Everi swings to 1Q loss, says conserving cash
Casino equipment maker and financial technology (fintech) supplier Everi Holdings Inc swung to a first-quarter net loss of US$13.5 million, compared to recording net income of US$5.9 million in the prior-year quarter.
The result was affected by casino closures from March onward in its key markets – including in the United States – due to the Covid-19 pandemic, the firm stated.
The net loss – equivalent to US$0.16 per diluted share – included a US$7.4-million pre-tax loss on extinguishment of debt.
“Since the onset of the pandemic and the resulting closure of our customers’ casinos in mid-March, our attention has been on addressing the impact on our employees and their families, our customers and our company,” said Michael Rumbolz, the group’s chief executive, in prepared remarks accompanying Tuesday’s earnings release.
The group’s first-quarter revenue was US$113.3 million, down 8.5 percent compared to US$123.8 million a year earlier.
Adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) were US$52.3 million compared to US$61.3 million in the prior-year period, a decline of 14.7 percent. Free cash flow was US$18.4 million compared to US$21.2 million in the prior year.
Total net debt was down 11 percent year-on-year by quarter-end, at just over US$1.0 billion, compared to US$1.13 billion in the prior-year opening quarter.
The CEO said the group had “acted aggressively to preserve cash” and improve its liquidity position in order to allow the company to achieve its “long-term goals as our customers’ operations begin to reopen”.
In Las Vegas, Nevada, in the U.S., some casinos including properties of MGM Resorts International and of Wynn Resorts Ltd – firms that are respectively parents of Macau gaming operators – were due to reopen on Thursday (June 4).
Mr Rumbolz said the financial first aid for his group had included “dramatically reducing” the firm’s “near-term cash burn rate, accessing the capital markets in April for an incremental US$125-million term loan and amending certain financial covenants” of the group’s existing credit agreement.
The CEO added: “As a result of these early actions, we believe Everi has the foundation and financial flexibility to both withstand this current disruption and further our product innovation as the industry and broader economy recover from the pandemic impact.”
First-quarter equipment sales revenues were US$6.4 million in the first quarter of 2020 compared to US$7.0 million in the first quarter of 2019, a decline of 8.6 percent. Sales of player-loyalty and marketing kiosks contributed US$1.4 million in the first three months of 2020.
Mr Rumbolz said the group’s overall business had been going well during the first two months of 2020 prior to the public health emergency.
There had been a 21 percent increase year-on-year on the daily win per unit of Everi’s installed base of gaming machines, and a 17 percent increase year-on-year in the total number of cash access transactions in the fintech segment.
That had offered “clear evidence” of the firm’s “operating momentum and contributed to the margin improvement we experienced,” stated the CEO.
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