Cash Systems, Inc. (NASDAQ: CKNN), a provider of cash access
solutions for the gaming industry, today announced first quarter
2008 financial results. First quarter 2008 highlights include: A
multi-year contract extension with Choctaw Nation of Oklahoma for
its Choctaw Casinos and the addition of another Choctaw Casino
location where Cash Systems will provide its casinopc for cash
advance services, ecash checking and full service booth operation.
A Letter of Intent to provide Cash Systems powercash product to
American Gaming Group LLC's first casino project. powercash
compatibility with the Bally Technologies, Inc.'s (NYSE: BYI) new
iVIEW(TM) Display Manager (DM)(TM). A new multi-year contract to
provide its full line of cash access services including all-in-1atm
services, casinopc for cash advance services, and ecash checking at
Gold River Casino. A new multi-year contract with The Wildwood
Casino where Cash Systems will provide its full line of cash access
services including all-in-1atm, casinopc for cash advance services,
and ecash checking. Subsequent to the end of the first quarter of
2008 the Company also announced: A new multi-year contract with
Fantasy Springs Resort Casino, to provide casinopc for cash advance
services, all-in-1atm services, ecash checking services for check
guarantee and full service booth operation, in addition to
powercash. First Quarter Financial Results Revenue for the first
quarter was $27.1 million, an increase of 8%, compared to $25.2
million in the first quarter of 2007. The Company reported a loss
from operations of ($864,031) in the first quarter of 2008 compared
to loss from operations of ($268,021) in the prior year period. Net
loss was ($4.6 million), or ($0.25) per diluted share, compared to
net loss of ($1.4 million) or ($0.08) per diluted share, in the
first quarter of 2007. Michael Rumbolz, President and Chief
Executive Officer of Cash Systems, Inc. stated, �We continue to see
progress and positive customer feedback from our product offerings
and we continue to make progress on powercash. We remain focused on
providing outstanding service to our clients.� Second Amended and
Restated Notes and Warrants On March 14, 2008, the Company entered
into a Second Amendment and Exchange Agreement with respect to its
outstanding senior secured convertible notes. The Second Amended
and Restated Notes differ from the First Amended and Restated Notes
in certain material respects, including, without limitation, (i)
the aggregate principal amount was increased from $22.0 million to
$24.2 million, (ii) the conversion price was reduced from $8.00 per
share to $2.51 per share, (iii) the aggregate amount that the note
holders may require the Company to redeem, and the aggregate amount
that the Company may elect to redeem, on October 10, 2008 was
increased from $8 million to $12.1 million, (iv) and the financial
covenants based on Consolidated Total Debt to EBITDA were
eliminated and the financial covenants based on Consolidated
Revenue and Consolidated EBITDA were modified to apply starting
with the quarter ending March 31, 2009. The Second Amended and
Restated Warrants to purchase common stock differ from the First
Amended and Restated Warrants in certain material respects,
including, without limitation, the exercise price was reduced from
$7.38 per share to $2.49 per share. As a result of the note
holder�s failure to reduce the conversion price of the Second
Amended and Restated Notes and the exercise price of the Second
Amended and Restated Warrants to 120% of the arithmetic average of
the weighted average price of the Company�s common stock for each
day during the period commencing on March 18, 2008 and ending on
April 15, 2008, the conversion price of the Second Amended and
Restated Notes continues to be $2.51 per share and the exercise
price of the Second Amended and Restated Warrants continues to be
$2.49 per share. Strategic Alternatives The Company previously
announced that its Board of Directors decided to explore strategic
alternatives to maximize shareholder value. This process is
ongoing. There can be no assurances that this process will result
in any specific transaction. The Company does not intend to
disclose developments regarding its exploration of strategic
alternatives unless and until the Board of Directors approve a
definitive transaction. Earnings Conference Call The Company will
conduct a conference call to discuss its first quarter 2008
financial results on Monday, May 12, 2008 at 5:00 p.m. ET. A
webcast of the call will be available by visiting the investor
relations section of the company's website at
http://www.cashsystemsinc.com/ir. The call can also be accessed
live over the phone by dialing 888-208-1427 or for international
callers by dialing 913-312-1398. A replay of the call 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 pin
number is 6643217. The replay will be available from May 12, 2008
through May 19, 2008. About Cash Systems, Inc. Cash Systems, Inc.,
located in Las Vegas, with additional offices in San Diego 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. 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 10K and 10Q. 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. CASH SYSTEMS, INC. CONSOLIDATED
BALANCE SHEETS � � � March 31, December 31, 2008 2007 (Unaudited)
(Audited) � ASSETS � CURRENT ASSETS Cash $ 13,408,127 $ 16,617,643
Restricted cash 630,906 625,059 Current portion of prepaid
commissions 428,908 394,096 Current portion of loans receivable
1,441,815 331,005 Settlements due from credit card processors
5,630,035 14,779,241 Settlements due from ATM processors 12,425,412
12,094,482 Other current assets � 7,930,474 � � 7,409,494 � Total
Current Assets � 41,895,677 � � 52,251,020 � � PROPERTY AND
EQUIPMENT, NET 7,098,945 7,087,436 � OTHER ASSETS Goodwill
4,077,700 4,077,700 Intangible assets, net 4,024,359 4,289,024
Long-term prepaid commissions, net of current portion 456,847
385,876 Long-term loans receivable, net of current portion 191,855
265,504 Restricted cash 396,158 211,317 Other � 93,655 � � 308,061
� Total Other Assets � 9,240,574 � � 9,537,482 � � TOTAL ASSETS $
58,235,196 � $ 68,875,938 � � � LIABILITIES AND STOCKHOLDERS'
EQUITY � CURRENT LIABILITIES Checks issued in excess of cash in
bank $ 8,031,664 $ 15,205,390 Short-term debt, net 12,100,000
12,100,000 Accounts payable - trade 1,922,469 1,754,781 Credit card
cash advance fees payable 1,696,789 1,667,462 ATM commissions
payable 2,556,061 2,028,940 Credit card chargebacks payable 620,452
326,563 Check cashing commissions payable 235,117 223,785 Deferred
Revenues 459,526 - Other accrued expenses � 20,398,760 � �
23,395,403 � Total Current Liabilities � 48,020,838 � � 56,702,324
� � LONG-TERM LIABILITIES Long-term debt, net � 12,100,000 � �
9,900,000 � Total Liabilities � 60,120,838 � � 66,602,324 � �
STOCKHOLDERS' EQUITY Common stock, par value of $0.001, 50,000,000
shares authorized,18,776,913 and 18,776,913 shares issued,
18,481,580 and 18,446,163shares outstanding 18,483 18,447
Additional paid-in capital 30,022,124 29,535,292 Accumulated
deficit � (31,926,249 ) � (27,280,125 ) Total Stockholders' Equity
� (1,885,642 ) � 2,273,614 � � TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 58,235,196 � $ 68,875,938 � CASH SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) � � Three Months
Ended March 31, � 2008 � � 2007 � � Commissions on credit card cash
advances,ATMs and check cashing services $ 27,066,228 $ 25,156,145
� Operating expenses Commissions 15,400,617 14,196,324 Processing
costs 4,325,779 4,305,903 Check cashing costs 2,073,227 923,502
Armored carrier services 302,253 277,360 Payroll, benefits and
related taxes 3,189,093 2,822,429 Professional fees 530,371 398,885
Other general and administrative expenses 1,261,678 1,654,609
Depreciation and amortization � 847,241 � � 845,154 � Total
operating expenses � 27,930,259 � � 25,424,166 � Loss from
operations � (864,031 ) � (268,021 ) � Other income (expense)
Interest expense (1,207,422 ) (1,169,180 ) Loss on extinguishment
of debt (2,615,480 ) - Interest and other income � 40,809 � �
11,246 � Total other income (expense) � (3,782,093 ) � (1,157,934 )
� Loss before income taxes (4,646,124 ) (1,425,955 ) � Provision
for income taxes � - � � - � � Net Loss $ (4,646,124 ) $ (1,425,955
) � Net Loss per common share: Basic $ (0.25 ) $ (0.08 ) � Diluted
$ (0.25 ) $ (0.08 ) � Weighted average common shares outstanding:
Basic 18,454,603 18,055,350 � Diluted 18,454,603 18,055,350 �
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