Global Axcess Corp (OTC Bulletin Board: GAXC), an independent electronic financial transaction processing company, announced today financial results for the first quarter ended March 31, 2006.
The Company reported revenues from continuing operations of $5.2 million for the first quarter ended March 31, 2006, up from the $4.7 million in reported revenues for the same period of 2005.
GAXC reported gross profit from continuing operations of $2.3 million or 43.4% of revenue, for the quarter ended March 31, 2006, compared to $2.0 million or 42.7% of revenue, for the same period of 2005. Gross margin increased mainly through revenues related to a 2005 acquisition and through an additional increase in transaction volume, offset by increased cash costs.
Operating expenses from continuing operations increased to $2.2 million for the first quarter ended March 31, 2006, from the $1.5 million for the same period of 2005. This increase is due from a depreciation and amortization increase of $0.3 million for the three month period ended March 31, 2006, due mainly from increased ATM, software and acquisition costs, as compared to the three month period ended March 31, 2005. The operating expense increase is also attributable to an increase in selling, general and administrative costs by $0.4 million during the quarter ended March 31, 2006 compared to the quarter ended March 31, 2005, mainly from increased salaries and benefits, professional fees and other expenses related to the increase in operating revenues.
Operating income from continued operations before interest, taxes and other items is $0.1 million for the first quarter ended March 31, 2006, as compared to $0.5 million for the same period of 2005.
Other expenses increased to $1.0 million for the first quarter ended March 31, 2006, from the $0.1 million for the same period of 2005. The main increases were non-operating accruals in the amount of $0.7 million when compared to the same period of 2005. Net interest expense increased to $0.3 million for the first quarter of 2006 compared to $0.1 million for the three- month period ended March 31, 2005. The increase was mainly due to increased debt and higher interest rates during the three month period ended March 31, 2006. As a result GAXC suffered a net loss for the quarter ended March 31, 2005 of $(0.9) million, or $(0.04) per basic and fully diluted share, compared to net income of $0.2 million or $0.01 per basic and fully diluted share for the same period of 2005.
The Company's balance sheet shows $31.0 million in total assets as of March 31, 2006, as compared to $31.6 million at December 31, 2005. Additionally, GAXC's total stockholders' equity as of March 31, 2006 was approximately $15.7 million, slightly lower than the $16.6 million from the year ended December 31, 2005.
Michael Dodak, CEO of Global Axcess, stated, "While we are pleased with our rapid revenue growth, we continue to seek ways to improve our financial performance. Further, we have made the conscious decision to review strategic alternatives for the Company with the engagement of Raymond James as our advisor."
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