Las Vegas-based Global Cash Access Holdings Inc reported revenue growth of 38 percent in the first quarter of 2015 compared to a year earlier. Revenues increased US$56.9 million in year-on-year terms, to US$207.5 million, the company announced on Tuesday.
The firm recorded net income of US$0.5 million for the first quarter of 2015 compared to US$7.5 million for the same period last year. The figure included US$1.5 million of acquisition and other costs related to the merger with Multimedia Games Holdings Co Inc, US$0.5 million of purchase accounting adjustments and a US$14.4 million benefit from one-time legal settlement proceeds, the company said.
Global Cash Access completed the US$1.2 billion acquisition of Multimedia Games by way of merger in December last year.
Adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) increased US$31.2 million, or 161 percent, to US$50.6 million for the first quarter of 2015. Cash earnings per share remained constant at US$0.22 compared to the prior-year period.
“Since completing our acquisition of Multimedia Games just over four months ago, we have been focused on our integration initiatives,” Randy L. Taylor, executive vice president and chief financial officer, said in a statement.
He added: “Through the first quarter of 2015, we have achieved annual run rate cost synergies of approximately US$18.1 million and continue to expect to achieve our targeted annual cost synergy run rate of US$24.0 million by calendar year end.”
After the acquisition of Multimedia Games, Global Cash Access changed its organisational structure to include two divisions. One includes its original payment business, namely the supply of cash processing technology and related services to the gaming industry. The other division features what was Multimedia Games business of supplying systems, content and electronic gaming units for casinos.
Following the results announcement by Global Cash Access, United States-based brokerage Sterne Agee CRT raised its cash earnings per share estimates for the company to US$1.11 for calendar year 2015 and US$1.30 the following year, from US$0.89 and US$1.21 respectively.
“[We] continue to view its stock price/peer-low valuation as a reflection of the lack of investor appreciation for its position in the gaming technology supply business,” analyst David Bain wrote in a note.
He added: “Global Cash Access forward commentary did not dwell on a challenged environment, which we expect will be a topic for supplier peers in their upcoming earnings calls. Instead, it reiterated an at least 10 percent increase in its game business – driven mostly by unit sales – and its calendar year 2015 EBITDA guidance of between US$218 million and US$228 million.”
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Daniel Boone Wayson
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