News

Global Axcess announces management reorganization

March 6, 2011

Global Axcess Corp., an independent provider of self-service kiosk solutions headquartered in Jacksonville, Fla., today provided a preliminary fourth-quarter outlook and announced a reorganization of senior management and several strategic initiatives designed to improve the company's financial performance.

Lock Ireland, vice chairman of the Board of Directors, and Director Michael I. Connolly will serve as Co-Chief Executive Officers, effective immediately. George McQuain, former CEO, has resigned to pursue other opportunities, according to a company press release.

"George had the foresight to anticipate systemic challenges in the ATM business, and position the company for long-term success by launching the DVD kiosk business," said Joseph Loughry, III, chairman of the board of directors." Now, the time is optimal to transition to a new senior leadership team to take Global Axcess to the next level of its development and unlock shareholder value. The decision to make this change was mutual, and we thank George for his professionalism and dedication."

Connolly said despite management's best efforts, the Board isn't satisfied with the company's financial performance, particularly for the last three quarters.

"This dissatisfaction continued as we reviewed the preliminary results for the fourth quarter," he said. "As such, the company has implemented a variety of strategic initiatives specifically designed to reduce expenses, increase the profitability of our ATM business and accelerate the revenue from the DVD kiosk business. I firmly believe we are close to realizing the benefits of our strategic investments made to date, and the management will focus on improving operating efficiencies and execution to take the Company to the next level."

The numbers

• Preliminary revenue for the fourth quarter is expected to be $6.1 million, including $5.3 million in ATM revenue and $800,000 in DVD revenue.
• Preliminary revenue for fiscal 2010 is expected to be $22.7 million, including $21.4 million in ATM revenue and $1.3 million in DVD revenue.
• For the fourth quarter, the company expects to report an operating loss per share of $0.05 to $0.06, due in large part to losses related to the DVD business.
• For fiscal 2010, the Company expects to report an operating loss per share of $0.03 to $0.04, due in large part to losses related to the DVD business.
• Based on the strategic initiatives described below, and the ongoing improvement in the DVD business, the company expects to report revenue of $7.0 to $7.5 million and significant bottom line improvement, excluding severance charges, during the first quarter.
• Global Axcess ended the year with $1.7 million of cash.

Strategic and operational initiatives

• Global Axcess' contract with its largest ATM customer auto-renewed at the same financial terms.
• The company increased ATM surcharges to select ATMs to meet industry levels. To date, transactions appear to be holding and revenues increasing.
• Management has executed a plan aimed at reducing field service costs through the realignment of ATM field maintenance staff, deployment of kiosk hardware solutions that reduce service needs and the implementation of a priority-based field service management system.
• The company is in the process of negotiating significant vendor contracts to lower contracted rates.
• The company has deployed a newer and faster version of its DVD interface software. This upgraded software now enables the speed of the company's DVD kiosks to be in line with the competition. This software upgrade should result in higher revenues due to improved customer experience and shorter lines during peak periods.
• The company's large grocery chain DVD customer agreed to include InstaFlix, the Company's DVD kiosk brand, in its mid-March (3/18 and 3/20) and mid-April email mailing list to drive additional awareness to the InstaFlix DVD kiosks. This list includes more than one million email addresses. The grocery chain also began featuring InstaFlix on its corporate Facebook pages.
• Management reached an agreement with the grocery chain to start the removal of unprofitable DVD kiosks.
• Management is working with AAFES/The Exchange on strategic initiatives aimed at increasing our future footprint in military bases and further enhancing revenues.