Everi Holdings Inc. (NYSE:EVRI) (“Everi” or the “Company”)
today announced it is seeking to refinance its outstanding $335
million aggregate principal amount of Senior Secured Notes due
2021 and its existing First Lien Term Loan that matures in 2020. As
of the date of this release, the outstanding balance on the First
Lien Term Loan was approximately $462.3 million. The Company
expects the proposed refinancing transaction to lower its annual
cash interest expense, enhance its financial flexibility and extend
its maturity schedule. In connection with the proposed refinancing,
Everi today announced selected preliminary financial results for
the first quarter ended March 31, 2017.
Preliminary 2017 First
Quarter Results of Operations
The Company currently expects consolidated
revenues to be in a range of approximately $233 million to $238
million and its quarterly net loss to be in a range of
approximately $6 million to $4 million for the three months
ended March 31, 2017. The Company also expects consolidated
Adjusted EBITDA for the first quarter of 2017 to be in a range of
approximately $52 million to $54 million. For the first quarter of
2016, consolidated revenues were $205.8 million, net loss was $13.2
million and consolidated Adjusted EBITDA was $45.7 million. Everi
currently expects to report its full 2017 first quarter results
after the market close on May 9th.
Michael Rumbolz, President and Chief Executive
Officer of Everi, commented, “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. 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.”
The consummation and actual terms of the
proposed refinancing are subject to a number of factors, including
market conditions, negotiation and execution of definitive
agreements and satisfaction of customary closing conditions. There
can be no assurance that the refinancing will occur, or, if it
does, as to the terms of the refinancing.
This press release is for informational purposes
only and does not constitute an offer to sell or a solicitation of
an offer to buy any securities.
Cautionary Note Regarding
Forward-Looking StatementsThe preliminary
unaudited 2017 first quarter results noted above are derived from
preliminary internal financial reports and are subject to revision
upon the completion of the Company’s customary financial reporting
process, including customary reviews, internal audit procedures and
approvals. Accordingly, actual results may differ from these
preliminary results and such differences may be materal.
This press release contains “forward-looking
statements” as defined in the U.S. Private Securities Litigation
Reform Act of 1995. In this context, forward-looking statements
often address our expected future business and financial
performance, and often contain words such as “goal,” “target,”
“future,” “estimate,” “expect,” “anticipate,” “intend,” “plan,”
“believe,” “seek,” “project,” “may,” “should,” or “will” and
similar expressions to identify forward-looking statements.
Examples of forward-looking statements include, among others,
statements the Company makes regarding its ability to refinance its
outstanding $335 million aggregate principal amount of Senior
Secured Notes due 2021 and its existing $462.3 million First
Lien Term Loan that matures in 2020, its expectation that the
proposed refinancing transaction will lower its annual cash
interest expense, enhance its financial flexibility and extend its
maturity schedule, its expectations regarding its 2017 first
quarter results of operations, and its ability to successfully
execute on its strategic priorities to achieve consistent operating
performance momentum over the balance of 2017 and beyond.
The forward-looking statements in this press
release are subject to additional risks and uncertainties,
including those set forth under the heading “Risk Factors” and
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations” in our filings with the Securities and
Exchange Commission (the “SEC”), including, without limitation, our
Annual Report on Form 10‑K for the fiscal year ended
December 31, 2016 filed with the SEC on March 14, 2017
and subsequent periodic reports, and are based on information
available to us on the date hereof.
These cautionary statements qualify our
forward-looking statements and you are cautioned not to place undue
reliance on these forward-looking statements. Any forward-looking
statement contained herein speaks only as of the date on which it
is made, and we do not intend, and assume no obligation, to update
or revise any forward-looking statements, whether as a result of
new information, future events or otherwise.
This press release should be read in conjunction
with our most recent reports on Form 10‑K and Form 10‑Q,
and the information included in our other press releases, reports
and other filings with the SEC. Understanding the information
contained in these filings is important in order to fully
understand our reported financial results and our business outlook
for future periods.
Non-GAAP Financial
Information
In order to enhance investor understanding of
the underlying trends in our business, our cash balance and cash
available for our operating needs, and to provide for better
comparability between periods in different years, we are
providing in this press release Adjusted EBITDA, which is not a
measure of our financial performance or position under United
States Generally Accepted Accounting Principles (“GAAP”).
Accordingly, Adjusted EBITDA should not be considered in isolation
or as a substitute for, and should be read in conjunction with, our
net earnings (loss), operating income (loss), basic or diluted
earnings (loss) per share and cash flow data prepared in accordance
with GAAP.
We define Adjusted EBITDA as earnings (loss)
before interest, taxes, depreciation and amortization, non-cash
stock compensation expense, accretion of contract rights and
separation costs related to the Company’s former CEO. We present
Adjusted EBITDA as we use this measure to manage our business and
consider this measure to be supplemental to our operating
performance. We also make certain compensation decisions based, in
part, on our operating performance, as measured by Adjusted EBITDA;
and our credit facility, senior secured notes and senior unsecured
notes require us to comply with a consolidated secured leverage
ratio that includes performance metrics substantially similar to
Adjusted EBITDA.
A reconciliation of the Company’s net loss per
GAAP to Adjusted EBITDA is provided in the table below.
About
Everi
Everi is dedicated to providing video and
mechanical reel gaming content and technology solutions, integrated
gaming payments solutions and compliance and efficiency software.
Everi Games provides: (a) comprehensive content, electronic
gaming units and systems for Native American and commercial
casinos, including the award winning TournEvent® slot tournament
solution; and (b) the central determinant system for the video
lottery terminals installed in the State of New York. Everi
Payments provides: (a) access to cash at gaming facilities via
Automated Teller Machine cash withdrawals, credit card cash access
transactions, point of sale debit card transactions, and check
verification and warranty services; (b) fully integrated
gaming industry kiosks that provide cash access and related
services; (c) products and services that improve credit
decision making, automate cashier operations and enhance patron
marketing activities for gaming establishments;
(d) compliance, audit and data solutions; and (e) online
payment processing solutions for gaming operators in states that
offer intrastate, Internet-based gaming and lottery activities.
EVERI HOLDINGS INC. AND
SUBSIDIARIES |
UNAUDITED RECONCILIATION OF NET LOSS TO EBITDA
AND ADJUSTED EBITDA |
(In thousands) |
|
|
|
|
|
|
|
|
|
|
Three Months Ended March
31, |
|
Preliminary and
Unaudited |
|
Unaudited |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(6,000 |
) |
- |
$ |
(4,000 |
) |
|
$ |
(13,151 |
) |
Income tax provision
(benefit) |
|
1,300 |
|
|
|
(8,056 |
) |
Interest expense, net
of interest income |
|
25,100 |
|
|
|
24,992 |
|
|
|
|
|
|
|
|
|
|
Operating income |
|
20,400 |
|
- |
|
22,400 |
|
|
|
3,785 |
|
|
|
|
|
|
|
|
|
|
Plus: depreciation and
amortization |
|
28,200 |
|
|
|
35,518 |
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
48,600 |
|
- |
|
50,600 |
|
|
|
39,303 |
|
|
|
|
|
|
|
|
|
|
Non-cash stock
compensation expense |
|
1,400 |
|
|
|
1,061 |
|
Accretion of contract
rights |
|
2,000 |
|
|
|
2,097 |
|
Separation costs for
former CEO |
|
- |
|
|
|
3,274 |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
52,000 |
|
- |
$ |
54,000 |
|
|
$ |
45,735 |
|
Contacts
Investor Relations
Richard Land, James Leahy
JCIR
212‑835‑8500 or evri@jcir.com
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