Jacksonville, Fla.-based Global Axcess Corp., an independent provider of self-service kiosk solutions, this week reported its financial results for the second quarter ended June 30, 2010.
Revenues from continuing operations of $5.5 million for the three-month period ended June 30, 2010, a 3 percent increase compared to $5.4 million for the three-month period ended June 30, 2009. Core ATM revenue was approximately $5.4 million and revenues generated from the DVD rental kiosks were approximately $60,000. Gross profit from continuing operations was $2.5 million, or 45.6 percent gross margin, for the second quarter of 2010 compared to $2.6 million, or 47.6 percent gross margin, for the same period of 2009.
Approximately $106,000 of the increase in cost of revenues year over year related to the DVD business. Operating expenses for the second quarter ended June 30, 2010 increased 17.8 percent to $2.2 million from $1.8 million in the year-ago period. The increase in SG&A expenses was mainly due to $221,000 of expenses incurred in connection with the DVD rental kiosk initiative. Depreciation expense increased due to increased ATM and DVD kiosks purchased during the latter part of 2009 to support new business in both business lines.
Operating income from continuing operations was $332,000 for the quarter ended June 30, 2010 compared to $707,000 in the year-ago period. During the second quarter of 2010, the Company recorded net interest expense of $110,000 compared to net interest expense of $150,000 for the same period in 2009. The decrease was mainly due to decreased debt balances at the three-month period ended June 30, 2010, as compared to the debt balances at the three-month period ended June 30, 2009.
EBITDA (earnings before net interest, taxes, depreciation and amortization) for the second quarter of 2010 was $751,000, compared to $1.2 million in the second quarter of 2009. Adjusted EBITDA (EBITDA before stock compensation expenses and loss on early extinguishment of debt) was $908,000 for the second quarter of 2010, down from $1.2 million for the second quarter of 2009. 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.
Net income for the second quarter ended June 30, 2010 was $121,000, or $0.01 per share (based on 21.9 million and 23.8 million basic and diluted weighted average shares outstanding, respectively), which compares to net income of $557,000, or $0.03 per share (based on 21.9 million and 22.3 million basic and diluted weighted average shares outstanding, respectively), for the same period of 2009. 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.
Global Axcess has deployed over 165 DVD kiosks as of the end of July, and expects to install additional kiosks in the third quarter, according to George McQuain, CEO.
"We just began deployment of new DVD kiosks with the major grocery chain that Global Axcess signed to a three-year contract in May, and to date, over 125 new DVD kiosks have been deployed and 323 total kiosks are scheduled to be deployed with this grocery chain by the end of August," said McQuain.
