Cash Systems, Inc., a provider of cash access solutions for the gaming industry, announced financial results for the first quarter 2004.
First Quarter Financial Results
Revenue for the first quarter increased 57% to $11.0 million from $7.0 million in the first quarter of fiscal 2003. Income from operations increased to $640,000 from $630,000 in the first quarter of last year. Operating margin in the first quarter of 2004 was 5.5%, down from 8.9% last year, reflecting non-recurring operational expenses of approximately $350,000 associated with the start of a major new client contract and litigation costs related to a contract dispute that has now been settled. The increase in operating expenses also reflects costs associated with a new customer service call center.
Income before tax increased to $507,000, compared to $482,000 in the prior year’s period. Net income for the first quarter was $304,000, or $0.02 per diluted share compared to $0.04 per diluted share in the prior year period. Net income in the first quarter of 2004 reflects approximately $0.02 per share of non-recurring expenses, a 40% income tax provision compared to no income tax provision in the first quarter of 2003, and higher shares outstanding compared to the prior year.
Craig Potts, President and Chief Executive Officer of Cash Systems, Inc. stated, “Our strong revenue growth reflects our success in securing new business, as well as continuing growth among our existing client base. During the first quarter we also made several investments in our business, including a new call center that will enhance our competitive position, improve customer service and support our ability to drive long-term revenue growth and profitability.”
Liquidity
The Company officially closed the remaining 190,000 shares of its private placement on April 14, 2004. With the issuance of the remaining 190,000 shares, the Company has raised total net proceeds of approximately $9.2 million. The Company intends to use the proceeds from this offering for general working capital and potential acquisitions, should any arise. Current cash balances and operating cash flow are expected to provide the Company with sufficient resources to meet its existing obligations, currently planned capital expenditure requirements and funding for internal growth initiatives.
As of March 31, 2004, the Company has $17.4 million of cash, up significantly from $3.0 million as of December 31, 2003.
Guidance
For fiscal year 2004, the Company currently expects revenues of $46 million to $47 million, a 39% increase over 2003.
About Cash Systems, Inc.
Minneapolis-based Cash Systems, Inc. has grown from a regional ATM provider to one of four cash access companies serving the gaming industry. Cash Systems’ products include its proprietary cash advance systems, ATMs and check cashing solutions. Cash Systems’ gaming clients are comprised of both Native American and commercial entities.
For complete details on Cash Systems’ first quarter results visit CardData ([www.carddata.com][1]).
[1]: http://www.carddata.com
