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Premium member Presentation Transcript Slide 1: Deutsche Bank Leveraged Finance Conference George Gresham September 24, 2008 Forward-Looking Statements : Forward-Looking Statements Statements in this presentation that are not reported financial results or other historical information are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include: (1) our intent to grow our business by growing revenues with current customers, winning new customers, penetrating new markets, innovating and leveraging our databases and marketing assets; (2) our plans to renew existing customers and win new customers; (3) our plans to increase same-store sales; (4) our expectation of growth in gaming revenue and gaming expansion in various markets; (5) our belief that providing cash access services on new platforms should enhance profitability and margins; (6) our belief that higher margin platforms will increase their installed base in the future, (7) our belief that the Arriva card should enhance profitability, (8) our guidance with respect to revenue, gross margin, operating expense and operating income, and (9) our estimated future free cash flow and uses thereof. Such forward-looking statements are based on current plans, estimates and expectations, and are not guarantees of future performance. They are subject to a number of business risks and uncertainties, any of which could cause actual results to differ materially from those expressed in or implied by the forward-looking statements, including the following: (1) technical, competitive and regulatory impediments, operational and resource limitations and gaming establishment acceptance of our value propositions; (2) competitive pressures such as pricing, availability and breadth of offerings or gaming establishments replacing their outsourced cash access services with in-house cash access services; (3) competitive pressures that require us to reduce our pricing or changes in gaming establishment patron cash access behavior; (4) regulatory or social responsibility impediments, economic downturns, a decline in the popularity of gaming or changes in the demographic profile of gaming patrons; (5) our failure to obtain regulatory approval for our EDITH platform or our inability to enter into strategic relationships with providers of redemption kiosks on favorable terms; (6) gaming patron preference for using traditional gaming establishment cashiers or gaming establishment unwillingness to incur capital expenditures for unmanned platforms; (7) our failure to properly manage the credit risk associated with the Arriva card; (8) our inability to control the demand for cash access services within gaming establishments, competition from new and existing competitors and the incurrence of unplanned operating or capital expenses; (9) our failure to achieve estimated future income levels, unanticipated capital expenditures, changes in tax rates or position and the need to deploy cash flow to existing or new business development initiatives. Additional factors that could cause actual results to differ materially are included under the heading “Risk Factors” in the Company’s Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q filed with the U.S. Securities and Exchange Commission from time to time. The Company undertakes no obligation to publicly update or revise any forward-looking statement. This presentation includes pro forma information, or non-GAAP financial measures, that are different from financial measures calculated in accordance with GAAP and may be different from pro forma calculations made by other companies. 2 Company Overview : Company Overview We are the world’s leading cash access provider to the gaming industry Industry Leader Recent consolidation of the sector with two acquisitions of smaller competitors Greater than 80% of the U.S. market Product Superiority 3-in-1 patent protected IP Expansive data sources Central Credit – Only gaming specific credit bureau in the world Differentiated service offerings including in source/out source model for booth operations and sophisticated help desk offerings PowerCash and other cashless gaming products deployed or in development Development relationships and or JVs with IGT and Bally’s Experienced Management Team New team now in place to drive operating performance improvement Compelling Financial Model Recurring revenue Low capital expenditure, high free cash flow Profits not currently subject to federal tax Significant operating leverage 3 Leading Cash Access Provider To The Gaming Industry : Leading Cash Access Provider To The Gaming Industry 4 At the Intersection of Consumers, Cash and Casinos Gaming Industry and Cash Access : Gaming Industry and Cash Access 5 Cash access vendor is critical to the success of the casino customer experience Consumers’ increasing use of debit and credit cards require casinos to offer multiple options to allow customers access to cash Casinos need to put money on the floor quickly and efficiently Casinos want to reduce lines at the cage and check cashing booth and allow customers to play longer Casinos want lower costs, increased customer play and enhanced customer loyalty GCA drives Casino Profits, Efficiency and Customer Loyalty Product Description : Product Description 6 Slide 7: 7 The Original GCA Advantage: 3-in-1 Rollover Protected: US Patent 6,081,792 Problem: the average ATM daily limit is $300-500 Insufficient for many gaming patrons Friday/Saturday/Sunday is “one day” Result 30% of ATM requests in casinos are declined Solution: Debit Card Cash Advance: daily debit limit is 5-10x the ATM limit Credit Card Cash Advance: independent of how much money is in the bank “3-in-1” rollover solution informs ATM patrons of alternatives when they’ve been declined on ATM. Without being informed, most patrons walk away 25% of declined ATM transactions converted to successful cash advance transactions Higher average ticket Higher average fee Slide 8: 8 GCA 3-in-1: Proven to Put More Cash on the Floor Large Native American + 16% Atlantic City + 29% Gulf Coast + 17% Companies have seen increases in debit and credit cash to the floor from switching to GCA 3-in-1 Invaluable Information : Invaluable Information 9 The industry’s only credit bureau for credit granted by casinos. The industry’s first and best casino cashier automation tool. Increased productivity and accuracy. GCA has the unique ability to tell casinos how much cash their best customers are accessing in competitors’ properties. Major Casinos Rely on GCA : Major Casinos Rely on GCA 10 GCA’s breadth of products is unmatched by the competition Harrah's/Caesars ? ? ? ? ? ? ? MGM MIRAGE ? ? ? ? ? Boyd/Coast ? ? ? ? ? ? ? Penn National ? ? ? ? ? ? Foxwoods ? ? ? ? ? ? ? Mohegan Sun ? ? ? ? ? ? ? Station Casinos ? ? ? ? Wynn ? ? ? ? ? ? Trump ? ? ? ? ? ? Pechanga ? ? ? ? ? ? Pinnacle ? ? ? ? ? ? Thunder Valley ? ? ? ? ? ? ATM Cash Advance Check Warranty Central Credit Marketing QCP EDITH KIOSK Top Customers Cash Access Services Information Services Cashless Gaming GCA’s History : GCA’s History 11 1998 Founded Formation of Global Cash Access, LLC: First Data 58%, Bank of America 21%, M&C International 21% 1999 – 2001 Significant Transactions First Data and M&C buyout of Bank of America interest Central Credit purchase Purchase of Wells Fargo gaming ATM business 2004 Re-capitalization/Re-structuring Buyout of First Data interest by M&C International Private equity co-investment by Summit Partners 2005 IPO Stock Price Chart - LTM New management team recruited to improve business performance Scott Betts, CEO (Oct 2007) George Gresham, CFO (Feb 2008) Mari Ellis, CIO (Feb 2008) Experienced Management Team : Experienced Management Team Payments/Gaming Experience – Years Scott Betts - President, Chief Executive Officer, Secretary and Treasurer 7 Joined GCA in late 2007 FDC, Payments industry consultant George W. Gresham - Executive Vice President and Chief Financial Officer 6 Joined GCA in February 2008 EFD – eFunds Corporation, Deloitte & Touche, LLP. Kathryn S. Lever - Executive Vice President and General Counsel 7 Joined GCA in September 2005 Practiced gaming law/regulation at Brownstein, Hyatt, Farber, and Shreck LP Mark Labay - Senior Vice President, Product Management 6 Joined GCA in 2002 Deloitte & Touche, LLP. Kurt Sullivan - Executive Vice President, Check Services and Central Credit 22 Joined GCA in December 2000 Circus Circus Enterprises, Inc. Mari Ellis - Executive Vice President, Technology 11 Joined GCA in February 2008 FDC, Blackhawk, Concord EFS 12 Competition in the U.S. Gaming Cash Access Market : Competition in the U.S. Gaming Cash Access Market 13 2006 Today Slide 14: 14 Attractive Business Model With Significant Growth Long-term contracts with high retention rate Modest fixed cost structure with significant operating leverage Short-term opportunities Integration of acquisitions Cost rationalization Define an integrated product and technology roadmap Long-term growth opportunities International Leverage technology innovation to drive margins GCA has significant growth opportunities Transaction Growth : Transaction Growth 15 GCA 2007 Transactions GCA volumes have been growing at 10-15% per year for the last six years $228 average transaction 161 transactions per minute $37,000 disbursed per minute Almost 1 billion $20 bills Enough to wrap Earth 3.7 times 3.9 billion hands of $5 blackjack Financial Performance : Financial Performance 16 ($ in millions) CAGR = 11.9% CAGR = 11.2% ($ in millions) 1 Excludes non-cash compensation expense Revenues Operating Income 1 $600.9 Financial Performance : Financial Performance 17 Cash Flow : Cash Flow 18 * In the first quarter of 2008, GCA discontinued the Arriva business resulting in a $5.5 million bad debt reserve adjustment. Balance Sheet : Balance Sheet 19 Summary : Summary 20 Industry Leader Attractive Business Model Long-term contracts with high retention rate Contractual linkage to customer expansion Low capital and labor intensity Significant Growth Opportunities United States Asia Europe New Product Leadership Competitive differentiation Margin improvement One-to-one relationship with gaming patrons Robust Free Cash Flow You do not have the permission to view this presentation. In order to view it, please contact the author of the presentation.
GCA IR Presentation - DB Conference cyber11 Download Post to : URL : Related Presentations : Share Add to Flag Embed Email Send to Blogs and Networks Add to Channel Uploaded from authorPOINT lite Insert YouTube videos in PowerPont slides with aS Desktop Copy embed code: (To copy code, click on the text box) Embed: URL: Thumbnail: WordPress Embed Customize Embed The presentation is successfully added In Your Favorites. Views: 264 Category: Business & Fin.. License: All Rights Reserved Like it (0) Dislike it (0) Added: February 11, 2009 This Presentation is Public Favorites: 1 Presentation Description No description available. Comments Posting comment... Premium member Presentation Transcript Slide 1: Deutsche Bank Leveraged Finance Conference George Gresham September 24, 2008 Forward-Looking Statements : Forward-Looking Statements Statements in this presentation that are not reported financial results or other historical information are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include: (1) our intent to grow our business by growing revenues with current customers, winning new customers, penetrating new markets, innovating and leveraging our databases and marketing assets; (2) our plans to renew existing customers and win new customers; (3) our plans to increase same-store sales; (4) our expectation of growth in gaming revenue and gaming expansion in various markets; (5) our belief that providing cash access services on new platforms should enhance profitability and margins; (6) our belief that higher margin platforms will increase their installed base in the future, (7) our belief that the Arriva card should enhance profitability, (8) our guidance with respect to revenue, gross margin, operating expense and operating income, and (9) our estimated future free cash flow and uses thereof. Such forward-looking statements are based on current plans, estimates and expectations, and are not guarantees of future performance. They are subject to a number of business risks and uncertainties, any of which could cause actual results to differ materially from those expressed in or implied by the forward-looking statements, including the following: (1) technical, competitive and regulatory impediments, operational and resource limitations and gaming establishment acceptance of our value propositions; (2) competitive pressures such as pricing, availability and breadth of offerings or gaming establishments replacing their outsourced cash access services with in-house cash access services; (3) competitive pressures that require us to reduce our pricing or changes in gaming establishment patron cash access behavior; (4) regulatory or social responsibility impediments, economic downturns, a decline in the popularity of gaming or changes in the demographic profile of gaming patrons; (5) our failure to obtain regulatory approval for our EDITH platform or our inability to enter into strategic relationships with providers of redemption kiosks on favorable terms; (6) gaming patron preference for using traditional gaming establishment cashiers or gaming establishment unwillingness to incur capital expenditures for unmanned platforms; (7) our failure to properly manage the credit risk associated with the Arriva card; (8) our inability to control the demand for cash access services within gaming establishments, competition from new and existing competitors and the incurrence of unplanned operating or capital expenses; (9) our failure to achieve estimated future income levels, unanticipated capital expenditures, changes in tax rates or position and the need to deploy cash flow to existing or new business development initiatives. Additional factors that could cause actual results to differ materially are included under the heading “Risk Factors” in the Company’s Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q filed with the U.S. Securities and Exchange Commission from time to time. The Company undertakes no obligation to publicly update or revise any forward-looking statement. This presentation includes pro forma information, or non-GAAP financial measures, that are different from financial measures calculated in accordance with GAAP and may be different from pro forma calculations made by other companies. 2 Company Overview : Company Overview We are the world’s leading cash access provider to the gaming industry Industry Leader Recent consolidation of the sector with two acquisitions of smaller competitors Greater than 80% of the U.S. market Product Superiority 3-in-1 patent protected IP Expansive data sources Central Credit – Only gaming specific credit bureau in the world Differentiated service offerings including in source/out source model for booth operations and sophisticated help desk offerings PowerCash and other cashless gaming products deployed or in development Development relationships and or JVs with IGT and Bally’s Experienced Management Team New team now in place to drive operating performance improvement Compelling Financial Model Recurring revenue Low capital expenditure, high free cash flow Profits not currently subject to federal tax Significant operating leverage 3 Leading Cash Access Provider To The Gaming Industry : Leading Cash Access Provider To The Gaming Industry 4 At the Intersection of Consumers, Cash and Casinos Gaming Industry and Cash Access : Gaming Industry and Cash Access 5 Cash access vendor is critical to the success of the casino customer experience Consumers’ increasing use of debit and credit cards require casinos to offer multiple options to allow customers access to cash Casinos need to put money on the floor quickly and efficiently Casinos want to reduce lines at the cage and check cashing booth and allow customers to play longer Casinos want lower costs, increased customer play and enhanced customer loyalty GCA drives Casino Profits, Efficiency and Customer Loyalty Product Description : Product Description 6 Slide 7: 7 The Original GCA Advantage: 3-in-1 Rollover Protected: US Patent 6,081,792 Problem: the average ATM daily limit is $300-500 Insufficient for many gaming patrons Friday/Saturday/Sunday is “one day” Result 30% of ATM requests in casinos are declined Solution: Debit Card Cash Advance: daily debit limit is 5-10x the ATM limit Credit Card Cash Advance: independent of how much money is in the bank “3-in-1” rollover solution informs ATM patrons of alternatives when they’ve been declined on ATM. Without being informed, most patrons walk away 25% of declined ATM transactions converted to successful cash advance transactions Higher average ticket Higher average fee Slide 8: 8 GCA 3-in-1: Proven to Put More Cash on the Floor Large Native American + 16% Atlantic City + 29% Gulf Coast + 17% Companies have seen increases in debit and credit cash to the floor from switching to GCA 3-in-1 Invaluable Information : Invaluable Information 9 The industry’s only credit bureau for credit granted by casinos. The industry’s first and best casino cashier automation tool. Increased productivity and accuracy. GCA has the unique ability to tell casinos how much cash their best customers are accessing in competitors’ properties. Major Casinos Rely on GCA : Major Casinos Rely on GCA 10 GCA’s breadth of products is unmatched by the competition Harrah's/Caesars ? ? ? ? ? ? ? MGM MIRAGE ? ? ? ? ? Boyd/Coast ? ? ? ? ? ? ? Penn National ? ? ? ? ? ? Foxwoods ? ? ? ? ? ? ? Mohegan Sun ? ? ? ? ? ? ? Station Casinos ? ? ? ? Wynn ? ? ? ? ? ? Trump ? ? ? ? ? ? Pechanga ? ? ? ? ? ? Pinnacle ? ? ? ? ? ? Thunder Valley ? ? ? ? ? ? ATM Cash Advance Check Warranty Central Credit Marketing QCP EDITH KIOSK Top Customers Cash Access Services Information Services Cashless Gaming GCA’s History : GCA’s History 11 1998 Founded Formation of Global Cash Access, LLC: First Data 58%, Bank of America 21%, M&C International 21% 1999 – 2001 Significant Transactions First Data and M&C buyout of Bank of America interest Central Credit purchase Purchase of Wells Fargo gaming ATM business 2004 Re-capitalization/Re-structuring Buyout of First Data interest by M&C International Private equity co-investment by Summit Partners 2005 IPO Stock Price Chart - LTM New management team recruited to improve business performance Scott Betts, CEO (Oct 2007) George Gresham, CFO (Feb 2008) Mari Ellis, CIO (Feb 2008) Experienced Management Team : Experienced Management Team Payments/Gaming Experience – Years Scott Betts - President, Chief Executive Officer, Secretary and Treasurer 7 Joined GCA in late 2007 FDC, Payments industry consultant George W. Gresham - Executive Vice President and Chief Financial Officer 6 Joined GCA in February 2008 EFD – eFunds Corporation, Deloitte & Touche, LLP. Kathryn S. Lever - Executive Vice President and General Counsel 7 Joined GCA in September 2005 Practiced gaming law/regulation at Brownstein, Hyatt, Farber, and Shreck LP Mark Labay - Senior Vice President, Product Management 6 Joined GCA in 2002 Deloitte & Touche, LLP. Kurt Sullivan - Executive Vice President, Check Services and Central Credit 22 Joined GCA in December 2000 Circus Circus Enterprises, Inc. Mari Ellis - Executive Vice President, Technology 11 Joined GCA in February 2008 FDC, Blackhawk, Concord EFS 12 Competition in the U.S. Gaming Cash Access Market : Competition in the U.S. Gaming Cash Access Market 13 2006 Today Slide 14: 14 Attractive Business Model With Significant Growth Long-term contracts with high retention rate Modest fixed cost structure with significant operating leverage Short-term opportunities Integration of acquisitions Cost rationalization Define an integrated product and technology roadmap Long-term growth opportunities International Leverage technology innovation to drive margins GCA has significant growth opportunities Transaction Growth : Transaction Growth 15 GCA 2007 Transactions GCA volumes have been growing at 10-15% per year for the last six years $228 average transaction 161 transactions per minute $37,000 disbursed per minute Almost 1 billion $20 bills Enough to wrap Earth 3.7 times 3.9 billion hands of $5 blackjack Financial Performance : Financial Performance 16 ($ in millions) CAGR = 11.9% CAGR = 11.2% ($ in millions) 1 Excludes non-cash compensation expense Revenues Operating Income 1 $600.9 Financial Performance : Financial Performance 17 Cash Flow : Cash Flow 18 * In the first quarter of 2008, GCA discontinued the Arriva business resulting in a $5.5 million bad debt reserve adjustment. Balance Sheet : Balance Sheet 19 Summary : Summary 20 Industry Leader Attractive Business Model Long-term contracts with high retention rate Contractual linkage to customer expansion Low capital and labor intensity Significant Growth Opportunities United States Asia Europe New Product Leadership Competitive differentiation Margin improvement One-to-one relationship with gaming patrons Robust Free Cash Flow