Title: Deutsche%20Bank%20Leveraged%20Finance%20Conference
1- Deutsche Bank Leveraged Finance Conference
- George Gresham
- September 24, 2008
2Forward-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 Companys 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.
3Company Overview
- We are the worlds 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
Ballys - 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
4Leading Cash Access Provider To The Gaming
Industry
At the Intersection of Consumers, Cash and Casinos
5Gaming Industry and Cash Access
GCA drives Casino Profits, Efficiency and
Customer Loyalty
- 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
6Product Description
CASH ADVANCE ATM CHECK SERVICES CENTRAL CREDIT/OTHER
SEGMENT DESCRIPTION Credit cash advances POS debit card transactions Patron repays the issuing bank based on cardholder agreement ATM services Largest category of GCA's electronic payments transactions, as measured by dollar and transaction volume Offers check verification services Central Credit database, used by gaming establishments to make credit issuing decisions Check warranty services - gaming establishment pays a fee for the warranty service Gaming patron credit bureau Designed to allow gaming establishments to improve their credit-making decisions. Other services include money transfer
of 2007 REV 52.6 40.0 5.2 2.2
of 2007 EBITDA 43.2 40.4 15.0 1.4
PRODUCTS Casino Cash Plus 3-in-1 ATMACM3-in-1 Enabled QuickJack PlusQuikCashQuikCreditQuikCash Plus WebTicket-Out Debit DeviceEDITH Casino Cash Plus 3-in-1 ATMACM3-in-1 Enabled QuickJack Plus Check VerificationCheck Warranty Information ServicesMoney Transfer
7The Original GCA Advantage 3-in-1 Rollover
- 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 theyve 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
Protected US Patent 6,081,792
8GCA 3-in-1 Proven to Put More Cash on the Floor
Large Native American 16
Companies have seen increases in debit and credit
cash to the floor from switching to GCA 3-in-1
Atlantic City 29
Gulf Coast 17
9Invaluable Information
The industrys only credit bureau for credit
granted by casinos.
GCA has the unique ability to tell casinos how
much cash their best customers are accessing in
competitors properties.
The industrys first and best casino cashier
automation tool. Increased productivity and
accuracy.
10Major Casinos Rely on GCA
GCAs breadth of products is unmatched by the
competition
Top Customers Cash Access Services Information
Services Cashless Gaming
ATM Cash Advance Check Warranty Central
Credit Marketing QCP EDITH KIOSK
Harrah's/Caesars ? ? ? ? ? ? ? MGM
MIRAGE ? ? ? ? ? Boyd/Coast ? ? ?
? ? ? ? Penn National ? ? ? ? ?
? Foxwoods ? ? ? ? ? ? ? Mohegan
Sun ? ? ? ? ? ? ? Station Casinos ? ?
? ? Wynn ? ? ? ? ? ? Trump ?
? ? ? ? ? Pechanga ? ? ? ? ? ?
Pinnacle ? ? ? ? ? ? Thunder Valley ?
? ? ? ? ?
11GCAs History
- New management team recruited to improve business
performance - Scott Betts, CEO (Oct 2007)
- George Gresham, CFO (Feb 2008)
- Mari Ellis, CIO (Feb 2008)
- 1998 Founded
- Formation of Global Cash Access, LLC First Data
58, Bank of America 21, MC International 21 - 1999 2001 Significant Transactions
- First Data and MC 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 MC
International - Private equity co-investment by Summit Partners
- 2005 IPO
Stock Price Chart - LTM
12Experienced 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
13Competition in the U.S. Gaming Cash Access Market
Today
2006
14Attractive Business Model With Significant Growth
GCA has significant growth opportunities
- 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
15Transaction Growth
GCA volumes have been growing at 10-15 per year
for the last six years
GCA 2007 Transactions
- Almost 1 billion 20 bills
- Enough to wrap Earth 3.7 times
- 3.9 billion hands of 5 blackjack
- 228 average transaction
- 161 transactions per minute
- 37,000 disbursed per minute
16Financial Performance
Revenues
Operating Income
( in millions)
( in millions)
1
CAGR 11.2
600.9
CAGR 11.9
1 Excludes non-cash compensation expense
17Financial Performance
18Cash Flow
In the first quarter of 2008, GCA discontinued
the Arriva business resulting in a 5.5 million
bad debt reserve adjustment.
19Balance Sheet
20Summary
- 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
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