Initiates 2023 Annual Guidance
LAS
VEGAS, March 1, 2023 /PRNewswire/ -- Everi
Holdings Inc. (NYSE: EVRI) ("Everi" or the "Company") today
announced results for the fourth quarter and full year ended
December 31, 2022.
Fourth Quarter 2022 Highlights
- Revenues increased 14% to $205.4
million from $180.4 million a
year ago.
-
- FinTech segment revenues grew 23% to $92.2 million, reflecting a 102% increase in
hardware revenues, an 18% increase in software and other revenues,
and a 10% rise in financial access revenues.
- Games segment revenues rose 7%, reflecting a 12% increase in
unit sales revenue and a 5% rise in gaming operations
revenues.
- Recurring revenues grew 9% to $142.9
million and represented 70% of total revenues; non-recurring
revenues rose 28% to $62.5
million.
- Operating income increased 8%, while net income decreased to
$27.0 million, or $0.28 per diluted share, compared to $89.4 million, or $0.88 per diluted share, in the 2021 fourth
quarter. The prior-year period included a $63.5 million, or $0.62 per share, non-cash tax benefit related to
the reversal of a valuation allowance on certain deferred tax
assets; if excluded, earnings would have been $0.26 per diluted share.
- Adjusted EBITDA, a non-GAAP financial measure, increased to
$93.4 million compared to
$88.8 million in the 2021 fourth
quarter.
- Free Cash Flow, a non-GAAP financial measure, was
$41.7 million compared to
$19.7 million in the 2021 fourth
quarter, which included $31.5 million
for placement fees.
- Repurchased 2.1 million shares of stock for $35.0 million in the 2022 fourth
quarter.
Full Year 2022 Highlights
- Revenues increased 18% to $782.5
million from $660.4 million in
2021, reflecting a 16% increase in Games segment revenues and a 22%
increase in FinTech segment revenues. Organic growth was 15% and
acquisitions contributed 3%, or $21.4
million in revenues. Recurring revenues rose 12% to
$560.9 million and represented 72% of
total revenues.
- Net income was $120.5 million,
or $1.24 per diluted share, compared
to $152.9 million, or $1.53 per diluted share, in 2021 that included
the $63.5 million, or $0.62 per share, non-cash tax benefit noted
above.
- Adjusted EBITDA, a non-GAAP financial measure, increased 8%
to $374.1 million compared to
$347.2 million in 2021.
- Free Cash Flow, a non-GAAP financial measure, was an
all-time record $186.7 million, an
increase of 18% compared to $158.7
million generated in 2021.
- Repurchased 5.0 million shares of stock for $84.3 million during 2022, or 5.4% of the
then-outstanding shares at the initiation of the repurchase
program.
Randy Taylor, Chief Executive
Officer of Everi, said, "Everi ended 2022 with another quarter of
strong performance, including record fourth quarter revenue and
Adjusted EBITDA, which extended our record of successful execution
on our operating priorities. Our ongoing investments in new product
development and acquisitions helped grow our product portfolio and
addressable markets and are a key driver of our operating success
that resulted in an 18% revenue increase, an 8% rise in Adjusted
EBITDA and a record $186.7 million in
Free Cash Flow for the 2022 full year.
"Our team's great performance during the last several years
reflects the balance and diverse strengths across our operations -
Games, FinTech, Loyalty, Digital and Mobile. Together with our
solid balance sheet and strong Free Cash Flow generation, Everi is
favorably positioned for both consistent near- and long-term growth
through our continued investments in growth-focused internal
product development initiatives and high-value acquisitions, as
well as to return capital to shareholders through opportunistic
share repurchases. We expect our successful execution on our growth
initiatives, combined with our large percentage of high-margin
recurring revenues in our overall revenue mix, will help us
mitigate potential challenges of the uncertain macroeconomic
environment and enable us to continue delivering profitable growth
in 2023 and beyond."
Consolidated Full Quarter Comparative Results
(unaudited)
|
As of and for the
Three Months
Ended December 31,
|
|
2022
|
|
2021
|
|
(in millions, except
per share amounts)
|
Revenues
|
$
205.4
|
|
$
180.4
|
|
|
|
|
Operating
income(1)
|
$
51.6
|
|
$
47.9
|
|
|
|
|
Net
income(1)
|
$
27.0
|
|
$
89.4
|
|
|
|
|
Net earnings per
diluted share(1)
|
$
0.28
|
|
$
0.88
|
|
|
|
|
Weighted average
diluted shares outstanding
|
95.1
|
|
102.1
|
|
|
|
|
Adjusted EBITDA
(2)
|
$
93.4
|
|
$
88.8
|
|
|
|
|
Free Cash Flow
(2)
|
$
41.7
|
|
$
19.7
|
|
|
|
|
Cash and cash
equivalents
|
$
293.4
|
|
$
302.0
|
|
|
|
|
Net Cash Position
(3)
|
$
89.2
|
|
$
99.4
|
(1)
|
Operating income, net
income, and earnings per diluted share for the three months ended
December 31, 2022, included $0.4 million in professional fees
associated with acquisitions and non-recurring litigation costs,
net of litigation settlements. Operating income, net income and
earnings per diluted share for the three months ended December 31,
2021, included $0.4 million in pre-tax charges for costs related to
the consolidation and exiting of certain facilities and $0.5
million for professional fees associated with acquisitions. Net
income and earnings per diluted share for the three months ended
December 31, 2021, also included a $63.5 million non-cash tax
benefit related to the reversal of a valuation allowance on certain
deferred tax assets and $34.4 million of pre-tax loss on the
extinguishment of debt associated with the Company's refinancing of
its outstanding debt.
|
(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 toward the end of this release.
|
Fourth Quarter 2022 Results Overview
Revenues for the three-month period ended December 31, 2022 increased 14% to $205.4 million compared to $180.4 million in the fourth quarter of 2021.
Organic revenues increased $16.6
million, or 9%, while revenues from recent acquisitions
contributed $8.3 million, or 5%, of
the year-over-year growth. Recurring revenues increased 9% to
$142.9 million from $131.7 million in the prior-year period driven by
growth in both the Games and FinTech Segments. Revenues from
lower-margin, non-recurring sales grew 28% to $62.5 million.
Operating income increased 8% to $51.6
million compared to $47.9
million in the prior-year period. Operating expenses
declined as a percentage of revenues in the 2022 fourth quarter
compared to the prior-year period. Higher research and development
expense and depreciation costs reflect the impact of acquisitions
earlier in the year and organic development costs to support
ongoing growth initiatives. The change in revenue mix, arising from
greater growth in product sales, resulted in a lower operating
margin compared to the same period a year ago.
Net income was $27.0 million, or
$0.28 per diluted share, compared to
$89.4 million, or $0.88 per diluted share, in the fourth quarter of
2021. The provision for income taxes increased $60.5 million compared to the prior-year period.
The fourth quarter of 2021 benefited from the $63.5 million, or $0.62 per diluted share, reversal of the
valuation allowance on certain deferred tax assets.
Adjusted EBITDA increased 5% to $93.4
million from $88.8 million in
the prior-year period, inclusive of higher development costs to
support future growth.
Free Cash Flow was $41.7 million
compared with $19.7 million in the
year-ago period. The prior year period included $31.5 million in placement fees paid to extend an
agreement with a customer and to fund incremental game unit
placements with another customer.
Outlook
Everi today initiated full year 2023 guidance for net income of
$88 million to $100 million, Adjusted EBITDA of $384 million to $396
million and Free Cash Flow of $150
million to $160 million.
Diluted earnings per share are expected to be $0.93 to $1.05 and
Adjusted Diluted EPS, a non-GAAP financial measure, is expected to
be $1.50 to $1.65. The lower end of the guidance range
reflects the Company's expectation if macroeconomic conditions
cause a relatively flat industry environment for the full year.
Additional factors considered in the Company's full-year
expectations include:
- Net income guidance includes higher interest expense caused by
rising interest rates, as well as increased non-cash depreciation
and amortization related to recent acquisitions and the associated
intangible asset values recorded for purchase accounting.
- Free Cash Flow guidance is inclusive of internal capital
investments of approximately $15
million for the recently announced production facilities
consolidation and $18 million of
discrete capital projects focused on upgrading portions of the
Company's IT infrastructure and ERP systems.
- Revenue growth from product and hardware sales is expected to
continue to outpace growth of higher-margin recurring revenues,
reflecting contributions from recent acquisitions and the Company's
success in increasing its product sales market share.
A summary and reconciliation of the full year 2023 financial
targets are included in a supplemental table at the end of this
release.
Games Segment Full Quarter Comparative Results
(unaudited)
|
Three Months Ended
December 31,
|
|
2022
|
|
2021
|
|
(in millions, except
unit amounts and prices)
|
Games
revenues
|
|
|
|
Gaming operations -
Land-based casinos
|
$
67.2
|
|
$
65.7
|
Gaming operations -
Digital iGaming
|
6.2
|
|
4.1
|
Gaming operations -
Total
|
73.4
|
|
69.8
|
Gaming equipment and
systems
|
39.8
|
|
35.6
|
Games total
revenues
|
$
113.2
|
|
$
105.4
|
|
|
|
|
Operating income
(1)
|
$
25.2
|
|
$
26.0
|
|
|
|
|
Adjusted EBITDA
(2)
|
$
56.7
|
|
$
55.9
|
|
|
|
|
Research and
development expense
|
$
12.0
|
|
$
8.1
|
|
|
|
|
Capital
expenditures
|
$
23.3
|
|
$
23.8
|
|
|
|
|
Gaming operations
information:
|
|
|
|
Units installed at
period end:
|
|
|
|
Class II
|
10,342
|
|
9,719
|
Class III
|
7,633
|
|
7,184
|
Total installed base
at period end
|
17,975
|
|
16,903
|
|
|
|
|
Average units
installed during period
|
17,837
|
|
16,605
|
|
|
|
|
Daily win per unit
("DWPU") (3)
|
$
37.76
|
|
$
40.83
|
|
|
|
|
Unit sales
information:
|
|
|
|
Units sold
|
1,944
|
|
1,910
|
Average sales price
("ASP")
|
$
19,631
|
|
$
18,106
|
(1)
|
Operating income for
the three months ended December 31, 2022, included a gain of $0.2
million from certain non-recurring litigation settlements.
Operating income for the three months ended December 31, 2021,
included a $0.4 million charge for costs related to the
consolidation and exiting of certain facilities.
|
(2)
|
For a reconciliation of
net income and operating income to Adjusted EBITDA, see the
Unaudited Reconciliation of Selected Financial GAAP to Non-GAAP
measures provided toward the end of this release.
|
(3)
|
Daily win per unit
excludes the impact of the direct costs associated with the
Company's wide-area progressive jackpot expense.
|
2022 Fourth Quarter Games Segment Highlights
Games segment revenues increased 7% to $113.2 million compared to $105.4 million in the fourth quarter of
2021, primarily reflecting a 12% increase in revenues from gaming
machine sales and a 5% increase in gaming operations revenues,
including digital gaming operations. The acquisition of Intuicode
Gaming contributed $2.0 million in
revenues in the 2022 fourth quarter.
Operating income was $25.2 million compared to $26.0 million in the fourth quarter of 2021,
reflecting higher revenues from gaming machine sales, offset by
lower margins on machine sales due to increased supply chain costs,
as well as increased depreciation and amortization costs associated
with recent acquisitions. The Company also incurred higher internal
research and development expense reflecting an increased investment
in games development and engineering costs. Adjusted EBITDA rose to
$56.7 million, from $55.9 million in the fourth quarter of
2021.
Gaming operations revenues increased 5% to $73.4 million compared to $69.8 million a year ago.
- The installed base expanded to 17,975 units as of December 31, 2022, a 6% increase, or by 1,072
units, year over year and increased by 240 units on a quarterly
sequential basis. The premium portion of the installed base
represented 49% of the installed base compared to 46% at
December 31, 2021. Growth was driven
in part by continued placements of Smokin' Hot Stuff Fire and
Ice™ video units and the Company's premium mechanical reel
games.
- Daily Win per Unit ("DWPU") was $37.76 in the fourth quarter of 2022 compared to
$40.83 in the fourth quarter of 2021
and decreased 5% on a quarterly sequential basis primarily
reflecting typical quarterly industry seasonal influences.
- Revenues from digital gaming rose 51% to $6.2 million compared to $4.1 million in the fourth quarter of 2021. The
increase primarily reflects growth in the library of available slot
content along with an expansion in the number of Gaming operator
sites featuring Everi's games.
Gaming equipment and systems revenues generated from the sale of
gaming machines, including historical horse racing ("HHR") units
and other related parts and equipment, increased 12% to
$39.8 million compared to
$35.6 million in the fourth quarter
of 2021.
- The Company sold 1,944 gaming machines at an average selling
price ("ASP") of $19,631 in the 2022
fourth quarter, up 34 units from the 1,910 units sold at an ASP of
$18,106 in the 2021 fourth quarter.
Unit sales continue to reflect ongoing strength in sales of the
Player Classic Signature™ mechanical reel cabinet launched
in the first half of 2022, together with ongoing sales of the
player-popular Player Classic™ mechanical reel cabinet and
demand for the expanding game library supporting the Empire
Flex™ video reel cabinet. The Company's unique next-generation
video gaming cabinet, the Dynasty Vue, is expected to launch
in the second quarter of 2023 and will be supported by a broad
array of new game titles.
Financial Technology Solutions Segment Full Quarter
Comparative Results (unaudited)
|
Three Months Ended
December 31,
|
|
2022*
|
|
2021*
|
|
(in millions, unless
otherwise noted)
|
FinTech
revenues
|
|
|
|
Financial access
services
|
$
52.8
|
|
$
48.1
|
Software and
other
|
21.2
|
|
17.9
|
Hardware
|
18.2
|
|
9.0
|
FinTech total
revenues
|
$
92.2
|
|
$
75.0
|
|
|
|
|
Operating
income(1)
|
$
26.4
|
|
$
21.9
|
|
|
|
|
Adjusted EBITDA
(2)
|
$
36.7
|
|
$
32.8
|
|
|
|
|
Research and
development expenses
|
$
5.1
|
|
$
4.2
|
|
|
|
|
Capital
expenditures
|
$
12.0
|
|
$
7.6
|
|
|
|
|
Value of financial
access transactions:
|
|
|
|
Funds advanced
|
$
2,749.1
|
|
$
2,438.5
|
Funds dispensed
|
7,566.4
|
|
6,930.6
|
Check warranty
|
426.3
|
|
390.8
|
Total value
processed
|
$
10,741.8
|
|
$
9,759.9
|
|
|
|
|
Number of financial
access transactions:
|
|
|
|
Funds advanced
|
3.6
|
|
3.3
|
Funds dispensed
|
28.9
|
|
27.0
|
Check warranty
|
0.8
|
|
0.9
|
Total transactions
completed
|
33.3
|
|
31.2
|
(1)
|
Operating income for
the three months ended December 31, 2022, included $0.6 million for
professional fees associated with certain acquisitions and
non-recurring litigation costs.
|
(2)
|
For a reconciliation of
net income and operating income to Adjusted EBITDA, see the
Unaudited Reconciliation of Selected Financial GAAP to Non-GAAP
Measures provided toward the end of this release.
|
2022 Fourth Quarter Financial Technology Solutions
("FinTech") Segment Highlights
FinTech revenues for the 2022 fourth quarter increased 23% to
$92.2 million compared to
$75.0 million in the fourth quarter
of 2021, reflecting 10% growth in financial access services, an 18%
gain in software and other revenues, and a 102% increase in
hardware sales. Organic growth of 15% was complemented by
$6.3 million in revenues from the
acquisitions of ecash Holdings and Venuetize.
Operating income increased 21% to $26.4 million compared to $21.9 million in the prior-year period,
reflecting higher revenues partially offset by higher depreciation
and amortization related to recent acquisitions and increased
research and development expense for new and enhanced products.
Adjusted EBITDA rose 12% to $36.7 million compared to $32.8 million in the 2021 fourth
quarter.
- Financial access services revenues, which include cashless and
cash-dispensing debit and credit card transactions and check
services, increased 10% versus the 2021 fourth quarter to
$52.8 million, reflecting higher
same-store financial funding transactions, as well as continued
growth from new customer additions. Funds delivered to casino
floors increased 10% to $10.7 billion
on a 7% increase in the number of completed financial transactions
together with an increase in average transaction size. While
representing less than 5% of funding transactions, cashless
transactions (including both digital wallet and paper gaming
voucher transactions) increased 42% over the 2021 fourth quarter.
The Company's CashClub Wallet technology is currently
deployed or being deployed across 21 jurisdictions at 42
casinos.
- Software and other revenues, which include Loyalty and RegTech
software, product subscriptions, kiosk maintenance services, and
other revenues, rose 18% to $21.2 million in the fourth quarter of 2022
compared to $17.9 million in the fourth quarter 2021.
Approximately 79% and 76% of software and other revenues were of a
recurring nature in the 2022 and 2021 fourth quarter periods,
respectively.
- Hardware sales revenues increased 102% to $18.2 million compared to $9.0 million in the fourth quarter of 2021,
reflecting a 52% increase in organic sales of the Company's
hardware and software solutions that delivered optimal performance
and improved cost efficiencies to casino operators, as well as
$4.5 million of revenues from ecash
Holdings' voucher redemption kiosks.
Balance Sheet, Liquidity and Cash Flow
- As of December 31, 2022, the
Company had $293.4 million of cash
and cash equivalents compared with $258.6
million as of September 30,
2022. The Net Cash Position was $89.2
million compared with $103.1
million as of September 30,
2022.
- Cash paid for interest was $12.7
million in the 2022 fourth quarter compared with
$6.1 million in the year-ago period,
primarily due to the impact of rising interest rates on the
Company's variable-rate term debt and third-party commercial cash
arrangements associated with certain of the Company's funding of
financial access services. The interest expense on the commercial
arrangements was $3.6 million for the
2022 fourth quarter on a daily average balance of $323.0 million and $8.3
million on an average daily balance of $349.8 million for the full year.
- The Company repurchased 2.1 million shares of its common stock
for total consideration of $35.0
million during the 2022 fourth quarter, and as of
December 31, 2022, had $65.7 million remaining under the existing
$150 million share repurchase program
approved by the Board in the 2022 second quarter.
- During the 2022 fourth quarter the Company closed on its
acquisition of substantially all of the assets of Venuetize, Inc.,
paying $18.2 million, with additional
performance-based payments of $2
million to $6 million expected
during the next 30 months following close.
Investor Conference Call and Webcast
The Company will host an investor conference call to discuss its
2022 fourth quarter and full year results at 11:00 a.m. EST (8:00 a.m.
PST) 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. ET
today and may be accessed by dialing +1 (412) 317-6671; the PIN
number is 13735707. A replay will be available until March 8, 2023. The call also will be webcast live
and archived on www.everi.com (select "Investors" followed by
"Events & Contact").
Non-GAAP Financial Information
In order to enhance investor understanding of the underlying
trends in our business, our cash balance, and cash available for
our operating needs, and to provide for better comparability
between periods in different years, we are providing in this press
release Adjusted EBITDA, Free Cash Flow, Adjusted Diluted EPS, 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, loss on extinguishment of debt,
non-cash stock compensation expense, accretion of contract rights,
non-recurring litigation costs net of settlements received,
facilities consolidation costs, asset acquisition expense,
non-recurring professional fees, and 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, 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 Adjusted Diluted EPS as earnings per diluted share
before non-cash stock compensation expense, accretion of contract
rights, amortization of acquired intangible assets, non-recurring
litigation costs net of settlements received, facilities
consolidation costs, asset acquisition expense, non-recurring
professional fees, and one-time charges and benefits. We consider
Adjusted Diluted EPS as a supplemental measure to our operating
performance and believe it provides investors with another
indicator of our operating performance. A reconciliation of the
Company's diluted earnings per share per GAAP to Adjusted Diluted
EPS is included in the Unaudited Reconciliation of diluted earnings
per share to Adjusted Diluted EPS provided at the end of this
release.
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," "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 2023 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 portions of the gaming floor
the Company's games address, including into the Historical Horse
Racing category of gaming devices and the Company's overall
targeted ship share of gaming machines sold; successfully
performing obligations required by acquisition agreements; 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: 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 the COVID-19 or
other global 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
innovations that address customer needs in a new and evolving
operating environment; to enhance shareholder value in the
long-term; trends in gaming establishment 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; 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 arrangements; inaccuracies in underlying
operating assumptions; our ability to withstand direct and indirect
impacts of a pandemic outbreak or other public health crisis 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, 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
establishment 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, and compromises; national and
international economic and industry conditions; changes in gaming
regulatory, financial regulatory, legal, card association, and
statutory 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; technological
obsolescence and our ability to adapt to evolving technologies;
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, 2022 (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 on Form 10-K for the year ended December 31, 2022, and with the information
included in our other press releases, reports and other filings
with the SEC. 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 and
services for land-based and iGaming 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, which is updated regularly with financial and other
information about the Company.
Investor Relations
Contacts:
|
|
|
|
Everi Holdings
Inc.
|
JCIR
|
William
Pfund
|
Richard Land, James
Leahy
|
SVP, Investor
Relations
|
212-835-8500 or
evri@jcir.com
|
702-676-9513 or
william.pfund@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
December 31,
|
|
Year Ended December
31,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Revenues
|
|
|
|
|
|
|
|
|
Games
revenues
|
|
|
|
|
|
|
|
|
Gaming operations
|
|
$
73,436
|
|
$
69,862
|
|
$
292,873
|
|
$
272,885
|
Gaming equipment and
systems
|
|
39,787
|
|
35,546
|
|
143,553
|
|
103,844
|
Games total revenues
|
|
113,223
|
|
105,408
|
|
436,426
|
|
376,729
|
FinTech
revenues
|
|
|
|
|
|
|
|
|
Financial access
services
|
|
52,809
|
|
48,046
|
|
206,860
|
|
178,019
|
Software and
other
|
|
21,176
|
|
17,923
|
|
80,232
|
|
67,797
|
Hardware
|
|
18,155
|
|
9,011
|
|
59,001
|
|
37,840
|
FinTech total revenues
|
|
92,140
|
|
74,980
|
|
346,093
|
|
283,656
|
Total revenues
|
|
205,363
|
|
180,388
|
|
782,519
|
|
660,385
|
Costs and
expenses
|
|
|
|
|
|
|
|
|
Games
cost of revenues
|
|
|
|
|
|
|
|
|
Gaming operations
|
|
6,479
|
|
5,887
|
|
25,153
|
|
21,663
|
Gaming equipment and
systems
|
|
23,917
|
|
21,035
|
|
86,638
|
|
60,093
|
Games total cost of revenues
|
|
30,396
|
|
26,922
|
|
111,791
|
|
81,756
|
FinTech
cost of revenues
|
|
|
|
|
|
|
|
|
Financial access
services
|
|
2,781
|
|
1,916
|
|
10,186
|
|
6,779
|
Software and
other
|
|
1,141
|
|
933
|
|
4,125
|
|
4,129
|
Hardware
|
|
12,146
|
|
5,707
|
|
39,220
|
|
22,785
|
FinTech total cost of revenues
|
|
16,068
|
|
8,556
|
|
53,531
|
|
33,693
|
Operating
expenses
|
|
55,729
|
|
55,580
|
|
216,959
|
|
188,900
|
Research and
development
|
|
17,141
|
|
12,252
|
|
60,527
|
|
39,051
|
Depreciation
|
|
18,459
|
|
14,916
|
|
66,801
|
|
61,487
|
Amortization
|
|
15,976
|
|
14,307
|
|
59,558
|
|
57,987
|
Total costs and
expenses
|
|
153,769
|
|
132,533
|
|
569,167
|
|
462,874
|
Operating
income
|
|
$
51,594
|
|
$
47,855
|
|
$
213,352
|
|
$
197,511
|
Other
expenses
|
|
|
|
|
|
|
|
|
Interest expense, net
of interest income
|
|
17,230
|
|
11,609
|
|
55,752
|
|
62,097
|
Loss on extinguishment
of debt
|
|
—
|
|
—
|
|
—
|
|
34,389
|
Total other
expenses
|
|
17,230
|
|
11,609
|
|
55,752
|
|
96,486
|
Income before
income tax
|
|
34,364
|
|
36,246
|
|
157,600
|
|
101,025
|
Income tax provision
(benefit)
|
|
7,327
|
|
(53,185)
|
|
37,111
|
|
(51,900)
|
Net
income
|
|
27,037
|
|
89,431
|
|
120,489
|
|
152,925
|
Foreign currency
translation gain (loss)
|
|
1,923
|
|
71
|
|
(2,742)
|
|
(264)
|
Comprehensive
income
|
|
$
28,960
|
|
$
89,502
|
|
$
117,747
|
|
$
152,661
|
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.30
|
|
$
0.98
|
|
$
1.33
|
|
$
1.71
|
Diluted
|
|
$
0.28
|
|
$
0.88
|
|
$
1.24
|
|
$
1.53
|
Weighted average
common shares outstanding
|
|
|
|
|
|
|
|
|
Basic
|
|
88,879
|
|
91,206
|
|
90,494
|
|
89,284
|
Diluted
|
|
95,128
|
|
102,081
|
|
97,507
|
|
99,967
|
EVERI HOLDINGS
INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(In thousands,
except par value amounts)
|
|
|
At December
31,
|
|
2022
|
|
2021
|
ASSETS
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
293,394
|
|
$
302,009
|
Settlement
receivables
|
263,745
|
|
89,275
|
Trade and other
receivables, net of allowances for credit losses of $4,855 and
$5,161 at December 31, 2022 and December 31, 2021,
respectively
|
118,895
|
|
104,822
|
Inventory
|
58,350
|
|
29,233
|
Prepaid expenses and
other current assets
|
38,822
|
|
27,299
|
Total current
assets
|
773,206
|
|
552,638
|
Non-current
assets
|
|
|
|
Property and
equipment, net
|
133,645
|
|
119,993
|
Goodwill
|
715,870
|
|
682,663
|
Other intangible
assets, net
|
238,275
|
|
214,594
|
Other
receivables
|
27,757
|
|
13,982
|
Deferred tax assets,
net
|
1,584
|
|
32,121
|
Other
assets
|
27,906
|
|
19,659
|
Total non-current
assets
|
1,145,037
|
|
1,083,012
|
Total
assets
|
$
1,918,243
|
|
$
1,635,650
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities
|
|
|
|
Settlement
liabilities
|
$
467,903
|
|
$
291,861
|
Accounts payable
and accrued expenses
|
217,424
|
|
173,933
|
Current portion
of long-term debt
|
6,000
|
|
6,000
|
Total current
liabilities
|
691,327
|
|
471,794
|
Non-current
liabilities
|
|
|
|
Deferred tax
liabilities, net
|
5,994
|
|
—
|
Long-term debt, less
current portion
|
971,995
|
|
975,525
|
Other accrued expenses
and liabilities
|
31,286
|
|
13,831
|
Total non-current
liabilities
|
1,009,275
|
|
989,356
|
Total
liabilities
|
1,700,602
|
|
1,461,150
|
Commitments and
contingencies
|
|
|
|
Stockholders'
equity
|
|
|
|
Common stock, $0.001
par value, 500,000 shares authorized and 119,390 and 88,036 shares
issued and outstanding at December 31, 2022, respectively, and
116,996 and 91,313 shares issued and outstanding at December
31, 2021, respectively
|
119
|
|
117
|
Convertible preferred
stock, 0.001 par value, 50,000 shares authorized and no shares
outstanding at December 31, 2022 and December 31, 2021,
respectively
|
—
|
|
—
|
Additional paid-in
capital
|
527,465
|
|
505,757
|
Accumulated
deficit
|
(21,266)
|
|
(141,755)
|
Accumulated other
comprehensive loss
|
(4,197)
|
|
(1,455)
|
Treasury stock, at
cost, 31,353 and 25,683 shares at December 31, 2022 and December
31, 2021, respectively
|
(284,480)
|
|
(188,164)
|
Total stockholders'
equity
|
217,641
|
|
174,500
|
Total liabilities
and stockholders' equity
|
$
1,918,243
|
|
$
1,635,650
|
EVERI HOLDINGS INC. AND
SUBSIDIARIES
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
|
(In
thousands)
|
|
|
Year Ended December
31,
|
|
2022
|
|
2021
|
Cash flows from
operating activities
|
|
|
|
Net income
|
$
120,489
|
|
$
152,925
|
Adjustments to
reconcile net income to cash provided by operating
activities:
|
|
|
|
Depreciation
|
66,801
|
|
61,487
|
Amortization
|
59,558
|
|
57,987
|
Non-cash lease
expense
|
4,847
|
|
4,401
|
Amortization of
financing costs and discounts
|
2,854
|
|
3,937
|
Loss on sale or
disposal of assets
|
591
|
|
1,658
|
Accretion of contract
rights
|
9,578
|
|
9,318
|
Provision for credit
losses
|
10,115
|
|
7,540
|
Deferred income
taxes
|
32,618
|
|
(52,077)
|
Reserve for inventory
obsolescence
|
792
|
|
2,275
|
Loss on extinguishment
of debt
|
—
|
|
34,389
|
Stock-based
compensation
|
19,789
|
|
20,900
|
Other non-cash
items
|
—
|
|
53
|
Changes in operating
assets and liabilities:
|
|
|
|
Settlement
receivables
|
(174,604)
|
|
(28,624)
|
Trade and other
receivables
|
(30,974)
|
|
(37,617)
|
Inventory
|
(26,314)
|
|
(3,755)
|
Prepaid expenses and
other assets
|
(25,717)
|
|
(10,219)
|
Settlement
liabilities
|
176,274
|
|
118,651
|
Accounts payable and
accrued expenses
|
25,944
|
|
48,401
|
Net cash provided
by operating activities
|
272,641
|
|
391,630
|
Cash flows from
investing activities
|
|
|
|
Capital
expenditures
|
(127,568)
|
|
(104,708)
|
Acquisitions, net of
cash acquired
|
(51,450)
|
|
(16,000)
|
Proceeds from sale of
property and equipment
|
227
|
|
261
|
Placement fee
agreements
|
(547)
|
|
(31,465)
|
Net cash used in
investing activities
|
(179,338)
|
|
(151,912)
|
Cash flows from
financing activities
|
|
|
|
Proceeds from new term
loan
|
—
|
|
600,000
|
Repayments of new term
loan
|
(6,000)
|
|
(1,500)
|
Repayments of prior
term loan
|
—
|
|
(735,500)
|
Repayment of prior
incremental term loan
|
—
|
|
(124,375)
|
Proceeds from 2021
unsecured notes
|
—
|
|
400,000
|
Repayments of 2017
unsecured notes
|
—
|
|
(285,381)
|
Fees associated with
debt transactions — new debt
|
—
|
|
(19,797)
|
Fees associated with
debt transactions — prior debt
|
—
|
|
(20,828)
|
Proceeds from exercise
of stock options
|
1,921
|
|
18,251
|
Treasury stock -
restricted share vestings and withholdings
|
(11,969)
|
|
(9,354)
|
Treasury stock -
repurchase of shares
|
(84,347)
|
|
—
|
Payment of acquisition
contingent consideration
|
(173)
|
|
(9,875)
|
Net cash used in
financing activities
|
(100,568)
|
|
(188,359)
|
Effect of exchange
rates on cash and cash equivalents
|
(1,398)
|
|
18
|
Cash, cash
equivalents and restricted cash
|
|
|
|
Net (decrease)
increase for the period
|
(8,663)
|
|
51,377
|
Balance, beginning of
the period
|
303,726
|
|
252,349
|
Balance, end of the
period
|
$
295,063
|
|
$
303,726
|
EVERI HOLDINGS INC. AND
SUBSIDIARIES
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
|
(In
thousands)
|
|
|
Year Ended December
31,
|
|
2022
|
|
2021
|
Supplemental cash
disclosures
|
|
|
|
Cash paid for
interest
|
$
54,749
|
|
$
51,224
|
Cash paid for income
tax, net of refunds
|
4,522
|
|
1,062
|
Supplemental
non-cash disclosures
|
|
|
|
Accrued and unpaid
capital expenditures
|
$
3,222
|
|
$
3,690
|
Transfer of leased
gaming equipment to inventory
|
9,588
|
|
8,782
|
EVERI HOLDINGS INC. AND
SUBSIDIARIES
|
UNAUDITED
RECONCILIATION OF CASH AND CASH EQUIVALENTS
|
TO NET CASH POSITION
AND NET CASH AVAILABLE
|
(In
thousands)
|
|
|
At December
31,
|
|
2022
|
|
2021
|
Cash
available
|
|
|
|
Cash and cash
equivalents (1)
|
$
293,394
|
|
$
302,009
|
Settlement
receivables
|
263,745
|
|
89,275
|
Settlement
liabilities
|
(467,903)
|
|
(291,861)
|
Net Cash
Position
|
89,236
|
|
99,423
|
|
|
|
|
Undrawn revolving
credit facility
|
125,000
|
|
125,000
|
Net Cash
Available
|
$
214,236
|
|
$
224,423
|
(1)
|
Cash and cash
equivalents does not include $1.7 million of restricted cash at
each of December 31, 2022 and 2021, respectively.
|
EVERI HOLDINGS INC. AND
SUBSIDIARIES
|
UNAUDITED
RECONCILIATION OF SELECTED FINANCIAL GAAP TO NON-GAAP
MEASURES
|
(In
thousands)
|
|
|
Three Months Ended
December 31, 2022
|
|
Games
|
|
FinTech
|
|
Total
|
Net
income
|
|
|
|
|
$
27,037
|
Income tax
provision
|
|
|
|
|
7,327
|
Interest expense, net
of interest income
|
|
|
|
|
17,230
|
Operating
income
|
$
25,174
|
|
$
26,420
|
|
$
51,594
|
|
|
|
|
|
|
Plus: depreciation and
amortization
|
27,084
|
|
7,351
|
|
34,435
|
EBITDA
|
$
52,258
|
|
$
33,771
|
|
$
86,029
|
|
|
|
|
|
|
Non-cash stock-based
compensation expense
|
2,464
|
|
2,313
|
|
4,777
|
Accretion of contract
rights
|
2,210
|
|
—
|
|
2,210
|
Facilities
consolidation costs
|
8
|
|
—
|
|
8
|
Litigation fees, net of
settlements received
|
(194)
|
|
508
|
|
314
|
Non-recurring
professional fees and other
|
—
|
|
63
|
|
$
63
|
Adjusted
EBITDA
|
$
56,746
|
|
$
36,655
|
|
$
93,401
|
|
|
|
|
|
|
Cash paid for
interest
|
|
|
|
|
(12,679)
|
Cash paid for capital
expenditures
|
|
|
|
|
(35,343)
|
Cash paid for income
taxes, net
|
|
|
|
|
(3,676)
|
Free Cash
Flow
|
|
|
|
|
$
41,703
|
EVERI HOLDINGS INC. AND
SUBSIDIARIES
|
UNAUDITED
RECONCILIATION OF SELECTED FINANCIAL GAAP TO NON-GAAP
MEASURES
|
(In
thousands)
|
|
|
Three Months Ended
December 31, 2021
|
|
Games
|
|
FinTech
|
|
Total
|
Net
income
|
|
|
|
|
$
89,431
|
Income tax
benefit
|
|
|
|
|
(53,185)
|
Interest expense, net
of interest income
|
|
|
|
|
11,609
|
Operating
income
|
$
25,957
|
|
$
21,898
|
|
$
47,855
|
|
|
|
|
|
|
Plus: depreciation and
amortization
|
23,156
|
|
6,067
|
|
29,223
|
EBITDA
|
$
49,113
|
|
$
27,965
|
|
$
77,078
|
|
|
|
|
|
|
Non-cash stock-based
compensation expense
|
4,095
|
|
4,401
|
|
8,496
|
Accretion of contract
rights
|
2,352
|
|
—
|
|
2,352
|
Facilities
consolidation costs
|
365
|
|
—
|
|
365
|
Non-recurring
professional fees and other
|
—
|
|
476
|
|
476
|
Adjusted
EBITDA
|
$
55,925
|
|
$
32,842
|
|
$
88,767
|
|
|
|
|
|
|
Cash paid for
interest
|
|
|
|
|
(6,057)
|
Cash paid for capital
expenditures
|
|
|
|
|
(31,420)
|
Cash paid for placement
fees
|
|
|
|
|
(31,465)
|
Cash paid for income
taxes, net
|
|
|
|
|
(87)
|
Free Cash
Flow
|
|
|
|
|
$
19,738
|
EVERI HOLDINGS INC. AND
SUBSIDIARIES
|
UNAUDITED
RECONCILIATION OF SELECTED FINANCIAL GAAP TO NON-GAAP
MEASURES
|
(In
thousands)
|
|
|
Year Ended December
31, 2022
|
|
Games
|
|
FinTech
|
|
Total
|
Net
income
|
|
|
|
|
$
120,489
|
Income tax
provision
|
|
|
|
|
37,111
|
Interest expense, net
of interest income
|
|
|
|
|
55,752
|
Operating
income
|
$
107,636
|
|
$
105,716
|
|
$
213,352
|
|
|
|
|
|
|
Plus: depreciation and
amortization
|
100,150
|
|
26,209
|
|
126,359
|
EBITDA
|
$
207,786
|
|
$
131,925
|
|
$
339,711
|
|
|
|
|
|
|
Non-cash stock-based
compensation expense
|
10,178
|
|
9,611
|
|
19,789
|
Accretion of contract
rights
|
9,578
|
|
—
|
|
9,578
|
Facilities
consolidation costs
|
686
|
|
—
|
|
686
|
Litigation fees, net of
settlements received
|
(194)
|
|
2,485
|
|
2,291
|
Non-recurring
professional fees and other
|
38
|
|
1,989
|
|
2,027
|
Adjusted
EBITDA
|
$
228,072
|
|
$
146,010
|
|
$
374,082
|
|
|
|
|
|
|
Cash paid for
interest
|
|
|
|
|
(54,749)
|
Cash paid for capital
expenditures
|
|
|
|
|
(127,568)
|
Cash paid for placement
fees
|
|
|
|
|
(547)
|
Cash paid for income
taxes, net
|
|
|
|
|
(4,522)
|
Free Cash
Flow
|
|
|
|
|
$
186,696
|
EVERI HOLDINGS INC. AND
SUBSIDIARIES
|
UNAUDITED
RECONCILIATION OF SELECTED FINANCIAL GAAP TO NON-GAAP
MEASURES
|
(In
thousands)
|
|
|
Year Ended December
31, 2021
|
|
Games
|
|
FinTech
|
|
Total
|
Net
income
|
|
|
|
|
$
152,925
|
Income tax
benefit
|
|
|
|
|
(51,900)
|
Loss on extinguishment
of debt
|
|
|
|
|
34,389
|
Interest expense, net
of interest income
|
|
|
|
|
62,097
|
Operating
income
|
$
102,021
|
|
$
95,490
|
|
$
197,511
|
|
|
|
|
|
|
Plus: depreciation and
amortization
|
96,742
|
|
22,732
|
|
119,474
|
EBITDA
|
$
198,763
|
|
$
118,222
|
|
$
316,985
|
|
|
|
|
|
|
Non-cash stock-based
compensation expense
|
10,170
|
|
10,730
|
|
20,900
|
Accretion of contract
rights
|
9,318
|
|
—
|
|
9,318
|
Litigation settlement,
net
|
—
|
|
(1,107)
|
|
(1,107)
|
Facilities
consolidation costs
|
365
|
|
—
|
|
365
|
Asset acquisition
expense, non-recurring professional fees and other
|
—
|
|
744
|
|
744
|
Adjusted
EBITDA
|
$
218,616
|
|
$
128,589
|
|
$
347,205
|
|
|
|
|
|
|
Cash paid for
interest
|
|
|
|
|
(51,224)
|
Cash paid for capital
expenditures
|
|
|
|
|
(104,708)
|
Cash paid for placement
fees
|
|
|
|
|
(31,465)
|
Cash paid for income
taxes, net
|
|
|
|
|
(1,062)
|
Free Cash
Flow
|
|
|
|
|
$
158,746
|
EVERI HOLDINGS INC. AND
SUBSIDIARIES
|
UNAUDITED
RECONCILIATION OF PROJECTED NET INCOME TO PROJECTED EBITDA TO
PROJECTED ADJUSTED EBITDA, AND TO PROJECTED FREE CASH
FLOW
|
FOR THE YEAR ENDING
DECEMBER 31, 2023
|
(In
thousands)
|
|
|
2023 Guidance Range
(1)
|
|
|
|
|
Projected net
income
|
$
88,000
|
|
$
100,000
|
|
|
|
|
Projected income tax
provision @ 23% - 24%
|
28,000
|
|
32,000
|
Projected interest
expense, net of interest income
|
84,000
|
|
78,000
|
Projected operating
income
|
$
200,000
|
|
$
210,000
|
Plus: projected
depreciation and amortization
|
143,000
|
|
148,000
|
Projected
EBITDA
|
$
343,000
|
|
$
358,000
|
|
|
|
|
Projected non-cash
stock compensation expense
|
21,000
|
|
22,000
|
Projected accretion of
contract rights
|
12,000
|
|
10,000
|
Projected facilities
consolidation costs, asset acquisition and non-recurring
professional fees, and certain litigation fees
|
8,000
|
|
6,000
|
Projected Adjusted
EBITDA
|
$
384,000
|
|
$
396,000
|
|
|
|
|
Projected cash paid for
interest, net of interest income
|
(84,000)
|
|
(78,000)
|
Projected cash paid for
capital expenditures
|
(113,000)
|
|
(120,000)
|
Projected cash paid for
new production facility and IT infrastructure
expenditures
|
(33,000)
|
|
(32,000)
|
Projected cash paid for
placement fees
|
(1,000)
|
|
(500)
|
Projected cash paid for
income taxes, net of refunds
|
(3,000)
|
|
(5,500)
|
Projected Free Cash
Flow
|
$
150,000
|
|
$
160,000
|
EVERI HOLDINGS INC. AND
SUBSIDIARIES
|
UNAUDITED
RECONCILIATION OF PROJECTED DILUTED EARNINGS PER SHARE
TO
|
PROJECTED ADJUSTED
DILUTED EPS
|
FOR THE YEAR ENDING
DECEMBER 31, 2023
|
(In
thousands)
|
|
|
2023 Guidance Range
(1)
|
|
|
|
|
Projected net
income
|
$
88,000
|
|
$
100,000
|
Projected weighted
average common shares - diluted
|
95,100
|
|
95,100
|
Projected diluted
earnings per share
|
$
0.93
|
|
$
1.05
|
|
|
|
|
Projected non-cash
stock compensation expense per share (2)
|
0.17
|
|
0.18
|
Projected amortization
of acquired intangible assets (2)(3)
|
0.24
|
|
0.30
|
Projected accretion of
contract rights per share (2)
|
0.10
|
|
0.08
|
Projected facilities
consolidation costs, asset acquisition and non-recurring
professional fees, and certain litigation fees
(2)
|
$
0.06
|
|
$
0.04
|
Projected Adjusted
Diluted EPS
|
$
1.50
|
|
$
1.65
|
(1)
|
All figures presented
are projected estimates for the year ending December 31,
2023.
|
(2)
|
Projected amounts are
inclusive of estimated tax impact at 24%.
|
(3)
|
Includes the
amortization of developed technology, customer contracts and
relationships, trade names and other similar items with fair values
assigned in connection with the purchase accounting valuation
process that the Company acquired through various business
combinations.
|
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SOURCE Everi Holdings Inc.