Everi Holdings, Inc., a provider of land-based and digital casino gaming content and products, financial technology, and player loyalty solutions, on Monday released expected financial results for the second quarter ending June 30.
The Las Vegas-based company said its revenue, net income, adjusted EBITDA and free cash flow will set quarterly records, which will allow it to take advantage of favorable market conditions to lower its cost of debt and extend maturities through a refinancing of its total outstanding debt.
CEO Michael Rumbolz (pictured) said Q2 revenue will be in the range of $167m to $172m, which will be up from $139.1m in Q1 2021, and an increase of more than 25% compared to $129.7m in the pre-pandemic Q2 2019.
The company expects Q2 2021 net income of $31m to $34m, compared to $20.5m in Q1 2021 and $5.5m in the second quarter of 2019. Diluted earnings per share are expected to be $0.31 to $0.34, an increase from $0.21 per share in Q1 2021 and $0.07 per share in Q2 2019.
In addition, Everi expects its adjusted EBITDAwill be $87m to $91m in the current quarter, compared to $75.4m in the first quarter of this year and $64.1m in the same quarter in 2019. As a result of the higher revenue and net income, free cash flow is expected to be $32m to $36m.
Everi plans to refinance its $35m revolving credit facility, which is due in 2022, and its $820m term loan facility due in 2024. It also will prepay in full its $125m incremental term loan facility due 2024, and redeem the $285.4m of unsecured notes due 2025.
After refinancing its $1,144.9m total outstanding debt, the company expects to have $1.0 billion of outstanding total debt and to have a new $125m revolving credit facility that will be undrawn at closing.
“Our expected record 2021 second quarter results highlight the ongoing strength of our core recurring revenue businesses and the benefit of our organic growth initiatives,” Rumbolz said in a statement. “Both our Games and FinTech segments are performing significantly above pre-pandemic periods, driving substantial improvements in our total revenue, net income, adjusted EBITDA and free cash flow. Since March, the total value processed of our financial access transactions on a same-store basis has been consistently trending at a mid-teens percentage growth rate above the comparable 2019 volumes. This is significantly higher than our mid-single digit percentage historical average growth rate.”
Rumbolz noted Everi’s gaming operation’s installed base has continued to grow, fueled primarily by a greater number of premium units, which, he said, is driving new record levels of daily win per unit. He said the company expectsits gaming machine unit sales in the second quarter will well exceed the level shipped in the first quarter of 2021.
“Given the momentum of our products in both of our business segments and our continued focus on operating execution, as well as the potential opportunity to lower our annual interest expense through refinancing of our outstanding debt, we believe Everi is well positioned to continue to generate strong free cash flow and further grow shareholder value,” Rumbolz added.
Everi noted the expected unaudited results announced today were derived from preliminary expected internal financial reports and are subject to revision. Accordingly, actual results may differ from these preliminary results and such differences may be material.
The company anticipates releasing its Q2 2021 results on August 4, after market close.