Global Axcess reports lower second-quarter net income

Global Axcess reports lower second-quarter net income
Tags: North America, Outsourcing, Public Companies, Retail / Off-Premises
August 10, 2010 - Frederick Lowe

Global Axcess Corp. yesterday reported lower second-quarter net income on an increase in revenues for the three-month period ending June 30.

The Jacksonville, Fla.-based ATM ISO posted a net income of $121,000, down 78 percent compared with $557,000 for the same three-month period last year.

“Second-quarter 2010 net income included expenses of $102,000 relating to the payoff of debt balances with a senior lender and a note payable,” company officials said.

In June, Global Axcess signed a $17 million credit facility agreement with Cincinnati-based Fifth Third Bank, reducing the company’s cost of debt and extending the firm’s ability to fund anticipated growth in its ATM and DVD kiosks business. The business paid off notes to Atlanta-based SunTrust Bank and Proficio Bank, which is based in Salt Lake City. The early payoff resulted in $40,000 prepayment fees because of early payments of the notes to both banks. Global Axcess also recorded a one-time, non-cash expense of approximately $60,000 in the second quarter because of accelerated amortization expenses for bank fees paid on the two notes.

Operating income from continuing operations during the second quarter was $332,000, down 53 percent compared with $707,000 for the same period in 2009.

Global Axcess attributed the drop in operating income to lower net interest expense during the quarter compared with the same period last year. In the second quarter, the independent sales organization reported $110,000 in net interest expense compared with net interest expense of $150,000 last year. The decrease was mainly due to lower debt balances, company officials said.

The firm reported second-quarter revenues of $5.5 million, up 1.9 percent compared with $5.4 million in revenues in 2009’s second quarter.

Global Axcess, which has deployed 4,500 off-premise ATMs in 43 states, reported revenues from its core ATM operations of $5.4 million, up 1.9 percent, compared with $5.3 million in 2009’s second quarter.

ATM Services recorded a second-quarter gross profit of $2.6 million, which was equal to 2009’s second quarter gross profit. ATM Services’ net income was $413,463, down 25.7 percent compared with $557,031 in 2009’s second quarter.

“Our core ATM business continues to progress as we believe there are several opportunities in the contract review phases, which have a reasonable probability of resulting in executed agreements in the coming months,” said George McQuain, the company’s CEO. “We’ve added an additional ATM salesperson and believe we can further penetrate this market as we continue to prove our service levels and our quality.”