Everi Holdings Inc. (EVRI) Tops Q4 EPS by 11c, Announces Strategic FinTech Tuck-in Acquisition

Everi Holdings Inc. (NYSE: EVRI) reported Q4 EPS of $0.06, $0.11 better than the analyst estimate of ($0.05). Revenue for the quarter came in at $119.5 million versus the consensus estimate of $114.2 million.

2019 Outlook

Everi today provided its initial forecast for certain 2019 financial and operational metrics. The Company expects to generate growth in revenue, Adjusted EBITDA and Free Cash Flow in 2019. Adjusted EBITDA is expected to rise to between $252 million to $255 million, with broad-based growth across the Company’s operating segments including expectations for:

• An increase in Gaming unit sales from the 4,513 units sold in 2018;
• Growth in gaming operations driven by growth in both the DWPU and an increase in the number of units in the year-end installed base;
• Increasing Interactive revenue;
• Higher cash access service revenue in the FinTech segment;
• An increase in sales of fully integrated kiosks and other FinTech equipment; and,
• An increase in information services and other revenue primarily driven by expected growth in revenue related to the servicing of FinTech equipment and higher compliance revenue, as well as initial contributions related to the acquisition noted above.

In addition, excluding the capital expenditures for the recently acquired business, the Company expects capital expenditures and placement fees for 2019 will be less than the amount spent in 2018.

Acquisition of Self-Service Casino Loyalty Enrollment and Marketing Platform

Everi also announced today that it recently acquired certain casino gaming-related assets from a leading provider of casino loyalty and marketing solutions. The acquired assets include existing technology related to self-service kiosks and a marketing platform as well as other intellectual property. The Company also acquired a portfolio of over 50 customer contracts representing over 100 casino locations where the platform is currently installed that provide a stream of high-margin recurring revenue related to software maintenance and support. The Company paid $20 million of the $40 million purchase price from cash balances on hand. The Company expects to pay the balance over the next two years as well as contingent earnout consideration of an additional $10 million at the end of a two-year earnout period also from cash balances on hand. The tuck-in acquisition is expected to be immediately additive to the Company’s Adjusted EBITDA and improves Everi’s ability to generate additional free cash flow.

The acquisition enhances the Company’s existing, market-leading financial technology solution portfolio by adding new touch-points for gaming patrons at customer locations and a new player loyalty and marketing focused business line. Everi intends to leverage its powerful gaming network to add valuable transactional information for customers.

Mr. Rumbolz, said, “The addition of this market-leading player loyalty platform enhances our existing FinTech solution offering. It supplements our existing Information Solutions capabilities, expands our products and services into a new and growing business segment of Marketing Information Services, and provides opportunities to achieve greater future growth.

“Our ability to integrate this robust player loyalty platform with our payment solutions and growing compliance suite through our already powerful proprietary network further differentiates our comprehensive offerings and enhances the overall value proposition of the FinTech services we provide to our customers. We believe this attractive tuck-in acquisition fits perfectly into our strategy of delivering products and services that are focused on improving the guest experience, growing our FinTech transactional base and creating operating efficiencies for our customers.”

For earnings history and earnings-related data on Everi Holdings Inc. (EVRI) click here.

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