Global Axcess Corp., an independent provider of self-service kiosk solutions, recently announced the company's financial results for the fourth quarter and fiscal year ended December 31, 2009.
The company's quarterly revenue, gross profit, gross margin and net income all increased, yielding a record net income for the year of $2.8 million. That included the recognition of deferred tax assets of $1.3 million, and the company's net income excluding the tax benefit was still a record $1.5 million, according to a company release.
"This was a year of tremendous progress, as we position the company for continued revenue and net income growth in 2010," Global Axcess CEO George McQuain said. "During 2009, we increased our gross margin and operating income, and reported a new record net income for the year, demonstrating our ability to expand the Company's profitability. We believe our focus on higher volume locations and managing our expenses, particularly our interest expense, has positioned us for additional acceleration of net income in 2010."
The company reported revenues from continuing operations of $5.4 million for Q4 2009, compared to $5.1 million for Q4 2008. This 4.9 percent increase was mainly due to increased focus on higher volume locations, according to the company. Gross profit from continuing operations was $2.5 million, or 47 percent gross margin, for Q4 2009, compared to $2.4 million, or 46.2 percent gross margin, for the same period of 2008.
For the fiscal year ended December 31, 2009, total revenue was $21.5 million, a decrease of 3 percent compared to $22.2 million for FY 2008. Gross profit for the FY 2009 was $10.2 million, reflecting a gross margin of 47.4 percent, compared to gross profit of $9.8 million, or a gross margin of 44.3 percent, for the comparable 2008 period. Operating income from continuing operations for the year was $2.7 million, compared to $2.2 million for the same period of 2008.
Net income for the fiscal year ended December 31, 2009, was $2.8 million, or $0.13 and $0.12 per basic and diluted share (based on 21.7 and 22.8 million basic and diluted weighted average shares outstanding, respectively), compared to net income for the same period of 2008 of $1.2 million, or $0.06 per share (based on 21.0 million basic and diluted weighted average shares outstanding). Excluding a $1.3 million income tax benefit, net income would have been $1.5 million for the fiscal year. EBITDA (earnings before net interest, taxes, depreciation and amortization) decreased to $4.1 million for the fiscal year ended December 31, 2009 from $4.4 million for the fiscal year ended December 31, 2008. Adjusted EBITDA increased to $4.7 million for the fiscal year ended December 31, 2009 from $4.6 million for the fiscal year ended December 31, 2008.
The recognition of deferred tax assets added $1.3 million of net income to the company's pre-tax operating profit of $404,481 and $1.5 million for the fourth quarter and fiscal year ended December 31, 2009, respectively. Deferred tax assets represent future potential tax deductions, which are a result of timing differences between tax laws and generally accepted accounting principles ("GAAP"). In order to recognize a deferred tax asset, GAAP requires evidence of sufficient future taxable income. Accounting practice typically views a history of profitability of eight to 12 consecutive quarters as sufficient evidence. In addition, a loss on the extinguishment of debt of $7,569 was recognized in the fourth quarter.
Operating income from continuing operations, excluding the recognition of a deferred tax asset and the loss on the extinguishment of debt, was $548,019 for the fourth quarter ended December 31, 2009, compared to $571,102 for the same period of 2008. During the fourth quarter of 2009, the company recorded net interest expense of $135,969, compared to net interest expense of $264,006 for the same period of 2008. The decrease was mainly due to a decrease in debt and refinancing outstanding debt at a lower interest rate. EBITDA for the fourth quarter of 2009 was $1.1 million, compared to $1.1 million for the fourth quarter of 2008. Adjusted EBITDA (EBITDA before stock compensation expenses and loss on early extinguishment of debt) was $1.1 million for the fourth quarter of 2009 from $1.1 million for the fourth quarter of 2008. EBITDA and adjusted EBITDA represent non-GAAP (Generally Accepted Accounting Principles) financial measures.
Inclusive of the recognition of deferred tax assets, net income for the fourth quarter ended December 31, 2009 was $1.7 million, or $0.08 and $0.07 per basic and diluted share, respectively (based on 21.9 and 23.6 million basic and diluted weighted average shares outstanding, respectively), which compares to net income of $330,968, or $0.02 per share (based on 21.0 million basic and diluted weighted average shares outstanding, respectively), for the same period of 2008. The tax benefit represented $0.06 in earnings per share and, excluding the tax benefit, net income would have been $404,481.
All of which offers a bright picture for the future, according to McQuain.
"Assuming similar transaction levels in 2010 compared to 2009, and based on what we believe to be is a stable base of predictable revenue, we are targeting 5 percent to 10 percent organic growth from our ATM business," he said. "Our DVD kiosk business will provide upside to this guidance, and we expect this new and emerging segment to add 5 percent to 10 percent in incremental revenue for calendar 2010. As we continue to carefully manage our expenses and focus on higher volume locations and higher margin opportunities, we anticipate accelerating our profitability in 2010 compared to 2009."
