EX-99.1 2 q321exhibit991.htm EX-99.1 Document

Exhibit 99.1
everi-logo.jpg
                                
EVERI REPORTS 2021 THIRD QUARTER RESULTS
Growth in Games and FinTech Segments Drives Quarterly Record Recurring Revenue
Raises Full-year Revenue and Earnings Guidance

Las Vegas – November 3, 2021 - Everi Holdings Inc. (NYSE: EVRI) (“Everi” or the “Company”), a premier provider of land-based and digital casino gaming content and products, financial technology and player loyalty solutions, today announced third quarter results for the period ended September 30, 2021.
Third Quarter 2021 Financial Highlights and Updated Full Year Outlook
As the third quarter 2020 financial results were significantly impacted by the COVID-19 pandemic, Everi believes a more meaningful comparison for its 2021 third quarter results and an indication of its growth is to the 2019 third quarter results, for which revenues and Adjusted EBITDA were higher than in the 2020 third quarter. Financial results for the 2021, 2020 and 2019 third quarter periods are presented in the Consolidated, Games and Financial Technology Solutions comparative results tables below.

•Revenues rose 25% to $168.3 million, compared to $134.6 million in the 2019 third quarter.
•Operating income more than doubled to a record $55.1 million compared to $27.3 million in the 2019 third quarter. Net income, inclusive of $34.4 million in pre-tax costs for the extinguishment of debt associated with the Company's refinancing of its outstanding debt in the quarter, decreased to $6.7 million, or $0.07 per diluted share, compared to $9.3 million, or $0.12 per diluted share, in the 2019 third quarter.
•Adjusted EBITDA, a non-GAAP financial measure, increased 40% to $90.6 million, compared to $64.7 million in the 2019 third quarter.
•Free Cash Flow, a non-GAAP financial measure, increased more than fivefold to a quarterly record of $56.3 million, compared to $11.1 million in the 2019 third quarter.
•Company now expects full year revenue of $645 million to $653 million, net income of $98 million to $100 million, Adjusted EBITDA of $342 million to $346 million and Free Cash Flow of $155 million to $160 million.
Michael Rumbolz, Chief Executive Officer of Everi, said, “The growth in our third quarter revenue, operating earnings and Free Cash Flow demonstrate the substantial ongoing momentum in our financial performance. We expect that further growth across both our Games and FinTech segments will continue for the remainder of this year and into 2022 and beyond. We expect to continue to benefit from the expansion of our installed base of leased gaming units, growth in ship share, same-store increases in financial access transactions, and the ongoing organic growth of our loyalty and regulatory compliance solutions. We believe the ongoing strength across both businesses and our deep pipeline of new offerings will drive consistent earnings and revenue growth as well as the continued generation of significant Free Cash Flow.
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“The favorable customer reaction to our newest products at G2E® last month bolsters our confidence in our near- and long-term outlook. For our Games segment, the scale of our newest content continues to increase with well-received new themes introduced across the spectrum of premium video, premium mechanical, standard video, standard mechanical, and wide-area progressive (“WAP”) machines. New premium games such as Cashnado™ and Smokin’ Hot Stuff Wicked Wheel Fire and Ice® further demonstrated to customers our commitment to offer both new themes and support of our popular hit franchises, while our unique for-sale Cha Ching™ and Moneyline™ games for the high-performing Empire Flex® portrait cabinet highlight the creativity and innovation of our game design teams. Everi’s development teams continue to create products that raise the level of gaming entertainment and thereby offer an attractive return on the investments our customers make in our gaming products.

“Our portfolio of integrated FinTech products and services is more comprehensive and provides more value to casino operators than ever before and our newest offerings were similarly met with very favorable response at G2E. Our omni-channel, digital Cashclub Wallet® was a highlight of the show, including our demonstration of its seamless integration with our mobile-player loyalty offering. New products, such as MetersXpress™ and PitXpress™, which extends our Digital Neighborhood to the casino pit, provide key process efficiencies. With the strength and depth of our newest products and core offerings, Everi is favorably positioned to execute on our significant opportunities to gain market share and deliver consistent future growth across our Games and FinTech businesses.”
Consolidated Full Quarter Comparative Results (unaudited)
 As of and for the Three Months Ended September 30,
 202120202019
 (in millions, except per share amounts)
Consolidated revenue$168.3 $112.1 $134.6 
Operating income$55.1 $19.7 $27.3 
Net income (loss)$6.7 $(0.9)$9.3 
Net earnings (loss) per diluted share$0.07 $(0.01)$0.12 
Diluted shares outstanding (1)
101.4 85.6 79.1 
Adjusted EBITDA (2)
$90.6 $59.8 $64.7 
Free Cash Flow (2)
$56.3 $22.8 $11.1 
Principal amount of outstanding debt (3)
$1,000.0 $1,145.6 $1,157.0 
Cash and cash equivalents$215.6 $235.4 $275.7 
Net Cash Position (4)
$88.6 $128.3 $33.3 
(1) In December 2019, the Company completed a public offering of 11.5 million shares of common stock. Weighted average basic shares outstanding were 90.3 million, 85.6 million, and 72.3 million shares for the three months ended September 30, 2021, 2020, and 2019, respectively.
(2) For a reconciliation of net income (loss) to Adjusted EBITDA and Free Cash Flow, see the Unaudited Reconciliation of Selected Financial GAAP to Non-GAAP Measures provided at the end of this release.
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(3) In the third quarter of 2021, the Company reduced its total outstanding debt to $1.0 billion through the successful issuance of $400 million of 5.000% senior unsecured notes due 2029 and $600 million of senior secured term loan, along with a $125 million revolving credit facility that is currently undrawn. In completing the transactions on August 3, 2021, the Company used cash on hand to pay the transaction fees and expenses and reduce the total debt outstanding by $144.6 million.
(4) 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 at the end of this release.

Third Quarter 2021 Results Overview
Results for the three-month period ended September 30, 2021 continued to reflect the impact of the COVID-19 pandemic, albeit to a lesser extent than recent quarterly periods. Third quarter 2020 results reflect a significant impact of COVID-19, while 2019 results were unimpacted by the pandemic.
Randy Taylor, Everi’s Chief Operating Officer, said, “Our strong quarterly financial results are directly correlated to the continued successful execution of our strategic growth initiatives, leading to consistent new demand for our products. A key driver of our operating momentum is the continued growth of our high-margin, recurring revenue streams, which increased to more than $131 million, a quarterly record. This strength translates to improved cash flow, which provides additional capital we can allocate towards return-focused investments in product innovation to drive sustainable growth, as well as the flexibility to pursue and successfully integrate and scale accretive bolt-on acquisitions.

“Growth in our FinTech business continues to reflect improvements in financial access services, loyalty and RegTech software solutions from new and existing customers, as well as double-digit growth in same-store financial access transactions and dollars processed. In addition, we are achieving consistent progress with the rollout of our cashless digital wallet offering which is now deployed across four jurisdictions at 15 casinos that have more than 32,000 gaming machines. This progress demonstrates our ability to offer industry-leading, integrated solutions that help our customers operate more efficiently and maximize funds delivered to their casino floors while providing their guests with a seamless experience.

“Our Games segment continues to benefit from placements of our higher-earning premium units, which grew to a record 7,351 units in the quarter, representing 45% of the total installed base. Third quarter sales of 1,176 electronic gaming machines reflect our growing ship share of replacement units, which we believe now approximate double-digit quarterly ship share. The strength of our for-sale games is also evidenced by the quarterly sequential growth in replacement sales achieved throughout 2021, compared to pre-pandemic periods. As the replacement cycle of electronic gaming machines returns to pre-pandemic levels, we expect the investments we have made in our Games business have positioned us to make consistent progress towards our new target of 15% ship share over the next several years.

“The operating performance of our two segments, together with a continued focus on costs, led to a record level of recurring revenue, operating income and Free Cash Flow generation of $56.3 million."

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Games Segment Full Quarter Comparative Results (unaudited)
Three Months Ended September 30,
 202120202019
 (in millions, except unit amounts and prices)
Games revenues
Gaming operations$71.6 $47.0 $48.5 
Gaming equipment and systems24.2 10.2 19.6 
Gaming other— — 1.2 
Games total revenues $95.8     $57.2 $69.3 
Operating income (loss)$30.2 $(0.4)$3.1 
Adjusted EBITDA (1)
$57.7 $32.9 $34.6 
Capital expenditures$19.3 $17.3 $30.3 
Gaming operations information: 
Units installed at period end: 
Class II9,525 9,115 9,188 
Class III6,896 6,141 5,084 
Total installed base at period end (2)
16,421 15,256 14,272 
Premium units (2)
7,351 6,141 4,395 
Average units installed during period (2)
16,232 15,081 13,979 
Daily win per unit ("DWPU") (3)
$42.74 $32.81 $33.95 
Unit sales information:
Units sold1,176 492 1,040 
Average sales price ("ASP")$18,014 $18,209 $17,983 
(1) For a reconciliation of net income (loss) to Adjusted EBITDA, see the Unaudited Reconciliation of Selected Financial GAAP to Non-GAAP measures provided at the end of this release.
(2) The ending and average installed base for all three periods includes all units, whether or not casinos were open and whether or not the games were active.
(3) Daily win per unit reflects the total of all units installed at casinos, inclusive of closed casinos and inactive units, where such units would have recorded no revenue and excludes the impact of the direct costs associated with the Company’s wide-area progressive jackpot expense.

2021 Third Quarter Games Segment Highlights
Games segment revenues increased to a quarterly record $95.8 million compared to $57.2 million and $69.3 million in the third quarter of 2020 and 2019, respectively, primarily reflecting growth in the installed base and in Daily Win per Unit ("DWPU") in gaming operations, as well as increased shipments of gaming machines.
Operating income increased to $30.2 million, compared to an operating loss of $0.4 million a year ago and operating income of $3.1 million in the third quarter 2019. The increase in operating income over the prior-year periods reflects the benefit of higher revenues, a revenue mix that includes a greater
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contribution from the higher-margin gaming operations business and lower amortization expense. Adjusted EBITDA increased to a quarterly record $57.7 million, from $32.9 million and $34.6 million in the third quarter of 2020 and 2019, respectively.
Gaming operations revenue grew to a quarterly record $71.6 million, compared to $47.0 million and $48.5 million in the third quarter of 2020 and 2019, respectively.
•Driven by the strength of higher-performing premium games, DWPU increased to $42.74 in the third quarter of 2021, compared to $32.81 and $33.95 in the third quarter of 2020 and 2019, respectively.
•The installed base as of September 30, 2021 was a record 16,421 units, an increase of 8%, or 1,165 units, compared to September 30, 2020. The installed base increased by 170 units on a quarterly sequential basis despite the previously announced convert-to-sale of 238 standard units in the 2021 third quarter.
◦In the third quarter, the Company extended terms of its placement fee arrangement with a significant multi-property tribal casino operator that secures 4,557 games, or 28% of the Company's current total installed base, until mid-2027 for an additional fee of $28.9 million to be paid in the 2021 fourth quarter.
•The premium portion of the installed base increased by 20%, or 1,210 units, year over year and by 390 units on a quarterly sequential basis to a record 7,351 units. This was the 13th consecutive quarterly sequential increase in premium units. Growth was in part driven by initial placements of Cashnado™ units along with incremental placements of the strong-performing The Vault™ game theme, as well as the Company's industry-leading premium mechanical reel games. The installed base of Wide-area Progressive (“WAP”) gaming machines, a subcategory of premium units, grew by 182 units year over year and 101 units on a quarterly sequential basis to 1,183 machines as of September 30, 2021, due in part to the launch of the Monsterverse™ game on the Empire DCX® cabinet and the installation of WAP units into commercial casinos in Nevada and New Jersey.
•Digital revenue rose 90% to $3.8 million compared to $2.0 million a year ago and more than triple the amount two years ago. Digital revenue growth reflects increased B2B revenue from the expanded base of iGaming operator sites featuring Everi's games – including new customer sites in New Jersey, Pennsylvania, and Michigan that went live during the quarter – along with a growing library of available slot content. Subsequent to quarter-end, Everi Digital went live in Ontario and Connecticut. The B2B revenue increase more than offset a decline in B2C revenue as the Company has de-emphasized its B2C social gaming operations, which it now expects will be fully closed by the end of 2021.
•Revenues from the New York Lottery systems business increased to $6.4 million compared to $1.1 million and $4.8 million in the third quarter of 2020 and 2019, respectively.
Gaming equipment and systems revenues generated from the sale of gaming units and other related parts and equipment totaled $24.2 million in the third quarter of 2021, compared to $10.2 million and $19.6 million in the third quarter of 2020 and 2019, respectively.
•The Company sold 1,176 new units at an average selling price (“ASP”) of $18,014 in the 2021 third quarter. This is an increase compared with 492 units at an ASP of $18,209 in the 2020 third quarter and 1,040 units at an ASP of $17,983 in the 2019 third quarter. Units sold and ASP do not include the 238 pre-owned convert-to-sale gaming machines at a customer location noted above.
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Financial Technology Solutions Segment Full Quarter Comparative Results (unaudited)*
Three Months Ended September 30,
 202120202019
 (in millions, unless otherwise noted)
FinTech revenues
Financial access services$46.4 $34.0 $43.1 
Software and other17.0 14.6 12.0 
Hardware9.0 6.2 10.2 
FinTech total revenues$72.4 $54.9 $65.3 
Operating income$24.9 $20.2 $24.2 
Adjusted EBITDA (1)
$32.9 $26.8 $30.1 
Capital expenditures$4.8 $5.0 $5.7 
Value of financial access transactions:
     Funds advanced$2,352.7 $1,767.6 $1,909.0 
     Funds dispensed7,164.0 4,906.4 5,402.2 
     Check warranty393.2 262.6 361.6 
Total value processed$9,909.9 $6,936.6 $7,672.8 
Number of financial access transactions:
     Funds advanced3.3 2.6 3.0 
     Funds dispensed28.6 21.1 25.0 
     Check warranty0.9 0.7 0.9 
Total transactions completed32.8 24.4 28.9 
* Rounding may cause variances.
(1)For a reconciliation of net income (loss) to Adjusted EBITDA, see the Unaudited Reconciliation of Selected Financial GAAP to Non-GAAP Measures provided at the end of this release.

2021 Third Quarter Financial Technology Solutions Segment Highlights
FinTech revenues for the 2021 third quarter increased to a record $72.4 million compared to $54.9 million and $65.3 million in the third quarter of 2020 and 2019, respectively. The growth over both years primarily reflects an increase in revenues from financial access services and software and other.
Operating income rose to $24.9 million compared to $20.2 million and $24.2 million in the third quarter of 2020 and 2019, respectively. The increase primarily reflects the benefit of higher revenues partially offset by an increase in research and development expense driven by an acceleration of new product development efforts, including new and enhanced loyalty products, the Company’s CashClub Wallet® digital technology solution and new RegTech offerings. Adjusted EBITDA was $32.9 million compared to $26.8 million and $30.1 million in the third quarter of 2020 and 2019, respectively.
•Financial access services revenues, which include cashless and cash-dispensing debit and credit card transactions and check services, increased on a quarterly sequential basis to $46.4 million from $44.8 million in the second quarter 2021, reflecting continued strength in casino activity; and
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were up 8% from the third quarter of 2019. Transactional activity on a same-store basis increased in the third quarter 2021 by a mid-teens percentage rate over the pre-COVID third quarter of 2019.
•Software and other revenues, which include loyalty and RegTech software, product subscriptions, kiosk maintenance services, and other revenue, rose to a record $17.0 million, of which approximately 77% were of a recurring nature. This compares to total revenue of $14.6 million in the third quarter 2020, of which 76% were of a recurring nature, and $12.0 million in the third quarter 2019, of which 73% were of a recurring nature.
•Hardware sales revenues were $9.0 million, inclusive of significant shipments of self-service kiosks and other loyalty and financial access equipment for new casino openings and major expansions, in the third quarter 2021, compared to $6.2 million and $10.2 million in the third quarter of 2020 and 2019, respectively.
Balance Sheet and Liquidity
•During the 2021 third quarter, the Company completed a refinancing that reduced total debt by $144.6 million to $1.0 billion, decreased annual cash interest costs and extended maturities.
•As of September 30, 2021, the Company had cash and cash equivalents of $215.6 million and a Net Cash Position of $88.6 million.
•Early in the 2021 fourth quarter, the Company paid $28.9 million in a single lump sum to extend the term of its placement fee agreement with a significant customer.
Outlook
Everi today raised its previous guidance for full year 2021 results. The Company now expects net income of $98 million to $100 million, Adjusted EBITDA of $342 million to $346 million, and Free Cash Flow of $155 million to $160 million (inclusive of the $28.9 million fourth quarter placement fee noted above). The factors considered in Everi’s 2021 outlook include:
•Continued year-over-year growth in gaming operations revenues. Reflecting the recent increase in installed base and the additional growth anticipated in the later part of the fourth quarter, the Company expects the 2021 year-end installed base will approach or slightly exceed 17,000 units, inclusive of ongoing growth in premium unit placements. While reflecting usual fourth quarter influences, recent record-high DWPU is anticipated to remain above $40.00.
•Capital expenditures and placement fees collectively are expected to be $132 million to $134 million.
•Although not factored into its guidance, the Company is currently evaluating a potential significant change to income taxes related to the possible reversal of some portion of the Company's deferred tax asset valuation allowances during the 2021 fourth quarter. To the extent this materializes, a significant non-cash income tax benefit may be realized, which would likely result in a substantial full year income tax benefit and increased net income for the Company while not affecting cash taxes paid or Free Cash Flow.
•The Company’s 2021 outlook does not contemplate any additional meaningful impact from a macroeconomic or pandemic-related setback; it does reflect, however, the likelihood of receding government stimulus benefits and an increase in pressure on consumer discretionary spending.
A summary and reconciliation of the financial targets are included in a supplemental table at the end of this release.
Investor Conference Call and Webcast
The Company will host an investor conference call to discuss its 2021 third quarter results at 11:00 a.m. ET (8:00 a.m. PT) 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 3:00 p.m. ET today and may be accessed by dialing +1 (412) 317-6671; the PIN number is 13724406. A replay will be available until November 10, 2021. The
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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, 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, Adjusted EBITDA, and Free Cash Flow 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 (loss) before interest, taxes, depreciation and amortization, loss on extinguishment of debt, non-cash stock compensation expense, accretion of contract rights, write-downs of inventory, property and equipment and intangible assets, employee severance costs and other related expenses, litigation settlement received net of legal costs, foreign exchange loss, asset acquisition expense, non-recurring professional fees, and one-time charges. 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 current credit facility and existing 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 and believe it provides investors with another indicator of our operating 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 (loss) 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 (i) Net Cash Position as cash and cash equivalents plus settlement receivables less settlement liabilities and (ii) 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. In this context, forward-looking statements address our expected future
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business and financial performance, and often contain words such as “goal,” “target,” "indication," “future,” “assume," "estimate,” “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “project,” “may,” “should,” “will,” “can,” “aim to,” “designed to,” “will provide,” or “favorably positioned” or similar expressions to identify forward-looking statements. 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 2021 financial and operational metrics; regain or maintain revenue, earnings and Free Cash Flow momentum; sustain our overall growth; drive growth of the gaming operations installed base and DWPU; continue expanding the portions of the gaming floor the Company’s games address; successfully perform obligations required by acquisition agreements; and create incremental value for our shareholders, as well as statements regarding our expectations for the industry environment and the adoption of our products and technologies.
Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations, and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent risks, uncertainties and changes in circumstances that are often difficult to predict and many of which are beyond our control. Our actual results and financial condition may differ materially from those indicated in forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, without limitation, the impact of the ongoing COVID-19 global pandemic on our business, operations and financial condition, our history of net losses and our ability to generate profits in the future; our debt leverage and the related covenants that restrict our operations; our ability to generate sufficient cash to service all of our indebtedness and fund working capital and capital expenditures; our ability to withstand unanticipated impacts of a pandemic outbreak of uncertain duration; 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 compete in the gaming industry; our ability to execute on mergers, acquisitions and/or strategic alliances, including the timing and closing of acquisitions and our ability to integrate and operate such acquisitions consistent with our forecasts; our ability to access the capital markets to raise funds; expectations regarding our existing and future installed base and daily win per day; expectations regarding development and placement fee arrangements; inaccuracies in underlying operating assumptions; expectations regarding customers’ and gaming patrons’ preferences and demands for future services and product offerings; the overall growth of the gaming industry, if any; our ability to replace revenue associated with terminated customer contracts; margin degradation from contract renewals; technological obsolescence; our ability to comply with the Europay, MasterCard and Visa global standard for cards equipped with security chip technology; our ability to introduce new and enhanced products and services, including third-party licensed content; our ability to prevent, mitigate or timely recover from cybersecurity breaches, attacks and compromises; the level of our capital expenditures and product development; anticipated sales performance; employee turnover; national and international economic conditions; global supply chain disruption; changes in global market, business and regulatory conditions arising as a result of the COVID-19 global pandemic; changes in gaming regulatory, card association and statutory requirements; regulatory and licensing difficulties that we may face; competitive pressures in the gaming and financial technology sectors; the impact of changes to tax laws; uncertainty of litigation outcomes; interest rate fluctuations; unanticipated expenses or capital needs and those other risks and uncertainties discussed in our most recent Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission on March 15, 2021. 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. 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 speak only as of the date hereof.
This press release should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2020, 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.
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About Everi
Everi’s mission is to lead the gaming industry through the power of people, imagination and technology. With a focus on player engagement and helping casino customers operate more efficiently, the Company develops entertaining game content and gaming machines, gaming systems, and services for land-based and iGaming operators. The Company is also a preeminent and comprehensive provider of trusted financial technology solutions that power the casino floor while improving operational efficiencies and fulfilling regulatory compliance requirements, including products and services that facilitate convenient and secure cash and cashless financial transactions, self-service player loyalty tools and applications, and regulatory and intelligence software. 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


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EVERI HOLDINGS INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)
(In thousands, except earnings (loss) per share amounts)

 Three Months Ended September 30,Nine Months Ended September 30,
 2021202020212020
Revenues  
Games revenues  
Gaming operations$71,580 $46,968 202,941 106,513 
Gaming equipment and systems24,220 10,229 68,298 28,795 
Gaming other33 44 82 76 
Games total revenues95,833 57,241 271,321 135,384 
FinTech revenues  
Financial access services46,421 33,979 129,973 80,986 
Software and other17,024 14,630 49,874 31,748 
Hardware9,024 6,248 28,829 16,004 
FinTech total revenues72,469 54,857 208,676 128,738 
Total revenues168,302 112,098 479,997 264,122 
Costs and expenses  
Games cost of revenues(1)
  
Gaming operations5,675 4,245 15,776 10,471 
Gaming equipment and systems13,503 5,730 39,058 16,625 
Gaming other— — — 456 
Games total cost of revenues19,178 9,975 54,834 27,552 
FinTech cost of revenues(1)
  
Financial access services1,830 1,161 4,863 5,227 
Software and other1,063 859 3,196 2,057 
Hardware5,380 3,548 17,078 9,452 
FinTech total cost of revenues8,273 5,568 25,137 16,736 
Operating expenses47,121 34,927 133,320 115,428 
Research and development9,598 7,034 26,799 20,958 
Depreciation14,463 16,163 46,571 48,700 
Amortization14,596 18,693 43,680 57,312 
Total costs and expenses113,229 92,360 330,341 286,686 
Operating income (loss)55,073 19,738 149,656 (22,564)
Other expenses  
Interest expense, net of interest income14,257 18,905 50,488 56,226 
Loss on extinguishment of debt34,389 — 34,389 7,457 
Total other expenses48,646 18,905 84,877 63,683 
Income (loss) before income tax6,427 833 64,779 (86,247)
Income tax (benefit) provision(319)1,711 1,285 (3,434)
Net income (loss)6,746 (878)63,494 (82,813)
Foreign currency translation(442)359 (335)(1,295)
Comprehensive income (loss)$6,304 $(519)$63,159 $(84,108)
(1) Exclusive of depreciation and amortization.
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 Three Months Ended September 30,Nine Months Ended September 30,
 2021202020212020
Earnings (loss) per share  
Basic$0.07 $(0.01)$0.72 $(0.97)
Diluted$0.07 $(0.01)$0.64 $(0.97)
Weighted average common shares outstanding  
Basic90,322 85,556 88,688 85,102 
Diluted101,359 85,556 99,581 85,102 


12


EVERI HOLDINGS INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par value amounts)
 
 
At September 30,
At December 31,
 20212020
ASSETS  
Current assets  
Cash and cash equivalents
$215,551 $251,706 
Settlement receivables
50,596 60,652 
Trade and other receivables, net of allowances for credit losses of $4,788 and $3,689 at September 30, 2021 and December 31, 2020, respectively
95,200 74,191 
Inventory
31,690 27,742 
Prepaid expenses and other current assets
25,218 17,348 
Total current assets418,255 431,639 
Non-current assets
Property and equipment, net114,943 112,323 
Goodwill681,975 681,974 
Other intangible assets, net216,621 214,627 
Other receivables14,068 14,620 
Other assets20,181 21,996 
Total non-current assets1,047,788 1,045,540 
Total assets$1,466,043 $1,477,179 
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)  
Current liabilities  
Settlement liabilities$177,582 $173,211 
 Accounts payable and accrued expenses199,254 145,029 
 Current portion of long-term debt6,000 1,250 
Total current liabilities382,836 319,490 
Non-current liabilities
Long-term debt, less current portion976,407 1,128,003 
Deferred tax liability, net19,782 19,956 
Other accrued expenses and liabilities14,250 17,628 
Total non-current liabilities1,010,439 1,165,587 
Total liabilities1,393,275 1,485,077 
Commitments and contingencies
Stockholders’ equity (deficit)  
Convertible preferred stock, $0.001 par value, 50,000 shares authorized and no shares outstanding at September 30, 2021 and December 31, 2020, respectively
— — 
Common stock, $0.001 par value, 500,000 shares authorized and 116,357 and 90,692 shares issued and outstanding at September 30, 2021, respectively, and 111,872 and 86,683 shares issued and outstanding at December 31, 2020, respectively
116 112 
Additional paid-in capital493,022 466,614 
Accumulated deficit(231,126)(294,620)
Accumulated other comprehensive loss(1,526)(1,191)
Treasury stock, at cost, 25,664 and 25,190 shares at September 30, 2021 and December 31, 2020, respectively
(187,718)(178,813)
Total stockholders’ equity (deficit)72,768 (7,898)
Total liabilities and stockholders’ equity (deficit)$1,466,043 $1,477,179 

13


EVERI HOLDINGS INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Nine Months Ended September 30,
20212020
Cash flows from operating activities
Net income (loss)$63,494 $(82,813)
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:
Depreciation46,571 48,700 
Amortization43,680 57,312 
Non-cash lease expense3,400 3,615 
Amortization of financing costs and discounts3,234 3,111 
Loss on sale or disposal of assets1,616 111 
Accretion of contract rights6,966 5,345 
Provision for credit losses5,499 6,925 
Deferred income taxes(174)(3,788)
Reserve for inventory obsolescence1,610 1,810 
Write-down of assets— 11,281 
Loss on extinguishment of debt34,389 7,457 
Stock-based compensation12,404 10,108 
Other non-cash items— 456 
Changes in operating assets and liabilities:
Settlement receivables10,056 36,922 
Trade and other receivables(25,522)6,682 
Inventory(5,569)(10,614)
Prepaid expenses and other assets(8,068)(4,952)
Settlement liabilities4,371 (93,622)
Accounts payable and accrued expenses45,543 (5,814)
Net cash provided by (used in) operating activities243,500 (1,768)
Cash flows from investing activities
Capital expenditures(73,288)(52,428)
Acquisitions, net of cash acquired(15,000)(15,000)
Proceeds from sale of property and equipment215 141 
Placement fee agreements— (3,021)
Net cash used in investing activities(88,073)(70,308)
Cash flows from financing activities
Proceeds from new term loan600,000 — 
Repayments of prior term loan(735,500)(13,500)
Proceeds from prior incremental term loan— 125,000 
Repayment of prior incremental term loan(124,375)(313)
Proceeds from prior revolver— 35,000 
Repayments of prior revolver— (35,000)
Proceeds from 2021 unsecured notes400,000 — 
Repayments of 2017 unsecured notes(285,381)(89,619)
Fees associated with debt transactions — new debt(19,797)— 
Fees associated with debt transactions — prior debt(20,828)(11,128)
Proceeds from exercise of stock options14,012 3,509 
Treasury stock(8,909)(1,097)
Payment of acquisition contingent consideration(9,875)— 
Net cash (used in) provided by financing activities(190,653)12,852 
Effect of exchange rates on cash and cash equivalents(237)(1,370)
Cash, cash equivalents and restricted cash
Net decrease for the period(35,463)(60,594)
Balance, beginning of the period252,349 296,610 
Balance, end of the period$216,886 $236,016 
14


EVERI HOLDINGS INC. AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF CASH AND CASH EQUIVALENTS
TO NET CASH POSITION AND NET CASH AVAILABLE
(In thousands)
At September 30,At December 31,At September 30,A September 30,
2021202020202019
Cash available  
Cash and cash equivalents (1)
$215,551 $251,706 $235,407 $275,706 
Settlement receivables50,596 60,652 33,126 56,035 
Settlement liabilities(177,582)(173,211)(140,229)(298,490)
Net Cash Position88,565 139,147 128,304 33,251 
Undrawn revolving credit facility125,000 35,000 35,000 35,000 
Net Cash Available$213,565 $174,147 $163,304 $68,251 
(1) Cash and cash equivalents does not include $1.3 million, $0.6 million, $0.6 million, and $8.4 million of restricted cash at September 30, 2021 December 31, 2020, September 30, 2020, and September 30, 2019, respectively.

15


EVERI HOLDINGS INC. AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF SELECTED FINANCIAL GAAP TO NON-GAAP MEASURES
(In thousands)
Three Months Ended September 30, 2021
 GamesFinTechTotal
Net income  $6,746 
Income tax benefit  (319)
Loss on extinguishment of debt34,389 
Interest expense, net of interest income  14,257 
Operating income$30,199 $24,874     $55,073 
Plus: depreciation and amortization23,300 5,759 29,059 
EBITDA$53,499 $30,633 $84,132 
Non-cash stock compensation expense1,904 2,048 3,952 
Accretion of contract rights2,330 — 2,330 
Non-recurring professional fees and other— 184 $184 
Adjusted EBITDA$57,733 $32,865 $90,598 
Cash paid for interest(9,858)
Cash paid for capital expenditures(24,054)
Cash paid for income taxes, net(409)
Free Cash Flow$56,277 

16


EVERI HOLDINGS INC. AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF SELECTED FINANCIAL GAAP TO NON-GAAP MEASURES
(In thousands)
Three Months Ended September 30, 2020
 GamesFinTechTotal
Net loss  $(878)
Income tax provision  1,711 
Interest expense, net of interest income  18,905 
Operating (loss) income$(430)$20,167     $19,738 
Plus: depreciation and amortization29,615 5,242 34,857 
EBITDA$29,185 $25,409 $54,595 
Non-cash stock compensation expense1,549 1,436 2,985 
Accretion of contract rights2,175 — 2,175 
Adjusted EBITDA$32,909 $26,845 $59,755 
Cash paid for interest(12,375)
Cash paid for capital expenditures(22,294)
Cash paid for placement fees(2,146)
Cash paid for income taxes, net(133)
Free Cash Flow$22,807 

17


EVERI HOLDINGS INC. AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF SELECTED FINANCIAL GAAP TO NON-GAAP MEASURES
(In thousands)
Three Months Ended September 30, 2019
 GamesFinTechTotal
Net income  $9,315 
Income tax benefit  (1,319)
Interest expense, net of interest income  19,297 
Operating income$3,073 $24,220     $27,293 
Plus: depreciation and amortization28,678 4,493 33,171 
EBITDA$31,751 $28,713 $60,464 
Non-cash stock compensation expense602 1,379 1,981 
Accretion of contract rights2,221 — 2,221 
Adjusted EBITDA$34,574 $30,092 $64,666 
Cash paid for interest(12,528)
Cash paid for capital expenditures(35,959)
Cash paid for placement fees(5,454)
Cash refunded for income taxes, net362 
Free Cash Flow$11,087 

18


EVERI HOLDINGS INC. AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF SELECTED FINANCIAL GAAP TO NON-GAAP MEASURES
(In thousands)
Nine Months Ended September 30, 2021
 GamesFinTechTotal
Net income  $63,494 
Income tax provision  1,285 
Loss on extinguishment of debt34,389 
Interest expense, net of interest income  50,488 
Operating income$76,064 $73,592     $149,656 
Plus: depreciation and amortization73,586 16,665 90,251 
EBITDA$149,650 $90,257 $239,907 
Non-cash stock compensation expense6,075 6,329 12,404 
Accretion of contract rights6,966 — 6,966 
Litigation settlement, net— (1,107)(1,107)
Asset acquisition expense, non-recurring professional fees and other— 268 268 
Adjusted EBITDA$162,691 $95,747 $258,438 
Cash paid for interest(45,167)
Cash paid for capital expenditures(73,288)
Cash paid for income taxes, net(975)
Free Cash Flow$139,008 
19


EVERI HOLDINGS INC. AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF SELECTED FINANCIAL GAAP TO NON-GAAP MEASURES
(In thousands)
Nine Months Ended September 30, 2020
 GamesFinTechTotal
Net loss  $(82,813)
Income tax benefit  (3,434)
Loss on extinguishment of debt7,457 
Interest expense, net of interest income  56,226 
Operating (loss) income$(47,671)$25,107     $(22,564)
Plus: depreciation and amortization90,087 15,926 106,013 
EBITDA$42,416 $41,033 $83,449 
Non-cash stock compensation expense5,237 4,871 10,108 
Accretion of contract rights5,345 — 5,345 
Write-down of inventory, property and equipment and intangible assets9,232 1,801 11,033 
Employee severance costs and other expenses1,578 1,122 2,700 
Foreign exchange loss83 1,199 1,282 
Non-recurring professional fees30 932 962 
Other one-time charges456 — 456 
Adjusted EBITDA$64,377 $50,958 $115,335 
Cash paid for interest(45,331)
Cash paid for capital expenditures(52,428)
Cash paid for placement fees(3,021)
Cash paid for income taxes, net(81)
Free Cash Flow$14,474 
20


EVERI HOLDINGS INC. AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF SELECTED FINANCIAL GAAP TO NON-GAAP MEASURES
(In thousands)
Nine Months Ended September 30, 2019
 GamesFinTechTotal
Net income  $20,661 
Income tax benefit  (2,747)
Interest expense, net of interest income  60,130 
Operating income$8,729 $69,315     $78,044 
Plus: depreciation and amortization83,927 13,278 97,205 
EBITDA$92,656 $82,593 $175,249 
Non-cash stock compensation expense1,895 4,246 6,141 
Accretion of contract rights6,539 — 6,539 
Write-down of inventory, property and equipment and intangible assets843 — 843 
Non-recurring professional fees484 790 1,274 
Adjusted EBITDA$102,417 $87,629 $190,046 
Cash paid for interest(52,077)
Cash paid for capital expenditures(81,642)
Cash paid for placement fees(17,102)
Cash refunded for income taxes, net69 
Free Cash Flow$39,294 
















21


EVERI HOLDINGS INC. AND SUBSIDIARIES
RECONCILIATION OF PROJECTED NET INCOME TO PROJECTED EBITDA AND PROJECTED ADJUSTED EBITDA FOR THE YEAR ENDING DECEMBER 31, 2021
(In thousands)
2021 Guidance Range (1)
 LowHigh
Revenues$645,000 $653,000 
Projected net income 98,000 100,000 
Projected income tax provision3,000 4,000 
Projected loss on extinguishment of debt34,400 34,400 
Projected interest expense, net of interest income64,600 62,600 
Projected operating income$200,000 $201,000 
Plus: projected depreciation and amortization119,000 120,000 
Projected EBITDA$319,000 $321,000 
Projected non-cash stock compensation expense14,800 15,800 
Projected accretion of contract rights9,000 10,000 
Projected asset acquisition expense and non-recurring professional fees300 300 
Projected litigation settlement, net(1,100)(1,100)
Projected Adjusted EBITDA$342,000 $346,000 
Projected cash paid for interest(52,000)(51,000)
Projected cash paid for capital expenditures(100,000)(102,000)
Projected cash paid for placement fees(32,000)(32,000)
Projected cash paid for income taxes, net of refunds(3,000)(1,000)
Projected Free Cash Flow$155,000 $160,000 
(1) All figures presented are projected estimates for the year ending December 31, 2021.
(2) This guidance assumes no change in deferred tax valuation allowances.


22