Mirroring its explanation for the previous quarter’s reduction in year-over-year revenue, Global Cash Access Holdings Inc. on Aug. 9 cited continued weakness in the gaming sector and consumer revolving credit and the loss of Harrah’s Entertainment’s casino business, the company’s largest customer, late last year as the chief attributing factors behind the company’s reduction in second-quarter income.
The Las Vegas-based company provides cash access and related products to casinos through ATMs, point-of-sale debit card transactions, credit card cash advances and check-warranty services.
Looking ahead, Global Cash Access expects to see benefits from reduced expenses resulting from the Federal Reserve Board’s debit card interchange caps that take effect Oct. 1. The company’s gross margins, exclusive of depreciation and amortization, for the year “will increase by approximately 100 basis points as a result of such anticipated decreases in interchange expense” resulting from the new Fed rule, the company noted in its earnings release.
During the quarter ended June 30, revenues totaled $135.1 million, down 14.1%, from $157.2 million during the same period last year. Net income attributable to the company and its subsidiaries was down 83.1%, to $1 million from $5.9 million.
ATM revenues during the quarter totaled $71.2 million, down 11.7% from $80.6 million. Check-warranty revenues dropped 12.7%, to $6.9 million from $7.9 million. Cash-advance revenues totaled $50.3 million, down 21.4% from $64 million.
ATM transactions totaled 17.4 million, down 13.4% from 20.1 million. Check-warranty transactions dropped 15.4%, to 1.1 million from 1.3 million. Cash-advance transactions totaled 2.1 million, down 22.2% from 2.7 million.
In terms of aggregate dollar amounts processed, ATM volume totaled $3.1 billion, down 11.4% from $3.5 billion. Check-warranties dropped 25%, to $300 million from $400 million. Cash advances totaled $1.1 billion, down 15.4% from $1.3 billion.
