Everi expects record second-quarter sales as it announces intentions to restructure its outstanding total debt and prolong maturities in order to take advantage of favourable market circumstances.
Even with a persistent, albeit decreased, impact from the COVID-19 pandemic, the business claims that its Q2 performance shows “meaningful quarterly sequential improvement” as well as considerable increase when compared to the pre-pandemic 2019 second quarter figures.
Everi estimates that sales for the three-month period will be in the $167-$172 million range, up from $139.1 million in Q1 and up over 25 percent from $129.7 million in 2019.
Furthermore, the company expects net profits to be between $31 million and $34 million, down from $20.5 million in the first quarter and $5.5 million two years ago.
During this era, adjusted EBITDA should be between $87 million and $91 million, compared to $75.4 million in the first quarter of 2021 and $64.1 million in the second quarter of 2019.
In line with Q1, the firm expects revenue and adjusted EBITDA contributions from the gaming and fintech segments to approximate a proportional split.
Free cash flow for the second quarter is estimated to be $32 million to $36 million as a result of improved revenues and net income.
Everi’s cash and cash equivalents increased to $360.8 million as of May 31, 2021, compared to $335.1 million as of March 31, 2021, and $251.7 million as of December 31, 2020, reflecting the benefits of increasing sales and continuous operating execution, which is driving higher margins.
Ongoing strength of core recurring revenue businesses
Everi’s CEO, Michael Rumbolz, 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 wants to refinance its $35 million revolving credit facility and $820 million term loan facility, which are due in 2022 and 2024, respectively, as well as prepay its $125 million incremental term loan facility due in 2024 and redeem the $285.4 million in unsecured notes due in 2025.
The firm plans to have $1 billion in total existing debt after refinancing its $1.1 billion in total outstanding debt, as well as a new $125 million revolving credit line that will be undrawn at completion.
“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.”