Everi announces new Las Vegas hub, posts forecast-topping earnings and revenue

March 2, 2023 12:42 PM
Photo: Everi's G2E 2021 Booth/CDC Gaming Reports
  • Matthew Crowley, CDC Gaming Reports
March 2, 2023 12:42 PM
  • Matthew Crowley, CDC Gaming Reports

An income-tax-provision increase dampened fourth-quarter earnings for Las Vegas-based gaming-equipment and cash-access-provider Everi Holdings. But earnings per share beat Wall Street forecasts, as did revenue, which rose from a year earlier.

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In a statement Wednesday, Everi said its net income was $27 million, or 28 cents per diluted share, for the three months ended Dec. 31, down from $89.4 million, or 88 cents per diluted share, a year earlier. The latest per-share result topped the 24 cents-per-share forecast of analysts surveyed by Seeking Alpha.

The income-taxes provision increased $60.5 million compared with the previous-year period. The fourth quarter of 2021 benefited from the $63.5 million, or 62 cents per share, valuation allowance reversal on certain deferred tax assets.

Adjusted earnings before interest, taxes, depreciation, and amortization, a cash-flow measure that excludes one-time costs, rose 5.2% to $93.4 million from $88.8 million.

Revenue rose 14% to $205.4 million from $180.4 million and topped the $197.6 million forecast of Seeking Alpha-polled analysts.

“We expect our successful execution on our growth initiatives, combined with our large percentage of high-margin recurring revenues in our overall revenue mix, to help us mitigate potential challenges of the uncertain macroeconomic environment and enable us to continue delivering profitable growth in 2023 and beyond,” Everi Chief Executive Officer Randy Taylor said in the statement.

Also Wednesday, Everi confirmed that it has started construction of a new 182,500-square-foot leased Las Vegas hub to consolidate the manufacturing, assembly, and distribution of its gaming machines, now done in Austin, Texas, with the assembly of its self-service cash-access and loyalty kiosks and other financial-technology products, now done in Las Vegas.

Everi said it expects to record approximately $4.5 million of expense in 2023 related to the planned closure and exit costs, relocation, employee retention, and other costs associated with the transition of production to the new building.

The new building, which Everi expects to be ready in October, will include space for lab facilities for game and financial-technology businesses, service and customer-installation teams and administrative staff, and future expansion to accommodate expected business growth.

The transition will affect 35 employees, Everi said; all are being offered the opportunity to move to Las Vegas or  apply for other positions within the company.

On Feb. 21, Everi said it agreed to integrate 1839 Labs technology into Everi’s Venuetize mobile-technology and e-commerce platform for the sports, hospitality, and entertainment industries. Financial terms weren’t disclosed. And on Feb. 15, Everi said it agreed to provide online-gaming content for the Caesars Sportsbook & Casino’s real-money online gaming operation. Financial terms weren’t disclosed for that deal, either.

For the full year ended Dec. 31, Everi had $120.5 million, or $1.24 per diluted share, in net income, down from $152.9 million, or $1.53 per diluted share. The 2021 figure included the aforementioned $63.5 million, or 62-cent-per-share, noncash tax benefit.

Twelve-month revenue rose 18% to $782.5 million from $660.4 million, boosted by a 16% increase in games revenue and a 22% increase in financial technology revenue.

Everi shares fell 33 cents, or 1.74%, Wednesday to close at $18.66 on the New York Stock Exchange. The shares dropped further after hours, sliding 9 cents, or 0.48% to settle at $18.57.