U.S.-based Everi Holdings Inc – a specialist in cash handling technology and electronic game content for the casino industry – on Tuesday reported revenue of US$204.4 million for the three months to December 31, up by 34.4 percent from the prior-year period.
The fourth quarter results include a full quarter of operating results following the US$1.2-billion acquisition of Multimedia Games Holdings Co Inc by way of merger in December 2014. The 2014 fourth quarter includes only 13 days of combined operations.
After the acquisition, Everi changed its organisational structure to include two divisions. One covers its original business, namely the supply of cash processing technology and related services to the gaming industry. The other division covers what was Multimedia Games’ segment: the supply of systems, content and electronic gaming units for casinos.
Everi’s fourth quarter 2015 revenues included US$50.5 million from the games segment and a 6 percent year-on-year increase in the payments segment to US$153.9 million.
In the last quarter of 2015, adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) increased by 91.3 percent year-on-year to US$45.9 million. The firm however saw its net loss widen to US$86.6 million, compared to US$5.7 million a year earlier.
Everi – until August known as Global Cash Access Holdings Inc – said its fourth quarter 2015 loss included a US$75-million goodwill impairment charge in the games unit.
The company said that charge followed its conclusion that the carrying amount of its games unit “exceeded the estimated fair value”. Everi stated it took into account several factors in that decision, including limited growth expectations as a result of capital expenditure constraints in the gaming industry, and consolidation and increased competition in the gaming manufacturing space.
For full-year 2015, Everi posted revenues of US$827 million, up by 39.4 percent year-on-year. Revenue from the games segment increased to US$214.4 million, compared to US$7.4 million in 2014. The payments segment reported revenue of US$612.6 million, up by 4.6 percent from the previous year.
The company however posted a net loss of approximately US$105 million for 2015, compared to a profit of US$12.1 million in the prior year.
“Our results for the 2015 full year reflect growth in both our games and payments businesses, which on a combined pro forma basis resulted in an annual increase in revenue and adjusted EBITDA of approximately 4 percent and 7 percent, respectively,” said Michael Rumbolz, Everi’s interim president and chief executive, in a statement.
“Our payments business is benefiting from sustained improvements in gross gaming revenue as a result of a stronger consumer environment,” he added.
Mr Rumbolz was appointed interim president and CEO last month, replacing Ram Chary.
Mr Rumbolz said: “While 2016 is expected to be a year that reflects the continued transition in our business … we expect our games segment will benefit from both an increase in our distribution capabilities as we enter new jurisdictions and from the continued strength of our Class II gaming content.”
The company achieved cost savings of approximately US$25 million at the end of 2015, said Randy Taylor, Everi’s executive vice president and chief financial officer. “We continue to expect to achieve the entire US$30 million in run rate synergies by the end of 2016,” he added.
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