LAS
VEGAS, May 8, 2024 /PRNewswire/ -- Everi Holdings
Inc. (NYSE: EVRI) ("Everi" or the "Company"), today announced
results for the first quarter ended March 31, 2024.
Randy Taylor, Chief Executive
Officer of Everi, said, "We are making progress on the steps
necessary to complete our proposed merger with IGT's Global Gaming
and PlayDigital businesses later this year or in early
2025. We are excited about the significant growth
opportunities we believe this combination will unlock. This
transaction will bring together a comprehensive and complementary
product set focused on our customers and their diverse needs which
we believe will deliver substantial long-term value to our
shareholders.
"During the first quarter our games segment continued to make
progress in our transition to our newest family of cabinets and new
and innovative content to support these cabinets. While this
transition has been slower than anticipated, we are gaining
momentum with these efforts and expect our progress will continue
to accelerate throughout the back half of the year. Starting in the
second quarter we expect this momentum to translate into
improvements in sequential quarterly unit sales. We will
continue to support our portfolio of game products following the
closing of the proposed merger.
"For our FinTech business, our highest margin financial access
and software and other revenue categories continued to grow in the
first quarter, though this growth was more than offset by a decline
in hardware revenues, which are less predictable on a quarterly
basis. Following the impact from weather related headwinds
early in the year, our financial access revenue trends continued to
improve, and we expect more consistent growth trends to continue.
In addition, we expect consolidated hardware sales will recover
over the balance of the year.
"Over the last several years, we have increased our investments
in our employees and technology to develop our next generation of
products that positions the Company for long-term growth. While
conversion of these investments into increased revenues has taken
longer than initially anticipated, we are on track to begin to
deliver on several of our initiatives in the second half of 2024,
including our initial video lottery terminal ("VLT") placements and
our first gaming products for Australia. While our investments
have led to higher payroll and related expenses, we believe
investing in new products for our FinTech segment, for-sale and
for-lease gaming products and products focused on new segments and
jurisdictions will drive revenue growth in the second half of 2024
and position the Company for long-term success."
First Quarter 2024 Financial Results
Consolidated revenues for the three-month period ended
March 31, 2024 were $189.3 million compared to
$200.5 million in the
year-ago first quarter.
Games revenues of $97.1 million
were down from the prior year period, and essentially flat on a
quarterly sequential basis as the Company continues to transition
to its new family of cabinets and content. Approximately half of
the decline in the installed base during the quarter is
attributable to the Company's proactive decisions not to replace
cabinets in lower performing locations. The Company launched its
new for-sale Dynasty Sol cabinet late in the 2023 fourth quarter
and its new, premium-leased Dynasty Sol Sync cabinet late in the
2024 first quarter. These cabinets are expected to continue to grow
in popularity as new games are introduced.
FinTech revenues of $92.2 million
were down slightly year over year and on a quarterly sequential
basis. Financial access revenues experienced more modest growth in
the quarter with bad weather impacting a large portion of the
Company's customer base early in the quarter. Same store
volumes began to improve late in the first quarter and remain
steady throughout the early part of the second quarter. In the
first quarter, the Company experienced a decline in hardware sales,
primarily from reduced unit sales of our ticket redemption kiosks
in certain foreign jurisdictions and lower loyalty equipment sales
due to timing of initial software sales and
installations. FinTech Hardware sales tend to be large
purchases tied to new contracts and contract renewals, and
therefore, revenues can fluctuate on a quarterly basis. The
Company expects to see growth in hardware sales for the
year.
Operating expenses and research and development expenses
increased year-over-year primarily due to the $15.7 million in merger-related costs incurred in
the first quarter this year. Both the decline in segment revenues
and higher operating expenses resulted in lower net income this
year compared to the prior year first quarter.
Consolidated Full Quarter Comparative Results
(unaudited)
|
As of and for the
Three Months
Ended March 31,
|
|
2024
|
|
2023
|
|
(in millions, except
per share amounts)
|
Revenues
|
$
189.3
|
|
$
200.5
|
|
|
|
|
Operating income
(1)
|
$
24.8
|
|
$
52.0
|
|
|
|
|
Net income
(1)
|
$
4.6
|
|
$
28.1
|
|
|
|
|
Net earnings per
diluted share (1)
|
$
0.05
|
|
$
0.30
|
|
|
|
|
Weighted average
diluted shares outstanding
|
87.3
|
|
94.8
|
|
|
|
|
Adjusted EBITDA
(2)
|
$
80.3
|
|
$
92.5
|
|
|
|
|
Free Cash Flow
(2)
|
$
14.0
|
|
$
40.1
|
|
|
|
|
Capital
Expenditures:
|
|
|
|
Games
|
$
34.5
|
|
$
23.8
|
FinTech
|
$
8.2
|
|
$
6.0
|
Consolidated
|
$
42.7
|
|
$
29.8
|
|
|
|
|
Cash and cash
equivalents
|
$
268.6
|
|
$
293.2
|
|
|
|
|
Net Cash Position
(3)
|
$
49.6
|
|
$
106.8
|
|
|
|
|
(1)
|
Operating income, net
income, and net earnings per diluted share for the three months
ended March 31, 2024, included $14.3 million of merger-related
professional fees, $1.3 million in merger-related employee
retention costs, $0.1 million of litigation fees net of insurance
recoveries, and $0.1 million associated with other acquisitions
costs and non-recurring professional fees. Operating income, net
income, and net earnings per diluted share for the three months
ended March 31, 2023, included $0.1 million for non-recurring
professional fees and other and a recovery of $0.2 million from
insurance for previously paid non-recurring litigation
costs.
|
(2)
|
For a reconciliation of
net income to Adjusted EBITDA and Free Cash Flow, see the Unaudited
Reconciliation of Selected Financial GAAP to Non-GAAP Measures
provided toward the end of this release.
|
(3)
|
For a reconciliation of
Net Cash Position to Cash and Cash Equivalents, see the Unaudited
Reconciliation of Cash and Cash Equivalents to Net Cash Position
and Net Cash Available provided toward the end of this
release.
|
|
Three Months Ended
March 31,
|
|
2024
|
|
2023
|
|
(in millions, except
unit amounts and prices)
|
Performance
Metrics:
|
|
|
|
|
|
|
|
Gaming operations
information:
|
|
|
|
Units installed at
period end:
|
|
|
|
Class II
|
10,195
|
|
10,346
|
Class III
|
6,569
|
|
7,461
|
HHR
|
153
|
|
34
|
Total installed base
at period end
|
16,917
|
|
17,841
|
|
|
|
|
Average units
installed during period
|
17,256
|
|
17,898
|
|
|
|
|
Daily win per unit
("DWPU") (1)
|
$
34.51
|
|
$
38.37
|
|
|
|
|
Games unit sales
information:
|
|
|
|
Units sold
|
1,021
|
|
1,546
|
Average sales price
("ASP")
|
$
20,827
|
|
$
19,748
|
|
|
|
|
Value of financial
access transactions:
|
|
|
|
Funds
advanced
|
$
3,086.3
|
|
$
2,968.0
|
Funds
dispensed
|
8,858.7
|
|
8,113.0
|
Check
warranty
|
476.8
|
|
462.4
|
Total value
processed
|
$
12,421.8
|
|
$
11,543.4
|
|
|
|
|
Number of financial
access transactions:
|
|
|
|
Funds
advanced
|
4.5
|
|
4.4
|
Funds
dispensed
|
33.6
|
|
30.9
|
Check
warranty
|
0.9
|
|
0.9
|
Total transactions
completed
|
39.0
|
|
36.2
|
|
|
|
|
(1)
|
Daily win per unit
excludes the impact of the direct costs associated with the
Company's wide-area progressive jackpot expense.
|
Balance Sheet
- As of March 31, 2024, the Company
had $268.6 million of cash and cash
equivalents compared with $267.2
million as of December 31,
2023. The Net Cash Position was $49.6
million compared with $46.1
million as of December 31,
2023.
- Total debt decreased to $980.5
million at March 31, 2024,
from $986.5 million as of
December 31, 2023, as the Company
paid $6.0 million on its secured term
loan during the 2024 first quarter.
Outlook
Everi updated its outlook for 2024 and now expects Adjusted
EBITDA to be down from 2023 primarily reflecting the ongoing
near-term challenges that are impacting the Games segment but
expects improvement in the second half of the year as new cabinets
and new content continue to gain traction with customers. The
business is also expected to benefit from new product introductions
including the initial commercialization of video lottery terminals
and the entrance into new international jurisdictions. The
Company's FinTech segment is expected to be relatively flat
year-over-year in the second quarter and return to year-over-year
growth in the second half of the year.
Everi expects Free Cash Flow to be down compared to 2023 with
capital expenditures for the year flat to up slightly compared with
2023, cash interest flat with 2023, and cash taxes of $15 million to $20
million.
Investor Conference Call and Webcast
The Company will host an investor conference call to discuss its
2024 first quarter results at 11:00 a.m.
EDT (8:00 a.m. PDT) today. The
conference call may be accessed live by phone by dialing (201)
689-8471. A replay of the call will be available beginning at
2:00 p.m. EDT today and may be
accessed by dialing (412) 317-6671; the PIN number is 13745956. A
replay will be available until May 17,
2024. The call also will be webcast live and archived on
www.everi.com (select "Investors" followed by "Events &
Contact").
Non-GAAP Financial Information
To provide for better comparability between periods and a better
understanding of underlying trends, this press release includes
Adjusted EBITDA, Free Cash Flow, Net Cash Position and Net Cash
Available, which are not measures of our financial performance or
position under United States Generally Accepted Accounting
Principles ("GAAP"). Accordingly, these measures should not be
considered in isolation or as a substitute for measures prepared in
accordance with GAAP. These measures should be read in conjunction
with our net earnings, operating income, and cash flow data
prepared in accordance with GAAP. With respect to Net Cash Position
and Net Cash Available, these measures should be read in
conjunction with cash and cash equivalents prepared in accordance
with GAAP.
We define Adjusted EBITDA as earnings before interest, taxes,
depreciation and amortization, non-cash stock compensation expense,
accretion of contract rights, non-recurring litigation costs net of
settlements and insurance proceeds received, facilities
consolidation costs, asset acquisition expense, non-recurring
professional fees, and other one-time charges and benefits. We
present Adjusted EBITDA, as we use this measure to manage our
business and consider this measure to be supplemental to our
operating performance. We also make certain compensation decisions
based, in part, on our operating performance, as measured by
Adjusted EBITDA; and our credit facility and senior unsecured notes
require us to comply with a consolidated secured leverage ratio
that includes performance metrics substantially similar to Adjusted
EBITDA.
We define Free Cash Flow as Adjusted EBITDA less cash paid for
interest net of cash received for interest income, cash paid for
capital expenditures, cash paid for placement fees, and cash paid
for taxes net of refunds. We present Free Cash Flow as a measure of
performance. It should not be inferred that the entire Free Cash
Flow amount is available for discretionary expenditures.
A reconciliation of the Company's net income per GAAP to
Adjusted EBITDA and Free Cash Flow is included in the Unaudited
Reconciliation of Selected Financial GAAP to Non-GAAP Measures
provided at the end of this release. Additionally, a reconciliation
of each segment's operating income to EBITDA and Adjusted EBITDA is
also included. On a segment level, operating income per GAAP,
rather than net earnings per GAAP, is reconciled to EBITDA and
Adjusted EBITDA as the Company does not report net earnings by
segment. Management believes that this presentation is meaningful
to investors in evaluating the performance of the Company's
segments.
We define Net Cash Position as cash and cash equivalents plus
settlement receivables less settlement liabilities and Net Cash
Available as Net Cash Position plus undrawn amounts available under
our revolving credit facility. We present Net Cash Position because
our cash position, as measured by cash and cash equivalents,
depends upon changes in settlement receivables and the timing of
payments related to settlement liabilities. As such, our cash and
cash equivalents can change substantially based upon the timing of
our receipt of payments for settlement receivables and payments we
make to customers for our settlement liabilities. We present Net
Cash Available as management monitors this amount in connection
with its forecasting of cash flows and future cash
requirements.
A reconciliation of the Company's cash and cash equivalents per
GAAP to Net Cash Position and Net Cash Available is included in the
Unaudited Reconciliation of Cash and Cash Equivalents to Net Cash
Position and Net Cash Available provided at the end of this
release.
Cautionary Note Regarding Forward-Looking Statements
This press release contains "forward-looking statements" as
defined in the U.S. Private Securities Litigation Reform Act of
1995. Forward-looking statements are neither historical facts nor
assurances of future performance, but instead are based only on our
current beliefs, expectations, and assumptions regarding the future
of our business, plans and strategies, projections, anticipated
events and trends, the economy, and other future conditions, as of
the date this press release is issued. Forward-looking statements
often, but do not always, contain words such as "expect,"
"anticipate," "aim to," "designed to," "intend," "plan," "believe,"
"goal," "target," "future," "assume," "estimate," "indication,"
"seek," "project," "opportunity," "may," "can," "could," "should,"
"favorably positioned," or "will" and other words and terms of
similar meaning. Readers are cautioned not to place undue reliance
on the forward-looking statements contained herein, which are based
only on information currently available to us and only as of the
date hereof. We undertake no obligation to update or publicly
revise any forward-looking statements as a result of new
information, future developments or otherwise.
Examples of forward-looking statements include, among others,
statements regarding our ability to execute on key initiatives and
deliver ongoing operating and financial improvements, including
guidance related to 2024 financial and operational metrics, such as
maintaining revenue, earnings and Free Cash Flow momentum;
sustaining our growth; driving growth of the gaming operations
installed base and DWPU; expanding the gaming categories the
Company's games address, including Video Lottery Terminal category
and the Company's overall targeted ship share of gaming machines
sold; successfully performing obligations required by acquisition
agreements; growth opportunities from the proposed merger with
IGT's Global Gaming and PlayDigital businesses, the anticipated
benefits of the proposed transaction, including with respect to our
products and for our customers, the potential to deliver value to
our shareholders, and the expected timetable for completing the
proposed transaction; and creating incremental value for our
shareholders, as well as statements regarding our expectations for
the industry environment and mitigating potential challenges
created by macroeconomic uncertainties and conditions; and the
adoption of our products and technologies.
Forward-looking statements are subject to inherent risks,
uncertainties, and changes in circumstances that are often
difficult to predict and many of which are beyond our control,
including, but not limited to, statements regarding trends,
developments, and uncertainties impacting our business, including
our ability to withstand: macro-economic impacts on consumer
discretionary spending, interest rates and interest
expense; global supply chain disruption; inflationary impact
on supply chain costs; inflationary impact on labor costs and
retention; equity incentive activity and compensation
expense; our ability to maintain revenue, earnings, and cash
flow momentum or lack thereof; changes in global market, business
and regulatory conditions whether as a result of a pandemic, or
other economic or geopolitical developments around the world,
including availability of discretionary spending income of
casino patrons as well as expectations for the closing
or re-opening of casinos; product and technological
innovations that address customer needs in a new and evolving
operating environment or disrupt the industry, such as generative
artificial intelligence; to enhance shareholder value in the
long-term; trends in gaming operator and patron usage of our
products; benefits realized by using our products and services;
benefits and/or costs associated with mergers, acquisitions, and/or
strategic alliances; the proposed transaction with IGT, including
the anticipated timing of the closing of the proposed transaction
and the incurrence and use of any debt pursuant to the commitment
letter in connection with the proposed merger; product development,
including the benefits from the release of new products, new
product features, product enhancements, or product extensions;
regulatory approvals and changes; gaming, financial regulatory,
legal, card association, and statutory compliance and changes; the
implementation of new or amended card association and payment
network rules or interpretations; consumer collection activities;
competition (including consolidations); tax liabilities; borrowings
and debt repayments; goodwill impairment charges; international
expansion or lack thereof; resolution of litigation or government
investigations; our share repurchase and dividend policy; new
customer contracts and contract renewals or lack thereof; and
financial performance and results of operations (including revenue,
expenses, margins, earnings, cash flow, and capital
expenditures).
Our actual results and financial condition may differ materially
from those indicated in forward-looking statements, and important
factors that could cause them to do so include, but are not limited
to, the following: our ability to generate profits in the future
and to create incremental value for shareholders; our ability to
withstand economic slowdowns, inflationary and other economic
factors that pressure discretionary consumer spending; our ability
to execute on mergers, acquisitions, and/or strategic alliances,
including our ability to integrate and operate such acquisitions or
alliances consistent with our forecasts in order to achieve future
growth; our ability to execute on key initiatives and deliver
ongoing improvements; expectations regarding growth for the
Company's installed base and daily win per unit; expectations
regarding placement fee agreements; inaccuracies in underlying
operating assumptions; our ability to withstand direct and indirect
impacts of a pandemic outbreak, or other public health crises of
uncertain duration on our business and the businesses of our
customers and suppliers, including as a result of actions taken in
response to governments, regulators, markets and individual
consumers; changes in global market, business, and regulatory
conditions arising as a result of economic, geopolitical and other
developments around the world, including a global pandemic,
increased conflict and political turmoil, capital market
disruptions and instability of financial institutions, climate
change or currently unexpected crises or natural disasters; our
leverage and the related covenants that restrict our operations;
our ability to comply with our debt covenants and our ability to
generate sufficient cash to service all of our indebtedness, fund
working capital, and capital expenditures; our ability to withstand
the loss of revenue during the closure of our customers'
facilities; our ability to maintain our current customers; our
ability to replace revenue associated with terminated contracts or
margin degradation from contract renewals; expectations regarding
customers' preferences and demands for future product and service
offerings; our ability to successfully introduce new products and
services, including third-party licensed content; gaming operator
and patron preferences; failure to control product development
costs and create successful new products; the overall growth or
contraction of the gaming industry; anticipated sales performance;
our ability to prevent, mitigate, or timely recover from
cybersecurity breaches, attacks, compromises and other security
vulnerabilities; national and international economic and industry
conditions, including the prospect of a shutdown of the U.S.
federal government; changes in gaming regulatory, financial
regulatory, legal, card association, and statutory requirements;
the impact of evolving legal and regulatory requirements, including
emerging environmental, social and governance requirements;
regulatory and licensing difficulties, competitive pressures and
changes in the competitive environment; operational limitations;
changes to tax laws; uncertainty of litigation outcomes; interest
rate fluctuations; business prospects; unanticipated expenses or
capital needs; the possibility that the conditions to the
consummation of the proposed transaction with IGT will not be
satisfied (including the failure to obtain necessary regulatory,
stockholder and shareholder approvals or any necessary waivers,
consents, or transfers, including for any required licenses or
other agreements) in the anticipated timeframe or at all; the
ability to realize the anticipated benefits of the proposed
transaction with IGT, including the possibility that the Company
and IGT may be unable to achieve the expected benefits, synergies
and operating efficiencies in connection with the proposed
transaction with IGT within the expected timeframes or at all and
to successfully separate and/or integrate the acquired businesses
of IGT; the occurrence of any event, change or other circumstances
that could give rise to the termination of the merger agreement for
the proposed transaction with IGT; changes in the extent and
characteristics of the common stockholders of the Company and its
effect pursuant to the merger agreement for the proposed
transaction with IGT on the number of shares of the Company's
common stock issuable pursuant to the proposed transaction with IGT
and the extent of indebtedness to be incurred by the Company in
connection with the proposed transaction with IGT; technological
obsolescence and our ability to adapt to evolving technologies,
including generative artificial intelligence; employee hiring,
turnover and retention; our ability to comply with regulatory
requirements under the Payment Card Industry ("PCI") Data Security
Standards and maintain our certified status; and those other risks
and uncertainties discussed in "Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations" and
"Item 1A. Risk Factors" of our Annual Report on Form 10-K for the
year ended December 31, 2023 (the "Annual Report"). Given
these risks and uncertainties, there can be no assurance that the
forward-looking information contained in this press release will in
fact transpire or prove to be accurate.
This press release should be read in conjunction with our Annual
Report and with the information included in our other press
releases, reports and other filings with the Securities and
Exchange Commission. Understanding the information contained in
these filings is important in order to fully understand our
reported financial results and our business outlook for future
periods.
About Everi
Everi's mission is to lead the gaming industry through the power
of people, imagination, and technology. As one of the largest
suppliers of technology solutions for the casino floor
that also has an expanding focus in adjacent industries, our
commitment is to continually develop products and services that
provide gaming entertainment, improve our customers' patron
engagement, and help our customers operate their businesses more
efficiently. We develop entertaining game content, gaming machines,
and gaming systems to serve our land-based, iGaming and bingo
operators. Everi is a leading innovator and provider of trusted
financial technology solutions that power casino
floors, improve casinos' operational efficiencies, and
fulfill regulatory compliance requirements. The Company also
develops and supplies player loyalty tools and mobile-first
applications that drive increased patron engagement for our
customers and venues in the casino, sports,
entertainment, and hospitality industries. For more information,
please visit www.everi.com.
Investor Relations Contacts:
Everi Holdings Inc.
Jennifer Hills
VP, Investor Relations
702-676-9513 or jennifer.hills@everi.com
Join Everi on Social Media
Twitter:
https://twitter.com/everi_inc
LinkedIn: https://www.linkedin.com/company/everi
Facebook: https://www.facebook.com/EveriHoldingsInc/
Instagram: https://www.instagram.com/everi_inc
EVERI
HOLDINGS INC. AND SUBSIDIARIES
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE
INCOME
(In thousands,
except earnings per share amounts)
|
|
|
Three Months Ended
March 31,
|
|
2024
|
|
2023
|
Revenues
|
|
|
|
Games
revenues
|
|
|
|
Gaming
operations
|
$
72,622
|
|
$
75,309
|
Gaming equipment and
systems
|
24,500
|
|
32,065
|
Games total
revenues
|
97,122
|
|
107,374
|
FinTech
revenues
|
|
|
|
Financial access
services
|
57,419
|
|
56,214
|
Software and
other
|
25,776
|
|
24,215
|
Hardware
|
9,029
|
|
12,669
|
FinTech total
revenues
|
92,224
|
|
93,098
|
Total
revenues
|
189,346
|
|
200,472
|
Costs and
expenses
|
|
|
|
Games cost of
revenues(1)
|
|
|
|
Gaming
operations
|
9,515
|
|
6,806
|
Gaming equipment and
systems
|
14,060
|
|
20,249
|
Games total cost of
revenues
|
23,575
|
|
27,055
|
FinTech cost of
revenues(1)
|
|
|
|
Financial access
services
|
2,697
|
|
2,899
|
Software and
other
|
3,132
|
|
1,423
|
Hardware
|
6,806
|
|
8,448
|
FinTech total cost
of revenues
|
12,635
|
|
12,770
|
Operating
expenses
|
73,614
|
|
59,192
|
Research and
development
|
19,310
|
|
16,096
|
Depreciation
|
19,951
|
|
18,949
|
Amortization
|
15,509
|
|
14,364
|
Total costs and
expenses
|
164,594
|
|
148,426
|
Operating
income
|
24,752
|
|
52,046
|
Other
expenses
|
|
|
|
Interest expense, net
of interest income
|
18,800
|
|
17,970
|
Total other
expenses
|
18,800
|
|
17,970
|
Income before income
tax
|
5,952
|
|
34,076
|
Income tax
provision
|
1,398
|
|
6,010
|
Net
income
|
4,554
|
|
28,066
|
Foreign currency
translation loss
|
(1,693)
|
|
(186)
|
Comprehensive
income
|
$
2,861
|
|
$
27,880
|
Earnings per
share
|
|
|
|
Basic
|
$
0.05
|
|
$
0.32
|
Diluted
|
$
0.05
|
|
$
0.30
|
Weighted average
common shares outstanding
|
|
|
|
Basic
|
83,777
|
|
88,355
|
Diluted
|
87,287
|
|
94,781
|
(1)
|
Exclusive of
depreciation and amortization.
|
EVERI HOLDINGS INC.
AND SUBSIDIARIES
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
(In thousands,
except par value amounts)
|
|
|
At March
31,
|
|
At December
31,
|
|
2024
|
|
2023
|
ASSETS
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
268,617
|
|
$
267,215
|
Settlement
receivables
|
422,807
|
|
441,852
|
Trade and other
receivables, net of allowances for credit losses of $5,233 and
$5,210 at March 31, 2024 and December 31, 2023,
respectively
|
107,578
|
|
107,933
|
Inventory
|
78,583
|
|
70,624
|
Prepaid expenses and
other current assets
|
43,600
|
|
43,906
|
Total current
assets
|
921,185
|
|
931,530
|
Non-current
assets
|
|
|
|
Property and equipment,
net
|
160,722
|
|
152,704
|
Goodwill
|
737,147
|
|
737,804
|
Other intangible
assets, net
|
229,376
|
|
234,138
|
Other
receivables
|
33,887
|
|
29,015
|
Deferred tax assets,
net
|
594
|
|
598
|
Other assets
|
39,679
|
|
38,081
|
Total non-current
assets
|
1,201,405
|
|
1,192,340
|
Total
assets
|
$
2,122,590
|
|
$
2,123,870
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities
|
|
|
|
Settlement
liabilities
|
$
641,863
|
|
$
662,967
|
Accounts payable
and accrued expenses
|
237,869
|
|
215,530
|
Current portion
of long-term debt
|
1,500
|
|
6,000
|
Total current
liabilities
|
881,232
|
|
884,497
|
Non-current
liabilities
|
|
|
|
Deferred tax
liabilities, net
|
10,379
|
|
13,762
|
Long-term debt, less
current portion
|
967,582
|
|
968,465
|
Other accrued expenses
and liabilities
|
32,102
|
|
31,004
|
Total non-current
liabilities
|
1,010,063
|
|
1,013,231
|
Total
liabilities
|
1,891,295
|
|
1,897,728
|
Commitments and
contingencies
|
|
|
|
Stockholders'
equity
|
|
|
|
Convertible preferred
stock, $0.001 par value, 50,000 shares authorized and no shares
outstanding at March 31, 2024 and December 31, 2023,
respectively
|
—
|
|
—
|
Common stock, $0.001
par value, 500,000 shares authorized and 123,287 and 83,836 shares
issued and outstanding at March 31, 2024, respectively, and
123,179 and 83,738 shares issued and outstanding at
December 31, 2023, respectively
|
123
|
|
123
|
Additional paid-in
capital
|
563,334
|
|
560,945
|
Retained
earnings
|
67,285
|
|
62,731
|
Accumulated other
comprehensive loss
|
(5,160)
|
|
(3,467)
|
Treasury stock, at
cost, 39,451 and 39,441 shares at March 31, 2024 and
December 31, 2023, respectively
|
(394,287)
|
|
(394,190)
|
Total stockholders'
equity
|
231,295
|
|
226,142
|
Total liabilities
and stockholders' equity
|
$
2,122,590
|
|
$
2,123,870
|
EVERI
HOLDINGS INC. AND SUBSIDIARIES
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In
thousands)
|
|
|
Three Months
Ended March 31,
|
|
2024
|
|
2023
|
Cash flows from
operating activities
|
|
|
|
Net income
|
$
4,554
|
|
$
28,066
|
Adjustments to
reconcile net income to cash provided by operating
activities:
|
|
|
|
Depreciation
|
19,951
|
|
18,949
|
Amortization
|
15,509
|
|
14,364
|
Non-cash lease
expense
|
1,487
|
|
1,317
|
Amortization of
financing costs and discounts
|
713
|
|
713
|
Loss on sale or
disposal of assets
|
89
|
|
134
|
Accretion of contract
rights
|
2,335
|
|
2,335
|
Provision for credit
losses
|
2,946
|
|
3,078
|
Deferred income
taxes
|
(3,353)
|
|
1,860
|
Reserve for inventory
obsolescence
|
426
|
|
319
|
Stock-based
compensation
|
1,942
|
|
4,825
|
Changes in operating
assets and liabilities:
|
|
|
|
Settlement
receivables
|
18,940
|
|
175,988
|
Trade and other
receivables
|
(7,150)
|
|
(87)
|
Inventory
|
(8,495)
|
|
(10,937)
|
Prepaid expenses and
other assets
|
(2,284)
|
|
(271)
|
Settlement
liabilities
|
(20,991)
|
|
(193,698)
|
Accounts payable and
accrued expenses
|
28,507
|
|
(15,247)
|
Net cash provided
by operating activities
|
55,126
|
|
31,708
|
Cash flows from
investing activities
|
|
|
|
Capital
expenditures
|
(42,744)
|
|
(29,821)
|
Proceeds from sale of
property and equipment
|
68
|
|
67
|
Net cash used in
investing activities
|
(42,676)
|
|
(29,754)
|
Cash flows from
financing activities
|
|
|
|
Repayments of term
loan
|
(6,000)
|
|
(6,000)
|
Proceeds from exercise
of stock options
|
447
|
|
5,233
|
Treasury stock -
equity award activities, net of shares withheld
|
(97)
|
|
(333)
|
Payment of deferred
acquisition consideration
|
(4,301)
|
|
(47)
|
Net cash used in
financing activities
|
(9,951)
|
|
(1,147)
|
Effect of exchange
rates on cash and cash equivalents
|
(960)
|
|
(167)
|
Cash, cash
equivalents and restricted cash
|
|
|
|
Net increase for the
period
|
1,539
|
|
640
|
Balance, beginning of
the period
|
272,506
|
|
295,063
|
Balance, end of the
period
|
$
274,045
|
|
$
295,703
|
Supplemental cash
disclosures
|
|
|
|
Cash paid for
interest
|
$
27,397
|
|
$
25,051
|
Cash (refunded) paid
for income tax, net
|
(83)
|
|
465
|
Supplemental
non-cash disclosures
|
|
|
|
Accrued and unpaid
capital expenditures
|
$
3,362
|
|
$
2,551
|
Transfer of leased
gaming equipment to inventory
|
1,116
|
|
1,809
|
EVERI
HOLDINGS INC. AND SUBSIDIARIES
UNAUDITED
RECONCILIATION OF CASH AND CASH EQUIVALENTS
TO NET CASH POSITION
AND NET CASH AVAILABLE
(In
thousands)
|
|
|
At March
31,
|
|
At December
31,
|
|
At March
31,
|
|
2024
|
|
2023
|
|
2023
|
Cash
available
|
|
|
|
|
|
Cash and cash
equivalents (1)
|
$
268,617
|
|
$
267,215
|
|
$
293,207
|
Settlement
receivables
|
422,807
|
|
441,852
|
|
87,771
|
Settlement
liabilities
|
(641,863)
|
|
(662,967)
|
|
(274,218)
|
Net Cash
Position
|
49,561
|
|
46,100
|
|
106,760
|
|
|
|
|
|
|
Undrawn revolving
credit facility
|
125,000
|
|
125,000
|
|
125,000
|
Net Cash
Available
|
$
174,561
|
|
$
171,100
|
|
$
231,760
|
|
|
|
|
|
|
(1)
|
Cash and cash
equivalents does not include $5.4 million, $5.3 million, and $2.5
million of restricted cash at March 31, 2024, December 31, 2023,
and March 31, 2023, respectively.
|
EVERI
HOLDINGS INC. AND SUBSIDIARIES
UNAUDITED
RECONCILIATION OF SELECTED FINANCIAL GAAP TO NON-GAAP
MEASURES
(In
thousands)
|
|
|
Three Months Ended
March 31, 2024
|
|
Games
|
|
FinTech
|
|
Total
|
Net
income
|
|
|
|
|
$
4,554
|
Income tax
provision
|
|
|
|
|
1,398
|
Interest expense, net
of interest income
|
|
|
|
|
18,800
|
Operating (loss)
income (1)
|
$
(307)
|
|
$
25,059
|
|
$
24,752
|
|
|
|
|
|
|
Plus: depreciation and
amortization
|
28,711
|
|
6,749
|
|
35,460
|
EBITDA
|
$
28,404
|
|
$
31,808
|
|
$
60,212
|
|
|
|
|
|
|
Non-cash stock-based
compensation expense
|
$
1,131
|
|
$
811
|
|
$
1,942
|
Accretion of contract
rights
|
2,335
|
|
—
|
|
2,335
|
Litigation fees, net of
insurance proceeds received
|
—
|
|
67
|
|
67
|
Merger-related employee
retention costs
|
689
|
|
630
|
|
1,319
|
Merger-related
professional fees and related expense
|
14,058
|
|
282
|
|
14,340
|
Asset acquisition
expense, non-recurring professional fees and other
|
13
|
|
77
|
|
90
|
Adjusted
EBITDA
|
$
46,630
|
|
$
33,675
|
|
$
80,305
|
|
|
|
|
|
|
Cash paid for interest,
net (2)
|
|
|
|
|
(23,683)
|
Cash paid for capital
expenditures
|
|
|
|
|
(42,744)
|
Cash refunded for
income taxes, net
|
|
|
|
|
83
|
Free Cash
Flow
|
|
|
|
|
$
13,961
|
|
|
|
|
|
|
(1)
|
Operating loss for the
Games segment for the three months ended March 31, 2024, included
$14.1 million of merger-related professional fees and related
expense and $0.7 million of merger-related employee retention
costs. Operating income for the FinTech segment for the three
months ended March 31, 2024, included $0.3 million of
merger-related professional fees and related expense and $0.6
million of merger-related employee retention costs.
|
(2)
|
Cash paid for interest,
net includes the cash received for interest income of $3.7
million.
|
EVERI
HOLDINGS INC. AND SUBSIDIARIES
UNAUDITED
RECONCILIATION OF SELECTED FINANCIAL GAAP TO NON-GAAP
MEASURES
(In
thousands)
|
|
|
Three Months Ended
March 31, 2023
|
|
Games
|
|
FinTech
|
|
Total
|
Net
income
|
|
|
|
|
$
28,066
|
Income tax
provision
|
|
|
|
|
6,010
|
Interest expense, net
of interest income
|
|
|
|
|
17,970
|
Operating
income
|
$
22,279
|
|
$
29,767
|
|
$
52,046
|
|
|
|
|
|
|
Plus: depreciation and
amortization
|
26,515
|
|
6,798
|
|
33,313
|
EBITDA
|
$
48,794
|
|
$
36,565
|
|
$
85,359
|
|
|
|
|
|
|
Non-cash stock-based
compensation expense
|
$
2,471
|
|
$
2,354
|
|
$
4,825
|
Accretion of contract
rights
|
2,335
|
|
—
|
|
2,335
|
Litigation fees, net of
insurance proceeds received
|
—
|
|
(156)
|
|
(156)
|
Non-recurring
professional fees and other
|
119
|
|
—
|
|
119
|
Adjusted
EBITDA
|
$
53,719
|
|
$
38,763
|
|
$
92,482
|
|
|
|
|
|
|
Cash paid for interest,
net (1)
|
|
|
|
|
(22,139)
|
Cash paid for capital
expenditures
|
|
|
|
|
(29,821)
|
Cash paid for income
taxes, net
|
|
|
|
|
(465)
|
Free Cash
Flow
|
|
|
|
|
$
40,057
|
|
|
|
|
|
|
(1)
|
Cash paid for interest,
net includes the cash received for interest income of $2.9
million.
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/everi-reports-first-quarter-2024-results-302139258.html
SOURCE Everi Holdings Inc.