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Global Axcess currently owns and operates over 3500 ATMs in its
national network spanning 42 states and provides proprietary branding and processing for
over 70 financial institutions
Global Axcess Corp.
224 Ponte Vedra Park Drive
Ponte Vedra Beach, FL 332082
Interview conducted by:
Lynn Fosse, Senior Editor
September 8, 2005
David Fann, President and Director
Prior to joining Global Axcess in March 2002, Mr. Fann was the Chief Executive Officer and
Chairman of the Board of TeraGlobal, Inc., a publicly traded company, from September 1998
through September 2000. He was president of TechnoVision Communications, Inc., a
subsidiary of TeraGlobal from November of 1995 to September 2000. He co founded Totally
Automated Systems Communications and acted as Vice President of that company from January
1993 through January 1995.
Global Axcess Corp (GAXC) was founded in 2001 with a mission to emerge as one of
the nation's leading network-based electronic commerce and transaction processing
companies. Through its wholly owned subsidiary, Nationwide Money Services, Inc., the
Company provides turnkey ATM management solutions that include cash, project and account
management services. NMS currently owns and operates over 3,500 ATMs in its national
network spanning 42 states and provides proprietary ATM branding and processing for over
70 financial institutions with over 650 branded sites nationwide. EFT Integration, Inc., a
wholly owned subsidiary of Global Axcess, provides traditional, certified transaction
processing and terminal driving to its valued customers and is developing alternative
processing solutions for expanding ATM functionality through web- based products and
services. Through its wholly owned subsidiary Electronic Payment & Transfer Corp.,
product offerings target potentially new ATM users with web-based solutions to provide
financial services to the un-banked customer, such as payroll distribution products, money
transfer and prepaid products/services.
CEOCFO: Mr. Dodak, what
is your vision for Global Axcess?
Mr. Fann: I am one of the original founders of Global
Axcess. We formed the company in December of 2000 as a private company; we went public in
June of 2001 with the intent of becoming one of the leading ATM providers in the U.S. We
are now the sixth largest. We started out with nothing and now we are at over $20 million
a year in revenue.
CEOCFO: What is involved
in being an ATM provider?
Mr. Fann: We own, operate and manage about 2,500 ATMs
in the U.S. today. We just announced a letter of intent to declare another 1,500 sites. We
are a full-service provider where we actually own the ATM and provide the maintenance,
processing, and we arrange for cash to be delivered from machines. We sell ATMs to
individual merchants and we provide various services for those merchants including
processing, maintenance, etc. We are a processing company and we have many clients for
which we just provide pure processing. It is everything from maintenance, transactions
through financial networks, to delivery of cash; anything from turnkey, and anything you
would ever need to know about how to run an ATM.
CEOCFO: Tell us about
the mix of your portfolio and if you would like to see that change.
Mr. Fann: Today, the mix of our portfolio is that we
own about half of the ATMs and we have about half that we call merchant models where we
sell the ATMs and collect the processing and the interchange fees. We like both models.
Being the owner allows us to do more things such as our branded cash program where we go
out to the ten thousand credit unions and community banks in the U.S., and get them to
brand our ATMs, which allows them to have the customers receive free transactions.
However, what the bank provides us is the cost of cash and delivery of cash at a reduced
rate. It appears that the bank ATM is ours but it lowers the banks cost, it has more
ATMs and it lowers our cost. It is a win/win for both companies. Our margins increase when
we do branded with the ownership model.
CEOCFO: Where are your
ATMS; is there a typical location?
Mr. Fann: Typically, we are in grocery stores; Food
Lion, LLC is one of our big customers at about 1,400 locations. Our theme here is
long-term recurring revenue and today, 85% of our revenue is recurring revenue. For
example, Food Lion has 1,400 locations and have been our customer since 1996 and they are
under contract for 2011, so when we sign a new customer, we get that revenue for a long
time. They are about 20% of our business. We are typically in grocery stores, convenience
stores, gas stations, and retail locations.
CEOCFO: Food Lion is a
large chain; do you deal primarily with chains or is someone going store to store to get
you into these places?
Mr. Fann: Half of our locations or more are just
individual merchants where we have a sales force in different cities where we go out and
sell ATMs to merchants. We have many customers that just want ATM.
CECOCFO: What is the
Mr. Fann: The market in the U.S. is growing at about 5%
per year, but we are growing faster than that; we are growing organically at 15 or 20% per
year. We also grow through acquisitions with consolidation going on in our industry. We
acquired through companies last year almost eighteen hundred ATMs and have doubled the
size of our company last year. This year, we announced our first acquisition of over
fifteen hundred ATMs. We will continue our pace of the last three years, which is top-line
growth of 40% in profit, and is doubling each year for the last three years and will
continue this year and on into the next. Our theory is to grow this thing 40% a year, but
while we are doing it, we are going to double the profits each year and we have been able
to maintain that growth.
CEOCFO: What do you need
to do to continue on that path?
Mr. Fann: The plan is working as we have laid it out.
As far as the organic growth, we are well funded and have the capital in-place to handle
organic growth at 20% a year. In order to do more acquisitions, we need to raise more
capital just like we did last year and we are pursuing all methods of doing that in a way
that is non-diluted to the company and shareholders.
CEOCFO: Why are
merchants and banks choosing Global Axcess instead of someone else with an ATM?
Mr. Fann: We have a very good reputation. Our uptime is
99.9%, we do what we say and provide excellent service. Therefore, we retain most of our
customers. It is all about service and doing what you say.
CEOCFO: What kind of
additional services might you be able to add?
Mr. Fann: In addition to providing ATM services, we
also provide financial transaction processing services, where we process the transaction
from the ATM to our switch and out to all the financial networks to that customers
bank, whether it be through Visa or MasterCard or any bank out there. Our newest product
is a prepaid debit card where we go after the 28 million people in the U.S. that work and
do not have a bank account. We can go to the employer and instead issuing a check to an
employee each month, they can give them a debit card and each pay period the net pay is
put on that card. Now the employee can use the prepaid debit card anywhere that takes an
ATM based transaction. You can use it at an ATM or buy products and services from grocery
stores or Wal-Mart. In addition to just being a payroll card, we can provide other
services on that card such as prepaid cellular, long-distance and prepaid money transfer,
to transfer money both in the U.S. and internationally without paying huge fees that
countries are charging today.
CEOCFO: Will you need to
add much infrastructure as you increase services?
Mr. Fann: We have invested in the future as we grow
especially through acquisitions and organically. We are doing run rates of over 20 million
this year but we could grow three times in the facility we are today without adding many
people. We have already made that investment into the future.
CEOCFO: What challenges
do you see ahead?
Mr. Fann: We have built a good management so we can do
the acquisitions. There is a consolidation going on in the industry, but we have a very
strict policy that we follow on valuation criteria and if we can buy companies for the
correct price, then we will. I think the challenge is to get the correct capital to
continue acquisition strategy, which so far, we have been able to do. We will continue
that. The big growth can come internationally as well; even if we do no more acquisitions,
we will grow the company 20% a year. Today we are focused in the United States.
CEOCFO: Do you focus
much on reaching potential investors?
Mr. Fann: Yes, we do. We have an investor relations
firm and advisors. We typically go out and do road shows once a month. We have an
aggressive campaign to get the word out about our company. We also are planning on moving
off the bulletin board to a fully listed exchange in the near future, where we will be
able to reach an entirely new group of investors. The future looks very bright for the
company and we are on track to achieve all of our goals. We are excited about where we are
at and where we have come from. We are going to continue to perform so that we can get the
maximum value for all of our shareholders.
CEOCFO: In closing, why should investors be interested and
what does not jump off the page about Global Access?
Mr. Fann: The first thing investors should know is that
over the last three years, we have grown the company 40% in revenue each year and doubled
the profit from the previous year. We are ahead of schedule to do that this year. With the
business we have yet to roll out, we will continue to do that next year. We have built a
good management team. If you look at our company compared to some of our competitors and
you look at the way we value companies like us, we are grossly undervalued. We are about
50% of our value compared to other companies that are public. It is a tremendous buy and
we are valued around $30 million by the marketplace today. As we continue to perform
fundamentally, you will see out stock price increase. At this level, it is a tremendous
opportunity for investors to get involved.
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