GGRAsia – Everi 1Q net loss was low water mark for 2016: CEO

Everi 1Q net loss was low water mark for 2016: CEO

May 12, 2016 Newsdesk Latest News, Top of the deck, World

U.S.-based Everi Holdings Inc – a specialist in cash handling technology and electronic game content for the casino industry – on Tuesday reported a net loss of US$13.2 million for the first three months of 2016, compared to a US$500,000 profit in the prior-year period.

The group declared a net loss per diluted share of US$0.20 in the first quarter, compared to net income per diluted share of US$0.01 in the first three months of 2015.

Michael Rumbolz – who on Tuesday was confirmed as the firm’s president and chief executive, having held the positions on an interim basis since February – said in a conference call with analysts that the latest quarterly results represented “the low water mark” for adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) this year.

“We expect to generate year-over-year and quarterly sequential improvement in the second quarter and we expect that the [EBITDA performance in the] second half of the year will be greater than the first half of the year,” added the CEO.

“These [latest] results reflect the impact of lower year-over-year unit sales, largely related to the timing of the trials of our new Core HDX gaming cabinet in the 2015 fourth quarter and in early 2016,” said Mr Rumbolz.

“Results were also affected by a year-over-year decline in sales of integrated kiosks to our payments customers,” he added.

Revenues for the first quarter of 2016 were down slightly at US$205.8 million compared to US$207.5 million in the first quarter of 2015.

First quarter 2016 revenues included US$48.2 million from the games segment and US$157.6 million from the payments segment.

The company – which is listed on the New York Stock Exchange – reported operating income of US$3.8 million for the first quarter of 2016 compared to operating income of US$28.1 million in the prior-year period.

Operating income for the three months ended March 31, 2016 included US$3.3 million for “accrued executive severance costs,” the firm said. Operating income for the prior-year period included a benefit of US$14.4 million from one-time legal settlement proceeds and US$2 million in acquisition and other costs related to a merger and to purchase accounting adjustments.

In December 2014, Everi – then known as Global Cash Access Holdings Inc – completed the US$1.2-billion acquisition of Multimedia Games Holdings Co Inc by way of merger.

“First quarter 2016 was in-line with consensus ex-items – certainly better than feared and we are encouraged by expected short-term/second quarter improvements in game sales and overall profitability,” said analyst David Bain of brokerage Sterne Agee CRT in a Wednesday commentary on Everi’s first-quarter numbers.

“With the confirmation of a permanent CEO, we believe Everi shares are approaching what could be a bottom,” stated analysts David Katz and Brian Davis of Telsey Advisory Group in its Wednesday note.

They added: “Most of the integration of the company is under way, the pipeline of new and better games is promised to be forthcoming, and the addressable market is largely fully formed. Thus, we turn our focus to the product development process, which will be the determining success factor in the next several quarters.”