Everi is anticipating record second quarter revenues, as the gaming content provider also unveils plans to capitalise on favourable market conditions to refinance its outstanding total debt and extend maturities.
The company says that its Q2 performance demonstrates “meaningful quarterly sequential improvement,” as well as substantial growth compared to the pre-pandemic 2019 second quarter results, even with a continued, albeit lesser, impact from the COVID-19 pandemic.
Everi says that revenue through the three month period should fall in the $167m-$172m boundary, representing an uptick Q1’s $139.1m and a rise of over 25 per cent from $129.7m from 2019.
Furthermore, the group anticipates that net income will fall between $31m-$34m compared to $20.5m in the first quarter and $5.5m in the same quarter two years ago.
Adjusted EBITDA should fall between $87m and $91m during the timeframe, compared to $75.4m in the 2021 first quarter and $64.1m in 2019’s second period.
The company expects that games and fintech segment contributions to revenue and adjusted EBITDA will approximate a proportional split in a manner consistent with Q1.
As a result of the higher revenues and net income, free cash flow is expected to be $32m to $36m for the second quarter.
Reflecting the benefits of improved revenues and consistent operating execution, which is driving higher margins, Everi’s cash and cash equivalents rose to $360.8m as of May 31, 2021, compared to $335.1m as of March 31, 2021, and $251.7m as of December 31, 2020.
Michael Rumbolz, CEO of Everi, explained: “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.
“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. Additionally, our gaming operations installed base has continued to grow, fueled primarily by a greater number of premium units, which is also driving new record levels of daily win per unit.
“We also expect our gaming machine unit sales in the second quarter will well exceed the level shipped in the first quarter of 2021.”
The company is looking to refinance its $35m revolving credit facility and $820m term loan facility which are due on 2022 and 2024, prepay in full its $125m incremental term loan facility due 2024, and redeem the $285.4m of unsecured notes due 2025.
After refinancing its $1.1bn total outstanding debt, the company expects to have $1bn of outstanding total debt and to have a new $125m revolving credit facility that will be undrawn at closing.
“Our strong performance is driven by the collaborative efforts of the worldwide Everi team to continuously enhance our product portfolio, and innovate new products that help our customers extend the connection with their guests and operate more efficiently, as well as our focus on providing unmatched customer service,” added Rumbolz.
“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.”