Everi Holdings Inc (EVRI) 2011 Q1 法說會逐字稿

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Global Cash Access Holdings, Inc. first quarter 2011 earnings conference call. During today's presentation all parties will be in a listen-only mode. Following the presentation the conference will be opened for questions.

(Operator Instructions)

This conference is being recorded today, Tuesday, May 10th of 2011. And I would now like to turn the conference over to Julie Yusgart, Treasury Manager. Please go ahead, ma'am.

Thank you, Britney and welcome everyone to GCA's first quarter 2011 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 first 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 the investor's section of our 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 without limitation statements regarding market conditions, the timing and -- and extent of a recovery in the gaming sector, consumer habits, projected revenue, projected earnings, expiration and renewal of existing business, addition of new business, the competitive landscape and pricing environment for cash access services in the gaming industry, product upgrades, new product and any regulatory approvals for new products, the impact and timing of the Durbin Amendment on our business, cost-saving measures, and possible uses of free cash flow including early debt repayment and debt retirement. 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 on our first quarter earnings call. When we gave guidance in our last call, we stated our belief that while 2011 would likely be a very choppy environment, it would also represent what we felt was the bottom of the trough for the industry and for GCA. We also believe that we would see solid indicators that the industry was indeed approaching a bottom and that we expected to see early signs of a recovery. In short, we were looking for modest improvements as we went across the year. So let me start out with two questions I hope to answer in my comments. Have we really seen the bottom? And do -- have we seen enough evidence to suggest that a modest recovery is in fact going to happen this year? And will this translate into improved results for GCA at subsequent quarters?

From our perspective, perhaps the biggest news is we are seeing signs that indeed Q4 last year may in fact have been the bottom and we are starting to see real evidence that we may be in the early stages of a recovery. No one is predicting smooth sailing yet, as we still are facing some unemployment issues for sure, flooding along the Mississippi which has closed 12 to 14 of our customers right now, and we have some lagging recovery in some Native American jurisdictions. But the significant sequential declines have stopped. The trends in our same-store numbers have begun to show a solid positive trend. For the first time in a very long time we can report sequential straightening -- strengthening over the last four months across ATM, credit and debit transactions. Most encouragingly, we have finally seen a break in the credit card volume declines and are seeing that important segment start to rebound. Credit has been stubbornly posting year-over-year declines in the 12% to 15% per month for the better part of two and half years. Since December we have seen these declines mitigate.

In fact, they were minus 17% in December, minus 11% in January, minus 7% in February, minus 4% in March, and April is down a mere 2%. ATM transaction volumes for the quarter were up 1.5% and debit total dollar volume to the floor was up 6%. In aggregate then, this makes our first -- the Q1 the first quarter in a very long time that has posted positive same-store year-over-year gains in total cash to the floor, an important driver to our business. Total dollars to the floor across all transaction types for the first quarter was up plus 1.7%. And April continues this trend up a healthy plus 7%. Perhaps a better way to look at this is year-to-date, same-store total transaction volume is up 3.1%. This seems to be confirmed by the publicly disclosed gaming revenues. In fact, we are slightly ahead of those by about 2%. And this also matches a trend we are seeing in most of our operators if they have done their recent earnings calls.

On a geographic basis, we are still seeing wide variation as you might expect. In our top five states which account for over 55% of our revenue, these growth trends with the exception of California, where Native American casinos are still down double-digits, are growing nicely. Our business currently is outperforming the reported gaming results in both Nevada and Atlantic City, where we are growing with our growing customers in those geographies. So the answer to the first question is have we reached the bottom? It certainly seems likely that we have. Frankly it feels good to say that even at these -- at this preliminary stage. It has been a rough two and half years. If this trend continues to hold even at very modest levels, we feel that the addition of our current initiative program will deliver strengthening performance as we go across subsequent quarters of the fiscal year.

We have a healthy pipeline of new properties coming on as we move through the year. Two weeks ago we restarted the UK business with a soft start, so it is still too early to talk about results, but it is up and running and we are nurturing that business back to health. The opening of Galaxy, Macau is scheduled for this weekend and the installation is complete and we are ready to go. Canada is growing at double digits. And beyond that we feel that we have a healthy pipeline of new property openings coming online in the US as we move across the year. We continue to win most of the accounts we compete for, especially new openings, where the value of our new kiosk technology and business intelligence product -- products are starting to draw a bigger differentiation versus competition. We're continuing to pick up momentum with our new Western money kiosk, as well as the CSI product. Both have strengthening pipelines. And we feel we will meet our internal objective on both these product lines.

From a competitive standpoint, we are certainly still working through strong pricing pressure. The aggressive price of needing to close some of our larger properties over the past nine months will continue to put some pressure on our portfolio margins going forward. This is where we see our new products addressing this margin compression over time. It is my experience that the more innovative and integrated solutions in any industry receive the best margins over time. That's certainly been the focus of our plans. These are all very positive indicators but we understand that we need to translate this into positive and steady sequential improvement in our financial results. And I can guarantee you the entire organization is focused on this moving forward.

The organization is doing a great job on cost containment and we have completed the quarter slightly better than expected. And we expect it to trend this way across the year. From an innovation standpoint, QuikTicket remains ready to go, but we are a bit frustrated as we continue to get a delay in obtaining the necessary approvals from the card associations. We have no indication that this is a problem. In fact, quite the opposite. What we have repeatedly been told it is simply a matter of all their effort being taken up in response to the Durbin Amendment debate. We still hope to get these approvals in the near future and no one is more anxious to get this in the marketplace than we are. But frankly, it is just the natural -- the nature of regulatory change, it is hard, unpredictable work.

While we are on the topic of the Durbin Amendment, GCA like all payments companies and processors have been following this very closely. There remains much uncertainty as to what the final version may be, how it will be implemented, and the timing of that implementation. As many of you know, there are two parts to the Durbin Amendment. The first is the elimination of exclusivity on routing of transactions. This is interesting and could lead to lower routing for all processors including GCA but we'll have to wait to see what shape this takes. This would be positive to us but probably not material. The more important point for everybody on this call to remember is something very unique about our business. GCA is not only the processor and the acquirer, but we are also the merchant in our transactions. So any reduction in interchange will directly benefit GCA.

Again, we still need to learn a lot about how the final form will take shape, including the actual implementation timing. But what is clear is that for GCA, any revision or capping of the debit interchange with the implementation of the Durbin Amendment could have a material impact on our results. I really can't go into any more specifics other than to note that our average interchange cost on debit card transactions are substantially higher than the interchange caps currently being proposed under the Durbin Amendment. Again, we'll all learn much more about this in the coming months. So given the volatility of the last few years -- over the last few years, we certainly remain cautious about the strength of any recovery but there does seem to us to be mounting and compelling evidence that we are in fact hit the bottom and the improving trends both in same-store as well as mix are certainly positive moving forward. The fact that we are not just improving but have turned positive in the same-store total dollars to the floor is probably the most compelling news. As I have said earlier, there's certainly uncertainty in the future, including weather, some lagging jurisdictions, and just the unpredictability we have seen over the last three years. And frankly, the Durbin Amendment is a pure wild card, but it is not in any of our guidance.

So as for the second question, do we see these trends improving for GCA as we go across the year? The answer is yes. Given this, we -- we believe our previous guidance is still obtainable, however given some of the uncertainty that the remains, and frankly some softness we saw in January, we would handicap this a bit by opening the range on the downside. We just need to -- we just need to see another quarter to get comfortable with the trends and understand how fast our initiatives are getting traction. On a more granular level, as you look at our quarter results, please remember the big factors are rolling off of Caesars Entertainment, formerly Harrah's, as well as some one-time costs of our refinancing efforts and some severance and other associated costs with our OpEx reductions as we went into the beginning of this year. So with that I will turn it all -- over to Mary Beth who will review this is in some more detail.

Thanks, Scott . Good afternoon, everyone. Revenue for the first quarter was $134.4 million and cash EPS was $0.05. This was impacted by approximately $0.03 per share in nonrecurring costs associated with the refinancing of all of our debt in March. Although the quarter was somewhat lower than expected, we are seeing very positive trends in our same-store metrics, as well as further confirmation with the gaming companies recent earnings calls where many of the operators are begin to see some top line evidence of a recovery for the sector. Although we believe that we may continue to see some volatility in the month-to-month result, we believe our initial full-year guidance may still be achievable. To that end, we are going to widen the range of our 211 guidance -- 2011 guidance for cash earnings per share to be between $0.38 and $0.43. We define cash earnings per share to include non-cash taxes as well as the add back of the one-time refinancing charges. We expect EBITDA will be between approximately $58 million and $65 million. These numbers reflect the various assumptions and trends that Scott's previously discussed with you.

As I go on to discuss the first quarter results, I want to remind everyone that the results this quarter have been materially impacted by the loss of the Harrah's contract. Revenue was down approximately $24.1 million from the first quarter of 2010. However, Harrah's represented approximately $21.8 million or 14% of the Company's revenue in the first quarter of 2010. On a same-store basis, revenue declined about 1.8% and, 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 8.8%, ATM usage increased by 3.2%, and debit decreased slightly by a little less than 1%. On a year-over-year basis, total cash advance revenue was down about 23% for the quarter or $15.1 million to $50.9 million. Again, Harrah's represents approximately $10 million of the Q1 2010 cash advance revenue. Non-Harrah's declines in cash advance revenue were $5.2 million or 8%, which consisted almost entirely of a decline in credit volume. ATM revenue decreased 13% in the first quarter of 2011 to $71.2 million and Harrah's were represented $10.6 million of the 2010 first quarter ATM revenues or 100% of the decline.

Our Check Warranty product continues to -- continued to decline during the quarter by about 16.5% compared to the prior year's results. Harrah's, however, represented only a small percentage of this decline. The majority of the decline in check -- in the check service business or roughly 78% was due to the closure of a number of our booth operations, many of which were unprofitable. Net of booth closures in the Harrah's loss, we have seen a slight decrease in the overall same-store numbers as a result of both a decrease in the number of check transactions as well as a decrease in revenue per transaction. Our gross margin for the first quarter was 21.7%, down from the first quarter of 2010 when it was 24.5% and down as compared to the fourth quarter of 2010 when the gross margin was approximately 22.1%.

This is a result of compressed margins on our recently highly competitive renewal, as well as a debit interchange increase in 2010 that has not been fully recovered through the contract cycle. We anticipate the recovery of that interchange increase to continue through the next couple of quarters. Operating expenses exclusive of depreciation and amortization decreased by $2.9 million from the same period in 2010. This is a 15.1% decrease from the prior year. We ended the quarter with 388 full time equivalent employees compared to 449 at the end of the first quarter of 2010. We had approximately 2,489 floor devices processing on our networks as of March 31. This included 968 redemption devices and the remainder largely consisting of ATMs. This compared to 22,775 floor devices at the end of the fourth quarter, of which 1,099 were redemption devices. Harrah's accounted for 325 total devices, about evenly mixed between ATM and redemption.

During the quarter, the Company completely refinanced all of its outstanding debt. The new credit facility consists of a $200 million term loan and a $35 million revolver. Total borrowings at March 31, 2011, were $200 million and we remain in compliance with all of our debt covenants. Using the 12 month trailing adjusted EBITDA as of March 31, our leverage ratio is approximately 2.7 times. As we have stated before it is our intention to continue to focus on debt reduction throughout the year with free cash flow. During the quarter, we had net debt repayments of approximately $8.9 million. At March 31, 2010, our cash was approximately $40.5 million. Our cash EPS for the quarter, as we said before, was $0.05 per share and if we adjusted the approximately $0.03 a share for one-time refinancing costs, cash EPS for the quarter would've been approximately $0.08. Our GAAP EPS was $0.03 per share for the first quarter of 2011, again adjusted for the refinancing cost, GAAP EPS would have been approximately $0.06.

The Company estimates full year 2011 cash earnings per share will be between $0.38 and $0.43. We would suggest investors look to our cash EPS and EBITDA guidance since we are not a net cash tax payer and there are significant fluctuations in the tax rate from quarter-to-quarter that have no impact on our cash earnings. So we believe cash EPS should always prove to be a more stable guidance target. As you have surely noticed, we have increased the range slightly to account for the fact that we believe we may be able to make up some of the ground that we lost in the first quarter. However, we also know the coming months may present issues that we have not forecasted and want to leave some room for continued month-to-month choppiness. The tax rate should be in the 42% to 45% range for the year . We have had some slight increase in that provision due to stock compensation issues associated with the recent employee reductions. But since we are not a cash taxpayer these provision rates should not be a real big discussion point.

And while we are discussing that tax provision, I do want to take a minute to discuss the deferred tax asset in a little more depth. Since joining GCA last September, this question around the value we may actually realize on an annual basis and the possible transferability of our DTA has come up on almost every investor analyst call that I have been on. So I do want to address these items directly to avoid any more confusion. First, as it relates to the value of the deferred tax assets, I have confirmed through our tax advisors that the DTA is sound and will be able to cover GCA tax -- cash taxes for the foreseeable future. While we do not realize all of the value in the periods which it is available, our current forecast suggests we should be able to use all of our tax attributes prior to their maturities. Any unused amortization simply rolls over and becomes an NOL that can be used at a later date. So currently no tax benefit is expected to be lost by GCA.

The second question surrounds the transferability of the DTA. While this is significant and complex in terms of absolute calculation -- the calculations depended on things like the value of the stock and the enterprise on any ownership change, my research suggests that under any reasonable scenario given the Company's current valuations, these tax attributes should be materially available to an acquirer. I hope that this explanation will be helpful -- helpful for those of you seeking a more definitive answer to the transferability of the DTA. The Company estimates EBITDA for the fiscal year 2011 to be -- be between $58 million and $65 million. This is a change from our original range of $61 million to $65 million. We are still on track with our estimate for cash outlays for CapEx between $7 million and $9 million and we expect fully diluted shares outstanding for the year to be between $64 million and $65 million. With that, I would like to turn the call back over to the operator and open up the line for

Thank you. We will now begin the question and answer session.

(Operator Instructions)

And our first question comes from the line of Greg Smith with Duncan-Williams. Please go ahead.

Yes, hello. Just first want a clarification on the guidance. Are -- are you using in the cash EPS guidance, $0.05 in the first quarter or $0.08?

$0.08.

Okay. You're using $0.08. Okay. That's helpful. And then Scott, I guess, just the potential impact in Mississippi with the flooding -- any way you can quantify that and I assume that's -- that's in your -- your guidance at this point?

Probably not within the variability. I think the biggest issue for us is the -- is how long they -- they remain closed. And I don't really have the answer to that. Obviously if it goes beyond three weeks and there are some estimates out there that it could be as long as six weeks that these stay closed. It would certainly suppress this quarter's volume a bit. But again, it's hard to predict exactly what's going on -- going to happen there.

Okay. And just back to the guidance. I'm still a little confused why there is the reduction because I mean this has been one of the more bullish calls lately and definitely seems like things are picking up. And you just -- you guys last reconfirmed or gave that guidance, it was in, I think, early March when you reported fourth quarter results. So I'm just a little confused, if you can just help me get a little more comfortable here.

Well, I think what we -- what we are trying to say is that for the first quarter, maybe we were off about -- a little -- about $0.02 from where everyone's expectations were. It is our hope that if what we are seeing is continued we'd probably be able to absorb that during the year. However, given the fact that we have been burned with the choppiness factor before, we wanted to leave that $0.02 sort of in there and if we can recover it and make the -- make the range just a little wider, with certainly a tremendous amount of positive momentum, but we probably -- I think what -- what Scott alluded to at the end of his comments were, we really want to see how the quarter goes and -- and we will be able to know better if we will be able to pick up some of that during the rest of the year. And that's really all that was effectively meant to do.

Okay. And then just one last one. Any updated thoughts on Bally's kind of strategic plans with the Sightline acquisition? Thanks.

No. We've seen no material change in the marketplace in terms of competitive activity.

Thank you.

Okay. Thanks, Greg.

Thank you and our next question comes from the line of David Parker with Lazard Capital Markets. Please go ahead.

Yes, thank you. Good afternoon. Just a follow-up on the Mississippi closures. Does this represent 10% of your volume, 5%, 2% of your volume? Any way you can quantify the potential impact?

I did look a little bit at the -- it's -- as I recall, it's under, it's -- Mississippi is under 1%. It's not -- it's in my list of under 1%.

Yes.

I don't even have the actual number. I don't believe -- unless it were closed for an extended period of time, more than four weeks, that it would be really material. But it gets past there and I think I looked at it, and it could a little bit--.

So I tell you -- I mean, it would be nowheres near 10, I mean, I -- Louisiana and Mississippi are both probably 1% or less of our -- of our total revenue. So those are the most affected states and so you can kind of take a look -- think about that as -- and that's obviously for an annual number. So hopefully it won't, we won't see -- we won't see this go on too much -- too much longer.

Okay that helps immensely. Thank you. And then just -- you mentioned that you continue to close some booth operations. Can you just talk about that and some of the reasons? And are we going to see more of those still going forward?

We -- we're pretty comfortable with where we have rationalized that portfolio right now in terms of changing the -- our structure with our customers, where we show that they are -- they are not profitable. And so that has been a sort of a change and a rationalization that happened over the last year. I think at this point in time, certainly the trend in the industry would be to continue to bring those in-house, but that would be more based on customer desires than us managing our portfolio on a go-forward basis. So I'd assume that would be pretty steady from here on out.

Okay. And then also, if you, Scott, if you could just remind us, you mentioned that you have some new properties coming online. Ca you talk about when exactly -- what quarter that they should hit and what properties those are?

Yes, the ones I can announce -- we have -- we won the Aqueduct contract and that's coming on in August, is when they're scheduled to come on. We've obviously opened up the UK, which is huge for us, as well as the Macau opening. And we believe we're in good shape on some of the others but are -- we will have to, we'll tell you about those when we can announce them.

Okay. And then just final question. Mary Beth, you -- I think you talked a little bit about the stock-based compensation. And I noticed also that your fully diluted shares outstanding, the guidance went down from $66 million to $67 million to $64 million to $65 million. Can you just talk about how those are working against each other, or?

Well, I -- well, the stock-based compensation issue had to do with severances that we have done over the past, well, pretty much over the past nine months. And we needed to -- we had expensed many of those stock comp expenses in previous periods and as those employees left, we had to recognize the reversal of those. And then we had a big chunk of, it is my understanding of, options that had some stock comp that had been issued that ended up going through the system in the first quarter of this year and expiring. So we had to work to get some of those out of the calculations and I think those are the two main issues that you see there.

Okay great. Thank you.

Thank you and our next question comes from the line of Matthew Kempler with Sidoti & Company. Please go ahead.

Thank you. So in the past two years, in the first quarter we kind of had a head fake where the business rebounded nicely sequentially and then it fell off again in the second quarter. Are you saying that this time it feels different primarily because of the follow through you're seeing in April and the comment -- commentary from some of the operators?

I think the big difference for me is in that past we have always tracked -- honestly, we've -- I think all hoped in the industry and we have talked about a declining decline -- rate of decline. We're -- we actually crossed the access, we're positive in terms of the actual, so we're not just talking about, yes, strengthening because our rate of decline is slowing down. The biggest thing that I -- is yes, that it is a continuity of that going into April, it's the fact that credit for the first time, has actually changed direction and improved. And yet to see what happens, but we're now down only a mere 2% and again that has been stubbornly stuck on 12% to 15% per month for the last 2 plus years. And like I say, when I look at the things that drive our business, which at the end of the day is the total cash dispensed, when I see that turn positive, not just talking about we're slowing down the rate of decline, but actually turning positive, I think that's all new news to us and welcome news over the last -- considering what's happened over the last 2.5 years. So I think that's -- I think that's what -- what makes us feel a little bit more conviction that, yes, we think we have kind of hit the trough. And our operators are seeing that, too. And you'd expect that because we certainly reflect our operators.

I think it's funny that you use the term head fake because I think that's widening up our margin. I think we're a little gun shy with the head fakes, so--.

Yes.

We're seeing a lot of positive news, we're equally afraid to believe it quite yet.

Okay.

But I think, again, once you get in positive territory, you're -- that really is a turn -- I mean, really is a turnaround and it's been four months and it's been consistent and it's been -- we've seen April, we -- that's obviously way too early to look at May right now. But so that's kind of where -- again, I -- could I be proven wrong? The answer is yes, but this one's -- it's -- the numbers are very different than what we have talked about before.

Okay. And then when you look at the traction you are getting in the UK, with Macau, with the Aqueduct, Canada, and then the other properties that you've alluded to in your pipeline, is there any way you can give us some perspective on how far along as you load all these different properties into your installed base, how far along that goes in making up for the Harrah's loss?

Harrah's loss is just -- it's at the law of large lumber numbers, that's a lot. I think that what we said last time was true, I think when we shut down the UK business in 2007 or were forced to shut it down, that was representing about $7 million or $8 million in revenue at that point in time. Again, we're just starting up, we've got to rebuild that business, we've got to get -- we got to do -- the marketing, people have to get comfortable with it and understand that it's now available and those types of things. So that's not going to spike all the way back up to that instantaneously. But again, we are going to continue to nurture that business along. Once we've got it sorted out around London we will move to the rest of the casinos across the UK. Yet to see how Galaxy does, but that's an important step for us. So I think it's -- I think it's going to be material to us in terms of potentially moving revenue several percentage points, but in -- as far as covering 15% of the -- of Harrah's, that's a big nut.

Okay. And then finally on the gross margin. Could you just go back to that? Review the details and what were the main drivers in that and then if we are seeing sequential improvements in revenue each quarter, should we see that margin also sequentially improve each quarter?

That's probably going to lag. I mean, as we have talked through, I mean we have been sort of down this now for several years, right? The three things that have always impacted our margin have been, obviously, just pure volume decline, right? Just a decline of the category, the mix issue with credit, and obviously, pricing pressure that probably reached a peak over the last 6 to 9 months as we were -- we were moving through the issues that we had in the marketplace and so forth. So the good news is we're seeing the volume decline stop and in fact turn around and that obviously sort of happens instantaneously, right? I mean you'll -- we will see the advantages of that as -- if that volume continues to improve across the year. Mix is still an issue because we are still lapping quarters where we -- where credit was down. I am looking at a sheet here real quick, but credit was down in the second quarter of last year again, it looks like something in the 16% range. Okay, so even though we are seeing that come back, we are still going to have mix issues versus year-ago comparisons. Okay? Because of that. It's going to take us a while to rebuild that.

We'll have to see credit continue to stay where it is or improve, but you're always going to have credit as a percent of total, if you think about it that way right, it is going to be less in this fiscal year. So yes, we will see some improvement in that, because we are not seeing a decline, but it is going to continue to put some pressure on that as we lap higher credit percentages year ago numbers. And on the resignings, we -- it was -- it's been a hypercompetitive market out there as people thought they could get some customers from -- from us. I think -- I personally believe that is going to mitigate as we go on. But those contracts are obviously coming on our portfolio and they'll be in that portfolio and that continues to suppress our margins a little bit. So I will turn it over to Mary Beth for some more granularity, but that really was the basis of her comment, that we're still -- that's the one we are most unsure about. Again, we are very pleased with the traction of our new products and CSI, our new equipment, is certainly improving our profitability on a customer basis. We have been able to particularly on new openings be able to put equipment and our services in. So that strategy is working. UK promises to be accretive to margins but again that is just starting out and very low volumes. So I think it is going to -- I just want to make sure the expectation isn't that our margins are going to march right up with the -- with the change in volume.

I think that my comments really -- keep your eye on credit. Because that has a fairly significant impact on the margins. We have had repricings which certainly give pressure on the top line, but a volume increase in our higher margin businesses will move that -- most of the really competitive ATM markets, so the ATM margins just top. And -- but -- and not variable really. Whereas the credit card cash advance market certainly has had volume increases. Has a tremendous impact to us. So keep your eye on that.

Okay. Thank you.

Thanks, Matthew.

Thank you.

(Operator Instructions)

Our next question comes from the line of Chris Mammone with Deutsche Bank. Please go ahead.

Thanks. Good afternoon. So you gave a lot of numbers in the same-store sale discussion and I definitely appreciate that. Just to be clear though, the -- that progression that you gave, the monthly progression down 17% December, January 11%, February 7%, March 4%, and April down 2%, that was just the credit -- that was just the credit?

That's the credit. Yes. Yes.

Okay. I'm just wondering is there any variability in how that -- how those growth rates look, I guess, destination locations versus more locals based locations? Have you sliced the data that way and can you give any color on how that might differ?

Yes, Chris, I have not looked at it from -- to break that down specifically by type of customer and so forth.

Overall. I have got some metrics by kind of state that are kind of an overall blended same-store--.

This is total all transactions of cash, debit, and so forth. Yes, we don't.

Total all transactions. Right. Yes, so you just -- and that's what we, what Scott was talking about earlier is -- Nevada kind of, we tend to track -- if you look at the Nevada results for the quarter, you'll hear -- you'll see things like baccarat and you'll see things and we talked about this a little before, we need the other stuff to move, so Nevada is still down actually first quarter of '11 over '10 except for table and baccarat play. So -- and then you don't see the Southern California tribal -- but they are down -- still down double digits, pretty significant. And between those--.

Arizona remains down, too. So really -- it really is sort of Native American as -- if you can -- the one thing we can tell you -- the only thing that we are seeing hugely from a geographic standpoint is our Indian gaming is certainly lagging. What you see in other jurisdictions. Obviously, Pennsylvania because they're lapping -- no table games -- as continuing to grow and our business is very healthy in that geography also. And everybody else seems to be moving along with the trend. So the things to watch for us there -- are first and foremost, credit. Obviously we not only need to see that continue on that trend but we need to see that turn positive. Hopefully we'll be able to report that next quarter. And for whatever reason, just there's just a lot of Native American casinos and they're lagging, and they're in some tough economies also.

Okay. And I guess just to follow-up on your comments around Durbin. It would be your -- it would be primarily your POS debit product that would -- that might benefit under the proposed caps, at least. Is that right? Is that--?

Yes, we are assuming that the way Durbin, at least all is structured today, it only covers both pin and signature debit. Okay. It does not contemplate anything to do with credit or obviously ATM transaction.

Can you remind us then what percentage of your overall volumes represent -- are represented by POS debit?

I don't know that we disclose that or we have that number right now.

I thought it was something like very small like lower than 5%. I mean is that the right neighborhood?

In terms of, what? Cash for the floor? Or in terms of--?

Either. Yes, I mean, I don't know if I had it measured by number of transactions or cash to the floor on that product alone.

Yes, yes. It's -- there's -- I don't have -- we don't have that number right now . And we'd have to -- pin and signature are combined and again I think at this point in time, what we wanted to do is try to give you guys a little bit of insight into how we felt about it. There's -- certainly the biggest variable here isn't going to be -- isn't going to be our numbers, but it is going to be how it is finally implemented in terms of where the caps and so forth goes. But again, I think what may be -- what may have been lost and we wanted to make sure people understood, is we are unique in the -- in sort of your processor world and acquirers world and we're also the merchant. So again, as you see people talk about capping or somehow modifying the interchange structure, that would be a material positive for us and it's because we're the merchant in the

Right.

That was the point we wanted to make. So many other things are variables in that and I guess we are going to -- we're going to learn a bunch over the next two or three months.

Yes. Okay. And then I guess my last question just around the -- just around the OpEx, I think the last time that we, the last time that you're running around this level of, I guess, quarterly revenue base in your OpEx was roughly $3 million or so lower per quarter. I mean, is that sort of the goal to get back to, given all your cost containment efforts, or why might that not actually play out given where the Company stands today?

Well, we bought Western Money.

Got it.

I mean, so if you were extract those, we're actually probably, I don't -- we're probably at or below, I would think, those levels that we were on the base business.

Right. Okay. That's all I had guys.

Okay.

Thank you. Ladies and gentlemen. This concludes the Global Cash Access Holdings Inc. first quarter 2011 earnings conference call. We thank you for your participation. You may now disconnect.