Everi Holdings, the gaming manufacturer and payments solutions provider, continued to build momentum in the first quarter by delivering a strong performance across its gaming and payments verticals, while sealing a deal to refinance nearly $800 million worth of debt.
Net revenues for the quarter checked in at $238 million, which was up 15 percent from $206 million during the prior year period. Adjusted EBITDA was $54 million and loss per share was $0.05, up from $46 million and $0.20, respectively.
“Our 2017 first quarter financial results, including double-digit year-over-year revenue and adjusted EBITDA growth, reflect the fourth consecutive quarter of successful execution against our strategic operating priorities,” said Michael Rumbolz, president and chief executive officer.
Everi’s payments segment turned in a particularly strong quarter on the heels of strong same-store growth in its cash advance and compliance businesses. Revenue for the vertical was $182 million and EBITDA was $24 million, up 16 percent and 39 percent year-over-year, respectively.
The payments side was also bolstered by contracts with several new casinos and the introduction of ATM services at 29 properties in Canada.
The company’s gaming segment delivered revenue of $55 million and EBITDA of $30 million, up 18 percent and 6 percent from the prior year quarter. Gaming unit sales for the quarter grew significantly to 1,018 from 432 and generated $19 million in revenue, though the average unit price dropped to $17,000.
Everi’s total installed base was up slightly to 13,022 despite the removal of nearly 400 units in Oklahoma and California due to recently amended gaming compacts.
The unit sales have been driven by the introduction of new games for the Core HDX gaming cabinet, as well as ongoing demand for three-reel mechanical games.
Revenues from gaming operations were down from $40 million to $37 million – which the company attributed to a decline in daily win per unit, which was down to $27.17 from $29.10.
“Our games segment continues to benefit from the introduction of a diverse portfolio of engaging new products, while our payments segment is extending its market leadership position through continued innovation,” said Rumbolz.
“The product development process appears to be gaining momentum, overall management of the business appears to be stable and therefore the support from the credit markets is likely to continue,” wrote David Katz, an analyst with the Telsey Group, reckoning that the company is “approaching a pivotal point that should be positive.”
The improved operations coupled with the refinance appear to have the company on the right path toward meaningful cash flow generation.
“Our continuing innovation in our games and payments businesses is helping drive consistent improvement and progress in our operating performance,” Rumbolz continued. “This innovation combined with the benefits of the recent debt refinancing transaction positions Everi to achieve consistent improvement going forward.”
The previously announced debt refinancing repackages a $462 million loan scheduled to mature in 2020 and a $335 million note set to expire in 2021 into an $820 million facility that will mature in 2024.
“Our now completed refinancing transaction extends the maturity on a large portion of our outstanding debt and lowers our overall interest expense,” said Randy Taylor, chief financial officer, adding that the move will generate approximately $8 million in savings on interest payments annually while increasing the company’s overall financial flexbility.
“This important refinancing event combined with our expectations for full-year adjusted EBITDA growth better position Everi to execute on our stated goal of deleveraging,” he continued.
