Everi is anticipating that its 2020 fourth quarter and full year results will demonstrate sequential improvement but will, however, reflect a continued impact from the COVID-19 pandemic and related casino closures.
The issuance of a trading update comes in connection with an opportunity to take advantage of favourable market conditions to lower its cost of debt, by repricing $735.5m of its first lien term loan which is due in 2024.
Expectation for the fourth quarter places consolidated revenue in the $117m to $121m range, which would reflect quarterly sequential improvement from $112.1m in Q3 but a significant drop from 2019’s Q4 of $145.2m.
The company expects its quarterly net loss to be in a range of $1.4m to $300,000, inclusive of approximately $1.5m in pre-tax charges related to the consolidation of certain facilities and the write-off of certain inventory.
This compares to a net loss of $900,000 recorded in the third quarter and a net loss of $4.1m from the same reporting period one year earlier, which included the impact of a $6.4m pre-tax charge for litigation settlement and approximately $1.6m of additional charges.
Furthermore, adjusted EBITDA is expected to fall in the range of $60m to $62m for 2020’s fourth quarter, compared to $59.8m in Q3 and $63.2m in 2019.
Reflecting the significant impact of the pandemic’s effect on the casino and hospitality industry throughout the year, revenue for 2020 is expected to be in a range of $381m to $385m with net loss of $85m to $83m, compared with $533.2m and $16.5m, respectively, in 2019.
Michael Rumbolz, CEO of Everi, explained: “Our preliminary 2020 fourth quarter results reflect quarterly sequential improvement highlighting the ongoing strength and balance of our business, as well as the benefit of our focus on consistent improvement in our operating execution.
“Even with increased casino closures and further restrictions on certain casino activities in the fourth quarter, the sequential progress of our expected financial and operating results demonstrate the significant improvements to our games and fintech product portfolios over the last several years.
“This includes our efforts to innovate new products that help our customers extend the connection with their guests and operate more efficiently. The combination of our improved operating performance and the ongoing benefits of our cost-enhancement initiatives is expected to result in free cash flow that is approximately triple the amount we reported in last year’s fourth quarter.
“We expect our operating strength and momentum to continue in the 2021 first quarter, as casinos again begin to reopen and casino activities improve compared to 2020 fourth quarter levels.”
