Everi Holdings Inc (EVRI) 2010 Q4 法說會逐字稿

Good day everyone. Welcome to the Global Cash Access Holdings Incorporated fourth-quarter 2010 earnings conference call. The conference is being recorded today Tuesday, March 8, 2011. I would like to turn the conference over to Ms. Julie [Yusgart], Treasury Manager. Please go ahead ma'am.

Thank you Vince, and welcome everyone to GCA's fourth quarter 2010 earnings conference call. Joining me on today's conference call is Chief Executive Officer, Scott Betts, and Chief Financial Officer, Mary Beth Higgins. On today's call, Scott will give an overview on the Company's progress, and then Mary Beth will provide a brief update on our financial performance in the fourth quarter and go over our guidance for 2011. Following these comments, we will be happy to take questions.

A few important items before I turn it over to Scott. First, we have posted our earnings release and our unaudited financial statements to our investors website at www.GCAInc.com for anyone who needs access to that information. Also, during this call if we use any non-GAAP financial measures for references, we will put up the appropriate GAAP financial reconciliation on our website. Finally, a replay of today's call will be posted on our website around 5 p.m. Pacific time and will remain there for approximately two weeks.

As we begin, let me remind everyone that today's discussion contains forward-looking statements based on the environment as we currently see it, and are subject to a number of risks and uncertainties. These include statements regarding market conditions, consumer habits, projected revenue, projected earnings, expiration and renewal of existing business, addition of new business, product upgrades and new products, cost-saving measures, possible uses of free cash flow including debt retirement and share buyback. For factors that could cause actual results to differ materially from those described in our forward-looking statements, we refer you to our SEC filings and the risk factors set forth therein.

With that, let me now hand it over to Scott.

Thank you Julie, and I would like to welcome everyone to our fourth-quarter and fiscal year 2010 earnings call.

Our results for the fourth quarter and for 2010 are squarely in line with the results we pre-announced earlier this year. Revenue for the year was $606 million and cash EPS was $0.54. We are also confirming our 2011 guidance for cash earnings per share between $0.40 and $0.43, and EBITDA between approximately $61 million and $65 million. These numbers reflect the various assumptions and trends that I will share during this call.

Since our last call, we have completed the refinancing of all of our debt under what we feel are favorable terms and in a manner that will allow us full flexibility and to continue to pay down debt, or to take advantage of opportunities that may come up. We also entered into long-term arrangements for our vault cash and our bank sponsorship agreement. These three important long-term agreements give us stability and flexibility for the out years, and hopefully removes any potential overhang these might have had on our shares.

As part of the debt refinancing process, we also released a rather lengthy list of important customer contract signings, including MGM, Galaxy, Aqueduct and others. So, while we remain in a very competitive environment, we are certainly able to compete, sign our fair share of contracts, and most importantly, sign new properties. These were all profitable contracts, perhaps not as profitable as they were in 2007, but not much is these days.

We have also made significant progress internationally signing Galaxy in Macau, which is scheduled to open in mid-May. This is an important step in getting that business growing. Our ability to offer innovation on both the payments as well as the kiosk side, were instrumental in getting this contact. We now have a product suite that gives us the ability to offer services others cannot.

We feel we are in a good position to gain ground in Macau as many of the original cash access contracts come up for renewal over the next 12 to 16 months. We are also pleased to announce that we have signed substantially all of the top London operators in the UK, and expect to relaunch that business in the next 30 days.

This has been a long process since the Gaming Act of 2005 prohibited cash access in casinos as they were performed back then. Since then, we have been working nonstop with the operators and the Gaming Commission to develop a system that meets everyone's current requirements. So, after three years of work, we believe we can reopen our UK business.

We believe this has potential to grow into a substantial revenue source over the next few years. For perspective, when we were forced to shut down that business in 2007, it was contributing about $7 million a year annually in revenues. After a period of market validation, we plan to expand across the UK. This has been tremendous work by our international team, and certainly a nod to perseverance.

On the product front, we are also making great progress. CSI is getting more traction post G2E, and with the start of the new year, new budgets. We have a fair number of contracts out for review, and I will say that this has been a major factor in our ability to win new properties. With new openings in Ohio, Illinois and other states coming up it certainly puts us at a competitive advantage. I can't think of a more valuable time to have this service than when you are opening a new casino.

QuikTicket is clearing its last hurdle with approval from the card networks. All approvals have been cleared, and as we understand it, only the drafting of the final rule changes are needed, which we anticipate in the next 30 to 45 days. We will be launching immediately after receiving final clearance. While it has been an arduous process in getting both gaming and card network approvals, we believe this program is industry changing, and will be the foundation we build on for our other cashless gaming products.

We are meeting our commitment to reduce costs by $5 million to $6 million in baseline SG&A. We committed to this in a previous call as an offset to the loss of Harrah's. These plans are in place and substantially completed. We have continued to work -- we will continue to look for ways to reduce costs further as we move through the year and anticipate continued pressure on margins.

I want to spend some time sharing our view on overall market trends. As you know, our data gives us a unique insight into these trends both on a macro and on a granular level. From a macro standpoint, we are continuing to see positive signs that the category is inching towards recovery.

Our fourth-quarter same-store numbers were down 3.6%, about flat from previous quarters where it was down 3.5%. Both these quarters' results were less than half the rate of decline in the first six months of 2010. This improving trend continues with January down just 1.9%, and February actually up 2.7%. Note these numbers are based on total dollars to the floor, the best predictor we have of overall gaming revenue.

We take this trend as a good sign that recovery is in the future, but from our standpoint, still may be several quarters away. Why the cautiousness? First, the month-to-month variation is still very high. In fact, in the three months of the fourth quarter, we saw monthly numbers range from a high of plus 1.7% to a low of minus 7.1%. This choppiness in the numbers continues to make quarterly forecasting very difficult, and I think we will see this pattern continue over the course of the year.

Second, in the last three years we have seen the first quarters start stronger than the rest of the year. So, the good news is, what I would call stage one recovery seems to be close at hand, the stabilization of the overall industry assuming gas prices or some other impact doesn't change the trend.

Having said that, transaction volume, and particularly credit card volumes, continue to slip. This suggests that this stage one recovery is being fueled by the core player population stabilizing, and playing slightly more. This is exactly what we would expect the bottom to look like where the runoff of player activity is abating.

We think stage two of this recovery will be for transaction volumes to increase. Transaction count still lags same-store dollar volume to the floor by about 1% or 2%. We certainly need to see these transactions increase to be more confident in a recovery. We will be following this closely, and logic says this should be the next step. We just don't know when.

Stage three for us will be the return in consumer confidence, credit and the average face increasing. In other words, the mix of transaction needs to return to a more historic level. We are still seeing credit declines in the double digits. So, in summary, the trends look very promising, but we are still in a very challenging economy. We simply do not have any benchmarks to how fast recovery will take. From GCA's standpoint, we need to see all three recover as mix and transaction size have significant impacts on our revenue.

So, you have just seen a glimpse into the power of our CSI product, our ability to understand the market dynamics in a very granular fashion. Imagine if you were an operator knowing all this data specific to your property, right down to the player level. From a competitive environment, it remains heated and ever-changing. Pricing is still under pressure and probably will be for the short term. While our product line up, our new kiosk design and new products are allowing us to get higher prices than our competitors, they will probably not be an adoption rate that will significantly offset margin pressure until next year.

You may have seen the recent announcement that Bally's Technology has purchased Sightline Payments. I will make a few comments on this now. First, we believe that the payments business is a scale business. It is also not always as easy as most people think it is. So, there are some natural advantages that we have which we believe will play out in our favor over the long haul.

It's too soon to tell what Bally's Technology intends to do. Will they be a competitor, a partner or both? But what we firmly believe is that for now, their commitment to open systems, and any push from our joint customers does not change our approach or our plans. Having said that we will continue to evolve our Company strategy to remain in a leadership position as an innovative payments provider.

So, in summary, 2011 will be challenging from an earnings growth standpoint as we work through this economy, but we remain focused on investments that will give us growth in the future. We expect it to be a choppy environment for the next several quarters, but the worst may be over. Our products, especially CSI and Western Money integration are showing significant leverage with customers, especially with new casino openings of which there are significant opportunities over the next 18 months.

Our product innovation plan continues to gain traction, and will continue to grow with our most forward-thinking customers. Internationally, we are hopeful for the successful reopening of the UK, and the further growth of Macau later this year. We will be working hard to make the launch of QuikTicket successful in the market and drive its adoption. We remain committed to our strategy of helping our customers manage their cash and payments better with a pipeline of innovative ideas that continues to expand.

So, with that, I will turn it over to Mary Beth with some more specifics on our financial results.

Thank you, Scott. Good afternoon everyone.

For the fourth quarter, revenue decreased approximately 7.4% compared with last year's fourth quarter, and about 5.8% on a same-store basis. Similar to prior quarters, the majority of the same-store decline was driven by declining credit card usage. Same-store figures for cash advance revenue declined 14.6%, ATM usage increased by 0.4%, and debit decreased, but slightly by 1.7%. We also saw year-over-year increases in our average cash dispensed per ATM transaction.

On a year-over-year basis total cash advance revenue was down about 15.4% for the quarter driven by the decrease in credit. ATM revenue decreased 1.2% in the fourth quarter of 2010 to $72.5 million, due largely to a decrease in year-over-year transactions of about 4.5% while revenue per ATM transaction was up modestly due to slightly higher average surcharges assessed for transactions.

Our Check Warranty product continued to decline during the quarter by about 18.2% compared to the prior year's results. And this is a result of both the decrease in the number of check service transactions as well as the decrease in check service revenue per transaction. The check service business was also impacted by the closer -- closure of a number of our booth operations many of which were unprofitable.

Our gross margin for the fourth quarter was 22.1%, down from the fourth quarter of 2009 when it was 25.3%, and down as compared to the third quarter of 2010 when the gross margin was 23.7%. Exclusive of depreciation and amortization, operating expenses were down $600,000 from the prior year.

In the fourth quarter of 2010, non-cash equity compensation expense was $1.5 million. We ended the quarter with 402 full-time equivalent employees, compared to 474 at the end of the fourth quarter of 2009. We had approximately 2774 floor devices processing on our networks as of December 31. This included 1045 redemption devices and the remainder largely consisting of ATMs. This compares to 2867 floor devices at the end of the third quarter of which 1092 were redemption devices.

Our cash EPS was $0.07 per share compared to $0.17 in the fourth quarter of last year. Our GAAP EPS, before discontinuing operations, was $0 per share for the fourth quarter of 2010 due to an income tax expense of $6.4 million, which was an increase of $1.9 million for the quarter ended December 31, 2010, as compared to the same quarter in 2009. The tax rate for the fourth quarter was effectively 104% compared to 38% for the same quarter in 2009.

The increase in the Company's effective tax rate for the fourth quarter was primarily with the result of two one-time issues. The first was the Company's decision to repatriate funds that had been accumulating in our foreign subsidiaries over many years. This one-time repatriation resulted in an increase in our tax provision of approximately $2.17 million.

The second issue that impacted the tax provision was the Company's reversal of a deferred tax asset related to foreign tax credits. It was determined that the Company would be unable to utilize these credits in the future. This tax provision was offset partially by the deductibility of foreign taxes and resulted in a one-time provision adjustment of $1.69 million. The provision for income taxes without these two one-time issues would have been approximately $2.52 million. Although this increased provision impacted our GAAP earnings for the fourth quarter of 2010, there were no significant cash impacts to the Company due to these tax provision changes.

On a cash basis, the full-year cash EPS was $0.54 and in-line with our previously announced expectations, and this compared to $0.72 for the full year of 2009. GCA provided $33.9 million of cash flows from operations during the fourth quarter of 2010. During the quarter, the Company made $15.3 million in debt repayments, and cash was approximately $60.6 million as of December 31.

We also recently announced the completion of our new five-year $245 million credit facility. The new facility is comprised of a $210 million term loan and a $35 million revolver. The proceeds will be used for working capital, CapEx, and general corporate purposes. The facility has standard leverage and interest coverage ratios as well as a free cash flow suite and it matures in 2016.

Total debt at December 31, was $208.75 million and we remain in compliance with all of our debt covenants, and our leverage ratio is approximately 2.78 times, trailing adjusted EBITDA as of December 31. As previously announced, the Company estimates for the fiscal year ending December 31, 2011, the cash earnings per share will be between $0.40 and $0.43 based upon a tax rate of 40%, which is slightly higher than the previously announced rates. The Company's diluted earnings per-share from continuing operations will be between approximately $0.24 and $0.26.

The Company estimates EBITDA for the fiscal year 2011 to be between $61 million and $65 million. These estimates assume a modest recovery and stabilization in the gaming industry during 2011, and that cash outlays for CapEx will be between $7 million and $9 million, and fully diluted shares outstanding for the full year between 66 million and 67 million.

And with that, I would like to turn the call back over to the operator, and open up the line for questions.

Thank you ma'am. Ladies and gentlemen, we will now begin the question-and-answer session. (Operator Instructions). Greg Smith, Duncan Williams. Mr. Smith your line is now open. If you have the line on mute, please--?

Yes, hi, can you hear me?

Yes, we can.

Scott, can you talk about Macau and what your competitive advantage is really there versus -- kind of compare and contrast with the US market, please?

Yes, I think the biggest advantage we have, is obviously, being able to provide solutions that are integrated from the kiosk straight through to our payment system. It gives us a lot of advantages in terms of how the equipment is controlled, and in its reporting and those types of things. We've also made significant upgrades to our payment platform that will allow for transactions to go over additional networks as well as be in EMV compliance. So, all of those have just contributed to our ability to offer something different in those geographies that we think will help us to grow the Macau business over time.

And then what specifically changed in the UK to allow you back into that market?

We are not going to disclose exactly what we've done for competitive reasons. There is no reason for me to teach anybody how we did it. We have been working very closely with the operators and the Gaming Commission over the last three years addressing the concerns that were raised in the Gaming Act as well as the needs of the operators. And through that work, we've come up with a solution that we feel meets everybody's requirement, and we are going to be reopening that business here shortly and we are very happy about that.

Do you expect competition from the get-go?

I always expect competition, so I don't know what to say about that.

Do you have some secret sauce that your competitors -- it's going to take them time to figure out?

Probably.

Okay. That is what I was looking for. And then, Mary Beth, just can you run through the debt where it stands today, and also, what your freely available cash is today? Just something that is more update than the end of the quarter because you refinanced the debt, and just freely available cash--?

We didn't have a significant impact on either the debt level or our cash position. We didn't pay down any debt. We just simply transferred the balances from the existing facilities. So, we ended up when it was all said and done, with about the same, around $210 million outstanding that we had prior.

And then what is the freely available cash that you have today?

I don't have that number. We haven't closed the books for February as of yet, but since we had made no significant paydowns, we did make an interest payment, obviously, for the refinanced debt. So, that would have taken somewhere approximately $6 million out of our cash flow, but other than that, there have not been any significant uses of cash.

Okay, thank you.

Thank you.

Chris Mammone, Deutsche Bank.

Thanks. First, if you could help us a little bit with modeling revenue in 2011. I notice that you changed your tone a little bit from the pre-announcement. I think you assumed no recovery in gaming and now assuming a slight recovery. Is that just based on the February results being up 2.7%, or is there something more baked into the optimism? And would it be right to assume that ex Harrah's, we could model the core business as flat to slightly up this year? Does that make sense?

Well, I think, I will give you my thoughts and then let Mary Beth give you some more granular comments on that. What I will tell you, I don't know that we have significantly changed our tone. I mean we have always assumed that 2011 would be the bottom trough year, if you will, however you want to describe it, that we would see the results be choppy as we start to hit the bottom and see a lot of month-to-month variation, particularly when you aggregate our whole portfolio. And in fact, we are seeing that. I think we are certainly glad to see the trend continuing in the first 2 months versus continuing to decline at 3% to 4%. That certainly would have been alarming. So, I don't know that we are really significantly changing what our point of view is, but we think that is what we expect the bottom to look like, and that is what it is looking like now. And so, this year we expect it to be essentially flat. It may continue to have a slight decline in the first couple of quarters. Maybe there's a slight increase in the last part of the year, but it hasn't changed our forecast, and hasn't changed obviously what we are reconfirming as 2011 guidance.

And I would just add to that, the modest recovery basically suggests that it's stopped declining because clearly a flat also translates when you are coming from a negative to a modest recovery. So, I think there is fine hairs that we are slicing here, but effectively, that's the issue. In order for it to even be flat or somewhat up, that requires some bottoming out, and our projections certainly anticipate that.

So, good news. We will continue to report on it at every quarter, and give you the same kind of insight into the -- in the category that we always do.

Yes. And at this point is Harrah's completely out or is that de-conversion still ongoing?

No. At this point they are completely converted.

And then a follow-up to one of Greg's questions on both Macau and UK. Much more of the scope today did discuss your international business. Given the lack of being able to predict when your core credit card business comes back, I think you talked about that as stage three, is the signal here that you are getting more aggressive in maybe substituting going after the international business? And will that be the goal to make the international sources of revenue a bigger percentage of the overall pie going forward? Is that part of the strategy?

Certainly. I think what I would refer you back to, we've been doing these calls together now for almost three years. We've always characterized the international business as small, but important to us, and we are going to stay strategically focused on it. I'm not kidding when I am telling you we have spent the last three years working hard to be able to reopen the UK business. We are obviously, for competitive reasons and a lot of others, won't say anything about that until we are where we are right now. Same with Macau. When it first opened, we thought there was an opportunity there. I think we have learned a tremendous amount about what it takes to be competitive there, particularly, with aspects of some of the unique card associations, the card networks that are over there. So, that learning we have plowed back into what we've accomplished as we have gone through our platform change. And, we also are seeing things like the Western Money kiosk business being -- again, we have always talked about that as a strategic advantage for us. Yes, it is a nice business to tuck in, and it's going to give us some incremental revenue, but we always said it's really strategically important to us. I think we are just starting to see some of that. So, I don't know that it is a new focus. I think it is a continuing focus, and again, I think behind the scenes we've just been at it hard for several years to get to a point where we can get the kind of traction we are starting to get. So, we feel very good about it.

Okay, and then last one for me you gave the FCE metric year-over-year. Can you break down for us how much of the turnover has been voluntary versus involuntary? And could you also give some color -- give an update on the sales force? I think you recently had some turnover in the senior sales level.

From a sales force standpoint, we continue to move forward. We think we have got the best sales force out there. We are continuing to manage our customers in a way that makes sense. And I think we got the right kind of mix of talent now where we've got people that understand not only our payments business, but we also have leadership that understands the systems business and the slot business, which has helped us tremendously in terms of moving forward with our major customers. Beyond that, I am not going to comment on any individual person, but we've got the business covered and we feel good about that.

Do you expect to grow the sales force this year or keep it flat?

I think we have some ideas on ways that we can be more effective with our customers, and we are continuing to adjust our organization internally to do that. And really, if I had to give you a bumper sticker for it, it's really trying to get more of our current organization up against our customers. We think we've got some talent and some opportunity to do that within the Company that maybe we haven't leveraged as much as we could have in the future. And now that we have been through the platform change and a bunch of other things, we are going to be focusing more on that as we move forward.

Okay, that's it for me. Good luck, guys.

You bet. Thank you Chris.

James Taylor, Bank of America Merrill Lynch.

Hello. Scott, Mary Beth. How are you?

Hi James.

First off, by my numbers, you guys will be generating a significant amount of cash this year, over $40 million. Can you talk about strategically what your focus is, debt reduction versus returning money to shareholders? And also what limitations are in the new bank deal?

Well, I think that we are firmly in the debt reduction camp for the foreseeable future and the requirement from the new credit facility, the 50% excess cash flow sweep. So, we have made the commitment both by agreeing to that, and by direction I think we think it is important during this time to really get our leverage down. It allows us to look at opportunities in the future in a much, much more strong way. So, you will see a significant amount of our free cash flow going to debt reduction.

Okay. In terms of the Harrah's contract, was there a dropdead date when it was all in your numbers or all out of your numbers or was that over a period of time? I'm trying to get a sense, how much of the fourth quarter included Harrah's business versus how much of the first quarter will include Harrah's business?

It will be immaterial in the first quarter.

Okay, but it was mostly still there in the fourth quarter?

Yes. It was basically weaning off in the quiet weeks towards the latter part of December, which would normally be pretty low numbers anyway. So, by the second week in January, it was all out, and over into January, it was very small.

Okay. Just on some the business stuff. On the comments about the same-store sales, can you maybe just -- I was having trouble writing them down fast enough. Can you go over those again, and maybe also give us the same store for all of 2010?

I will give you what I have here. What we said was same-store -- and again, these are numbers that reflect sort of dollars dispensed to the floor, if you will, which we think is the best predictor of gaming revenue, and an insight into the category performance. We said, in the fourth quarter of this year, we were down 3.6%, and that compares, essentially flat with what third-quarter was at about 3.5%. Both of those were about half the rate of the first six months, which were north of 7% in both quarters. So, that's sort of where we are for the fiscal year. I think and what we said for moving into this year because we've got some insight into January and February numbers, that January's continued to improve, where it was down only minus 1.9%, and in fact in February, it was up plus 2.7%.

And anecdotally, that plus 2.7%, that's got to be the first positive comp in--?

Actually not. That is why we are cautioning on the variability of it. November last year was actually plus 1.7%. November, October, one of those. I don't have the data with me, but it was October. The folks here have it, and tell me it was October it was plus 1.7%. So, again, you kind of see that variation in the fourth quarter where we were as high as 1.7% and as low as minus 7%. It is that kind of variability that -- again, certainly the trend is better than not, and I think we framed it right in our comments, but it's that variability that we still just need to see some more quarters. Okay, but it is certainly heading in the right direction.

Okay. In terms of the composition of the business, can you talk about the -- what is the rate of switching -- well, the levels, the switching that is still going on between cash advance versus ATM?

Well, what we are still seeing is that the credit volume, while you look at those same-store numbers that I just gave you, even in the first two months of this year, the decline in credit volume is still in the very low double digits. Okay, so call that 10% or so in those months. So, we are still seeing credit drop-off. Now, debit is picking up, so there is some shift in terms of the consumer behavior on the amount to the floor. We are still seeing that happen, and obviously we are seeing, as Mary Beth stated in her comments, that the ATM is growing too. So, we are still seeing some of those shifts, and I think we will and that is why I said those things -- we laid this hypothesis out for recovery, I think two or three calls ago, where we said the first thing we would see is the cash to the floor stabilizing. That appears to be happening. I think it will take a little longer for transactions to start to grow, and then for the shift back to credit has probably got the most to do with the macro economics. So, that's how we see this thing playing out over the next several quarters.

Okay. Very good. Finally, obviously Macau is a massive gaming market, four times Las Vegas, but a lot of that's going through junkets. How big is the addressable market over there? Is it most of the mass market or is it even a subset of that?

It addresses the mass market from a credit card usage standpoint over there, and, again, we think has the ability to generate significant revenue for us if we are able to continue to sign the major operators. The other thing I will tell you is while, yes, junket operators and high-end gets a lot of the press, particularly, I may not have the numbers right, but with the stabilization of visas and the flow of people from the mainland down. I think their mass gaming is still growing at 30% plus a year. So, good market, and still has the potential to be a great growing market for us even though I think Macau will always be driven by the high-end, but good market for us over the long haul.

Excellent. Very good. Thank you.

You bet. Thank you.

David Parker, Lazard Capital Markets.

You mentioned that QuikTicket was close to clearing the last hurdle with the card networks. Can you talk about what the issue was there, and what type of agreement you are close to finalizing with them?

What I will share with you is, as we go through -- as you might expect, I think maybe some people under appreciate the amount of effort and time it takes to make changes in the payment system particularly in gaming. We've had to get gaming regulatory approval which we had and reported on about mid-last year. We have also been working to make sure that the card networks are also comfortable with the transaction, that we're doing it within the appropriate rules for those transactions, so that we not only protect the consumer and their card, but also protect the card associations, and frankly protect GCA from any disputes and charge backs. So, it has been a lengthy, a very thoughtful process that we have done with the card associations, and they have seen the advantages of what we're proposing and understand the rigor with which we have put it into our system. And have gotten comfortable with the transaction, and are now in the final stages of writing their rule changes, so that their issuers will understand what the transaction is.

And, will your competitors have to have similar negotiations with them, or have you paved the way for them to piggyback what you have done with the networks in changing those rules?

When you talk about both gaming regulatory rules as well as card network changes, the leader has the burden of plowing that ground for everybody, and in some cases that is certainly true here. We still have a period of time for exclusivity of the TITO patent in this space, which we have commented on previously, and we certainly have first mover advantage and understand those rules and so forth better than anybody else in the marketplace. So, that is where we maintain our competitive advantage.

Okay, and then you mentioned the Bally's acquisition. What were you doing exactly with them currently, or what are you doing with them? Was it primarily just with the old power cash product or were you doing something currently with them, and then also if you could just talk about the IGT relationship.

As we talk about our vision for cashless products, and so forth, if you boil it all down to its most basic level, it really is our capability to link the payment's network to the casino management systems. So, in that context, we continue to work with all suppliers of casino management systems to get the interfaces that we need to be able to launch these new products. We've obviously been able to step that up across the industry with the acquisition of Western Money. I hate to sound like a broken record, but it really was a very strategic acquisition for us because it gave us those interfaces because that is the piece of equipment that those interfaces go through. So, right now, we are working productively with all of the manufacturers in terms of getting those interfaces completed, and so that is step one. As we get more sophisticated in how we want to interface, both in terms of doing interactive marketing at the kiosk level and perhaps moving to more sophisticated cash access products, will require us to get deeper and deeper into those casino management systems and those interfaces. I think one of the things that will always be true is that we will always have the ability to bring our customers to bear in terms of what these suppliers will or won't do. So, we remain, friends and productive with everybody in the space. We still have a relationship with IGT. Excuse me for my voice, I'm starting to lose it here. I am getting over a little bit of laryngitis. We continue to have that relationship and are working hard to develop new products and services that take the next step into integration with IGT.

Okay thanks, Scott, and last question from me. Mary Beth, you mentioned that there was a number of booth operators that were closed on the check side. Is that done or do you anticipate closing some more going forward?

I think that the bulk of them are done. I think we are still looking at a couple of marginal locations, but I think last year was really the big sweep to try and get those booths that were actually operating, drawing revenue in, but really at the bottom line after you pay payroll, and do all of that, it just wasn't profitable for us.

Okay.

(Operator Instructions). Matthew Kempler, Sidoti & Company.

To follow up on the QuikTicket side, have you put your marketing efforts on hold while awaiting this approval, or have you been building up any sort of pilot backlog with the casino operators?

We continue to have had interest from operators, and again because the uncertainty of the timing has dictated what we are going to do, but we have had conversations with many of our operators, and we certainly don't see any issue with being able to get out into beta testing very quickly after we get final approval. And we are continuing to work through right now, full speed ahead, on all the other commercialization aspects. So.

Okay. And then on the cash advance side, can you give us a sense of what percent of transactions and revenue in the cash advance segment is now coming from debit?

We certainly can get those numbers. We don't have them right now. I don't think.

Okay. Well, in your 2011--?

I can give you some rough numbers that -- so we're -- we're by far -- let me run that -- let me get a calculator here. I will give them to you right now. I did not know there would be a math question. We are about 10% or so in debit of total cash to the floor.

Okay.

ATM has always been the major portion of the business, but yes, it's about 10%.

Okay, and then two other follow-ups. One, do you have the Harrah's contribution to revenue in the fourth quarter?

No, but it would have been what we've said before because, as Mary Beth said, it was -- appreciably they were in for the entire quarter. The major parts of the move, the transition off did not happen until around the two weeks around Christmas and before New Year's, which would have been very slow weeks for our total business anyway. So, think about the fourth quarter being the same as the rest of it, which is about 15% of our revenue, I think is what we said.

Okay. And then finally, the Company's on track with its plan of $5 million, $6 million of SG&A cost savings, but if I look at the fourth-quarter number, at least they declined sequentially in operating expenses. It suggests that you are doing better than that. So, are there costs that we think should be coming back into the model?

No.

No.

Okay. All right. Good. Thank you.

Thank you. This does conclude the Global Cash Access Holdings Incorporated fourth-quarter and 2010 earnings conference call. We would like to thank you for your participation today. You may now disconnect.