Cash Systems, Inc. (Amex: CKN), a provider of cash access solutions
for the gaming industry, today announced financial results for the
third quarter 2005. Revenue for the third quarter increased 34% to
$17.1 million from $12.8 million in the third quarter of fiscal
2004. The increase reflects the continued expansion of products and
services to gaming customers. Operating expenses for the third
quarter increased 46% to $17.1 million from $11.8 million in the
prior year period. The increase in operating expenses in the third
quarter of 2005 compared to the third quarter of 2004 is primarily
due to the Company's expanded operations, Sarbanes Oxley compliance
efforts, information technology cost increases and the costs
related to the build-out of the Company's accounting and finance
infrastructure. Net loss was ($71,108) or breakeven per diluted
share, compared to net income of $582,744 or $0.04 per diluted
share in the prior year period. Michael Rumbolz, President and
Chief Executive Officer of Cash Systems, Inc. stated, "The Company
has undergone a significant transformation in the last six months
as we made necessary investments in the business to create a
platform for sustainable growth. While these investments have
impacted our near-term operating results, we believe we made the
right decisions in solidifying our systems, operations, team and
infrastructure so that we can effectively capitalize on the
significant growth opportunities we have identified." Liquidity The
Company finished the third quarter of 2005 with cash and cash
equivalents of $20.4 million. Current cash balances and operating
cash flow are expected to provide the Company with sufficient
resources to meet its existing obligations, currently planned
capital expenditure requirements and funding for internal growth
initiatives. Guidance The Company now expects 2005 revenue of
approximately $62-$63 million, compared to previous revenue
guidance of $60-$62 million, and continues to expect diluted loss
per share of ($0.10) in 2005. Earnings Conference Call The Company
will conduct a conference call to discuss financial results on
November 14, 2005 at 5:00 p.m. ET. The call can be accessed live
over the phone by dialing 1-877-502-9274 or for international
callers by dialing 1-913-981-5584. A simultaneous webcast of the
call will be available by visiting
http://www.cashsystemsinc.com/ir/companyoverview.asp. A replay will
be available one hour after the call and can be accessed by dialing
(888) 203-1112 or (719) 457-0820 for international callers; the
password is 6404464. The replay will be available from November 14,
2005, through November 21, 2005. About Cash Systems, Inc. Cash
Systems, Inc., located in Las Vegas and Minneapolis, is a provider
of cash access and related services to the retail and gaming
industries. Cash Systems' products include its proprietary cash
advance systems, ATMs and check cashing solutions. Please visit
http://www.cashsystemsinc.com for more information. Forward-Looking
Statements This press release may contain forward-looking
statements, including the Company's beliefs about its business
prospects and future results of operations. These statements
involve risks and uncertainties. Among the important additional
factors that could cause actual results to differ materially from
those forward-looking statements are risks associated with the
overall economic environment, the successful execution of the
Company's plan of operation, changes in the Company's anticipated
earnings, continuation of current contracts, gaming and other
applicable regulations, and other factors detailed in the Company's
filings with the Securities and Exchange Commission, including its
most recent Forms 10-KSB and 10-Q. In addition, the factors
underlying Company forecasts are dynamic and subject to change and
therefore those forecasts speak only as of the date they are given.
The Company does not undertake to update any forecasts that it may
make available to the investing public. -0- *T CASH SYSTEMS, INC.
AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS September 30, December
31, 2005 2004 (Unaudited) (Audited) ------------- -------------
ASSETS CURRENT ASSETS Cash $ 20,441,677 $ 13,043,874 Due from
related party 54,603 183,560 Current portion of prepaid commissions
450,685 348,601 Current portion of loans receivable 1,148,236
1,849,420 Other receivables - 645,006 Deferred income taxes
1,789,000 336,000 Settlements due from credit card processors
871,458 1,889,856 Other current assets 3,336,921 2,638,759
------------ ------------ Total Current Assets 28,092,580
20,935,076 ------------ ------------ PROPERTY AND EQUIPMENT, NET
4,926,030 3,373,170 OTHER ASSETS Long-term prepaid commissions, net
of current portion 262,376 523,827 Long-term loans receivable, net
of current portion 60,229 350,835 ------------ ------------ Total
Other Assets 322,605 874,662 ------------ ------------ TOTAL ASSETS
$ 33,341,215 $ 25,182,908 ============ ============ LIABILITIES AND
STOCKHOLDERS' EQUITY CURRENT LIABILITIES Checks issued in excess of
cash in bank $ 9,771,303 $ 3,331,381 Accounts payable - trade
889,431 436,322 Credit card cash advance fees payable 839,579
655,036 ATM commissions payable 1,019,951 629,328 Credit card
chargebacks payable 231,914 80,000 Check cashing commissions
payable 119,143 102,801 Due to related party - 211,846 Other
accrued expenses 286,032 197,869 ------------ ------------ Total
Current Liabilities 13,157,353 5,644,583 ------------ ------------
LONG-TERM LIABILITIES Deferred income taxes 1,012,000 797,000
------------ ------------ Total Liabilities 14,169,353 6,441,583
------------ ------------ COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY Common stock, par value of $0.001, 50,000,000
shares authorized, 16,876,738 and 16,173,445 shares issued and
outstanding 16,877 16,173 Additional paid-in capital 18,770,081
16,838,356 Retained earnings 384,904 1,886,796 ------------
------------ Total Stockholders' Equity 19,171,862 18,741,325
------------ ------------ TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 33,341,215 $ 25,182,908 ============ ============ *T -0-
*T CASH SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF
OPERATIONS (Unaudited) Three Months Ended Nine Months Ended
September 30, September 30, -------------------------
------------------------- 2005 2004 2005 2004 ------------
------------ ------------ ------------ Commissions on credit card
cash advances, ATMs and check cashing services $17,050,788
$12,773,387 $46,737,656 $35,620,314 Operating expenses Commissions
8,365,053 6,388,588 22,909,965 17,201,364 Processing costs
3,412,956 2,143,906 10,540,434 6,378,394 Check cashing costs
1,042,135 745,022 3,698,742 2,018,186 Armored carrier services
93,499 148,507 337,637 348,717 Payroll, benefits and related taxes
2,273,642 1,342,571 5,776,805 3,872,833 Professional fees 613,440
151,817 1,649,255 517,497 Compensation expense related to warrants
and options - 23,197 - 91,377 Other 1,020,561 569,474 3,226,054
2,040,271 Depreciation and amortization 325,584 249,350 925,720
500,338 ------------ ------------ ------------ ------------ Total
operating expenses 17,146,870 11,762,432 49,064,612 32,968,977
------------ ------------ ------------ ------------ Income (loss)
from operations (96,082) 1,010,955 (2,326,956) 2,651,337
------------ ------------ ------------ ------------ Other income
(expense) Interest expense (122,635) (43,172) (346,869) (190,823)
Interest income 99,609 3,457 228,333 4,713 ------------
------------ ------------ ------------ Total other income (expense)
(23,026) (39,715) (118,536) (186,110) ------------ ------------
------------ ------------ Income (loss) before income taxes
(119,108) 971,240 (2,445,492) 2,465,227 Provision for (benefit
from) income taxes (48,000) 388,496 (943,600) 986,496 ------------
------------ ------------ ------------ Net income (loss) $ (71,108)
$ 582,744 $(1,501,892) $ 1,478,731 ============ ============
============ ============ Net income (loss) per common share: Basic
$ (0.00) $ 0.04 $ (0.09) $ 0.10 ============ ============
============ ============ Diluted $ (0.00) $ 0.04 $ (0.09) $ 0.09
============ ============ ============ ============ Weighted
average common shares outstanding: Basic 16,672,815 15,586,001
16,514,792 14,803,792 ============ ============ ============
============ Diluted 16,672,815 16,509,087 16,514,792 15,918,983
============ ============ ============ ============ *T -0- *T CASH
SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH
FLOWS (Unaudited) Nine Months Ended September 30,
------------------------- 2005 2004 ------------ ------------ Cash
flows from operating activities: Net income (loss) $(1,501,892)
$1,478,731 Adjustments to reconcile net income (loss) to cash flows
from operating activities: Depreciation and amortization 925,720
497,753 Compensation expense related to non-employee stock options
- 91,377 Tax benefit associated with employee stock option
exercises 390,000 - Deferred income taxes (1,238,000) 289,000
Interest receivable on loans receivable (153,548) (3,182) Changes
in operating assets and liabilities: Due from related party 128,957
25,000 Prepaid commissions (102,084) (646,350) Other receivables
645,006 (22,817) Settlements due from credit card processors
1,018,398 - Other current assets (698,162) (452,784) Long-term
prepaid commissions 261,451 (66,033) Long-term receivable - 453,295
Accounts payable - trade 453,109 (1,224,676) Credit card cash
advance fees payable 184,543 (119,738) ATM commissions payable
390,623 282,766 Credit card chargebacks payable 151,914 30,911
Check cashing commissions payable 16,342 14,657 Due to related
party (211,846) - Other accrued expenses 88,163 507,682
------------ ------------ Cash flows provided by operating
activities 748,694 1,135,592 ------------ ------------ Cash flows
from investing activities: Purchases of property and equipment
(2,478,580) (1,592,816) Loans receivable, net 1,145,338 (375,000)
------------ ------------ Cash flows used in investing activities
(1,333,242) (1,967,816) ------------ ------------ Cash flows from
financing activities: Checks issued in excess of cash in bank
6,439,922 (686,118) Payments on long-term debt - (713,035) Issuance
of common stock, net of expenses - 11,309,156 Exercise of stock
options 1,351,529 157,000 Exercise of warrants 190,900 214,750
------------ ------------ Cash flows provided by financing
activities 7,982,351 10,281,753 ------------ ------------ Increase
in cash 7,397,803 9,449,529 Cash, beginning of period 13,043,874
3,035,747 ------------ ------------ Cash, end of period $20,441,677
$12,485,276 ============ ============ SUPPLEMENTAL CASH FLOWS
INFORMATION: Cash paid for financing costs and interest expense,
net of amortization of original issue discount $ 318,827 $ 180,927
============ ============ Cash received (paid) from income taxes $
609,322 $ (146,019) ============ ============ NONCASH INVESTING AND
FINANCING ACTIVITIES: Reclassification of other current assets to
proceeds from issuance of common stock $ - $ 11,604 ============
============ Note receivable issued in connection with sale of ATMs
$ 242,000 ============ *T
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