EX-99.1 2 a63022q2991exhibit.htm EX-99.1 Document

Exhibit 99.1


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EVERI REPORTS RECORD SECOND QUARTER 2022 RESULTS
All-Time Quarterly Record Revenues of $197.2 Million Drive Second Quarter Net Income of $32.5 Million and Adjusted EBITDA of $94.4 Million
Games and FinTech Segments Each Generate Record Quarterly Recurring Revenues
Highest-Ever Quarterly Sales of 1,957 Gaming Machines and Second Consecutive        Quarter with More than $10 Billion in Funds Delivered to Customers' Casino Floors
Repurchased 2.0 Million Shares for $33.3 Million
Las Vegas – August 3, 2022 - Everi Holdings Inc. (NYSE: EVRI) (“Everi” or the “Company”), a premier provider of land-based and digital casino gaming content and products, financial technology and player loyalty solutions, today announced results for the second quarter ended June 30, 2022. Everi also reiterated its full year outlook for Net income, Adjusted EBITDA and Free Cash Flow.
Second Quarter 2022 Financial Highlights
•Revenues grew 14% to an all-time quarterly record $197.2 million from $172.6 million in the 2021 second quarter, reflecting a 7% increase in recurring revenues to a quarterly record $139.7 million and a 37% increase in sales of gaming machines and FinTech hardware.
•Income before income tax increased 16% to a record $42.3 million compared to $36.6 million a year ago.
•Net income was $32.5 million, or $0.33 per diluted share, compared to $36.2 million, or $0.36 per diluted share, in the 2021 second quarter, as the provision for income taxes increased $9.3 million in the 2022 second quarter related to the reversal of deferred tax asset valuation allowance in the 2021 fourth quarter; cash taxes paid were essentially flat at $0.1 million.
•Adjusted EBITDA, a non-GAAP financial measure, increased to an all-time quarterly record $94.4 million compared to $92.5 million in the 2021 second quarter.
•Free Cash Flow, a non-GAAP financial measure, rose 26% to $49.5 million from $39.2 million in the 2021 second quarter.
•Repurchased 2.0 million shares of stock for $33.3 million in the 2022 second quarter.
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Randy Taylor, Chief Executive Officer of Everi, said, “Our strong operating momentum continued in the second quarter, as we delivered all-time quarterly record revenues, income before income tax, Adjusted EBITDA and Free Cash Flow. These record financial results were driven by another consecutive quarter of record recurring revenues for both our Games and FinTech businesses despite the very challenging year-over-year comparison for these operations, as last year’s results included the significant benefit from casino reopening activities and financial stimulus payments provided to consumers.
“Our second quarter Games segment results include our highest-ever quarterly level of gaming machines sold, which increased 40% to 1,957 units; and the 13th consecutive quarterly sequential increase in our installed base of gaming operations units. Our ongoing investments in the development of differentiated cabinets and expansion of our games portfolio continues to drive increases in our installed base, strong Daily Win per Unit, and growth in our ship share of units sold. In particular, the record number of units sold in the quarter reinforces our confidence in our ability to achieve our 15% ship share target over the next several years.
“Our FinTech segment is achieving similar success, as it generated record revenues, operating income and Adjusted EBITDA for the third consecutive quarter. The record quarterly performance was driven by increased revenues from financial access services, which included more than $10 billion of funding delivered to our customers’ casino floors for the second consecutive quarter, a record number of kiosk sales, and ongoing organic growth of our Loyalty and RegTech solutions. These results demonstrate our ability to offer industry-leading, integrated solutions that help drive increases in same-store activity and cost efficiencies for our customers. With our planned introductions of additional innovative products to our Digital Neighborhood of integrated solutions, our FinTech business is positioned to deliver consistent growth.
“Our top-line growth and focus on operational excellence continues to result in strong Free Cash Flow generation, which reached $49.5 million in the 2022 second quarter and $101.1 million for the first six months of 2022. We remain focused on allocating our higher Free Cash Flow to further grow the business through prudent investments in product development, as well as with acquisitions of businesses and technologies that continue to expand the scale and scope of our product offerings and/or drive our entry into new product categories and geographical markets. As reflected in the growing contributions of our Loyalty products, our return-focused approach to acquisitions benefits our operating performance. We expect recent acquisitions, which have expanded our addressable market to include opportunities in Australia and Historical Horse Racing gaming devices, will deliver similar benefits over time. Our Free Cash Flow performance, liquidity, and strong balance sheet also enabled us to opportunistically act on our share repurchase program in the second quarter given our view that our current valuation does not fully reflect the strength of our business and our outlook for ongoing growth."

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Consolidated Full Quarter Comparative Results (unaudited)
 
As of and for the Three Months Ended June 30,
 20222021
 (in millions, except per share amounts)
Revenue$197.2 $172.6 
Operating income (1)
$54.5 $54.4 
Net income (1)
$32.5 $36.2 
Net earnings per diluted share (1)
$0.33 $0.36 
Weighted average diluted shares outstanding98.7 100.0 
Adjusted EBITDA (2)
$94.4 $92.5 
Free Cash Flow (2)
$49.5 $39.2 
Principal amount of outstanding debt$995.5 $1,144.6 
Cash and cash equivalents$238.1 $340.4 
Net Cash Position (3)
$93.1 $196.6 
(1) Operating income, net income, and net earnings per diluted share for the three months ended June 30, 2022, included $0.7 million for office and warehouse consolidation costs, and $0.9 million in professional fees associated with acquisitions and for non-recurring litigation costs.
(2) For a reconciliation of net income to Adjusted EBITDA and Free Cash Flow, see the Unaudited Reconciliation of Selected Financial GAAP to Non-GAAP Measures provided toward the end of this release.
(3)    For a reconciliation of Net Cash Position to Cash and Cash Equivalents, see the Unaudited Reconciliation of Cash and Cash Equivalents to Net Cash Position and Net Cash Available toward the end of this release.
Second Quarter 2022 Results Overview
Revenues for the three-month period ended June 30, 2022 increased 14% to $197.2 million compared to $172.6 million in the second quarter of 2021. Recurring revenues grew 7% to $139.7 million and revenues from non-recurring sales increased 37% to $57.5 million.
Operating income for the 2022 second quarter was $54.5 million compared to $54.4 million in the prior-year period, and net income was $32.5 million, or $0.33 per diluted share, compared to $36.2 million, or $0.36 per diluted share, in the second quarter of 2021. The provision for income taxes increased $9.3 million in the 2022 second quarter related to the reversal of deferred tax asset valuation allowance in the 2021 fourth quarter. Operating margin declined from the prior-year period, reflecting a change in the revenue mix as a result of substantially greater growth in gaming machine and FinTech hardware sales year over year together with a lower margin on machine and hardware sales due to increased supply chain costs, higher operating costs that reflect the additions of acquisitions, and higher research and development expense that supports the Company's focus on increased internal, new product development. Adjusted EBITDA increased to $94.4 million from $92.5 million in the prior-year period.
Free Cash Flow increased to $49.5 million from $39.2 million in the year-ago period, reflecting higher Adjusted EBITDA and lower cash interest paid, partially offset by higher capital expenditures.
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Games Segment Full Quarter Comparative Results (unaudited)
Three Months Ended June 30,
 20222021
 (in millions, except unit amounts and prices)
Games revenues
Gaming operations - Land-based casinos$68.2 $69.6 
Gaming operations - Digital iGaming5.8 3.6 
Gaming operations - Total74.0 73.2 
Gaming equipment and systems38.3 26.1 
Gaming other— — 
Games total revenues $112.3     $99.3 
Operating income (1)
$28.9 $30.6 
Adjusted EBITDA (2)
$58.7 $60.4 
Capital expenditures$28.9 $21.3 
Gaming operations information: 
Units installed at period end: 
Class II9,792 9,422 
Class III7,672 6,829 
Total installed base at period end (3)
17,464 16,251 
Premium units (3)
8,355 6,961 
Average units installed during period (3)
17,362 16,088 
Daily win per unit ("DWPU") (4)
$39.94 $45.66 
Unit sales information:
Units sold1,957 1,402 
Average sales price ("ASP")$18,800 $17,894 
(1)     Operating income for the three months ended June 30, 2022, included $0.7 million for office and warehouse consolidation costs and professional fees associated with acquisitions.
(2) For a reconciliation of net income to Adjusted EBITDA, see the Unaudited Reconciliation of Selected Financial GAAP to Non-GAAP measures provided toward the end of this release.
(3) The ending and average installed base include all units, whether or not casinos were open and whether or not the games were active.
(4) Daily win per unit reflects the total of all units installed at casinos, inclusive of casinos closed due to the COVID pandemic and inactive units, where such units would have recorded no revenue and excludes the impact of the direct costs associated with the Company’s wide-area progressive jackpot expense.
2022 Second Quarter Games Segment Highlights
Games segment revenues grew 13% to a record $112.3 million compared to $99.3 million in the second quarter of 2021, primarily driven by record sales of gaming machines and ongoing growth in digital gaming revenues.
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Operating income was $28.9 million compared to $30.6 million in the second quarter of 2021, reflecting higher revenues from machine sales, offset by lower margins on the machine sales due to increased supply chain costs as well as higher operating expenses, including increased costs associated with acquisitions and higher research and development expense, reflecting an acceleration in games development to support a path to a targeted future 15% ship share of gaming machines sold. Adjusted EBITDA was $58.7 million compared to $60.4 million in the second quarter of 2021. Revenues from the recent acquisitions of Intuicode Gaming and certain assets of Atlas Gaming (Australia) contributed $1.4 million in the 2022 second quarter.
Gaming operations revenues were $74.0 million compared to $73.2 million a year ago, and increased 5% on a quarterly sequential basis.
•The installed base reached a record 17,464 units as of June 30, 2022; representing a year-over-year increase of 7%, or 1,213 units. The installed base increased by 136 units on a quarterly sequential basis.
•The premium portion of the installed base increased by 20%, or 1,394 units, year over year and by 276 units on a quarterly sequential basis to a record 8,355 units. This was the 16th consecutive quarterly sequential increase in premium units. Growth was driven in part by continued placements of Cashnado™ units, the initial installations of Smokin' Hot Stuff Fire and Ice™, the Company's popular premium mechanical reel games, and its Wide-area Progressive (“WAP”) gaming machines.
•Daily Win per Unit ("DWPU") was $39.94 in the second quarter of 2022 compared to $45.66 in the second quarter of 2021. DWPU in the year-ago period included the significant benefit of government stimulus payments coupled with pent-up demand as COVID vaccinations increased and consumers began to return to normalized activities. DWPU improved on a quarterly sequential basis from $39.76 in the 2022 first quarter.
•Gaming operations revenues from digital gaming rose 61% to $5.8 million in the second quarter of 2022 compared to $3.6 million in the second quarter of 2021, and increased 5% on a quarterly sequential basis. Digital revenue growth reflects the continued growth and expanded base of iGaming operator sites featuring Everi's games along with a growing library of available slot content, as well as going live in Ontario, Canada with nine operator sites as of June 30, 2022.
Gaming equipment and systems revenues generated from the sale of gaming machines and other related parts and equipment increased 47% to $38.3 million in the second quarter of 2022 compared to $26.1 million in the second quarter of 2021.
•The Company sold an all-time record 1,957 gaming machines at an average selling price (“ASP”) of $18,800 in the 2022 second quarter, up 555 units, or 40%, from 1,402 units sold at an ASP of $17,894 in the 2021 second quarter, which had included a larger-than-average number of unit sales for new casino openings and expansions. Unit growth reflects the Company's estimation of an improved industry ship share driven by the popularity of an expanding game library supporting the Empire Flex™ video reel cabinet, ongoing demand for the Player Classic™ mechanical reel cabinet, and sales of the newly launched Player Classic Signature™ mechanical reel cabinet.

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Financial Technology Solutions Segment Full Quarter Comparative Results (unaudited)
Three Months Ended June 30,
 
2022*
2021*
 (in millions, unless otherwise noted)
FinTech revenues
Financial access services$50.9 $44.8 
Software and other19.0 15.6 
Hardware15.0 12.8 
FinTech total revenues$84.9 $73.2 
Operating income (1)
$25.7 $23.8 
Adjusted EBITDA (2)
$35.7 $32.1 
Capital expenditures$7.5 $7.9 
Value of financial access transactions:
     Funds advanced$2,661.1 $2,210.9 
     Funds dispensed7,511.0 6,960.1 
     Check warranty439.1 378.8 
Total value processed$10,611.2 $9,549.8 
Number of financial access transactions:
     Funds advanced3.5 3.3 
     Funds dispensed28.6 28.4 
     Check warranty1.2 0.9 
Total transactions completed33.3 32.6 
* Rounding may cause variances.
(1)Operating income for the three months ended June 30, 2022, included $0.9 million for professional fees associated with certain acquisitions and non-recurring litigation costs.
(2)For a reconciliation of net income to Adjusted EBITDA, see the Unaudited Reconciliation of Selected Financial GAAP to Non-GAAP Measures provided toward the end of this release.

2022 Second Quarter Financial Technology Solutions ("FinTech") Segment Highlights
FinTech revenues for the 2022 second quarter increased 16% to an all-time quarterly record $84.9 million compared to $73.2 million in the 2021 second quarter, reflecting a 14% increase in financial access services, a 22% increase in software and other revenues, and a 17% improvement in revenues from hardware sales. Revenues from the recent acquisition of ecash Holdings (Australia) contributed $4.2 million in the 2022 second quarter.
Operating income increased 8% to $25.7 million in the 2022 second quarter compared to $23.8 million in the prior-year period, reflecting a benefit from higher revenues partially offset by increased research and development expense primarily in support of new and enhanced Loyalty products, the Company’s digital CashClub Wallet®, and new RegTech products and software. Adjusted EBITDA rose 11% to $35.7 million compared to $32.1 million in the 2021 second quarter.
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•Financial access services revenues, which include cashless and cash-dispensing debit and credit card transactions and check services, was a quarterly record $50.9 million, a 14% increase compared with the 2021 second quarter, reflecting continued strength in financial funding transactions at casinos, as well as growth from new customer additions. The number of completed financial transactions increased 2% year over year and for the second consecutive quarter delivered more than $10 billion of funding to customers’ casino floors, representing a year-over-year funding increase of 11%. The Company’s CashClub Wallet digital technology is currently deployed across six jurisdictions at 19 casinos, with 20 additional casino properties under various stages of deployment.
•Software and other revenues, which include Loyalty and RegTech software, product subscriptions, kiosk maintenance services, and other revenues, rose 22% to $19.0 million in the second quarter of 2022 compared to $15.6 million in the second quarter 2021. Approximately 78% and 80% of software and other revenues were of a recurring nature in the 2022 and 2021 second quarter periods, respectively.
•Hardware sales revenues increased 17% to a record $15.0 million compared to $12.8 million in the second quarter of 2021. The record level of self-service kiosks and other cash access hardware products sold in the quarter reflect significant continued demand for the Company's hardware and software solutions that deliver optimal performance and cost efficiencies to casino operators, including voucher redemption kiosks sold in Australia as a result of the ecash Holdings acquisition.
Balance Sheet and Liquidity
•As of June 30, 2022, the Company had $238.1 million of cash and cash equivalents, and its Net Cash Position was $93.1 million.
•The Company repurchased 2.0 million shares of its common stock for total consideration of $33.3 million during the quarter, and as of June 30, 2022, had $116.7 million remaining under the Board’s $150 million authorization announced on May 10, 2022.
•In the 2022 second quarter, the Company paid $14.1 million for the initial purchase price payment and the net working capital payment related to the acquisition of Intuicode Gaming, $6.0 million of consideration related to the acquisition of certain assets of ecash Holdings and $2.0 million related to the acquisition of certain assets of XUVI.
Outlook
Reflecting the operating performance in the first half of the year and the Company’s expectations for continued operating execution over the balance of the year driven by demand for its products, Everi reiterated its full year 2022 guidance for net income of $125 million to $132 million, Adjusted EBITDA of $368 million to $378 million and Free Cash Flow of $187 million to $200 million.
The Company’s year-to-date results have not reflected, and its updated guidance does not contemplate, any additional material impact from a pandemic-related setback or other macroeconomic effect, such as recessionary or inflationary influence on consumer spending, a material supply chain disruption, or other changes in global market conditions. A summary and reconciliation of the full year 2022 financial targets are included in a supplemental table at the end of this release.
Investor Conference Call and Webcast
The Company will host an investor conference call to discuss its 2022 second quarter results at 11:00 a.m. EDT (8:00 a.m. PDT) today. The conference call may be accessed live by phone by dialing (201) 689-8471. A replay of the call will be available beginning at 2:00 p.m. ET today and may be accessed by dialing (412) 317-6671; the PIN number is 13730679. A replay will be available until August 10,
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2022. The call also will be webcast live and archived on www.everi.com (select “Investors” followed by “Events & Contact”).
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, Free Cash Flow, Net Cash Position and Net Cash Available, which are not measures of our financial performance or position under United States Generally Accepted Accounting Principles (“GAAP”). Accordingly, Adjusted EBITDA and Free Cash Flow should not be considered in isolation or as a substitute for measures prepared in accordance with GAAP. These measures should be read in conjunction with our net earnings, operating income, and cash flow data prepared in accordance with GAAP. With respect to Net Cash Position and Net Cash Available, these measures should be read in conjunction with cash and cash equivalents prepared in accordance with GAAP.
We define Adjusted EBITDA as earnings (loss) before interest, taxes, depreciation and amortization, loss on extinguishment of debt, non-cash stock compensation expense, accretion of contract rights, write-downs of inventory, property and equipment and intangible assets, employee severance costs and other related expenses, litigation settlement received net of legal costs, foreign exchange loss, asset acquisition expense, non-recurring professional fees, certain litigation costs, and one-time charges. 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 current credit facility and existing senior unsecured notes require us to comply with a consolidated secured leverage ratio that includes performance metrics substantially similar to Adjusted EBITDA.
We define Free Cash Flow as Adjusted EBITDA less cash paid for interest, cash paid for capital expenditures, cash paid for placement fees, and cash paid for taxes net of refunds. We present Free Cash Flow as a measure of performance and believe it provides investors with another indicator of our operating performance. It should not be inferred that the entire Free Cash Flow amount is available for discretionary expenditures.
A reconciliation of the Company’s net income (loss) per GAAP to Adjusted EBITDA and Free Cash Flow is included in the Unaudited Reconciliation of Selected Financial GAAP to Non-GAAP Measures provided at the end of this release. Additionally, a reconciliation of each segment’s operating income to EBITDA and Adjusted EBITDA is also included. On a segment level, operating income per GAAP, rather than net earnings per GAAP, is reconciled to EBITDA and Adjusted EBITDA as the Company does not report net earnings by segment. Management believes that this presentation is meaningful to investors in evaluating the performance of the Company’s segments.
We define (i) Net Cash Position as cash and cash equivalents plus settlement receivables less settlement liabilities and (ii) Net Cash Available as Net Cash Position plus undrawn amounts available under our revolving credit facility. We present Net Cash Position because our cash position, as measured by cash and cash equivalents, depends upon changes in settlement receivables and the timing of payments related to settlement liabilities. As such, our cash and cash equivalents can change substantially based upon the timing of our receipt of payments for settlement receivables and payments we make to customers for our settlement liabilities. We present Net Cash Available as management monitors this amount in connection with its forecasting of cash flows and future cash requirements.
A reconciliation of the Company’s cash and cash equivalents per GAAP to Net Cash Position and Net Cash Available is included in the Unaudited Reconciliation of Cash and Cash Equivalents to Net Cash Position and Net Cash Available provided at the end of this release.

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Cautionary Note Regarding Forward-Looking Statements
This press release contains “forward-looking statements” as defined in the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are neither historical facts nor assurances of future performance, but instead are based only on our current beliefs, expectations, and assumptions regarding the future of our business, plans and strategies, projections, anticipated events and trends, the economy, and other future conditions, as of the date this press release is issued. Forward-looking statements often, but do not always, contain words such as “expect,” “anticipate,” “aim to,” “designed to,” “intend,” “plan,” “believe,” “goal,” “target,” “future,” “assume,” “estimate,” “indication,” “seek,” “project,” “may,” “can,” “could,” “should,” “favorably positioned,” or “will” and other words and terms of similar meaning. Readers are cautioned not to place undue reliance on the forward-looking statements contained herein, which are based only on information currently available to us and only as of the date hereof.
Examples of forward-looking statements include, among others, statements regarding our ability to execute on key initiatives and deliver ongoing operating and financial improvements, including guidance related to 2022 financial and operational metrics; regain or maintain revenue, earnings and Free Cash Flow momentum; sustain our overall growth; drive growth of the gaming operations installed base and DWPU; continue expanding the portions of the gaming floor the Company’s games address, including into the Historical Horse Racing category of gaming devices and the Company's overall targeted ship share of gaming machines sold; successfully perform obligations required by acquisition agreements; and create incremental value for our shareholders, as well as statements regarding our expectations for the industry environment and the adoption of our products and technologies.
Forward-looking statements are subject to inherent risks, uncertainties, and changes in circumstances that are often difficult to predict and many of which are beyond our control, including, but not limited to, statements regarding: trends, developments, and uncertainties impacting our business, including our ability to withstand: global supply chain disruption; inflationary impact on supply chain costs; changes in global market, business and regulatory conditions arising as a result of the COVID-19 global pandemic, including any related public health confidence and availability of discretionary spending income of casino patrons, as well as expectations for the re-opening of casinos; product innovations that address customer needs in a new and evolving operating environment; to regain or maintain revenue, earnings, and cash flow momentum, and to enhance shareholder value in the long-term; trends in gaming establishment and patron usage of our products; benefits realized by using our products and services; benefits and/or costs associated with mergers, acquisitions, and/or strategic alliances; product development, including the release of new game features, additional games, and system releases in the future; regulatory approvals; gaming and financial regulatory and legal, card association, and statutory compliance and changes; the implementation of new or amended card association and payment network rules or interpretations; consumer collection activities; competition (including consolidations); tax liabilities; goodwill impairment charges; international expansion; resolution of litigation or government investigations; our dividend policy; new customer contracts and contract renewals; financial performance and results of operations (including revenue, expenses, margins, earnings, cash flow, and capital expenditures); inflationary impact on labor costs and retention; interest rates and interest expense; borrowings and debt repayments; and equity incentive activity and compensation expense.
Our actual results and financial condition may differ materially from those indicated in forward-looking statements, and important factors that could cause them to do so include, but are not limited to, the following: our ability to generate profits in the future and to create incremental value for shareholders; our ability to withstand inflationary and other factors that pressure discretionary consumer spending; our ability to execute on mergers, acquisitions and/or strategic alliances, including our ability to integrate and operate such acquisitions or alliances consistent with our forecasts in order to achieve
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future growth; our ability to execute on key initiatives and deliver ongoing improvements; expectations regarding growth for the Company’s installed base and daily win per unit; expectations regarding placement fee arrangements; inaccuracies in underlying operating assumptions; the impact of the ongoing Coronavirus Disease 2019 (“COVID-19”) global pandemic on our business, operations and financial condition, including (i) actions taken by international, federal, state, tribal and municipal governmental and regulatory agencies to contain the COVID-19 public health emergency or mitigate its impact, (ii) the direct and indirect economic effects of COVID-19 and measures to contain it, including directives, orders or similar actions by international, federal, state, tribal and municipal governmental and regulatory agencies to regulate freedom of movement and business operations such as travel restrictions, border closures, business closures, limitations on public gatherings, quarantines and shelter-in-place orders as well as re-opening safety protocols; changes in global market, business, and regulatory conditions arising as a result of the COVID-19 global pandemic; our history of net losses and our ability to generate profits in the future; our leverage and the related covenants that restrict our operations; our ability to withstand unanticipated impacts of a pandemic outbreak of uncertain duration; our ability to withstand the loss of revenue during the closure of our customers’ facilities; our ability to generate sufficient cash to service all of our indebtedness, fund working capital, and capital expenditures; our ability to maintain our current customers; expectations regarding customers’ preferences and demands for future product and service offerings; the overall growth of the gaming industry, if any; our ability to replace revenue associated with terminated contracts; margin degradation from contract renewals; our ability to comply with the Europay, MasterCard, and Visa global standard for cards equipped with security chip technology; our ability to successfully introduce new products and services, including third-party licensed content; gaming establishment and patron preferences; failure to control product development costs and create successful new products; anticipated sales performance; our ability to prevent, mitigate, or timely recover from cybersecurity breaches, attacks, and compromises; national and international economic and industry conditions; changes in gaming regulatory, card association, and statutory requirements; regulatory and licensing difficulties, competitive pressures and changes in the competitive environment; operational limitations; gaming market contraction; changes to tax laws; uncertainty of litigation outcomes; interest rate fluctuations; business prospects; unanticipated expenses or capital needs; technological obsolescence and our ability to adapt to evolving technologies; our ability to comply with our debt covenants and service outstanding debt; employee hiring, turnover, and retention; our ability to comply with regulatory requirements under the Payment Card Industry (“PCI”) Data Security Standards and maintain our certified status; and those other risks and uncertainties discussed in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2021 (the “Annual Report”). Given these risks and uncertainties, there can be no assurance that the forward-looking information contained in this press release will in fact transpire or prove to be accurate.
This press release should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2021, and with 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.
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About Everi
Everi’s mission is to lead the gaming industry through the power of people, imagination and technology. With a focus on player engagement and helping casino customers operate more efficiently, the Company develops entertaining game content and gaming machines, gaming systems, and services for land-based and iGaming operators. The Company is also a preeminent and comprehensive provider of trusted financial technology solutions that power the casino floor while improving operational efficiencies and fulfilling regulatory compliance requirements, including products and services that facilitate convenient and secure cash and cashless financial transactions, self-service player loyalty tools and applications, and regulatory and intelligence software. For more information, please visit www.everi.com, which is updated regularly with financial and other information about the Company.

Investor Relations Contacts:
Everi Holdings Inc.                        
William Pfund                            Steven Kopjo
SVP, Investor Relations                    Director, Investor Relations
702-676-9513 or william.pfund@everi.com            702-785-7157 or steven.kopjo@everi.com
JCIR
Richard Land, James Leahy
212-835-8500 or evri@jcir.com
Join Everi on Social Media
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EVERI HOLDINGS INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME
(In thousands, except earnings per share amounts)
Three Months Ended June 30,
Six Months Ended June 30,
2022    202120222021
Revenues
  Games revenues
     Gaming operations$74,035 $73,220 $144,332 $131,361 
     Gaming equipment and systems38,268 26,090 66,266 44,078 
     Gaming other44 27 85 49 
         Games total revenues112,347 99,337 210,683 175,488 
   FinTech revenues
     Financial access services50,876 44,840 100,755 83,552 
     Software and other18,997 15,604 36,864 32,850 
     Hardware15,002 12,801 24,536 19,805 
         FinTech total revenues84,875 73,245 162,155 136,207 
         Total revenues197,222 172,582 372,838 311,695 
Costs and expenses
   Games cost of revenues (1)
     Gaming operations6,122 5,342 12,117 10,101 
     Gaming equipment and systems23,394 15,248 40,176 25,555 
         Games total cost of revenues29,516 20,590 52,293 35,656 
   FinTech cost of revenues (1)
     Financial access services2,470 1,560 4,645 3,033 
     Software and other886 1,129 1,821 2,133 
     Hardware10,362 7,670 16,303 11,698 
         FinTech total cost of revenues13,718 10,359 22,769 16,864 
Operating expenses
55,051 48,178 104,876 86,221 
Research and development
14,064 8,766 26,583 17,179 
Depreciation
15,678 15,931 30,898 32,108 
Amortization
14,646 14,369 28,279 29,084 
Total costs and expenses142,673 118,193 265,698 217,112 
Operating income54,549 54,389 107,140 94,583 
Other expenses
Interest expense, net of interest income12,294 17,760 23,642 36,231 
Total other expenses
12,294 17,760 23,642 36,231 
Income before income tax42,255 36,629 83,498 58,352 
Income tax provision9,734 415 19,455 1,604 
Net income32,521 36,214 64,043 56,748 
Foreign currency translation (loss) gain(2,606)328 (2,026)107 
Comprehensive income$29,915 $36,542 $62,017 $56,855 
Earnings per share
          Basic$0.35 $0.41 $0.70 $0.65 
          Diluted$0.33 $0.36 $0.65 $0.57 
Weighted average common shares outstanding
          Basic91,710 88,722 91,560 87,858 
          Diluted98,706 100,030 99,249 99,004 

(1) Exclusive of depreciation and amortization.
12


EVERI HOLDINGS INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par value amounts)
 
At June 30,
At December 31,
 20222021
ASSETS  
Current assets  
Cash and cash equivalents
$238,106 $302,009 
Settlement receivables
59,195 89,275 
Trade and other receivables, net of allowances for credit losses of $5,284 and $5,161 at June 30, 2022 and December 31, 2021, respectively
108,726 104,822 
Inventory
49,163 29,233 
Prepaid expenses and other current assets
38,895 27,299 
Total current assets494,085 552,638 
Non-current assets
Property and equipment, net127,131 119,993 
Goodwill707,258 682,663 
Other intangible assets, net236,112 214,594 
Other receivables20,997 13,982 
Deferred tax assets, net9,475 32,121 
Other assets28,945 19,659 
Total non-current assets1,129,918 1,083,012 
Total assets$1,624,003 $1,635,650 
LIABILITIES AND STOCKHOLDERS’ EQUITY  
Current liabilities  
Settlement liabilities$204,199 $291,861 
 Accounts payable and accrued expenses208,200 173,933 
 Current portion of long-term debt6,000 6,000 
Total current liabilities418,399 471,794 
Non-current liabilities
Long-term debt, less current portion973,760 975,525 
Other accrued expenses and liabilities29,215 13,831 
Total non-current liabilities1,002,975 989,356 
Total liabilities1,421,374 1,461,150 
Commitments and contingencies
Stockholders’ equity  
Convertible preferred stock, $0.001 par value, 50,000 shares authorized and no shares outstanding at June 30, 2022 and December 31, 2021, respectively
— — 
Common stock, $0.001 par value, 500,000 shares authorized and 119,109 and 90,761 shares issued and outstanding at June 30, 2022, respectively, and 116,996 and 91,313 shares issued and outstanding at December 31, 2021, respectively
119 117 
Additional paid-in capital516,785 505,757 
Accumulated deficit(77,712)(141,755)
Accumulated other comprehensive loss(3,481)(1,455)
Treasury stock, at cost, 28,348 and 25,683 shares at June 30, 2022 and December 31, 2021, respectively
(233,082)(188,164)
Total stockholders’ equity202,629 174,500 
Total liabilities and stockholders’ equity$1,624,003 $1,635,650 
13


EVERI HOLDINGS INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Six Months Ended June 30,
20222021
Cash flows from operating activities
Net income$64,043 $56,748 
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation30,898 32,108 
Amortization28,279 29,084 
Non-cash lease expense2,257 2,399 
Amortization of financing costs and discounts1,427 2,344 
Loss on sale or disposal of assets289 1,486 
Accretion of contract rights4,897 4,637 
Provision for credit losses4,275 3,806 
Deferred income taxes18,548 896 
Reserve for inventory obsolescence468 1,211 
Stock-based compensation10,311 8,452 
Changes in operating assets and liabilities:
Settlement receivables30,041 10,546 
Trade and other receivables(8,888)(26,297)
Inventory(15,157)(4,764)
Prepaid expenses and other assets(23,892)(7,146)
Settlement liabilities(87,607)20,682 
Accounts payable and accrued expenses14,046 27,326 
Net cash provided by operating activities74,235 163,518 
Cash flows from investing activities
Capital expenditures(60,044)(49,234)
Acquisitions, net of cash acquired(33,250)(15,000)
Proceeds from sale of property and equipment67 19 
Placement fee agreements(547)— 
Net cash used in investing activities(93,774)(64,215)
Cash flows from financing activities
Repayments of new term loan(3,000)— 
Repayment of prior incremental term loan— (625)
Proceeds from exercise of stock options719 8,703 
Treasury stock - restricted share vesting and withholding(11,582)(8,612)
Treasury stock - repurchase of shares(30,298)— 
Payment of contingent consideration, acquisition— (9,875)
Net cash used in financing activities(44,161)(10,409)
Effect of exchange rates on cash and cash equivalents(450)67 
Cash, cash equivalents and restricted cash
Net (decrease) increase for the period(64,150)88,961 
Balance, beginning of the period303,726 252,349 
Balance, end of the period$239,576 $341,310 
Supplemental cash disclosures
Cash paid for interest$22,259 $35,309 
Cash paid for income tax, net87 566 
Supplemental non-cash disclosures
Accrued and unpaid capital expenditures$3,587 $2,212 
Transfer of leased gaming equipment to inventory4,078 3,715 
14



EVERI HOLDINGS INC. AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF CASH AND CASH EQUIVALENTS
TO NET CASH POSITION AND NET CASH AVAILABLE
(In thousands)

At June 30,
At December 31,
At June 30,
202220212021
Cash available  
Cash and cash equivalents (1)
$238,106 $302,009 $340,361 
Settlement receivables59,195 89,275 50,111 
Settlement liabilities(204,199)(291,861)(193,893)
Net Cash Position93,102 99,423 196,579 
Undrawn revolving credit facility125,000 125,000 35,000 
Net Cash Available$218,102 $224,423 $231,579 
(1) Cash and cash equivalents does not include $1.5 million, $1.7 million, and $0.9 million of restricted cash at June 30, 2022, December 31, 2021, and June 30, 2021, respectively.

15


EVERI HOLDINGS INC. AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF SELECTED FINANCIAL GAAP TO NON-GAAP MEASURES
(In thousands)
Three Months Ended June 30, 2022
 GamesFinTechTotal
Net income  $32,521 
Income tax provision  9,734 
Interest expense, net of interest income  12,294 
Operating income$28,883 $25,666     $54,549 
Plus: depreciation and amortization23,801 6,523 30,324 
EBITDA$52,684 $32,189 $84,873 
Non-cash stock-based compensation expense2,815 2,685 5,500 
Accretion of contract rights2,470 — 2,470 
Office and warehouse consolidation678 — 678 
Non-recurring professional fees and other$34 $868 $902 
Adjusted EBITDA$58,681 $35,742 $94,423 
Cash paid for interest(7,820)
Cash paid for capital expenditures(36,405)
Cash paid for placement fees(547)
Cash paid for income taxes, net(128)
Free Cash Flow$49,523 

16


EVERI HOLDINGS INC. AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF SELECTED FINANCIAL GAAP TO NON-GAAP MEASURES
(In thousands)
Three Months Ended June 30, 2021
 GamesFinTechTotal
Net income  $36,214 
Income tax provision  415 
Interest expense, net of interest income  17,760 
Operating income$30,589 $23,800     $54,389 
Plus: depreciation and amortization24,739 5,561 30,300 
EBITDA$55,328 $29,361 $84,689 
Non-cash stock-based compensation expense2,713 2,734 5,447 
Accretion of contract rights2,318 — 2,318 
Adjusted EBITDA$60,359 $32,095 $92,454 
Cash paid for interest(23,283)
Cash paid for capital expenditures(29,199)
Cash paid for income taxes, net(763)
Free Cash Flow$39,209 

17


EVERI HOLDINGS INC. AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF SELECTED FINANCIAL GAAP TO NON-GAAP MEASURES
(In thousands)
Six Months Ended June 30, 2022
 GamesFinTechTotal
Net income  $64,043 
Income tax provision  19,455 
Interest expense, net of interest income  23,642 
Operating income$56,680 $50,460     $107,140 
Plus: depreciation and amortization46,587 12,590 59,177 
EBITDA$103,267 $63,050 $166,317 
Non-cash stock-based compensation expense5,286 5,025 10,311 
Accretion of contract rights4,897 — 4,897 
Office and warehouse consolidation678 — 678 
Non-recurring professional fees and other34 1,808 1,842 
Adjusted EBITDA$114,162 $69,883 $184,045 
Cash paid for interest(22,259)
Cash paid for capital expenditures(60,044)
Cash paid for placement fees(547)
Cash paid for income taxes, net(87)
Free Cash Flow$101,108 















18




EVERI HOLDINGS INC. AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF SELECTED FINANCIAL GAAP TO NON-GAAP MEASURES
(In thousands)
Six Months Ended June 30, 2021
 GamesFinTechTotal
Net income  $56,748 
Income tax provision  1,604 
Interest expense, net of interest income  36,231 
Operating income$45,865 $48,718     $94,583 
Plus: depreciation and amortization50,286 10,906 61,192 
EBITDA$96,151 $59,624 $155,775 
Non-cash stock-based compensation expense4,172 4,280 8,452 
Accretion of contract rights4,637 — 4,637 
Litigation settlement, net— (1,107)(1,107)
Asset acquisition expense, non-recurring professional fees and other— 84 84 
Adjusted EBITDA$104,960 $62,881 $167,841 
Cash paid for interest(35,309)
Cash paid for capital expenditures(49,234)
Cash paid for income taxes, net(566)
Free Cash Flow$82,732 

























19






EVERI HOLDINGS INC. AND SUBSIDIARIES
RECONCILIATION OF PROJECTED NET INCOME TO PROJECTED EBITDA AND PROJECTED ADJUSTED EBITDA FOR THE YEAR ENDING DECEMBER 31, 2022
(In thousands)
2022 Guidance Range (1)
 LowHigh
Projected net income $125,000 $132,000 
Projected income tax provision @ 23% - 23.5%37,000 40,000 
Projected interest expense, net of interest income52,000 54,000 
Projected operating income$214,000 $226,000 
Plus: projected depreciation and amortization121,000 116,000 
Projected EBITDA$335,000 $342,000 
Projected non-cash stock compensation expense19,000 22,000 
Projected accretion of contract rights12,000 10,000 
Projected asset acquisition expense and non-recurring professional fees2,000 4,000 
Projected Adjusted EBITDA$368,000 $378,000 
Projected cash paid for interest(50,000)(52,000)
Projected cash paid for capital expenditures(130,000)(124,000)
Projected cash paid for placement fees(500)(500)
Projected cash paid for income taxes, net of refunds(500)(1,500)
Projected Free Cash Flow$187,000 $200,000 
(1) All figures presented are projected estimates for the year ending December 31, 2022.


20