Todd Valli - Vice President of Corporate Finance and Investor Relations Ram Chary - Chief Executive Officer, President and Director Randy Taylor - Executive Vice President and Chief Financial Officer.

David Bain - Sterne Agee George Sutton - Craig Hallum John Davis - Stifel.

Hello, everyone. Thank you for standing by, and welcome to the Global Cash Access Holdings Inc. 2015 First Quarter Earnings Conference Call. During today’s presentation, all parties will be in a listen-only mode. Following the presentation the call will be opened for a question-and-answer session.

This conference call is being recorded today, Tuesday, May 5, 2015. And now, I would like to turn the conference over to Mr. Todd Valli, Vice President of Corporate Finance and Investor Relations. Please go ahead, sir..

Thank you, and welcome to the call. Joining me today is President and Chief Executive Officer, Ram Chary; and Executive Vice President and Chief Financial Officer, Randy Taylor.

Before we begin, I would like to remind you that the safe harbor disclaimer and our public documents covers this call in a webcast and that some of the comments to be made contain forward-looking statements and assumptions that are subject to risks and uncertainties including, but not limited to, those contained in our SEC filings, all of which are posted within the Investor Relations section of the corporate website.

These events could cause actual results to differ materially from those described in our forward-looking statements and as such, we would like to caution against undue reliance on these forward-looking statements, which speak only as of today.

They should not be considered an indication of future performance and we do not intend and assume no obligation to update any forward-looking statement. In addition, this call may refer to certain non-GAAP measures such as adjusted EBITDA and cash earnings per share.

We reference these non-GAAP measures to enhance investor understanding of the underlying trends in our business and to provide better comparability between periods in different years.

For a full reconciliation of these non-GAAP measures to GAAP results, please see our earnings press release and related 8-K, both of which are available within the Investor Relation section of our corporate website.

Finally, this call is being webcast, which may be also accessed within the Investor Relation section of our corporate website, and a replay of the call will be archived. With that, I am pleased to introduce our President and Chief Executive Officer, Ram Chary..

Thank you, Todd. Good afternoon, everyone, and thank you for joining us on today’s call. I will provide an update on our integration activities and the key initiatives we’ve undertaken, since completing the acquisition of Multimedia in late 2014, after which, Randy will discuss our 2015 first quarter in more detail.

I want to start by noting that we believe our first quarter operating results were a solid representation of how the reminder of 2015 is expected to evolve.

The quarterly sequential revenue growth achieved by our games segment is line with our improvement expectations and our payments results reflect the continued success we’re having in growing this segment.

It is significant to note that the rapid progress we’ve made with the Multimedia integration is only partially reflected in our first quarter results. And we have a solid plan in place that we anticipate will accelerate the benefits, we expect to achieve going forward.

While the integration of Multimedia is still early, nearly five months into the integration, we see clear signs that the value proposition and anticipated cross market synergy are being realized. In the market place customers are noting that we’ve created a differentiated value proposition through this combination of games and payments.

The feedback we’re receiving provides us with the added confidence that our ability to leverage a portfolio of spot gaming entertainment payments and compliance solutions is being favorably viewed by our customers and we believe is creating an avenue for growth in both our games and payments segments.

In terms of our integration progress, we have implemented approximately $18.1 million of our targeted year one annualized cost savings initiatives and we remain on track to achieve the $24 million in targeted year one annualized cost savings.

We are benefiting from a shared services arrangement across our sales, marketing, finance, legal and human resources functions. And later this year, we expect to realize benefits from the combination of our game and cash manufacturing operations as well as our service teams.

In addition to our efficiency focused approach for integration we’re fully dedicated to bringing our cultures together and unlocking revenue opportunities that represent the core of our transformational combination.

As I mentioned on the Q4, 2014 call, a significant priority for us was to organize our operations into two distinct business segments, games and payments. For the most part each of the sales functions would initially focus on their individual offerings.

And that by 2016, we believe sales teams will be working with customers on all of our portfolio solutions. With that being said, in just the first few months, our combined efforts have led to a growing number of interactions with customers that included sales representatives from both our games and our payments segments.

And the feedback on this approach has been very positive.

Looking at our games segment, the culture of our Austin based operations is very unique among gaming equipment suppliers and it has to date enabled that group to create games that are innovative and not dependent on a lot of the me-too type of game development that we believe has existed in the industry for some time.

I believe this distinct culture has played a significant role in the growth of games business as evidenced by the number of our products that are now on Casino floors. Our goal is to continue to foster this culture and in fact, we’ve plans to increase our game development capacity from eight development teams to 16 teams over the next 18 months.

As a part of our efforts, we’ll continue to focus on both Class 2 and Class 3 game development. We believe that we’ll be able to leverage our significant compliance and regulatory expertise and infrastructure to bring more new games to market in a shorter time frame. And that ability is certainly one of the key attributes of the acquisition rational.

Of course another key attribute is our ability to leverage a significantly larger number of customers that our payments business has built over a much longer period of time.

It is important to mention that we maintain our full year 2015 estimated outlook for adjusted EBITDA, of between $218 million and $228 million and we’re very pleased with the first quarter results as they support our annual guidance expectations.

I’ll remind you that our 2015 outlook, included expectations for double digit growth in our games segment and single digit growth in our payments segment. Our company continues to benefit from significant recurring revenue, which contributed approximately 90% of our Q1, 2015 total revenues.

In terms of the guidance we provided for our games segment, we anticipate that the larger portion of our expected revenue growth for the year will be comprised of games sales. We’re prioritizing the allocation of free cash flow to paying down debt and I expect we’ll continue to make consistent progress on this front throughout the year.

With that let me turn the call over to Randy to review our first quarter 2015 results..

Thank you, Ram and good afternoon to everyone. My discussion of the financial results will focus on the combined operations of our games and payments business line. Of note, our 2015 games segments results included the first full quarter contribution following the closing of the acquisition last December.

2015, first quarter total revenues were $207.5 million comprised a $55.1 million in revenues from our games segment and $152.4 million in revenues from our payments segment. This represented an increase of 1% on a year-over-year in our payments business.

Excluding the effects of the Caesars Entertainment contract that we elected not to renew, which represented approximately $10.8 million in additional revenues for the prior quarter, total payments revenues would have increased by approximately 9% for the three months ended March 31, 2015.

For comparison purposes, while $55.1 million in games revenue was approximately a 6%, when compared to the same period in the prior year. On a sequential basis, games revenue in the first quarter of 2015 increased by $7 million, when compared to the full calendar fourth quarter of 2014.

Adjusted EBITDA increased $31.2 million to $50.6 million from $19.4 million in the same period last year, primarily due to the acquisition of Multimedia in December of last year. The year-over-year basis, adjusted EBITDA for the games segment was $30.6 million, compared to $32.0 million a year ago.

And adjusted EBITDA for the payments segment was $20 million, compared to $19.4 million in the prior year period. On a sequential basis, the games segment adjusted EBITDA improved by $7.8 million, when compared to the full calendar fourth quarter of 2014.

We define adjusted EBITDA as earnings before interest, taxes, depreciation, amortization, non-cash stock compensation, accretion of contract rights, acquisition cost and other cost related to the merger and purchase accounting adjustments plus one time legal settlement proceeds received by the company in January 2015.

At first quarter 2015, cash EPS was $0.22 per share on $66.5 million weighted average diluted shares, compared to $0.22 on $67.4 million weighted average diluted shares in Q1, 2014.

We define cash EPS as net income plus deferred income tax, amortization, non-cash stock compensation, accretion of contract rights, acquisition and other costs related to the merger and purchase accounting adjustments as a benefit from one time legal settlement proceeds received by the company in January 2015.

For our games segment, gaming operations revenue increased approximately 7% year-over-year to $40.3 million, which represented the highest ever quality performance. This reflected a 420 unit increase in installed base, which included 444 additional units in our higher yielding premium participation games.

The year-over-year installed base comparison also reflected a temporary removal of 123 units at a customer’s facility beginning last October, to accommodate a renovation at the facility.

On a quarterly sequential basis, while the installed base declined by 150 units, we did grow the installed base of our higher yielding premium participation games by 73 units. At quarter end this year installed base comprised of 7,876 units in Oklahoma and 5,296 units outside of Oklahoma.

The mix of our installed base was 6,697 Class 2 units and 6,475 Class 3 units. Our average daily win per unit in Q1, 2015 was $29.68. Revenues from electronic games sales declined $5.3 million year-over-year to $14.6 million in the first quarter of 2015.

We sold 820 units in Q1, 2015 at an average sales price of $16,498 as compared to 1,094 units sold in Q1, 2014 at an average sales price of $16,721. Prior quarter included the sale of 303 units that were previously in our installed base, while in the first quarter of 2015, we only sold 25 such units.

Excluding sales from our installed base, we sold a similar number of units in both periods. On a quarterly sequential basis, unit sales are up 285 units on a slightly higher average sales price. TournEvent sales comprised 24% of unit sales in March, 2015 quarter, compared to 34 % of unit sales in the March, 2014 quarter.

Overall adjusted EBITDA margin for the games segment was 55.6% for Q1, 2015 compared to 55% for Q1, 2014, driven primarily by lower operating expenses in the current period. Adjusted EBITDA margin for the fourth quarter ended December 31, 2014 was 47.5%, driven primary by higher operating expenses in the quarter.

Our payments segments revenues increased for the quarter, primarily due to our anti money laundering and tax compliance software offerings.

Overall adjusted EBITDA margin for the payments segment was 13.1% for Q, 2015 compared to 12.9% for Q1, 2014, driven primarily by higher margins in the other revenue due to the contribution from compliance and efficiency software offerings and improved margins from our fully integrated kiosks sales as compared to the prior year period.

In addition, the adjusted EBITDA margin for Q1, 2014 included a reduction in cash advance direct expenses of approximately $2 million through the refund of a goods and services tax in Canada for commissions paid to Canadian Casino’s.

Adjusted EBITDA margin for the fourth quarter ended December 31, 2014 was 13.8%, driven primarily by an increase in other revenue when compared to Q1, 2015. The other cash transaction methods to note include same store cash-to-floor, our best indicator of industry trends was up 6.7% as compared to the same period in Q1, 2014.

ATM volume increased for the second consecutive quarter following nearly three years of no such growth. Correspondingly, both debit and credit card transactions also increased in the quarter. Combined credit and debit cash-to-floor increased by approximately 5% for Q1, 2015, while ATM cash-to-floor increased by approximately 7.4%.

Operating expenses of $15.8 million in Q1, 2015 included a $14.4 million benefit from one time legal settlement proceeds and $1.5 million of acquisition and other cost related to the purchase of Multimedia.

Excluding the acquisition and other cost related to the merger and the benefit from one time legal settlement proceeds, operating expenses were $28.7 million for the first quarter of 2015, inclusive of $9.7 million in operating expenses for games segment, which compared to operating expenses of $20 million in the prior year quarter.

The increase in depreciation and amortization expense in the quarter compared to the prior year period is primarily due to the Multimedia acquisition. Moving on to the balance sheet, cash and cash equivalents were $145 million at March 31, 2015.

To clarify, our daily cash balance fluctuates significantly due to our large settlement receivables and settlement liabilities and the ultimate timing of when the cash is received from patrons issuing banks and when we reimburse our Casino customers.

Our long term debt was $1.183 billion at the end of the quarter, reflecting our borrowings to complete the Multimedia acquisition. We repaid $15 million on our then outstanding senior secured notes and $2.5 million on our term loan. The company was also in compliance with debt convents as of March 31, 2015.

In April, we refinanced the remaining $335 million of our senior secured notes at a private placement, thereby reducing the interest rate from 7.75% to 7.25%, which we expect will approximately $1.7million in annual interest charges.

Capital expenditures were $13.9 million for the quarter ended March 31, 2015, inclusive of $11.1 million in CapEx for our games segment, of which approximately $5.4 million was associated with game refreshes and related maintenance cost for our installed base.

We expect full year capital expenditures of between $60 million and $70 million, which would include capitalized software cost and contract rates.

We also expect full year depreciation and amortization expense of between $130 million and $135 million, although this particular estimate could change significantly depending on the company’s final allocation of the Multimedia purchase price to certain depreciable and amortizable assets as well as non-amortizable goodwill.

Regarding our integration activities, as Ram indicated, we remain on track to achieve our targeted annual run rate of $24 million cost synergies by the end of the calendar year. As of March 31, 2015 we’ve achieved approximately $18.1 million in annualized sales. Looking forward, we’ll continue to focus on reducing outstanding debt.

With that I would like to turn the call back to the operator for your questions..

Thank you. [Operator Instructions] And we move first to David Bain with Sterne Agee..

Great, thank you.

I guess first guys can I understand the sale the first spacing [ph] units in the quarter? Was that something up on lease or was that somehow strategic and is that something we should expect in coming reports?.

David, you were just saying that the amounts that we provided.

I guess I just wanted to provide that there were a significant amount of the installed base that were sold last year, so they in some cases will have a slightly lower margin depending on how long they had been out there, but there was a significant sale in Q1 of last year, so have probably may or may not continue to report it.

It just was significant compared to last year to this year, 300 to 325 is all I want to try to point out..

Was it a 25 in this quarter, I’m sorry?.

There was only 25 in this quarter -.

Okay, fantastic might have been [ph]. Okay. Also in the games division I saw the win per unit was down year-over-year, but it was up nice sequentially. I mean, can you speak to any mix issues or other variances why that would be off? It looks like premium game installations were up nicely still trying to reconcile that..

Yeah, I would say this time David, I don’t know that I have a real answer for you. It may have been - I just don’t have a specific amount. It wasn’t down significantly compared to last year, I think it was $0.20, but you can again put more installed base out there.

I can say that, not sure that I can tell you specifically where that came from, it’s just the actual numbers pulled together..

Okay. And then final one, it seems like a big part of the 10% increase in the games revenue is based on the conceptual merger thought process, and I guess I'm wondering you noted many interactions with GCA sales perhaps and folks that buy actual game devices.

Is there an, I guess an incident where GCA is the incumbent payment provider and MGAM is maybe not a game provider where an order has been place or there is a visible order pipeline building..

David, there’s definitely a pipeline building. We haven’t yet closed one of those cross market opportunities, if you will, for the most as I described our payments client base is significantly greater than our games client base that exists today, so most of those opportunities will be selling games to legacy payments clients.

Haven’t closed one yet, we do have a significant growing pipeline. My expectation is that in this quarter we’ll have our first example and as we go throughout the year, I think you’ll see more of those gambles..

Okay, great. Thank you..

Thank you. Our next question comes from George Sutton with Craig Hallum..

Thank you. Ram, just to follow-up on that last question. You had mentioned in your prepared comments there are clear signs of the value proposition and cross marketing synergies are being realized.

Were you referring specifically to the pipeline?.

Yes, absolutely. That and the fact that we have quite a bit of inbound interest from our client base, both segments, about the other segment. So the client base seems to want to discuss our unique value proposition that combines both of those unique verticals that we have relative to any other supplier.

Again, those conversations ultimately have to translate into results, but our pipeline would suggest that those results are coming..

I heard it as fairly significant that you are looking to increase the number of product development teams on the gaming side from 8 to 16.

Can you give us a little more detail there and the thought behind that?.

Well, we believe that given the competitive landscape, especially as we focus on North America, there will be many points, as much as 10 to 15 percentage points of market share available for us to take and that’s only going to come if we scale and if we grow and if we provide new and better product functionality both in hardware and software term-to-terms in the game space.

In order to realize that we have to invest, we have to grow, I think we’re unique in the space as we’re the only larger supplier of any scale talking about growth and it’s going to take essentially doubling our studio content capacity to make those products and those capabilities available to our client base.

So that’s what we intend to do over the next year and a half..

Okay. You mentioned last quarter that you had one large payment customer who was not yet moving to a suite multi year renewal, but was sort of on a try it before you buy it methodology.

Could you give us an update on that specifically?.

They’re still assessing, so has not concluded yet from their perspective. They’re still assessing again because the shift to our payments solution is a significant shift and one that our clients have to adjust to and we’re respectful of that, so we’re allowing them the time.

They’re just making time than most to assess it, to get used to it and to see what it means for their business going forward. So it’s still ongoing, I would expect to have resolution this quarter, but it could go on beyond that, but my expectation is we would have a decision by the end of this quarter..

Okay. Lastly if I could, you continue to see cash-to-floor at higher than market rates.

Could you just discuss the reasons behind that as you see it?.

George, this is Randy. I know that I have - I mean, I think we see two things.

Probably we’re seeing on a same store basis that we’re doing - on ATM we’re seeing more transactions, I don’t know if that partly - the regional market coming back a little bit or it’s more people coming out to play on the ATM transactions and even on the cash advance, we’re seeing an uptick in the number.

Well, I think that’s more of the dollar amounts on the cash advance transaction. I don’t know that I have a specific answer for you other than really helped us to offset the Caesars loss in this quarter which now will be true, but I don’t know that I - I don’t know if I can point you to a - is there a recovery. It’s just hard to say.

All I can say is the first quarter from a transaction standpoint, same store was very positive as well as some of the new business we picked up last year that lapped in the first quarter..

Perfect. Thanks guys..

Thank you. [Operator Instructions] Our next question comes from John Davis with Stifel..

Good afternoon guys. Quickly, Ram, could you give us an update on retention efforts MGAM hopefully this is the last time we have to talk about this but any update there would be great..

Yeah, we’re done and this has been ongoing over the last few months. Again, since we only closed the transaction in late 2014, from my perspective we’re done.

We have successfully retained through formal agreement or otherwise, everybody relative to the development organization at Multimedia, the studio content teams, everybody related to the sales and relationship part of the organization, which wasn’t very large to begin with.

And we’ve done that on both sides, not just on the games side, so for the most part we’re done. Our unwanted attrition has been very low and now we’re looking to grow as I described before, so our focus has shifted from retention to hiring..

Great and then also maybe, Randy, could you touch on the quarterly cadence of guidance, and should we see acceleration throughout the year as you ramp up MGAM and payments lap Caesars, just kind of help us think about quarterly cadence as we go forward through 2015..

Well, I’ll jump in on that. I mean, as you know we don’t provide quarterly guidance really on any metric. We provide full year adjusted EBITDA guidance and we believe that we’re tracking towards the full year guidance that we gave.

I mean, it’s kind of difficult to parse that out although we’re very pleased with the sequential acceleration we saw from calendar fourth quarter to our calendar first quarter and believe that that trajectory will continue in a way that will make our guidance achievable..

Okay. Fair enough. And then on TournEvent sales I think you guys said it came down to 24% this quarter down from 34%.

Do you expect that to kind of stay there or potentially as you get new licenses and new jurisdictions that TournEvent could re-accelerate as people that couldn't get it before can now get it? Any kind of commentary there would be helpful..

Yeah, I believe from our perspective for a lot of good reasons the legacy Multimedia team did have a slowing in terms of TournEvent penetration. I mean, a good data point to focus on is, less than a third of their our combined - less than a third of our combined client base has TournEvent, while they were approaching 55% of their client base.

So we have green field opportunity to continue to sell TournEvent into the space and then we’re also continuing to penetrate existing TournEvent clients with more boxes. For the most part their client base was limited to banks of about eight. We’re pushing that even in existing clients to 16, 20 or more.

So two different ways that we’re going to accelerate the growth TournEvent from what it’s been most recently because I do believe to some extent they had lost steam there..

Okay.

And then on the participation footprint I know it’s year-over-year - sorry, down quarter-over-quarter, but is that something you expect to grow this year? I know we have 123 machines coming back online in third quarter or just any kind of commentary on growth outlook for participation footprint?.

Yeah, I expect that when we look at our full year of 2015 and compare to 2014 full year, we’ll have ground.

As Randy mentioned earlier, some of those dynamics by week, by month or even by a quarter shift around and if there’s some natural shifting that goes with it, I think you have to have a more holistic perspective and measure it on a year-over-year basis and we believe year-over-year we’ll grow..

Okay, great.

And then finally, Randy, just a housekeeping question on - the $20 million of amortization as excluded from cash EPS this quarter, is that a pretty good run rate for the rest of the year as we trying to figure out adjusted EPS?.

Yeah, I don’t think your amortization would change dramatically. It should be that –in that kind of a run rate. It’s pretty much set, it may in future quarters come down, but for this year that should be a good proxy..

Okay, great. Thanks guys..

Thank you for your question. As there are no further questions at this time, I’d like to turn things back to Mr. Randy Taylor for closing remarks..

Thank you for joining us on the call this afternoon. We look forward to discussing further progress of our business when we report our second quarter results..