012 and 2011:

For the Three Months Ended

March 31, 2012

March 31, 2011

Net loss

$        (291,308)

$        (543,644)

Income tax expense

22,500

22,000

Interest expense, net

254,596

170,897

Depreciation expense

615,185

575,324

Amortization of intangible merchant contracts

326,844

288,438

EBITDA from operations

$          927,817

$          513,015

The following table sets forth a reconciliation of net loss to Adjusted EBITDA from operations for the three months ended March 31, 2012 and 2011:

For the Three Months Ended

March 31, 2012

March 31, 2011

Net loss

$        (291,308)

$        (543,644)

Income tax expense

22,500

22,000

Interest expense, net

254,596

170,897

Depreciation expense

615,185

575,324

Amortization of intangible merchant contracts

326,844

288,438

Restructuring charges

-

485,040

Stock compensation expense

17,195

21,700

Gain on sale of assets

(20,493)

-

Other non-operating expense

-

112,500

Adjusted EBITDA from operations

$          924,519

$       1,132,255

EBITDA (a non-GAAP measure) is defined as earnings before net interest, taxes, depreciation and amortization.  Adjusted EBITDA is defined as EBITDA from operations before restructuring charges, stock compensation expense, gain on sale of assets and other non-operating expense.

The following table summarizes our revenue, gross profit, SG&A, stock compensation expense, depreciation and amortization, impairment of assets, restructuring charges, operating loss, net loss and Adjusted EBITDA by segment for the periods indicated below.

For the Three Months Ended

March 31, 2012

March 31, 2011

Revenues:

   ATM Services

$               7,229,068

$               5,946,577

   DVD Services - The Exchange

1,067,232

1,068,886

   DVD Services - Other

-

934,608

   Corporate Support

-

-

Consolidated revenues

$               8,296,300

$               7,950,071

Gross profit:

   ATM Services

$               2,433,364

$               2,550,874

   DVD Services - The Exchange

226,128

544,819

   DVD Services - Other

-

(21,792)

   Corporate Support

-

-

Consolidated gross profit

$               2,659,492

$               3,073,901

SG&A:

   ATM Services

$               1,061,579

$               1,076,567

   DVD Services - The Exchange

185,006

195,537

   DVD Services - Other

-

287,268

   Corporate Support

488,388

382,274

Consolidated SG&A

$               1,734,973

$               1,941,646

Stock compensation expense:

   ATM Services

$                              -

$                             -

   DVD Services - The Exchange

-

-

   DVD Services - Other

-

-

   Corporate Support

17,195

21,700

Consolidated stock compensation expense

$                    17,195

$                    21,700

Depreciation & Amortization:

   ATM Services

$                  599,678

$                  479,216

   DVD Services - The Exchange

265,764

40,622

   DVD Services - Other

-

267,651

   Corporate Support

76,587

76,273

Consolidated depreciation & amortization

$                  942,029

$                  863,762

Restructuring charges:

   ATM Services

$                             -

$                    24,218

   DVD Services - The Exchange

-

-

   DVD Services - Other

-

-

   Corporate Support

-

460,822

Consolidated restructuring charges

$                             -

$                  485,040

Operating income (loss):

   ATM Services

$                  772,107

$                  970,873

   DVD Services - The Exchange

(224,642)

308,660

   DVD Services - Other

-

(576,711)

   Corporate Support

(582,170)

(941,069)

Consolidated operating loss

$                  (34,705)

$                (238,247)

Net income (loss):

   ATM Services

$                  742,332

$                  933,125

   DVD Services - The Exchange

(205,371)

308,660

   DVD Services - Other

-

(539,211)

   Corporate Support

(828,269)

(1,246,218)

Consolidated net loss

$                (291,308)

$                (543,644)

Adjusted EBITDA:

   ATM Services

$               1,371,785

$               1,452,307

   DVD Services - The Exchange

41,122

349,282

   DVD Services - Other

-

(309,060)

   Corporate Support

(488,388)

(382,274)

Consolidated Adjusted EBITDA

$                  924,519

$               1,110,255

SOURCE Global Axcess Corp



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http://www.globalaxcess.biz