Innovation is the best antidote to price compressing and competition ... Current floors are cashless in some respects wi
Scott Betts, CEO June 2010
GCA Holdings, Inc. Deutsche Bank
Leveraged Finance Conference
George Gresham, CFO September 2009
Safe Harbor Disclosure This presentation contains forward-looking statements within the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Such statements in this presentation include, without limitation, (a) our belief that our recent acquisitions will drive growth, and provide additional operational improvements and cost savings; (b) our 2009 revenue, EBITDA, diluted earnings per share and cash earnings per share expectations and the assumption upon which they are based; (c) our intention that our expense investment in platforms will be between $2 million and $4 million; (d) our expectation that average 30-day LIBOR for the period will be 1.3% and our average outstanding balances subject to 30-day LIBOR will be $430 million; (e) our expectation that our effective tax rate for the full year 2009 will be approximately 38%; (f) our expectation that cash outlays for capital expenditures to approximate those amounts disbursed in 2008; (g) our assumption that there will be approximately 77 million diluted shares issued; and (h) our belief that EBITDA, adjusted EBITDA, and Cash EPS are widely-referenced financial measures in the financial markets and our belief that references to the foregoing is helpful to investors. Our beliefs, expectations, forecasts, objectives, anticipations, intentions and strategies regarding the future, including without limitation those concerning expected operating results, revenues and earnings are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from results contemplated by the forwardlooking statements, including but not limited to: (a) unexpected events that may impact our ability to drive growth, or achieve operational improvements or cost savings; (b) reduced demand for or increased competition with our products and services that affects our 2009 revenue, EBITDA, diluted earnings per share and cash earnings per share; (c) unexpected events that may require us to incur additional expense investment in our platforms; (d) unexpected adjustments to average 30-day LIBOR or the amount of outstanding balances subject to 30-day LIBOR; (e) with respect to our expectation that our effective tax rate will be approximately 38% for the full year 2009 (i) incurrence of expenses that are not deductible for tax purposes, and (ii) the entry into business lines or foreign countries with tax structures different from the ones we are currently subject to; (f) unexpected events that may require capital expenditures to materially differ from those amounts disbursed in 2008; and (g) unanticipated share issuances or redemptions, and (h) inaccuracies in our assumptions as to the financial measures that investors use or the manner in which such financial measures may be used by such investors. The forward-looking statements in this presentation are subject to additional risks and uncertainties set forth under the heading “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our filings with the Securities and Exchange Commission, including, without limitation, our registration statement on Form S-1 (No. 333-133996), our Annual Report filed on Form 10-K (No. 00132622) on March 13, 2009 and our quarterly reports on Form 10-Q, and are based on information available to us on the date hereof. We do not intend, and assume no obligation, to update any forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this presentation.
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Leading Cash Access Provider To The Gaming Industry At the Intersection of Casinos, Consumers and Cash
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Game Industry and Cash Access GCA Drives Casino Profits, Efficiency and Customer Loyalty • Cash access is critical to the success of the casino customer experience – Total GCA funds dispensed in 2009 – approximately $21.7 billion, a significant proportion of total US gaming revenue
• Patrons increasing use of bank cards requires casinos to offer a broad mix of cash access end points • Quick, efficient access to cash is critical to casino’s growth and profitability • Casinos motivated to reduce lines at cage and booth allowing patrons more time to play • Casinos seek lower costs, increased play and dynamic customer loyalty programs – This is were we see the new innovation providing increases value 4
Company Overview GCA is the World’s 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 /Innovation • • • • •
3-in-1 patent protected IP Expansive data sources and casino marketing services Central Credit – only gaming specific credit bureau in the world Only company developing cashless gaming products Development relationships and/or JVs with IGT and Bally’s
Experienced Management Team • •
Executive team in place to drive operating performance improvement Best of breed sales and relationship management team
Compelling Financial Model • • • •
Recurring revenue Low capital expenditure, high free cash flow Profits not currently subject to federal tax (subject to limitations) Significant operating leverage
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Transaction Growth Transactions (millions)
Cash to the Gaming Floor (billions)
Revenues (millions)
EBITDA (millions)
08 02 03 04 05 06 07 6
Innovation Plan Overview GCA’s Strategy is to grow with Innovation Innovation is the best antidote to price compressing and competition • Market has experienced a commoditization of services • Price compression is a significant issue if trends continue
Product Plan • Focus on three broad strategies • Cashless Gaming Products Removing the cost of cash on the casino floor Current floors are cashless in some respects with tickets and chips Just making it more efficient • Information Services – such as Casino Share Intelligence • Marketing Capability to market to individual patrons at our devices 7
Innovation Plan Overview Cashless Gaming Products “Quick Ticket” • • • • •
Concept is to eliminate the initial cash insertion into the slots Dispense a ticket instead of cash for the ATM Consumer choice Eliminates cash from floor Increases Coin In
Wagering Accounts • • • •
Use current players club card as a “e-wallet” Can load and unload from our devises Solution will work on both tables and slots Can be used across the property
Marketing and Incentives • • •
Connection to the Casino Management System allows for marketing and incentives at our devise Drives adoption of cashless gaming Allows property to dynamically control screens to “brand” cash access services 8
System/Data Integration Prop Data
Gaming Data
Regional Data
Player Data
• Integrated Payments – Across Casino – Across property
GCA System
Slot System
Financial Transaction
Accounting
Data
Player Management
System Interface
Table Management
Dynamic Messaging
Floor Management
Retail Interface
Bank Module (Accounts) Bonus Engine TITO Module Media/ Player Communication
• “Cashless” Gaming – Ticket Out – Wagering Accounts – Stored Value Cards
• Customized Marketing – Messaging – Incentives – Data Collection
• Enriched BI – Floor Management – Share Data – Historical Data
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Vertical Integration
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CSI_Slides_investor.pptx
“Quick Wagering” Account
“Quick Ticket” Enrolled players club card
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Casino Share Intelligence
Market Share Wallet Share Patron Share Patron Value Index
Market Share Heat Map
Market Share/Wallet Share
Market Share
Wallet Share
Customer Who’s Value is Not Seen
Deflector Example
Summary 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 • Sector rebound • International
New Product Leadership • Competitive differentiation • Margin improvement through product innovation • One-to-one relationship with gaming patrons
Robust Free Cash Flow 16
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