Click here to close now.

Welcome!

.NET Authors: Greg O'Connor, Pat Romanski, Jayaram Krishnaswamy, Adine Deford, Peter Silva

News Feed Item

DirectCash Payments Inc. Announces Results of Operations for the Three and Nine Months Ended September 30, 2012

CALGARY, ALBERTA -- (Marketwire) -- 11/14/12 -- DirectCash Payments Inc. ("DirectCash" or the "Company") (TSX:DCI) today announced consolidated financial results for the three and nine months ended September 30, 2012.

Financial and Operational Highlights:


--  Increased the three month EBITDA 82% to $18.1 million and the nine month
    EBITDA 34% to $38.2 million 
--  Increased the three month Revenue 135% to $67.0 million and the nine
    month Revenue 49% to $127.0 million 
--  Business continues to generate solid financial results with Funds from
    Operations payout ratio of 59% 
--  Gained market share in the United Kingdom, becoming the 2nd largest non-
    bank ATM deployer with 5,298 ATMs 
--  Closed acquisition of Customers Limited in Australia and began
    integration process 
--  Syndicated and expanded the Company's credit facilities 
--  Issued 2,800,000 new shares to the public at $23.35 per share for gross
    proceeds of $65.4 million 
--  Issued $125 million aggregate principle amount of 7-year senior
    unsecured notes bearing interest at 8.125% per annum 
--  Subsequent to the quarter, acquired 100% of the shares of New Zealand
    ATM Services Limited

Management's Commentary

"We are pleased with our results in the third quarter which incorporated our transformative acquisitions of Customers and InfoCash. Our initial results have been very promising and we are pleased with our ability to generate synergies in the business and we look forward to driving shareholder value through the operation of our businesses" said Jeffrey Smith, DirectCash's President and Chief Executive Officer.

As expected in the early stages of the integration process following the very significant Australian acquisition, SG&A and operating costs incurred in Q3 2012 included non- recurring expenditures. Personnel costs included approximately $1.0 million in severance costs to streamline operations. This is expected to result in annual cost savings of approximately $3.1 million. The Company also internalized technician services during the quarter which will be reflected in lower costs for the balance of the year. Additionally, to address Australian ATM transaction processing costs we recently successfully renegotiated the contract effecting per transaction fee reductions of approximately 50%, representing annual savings in excess of $1.5 million, and extending the term of the contract.

DirectCash will continue to seek to increase efficiencies and to pursue growth through additional accretive acquisitions as opportunities arise. DirectCash's stable, contracted revenue stream and dominant market positions will continue to provide consistent cash dividends to DirectCash's Shareholders.

Summary financial and operating results for the three and nine months ended September 30, 2012 are set forth below and complete copies of the Company's Financial Statements and Management's Discussion & Analysis ("MD&A") are available on SEDAR at (www.sedar.com).


                                 Three months ended       Nine months ended 
                                       September 30               September 
                                   2012        2011        2012        2011 
----------------------------------------------------------------------------
Summary operating results                                                   
----------------------------------------------------------------------------
Number of machines                                                          
Active ATM terminals(1)          19,423       7,848      19,423       7,848 
Number of transactions                                                      
ATM transactions             27,929,616   9,013,934  47,732,637  25,998,143 
Other transactions            4,386,524   4,947,649  13,584,552  14,419,444 
----------------------------------------------------------------------------
Summary financial results                                                   
(thousands, except for per                                                  
 share amounts)                                                             
----------------------------------------------------------------------------
Revenue                          67,017      28,466     126,977      85,251 
EBITDA(2)                        18,095       9,931      38,246      28,634 
  EBITDA margin(3)                 27.0%       34.9%       30.1%       33.6%
Net Income (Loss)                (2,468)      4,380       4,656      11,774 
Net Income (Loss)                                                           
 attributable to common                                                     
 shareholders                    (2,096)      4,380       5,028      11,774 
  Per share, basic                (0.14)       0.32        0.35        0.86 
  Per share, diluted              (0.14)       0.32        0.35        0.85 
Funds from operations(3)          8,704       8,854      25,033      26,163 
  Funds from operations per                                                 
   share, basic(3)                 0.57        0.64        1.75        1.90 
  Funds from operations per                                                 
   share, diluted(3)               0.56        0.64        1.74        1.89 
Dividends declared                5,418       4,775      14,968      14,324 
Dividends declared per                                                      
 share(4)                          0.35        0.35        1.04        1.04 
Funds from operations payout                                                
 ratio(4)                          62.2%       53.9%       59.8%       54.7%
Total assets                    436,252     157,774     436,252     157,774 
Total long-term debt            199,112           -     199,112           - 
Common shares outstanding,                                                  
 end of period                   16,639      13,839      16,639      13,839 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
1.  DirectCash has included statistics only for sites that recoded a        
    transaction in the last calendar month of the period indicated.         
2.  An additional GAAP measure which is defined in the Additional GAAP      
    Measure section of this press release.                                  
3.  A non-GAAP measure which is defined in the Non-GAAP Measures section of 
    this press release.                                                     
4.  See Dividends section of this press release.                            

Customers Limited Acquisition

On July 4, 2012 the Company successfully completed its acquisition of Customers Limited ("Customers") (ASX: CUS), whereby DirectCash acquired all of the outstanding shares of Customers for $1.27 Australian dollars per diluted share in cash.

As a result of the acquisition of Customers, the largest deployer of ATMs in Australia, a total of approximately 6,600 ATM sites and related contracts were acquired by DirectCash in Australia and New Zealand. The acquisition provides the opportunity to grow the Customers ATM business platform in Australia and capitalize on the less mature Australian market, where transactions and gross profits per ATM are significantly greater than in the mature Canadian ATM market.

On August 8, 2012 DirectCash issued $125 million aggregate principal amount of seven year senior unsecured notes (the "Notes"). The Notes are direct senior unsecured obligations ranking pari passu with all other present and future senior unsecured indebtedness of DirectCash and bear interest at 8.125 % per annum, payable semi- annually in arrears. The net proceeds were used to repay the bond bridge loan drawn in respect of the Customers acquisition.

On August 9, 2012 DirectCash completed a private placement of 2,800,000 common shares of the Company for $23.35 per common share. The net proceeds from the issue were used to repay the equity bridge loan, drawn in respect of the Customers acquisition, with the remainder of the proceeds added to working capital.

Outlook

DirectCash believes it is well positioned with a strong balance sheet and a steady cash flow stream based on long term contracts. DirectCash' focus for the balance of 2012 will be to integrate the acquisitions of Customers and InfoCash, as well as to continue to grow the business in a reasonable and sustainable manner by maintaining current customer relationships and managing our cost structures. In the ATM business, emphasis continues to be on the streamlining of DirectCash's operations as well as continuing to pursue quality accretive acquisitions and additional organic growth within DirectCash's international operations. With the completion of regulatory mandated security upgrade changes in Canada, DirectCash will be positioned to refocus its efforts on growth through quality accretive acquisitions and additional organic growth.

As a result of the acquisition of Customers, the largest deployer of ATMs in Australia, a total of approximately 6,600 ATM sites and related contracts were acquired by DirectCash in Australia and New Zealand. The acquisition provides the opportunity to grow the Customers ATM business platform in Australia and capitalize on the less mature Australian market, where transactions and gross profits per ATM are significantly greater than in the mature Canadian ATM market.

As a result of the acquisition of InfoCash, a total of approximately 4,700 ATM sites and related contracts were acquired by DirectCash in the United Kingdom. Since the acquisition, DirectCash has grown organically, adding 598 ATMs for a total of 5,298 as at September 30, 2012. This growth positions DirectCash as the second largest deployer of ATMs in the United Kingdom. DirectCash's focus in this market moving forward is to continue to grow the ATM business in Europe through quality accretive acquisitions and organic growth.

In the prepaid products line of business DirectCash will strive to increase diversification, both in terms of product offerings such as MasterCard prepaid cards, bank accounts and related financial services through DirectCash's strategic alliance with DirectCash Bank, and in terms of the number of customers DirectCash serves in order to reduce DirectCash's dependence on a small group of large volume customers.

DirectCash will continue to organically grow the debit terminal business via cross selling to existing customers and through the pursuit of new customer relationships. Quality accretive acquisitions will be pursued as opportunities arise.

At the time of acquisition by the Company, Customers held a 47.75% interest in New Zealand ATM Services Limited ("NZ ATM"), which represented a control position. The results of NZ ATM have been consolidated with the results of the Company.

On November 12, 2012 the founding shareholders of NZ ATM, NZ ATM and DC Payments Pty Limited ("DC Payments") entered into a Deed of Settlement and Release whereby the founding shareholders sold to DC Payments their 52.25% shareholdings in NZ ATM plus shareholder loans for NZ$1.2 million (approximately $1.0 million) effective immediately. As part of this transaction the Put and Call arrangement between the founding shareholders and DC Payments has been eliminated for no consideration.

On November 9, 2012, DirectCash in addition to The CashStore Financial Services Inc. ("CashStore") and DC Bank were named in a class action lawsuit as it relates to payday loans and related fees in the province of Manitoba. DirectCash is indemnified by CashStore and in turn has indemnified DC Bank. DirectCash has retained counsel on this matter.

Additional GAAP Measure:

DirectCash has presented earnings before interest, taxes, depreciation and amortization ("EBITDA") as a subtotal in its condensed consolidated interim statement of operations. EBITDA is an important measure utilized by management in assessing the financial performance of the Company relative to its operating plans and budgets. It is also the primary measurement utilized by the holders of our long term debt. The Company has presented EBITDA prior to the deduction for acquisition-related expenses. These expenses relate to the acquisitions of Customers and InfoCash, which resulted in the expansion of the Company into two new primary geographical segments and are non-recurring expenditures. The Company has also presented EBITDA prior to unrealized foreign exchange gains and losses which is consistent with the Company's financial covenants. The Company's EBITDA may differ from similar computations as reported by other issuers and, accordingly, may not be comparable to EBITDA as reported by such issuers. EBITDA is reconciled to net income (loss) in the Company's MD&A for the three and nine months ended September 30, 2012 and 2011.

Non-GAAP Measures:

There are a number of financial calculations that are not defined performance measurements under GAAP but which DirectCash believes are useful and accepted performance measurements utilized by the investing public in assessing the overall financial performance of the Company and to compare cash flows between entities.

EBITDA margin: EBITDA margin means EBITDA expressed as a percentage of total revenue.

Funds from operations and funds from operations per share: DirectCash calculates funds from operations as net income (loss) plus or minus depreciation, amortization, deferred income taxes and unrealized foreign exchange losses (gains) and after provision for productive capital maintenance capital expenditures (see discussion below). Readers are cautioned that funds from operations cannot be assured to continue at equivalent levels in the future. DirectCash's funds from operations and funds from operations per share may differ from similar computations as reported by other issuers and, accordingly, may not be comparable to funds from operations and funds from operations per share as reported by such issuers. Funds from operations is reconciled to net income (loss) in the Company's MD&A for the three and nine months ended September 30, 2012 and 2011.

Funds from operations payout ratio: Funds from operations payout ratio means dividends declared expressed as a percentage of total funds from operations.

Productive capital maintenance expenditures: DirectCash differentiates capital expenditures between growth and productive capital maintenance ("Maintenance Capital"). There is no such distinction under GAAP. However, DirectCash believes it is important to differentiate between them as maintenance capital expenditures represent an adjustment to funds from operations while growth capital does not.

Maintenance capital expenditures are defined as expenditures required to service and maintain DirectCash's existing productive capacity, while growth capital is expended to increase DirectCash's productive capacity by adding additional sources of revenue not currently in existence. Current measures of productive capacity that DirectCash utilizes include ATMs and debit terminals under contract (see "Operational Highlights"), software and hardware upgrades to existing infrastructure, ATM and debit terminal equipment upgrades necessary to meet changing regulatory requirements, contract extension incentives, and fleet vehicle purchases and upgrades. Examples of growth capital expenditures include the acquisition of a competitor's assets, the cost of an ATM in a new location, or technology costs related to new sources of revenue.

Readers are cautioned that the Company's computation of productive maintenance capital expenditure may differ from similar computations as reported by other issuers and, accordingly, may not be comparable to productive maintenance capital expenditures as reported by such issuers.

Dividends:

Beginning January 1, 2011 (starting with the January 31, 2011 record date), shareholders of DirectCash have received monthly payments in the form of dividends, with the initial monthly dividend set at $0.115 per Common Share. All dividends are eligible dividends for the purpose of the Income Tax Act (Canada) unless indicated otherwise. Dividends are funded by the generation of funds from operations of the business. As of January 1, 2011, all of the income generated at the level of the various subsidiaries of the Company is taxed by applicable government authorities with the remaining after-tax funds either being retained by the subsidiary or distributed up to the Company where it can be made available for payment of dividends by DirectCash. Continued future distribution of dividends (and the amount of any dividends) is subject to DirectCash's Board of Directors approval. DirectCash's Board of Directors is not obligated to distribute all net available cash as dividends to shareholders.

Forward Looking Information:

This MD&A offers our assessment of DirectCash's future plans and operations and contains "forward-looking information" relating to future events as defined under applicable Canadian securities legislation. DirectCash's actual results or performance could differ materially from those expressed in, or implied by, this forward-looking information. DirectCash can give no assurance that any of the events anticipated will transpire or occur or, if any of them do, what benefits or costs we will derive from them. Forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond DirectCash's ability to control, including but not limited to general economic conditions, interest rates, foreign currency rates, consumer spending, borrowing trends and regulatory changes to name a few. Additional risk and uncertainties are described in DirectCash's Annual information Form for the year ended December 31, 2011 which is available at www.SEDAR.com and in the "Key Business Risks" section of the Company's MD&A for the three and nine months ended September 30, 2012.

The forward-looking information contained in this MD&A is expressly qualified by this cautionary statement. Certain statements that contain words such as "could", "believe", "expects", "expected", "will", "intends", "projects", "anticipates", "estimates", "continues" or similar words relating to matters that are not historical facts constitute "forward-looking information" within the meaning of applicable Canadian securities legislation.

Forward-looking information and statements contained in this MD&A include statements related to DirectCash's projected growth in international operations in the Americas, Australasia and Europe in the ATM business, projected growth in the prepaid and debit terminal business, ability to complete accretive acquisitions on a go forward basis, expansion of DirectCash's merchant base through new and innovative products, impact of acquisitions in United Kingdom and Australia including realizing on expected synergies, ability to continue to acquire long-term recurring services contracts and negotiate renewals thereof in advance of their expiry, ability to maintain current customer relationships, ability to obtain improved supplier terms and manage cost structures internationally, ability to increase our product offerings in Australia and the United Kingdom and expected increase in capital expenditures due to regulatory mandated security upgrade changes.

Readers are cautioned that our expectations, estimates, projections and assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. With respect to forward-looking statements contained within this MD&A, expectations are based on our current strategic plan and management forecasts, the historical financial performance and operational data of acquired entities, our existing contracts schedule, forecast and budget and projections of increased capital expenditure requirements based on our view of the mandated regulatory security upgrade requirements and age of capital assets currently in use by DirectCash.

The assumptions and estimates relating to the forward-looking information referred to above are updated quarterly and except as required by law, we do not undertake to update any other forward-looking information.

Additional information about DirectCash is available on SEDAR (www.sedar.com) or DirectCash's website at www.directcash.net.

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

@ThingsExpo Stories
GENBAND has announced that SageNet is leveraging the Nuvia platform to deliver Unified Communications as a Service (UCaaS) to its large base of retail and enterprise customers. Nuvia’s cloud-based solution provides SageNet’s customers with a full suite of business communications and collaboration tools. Two large national SageNet retail customers have recently signed up to deploy the Nuvia platform and the company will continue to sell the service to new and existing customers. Nuvia’s capabilities include HD voice, video, multimedia messaging, mobility, conferencing, Web collaboration, deskt...
SYS-CON Media announced today that @WebRTCSummit Blog, the largest WebRTC resource in the world, has been launched. @WebRTCSummit Blog offers top articles, news stories, and blog posts from the world's well-known experts and guarantees better exposure for its authors than any other publication. @WebRTCSummit Blog can be bookmarked ▸ Here @WebRTCSummit conference site can be bookmarked ▸ Here
SYS-CON Events announced today that Cisco, the worldwide leader in IT that transforms how people connect, communicate and collaborate, has been named “Gold Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Cisco makes amazing things happen by connecting the unconnected. Cisco has shaped the future of the Internet by becoming the worldwide leader in transforming how people connect, communicate and collaborate. Cisco and our partners are building the platform for the Internet of Everything by connecting the...
The WebRTC Summit 2014 New York, to be held June 9-11, 2015, at the Javits Center in New York, NY, announces that its Call for Papers is open. Topics include all aspects of improving IT delivery by eliminating waste through automated business models leveraging cloud technologies. WebRTC Summit is co-located with 16th International Cloud Expo, @ThingsExpo, Big Data Expo, and DevOps Summit.
Temasys has announced senior management additions to its team. Joining are David Holloway as Vice President of Commercial and Nadine Yap as Vice President of Product. Over the past 12 months Temasys has doubled in size as it adds new customers and expands the development of its Skylink platform. Skylink leads the charge to move WebRTC, traditionally seen as a desktop, browser based technology, to become a ubiquitous web communications technology on web and mobile, as well as Internet of Things compatible devices.
SYS-CON Events announced today that robomq.io will exhibit at SYS-CON's @ThingsExpo, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. robomq.io is an interoperable and composable platform that connects any device to any application. It helps systems integrators and the solution providers build new and innovative products and service for industries requiring monitoring or intelligence from devices and sensors.
Docker is an excellent platform for organizations interested in running microservices. It offers portability and consistency between development and production environments, quick provisioning times, and a simple way to isolate services. In his session at DevOps Summit at 16th Cloud Expo, Shannon Williams, co-founder of Rancher Labs, will walk through these and other benefits of using Docker to run microservices, and provide an overview of RancherOS, a minimalist distribution of Linux designed expressly to run Docker. He will also discuss Rancher, an orchestration and service discovery platf...
Wearable technology was dominant at this year’s International Consumer Electronics Show (CES) , and MWC was no exception to this trend. New versions of favorites, such as the Samsung Gear (three new products were released: the Gear 2, the Gear 2 Neo and the Gear Fit), shared the limelight with new wearables like Pebble Time Steel (the new premium version of the company’s previously released smartwatch) and the LG Watch Urbane. The most dramatic difference at MWC was an emphasis on presenting wearables as fashion accessories and moving away from the original clunky technology associated with t...
SYS-CON Events announced today that Vitria Technology, Inc. will exhibit at SYS-CON’s @ThingsExpo, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Vitria will showcase the company’s new IoT Analytics Platform through live demonstrations at booth #330. Vitria’s IoT Analytics Platform, fully integrated and powered by an operational intelligence engine, enables customers to rapidly build and operationalize advanced analytics to deliver timely business outcomes for use cases across the industrial, enterprise, and consumer segments.
SYS-CON Events announced today that Solgenia will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY, and the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Solgenia is the global market leader in Cloud Collaboration and Cloud Infrastructure software solutions. Designed to “Bridge the Gap” between Personal and Professional Social, Mobile and Cloud user experiences, our solutions help large and medium-sized organizations dr...
SYS-CON Events announced today that Liaison Technologies, a leading provider of data management and integration cloud services and solutions, has been named "Silver Sponsor" of SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York, NY. Liaison Technologies is a recognized market leader in providing cloud-enabled data integration and data management solutions to break down complex information barriers, enabling enterprises to make smarter decisions, faster.
@ThingsExpo has been named the Top 5 Most Influential M2M Brand by Onalytica in the ‘Machine to Machine: Top 100 Influencers and Brands.' Onalytica analyzed the online debate on M2M by looking at over 85,000 tweets to provide the most influential individuals and brands that drive the discussion. According to Onalytica the "analysis showed a very engaged community with a lot of interactive tweets. The M2M discussion seems to be more fragmented and driven by some of the major brands present in the M2M space. This really allows some room for influential individuals to create more high value inter...
After making a doctor’s appointment via your mobile device, you receive a calendar invite. The day of your appointment, you get a reminder with the doctor’s location and contact information. As you enter the doctor’s exam room, the medical team is equipped with the latest tablet containing your medical history – he or she makes real time updates to your medical file. At the end of your visit, you receive an electronic prescription to your preferred pharmacy and can schedule your next appointment.
The world's leading Cloud event, Cloud Expo has launched Microservices Journal on the SYS-CON.com portal, featuring over 19,000 original articles, news stories, features, and blog entries. DevOps Journal is focused on this critical enterprise IT topic in the world of cloud computing. Microservices Journal offers top articles, news stories, and blog posts from the world's well-known experts and guarantees better exposure for its authors than any other publication. Follow new article posts on Twitter at @MicroservicesE
The list of ‘new paradigm’ technologies that now surrounds us appears to be at an all time high. From cloud computing and Big Data analytics to Bring Your Own Device (BYOD) and the Internet of Things (IoT), today we have to deal with what the industry likes to call ‘paradigm shifts’ at every level of IT. This is disruption; of course, we understand that – change is almost always disruptive.
SYS-CON Events announced today the IoT Bootcamp – Jumpstart Your IoT Strategy, being held June 9–10, 2015, in conjunction with 16th Cloud Expo and Internet of @ThingsExpo at the Javits Center in New York City. This is your chance to jumpstart your IoT strategy. Combined with real-world scenarios and use cases, the IoT Bootcamp is not just based on presentations but includes hands-on demos and walkthroughs. We will introduce you to a variety of Do-It-Yourself IoT platforms including Arduino, Raspberry Pi, BeagleBone, Spark and Intel Edison. You will also get an overview of cloud technologies s...
SYS-CON Events announced today that SafeLogic has been named “Bag Sponsor” of SYS-CON's 16th International Cloud Expo® New York, which will take place June 9-11, 2015, at the Javits Center in New York City, NY. SafeLogic provides security products for applications in mobile and server/appliance environments. SafeLogic’s flagship product CryptoComply is a FIPS 140-2 validated cryptographic engine designed to secure data on servers, workstations, appliances, mobile devices, and in the Cloud.
SOA Software has changed its name to Akana. With roots in Web Services and SOA Governance, Akana has established itself as a leader in API Management and is expanding into cloud integration as an alternative to the traditional heavyweight enterprise service bus (ESB). The company recently announced that it achieved more than 90% year-over-year growth. As Akana, the company now addresses the evolution and diversification of SOA, unifying security, management, and DevOps across SOA, APIs, microservices, and more.
SYS-CON Events announced today that Akana, formerly SOA Software, has been named “Bronze Sponsor” of SYS-CON's 16th International Cloud Expo® New York, which will take place June 9-11, 2015, at the Javits Center in New York City, NY. Akana’s comprehensive suite of API Management, API Security, Integrated SOA Governance, and Cloud Integration solutions helps businesses accelerate digital transformation by securely extending their reach across multiple channels – mobile, cloud and Internet of Things. Akana enables enterprises to share data as APIs, connect and integrate applications, drive part...
Cloud is not a commodity. And no matter what you call it, computing doesn’t come out of the sky. It comes from physical hardware inside brick and mortar facilities connected by hundreds of miles of networking cable. And no two clouds are built the same way. SoftLayer gives you the highest performing cloud infrastructure available. One platform that takes data centers around the world that are full of the widest range of cloud computing options, and then integrates and automates everything. Join SoftLayer on June 9 at 16th Cloud Expo to learn about IBM Cloud's SoftLayer platform, explore se...