Cash Systems, Inc. Announces Fourth Quarter and Full Year 2004 Financi

Cash Systems, Inc. Announces Fourth Quarter and Full Year 2004 Financial Results

    Business Editors

    MINNEAPOLIS--(BUSINESS WIRE)--March 23, 2005--Cash Systems, Inc. (Amex: CKN), a provider of cash access solutions for the gaming industry, today announced financial results for the fourth quarter and full year 2004.
    Highlights for the fourth quarter of 2004 relative to the same quarter last year were as follows:

--	Total revenues increased 45.7% to $12.8 million
--	Income from operations improved 95.8% to $1.1 million
--	Operating Margin improved to 9.0%
--	Net income improved to $705,000, or $0.04 per diluted share

    Highlights for fiscal 2004 compared to fiscal 2003 were as follows:

    -- Total revenues increased approximately 47.9% to $48.4 million
    -- Income from operations increased over 62.2% to $3.8 million
    -- Operating Margin reached 7.8%
    -- Net income increased 32.0% to $2.2 million, or $0.14 per
    diluted share

    Michael Rumbolz, President and Chief Executive Officer of Cash Systems, Inc. stated, "We were successful in achieving strong growth in 2004 as we continued to develop and leverage our superior cash access technology to assist our customers in attaining improved profitability. With the recent additions to the executive management team, we are re-doubling our efforts to maintain our technology leadership position to further exploit growth opportunities in the cash access market."

    Fourth Quarter Financial Results

    Revenue for the fourth quarter was $12.8 million, an increase of 45.7%, compared to $8.8 million in the fourth quarter of fiscal 2003. Income from operations was $1.1 million compared to $0.6 million in the prior year period. Net income more than doubled to $705,000, compared to $330,000 in the prior year period. Diluted net income per share improved to $0.04, compared to $0.02 in the prior year.

    Fiscal 2004 Financial Results

    Revenue for fiscal 2004 was $48.4 million, an increase of 47.9%, compared to $32.7 million in fiscal 2003. Income from operations was $3.8 million in fiscal 2004 compared to $2.3 million in the prior year, a 62.2% improvement. Net income was $2.2 million, a 32% improvement compared to $1.7 million in fiscal 2003. Diluted net income per share improved to $0.14, compared to $0.12 in the prior year.

    Liquidity

    The Company finished fiscal 2004 with cash and cash equivalents of $13 million. Current cash balances and operating cash flow are expected to provide the Company with sufficient resources to meet its existing obligations, currently planned capital expenditure requirements and funding for internal growth initiatives.

    Earnings Conference Call

    The Company will conduct a conference call to discuss its fourth quarter and full year 2004 financial results on Wednesday, March 23, 2005 at 4:30 p.m. ET. A webcast of the call will be available by visiting the investor relations section of the company's website at http://www.cashsystemsinc.com/ir. The call can also be accessed live over the phone by dialing (800) 289-0572 or for international callers by dialing (913) 981-5543. A replay of the call will be available one hour after the call and can be accessed by dialing (888) 203-1112 or (719) 457-0820 for international callers; the password is 9347142. The replay will be available from March 23, 2005, through March 30, 2005.

    About Cash Systems, Inc.

    Minneapolis-based Cash Systems, Inc. has grown from a regional ATM provider to one of four cash access companies serving the gaming industry. Cash Systems' products include its proprietary cash advance systems, ATMs and check cashing solutions. Cash Systems' gaming clients are comprised of both Native American, public and private entities. Please visit http://www.cashsystemsinc.com for more information.

    This press release may contain forward-looking statements, including the Company's beliefs about its business prospects and future results of operations. These statements involve risks and uncertainties. Among the important additional factors that could cause actual results to differ materially from those forward-looking statements are risks associated with the overall economic environment, the successful execution of the Company's plan of operation, changes in the Company's anticipated earnings, continuation of current contracts, gaming and other applicable regulations, and other factors detailed in the Company's filings with the Securities and Exchange Commission, including its most recent Forms 10-KSB and 10-QSB. In addition, the factors underlying Company forecasts are dynamic and subject to change and therefore those forecasts speak only as of the date they are given. The Company does not undertake to update any forecasts that it may make available to the investing public.

CASH SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, 2004 and 2003

2004 2003 ------------ ----------- ASSETS

CURRENT ASSETS Cash and cash equivalents $13,043,874 $3,035,747 Related parties receivable 183,560 25,000 Prepaid commissions 348,601 362,000 Current portion of loans receivable 1,849,420 - Other receivable 645,006 617,739 Deferred income taxes 336,000 299,000 Other current assets 4,528,615 1,053,777 ------------ ----------- Total Current Assets 20,935,076 5,393,263 ------------ -----------

PROPERTY AND EQUIPMENT, NET 3,373,170 1,855,791

OTHER ASSETS Long-term receivable - 453,295 Long-term prepaid commissions, net of current portion 523,827 - Long-term loans receivable, net of current portion 350,835 - ------------ ----------- Total Other Assets 874,662 453,295 ------------ -----------

TOTAL ASSETS $25,182,908 $7,702,349 ============ ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES Checks issued in excess of cash in bank $3,331,381 $686,118 Current portion of long-term debt - 631,434 Accounts payable - trade 436,322 1,734,653 Credit card cash advance fees payable 655,036 743,423 ATM commissions payable 629,328 331,944 Credit card chargebacks payable 80,000 103,957 Check cashing commissions payable 102,801 91,146 Due to related party 211,846 - Other accrued expenses 197,869 221,357 ------------ ----------- Total Current Liabilities 5,644,583 4,544,032 ------------ -----------

LONG-TERM LIABILITIES Long-term debt, net of current portion - 81,601 Deferred income taxes 797,000 354,000 ------------ ----------- Total Liabilities 6,441,583 4,979,633 ------------ -----------

STOCKHOLDERS' EQUITY

Common stock, par value of $0.001, 50,000,000 shares authorized, 16,173,445 and 12,892,735 shares issued and outstanding 16,173 12,893 Additional paid-in capital 14,591,297 1,872,747 Warrants 1,341,057 1,341,057 Deferred consulting services - (207,359) Retained earnings (accumulated deficit) 1,886,796 (296,622)

------------ ----------- Total Stockholders' Equity 18,741,325 2,722,716 ------------ -----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $25,182,908 $7,702,349 ============ ===========

CASH SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS For the Years Ended December 31, 2004 and 2003

2004 2003 ----------------------- ----------------------- Amount Percentage Amount Percentage ------------ ---------- ------------ ---------- COMMISSIONS $48,411,008 100.0% $32,728,186 100.0%

OPERATING EXPENSES Commissions 23,227,573 48.0% 16,208,769 49.5% Processing costs 8,536,613 17.6% 6,334,685 19.3% Check cashing costs 2,843,857 5.9% 1,169,372 3.6% Armored carrier services 458,554 1.0% 447,090 1.4% Payroll, benefits and related taxes 5,103,017 10.5% 2,986,705 9.1% Professional fees 732,893 1.5% 516,880 1.6% Compensation expense related to warrants and options 91,377 0.2% 185,105 0.6% Other 2,856,520 5.9% 1,968,225 6.0% Depreciation and amortization 762,987 1.6% 569,658 1.7% ----------------------------------------------- Total Operating Expenses 44,613,391 92.2% 30,386,489 92.8% ----------------------------------------------- Income from Operations 3,797,617 7.8% 2,341,697 7.2% -----------------------------------------------

OTHER INCOME (EXPENSE) Interest expense (269,050) -0.5% (411,812) -1.3% Amortization of original issue discount - 0.0% (133,843) -0.4% Interest income 20,683 0.0% 617 0.0% ----------------------------------------------- Total Other Income (Expense) (248,367) -0.5% (545,038) -1.7% -----------------------------------------------

Income Before Income Taxes 3,549,250 7.3% 1,796,659 5.5%

PROVISION FOR INCOME TAXES 1,365,832 2.8% 142,000 0.4% -----------------------------------------------

NET INCOME $2,183,418 4.5% $1,654,659 5.1% ===============================================

EARNINGS PER COMMON SHARE - BASIC $0.14 $0.13 ============ ============

EARNINGS PER COMMON SHARE - DILUTED $0.14 $0.12 ============ ============

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC 15,072,768 12,740,653 ============ ============

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - DILUTED 16,131,136 13,500,976 ============ ============

--30--RG/ny*

CONTACT: Cash Systems David Clifford, 952-895-8299 or ICR Don Duffy or Ashley Ammon 203-682-8200

KEYWORD: MINNESOTA INDUSTRY KEYWORD: GAMING EARNINGS CONFERENCE CALLS SOURCE: Cash Systems, Inc.

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