Products in Everi Holdings’ financial services business don’t carry flashy themes, such as the company’s slot machine game based on the Discovery series “Shark Week.”
But revenues from the division referred to by the Las Vegas-based gaming equipment provider as FinTech, helped drive Everi to solid fourth quarter and year-end results.
“The balance between our Games and FinTech segments, and the continuing significant opportunities within North America, provide us with a substantial runway for growth,” CEO Mike Rumbolz said Monday on Everi’s fourth-quarter earnings conference call.
In the quarter, which ended Dec. 31, Everi grew revenues 22% to $145.2 million. The Games segment accounted for $77.1 million in revenues while FinTech revenues were at $68.1 million.
“Our cash access business had its 21st consecutive quarter of same-store increases, in both transaction volumes and dollars processed,” Rumbolz said.
In a statement, Rumbolz highlighted successes within the company’s multi-pronged businesses, including a record level of slot machine sales that included a record year-end installed base of 14,711 installed games that had a 15% improvement in daily win per day.
The FinTech business had year-over-year growth in cash access services transactions and revenue, equipment sales, and information and compliance product-related revenue.
Everi, however, reported a net loss of $4.1 million, or 5 cents per share, which company executives said was the result of a $6.4 million pre-tax charge related to a litigation settlement. Cash flow in the quarter increased 16% to $63.2 million.
For all of 2019, Everi grew revenues 14% to $533.2 million while net income increased 33% to $16.5 million, or 21 cents per share. Cash flow jumped 10% to $253.2 million.
Rumbolz the results reflected on Everi’s priorities, “and solid execution across our businesses.”
On the Games side, Everi Executive Vice President Dean Ehrlich said the company’s investments into game development studios and the development process, “led to the creation of new innovative, differentiated games.”
During the year, Everi increased its presence in the player loyalty segment, acquiring Atrient in April 2019 for $40 million and a “tuck in” acquisition of Micro Gaming Technologies (MGT) in December for $25 million.
On the conference call, Rumbolz said the company was pleased with the “integration and scaling” of the customer loyalty business into Everi’s overall selection of products.
“We also established a strong foundation to deliver growth from our entry into the player loyalty products and services market,” Rumbolz said in a statement.
Shares of Everi, traded on the New York Stock Exchange, closed at $9.74 on Monday, down 66 cents or 6.35%. In after-hours trading following the quarterly earnings release, Everi shares rose almost 2%.
At the call’s outset, Rumbolz said the company was monitoring the situation surrounding the coronavirus spread and “how it could affect our supply chain,” and the well-being of the company’s employees.
“We have certainly noted the virus’ impact on global markets, including the gaming sector,” Rumbolz said. “But Everi has not experienced any discernable impact to-date.”
Rumbolz said any of Everi’s financial projections for 2020, “does not contemplate any impact from the virus.”
#exclusive – Q4 earnings for Everi Holdings promote ‘balance’ between the company’s divisions. –@howardstutz, CDC Gaming Reports. https://t.co/nDrU13Kxfb @everi_inc #CDCgaming
— CDC Gaming Reports (@CDCNewswire) March 3, 2020
In January, Everi extended its contract with the New York Lottery for 10 additional years, pushing its agreement to provide a video lottery central system through September 2029.
Everi’s central system currently monitors and administers more than 17,000 Video Lottery Terminals installed at nine racetrack facilities across New York State. As for financial terms, Everi said it will continue to earn a fixed percentage of the net revenue generated by the installed VLTs.
Meanwhile, the company raised $107 million in December to pay down a portion of its long-term debt, which stood at $1.07 billion at the end of the year.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
