Everi Holdings, the gaming equipment and financial services provider, received a boost from the markets Monday with shares surging 17 percent on news that the company is looking to refinance two major loans.
If successful, refinancing could yield significant interest savings on its respective $462 million and $335 million credit notes and extend their maturity schedules until 2020 and 2021 – thereby lowering increasing its free cash flow and improving its leverage position.
The company also announced preliminary first quarter earnings of $233-$238 million in net revenues, a quarterly net loss in the range of $6 million to $4 million and adjusted EBITDA of $52-$54 million.
For the first quarter of 2016, the company reported net revenues of $206 million, a net loss of $13 million and adjusted EBITDA of $46 million.
Markets reacted positively on Monday to the announcement, with Everi shares closed at $5.85 after opening at $5.06.
“Our preliminary 2017 first quarter results include year-over-year revenue and Adjusted EBITDA growth for both our Games and Payments segments, which reflect the Company’s continued successful execution against its strategic priorities,” said Michael Rumbolz, President and Chief Executive Officer of Everi.
“With the strongest and most diverse Games and Payments products and technology solutions in our history and our company-wide focus on disciplined expense management, we are well positioned to deliver consistent operating performance momentum over the balance of 2017 and beyond, he added.
David Katz, an analyst at the Telsey Group, said that the proposed restructuring and early results bode well for company in the medium term.
“The refinancing, assuming it is successful, should enhance the free cash flow prospects for the company and add stability to the balance sheet in a leverage-focused story,” he wrote in a note.
Based in Las Vegas, Everi provides slot machines and financial equipment and services to casinos, with a specialty in mechanical reel gaming content and technology solutions, integrated payments solutions and compliance and efficiency software.
