Global Axcess Corp Announces Record Second Quarter 2008 Financial Results

2008-08-06 15:30:00

Global Axcess Corp Announces Record Second Quarter 2008 Financial Results

 - Generated Record $450,300 of Net Income and EPS of $.02 for 2nd Quarter

                                   2008 -

   - Achieved highest quarterly gross profit dollars in Company history -

- Achieved highest quarterly EBITDA and EBITDA per share in Company history

                                     -

     - Achieved highest quarterly operating income in Company history -



    JACKSONVILLE, Fla., Aug. 6 /EMWNews/ -- Global Axcess Corp

(OTC Bulletin Board: GAXC) (the "Company"), an independent provider of ATM

solutions, today announced the financial results for the second quarter

ended June 30, 2008.



    The Company reported revenues from continuing operations of

approximately $5.8 million for the second quarter ended June 30, 2008, up

from the reported revenues of approximately $5.6 million for the same

period of 2007. The increase in revenue was mainly due to an increase in

surcharge/convenience fees on selected ATMs beginning in the first quarter

of 2008. This represented an increase of approximately 4.4% over the second

quarter of 2007.



    The Company recorded net income for the second quarter ended June 30,

2008 of approximately $450,300, or 2 cents per share, which compares to net

income of $170,900 or 1 cent per share for the same period of 2007. Second

quarter 2007 net income included $100,000 of bad debt recovery income

relating to a settlement of a lawsuit. Excluding the $100,000 bad debt

recovery income in the second quarter 2007, net income would have increased

$379,400 or 535% over the second quarter of 2007.



    The Company achieved gross profit from continuing operations of

approximately $2.6 million or 44.3% of revenue for the three-month period

ended June 30, 2008. This compared to $2.3 million or 41.6% of revenue for

the same period of 2007, or an increase in gross profit dollars of 11.1%

over second quarter of 2007. The increase in gross profit and gross profit

percentage was mainly due to an increase in surcharge/convenience fees on

selected ATMs beginning in the first quarter of 2008 and lower cash costs

due to lower interest rates. Second quarter 2008 gross profit represented

the highest quarterly gross profit dollars in the Company's history,

surpassing the previous high in the first quarter of 2008.



    SG&A expenses were approximately $1.3 million, or 22.4% of revenue for

the second quarter 2008 versus nearly $1.4 million, or 24.5% of revenue for

the same period in 2007.



    Depreciation and amortization expenses increased by approximately

$11,300 to $570,100 for the three-month period ended June 30, 2008 as

compared to $558,800 for the same period in 2007.



    During the second quarter of 2008, the Company recorded net interest

expense of approximately $216,700. This is compared to net interest expense

of approximately $290,900 for the same period in 2007. The decrease was

mainly due to a decrease in debt balances. Included in the second quarter

2008 net interest expense was $38,400 of non-cash income relating to the

interest swap agreement the Company entered into with its senior lender in

October 2005.



    The Company's EBITDA (earnings before net interest, taxes, depreciation

and amortization) increased to $1,237,100 for the second quarter of 2008

from $1,020,600 for the second quarter of 2007. Excluding the $100,000

income from recovery of bad debts in the second quarter of 2007, EBITDA

would have increased $316,500 or 34.4% over the same period in 2007.



    EBITDA per share for the second quarter of 2008 was 6 cents compared to

EBITDA per share of 5 cents for the second quarter of 2007.



    The Company's EBITDA before stock compensation expenses increased to

$1,279,500 for the second quarter of 2008 from $1,025,900 for the second

quarter of 2007.



    EBITDA represents a non-GAAP (Generally Accepted Accounting Principles)

financial measure. A table reconciling this measure to the appropriate GAAP

measure is included in this release.



    Michael J. Loiacono, Chief Financial Officer of the Company, stated, "I

am happy to report that we followed a strong first quarter with an even

stronger second quarter. Our second quarter results surpassed our internal

expectations."



    Mr. George McQuain, Chief Executive Officer of the Company, stated,

"Our second quarter results have reinforced our ability to perform well in

an unstable economy. Our record setting performance is a tribute to our

recent turn-around strategies and the way we have positioned the new

company to succeed. I remain proud of our employees for their efforts in

making the second quarter a record setting quarter for us."



    Conference Call Information



    The conference call will take place at 10:00 a.m. Eastern, on Thursday,

August 7, 2008. Anyone interested in participating should call (800)

829-9048 and enter pass code 6241368 if calling within the United States,

or (913) 312-0392 and pass code 6241368 if calling internationally,

approximately 5 to 10 minutes prior to 10:00 a.m. There will be a playback

available until August 14, 2008. To listen to the playback, please call

(888) 203-1112 if calling within the United States or (719) 457-0820 if

calling internationally. Please use pass code 6241368 for the replay.



    The call is being webcast as well and can be accessed at the Company's

website at http://www.globalaxcess.biz . The webcast will be archived and

available through November 7, 2008.



    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 ATM

services in the United States. Through its wholly owned subsidiary,

Nationwide Money Services, Inc. ("NMS"), the Company provides turnkey ATM

management solutions that include cash, project and account management

services. NMS currently owns and operates approximately 4,300 ATMs in its

national network spanning 44 states. For more information on the Company,

please visit http://www.globalaxcess.biz .




Investor Relations Contact: Sharon Jackson, 904-395-1149 Sharon.Jackson@GLXS.biz This press release may contain forward-looking statements. 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. Various important risks and uncertainties may cause the Company's actual results to differ materially from the results indicated by these forward-looking statements. For a list and description of the risks and uncertainties the Company faces, please refer to Part I, Item 1 of the Company's Annual Report on Form 10-KSB, filed with the Securities and Exchange Commission on March 05, 2008, and other filings that have been filed with the Securities and Exchange Commission. The Company assumes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, and such statements are current only as of the date they are made.
GLOBAL AXCESS CORP AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET June 30, 2008 (Unaudited) ASSETS Current assets Cash and cash equivalents $ 788,529 Accounts receivable, net of allowance for doubtful accounts of $13,568 1,042,192 Inventory 360,666 Prepaid expenses and other current assets 182,216 Total current assets 2,373,603 Fixed assets, net 5,164,202 Other assets Merchant contracts, net 11,701,887 Intangible assets, net 4,141,641 Deferred tax asset - non-current 339,800 Other assets 9,219 Total assets $23,730,352 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable and accrued liabilities $2,869,699 Notes payable - related parties - current portion, net 19,821 Senior lenders' notes payable - current portion, net 606,223 Capital lease obligations - current portion 801,229 Total current liabilities 4,296,972 Long-term liabilities Notes payable - related parties - long- term portion, net 1,313,713 Senior lenders' notes payable - long-term portion, net 4,466,265 Capital lease obligations - long-term portion 834,670 Total liabilities 10,911,620 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, 21,021,786 shares issued, 20,973,924 outstanding 21,022 Additional paid-in capital 22,575,608 Accumulated deficit (9,765,932) Treasury stock; 47,862 shares of common stock at cost (11,966) Total stockholders' equity 12,818,732 Total liabilities and stockholders' equity $23,730,352 GLOBAL AXCESS CORP AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) For the Three Months Ended June 30, 2008 June 30, 2007 Revenues $5,845,128 $5,596,210 Cost of revenues 3,258,602 3,267,497 Gross profit 2,586,526 2,328,713 Operating expenses Depreciation expense 377,553 382,447 Amortization of intangible merchant contracts 192,538 176,326 Selling, general and administrative 1,307,031 1,373,174 Impairment of notes receivable - 5,743 Recovery of bad debts - (100,000) Stock compensation expense 42,376 5,330 Total operating expenses 1,919,498 1,843,020 Operating income from continuing operations before items shown below 667,028 485,693 Interest expense, net (216,738) (290,909) Loss on disposal of assets - (23,877) Income from continuing operations $450,290 $170,907 Net Income $450,290 $170,907 Income per common share - basic: Income from continuing operations $ 0.02 $ 0.01 Net Income per common share $ 0.02 $ 0.01 Income per common share - diluted: Income from continuing operations $ 0.02 $ 0.01 Net Income per common share $ 0.02 $ 0.01 Weighted average common shares outstanding: Basic 20,973,924 20,984,443 Diluted 20,979,768 20,984,443 GLOBAL AXCESS CORP AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) For the Six Months Ended June 30, 2008 June 30, 2007 Revenues $11,373,488 $10,867,200 Cost of revenues 6,378,646 6,362,171 Gross profit 4,994,842 4,505,029 Operating expenses Depreciation expense 779,257 752,973 Amortization of intangible merchant contracts 384,329 353,941 Selling, general and administrative 2,620,406 2,758,459 Impairment of notes receivable - 5,743 Recovery of bad debts - (100,000) Stock compensation expense 122,024 5,330 Total operating expenses 3,906,016 3,776,446 Operating income from continuing operations before items shown below 1,088,826 728,583 Interest expense, net (526,381) (608,440) Loss on disposal of assets - (23,017) Income from continuing operations $562,445 $97,126 Income from discontinued operations, net of tax $- $175,000 Net Income $562,445 $272,126 Income per common share - basic: Income from continuing operations $ 0.03 $- Income from discontinued operations $- $ 0.01 Net Income per common share $ 0.03 $ 0.01 Income per common share - diluted: Income from continuing operations $ 0.03 $- Income from discontinued operations $- $ 0.01 Net Income per common share $ 0.03 $ 0.01 Weighted average common shares outstanding: Basic 20,973,924 21,003,011 Diluted 20,973,924 21,003,011 GLOBAL AXCESS CORP AND SUBSIDIARIES EBITDA Reconciliation (Unaudited) For the Three Months Ended June 30, 2008 June 30, 2007 Net income $450,290 $170,907 Interest expense, net 216,738 290,909 Depreciation expense 377,553 382,447 Amortization of intangible merchant contracts 192,538 176,326 EBITDA $1,237,119 $1,020,589 EBITDA per common share $0.06 $0.05 For the Six Months Ended June 30, 2008 June 30, 2007 Net income $562,445 $272,126 Interest expense, net 526,381 608,440 Depreciation expense 779,257 752,973 Amortization of intangible merchant contracts 384,329 353,941 EBITDA $2,252,412 $1,987,480 EBITDA per common share $0.11 $0.09 GLOBAL AXCESS CORP AND SUBSIDIARIES EBITDA before Stock Compensation Expense Reconciliation (Unaudited) For the Three Months Ended June 30, 2008 June 30, 2007 Net income $450,290 $170,907 Interest expense, net 216,738 290,909 Depreciation expense 377,553 382,447 Amortization of intangible merchant contracts 192,538 176,326 Stock compensation expense 42,376 5,330 EBITDA before Stock Compensation Expense $1,279,495 $1,025,919 EBITDA before Stock Compensation per common share $0.06 $0.05 For the Six Months Ended June 30, 2008 June 30, 2007 Net income $562,445 $272,126 Interest expense, net 526,381 608,440 Depreciation expense 779,257 752,973 Amortization of intangible merchant contracts 384,329 353,941 Stock compensation expense 122,024 5,330 EBITDA before Stock Compensation Expense $2,374,436 $1,992,810 EBITDA before Stock Compensation per common share $0.11 $0.09

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