Everi Holdings Inc (EVRI) 2012 Q3 法說會逐字稿

Good day ladies and gentlemen, thank you for standing by. Welcome to the Global Cash Access Holdings Inc., 2012 third quarter conference call. (Operator Instructions). I would now like to turn the conference over to [Julie Uscar], Treasury Manager . Please go ahead, Ma'am.

Thank you, andwelcome everyone to GCA 2012 third quarter earnings conference call. Joining me on today's call is Chief Executive Officer Scott Betts, Chief Financial Officer Mary Beth Higgins and President David Lopez. On today's call Scott and David will be giving an overview on the Company's progress and Mary Beth will provide a brief update on our financial performance in the third quarter and review our guidance for 2012. 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 in the Investor Relations section of our website at www.gcainc.com for anyone who needs access to that information. Also if during this call 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 PM Pacific Time.

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 and segment trends and conditions in the cash access kiosks and gaming industry for the remainder of 2012 and future periods, our current perspective on the Internet and social gaming landscape, our perspective and belief about our pending strategic alliance with Live Gamer, our belief that we are positioned to grow our business in the future. The continuing impact of the MCA asset acquisition on our business.

The continued impact of the Durbin amendment. The implemented changes to rules and regulation regarding the interchange reimbursement structure for ATM transactions and other uncertainties regarding changes in network fees on our business. Our projections and guidance regarding cash EPS,adjusted EBITDA and other financial natures. Our product pipeline, regulatory approvals for new products and our competitive position. 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.

Thanks, Julie. I would like to welcome everyone to today's call. We are extremely happy to announce GCA's strong third quarter results. Adjusted EBITDA was $20.8 million up 56%, and cash EPS of $0.23 was up $0.12 versus the third quarter 2011. Year-to-date results are adjusted EBITDA of $62.8 million and cash EPS of $0.67 up $0.36 versus the same period in 2011. Clearly this year is coming along very, very well, and based on these results we will be increasing our full year cash EPS guidance from the previous $0.76 to $0.82 to $0.81 to and $0.84, and be increasing our adjusted EBITDA from $73 million to $77 millionto $77 million to $80 million.

Given this new higher guidance and strong sequential growth we have had through the last three quarters I want to provide some perspective on the fourth quarter. I do not want anyone thinking there is a weaken of the business if our projected cash EPS as you can tell is only in the $0.14 to $0.17 for Q4. First as we all know the fourth quarter is by far the weakest quarter of the year historically, and we assume it will be this year also. This may be compounded slightly by a very modest softening in segment growth that we are seeing lately, so we are projecting a flat Q4 growth rate versus a plus 2% to plus 4%, we have discussed on recent calls.

We also believe that this is a short term softening. Additionally tropical storm Sandy is certainly in the news and certainly in our thoughts of all those who are affected. Sandy resulted in the closure of many of our East Coast customers and a significant reduction in business over the past week or so. The impact to our business is difficult to assess, but we believe it could be approximately $0.01 in cash EPS for the quarter which is included in our updated guidance for the year. Neither of these item materially change our positive outlook for 2013.

Second the largest component of this quarter-to-quarter variation is our Western Money business. Recall we have been saying for several quarters now that while we have confidence and are accurate in our annual guidance quarter-to-quarter and therefore year-over-year contribution from Western Money can very significantly, and this is the case here. Q4 last year had a big new property opening. This year we have had a very strong Q3 and are seeing some Q4 shipments move into 2013.

The magnitude of these swing can be and are $0.02 plus per share. As Western Money becomes an increasing part of our profit contribution this quarter-to-quarter difference will become a familiar sight. The great news here is we are hitting and exceeding our annual numbers both in Western Money as well as the total business hence we are raising our guidance, and we are very optimistic on the pipeline we see coming out of a strong G2E show going into 2013.

Lastly I will also remind you we have an increased OpEx spending that we have talked about across the entire year and that contributes another $0.01 to the difference. So that is it. Three easy pieces on the fourth quarter. As you will hear from David we have several significant initiatives coming to market near term that will contribute to driving our growth in 2013 and beyond, and we feel our ability to resign key customers is very good.

Lastly I want to share our principals on the use of capital moving forward. We are announcing today that the Company tends to enter into a stock buyback program of $40 million over the next two years. Mary Beth will get more into the detail, but I wanted to outline the principals that we are using so you have some clarity as to our plans and can model them appropriately.

We think we have a very balanced approach to free cash flow moving forward with a targeted split of roughly one-third for debt reduction, one-third for share buy back, and one-third for investment in the business including small acquisitions and technology partnerships. This plan is transparent and consistent in its execution, so you can include it in your models. And we believe there is enough flexibility to handle our business needs going forward. Obviously these are target numbers, and if there is a swing in the cash needs of the business either up or down we will adjust the debt reduction and equity buy back, but again those are our targets and those are our principals.

We have been very focused over the last year or so to strengthen our balance sheet and reduce debt levels. We think we have accomplished that, and this plan we believe provides a better return for our investors going forward. With that, let me turn it over to David to outline the key initiatives and results of the business. David.

Thank you, Scott, and good afternoon everyone. I would like to start by saying I am truly excited about being here, about the opportunity to be a leader at this Company and thrilled for what the future holds at GCA. My first 5 months have been energizing, fast paced and a lot of fun. Earlier this year when GCA approach me with the opportunity to join the team as President, it did not take me long to recognize that many of the Company's strength in casino customer service, utility products such as full service kiosks, and technology matched up perfectly with the areas where I have built my career.

With this reality I decided that GCA was a place I wanted to be for the coming years working along side a great team of people to grow and further position GCA as a technology leader in gaming and payments. Now that I have had the opportunity see the Company from the inside, I can say that GCA not only has the key elements necessary to maintain its place as leader in casino cash access and cash handling, but it also has the opportunity establish itself as one of the premium gaming companies to work with and for.

At the core of GCA's strength are its people, about 425 of them. It is obviously people are at the heart of everything we do. People drive process improvement, execution, products, customer service and without a doubt people drive culture. Perhaps one of the most refreshing surprises at GCA has been the spirit of the people here. Their deep understanding of the business and positive attitude are key as we seek product, operational and cultural opportunities. While people are top of mind for me, I want to stress how important product service and innovation are for the Company and this will only intensify going forward. This is best reflected by our most recent showing at G2E, which is what I would like to focus on next along with new product roll outs, the continuous improvement of our management team and customer service.

First some thoughts on G2E and the rollouts of new products showcased at our booth this year. This was my 15th major gaming convention attended in Las Vegas. There is no doubt it was one of the best I have been a part of. A surprise for me at G2E was the number of high level decision-makers visiting our booth which really underscores the importance of the products we demonstrated, and that GCA's product vision was clearly resonating with our customers. Much of the energy at the show was centered around our kiosks and cashless products like TableXchange and QuikTicket.

Our gaming partners not only saw the value of each individual product, but realised the combined benefits of integrated product platform that reduces physical cash needs on the gaming floor, increases the velocity of gaming and adds an enhanced level of security. Although these products generated significant interest at the show, several other products such as Cash Club which is rolling out this quarter for beta, Casino Share Intelligence and GCA's E-Wallet all received a great deal of attention as well.

The demonstration of our iGaming products suite helped many of our gaming partners better understand GCA's holistic product vision of providing integrated cash access for iGaming and brick and mortar casinos. The benefits of bridging these two worlds is truly compelling to our customers. Now obviously this was just my first show with GCA, and was very impressed with execution of the development team and the expertise and relationships of an extremely focused sales team, who met a number of challenges presented to them during the show.

Another important observation in my time at GCA is the strong and focused management team Scott has assembled over the past several year. The most recent addition our new CIO Rob Myhre is one of the best talents in the payment business joining us from MasterCard. Acquiring someone of Rob's stature not only represents a significant enhancement to our executive team, but it sends a clear message to our customers that we are taking customer service, reliability and technology very seriously. Since joining the Company I have adopted a practice that Scott Betts began over the last several years, which is one of process and product improvement as it is something we agree on as a standard practice.

Concept of continuous improvement is not just for product development, operations or sales, it is something we believe must be a practice for every discipline and every department. This is why we are so focus on our human resource efforts and how those efforts relate to developing our employee base and the recruiting and retention of the best talent in the gaming and payment industries.

Which all leads me to my last topic which is customer service. Although GCA is considered the pioneer of casino cash access, we now aim to shift gears from market leader to best-in-class. This drive for excellence is shared across the management team and with some recent changes in our sales team coupled with the addition of our CIO we have already achieved improvements in customer communication, quality of our touch points and relationship management. Customer relationships are something I along with the executive team take very seriously, and through the implementation of management sponsorship program each executive has an account assigned to them for a 12-month period that they sponsor along with the salesperson directly responsible for the account. This program has countless positive impacts on account management.

Our executive team works closer to the customers to help build relationships and understand market trends, which also builds a closer relationship between the executives and the sales team which is yet another cultural win. As you can tell I am excited about our people and our products and the road we have had ahead of us at GCA.

With that, I will turn it over to Mary Beth.

Thanks, David. Good afternoon, everyone. As Scott suggested earlier the third quarter of 2012 continued to produce strong results for GCA. Our cash EPS which is defined as net income plus equity compensation plus deferred income tax expensive plus amortization divided by diluted shares outstanding was $0.23 and $0.67 for the three and nine months end September 30, 2012, respectively with a slight increase in the average shares outstanding. Shares currently total 67.6 million and 67.0 million for the three and nine months end September 30, 2012. Adjusted EBITDA which excludes non-cash stock comp expense for the third quarter of 2012 was $20.8 million an increase of 56% from $13.3 million in the third quarter of 2011. Year-to-date adjusted EBITDA was $62.8 million an increase of 51%, from $41.7 million for the same period in 2011.

Before we look into some of the details behind the numbers, I want to remind everyone that biggest impact to segment revenues for the third quarter of 2012 for both cash advance and ATM was the inclusion of the MCA related contracts that were acquired in the fourth quarter of last year. These contract accounted for approximately 10% of the revenue growth in the cash advance segment for this period. On a segment basis cash advance revenues, operating income and operating margin were $57.5 million, $15.8 million and 27.5% for the third quarter of 2012. The nine month revenue , operating income and operating margin were $172.6 million, $48.4 million and 28%. The decrease in cash advance margin for the quarter was a result of pricing adjustments partially offset by continued growth in the volume of our PIN debit transactions and an improved transaction mix.

On a segment basis ATM revenues, operating income and operating margin for the third quarter of 2012 were $76.4 million, $8 million and 10.5%. The nine month revenue operating income and operating margin were $233.4 million, $25.6 million and 11%. The decrease in ATM margin for the quarter was a result of increases in surcharge enacted by casino customers to offset the reverse interchange cash through that occurred in the second quarter. On a segment basis check services revenue, operating income and operating margin for the third quarter of 2012 were $6.6 million, $3.8 million and 57.6%. The ninemonth revenue operating income and operating margin were $19.7 million, $11 million and 55.8%

Our other segment includes primarily the results of Western Money and Central Credit operations. On a segment basis other revenues, operating income and operating margin for the third quarter of 2012 were $9.3 million,$4.7 million and 50.5%. The nine month revenue operating income and operating margin for the other segment were $22.7 million , $11.6 million and 51.1%. The timing of equipment sales is more difficult to predict given the fluidity of delivery date, but the delivery schedule for the fourth quarter is expected to be softer than the fourth quarter 2011.

Corporate operating expenses were $17.6 million for the third quarter of 2012 as compared to $16.8 million for the same period in 2011. This was primarily due to higher payroll and related costs partially offset by lower professional and consulting related costs. As compared to the prior year for the nine months ended September 30th corporate operating expenses are up approximately 5.5%, and we expect corporate operating expenses to be up between 6% and 8% for the full year. We also expect corporate operating expenses to be impacted by our new strategic lines of Live Gamer and our planned relocation of corporate headquarters that will occur in early 2013.

Based on these expectation for the remainder of the year we have revised our guidance for full year 2012 to a target cash EPS of $0.81 to $0.84 and target adjusted EBITDA between $77 million and $80 million. This revised guidance anticipates a fourth quarter to fourth quarter impact from lower Western Money sales of approximately $0.01 to $0.02, OpEx increases over Q4 of 2011 of approximately $0.01 and also contemplated in the guidance is a range for the impact from Hurricane Sandy that could be approximately $0.01.

Looking briefly to balance sheet as of today our total borrowings outstanding were $124.5 million. As of September 30, 2012, our leverage ratio was approximately 1.6 times based on an outstanding debt level at 9/30 of $126.5 million. At September 30, 2012, cash was approximately $46.9 million. Our capital expenditures were $7.4 million for the nine months ended September 30, 2012, and we anticipate CapEx for the full year will be approximately $12 million which is consistent with our revised guidance provided at the end of Q2.

As Scott outlined in his comments, we will begin a share repurchase program in 2013. The Board has authorised $40 million. The program will be accomplished from free cash flow and will be opportunistic but consistent. It is management's intention to deploy our free cash flow barring an acquisition or some other significant event at roughly one-third to share repurchase, one-third to debt reduction and one-third to CapEx and cash growth over the next two years. Now I will turn the call back over to Scott for some closing remarks.

Thank you, Mary Beth. David and I remain very focused on our strategy and plans for the remainder of the year and into 2013. First of these is delivery of our product pipeline specifically Internet opportunities and cash management products such as QuikTicket and TableXchange, which will be going into the market this quarter and early into 2013. We continue to improve the execution and sales focus on all facets of our business driven by the people and talent that we have. We continue to build a foundation for International growth.

We are focused on growing the UK as well as developing the Asia region behind several of our new products and capabilities. And lastly find, foster and execute technology partnerships and acquisitions to grow and expand the Company's portfolio. This has become an increasingly interesting opportunity as the industry and other players are now seeing what GCA's capabilities are.

Finally, you also saw the announcement that I have decided to retire at the first of the year. At that time David Lopez will assume the role of President and CEO of GCA. The Board and I have always put the development of the our management team and have a strong succession plan as top priority. I think you can see from this call we have great momentum in the business, our innovation strategy is really kicking in and we have an outstanding management team leading these efforts. So this is a good time to transition. I have all the confidence in David's ability to drive this Company forward, and I am so proud of the job the organization has done to bring this Company from where we started five years ago to where we are today. We are a better, stronger, smarter Company and it shows in our results.

On a personal level, I look forward to spending more time with my family, enjoying be a grandfather and living with a little more grace. I will remain on the Board , and look forward to supporting David and the management team as this Company continues to grow. It has been my true pleasure to serve GCA and its organization in the capacity of CEO and President, and leading the Company through the last five years. So enough about me, and let usopen it up to questions. Operator.

Thank you, sir. (Operator Instructions). Our first question comes from the line of George Sutton with Craig-Hallum Capital Group. Please go ahead.

Hi guys, Jaeson on for Georgia. First of all, just wanted to say congratulations to David.

Thanks appreciate it.

Sure. So first question here, we have heard a lot about potential Federal Poker Bill coming from Senators Reid and Heller, and I am wondering if you have perspective on that, and if the likelihood of that changes at all after the elections?

I can probable start off and let the other chime in a bit. It is little early. We have been reading up on it, and studying it ourselves, but I would say it is little too soon in the game for us to make a call on it. Obviously we hope that any Federal Poker Bill goes through, because I think it would open things up across the country and it falls right in line with much of our strategy that you have seen that we have laid out here with Live Gamer and even how that all ties in to the casino through our Xchange products and QuikTicket and TableXchange. Crossing the bridge between bricks and mortars and the Internet world would be great, and I hope the Bill pushes forward, but obviously there is a lot to be learned on that Bill so far.

Okay. Thank you for that. I know it is still early on QuikTicket and TableXchange, but just wondering if you could give any color what you have been hearing from customers or may be some of the feedback you got at G2E relative to those two products?

Our experience right now are just based on G2E, because we showed two products at G2E and we will be rolling them out over the next two quarters in beta mode. Again my first show at G2E with GCA here and the amount of energy that was focused on these products along with our kiosks business was amazing. They get it. They are starting to see that it is no mistake the way Scott has built the products in this Company, and the way the team has vertically integrated everything from TableXchange, QuikTicket our full service kiosks along with the cash access business. I think they are excited. We have a lot of people, a lot of takers, that would love trial the product, but you only start off with a couple here and there . So we are looking forward to the initial rollout at this point.

Okay. Last for me. As it relates to online poker it sounds like South Point should be coming online sooner than later, and wondering if you have perspectives on some of the other larger players in the industry and what you see for timing there?

I think timing is up in the air, and I will let Scott take the rest of it, because he has been very close to this. But I think a lot of the timing is up in the air right now on getting this done until we see some broader laws up in Nevada, but it does not seem like anything is too imminent just yet.

I think on the actual moving to live execution the proper way probably is not sooner than later, it is later than sooner. We are obviously now in November , they may be up and running by December which is quite a few months beyond when they thought they would. And, again, as we said before it is really just a matter of them sorting out all the regulatory situations, what has to get tested, the compliance pieces and so forth. We are doing everything we can to get our side ready and be able to submit our systems to regulators and move forward in to 2013. But it is definitely a 2013 event.

Okay . That is all for me. Thank you.

Thank you.

Thank you. Our next question comes from the line of Doug Greiner with Compass Point . Please go ahead.

Just one question, in the quarter there was some concern about a loss contract. I wanted to ask for an update on the renewal environment and visibility going into next year? Thank you.

I am not sure exactly what loss contract you are referring to, but we have pretty good visibility on when all of our [RFPs] are coming up. It is going to be a very busy 12 months ahead of us. As I have heard Scott say on the last call and others, we do notwin them all. We certainly try to win them all. It is a very competitive environment we are operating in at this point, but as far as reading the tea leaves or announcing anything at this point we do not really even announce once we close the deals, but it will be a very busy 12 to 15 months in front of us of addressing our RFPs. Our strategy , of course, is to get in front of RFP, and not actually let them issue, so that is something that we are looking to do over the next year here in 2013, to get in front of all the customers before our RFPs are even issued.

The other thing I would ask you to remember is again while other people may announce things and so forth some of which are real and some of which are not so real. We have always enjoyed extremely high win rates on new casino openings as you could tell over the last year, and we have always enjoyed very high resign rates. And I do not see any reason for that to change. As our product program continues to strengthen overtime I think that bodes well for us, and again if there is ever anything that is all material, we certainly would announce it. But other than that we do not announce every little contract difference or wins and losses for us.

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

Thank you. First just following up on the renewals question. When you look out at the operator landscape today, what is your sense of their mental state from the perspective of focusing on strategic direction and technology versus just being in pure cross mode today?

I think like any product line it is a little bit of a mix bag. I think that there is a great number of the bigger corporate customers that get the big picture strategy and technology and are not just looking at cash access, but they are looking at cash access they are looking at the kiosks business, and a lot of customers you sit down with is a great segway way right into their Internet aspirations and what ours are in the space as well. I think the big corporates get it, and some of the smaller casino operators get it as well. Certainly there is always going to be customers out there that are going to go for the lowest pricing they can possibly get , and that is obviously where the environment gets very competitive.

The other thing as you well know, Matthew, the product and services and the new innovations we have out there are not about glitz. They are about savings and efficiencies, getting cash costs , freeing cash up at the customer. Unless you are extremely just purely pricing focused, these are the kind of products that the industry needs right now as it goes through a recovery.

Okay. Thank you. And then on the cashless gaming products can you talk about how you are looking at positioning this product from the perspective is this going to be a revenue driver for GCA and margin protector and margin enhancer? How are you forming these relationships today?

It depends on the product, okay. And how it moves forward. Obviously let us start with our kiosks which are at the center of this. This is obviously growing both our overall margins, they are growing our revenue and obviously contributing to the earnings. When you look at some of products like QuikTicket and so forth again those will I think we have said this in the past really do not materially change our revenue because the surcharge to the customer will be the same or in some cases maybe lower, but would contribute to an increase of our margin in the cash access business. And that is probably where you see that flow-through.

And lastly when you look at TableXchange and things like that those are more like the kiosks business. So again with those actual adoption rates -- and again the biggest part for us will be the adoption rates. And that is what will learn as we go through these beta tests and start rolling out in 2013 just how fast the adoption rates are, but that is how they will probably generally flow-through the Company earnings.

Okay. And if things go well with these beta test from a big picture perspective how do you see the next 12 months rolling out on QuikTicket?

Scale up is not an issue for us. It really is about making sure -- and again the beta tests certainly are to make sure you have everything right and wired up right, but for us more than anything it is about getting the information we need to help our customers get the kind of adoption rate and drive volume that they want. Because obviously each one of these transaction is better for them than a cash transaction, but there is no big capital requirements or anything else. It is a software change to our equipment, so the roll out and scale up will really be driven by how well they do in beta testing and what the adoption rate is from the industry.

Okay. And the last one from me, I think mentioned that there was some softening in segments recently. Are you talking across the board or specific segments to the business?

Well, cash access that is what we are talking about. Let us forget about the East Coast for a while, because of the horrific issues they have over there. But we are seeing the same-store cash access numbers soften a little bit. There is a lot of moving parts in there, but again we do not see that as a huge issue. They are still positive, maybe not as positive as they were in first quarter. But I do not know, Mary Beth, if there is anymore you want to say on that.

Sequentially what we saw was really strong first quarter as you will recall, second quarter weakened, third quarter is actually slightly better than second quarter but it did not rebound back to where we were at first. So I think everything is sort of hunkered down, and we expect to run about it the same rate but certainly not as hot as it was towards the last month or two of 2011 and the first two months of 2012 that came out pretty hot. But barring what has happened in the East Coast which is obviously temporary and hopefully we will rebound with construction money, but barring that we see a very similar again low single-digit growth rate for the rest of the year. It seems to have hunkered down into the rate.

Okay. Great. Thank you.

Thank you. (Operator Instructions). And our next question comes from the line of Rich Todaro with Kennedy Capital . Please go ahead.

First, I wanted to thank Scott for the last few years through the tough times he always picked up the phone to shareholders and did a great job defending the story when times were tough, so A plus for that. Second, can you talk about the competitive environment? I was not able to go out to the show, but are the casinos looking for somebody that can do cash access and eWallet all in one and the rest of this, or will they pick and choose one competitor versus another and just piece meal it? How do you see that happening? And then does GPN do they even have a eWallet right now, and are they working on it that you know of? What is going on with the competitive environment there?

I will start with your second question. GPN does not have an eWallet at the moment and no indications of such either. I think there is so much excitement at G2E you do not get a chance to sit down with big corporate guys and talk big picture strategy, but being here about five months now there has been a lot meetings. It is one of the things I have been impressed with is GCA's ability to get out there and meet with the most important guys CFOs and COOs at very high level organization. Those conversations are happening at the different corporate structures.

And absolutely I think they would love to be able to package up the whole deal and offer technology from out in the floor standard cash access business rolling right up in to full service kiosks and hopefully QuikTicket and TableXchange and, of course, layering on our Internet strategy along with it, so they can have a one-stop shop and fully integrated. And as I was talking about earlier in the script is where the two worlds start to come together is the kiosks itself where an gambler an online gambler, a brick and mortar gambler perhaps access his cash at the kiosks.

Based on licenses or how long it takes would there be a reason that MGM needs to announce a partnership with GCA or somebody like that to get the license approved? Would that be a press releasable event that needs to happen to get these guys approved for online gaming?

We already have all the licenses we need across our products, all the products we talked about both the Internet as well as brick and mortar. So from that standpoint we have already gotten over those hurdles. For our customers they do have to be able to submit a combined technical solution that has to get tested in labs, so that remains again what I said before that is really one of the hangs up in terms of it taking a lot longer than people have anticipating I think when the first announcements came out around Nevada, so we will just have to see how that goes.

Back to your first question I will make one comment that is germane , as David said nobody else in the business has the type of products that we are putting out in the marketplace. We certainly understand competitive environments and it is always the job of the leader to continue to innovate and stay ahead of everybody, but we are more than just the development of the products we are uniquely positioned to be able integrate these together. While a payment company like Global could certainly think about building a wallet they still do not have a kiosks business. They do not understand the kiosks business.

They are not licensed to be able to do the kiosks business and that is the center of what we do. Other competitors probably do not have all the money transmitter licenses and everything you need to run an eWallet on the Internet. There is a lot of fundamental core capabilities that we have that we have been building in anticipation of this for the last four years that really do give us a first mover advantage right now that I think we are very excited about and you are seeing our customers get excited about it too.

You lived through this too, the shock and awe of 2010 was it when you lost customer and stock was down big, and then with renewals next year it seems like you are offerings these technologies so the customers would be willing to sign with you, et cetera, but then we hear about recent market share losses to GPN and it starts to raise red flags that we are not really sure how confident you are or how you think about that?

Let us be clear on that. That is a great question. Let us be clear on that. First off in the fact we are not losing market share, okay. Yes there might have been a contract we did not get or did not get all of a property, but stack that up against the fact that we won Rivers, we are in Ohio, we have Resorts World. We are building share. Several people have mentioned this, but the industry is going to transition our customers have been through a very tough time.

You will have people who even today when they see all this will still want to unbundled, and still want to take a purchasers approach to cash access and see if they can get -- but we are continuing to build share, so our confidence in our new products and our ability to build share because they are of great value to our customers and we have listened to our customers to figure out how we are can help them will be what we win in long term.

That is great and appreciate you putting that in perspective. As you think of -- and I do not know what casinos are still opening or what could grow next year versus even if you lost a couple of smaller contracts is there enough potential new business out there, are you ramping enough casinos from last year that will help you under that scenario we would still have at least flat growth year-over-year even without eWallet or the rest of the stuff?

We are lapping a lot of the new properties that came on earlier in this year. Ohio will be obviously a contributor in to next year. Massachusetts is the next big jurisdiction to open up. There will probably three new casinos up there, and if you look at our track record we certainly would expect to get our fair share of those. But they probably will not impact us until 2014. And again the other part of it is there is always ability for us to gain contracts from others too.

We win contracts. We may not talk about them all the time, but we win contracts all the time too, so there is always that opportunity. Again on balance if you take away all the products and everything else we feel very good about maintaining the kind of leadership shares we have going into 2013, and overtime hopefully we will continue to provide value added products for our customers that they appreciate and they see the value on and we will continue to build the business.

And my last question I promise. Do you think that based on what you are seeing the online gaming starts to move the needle for the Company or these other new products whether it is OuikTicket or any of those are those a later 2013 event, is that reasonable?

I think QuikTicket and TableXchange is the latter part of 2013. We are continuing to grow and drive our kiosks business and we see that, as we said in the call, we see that as being very positive our pipeline going into 2013. I still have to be very cautious about online gaming and it actually being an impact to our business and would look at that more as a 2014 event. I still have a lot of the faith it is going to happen.

It will happen in multiple states and eventually we will get it all cleared up on a Federal revenue. There is just too much revenue associate with it, so the same fundamental drivers for me if I step back and look at it are the same thing that built land based casinos. I think it has always been for me a when not an if, but again with just Nevada is the only one that has really been approved and Delaware to be technically correct. So I think that one is probably more like a 2014 event.

Thank as lot, Scott. I really appreciate all you have done, and good luck

I hope I am wrong, but I think that is probably where it isThank you.

Thank you.

Thank you (Operator Instructions). Our next question comes from the line of Tim Willi with Wells Fargo . Please go ahead.

Thanks, and good afternoon. Scott, congrats. I am sure the last five years were probably a little bit more than you bargained for when you took the job initially, but you have done a great job. So the question I had and maybe it got touched on a little bit in the last round of questioning there two things. One was if I remember going back several years, Scott, when you had started on the product map it is playing out in a discussion of more value to casinos, there had been some discussion of needing to get more so to the right types of decision-makers and thinkers and getting away from the (Inaudible) people that were maybe were just most focused on the cash access --

I think we can answer that question. Why don't we try. I think we have the question, so David why don't you, hopefully you can still hear, Tim.

Hopefully you can still hear, but your line cut out. I think we are getting to the bigger decision-makers and getting away from, there is always going to be situations where you have a head of purchasing making a decision or leading the process. It is not all bad to have guys that are in the cash access business involved in the process, because I think we have a great suite of products, but we are getting in front of CFOs and those are the guys we want to get in front of. We want to get in front of CFOs and COOs, and when applicable a CEO .

I k that some of changes that we have mentioned on the call have really reshaped our staff and refocused our efforts to get out there and talk to high level executives in the casino, and those customer relationships that we talked about are huge. If we can get our executive team and our top sales people in front of their big decision-makers, and not the lower line level guys then I think that we stand a great chance to win more contracts.

All right. Thank you. I am showing there are no further questions. I will turn the call back over to Mr. Betts for closing remarks.

I want to thank everybody on the call for their support and support of the Company and at times support for me over the past five years as we have been on this journey with GCA. Again, I thank everybody who is on the call, and I know that David and the management team here is going to do a great job moving forward. And again I look forward to continuing to help and support their efforts as a continuing Board member. Thank you everyone, and have a good day.

Ladies and gentlemen, this concludes our conference for today. We thank you for your participation. You may now disconnect.