Cash Systems, Inc. Announces Third Quarter 2004 Financial Results.MINNEAPOLIS Minneapolis (mĭn'ēăp`əlĭs), city (1990 pop. 368,383), seat of Hennepin co., E Minn., at the head of navigation on the Mississippi River, at St. Anthony Falls; inc. 1856. -- Cash Systems, Inc. (Amex:CKN CKN Camp Kesem National (summer camps for children of cancer patients) ), a provider of cash access solutions for the gaming industry, today announced financial results for the third quarter 2004. Third Quarter Financial Results Revenue for the third quarter increased 40.7% to $12.8 million from $9.1 million in the third quarter of fiscal 2003. Income from operations increased 73% to $979,000 from $565,000 in the third quarter of last year. Operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: in the third quarter of 2004 was 7.7%, up from 6.2% last year, reflecting higher revenue. Income before tax increased to $971,000, compared to $427,000 in the prior year's period. In the third quarter of 2003, the Company incurred interest expense of $101,000 as well as a $37,000 charge related to the amortization of original issue discount for the Company's convertible notes. Net income for the third quarter was $583,000, or $0.04 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to $427,000, or $0.03 per diluted share in the prior year period. Net income in the third quarter of 2004 includes a 40% income tax provision compared to no income tax provision in the third quarter of 2003. Also, third quarter results were based on 16.5 million shares outstanding, versus 13.6 million shares outstanding in the prior year period. Craig Craig , Edward Gordon 1872-1966. British theatrical producer, director, and designer whose innovative productions and simplified stage designs influenced modern theater. Potts, President and Chief Executive Officer of Cash Systems, Inc. stated, "We continued our positive momentum in the third quarter and achieved our revenue and profitability goals. The revenue growth reflects our ability to win large and small clients alike with superior product and service offerings." Liquidity As of September September: see month. 30, 2004, the Company had $12.5 million of cash, up significantly from $3.0 million as of December December: see month. 31, 2003. The Company currently has no long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. . Guidance Cash Systems continues to expect revenue for fiscal year 2004 to be in excess of $49 million and anticipates diluted earnings of $0.14 to $0.16 per share. For 2005 the company expects revenue of $64 million to $66 million and diluted earnings of $0.25 to $0.26 per share. Earnings Conference Call The Company will hold a conference call today at 5:00 PM EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT . The call can be accessed live by dialing (877) 691-0879. The conference call will also be simultaneously si·mul·ta·ne·ous adj. 1. Happening, existing, or done at the same time. See Synonyms at contemporary. 2. Mathematics webcast at http://www.cashsystemsinc.com/ir/companyoverview.asp. A replay will be available one hour after the call and can be accessed by dialing (973) 341-3080, password A secret word or code used to serve as a security measure against unauthorized access to data. It is normally managed by the operating system or DBMS. However, the computer can only verify the legitimacy of the password, not the legitimacy of the user. See NCSC. 5369288. About Cash Systems, Inc. Cash Systems, Inc., located in Minneapolis and Las Vegas Las Vegas (läs vā`gəs), city (1990 pop. 258,295), seat of Clark co., S Nev.; inc. 1911. It is the largest city in Nevada and the center of one of the fastest-growing urban areas in the United States. , is a provider of cash access and related services to the retail and gaming industries. Cash Systems' products include its proprietary cash advance systems, ATMs and check cashing solutions. Please visit http://www.cashsystemsinc.com for more information. This press release may contain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , including the Company's beliefs about its business prospects and future results of operations. These statements involve risks and uncertainties. Among the important additional factors that could cause actual results to differ materially from those forward-looking statements are risks associated with the overall economic environment, the successful execution of the Company's plan of operation, changes in the Company's anticipated earnings, continuation continuation - continuation passing style of current contracts, gaming and other applicable regulations, and other factors detailed in the Company's filings with the Securities and Exchange Commission, including its most recent Forms 10-KSB and 10-QSB. In addition, the factors underlying Company forecasts are dynamic and subject to change and therefore those forecasts speak only as of the date they are given. The Company does not undertake to update any forecasts that it may make available to the investing public.
CASH SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 30, 2004 (unaudited) and December 31, 2003 (audited)
----------------------------------------------------------------------
ASSETS
2004 2003
(unaudited) (audited)
------------ -----------
CURRENT ASSETS
Cash $12,485,276 $3,035,747
Due from officer - 25,000
Prepaid commissions 1,008,350 362,000
Other receivable 640,556 617,739
Deferred income taxes 254,000 299,000
Short- term note receivable 375,000 -
Current Portion of Note Receivable 134,250 -
Other current assets 1,496,985 1,052,623
------------ -----------
Total Current Assets 16,394,418 5,392,109
------------ -----------
PROPERTY AND EQUIPMENT, NET 2,708,854 1,855,791
------------ -----------
OTHER ASSETS
Deposits and other 1,154 1,154
Note Receivable net of current portion 107,750 -
Other Assets 66,033
Long-term receivable - 453,295
------------ -----------
Total Other Assets 174,937 454,449
------------ -----------
TOTAL ASSETS $19,278,209 $7,702,349
============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Checks issued in excess of cash in bank $- $686,118
Current portion of long-term debt - 631,434
Accounts payable - trade 509,977 1,734,653
Credit card cash advance fees payable 623,685 743,423
ATM Commissions payable 614,710 331,944
Check cashing commissions payable 105,803 91,146
Credit card chargebacks payable 134,868 103,957
Other accrued expenses 729,039 221,357
------------ -----------
Total Current Liabilities 2,718,083 4,544,032
LONG-TERM LIABILITIES
Long-term debt, net - 81,601
Deferred income taxes 598,000 354,000
------------ -----------
Total Liabilities 3,316,083 4,979,633
------------ -----------
STOCKHOLDERS' EQUITY
Common stock, par value of $0.001,
50,000,000 shares authorized,
15,745,468 and 12,892,735 shares
issued and outstanding 15,745 12,893
Additional paid-in capital 13,539,196 1,872,747
Warrants 1,341,057 1,341,057
Deferred consulting services (115,982) (207,359)
Accumulated earnings 1,182,109 (296,622)
------------ -----------
Total Stockholders' Equity 15,962,126 2,722,716
------------ -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $19,278,209 $7,702,349
============ ===========
See accompanying notes to consolidated financial statements.
CASH SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Three months Ended Nine months Ended
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Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2004 2003 2004 2003
------------ ----------- ------------ ------------
Amount Amount Amount Amount
------------ ----------- ------------ ------------
COMMISSIONS $12,773,387 $9,075,784 $35,620,314 $23,949,358
------------ ----------- ------------ ------------
COSTS AND EXPENSES
Commissions 6,385,182 4,523,921 17,197,958 12,307,625
Processing costs 2,143,906 1,688,720 6,378,394 4,581,911
Check cashing
costs 692,911 473,006 1,966,075 761,686
Armored carrier
services 148,506 123,127 348,717 344,911
Payroll and
related services 1,210,837 815,264 3,507,680 1,924,607
Other 943,136 703,251 2,981,025 1,742,220
Compensation
expense related
to options and
warrants 23,196 61,701 91,377 163,317
Depreciation and
amortization 246,765 122,257 497,753 366,755
------------ ----------- ------------ ------------
Total
Operating
Expenses 11,794,439 8,511,247 32,968,977 22,193,032
------------ ----------- ------------ ------------
Income from
Operations 978,947 564,537 2,651,337 1,756,326
------------ ----------- ------------ ------------
OTHER INCOME
(EXPENSE)
Interest expense (11,167) (101,345) (190,823) (323,168)
Amortization of
original issue
discount - (36,503) - (109,508)
Interest income 3,458 152 4,713 546
------------ ----------- ------------ ------------
Total Other
Income
(Expense) (7,709) (137,696) (186,110) (432,130)
------------ ----------- ------------ ------------
Income Before
Income Taxes 971,238 426,841 2,465,226 1,324,196
Provision for
Income Taxes 388,496 - 986,496 -
------------ ----------- ------------ ------------
NET INCOME $582,742 $426,841 $1,478,730 $1,324,196
============ =========== ============ ============
INCOME PER COMMON
SHARE
BASIC $0.04 $0.03 $0.10 $0.10
============ =========== ============ ============
DILUTED $0.04 $0.03 $0.09 $0.10
============ =========== ============ ============
WEIGHTED AVERAGE
COMMON SHARES
OUTSTANDING
BASIC 15,586,001 12,762,677 14,803,792 12,739,093
============ =========== ============ ============
DILUTED 16,509,087 13,613,040 15,918,983 13,384,983
============ =========== ============ ============
See accompanying notes to consolidated financial statements.
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