Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2021 | May 03, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-32622 | |
Entity Registrant Name | EVERI HOLDINGS INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-0723270 | |
Entity Address, Address Line One | 7250 S. Tenaya Way, Suite 100 | |
Entity Address, City or Town | Las Vegas | |
Entity Address, State or Province | NV | |
Entity Address, Postal Zip Code | 89113 | |
City Area Code | 800 | |
Local Phone Number | 833-7110 | |
Title of 12(b) Security | Common Stock, $0.001 par value | |
Trading Symbol | EVRI | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 88,122,030 | |
Entity Central Index Key | 0001318568 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | ||
Revenues | |||
Total revenues | $ 139,113 | $ 113,308 | |
Costs and expenses | |||
Operating expenses | 38,043 | 39,272 | |
Research and development | 8,413 | 8,355 | |
Depreciation | 16,177 | 16,243 | |
Amortization | 14,715 | 19,324 | |
Total costs and expenses | 98,919 | 102,882 | |
Operating income | 40,194 | 10,426 | |
Other expenses | |||
Interest expense, net of interest income | 18,471 | 17,499 | |
Loss on extinguishment of debt | 0 | 7,378 | |
Total other expenses | 18,471 | 24,877 | |
Income (loss) before income tax | 21,723 | (14,451) | |
Income tax provision (benefit) | 1,189 | (997) | |
Net income (loss) | 20,534 | (13,454) | |
Foreign currency translation | (221) | (1,958) | |
Comprehensive income (loss) | $ 20,313 | $ (15,412) | |
Earnings (loss) per share | |||
Basic (in dollars per share) | $ 0.24 | $ (0.16) | |
Diluted (in dollars per share) | $ 0.21 | $ (0.16) | |
Weighted average common shares outstanding | |||
Basic (in shares) | 86,984 | 84,624 | |
Diluted (in shares) | 97,968 | 84,624 | |
Games | |||
Revenues | |||
Total revenues | $ 76,151 | $ 57,290 | |
Costs and expenses | |||
Cost of revenues | [1] | 15,066 | 11,369 |
Operating expenses | 14,595 | 14,805 | |
Research and development | 5,667 | 6,195 | |
Depreciation | 14,563 | 14,728 | |
Amortization | 10,984 | 15,585 | |
Total costs and expenses | 60,875 | 62,682 | |
Operating income | 15,276 | (5,392) | |
Games | Gaming operations | |||
Revenues | |||
Total revenues | 58,141 | 45,686 | |
Costs and expenses | |||
Cost of revenues | [1] | 4,759 | 4,545 |
Games | Gaming equipment and systems | |||
Revenues | |||
Total revenues | 17,988 | 11,583 | |
Costs and expenses | |||
Cost of revenues | [1] | 10,307 | 6,824 |
Games | Gaming other | |||
Revenues | |||
Total revenues | 22 | 21 | |
FinTech | |||
Revenues | |||
Total revenues | 62,962 | 56,018 | |
Costs and expenses | |||
Cost of revenues | [1] | 6,505 | 8,319 |
Operating expenses | 23,448 | 24,467 | |
Research and development | 2,746 | 2,160 | |
Depreciation | 1,614 | 1,515 | |
Amortization | 3,731 | 3,739 | |
Total costs and expenses | 38,044 | 40,200 | |
Operating income | 24,918 | 15,818 | |
FinTech | Financial access services | |||
Revenues | |||
Total revenues | 38,712 | 36,973 | |
Costs and expenses | |||
Cost of revenues | [1] | 1,473 | 3,555 |
FinTech | Software and other | |||
Revenues | |||
Total revenues | 17,246 | 12,694 | |
Costs and expenses | |||
Cost of revenues | [1] | 1,004 | 873 |
FinTech | Hardware | |||
Revenues | |||
Total revenues | 7,004 | 6,351 | |
Costs and expenses | |||
Cost of revenues | [1] | $ 4,028 | $ 3,891 |
[1] | (1) Exclusive of depreciation and amortization. |
UNAUDITED CONDENSED CONSOLIDA_2
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash and cash equivalents | $ 335,133 | $ 251,706 |
Settlement receivables | 45,822 | 60,652 |
Trade and other receivables, net of allowances for credit losses of $4,449 and $3,689 at March 31, 2021 and December 31, 2020, respectively | 80,235 | 74,191 |
Inventory | 29,729 | 27,742 |
Prepaid expenses and other current assets | 19,865 | 17,348 |
Total current assets | 510,784 | 431,639 |
Non-current assets | ||
Property and equipment, net | 109,909 | 112,323 |
Goodwill | 681,981 | 681,974 |
Other intangible assets, net | 203,093 | 214,627 |
Other receivables | 14,238 | 14,620 |
Other assets | 19,809 | 21,996 |
Total non-current assets | 1,029,030 | 1,045,540 |
Total assets | 1,539,814 | 1,477,179 |
Current liabilities | ||
Settlement liabilities | 198,316 | 173,211 |
Accounts payable and accrued expenses | 157,029 | 145,029 |
Current portion of long-term debt | 1,250 | 1,250 |
Total current liabilities | 356,595 | 319,490 |
Non-current liabilities | ||
Long-term debt, less current portion | 1,128,815 | 1,128,003 |
Deferred tax liability, net | 20,776 | 19,956 |
Other accrued expenses and liabilities | 16,096 | 17,628 |
Total non-current liabilities | 1,165,687 | 1,165,587 |
Total liabilities | 1,522,282 | 1,485,077 |
Commitments and contingencies (Note 13) | ||
Stockholders’ equity (deficit) | ||
Convertible preferred stock, $0.001 par value, 50,000 shares authorized and no shares outstanding at March 31, 2021 and December 31, 2020, respectively | 0 | 0 |
Common stock, $0.001 par value, 500,000 shares authorized and 112,852 and 87,651 shares issued and outstanding at March 31, 2021, respectively, and 111,872 and 86,683 shares issued and outstanding at December 31, 2020, respectively | 113 | 112 |
Additional paid-in capital | 471,902 | 466,614 |
Accumulated deficit | (274,086) | (294,620) |
Accumulated other comprehensive loss | (1,412) | (1,191) |
Treasury stock, at cost, 25,202 and 25,190 shares at March 31, 2021 and December 31, 2020, respectively | (178,985) | (178,813) |
Total stockholders’ equity (deficit) | 17,532 | (7,898) |
Total liabilities and stockholders’ equity (deficit) | $ 1,539,814 | $ 1,477,179 |
UNAUDITED CONDENSED CONSOLIDA_3
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets | ||
Allowances for doubtful accounts | $ 4,449 | $ 3,689 |
Stockholders’ equity (deficit) | ||
Convertible preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Convertible preferred stock authorized (in shares) | 50,000,000 | 50,000,000 |
Convertible preferred stock outstanding (in shares) | 0 | 0 |
Common stock par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock issued (in shares) | 112,852,000 | 111,872,000 |
Common stock outstanding (in shares) | 87,651,000 | 86,683,000 |
Treasury stock (in shares) | 25,202,000 | 25,190,000 |
UNAUDITED CONDENSED CONSOLIDA_4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash flows from operating activities | ||
Net income (loss) | $ 20,534 | $ (13,454) |
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities: | ||
Depreciation | 16,177 | 16,243 |
Amortization | 14,715 | 19,324 |
Non-cash lease expense | 1,196 | 1,056 |
Amortization of financing costs and discounts | 1,172 | 854 |
Loss on sale or disposal of assets | 743 | 87 |
Accretion of contract rights | 2,318 | 2,170 |
Provision for credit losses | 1,999 | 3,750 |
Deferred income taxes | 820 | (1,175) |
Reserve for inventory obsolescence | 467 | 362 |
Loss on extinguishment of debt | 0 | 7,378 |
Stock-based compensation | 3,005 | 2,483 |
Changes in operating assets and liabilities: | ||
Settlement receivables | 14,832 | 67,604 |
Trade and other receivables | (7,673) | 15,846 |
Inventory | (2,438) | (13,131) |
Prepaid expenses and other assets | (1,863) | 856 |
Settlement liabilities | 25,105 | (221,832) |
Accounts payable and accrued expenses | 20,497 | (19,257) |
Net cash provided by (used in) operating activities | 111,606 | (130,836) |
Cash flows from investing activities | ||
Capital expenditures | (20,035) | (22,507) |
Acquisitions, net of cash acquired | (10,000) | (10,000) |
Proceeds from sale of property and equipment | 80 | 30 |
Placement fee agreements | 0 | (585) |
Net cash used in investing activities | (29,955) | (33,062) |
Cash flows from financing activities | ||
Repayments of incremental term loan | (313) | 0 |
Proceeds from revolving credit facility | 0 | 35,000 |
Repayments of existing term loan | 0 | (13,500) |
Repayments of unsecured notes | 0 | (89,619) |
Fees associated with debt transactions | 0 | (6,491) |
Proceeds from exercise of stock options | 2,285 | 1,642 |
Treasury stock | (173) | (42) |
Net cash provided by (used in) financing activities | 1,799 | (73,010) |
Effect of exchange rates on cash and cash equivalents | (120) | (2,592) |
Cash, cash equivalents and restricted cash | ||
Net increase (decrease) for the period | 83,330 | (239,500) |
Balance, beginning of the period | 252,349 | 296,610 |
Balance, end of the period | 335,679 | 57,110 |
Supplemental cash disclosures | ||
Cash paid for interest | 12,026 | 10,855 |
Cash refunded for income tax, net | (197) | (78) |
Supplemental non-cash disclosures | ||
Accrued and unpaid capital expenditures | 2,786 | 4,488 |
Transfer of leased gaming equipment to inventory | $ 1,407 | $ 5,529 |
UNAUDITED CONDENSED CONSOLIDA_5
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Treasury Stock |
Balance, beginning of period (in shares) at Dec. 31, 2019 | 109,493 | |||||
Balance, beginning of period at Dec. 31, 2019 | $ 53,988 | $ 109 | $ 445,162 | $ (212,940) | $ (819) | $ (177,524) |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | (13,454) | (13,454) | ||||
Foreign currency translation | (1,958) | (1,958) | ||||
Stock-based compensation expense | 4,173 | 4,173 | ||||
Exercise of options (in shares) | 298 | |||||
Exercise of options | 1,642 | $ 1 | 1,641 | |||
Restricted share vesting and withholding (in shares) | 15 | |||||
Restricted share vesting and withholding | (42) | (42) | ||||
Balance, end of period (in shares) at Mar. 31, 2020 | 109,806 | |||||
Balance, end of period at Mar. 31, 2020 | $ 44,349 | $ 110 | 450,976 | (226,394) | (2,777) | (177,566) |
Balance, beginning of period (in shares) at Dec. 31, 2020 | 86,683 | 111,872 | ||||
Balance, beginning of period at Dec. 31, 2020 | $ (7,898) | $ 112 | 466,614 | (294,620) | (1,191) | (178,813) |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | 20,534 | 20,534 | ||||
Foreign currency translation | (221) | (221) | ||||
Stock-based compensation expense | 3,005 | 3,005 | ||||
Exercise of warrants (in shares) | 378 | |||||
Exercise of options (in shares) | 561 | |||||
Exercise of options | 2,285 | $ 1 | 2,284 | |||
Restricted share vesting and withholding (in shares) | 41 | |||||
Restricted share vesting and withholding | $ (173) | (1) | (172) | |||
Balance, end of period (in shares) at Mar. 31, 2021 | 87,651 | 112,852 | ||||
Balance, end of period at Mar. 31, 2021 | $ 17,532 | $ 113 | $ 471,902 | $ (274,086) | $ (1,412) | $ (178,985) |
BUSINESS
BUSINESS | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS | BUSINESS Everi Holdings Inc. (“Everi Holdings,” or “Everi”) is a holding company, the assets of which are the issued and outstanding shares of capital stock of each of Everi Payments Inc. (“Everi FinTech” or “FinTech”) and Everi Games Holding Inc., which owns all of the issued and outstanding shares of capital stock of Everi Games Inc. (“Everi Games” or “Games”). Unless otherwise indicated, the terms the “Company,” “we,” “us,” and “our” refer to Everi Holdings together with its consolidated subsidiaries. Everi is a leading supplier of entertainment and trusted technology solutions for the casino and digital gaming industry. Everi’s mission is to be the industry leader by reimagining the gaming experience. 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 the preeminent 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. Everi reports its financial performance, and organizes and manages its operations, across the following two business segments: (i) Games and (ii) FinTech. Everi Games provides gaming operators with gaming technology products and services, including: (i) gaming machines, primarily comprising Class II and Class III slot machines placed under participation or fixed-fee lease arrangements or sold to casino customers; (ii) providing and maintaining the central determinant systems for the video lottery terminals (“VLTs”) installed in the State of New York and similar technology in certain tribal jurisdictions; (iii) business-to-business (“B2B”) and business-to-consumer (“B2C”) digital online gaming activities. Everi FinTech provides gaming operators with financial technology products and services, including: financial access and deposit-based services supporting digital, cashless and physical cash options across mobile, assisted and self-service channels along with related loyalty and marketing tools, and other information-related products and services. In addition, we provide an end-to-end security suite to protect against cyber-related attacks and maintain the necessary secured environments to maintain compliance with applicable regulatory requirements. These solutions include: access to cash and cashless funding at gaming facilities via Automated Teller Machine (“ATM”) debit withdrawals, credit card financial access transactions, and point of sale (“POS”) debit card purchases at casino cages, kiosk and mobile POS devices; federally insured deposit accounts for the CashClub Wallet, check warranty services, self-service ATMs and fully integrated kiosk and maintenance services; self-service loyalty tools and promotion management software; compliance, audit, and data software; casino credit data and reporting services; marketing and promotional offering subscription-based services; and other ancillary offerings. With respect to our FinTech business, we have made the following updates to certain of our financial statement descriptions, where applicable: (i) “Cash access services” has become “Financial access services;” (ii) “ATM” has been renamed “Funds dispensed;” (iii) “Equipment” has been changed to “Hardware;” and (iv) “Information services and other” has been revised to “Software and other.” These naming convention changes better represent how our business has evolved. Impact of Coronavirus Disease 2019 (“COVID-19”) Pandemic The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains, temporarily lowered equity market valuations, created significant volatility in the financial markets, increased unemployment levels, caused temporary, and in certain cases, permanent closures of many businesses. The gaming industry was not immune to these factors as our casino customers closed their gaming establishments, and as a result, our operations experienced significant disruptions in the first three quarters of 2020. At the immediate onset of the COVID-19 pandemic, we were affected by various measures, including, but not limited to: the institution of social distancing and sheltering-in-place requirements in many states and communities where we operate, which significantly impacted demand for our products and services, and resulted in office closures, the furlough of a majority of our employees, the implementation of temporary base salary reductions for our employees and the implementation of a work-from-home policy. Since the onset of COVID-19, we have implemented measures to mitigate our exposure throughout the global pandemic. While there may be further uncertainty facing our customers as a result of COVID-19, we continue to evaluate our business strategies and the impacts of the global pandemic on our results of operations and financial condition and make business decisions to mitigate further risk. It is unclear when, and if, customer volumes will consistently return to pre-COVID levels, the extent a resurgence of COVID-19 could result in the further or re-closure of casinos by federal, state, tribal or municipal governments and regulatory agencies or by the casino operators themselves in an effort to contain the COVID-19 global pandemic or mitigate its impact and the impact of vaccines on these matters; however, we continue to monitor the impacts of the global pandemic and make adjustments to our business, accordingly. Industry conditions have improved as many of the casino properties that again temporarily closed operations in late 2020 began reopening in the first quarter of 2021. As of March 31, 2021, approximately 5% of casinos in the United States remained closed, according to the American Gaming Association. Our revenues, cash flows, and liquidity improved during the first quarter of 2021 as compared to the prior year on a sequential basis. At the onset of the pandemic, our customers implemented protocols intended to protect their patrons and guests from potential COVID-19 exposure and re-establish customer confidence in the gaming and hospitality industry. These measures included enhanced sanitization, limitations on public gathering and casino capacity, patron social distancing requirements, limitations on casino operations and amenities, of which have limited the number of patrons that are able or who desire to attend these venues. This has also impacted the pace at which demand for our products and services rebounds. We expect that demand for our products and services will continue to be tempered in the short-term, to the extent gaming activity decreases at our customers’ locations or fails to increase at expected rates return to pre-pandemic levels and to the extent our customers decide to restrict their capital spending as a result of uncertainty in the industry, or otherwise. As a result, we continue to monitor and manage liquidity levels and we may, from time to time, evaluate available capital resource alternatives on acceptable terms to provide additional financial flexibility. The impact of the COVID-19 pandemic also exacerbates the risks disclosed in our Annual Report, including, but not limited to: our ability to comply with the terms of our indebtedness, our ability to generate revenues, earn profits and maintain adequate liquidity, our ability to service existing and attract new customers, maintain our overall competitiveness in the market, the potential for significant fluctuations in demand for our services, overall trends in the gaming industry impacting our business, and potential volatility in our stock price, among other consequences such as cybersecurity exposure. |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation Our unaudited condensed consolidated financial statements included herein have been prepared by us pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Some of the information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) have been condensed or omitted pursuant to such rules and regulations, although we believe the disclosures are adequate to make the information presented not misleading. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary for a fair statement of results for the interim periods have been made. The results for the three months ended March 31, 2021 are not necessarily indicative of results to be expected for the full fiscal year. The Financial Statements should be read in conjunction with the consolidated financial statements and notes thereto included in the 2020 Annual Report. We evaluate the composition of our revenues to maintain compliance with SEC Regulation S-X Section 210.5-3, which requires us to separately present certain categories of revenues that exceed the quantitative threshold on our Statements of Operations. Revenue Recognition Overview We evaluate the recognition of revenue based on the criteria set forth in Accounting Standards Codification (“ASC”) 606 — Revenue from Contracts with Customers and ASC 842 — Leases, as appropriate. We recognize revenue upon transferring control of goods or services to our customers in an amount that reflects the consideration we expect to receive in exchange for those goods or services. We enter into contracts with customers that include various performance obligations consisting of goods, services, or combinations of goods and services. Timing of the transfer of control varies based on the nature of the contract. We recognize revenue net of any sales and other taxes collected from customers, which are subsequently remitted to governmental authorities and are not included in revenues or operating expenses. We measure revenue based on the consideration specified in a contract with a customer and adjusted, as necessary. Disaggregation of Revenues We disaggregate revenues based on the nature and timing of the cash flows generated by such revenues as presented in “Note 18 — Segment Information.” Contract Balances Since our contracts may include multiple performance obligations, there is often a timing difference between cash collections and the satisfaction of such performance obligations and revenue recognition. Such arrangements are evaluated to determine whether contract assets and liabilities exist. We generally record contract assets when the timing of billing differs from when revenue is recognized due to contracts containing specific performance obligations that are required to be met prior to a customer being invoiced. We generally record contract liabilities when cash is collected in advance of us satisfying performance obligations, including those that are satisfied over a period of time. Balances of our contract assets and contract liabilities may fluctuate due to timing of cash collections. The following table summarizes our contract assets and contract liabilities arising from contracts with customers (in thousands): Three Months Ended March 31, 2021 2020 Contract assets (1) Balance at January 1 — current $ 9,240 $ 8,634 Balance at January 1 — non-current 8,321 6,774 Total 17,561 15,408 Balance at March 31 - current 9,796 8,559 Balance at March 31 - non-current 7,299 6,902 Total 17,095 15,461 (Decrease)/increase $ (466) $ 53 Contract liabilities (2) Balance at January 1 — current $ 26,980 $ 28,510 Balance at January 1 — non-current 289 354 Total 27,269 28,864 Balance at March 31 - current 27,887 31,226 Balance at March 31 - non-current 98 185 Total 27,985 31,411 Increase $ 716 $ 2,547 (1) The current portion of contract assets is included within trade and other receivables, net, and the non-current portion is included within other receivables in our Balance Sheets. (2) The current portion of contract liabilities is included within accounts payable and accrued expenses, and the non-current portion is included within other accrued expenses and liabilities in our Balance Sheets. We recognized approximately $10.5 million and $11.0 million in revenue that was included in the beginning contract liability balance during the three months ended March 31, 2021 and 2020, respectively. Games Revenues Our products and services include electronic gaming devices, such as Native American Class II offerings and other electronic bingo products, Class III slot machine offerings, VLTs, B2B and B2C digital online gaming activities, accounting and central determinant systems, and other back office systems. We conduct our Games segment business based on results generated from the following major revenue streams: (i) Gaming Operations; (ii) Gaming Equipment and Systems; and (iii) Gaming Other. We recognize our Gaming Operations revenue based on criteria set forth in ASC 842 or ASC 606, as applicable. The amount of lease revenue included in our Gaming Operations revenues and recognized under ASC 842 was approximately $40.8 million and $34.0 million for the three months ended March 31, 2021 and 2020, respectively. FinTech Revenues Our FinTech products and services include solutions that we offer to gaming establishments to provide their patrons with financial access and deposit-based services supporting digital, cashless and physical cash options across mobile, assisted and self-service channels along with related loyalty and marketing tools, and other information-related products and services. In addition, we provide an end-to-end se curity suite to protect against cyber-related attacks and maintain the necessary secured environments to maintain compliance with applicable regulatory requirements. These solutions include: access to cash and cashless funding at gaming facilities via ATM debit withdrawals, credit card financial access transactions, and POS debit card purchases at casino cages, kiosk and mobile POS devices; federally insured deposit accounts for the CashClub Wallet, check warranty services, self-service ATMs and fully integrated kiosk and maintenance services; self-service loyalty tools and promotion management software; compliance, audit, and data software; casino credit data and reporting services; marketing and promotional offering subscription-based services; and other ancillary offerings. We conduct our FinTech segment business based on results generated from the following major revenue streams: (i) Financial Access Services; (ii) Software and Other; and (iii) Hardware. Hardware revenues are derived from the sale of our financial access and loyalty kiosks and related equipment and are accounted for under ASC 606, unless such transactions meet the definition of a sales type or direct financing lease, which are accounted for under ASC 842. We did not have any new financial access kiosk and related equipment sales contracts accounted for under ASC 842 during the three months ended March 31, 2021 and 2020. Restricted Cash Our restricted cash primarily consists of: (i) funds held in connection with certain customer agreements; (ii) deposits held in connection with a sponsorship agreement; (iii) wide area progressive (“WAP”)-related restricted funds; and (iv) internet-related financial access activities. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Balance Sheets that sum to the total of the same such amounts shown in the statement of cash flows for the three months ended March 31, 2021 (in thousands). Classification on our Balance Sheets At March 31, 2021 At December 31, 2020 Cash and cash equivalents Cash and cash equivalents $ 335,133 $ 251,706 Restricted cash - current Prepaid expenses and other current assets 445 542 Restricted cash - non-current Other assets 101 101 Total $ 335,679 $ 252,349 Allowance for Credit Losses We continually evaluate the collectability of outstanding balances and maintain an allowance for credit losses related to our trade and other receivables and notes receivable that have been determined to have a high risk of uncollectability, which represents our best estimates of the current expected credit losses to be incurred in the future. To derive our estimates, we analyze historical collection trends and changes in our customer payment patterns, current and expected conditions and market trends along with our operating forecasts, concentration, and creditworthiness when evaluating the adequacy of our allowance for credit losses. In addition, with respect to our check warranty receivables, we are exposed to risk for the losses associated with warranted items that cannot be collected from patrons issuing these items. We evaluate the collectability of the outstanding balances and establish a reserve for the face amount of the current expected credit losses related to these receivables. The provision for doubtful accounts receivable is included within operating expenses and the check warranty loss reserves are included within financial access services cost of revenues in the Statements of Operations. Goodwill Goodwill represents the excess of the purchase price over the identifiable tangible and intangible assets acquired plus liabilities assumed arising from business combinations. We test for impairment annually on a reporting unit basis, at the beginning of our fourth fiscal quarter and between annual tests if events and circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The annual impairment test is completed using either: a qualitative “Step 0” assessment based on reviewing relevant events and circumstances; or a quantitative “Step 1” assessment, which determines the fair value of the reporting unit, using both an income approach that discounts future cash flows based on the estimated future results of our reporting units and a market approach that compares market multiples of comparable companies to determine whether or not any impairment exists. To the extent the carrying amount of a reporting unit is less than its estimated fair value, an impairment charge is recorded. The evaluation of impairment of goodwill requires the use of estimates about future operating results. Changes in forecasted operations can materially affect these estimates, which could materially affect our results of operations and financial condition. The estimates of expected future cash flows require significant judgment and are based on assumptions we determined to be reasonable; however, they are unpredictable and inherently uncertain, including, estimates of future growth rates, operating margins and assumptions about the overall economic climate as well as the competitive environment within which we operate. There can be no assurance that our estimates and assumptions made for purposes of our impairment assessments as of the time of evaluation will prove to be accurate predictions of the future. If our assumptions regarding business plans, competitive environments, or anticipated growth rates are not correct, we may be required to record non-cash impairment charges in future periods, whether in connection with our normal review procedures periodically, or earlier, if an indicator of an impairment is present prior to such evaluation. Our reporting units are identified as operating segments or one level below. Reporting units must: (i) engage in business activities from which they earn revenues and incur expenses; (ii) have operating results that are regularly reviewed by our segment management to ascertain the resources to be allocated to the segment and assess its performance; and (iii) have discrete financial information available. As of March 31, 2021, our reporting units included: (i) Games; (ii) Financial Access Services; (iii) Kiosk Sales and Services; (iv) Central Credit Services; (v) Compliance Sales and Services; and (vi) Loyalty Sales and Services. Fair Values of Financial Instruments The fair value of a financial instrument represents the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Fair value estimates are made at a specific point in time, based upon relevant market information about the financial instrument. The carrying amount of cash and cash equivalents, restricted cash, settlement receivables, short-term trade and other receivables, settlement liabilities, accounts payable, and accrued expenses approximate fair value due to the short-term maturities of these instruments. The fair value of the long-term trade and loans receivable is estimated by discounting expected future cash flows using current interest rates at which similar loans would be made to borrowers with similar credit ratings and remaining maturities. The fair value of long-term accounts payable is estimated by discounting the total obligation using the appropriate interest rates. As of March 31, 2021 and December 31, 2020, the fair value of trade and loan receivable approximated the carrying value due to contractual terms generally being slightly over 12 months. The fair value of our borrowings is estimated based on various inputs to determine a market price, such as: market demand and supply, size of tranche, maturity, and similar instruments trading in more active markets. The estimated fair value and outstanding balances of our borrowings are as follows (dollars in thousands): Level of Hierarchy Fair Value Outstanding Balance March 31, 2021 Term loan 2 $ 731,749 $ 735,500 Incremental term loan 2 $ 130,886 $ 124,063 Senior unsecured notes 2 $ 296,454 $ 285,381 December 31, 2020 Term loan 2 $ 729,138 $ 735,500 Incremental term loan 2 $ 129,972 $ 124,375 Senior unsecured notes 2 $ 296,083 $ 285,381 Our borrowings’ fair values were determined using Level 2 inputs based on quoted market prices for these securities. Reclassification of Prior Year Balances Reclassifications were made to prior-period Financial Statements to conform to the current period presentation, where applicable. Recent Accounting Guidance Recently Adopted Accounting Guidance Standard Description Date of Adoption Effect on Financial Statements Accounting Standard Update (“ASU”) No. 2019-12 , Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes This ASU simplifies the accounting for income taxes by removing certain exceptions for investments, intraperiod allocations, and interim calculations, and adds guidance to reduce the complexity of applying Topic 740. January 1, 2021 The adoption of this ASU did not have a material effect on our Financial Statements or on our disclosures. Recent Accounting Guidance Not Yet Adopted As of March 31, 2021, we did not identify recently issued accounting guidance that would have a significant impact on our consolidated financial statements. |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
LEASES | LEASES We determine if a contract is, or contains, a lease at the inception, or modification, of a contract based on whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Control over the use of an asset is predicated upon the notion that a lessee has both the right to (i) obtain substantially all of the economic benefit from the use of the asset; and (ii) direct the use of the asset. Operating lease right-of-use (“ROU”) assets and liabilities are recognized based on the present value of minimum lease payments over the expected lease term at commencement date. Lease expense is recognized on a straight-line basis over the expected lease term. Our lease arrangements have both lease and non-lease components, and we have elected the practical expedient to account for the lease and non-lease elements as a single lease. Certain of our lease arrangements contain options to renew with terms that generally have the ability to extend the lease term to a range of approximately 1 to 10 years. The exercise of lease renewal options is generally at our sole discretion. The expected lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise such option. The depreciable life of leased assets and leasehold improvements are limited by the expected term of such assets, unless there is a transfer of title or purchase option reasonably certain to be exercised. Lessee We enter into operating lease agreements for real estate purposes that generally consist of buildings for office space and warehouses for manufacturing purposes. Certain of our lease agreements consist of rental payments that are periodically adjusted for inflation. Our lease agreements do not contain material residual value guarantees or material restrictive covenants. Our lease agreements do not generally provide explicit rates of interest; therefore, we use our incremental collateralized borrowing rate, which is based on a fully collateralized and fully amortizing loan with a maturity date the same as the length of the lease that is based on the information available at the commencement date to determine the present value of lease payments. Leases with an expected term of 12 months or less (short-term) are not accounted for on our Balance Sheets. As of March 31, 2021 and December 31, 2020, our finance leases are immaterial. Supplemental balance sheet information related to our operating leases is as follows (in thousands): Classification on our Balance Sheets At March 31, 2021 At December 31, 2020 Assets Operating lease ROU assets Other assets, non-current $ 14,907 $ 16,104 Liabilities (1) Current operating lease liabilities Accounts payable and accrued expenses $ 5,605 $ 5,649 Non-current operating lease liabilities Other accrued expenses and liabilities $ 14,798 $ 16,077 Supplemental cash flow information related to leases is as follows (in thousands): Three Months Ended March 31, 2021 2020 Cash paid for: Long-term operating leases $ 1,625 $ 1,299 Short-term operating leases $ 430 $ 489 Right-of-use assets obtained in exchange for lease obligations: Operating leases (1) $ — $ 704 (1) The amounts are presented net of current year terminations and exclude amortization for the period. Other information related to lease terms and discount rates is as follows: At March 31, 2021 At December 31, 2020 Weighted Average Remaining Lease Term (in years): Operating leases 4.03 4.16 Weighted Average Discount Rate: Operating leases 5.15 % 5.16 % Components of lease expense, which are included in operating expenses, are as follows (in thousands): Three Months Ended March 31, 2021 2020 Operating Lease Cost: Operating lease cost (1) $ 1,460 $ 1,372 Variable lease cost $ 250 $ 445 (1) The amount includes approximately $1.2 million and $1.1 million in non-cash lease expense for the three months ended March 31, 2021 and 2020, respectively. Maturities of lease liabilities are summarized as follows as of March 31, 2021 (in thousands): Year Ending December 31, Amount 2021 (excluding the three months ended March 31, 2021) $ 4,936 2022 5,891 2023 4,414 2024 3,456 2025 2,889 Thereafter 1,043 Total future minimum lease payments $ 22,629 Amount representing interest 2,226 Present value of future minimum lease payments $ 20,403 Current operating lease obligations 5,605 Long-term lease obligations $ 14,798 Lessor We generate lease revenues primarily from our gaming operations activities, and the majority of our leases are month-to-month leases. Under these arrangements, we retain ownership of the electronic gaming machines (“EGMs”) installed at customer facilities. We receive recurring revenues based on a percentage of the net win per day generated by the leased gaming equipment or a fixed daily fee. Such revenues are generated daily and are limited to the lesser of the net win per day generated by the leased gaming equipment or the fixed daily fee and the lease payments that have been collected from the lessee. Certain of our leases have terms and conditions with options for a lessee to purchase the underlying assets. Refer to "Note 9 - Property and Equipment" for details of our rental pool assets cost and accumulated depreciation. We did not have any new sales transactions that qualified for sales-type lease accounting treatment during the three months ended March 31, 2021 and 2020 . Our interest income recognized in connection with sales-type leases executed in the prior periods is immaterial. Supplemental balance sheet information related to our sales-type leases is as follows (in thousands): Classification on our Balance Sheets At March 31, 2021 At December 31, 2020 Assets Net investment in sales-type leases — current Trade and other receivables, net $ 1,258 $ 1,397 Net investment in sales-type leases — non-current Other receivables $ 575 $ 803 |
LEASES | LEASES We determine if a contract is, or contains, a lease at the inception, or modification, of a contract based on whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Control over the use of an asset is predicated upon the notion that a lessee has both the right to (i) obtain substantially all of the economic benefit from the use of the asset; and (ii) direct the use of the asset. Operating lease right-of-use (“ROU”) assets and liabilities are recognized based on the present value of minimum lease payments over the expected lease term at commencement date. Lease expense is recognized on a straight-line basis over the expected lease term. Our lease arrangements have both lease and non-lease components, and we have elected the practical expedient to account for the lease and non-lease elements as a single lease. Certain of our lease arrangements contain options to renew with terms that generally have the ability to extend the lease term to a range of approximately 1 to 10 years. The exercise of lease renewal options is generally at our sole discretion. The expected lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise such option. The depreciable life of leased assets and leasehold improvements are limited by the expected term of such assets, unless there is a transfer of title or purchase option reasonably certain to be exercised. Lessee We enter into operating lease agreements for real estate purposes that generally consist of buildings for office space and warehouses for manufacturing purposes. Certain of our lease agreements consist of rental payments that are periodically adjusted for inflation. Our lease agreements do not contain material residual value guarantees or material restrictive covenants. Our lease agreements do not generally provide explicit rates of interest; therefore, we use our incremental collateralized borrowing rate, which is based on a fully collateralized and fully amortizing loan with a maturity date the same as the length of the lease that is based on the information available at the commencement date to determine the present value of lease payments. Leases with an expected term of 12 months or less (short-term) are not accounted for on our Balance Sheets. As of March 31, 2021 and December 31, 2020, our finance leases are immaterial. Supplemental balance sheet information related to our operating leases is as follows (in thousands): Classification on our Balance Sheets At March 31, 2021 At December 31, 2020 Assets Operating lease ROU assets Other assets, non-current $ 14,907 $ 16,104 Liabilities (1) Current operating lease liabilities Accounts payable and accrued expenses $ 5,605 $ 5,649 Non-current operating lease liabilities Other accrued expenses and liabilities $ 14,798 $ 16,077 Supplemental cash flow information related to leases is as follows (in thousands): Three Months Ended March 31, 2021 2020 Cash paid for: Long-term operating leases $ 1,625 $ 1,299 Short-term operating leases $ 430 $ 489 Right-of-use assets obtained in exchange for lease obligations: Operating leases (1) $ — $ 704 (1) The amounts are presented net of current year terminations and exclude amortization for the period. Other information related to lease terms and discount rates is as follows: At March 31, 2021 At December 31, 2020 Weighted Average Remaining Lease Term (in years): Operating leases 4.03 4.16 Weighted Average Discount Rate: Operating leases 5.15 % 5.16 % Components of lease expense, which are included in operating expenses, are as follows (in thousands): Three Months Ended March 31, 2021 2020 Operating Lease Cost: Operating lease cost (1) $ 1,460 $ 1,372 Variable lease cost $ 250 $ 445 (1) The amount includes approximately $1.2 million and $1.1 million in non-cash lease expense for the three months ended March 31, 2021 and 2020, respectively. Maturities of lease liabilities are summarized as follows as of March 31, 2021 (in thousands): Year Ending December 31, Amount 2021 (excluding the three months ended March 31, 2021) $ 4,936 2022 5,891 2023 4,414 2024 3,456 2025 2,889 Thereafter 1,043 Total future minimum lease payments $ 22,629 Amount representing interest 2,226 Present value of future minimum lease payments $ 20,403 Current operating lease obligations 5,605 Long-term lease obligations $ 14,798 Lessor We generate lease revenues primarily from our gaming operations activities, and the majority of our leases are month-to-month leases. Under these arrangements, we retain ownership of the electronic gaming machines (“EGMs”) installed at customer facilities. We receive recurring revenues based on a percentage of the net win per day generated by the leased gaming equipment or a fixed daily fee. Such revenues are generated daily and are limited to the lesser of the net win per day generated by the leased gaming equipment or the fixed daily fee and the lease payments that have been collected from the lessee. Certain of our leases have terms and conditions with options for a lessee to purchase the underlying assets. Refer to "Note 9 - Property and Equipment" for details of our rental pool assets cost and accumulated depreciation. We did not have any new sales transactions that qualified for sales-type lease accounting treatment during the three months ended March 31, 2021 and 2020 . Our interest income recognized in connection with sales-type leases executed in the prior periods is immaterial. Supplemental balance sheet information related to our sales-type leases is as follows (in thousands): Classification on our Balance Sheets At March 31, 2021 At December 31, 2020 Assets Net investment in sales-type leases — current Trade and other receivables, net $ 1,258 $ 1,397 Net investment in sales-type leases — non-current Other receivables $ 575 $ 803 |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 3 Months Ended |
Mar. 31, 2021 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATIONS | BUSINESS COMBINATIONS We had no material acquisitions for the three months ended March 31, 2021. Atrient, Inc. On March 8, 2019, we acquired certain assets of Atrient, Inc. (“Atrient,” the “Seller”), a privately held company that developed and distributed hardware and software applications to gaming operators to enhance gaming patron loyalty, pursuant to an asset purchase agreement. This acquisition included existing contracts with gaming operators, technology, and intellectual property that allow us to provide gaming operators with self-service enrollment, loyalty and marketing equipment, a mobile application to offer a gaming operator’s patrons additional flexibility in accessing casino promotions, and a marketing platform that manages and delivers a gaming operator’s marketing programs through these patron interfaces. This acquisition expanded our financial technology solutions offerings within our FinTech segment. Under the terms of the asset purchase agreement, we paid the Seller $20.0 million at the closing of the transaction, $10.0 million one year following the closing and an other $10.0 million during the three months ended March 31, 2021. The related liabilities were recorded at fair value on the acquisition date as part of the consideration transferred and were included in accounts payable and accrued expenses as of December 31, 2020. Furthermore, an additional amount of approximately $10.0 million in contingent consideration was earned by the Seller based upon the achievement of certain revenue targets over the first two years post-closing. The related liabilities were recorded at fair value on the acquisition date as part of the consideration transferred and are remeasured each reporting period. The inputs used to measure the fair value of our liabilities are categorized as Level 3 in the fair value hierarchy. Contingent consideration liabilities as of March 31, 2021 and December 31, 2020 were approximately $10.0 million and $9.9 million, respectively, and were included in accounts payable and accrued expenses in our Balance Sheets as of March 31, 2021 and December 31, 2020, respectively. Micro Gaming Technologies, Inc. On December 24, 2019, we acquired certain assets of Micro Gaming Technologies, Inc. (“MGT”), a privately held company that developed and distributed kiosks and software applications to gaming patrons to enhance patron loyalty, in an asset purchase agreement. The acquired assets consisted of existing contracts with gaming operators, technology, and intellectual property intended to allow us to provide gaming operators with self-service patron loyalty functionality delivered through stand-alone kiosk equipment and a marketing platform that manages and delivers gaming operators marketing programs through these patron interfaces. This acquisition further expanded our financial technology loyalty offerings within our FinTech segment. Under the terms of the asset purchase agreement, we paid MGT $15.0 million at the closing of the transaction, with an additional $5.0 million due by April 1, 2020 and a final payment of $5.0 million due two years following the date of closing. In the second quarter of 2020, we entered into an amendment to the asset purchase agreement allowing us to remit the additional $5.0 million by July 1, 2020, which we paid in June 2020, with a final payment of $5.0 million due by July 1, 2021. The related liabilities were recorded at fair value on the acquisition date as part of the consideration transferred and were included in accounts payable and accrued expenses as of March 31, 2021 and December 31, 2020. The total consideration for this acquisition is expected to be approximately $25.0 million. The acquisition did not have a significant impact on our results of operations or financial condition. |
FUNDING AGREEMENTS
FUNDING AGREEMENTS | 3 Months Ended |
Mar. 31, 2021 | |
A T M Funding Agreement Disclosure [Abstract] | |
FUNDING AGREEMENTS | FUNDING AGREEMENTS We have commercial arrangements with third-party vendors to provide cash for certain of our fund dispensing devices. For the use of these funds, we pay a usage fee on either the average daily balance of funds utilized multiplied by a contractually defined usage rate or the amounts supplied multiplied by a contractually defined usage rate. These fund usage fees, reflected as interest expense within the Statements of Operations, were approximately $0.7 million and $1.5 million for the three months ended March 31, 2021 and 2020, respectively. We are exposed to interest rate risk to the extent that the applicable rates increase. Under these agreements, the currency supplied by third party vendors remain their sole property until the funds are dispensed. As these funds are not our assets, supplied cash is not reflected in our Balance Sheets. The outstanding balance of funds provided from the third parties were approximately $451.0 million and $340.3 million as of March 31, 2021 and December 31, 2020, respectively. Our primary commercial arrangement, the Contract Cash Solutions Agreement, as amended, is with Wells Fargo, N.A. (“Wells Fargo”). Wells Fargo provides us with cash up to $300 million with the ability to increase the amount as defined within the agreement or otherwise permitted by the vault cash provider. The term of the agreement expires on June 30, 2023 and will automatically renew for additional one-year periods unless either party provides a ninety-day written notice of its intent not to renew. We are responsible for losses of cash in the fund dispensing devices under this agreement, and we self-insure for this type of risk. There were no material losses for the three months ended March 31, 2021 and 2020. |
TRADE AND OTHER RECEIVABLES
TRADE AND OTHER RECEIVABLES | 3 Months Ended |
Mar. 31, 2021 | |
Receivables [Abstract] | |
TRADE AND OTHER RECEIVABLES | TRADE AND OTHER RECEIVABLESTrade and other receivables represent short-term credit granted to customers and long-term loans receivable in connection with our Games and FinTech equipment and compliance products. Trade and loans receivables generally do not require collateral. The balance of trade and loans receivables consists of outstanding balances owed to us by gaming establishments. Other receivables include income tax receivables and other miscellaneous receivables. The balance of trade and other receivables consisted of the following (in thousands): At March 31, At December 31, 2021 2020 Trade and other receivables, net Games trade and loans receivables $ 55,770 $ 44,794 FinTech trade and loans receivables 18,398 14,683 Contract assets (1) 17,095 17,561 Net investment in sales-type leases 1,833 2,200 Insurance settlement receivable (2) — 7,650 Other receivables 1,377 1,923 Total trade and other receivables, net 94,473 88,811 Non-current portion of receivables Games trade and loans receivables (1,082) (1,333) FinTech trade and loans receivables (5,282) (4,163) Contract assets (1) (7,299) (8,321) Net investment in sales-type leases (575) (803) Total non-current portion of receivables (14,238) (14,620) Total trade and other receivables, current portion $ 80,235 $ 74,191 (1) Refer to “Note 2 — Basis of Presentation and Summary of Significant Accounting Policies ” for a discussion on the contract assets. (2) Refer to “Note 13 — Commitments and Contingencies” for a discussion on the insurance settlement receivable. Allowance for Credit Losses The activity in our allowance for credit losses for the three months ended March 31, 2021 and 2020 is as follows (in thousands): Three Months Ended March 31, 2021 2020 Beginning allowance for credit losses $ (3,689) $ (5,786) Provision (1,999) (3,750) Charge-offs and recoveries 1,239 3,943 Ending allowance for credit losses $ (4,449) $ (5,593) |
INVENTORY
INVENTORY | 3 Months Ended |
Mar. 31, 2021 | |
Inventory Disclosure [Abstract] | |
INVENTORY | INVENTORY Our inventory primarily consists of component parts as well as work-in-progress and finished goods. The cost of inventory includes cost of materials, labor, overhead and freight, and is accounted for using the first in, first out method. The inventory is stated at the lower of cost or net realizable value. Inventory consisted of the following (in thousands): At March 31, At December 31, 2021 2020 Inventory Component parts, net of reserves of $1,555 and $1,262 at March 31, 2021 and December 31, 2020, respectively $ 21,956 $ 21,560 Work-in-progress 2,408 182 Finished goods 5,365 6,000 Total inventory $ 29,729 $ 27,742 |
PREPAID EXPENSES AND OTHER ASSE
PREPAID EXPENSES AND OTHER ASSETS | 3 Months Ended |
Mar. 31, 2021 | |
Prepaid Expense and Other Assets [Abstract] | |
PREPAID EXPENSES AND OTHER ASSETS | PREPAID EXPENSES AND OTHER ASSETS Prepaid expenses and other assets include the balance of prepaid expenses, deposits, debt issuance costs on our Revolving Credit Facility (defined herein), restricted cash, operating lease ROU assets, and other assets. The current portion of these assets is included in prepaid expenses and other assets and the non-current portion is included in other assets, both of which are contained within the Balance Sheets. The balance of the current portion of prepaid expenses and other assets consisted of the following (in thousands): At March 31, At December 31, 2021 2020 Prepaid expenses and other current assets Prepaid expenses $ 13,178 $ 11,282 Deposits 4,960 4,133 Restricted cash (1) 445 542 Other 1,282 1,391 Total prepaid expenses and other current assets $ 19,865 $ 17,348 (1) Refer to “Note 2 — Basis of Presentation and Summary of Significant Accounting Policies” for discussion on the composition of the restricted cash balance. The balance of the non-current portion of other assets consisted of the following (in thousands): At March 31, At December 31, 2021 2020 Other assets Operating lease ROU assets $ 14,907 $ 16,104 Prepaid expenses and deposits 4,073 4,952 Debt issuance costs of revolving credit facility 220 267 Other 609 673 Total other assets $ 19,809 $ 21,996 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment consist of the following (dollars in thousands): At March 31, 2021 At December 31, 2020 Useful Life Cost Accumulated Net Book Cost Accumulated Net Book Property and equipment Rental pool - deployed 2-4 $ 223,409 $ 145,853 $ 77,556 $ 216,775 $ 136,975 $ 79,800 Rental pool - undeployed 2-4 22,769 17,636 5,133 21,974 16,680 5,294 FinTech equipment 1-5 31,985 20,460 11,525 33,349 21,947 11,402 Leasehold and building improvements Lease Term 11,771 8,717 3,054 11,352 8,557 2,795 Machinery, office, and other equipment 1-5 45,981 33,340 12,641 45,085 32,053 13,032 Total $ 335,915 $ 226,006 $ 109,909 $ 328,535 $ 216,212 $ 112,323 Depreciation expense related to property and equipment totaled approximately $16.2 million for both the three months ended March 31, 2021 and 2020. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill Goodwill represents the excess of the purchase price over the identifiable tangible and intangible assets acquired plus liabilities assumed arising from business combinations. The balance of goodwill was approximately $682.0 million at March 31, 2021 and December 31, 2020, respectively. We have the following reporting units: (i) Games; (ii) Financial Access Services; (iii) Kiosk Sales and Services; (iv) Central Credit Services; (v) Compliance Sales and Services; and (vi) Loyalty Sales and Services. In accordance with ASC 350 (“Intangibles-Goodwill and Other”), we test goodwill at the reporting unit level, which is identified as an operating segment or one level below, for impairment on an annual basis and between annual tests if events and circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount. We test our goodwill for impairment on October 1 each year, or more frequently if events or changes in circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The annual impairment test is completed using either: a qualitative “Step 0” assessment based on reviewing relevant events and circumstances or a quantitative “Step 1” assessment, which determines the fair value of the reporting unit, using both an income approach that discounts future cash flows based on the estimated future results of our reporting units and a market approach that compares market multiples of comparable companies to determine whether or not any impairment exists. To the extent the carrying amount of a reporting unit is less than its estimated fair value, an impairment charge is recorded. There was no impairment identified for our goodwill for the three months ended March 31, 2021 and 2020. Other Intangible Assets Other intangible assets consist of the following (dollars in thousands): At March 31, 2021 At December 31, 2020 Useful Life Cost Accumulated Net Book Cost Accumulated Net Book Other intangible assets Contract rights under placement fee agreements 3-7 $ 60,561 $ 30,426 $ 30,135 $ 60,561 $ 28,108 $ 32,453 Customer contracts 3-14 71,975 55,633 16,342 71,975 54,407 17,568 Customer relationships 3-7 231,100 131,791 99,309 231,100 126,549 104,551 Developed technology and software 1-6 317,621 261,789 55,832 313,957 255,771 58,186 Patents, trademarks, and other 2-18 19,682 18,207 1,475 19,682 17,813 1,869 Total $ 700,939 $ 497,846 $ 203,093 $ 697,275 $ 482,648 $ 214,627 Amortization expense related to other intangible assets was approximately $14.7 million and $19.3 million for the three months ended March 31, 2021 and 2020, respectively. There were no placement fees for the three months ended March 31, 2021. We paid approximately $0.6 million in placement fees for the three months ended March 31, 2020. We evaluate our other intangible assets for potential impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. During the three months ended March 31, 2021 and 2020, there were no material write-downs of intangible assets. |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 3 Months Ended |
Mar. 31, 2021 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | ACCOUNTS PAYABLE AND ACCRUED EXPENSES The following table presents our accounts payable and accrued expenses (in thousands): At March 31, At December 31, 2021 2020 Accounts payable and accrued expenses Trade accounts payable $ 79,955 $ 54,531 Contract liabilities 27,887 26,980 Contingent consideration and acquisition-related liabilities (1) 14,935 24,674 Payroll and related expenses 14,924 13,357 Accrued interest 6,414 1,068 Operating lease liabilities 5,605 5,649 Other 3,288 3,605 Financial access processing and related expenses 2,634 1,109 Accrued taxes 1,387 1,329 Litigation accrual (2) — 12,727 Total accounts payable and accrued expenses $ 157,029 $ 145,029 (1) Refer to “Note 4 — Business Combinations.” (2) Refer to “Note 13 — Commitments and Contingencies.” |
LONG-TERM DEBT
LONG-TERM DEBT | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT The following table summarizes our outstanding indebtedness (dollars in thousands): Maturity Interest At March 31, At December 31, Date Rate 2021 2020 Long-term debt $820 million Term Loan Facility 2024 LIBOR+2.75% $ 735,500 $ 735,500 $125 million Incremental Term Loan Facility 2024 LIBOR+10.50% 124,063 124,375 $35 million Revolving Credit Facility 2022 LIBOR+4.50% — — Senior Secured Credit Facilities 859,563 859,875 $375 million 2017 Unsecured Notes 2025 7.50% 285,381 285,381 Total debt 1,144,944 1,145,256 Debt issuance costs and discount (14,879) (16,003) Total debt after debt issuance costs and discount 1,130,065 1,129,253 Current portion of long-term debt (1,250) (1,250) Total long-term debt, net of current portion $ 1,128,815 $ 1,128,003 Senior Secured Credit Facilities Our Senior Secured Credit Facilities consist of: (i) an $820.0 million, seven-year senior secured term loan facility (the “Term Loan Facility”); (ii) a $125.0 million, seven-year senior secured term loan (the “Incremental Term Loan”); and (iii) a $35.0 million, five-year senior secured revolving credit facility (the “Revolving Credit Facility”) provided for under our credit agreement with Everi Payments, as borrower, and Everi Holdings with the lenders party thereto and Jefferies Finance LLC, as administrative agent, collateral agent, swing line lender, letter of credit issuer, sole lead arranger and sole book manager (the “Credit Agreement”). On February 2, 2021, we entered into the Fifth Amendment to our existing Credit Agreement, which reduced the LIBOR and Base Rate floor components of the interest rate of our First Lien Term Loan by 0.25% from 1.00% to 0.75% and from 2.00% to 1.75%, respectively, with the LIBOR and Base Rate margins unchanged at 2.75% and 1.75%, respectively. The First Lien Term Loan under the Credit Agreement will be subject to a prepayment premium of 1.00% of the principal amount repaid for any voluntary prepayment or mandatory prepayment with proceeds of debt that has a lower effective yield than the repriced First Lien Term Loan or any amendment to the repriced First Lien Term Loan that reduces the interest rate thereon, in each case, to the extent occurring within six months of the effective date of the Amendment. The maturity of the First Lien Term Loan remains May 9, 2024, and no changes were made to the financial covenants or other debt repayment terms. The weighted average interest rate on the Term Loan was 3.59% for the three months ended March 31, 2021. The weighted average interest rate on the Incremental Term Loan Credit Facility was 11.50% for the three months ended March 31, 2021. The Incremental Term Loan matures May 9, 2024. The interest rate per annum applicable to the Incremental Term Loan will be, at Everi Payment’s option, the Eurodollar rate plus 10.50% or the base rate plus 9.50%. Voluntary prepayments of the Incremental Term Loan prior to the two-year anniversary of the Closing Date will be subject to a make-whole premium, and voluntary prepayments for the subsequent six-month period will be subject to a prepayment premium of 1.00% of the principal amount repaid. Subject to certain exceptions, the obligations under the Credit Facilities are secured by substantially all of the present and subsequently acquired assets of each of Everi FinTech, Everi Holdings, and the subsidiary guarantors party thereto including: (a) a perfected first priority p ledge of all the capital stock of Everi FinTech and each domestic direct, wholly owned material restricted subsidiary held by Everi Holdings, Everi FinTech, or any such subsidiary guarantor; and (b) a perfected first priority security interest in substantially all other tangible and intangible assets of Everi Holdings, Everi FinTech, and such subsidiary guarantors (including, but not limited to, accounts receivable, inventory, equipment, general intangibles, investment property, real property, intellectual property, and the proceeds of the foregoing). Subject to certain exceptions, the Credit Facilities are unconditionally guaranteed by Everi Holdings and such subsidiary guarantors. The Incremental Term Loan Credit Agreement contains certain covenants that, among other things, limit our ability, and the ability of certain of our subsidiaries, to incur additional indebtedness, sell assets or consolidate or merge with or into other companies, pay dividends or repurchase or redeem capital stock, make certain investments, issue capital stock of subsidiaries, incur liens, prepay, redeem or repurchase subordinated debt, and enter into certain types of transactions with our affiliates. The Incremental Term Loan Credit Agreement also requires us, together with our subsidiaries, to comply with a maximum consolidated secured leverage ratio. In connection with the issuance of the Incremental Term Loan on April 21, 2020, we also issued warrants to Sagard Credit Partners, LP and Sagard Credit Partners (Cayman), LP (collectively, “Sagard”) to acquire 184,670 and 40,330 shares of our common stock, respectively, with an exercise price equal to $5.37 per share. The warrants were issued in connection with the Incremental Term Loan as further consideration based on the level of participation in the arrangement by Sagard. The warrants were to expire on the fifth anniversary of the date of issuance. The number of shares issuable pursuant to the warrants and the warrant exercise price were subject to adjustment for stock splits, reverse stock splits, stock dividends, recapitalization, mergers and certain other events. In March 2021, the outstanding warrants issued to Sagard were exercised in full. Senior Unsecured Notes Our Senior Unsecured Notes (the “2017 USN”) originally issued in an aggregate principal amount of $375.0 million had an outstanding balance of approximately $285.4 million as of March 31, 2021, for which interest accrues at a rate of 7.50% per annum and is payable semi-annually in arrears on each June 15 and December 15. Compliance with Debt Covenants |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIESWe are involved in various legal proceedings in the ordinary course of our business. While we believe resolution of the claims brought against us, both individually and in the aggregate, will not have a material adverse impact on our financial condition or results of operations, litigation of this nature is inherently unpredictable. Our views on these legal proceedings, including those described below, may change in the future. We intend to vigorously defend against these actions, and ultimately believe we should prevail. Legal Contingencies We evaluate matters and record an accrual for legal contingencies when it is both probable that a liability has been incurred and the amount or range of the loss may be reasonably estimated. We evaluate legal contingencies at least quarterly and, as appropriate, establish new accruals or adjust existing accruals to reflect: (i) the facts and circumstances known to us at the time, including information regarding negotiations, settlements, rulings, and other relevant events and developments; (ii) the advice and analyses of counsel; and (iii) the assumptions and judgment of management. Legal costs associated with such proceedings are expensed as incurred. Due to the inherent uncertainty of legal proceedings as a result of the procedural, factual, and legal issues involved, the outcomes of our legal contingencies could result in losses in excess of amounts we have accrued. We accrued approximately $14.0 million for the legal contingencies in December 2019 in connection with Fair and Accurate Credit Transactions Act (“FACTA”)-related matters based on ongoing settlement negotiations by and among the various plaintiffs described in the FACTA-related matters discussion below and Everi by and on behalf of itself and Everi FinTech. We expected to recover approximately $7.7 million of the amount accrued from certain of our insurance providers in 2021, for which we had recorded an insurance settlement receivable included within trade and other receivables, net on our Balance Sheets. In addition, we are seeking relief from Peleus Insurance Company pursuant to the provisions of our policy. See below for discussion of Everi Payments Inc. and Everi Holdings Inc. v. Peleus Insurance Company case. In the first quarter of 2021, we entered into a settlement agreement and received funds from our third-tier insurance carrier in the amount of approximately $1.9 million related to the FACTA matters. We recorded these proceeds against our operating expenses in our Statements of Operations for the first quarter of 2021. In total, the receivables expected have been received in full and the expenses accrued have been paid in full, which resulted in total funds received from our insurance providers of approximately $9.6 million and a net charge of approximately $4.4 million to our Statements of Operations, of which approximately $6.3 million was recorded in December 2019, offset by the reduction of operating expenses of $1.9 million received and recorded in the first quarter of 2021. We did not have any new material legal matters that were accrued as of March 31, 2021. FACTA-related matters: Geraldine Donahue, et. al. v. Everi FinTech, et. al. (“Donahue”) is a putative class action matter filed on December 12, 2018, in the Circuit Court of Cook County, Illinois County Division, Chancery Division. The original defendant was dismissed and the Company was substituted as the defendant on April 22, 2019. Plaintiff, on behalf of himself and others similarly situated, alleges that Everi FinTech and the Company (i) have violated certain provisions of FACTA by their failure, as agent to the original defendant, to properly truncate patron credit card numbers when printing financial access receipts as required under FACTA, and (ii) have been unjustly enriched through the charging of service fees for transactions conducted at the original defendant’s facilities. Plaintiff sought an award of statutory damages, attorney’s fees, and costs. The parties settled this matter on a nationwide class basis. The settlement has since received final approval from the court, and Everi has paid all funds required pursuant to the settlement. Distributions to class members are in process, and a final hearing is set for October 4, 2021, to report to the court on the distribution metrics and determine what remaining unclaimed funds, if any, may be distributed to a nonprofit charitable organization as necessary. Everi Payments Inc. and Everi Holdings Inc. v. Peleus Insurance Company is a civil action filed by the Company on January 28, 2020, in the District Court, Clark County, Nevada alleging defendant breached its contractual obligations under an excess insurance policy when it denied the Company coverage of the FACTA-related matters described above. Everi FinTech and the Company are seeking actual and consequential damages for breach of contract, costs, attorney’s fees, and other fees and expenses incurred by Everi FinTech and the Company, up to and including amounts related to the settlement in Donahue. On February 16, 2021, the parties entered into a Confidential Settlement Agreement and Release resolving this matter. We received the funds from the insurance carrier and a final court order dismissing this matter with prejudice in the first quarter of 2021. NRT matter: NRT Technology Corp., et. al. v. Everi Holdings Inc., et. al. is a civil action filed on April 30, 2019 against the Company and Everi FinTech in the United States District Court for the District of Delaware by NRT Technology Corp. and NRT Technology, Inc., alleging monopolization of the market for unmanned, integrated kiosks in violation of federal antitrust laws, fraudulent procurement of patents on functionality related to such unmanned, integrated kiosks and sham litigation related to prior litigation brought by Everi FinTech (operating as Global Cash Access Inc.) against the plaintiff entities. Plaintiffs seek compensatory damages, treble damages, and injunctive and declaratory relief. This case is in the early stages of discovery. We are currently unable to determine the probability of the outcome or estimate the range of reasonably possible loss, if any, in this matter. Zenergy Systems, LLC matter: Zenergy Systems, LLC v. Everi Holdings Inc. is a civil action filed on May 29, 2020 against the Company in the United States District Court for the District of Nevada, Clark County by Zenergy Systems, LLC, alleging breach of contract, breach of a non-disclosure agreement, conversion, breach of the covenant of good faith and fair dealing, and breach of a confidential relationship related to a contract with Everi that expired in November 2019. The plaintiff is seeking compensatory and punitive damages. Everi has counterclaimed against Zenergy alleging breach of contract, breach of implied covenant of good faith and fair dealing, and for declaratory relief. The case is in early stages of discovery process. We are currently unable to determine the probability of the outcome or estimate the range of reasonably possible loss, if any, in this matter . In addition, we have commitments with respect to certain lease obligations discussed in “Note 3 — Leases” and installment payments under our asset purchase agreements discussed in “Note 4 — Business Combinations.” |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY On February 28, 2020, our Board of Directors authorized and approved a new share repurchase program granting us the authority to repurchase an amount not to exceed $10.0 million of outstanding Company common stock with no minimum number of shares that the Company is required to repurchase. This repurchase program commenced in the first quarter of 2020 and authorizes us to buy our common stock from time to time in open market transactions, block trades or in private transactions in accordance with trading plans established in accordance with Rules 10b5-1 and 10b-18 of the Securities Exchange Act of 1934, as amended, or by a combination of such methods, including compliance with the Company’s finance agreements. The share repurchase program is subject to available liquidity, general market and economic conditions, alternate uses for the capital and other factors, and may be suspended or discontinued at any time without prior notice. In light of COVID-19, we have suspended our share repurchase program. There were no share repurchases during the three months ended March 31, 2021 and 2020 , respectively. |
WEIGHTED AVERAGE SHARES OF COMM
WEIGHTED AVERAGE SHARES OF COMMON STOCK | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
WEIGHTED AVERAGE SHARES OF COMMON STOCK | WEIGHTED AVERAGE SHARES OF COMMON STOCK The weighted average number of shares of common stock outstanding used in the computation of basic and diluted earnings per share is as follows (in thousands): Three Months Ended March 31, 2021 2020 Weighted average shares Weighted average number of common shares outstanding - basic 86,984 84,624 Potential dilution from equity awards (1) 10,984 — Weighted average number of common shares outstanding - diluted (1) 97,968 84,624 |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION Equity Incentive Awards Generally, we grant the following types of awards: (i) time-based options; (ii) market-based options; (iii) time-based restricted stock units; and (iv) restricted stock units (“RSUs”) with either time- or performance-based stock units criteria. We estimate forfeiture amounts based on historical patterns. A summary of award activity is as follows (in thousands): Stock Options Restricted Stock Units Outstanding, December 31, 2020 10,261 4,250 Granted — 50 Exercised options or vested shares (561) (41) Canceled or forfeited (3) (15) Outstanding, March 31, 2021 9,697 4,244 |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The income tax provision for the three months ended March 31, 2021, reflected an effective income tax rate of 5.5%, which was less than the statutory federal rate of 21.0%, primarily due to a decrease in our valuation allowance for our deferred tax assets and the benefit from both stock option exercises and from a research credit. The decrease in our valuation allowance was primarily due to book income earned during the period. The income tax benefit for the three months ended March 31, 2020 reflected an effective income tax rate of 6.9%, which was less than the statutory federal rate of 21.0%, primarily due to an increase in our valuation allowance due to book loss incurred during the period, partially offset by certain indefinite lived deferred tax assets that can be offset against our indefinite lived deferred tax liabilities. We have analyzed filing positions in all of the federal, state, and foreign jurisdictions where we are required to file income tax returns, as well as all open tax years in these jurisdictions. As of March 31, 2021, we recorded approximately $1.7 million of unrecognized tax benefits, all of which would impact our effective tax rate, if recognized. We do not anticipate that our unrecognized tax benefits will materially change within the next 12 months. We have not accrued any penalties and interest for our unrecognized tax benefits. We may, from time to time, be assessed interest or penalties by tax jurisdictions, although any such assessments historically have been minimal and immaterial to our financial results. Our policy for recording interest and penalties associated with audits and unrecognized tax benefits is to record such items as a component of income tax in our Statements of Operations. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-making group (the “CODM”). Our CODM consists of the Chief Executive Officer, the President and Chief Operating Officer, and the Chief Financial Officer. Our CODM allocates resources and measures profitability based on our operating segments, which are managed and reviewed separately, as each represents products and services that can be sold separately to our customers. Our segments are monitored by management for performance against our internal forecasts. We have reported our financial performance based on our segments in both the current and prior periods. Our CODM determined that our operating segments for conducting business are: (i) Games and (ii) FinTech: • The Games segment provides solutions directly to gaming establishments to offer their patrons gaming entertainment- related experiences including: leased gaming equipment; sales of gaming equipment; gaming systems; digital online solutions; and ancillary products and services. • The FinTech segment provides solutions directly to gaming establishments to offer their patrons financial access-related services and products, including: access to cash and cashless funding at gaming facilities via debit withdrawals; credit card financial access transactions and POS debit card financial access transactions; check warranty services; kiosks for financial access and other services; self-service enrollment, loyalty and marketing equipment; maintenance services; compliance, audit, and data software; casino credit data and reporting services, and other ancillary offerings. Corporate overhead expenses have been allocated to the segments either through specific identification or based on a reasonable methodology. In addition, we record depreciation and amortization expenses to the business segments. Our business is predominantly domestic with no specific regional concentrations and no significant assets in foreign locations. The following tables present segment information (in thousands)*: Three Months Ended March 31, 2021 2020 Games Revenues Gaming operations $ 58,141 $ 45,686 Gaming equipment and systems 17,988 11,583 Gaming other 22 21 Total revenues 76,151 57,290 Costs and expenses Cost of revenues (1) Gaming operations 4,759 4,545 Gaming equipment and systems 10,307 6,824 Cost of revenues 15,066 11,369 Operating expenses 14,595 14,805 Research and development 5,667 6,195 Depreciation 14,563 14,728 Amortization 10,984 15,585 Total costs and expenses 60,875 62,682 Operating income (loss) $ 15,276 $ (5,392) (1) Exclusive of depreciation and amortization. * Rounding may cause variances. Three Months Ended March 31, 2021 2020 FinTech Revenues Financial access services $ 38,712 $ 36,973 Software and other 17,246 12,694 Hardware 7,004 6,351 Total revenues 62,962 56,018 Costs and expenses Cost of revenues (1) Financial access services 1,473 3,555 Software and other 1,004 873 Hardware 4,028 3,891 Cost of revenues 6,505 8,319 Operating expenses 23,448 24,467 Research and development 2,746 2,160 Depreciation 1,614 1,515 Amortization 3,731 3,739 Total costs and expenses 38,044 40,200 Operating income $ 24,918 $ 15,818 (1) Exclusive of depreciation and amortization. * Rounding may cause variances. At March 31, At December 31, 2021 2020 Total assets Games $ 816,563 $ 811,523 FinTech 723,251 665,656 Total assets $ 1,539,814 $ 1,477,179 Major customers. No sin |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTSAs of the filing date, we had not identified, and were not aware of, any subsequent events for the period. |
BASIS OF PRESENTATION AND SUM_2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Our unaudited condensed consolidated financial statements included herein have been prepared by us pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Some of the information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) have been condensed or omitted pursuant to such rules and regulations, although we believe the disclosures are adequate to make the information presented not misleading. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary for a fair statement of results for the interim periods have been made. The results for the three months ended March 31, 2021 are not necessarily indicative of results to be expected for the full fiscal year. The Financial Statements should be read in conjunction with the consolidated financial statements and notes thereto included in the 2020 Annual Report. |
Revenue Recognition | Revenue Recognition Overview We evaluate the recognition of revenue based on the criteria set forth in Accounting Standards Codification (“ASC”) 606 — Revenue from Contracts with Customers and ASC 842 — Leases, as appropriate. We recognize revenue upon transferring control of goods or services to our customers in an amount that reflects the consideration we expect to receive in exchange for those goods or services. We enter into contracts with customers that include various performance obligations consisting of goods, services, or combinations of goods and services. Timing of the transfer of control varies based on the nature of the contract. We recognize revenue net of any sales and other taxes collected from customers, which are subsequently remitted to governmental authorities and are not included in revenues or operating expenses. We measure revenue based on the consideration specified in a contract with a customer and adjusted, as necessary. Disaggregation of Revenues We disaggregate revenues based on the nature and timing of the cash flows generated by such revenues as presented in “Note 18 — Segment Information.” Contract Balances Since our contracts may include multiple performance obligations, there is often a timing difference between cash collections and the satisfaction of such performance obligations and revenue recognition. Such arrangements are evaluated to determine whether contract assets and liabilities exist. We generally record contract assets when the timing of billing differs from when revenue is recognized due to contracts containing specific performance obligations that are required to be met prior to a customer being invoiced. We generally record contract liabilities when cash is collected in advance of us satisfying performance obligations, including those that are satisfied over a period of time. Balances of our contract assets and contract liabilities may fluctuate due to timing of cash collections. The following table summarizes our contract assets and contract liabilities arising from contracts with customers (in thousands): Three Months Ended March 31, 2021 2020 Contract assets (1) Balance at January 1 — current $ 9,240 $ 8,634 Balance at January 1 — non-current 8,321 6,774 Total 17,561 15,408 Balance at March 31 - current 9,796 8,559 Balance at March 31 - non-current 7,299 6,902 Total 17,095 15,461 (Decrease)/increase $ (466) $ 53 Contract liabilities (2) Balance at January 1 — current $ 26,980 $ 28,510 Balance at January 1 — non-current 289 354 Total 27,269 28,864 Balance at March 31 - current 27,887 31,226 Balance at March 31 - non-current 98 185 Total 27,985 31,411 Increase $ 716 $ 2,547 (1) The current portion of contract assets is included within trade and other receivables, net, and the non-current portion is included within other receivables in our Balance Sheets. (2) The current portion of contract liabilities is included within accounts payable and accrued expenses, and the non-current portion is included within other accrued expenses and liabilities in our Balance Sheets. We recognized approximately $10.5 million and $11.0 million in revenue that was included in the beginning contract liability balance during the three months ended March 31, 2021 and 2020, respectively. Games Revenues Our products and services include electronic gaming devices, such as Native American Class II offerings and other electronic bingo products, Class III slot machine offerings, VLTs, B2B and B2C digital online gaming activities, accounting and central determinant systems, and other back office systems. We conduct our Games segment business based on results generated from the following major revenue streams: (i) Gaming Operations; (ii) Gaming Equipment and Systems; and (iii) Gaming Other. We recognize our Gaming Operations revenue based on criteria set forth in ASC 842 or ASC 606, as applicable. The amount of lease revenue included in our Gaming Operations revenues and recognized under ASC 842 was approximately $40.8 million and $34.0 million for the three months ended March 31, 2021 and 2020, respectively. FinTech Revenues Our FinTech products and services include solutions that we offer to gaming establishments to provide their patrons with financial access and deposit-based services supporting digital, cashless and physical cash options across mobile, assisted and self-service channels along with related loyalty and marketing tools, and other information-related products and services. In addition, we provide an end-to-end se curity suite to protect against cyber-related attacks and maintain the necessary secured environments to maintain compliance with applicable regulatory requirements. These solutions include: access to cash and cashless funding at gaming facilities via ATM debit withdrawals, credit card financial access transactions, and POS debit card purchases at casino cages, kiosk and mobile POS devices; federally insured deposit accounts for the CashClub Wallet, check warranty services, self-service ATMs and fully integrated kiosk and maintenance services; self-service loyalty tools and promotion management software; compliance, audit, and data software; casino credit data and reporting services; marketing and promotional offering subscription-based services; and other ancillary offerings. We conduct our FinTech segment business based on results generated from the following major revenue streams: (i) Financial Access Services; (ii) Software and Other; and (iii) Hardware. Hardware revenues are derived from the sale of our financial access and loyalty kiosks and related equipment and are accounted for under ASC 606, unless such transactions meet the definition of a sales type or direct financing lease, which are accounted for under ASC 842. We did not have any new financial access kiosk and related equipment sales contracts accounted for under ASC 842 during the three months ended March 31, 2021 and 2020. |
Restricted Cash | Restricted CashOur restricted cash primarily consists of: (i) funds held in connection with certain customer agreements; (ii) deposits held in connection with a sponsorship agreement; (iii) wide area progressive (“WAP”)-related restricted funds; and (iv) internet-related financial access activities |
Allowance for Credit Losses | Allowance for Credit LossesWe continually evaluate the collectability of outstanding balances and maintain an allowance for credit losses related to our trade and other receivables and notes receivable that have been determined to have a high risk of uncollectability, which represents our best estimates of the current expected credit losses to be incurred in the future. To derive our estimates, we analyze historical collection trends and changes in our customer payment patterns, current and expected conditions and market trends along with our operating forecasts, concentration, and creditworthiness when evaluating the adequacy of our allowance for credit losses. In addition, with respect to our check warranty receivables, we are exposed to risk for the losses associated with warranted items that cannot be collected from patrons issuing these items. We evaluate the collectability of the outstanding balances and establish a reserve for the face amount of the current expected credit losses related to these receivables. The provision for doubtful accounts receivable is included within operating expenses and the check warranty loss reserves are included within financial access services cost of revenues in the Statements of Operations. |
Goodwill | Goodwill Goodwill represents the excess of the purchase price over the identifiable tangible and intangible assets acquired plus liabilities assumed arising from business combinations. We test for impairment annually on a reporting unit basis, at the beginning of our fourth fiscal quarter and between annual tests if events and circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The annual impairment test is completed using either: a qualitative “Step 0” assessment based on reviewing relevant events and circumstances; or a quantitative “Step 1” assessment, which determines the fair value of the reporting unit, using both an income approach that discounts future cash flows based on the estimated future results of our reporting units and a market approach that compares market multiples of comparable companies to determine whether or not any impairment exists. To the extent the carrying amount of a reporting unit is less than its estimated fair value, an impairment charge is recorded. |
Fair Values of Financial Instruments | Fair Values of Financial Instruments The fair value of a financial instrument represents the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Fair value estimates are made at a specific point in time, based upon relevant market information about the financial instrument. |
Recent Accounting Guidance | Recently Adopted Accounting Guidance Standard Description Date of Adoption Effect on Financial Statements Accounting Standard Update (“ASU”) No. 2019-12 , Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes This ASU simplifies the accounting for income taxes by removing certain exceptions for investments, intraperiod allocations, and interim calculations, and adds guidance to reduce the complexity of applying Topic 740. January 1, 2021 The adoption of this ASU did not have a material effect on our Financial Statements or on our disclosures. Recent Accounting Guidance Not Yet Adopted As of March 31, 2021, we did not identify recently issued accounting guidance that would have a significant impact on our consolidated financial statements. |
BASIS OF PRESENTATION AND SUM_3
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Contract Asset and Liability | The following table summarizes our contract assets and contract liabilities arising from contracts with customers (in thousands): Three Months Ended March 31, 2021 2020 Contract assets (1) Balance at January 1 — current $ 9,240 $ 8,634 Balance at January 1 — non-current 8,321 6,774 Total 17,561 15,408 Balance at March 31 - current 9,796 8,559 Balance at March 31 - non-current 7,299 6,902 Total 17,095 15,461 (Decrease)/increase $ (466) $ 53 Contract liabilities (2) Balance at January 1 — current $ 26,980 $ 28,510 Balance at January 1 — non-current 289 354 Total 27,269 28,864 Balance at March 31 - current 27,887 31,226 Balance at March 31 - non-current 98 185 Total 27,985 31,411 Increase $ 716 $ 2,547 (1) The current portion of contract assets is included within trade and other receivables, net, and the non-current portion is included within other receivables in our Balance Sheets. (2) The current portion of contract liabilities is included within accounts payable and accrued expenses, and the non-current portion is included within other accrued expenses and liabilities in our Balance Sheets. |
Reconciliation of Cash, Cash Equivalents, and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Balance Sheets that sum to the total of the same such amounts shown in the statement of cash flows for the three months ended March 31, 2021 (in thousands). Classification on our Balance Sheets At March 31, 2021 At December 31, 2020 Cash and cash equivalents Cash and cash equivalents $ 335,133 $ 251,706 Restricted cash - current Prepaid expenses and other current assets 445 542 Restricted cash - non-current Other assets 101 101 Total $ 335,679 $ 252,349 |
Reconciliation of Cash, Cash Equivalents, and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Balance Sheets that sum to the total of the same such amounts shown in the statement of cash flows for the three months ended March 31, 2021 (in thousands). Classification on our Balance Sheets At March 31, 2021 At December 31, 2020 Cash and cash equivalents Cash and cash equivalents $ 335,133 $ 251,706 Restricted cash - current Prepaid expenses and other current assets 445 542 Restricted cash - non-current Other assets 101 101 Total $ 335,679 $ 252,349 |
Estimated Fair Value and Outstanding Balances of Borrowings | The estimated fair value and outstanding balances of our borrowings are as follows (dollars in thousands): Level of Hierarchy Fair Value Outstanding Balance March 31, 2021 Term loan 2 $ 731,749 $ 735,500 Incremental term loan 2 $ 130,886 $ 124,063 Senior unsecured notes 2 $ 296,454 $ 285,381 December 31, 2020 Term loan 2 $ 729,138 $ 735,500 Incremental term loan 2 $ 129,972 $ 124,375 Senior unsecured notes 2 $ 296,083 $ 285,381 |
Summary of Recent Accounting Guidance | Recently Adopted Accounting Guidance Standard Description Date of Adoption Effect on Financial Statements Accounting Standard Update (“ASU”) No. 2019-12 , Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes This ASU simplifies the accounting for income taxes by removing certain exceptions for investments, intraperiod allocations, and interim calculations, and adds guidance to reduce the complexity of applying Topic 740. January 1, 2021 The adoption of this ASU did not have a material effect on our Financial Statements or on our disclosures. Recent Accounting Guidance Not Yet Adopted |
LEASES - (Tables)
LEASES - (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Balance Sheet Information | Supplemental balance sheet information related to our operating leases is as follows (in thousands): Classification on our Balance Sheets At March 31, 2021 At December 31, 2020 Assets Operating lease ROU assets Other assets, non-current $ 14,907 $ 16,104 Liabilities (1) Current operating lease liabilities Accounts payable and accrued expenses $ 5,605 $ 5,649 Non-current operating lease liabilities Other accrued expenses and liabilities $ 14,798 $ 16,077 |
Cash Flow Information | Supplemental cash flow information related to leases is as follows (in thousands): Three Months Ended March 31, 2021 2020 Cash paid for: Long-term operating leases $ 1,625 $ 1,299 Short-term operating leases $ 430 $ 489 Right-of-use assets obtained in exchange for lease obligations: Operating leases (1) $ — $ 704 |
Lease Costs | Other information related to lease terms and discount rates is as follows: At March 31, 2021 At December 31, 2020 Weighted Average Remaining Lease Term (in years): Operating leases 4.03 4.16 Weighted Average Discount Rate: Operating leases 5.15 % 5.16 % Components of lease expense, which are included in operating expenses, are as follows (in thousands): Three Months Ended March 31, 2021 2020 Operating Lease Cost: Operating lease cost (1) $ 1,460 $ 1,372 Variable lease cost $ 250 $ 445 (1) The amount includes approximately $1.2 million and $1.1 million in non-cash lease expense for the three months ended March 31, 2021 and 2020, respectively. |
Payments Due | Maturities of lease liabilities are summarized as follows as of March 31, 2021 (in thousands): Year Ending December 31, Amount 2021 (excluding the three months ended March 31, 2021) $ 4,936 2022 5,891 2023 4,414 2024 3,456 2025 2,889 Thereafter 1,043 Total future minimum lease payments $ 22,629 Amount representing interest 2,226 Present value of future minimum lease payments $ 20,403 Current operating lease obligations 5,605 Long-term lease obligations $ 14,798 |
Sales-type lease | Supplemental balance sheet information related to our sales-type leases is as follows (in thousands): Classification on our Balance Sheets At March 31, 2021 At December 31, 2020 Assets Net investment in sales-type leases — current Trade and other receivables, net $ 1,258 $ 1,397 Net investment in sales-type leases — non-current Other receivables $ 575 $ 803 |
TRADE AND OTHER RECEIVABLES - (
TRADE AND OTHER RECEIVABLES - (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Receivables [Abstract] | |
Schedule of Components of Trade and Other Receivables | The balance of trade and other receivables consisted of the following (in thousands): At March 31, At December 31, 2021 2020 Trade and other receivables, net Games trade and loans receivables $ 55,770 $ 44,794 FinTech trade and loans receivables 18,398 14,683 Contract assets (1) 17,095 17,561 Net investment in sales-type leases 1,833 2,200 Insurance settlement receivable (2) — 7,650 Other receivables 1,377 1,923 Total trade and other receivables, net 94,473 88,811 Non-current portion of receivables Games trade and loans receivables (1,082) (1,333) FinTech trade and loans receivables (5,282) (4,163) Contract assets (1) (7,299) (8,321) Net investment in sales-type leases (575) (803) Total non-current portion of receivables (14,238) (14,620) Total trade and other receivables, current portion $ 80,235 $ 74,191 (1) Refer to “Note 2 — Basis of Presentation and Summary of Significant Accounting Policies ” for a discussion on the contract assets. (2) Refer to “Note 13 — Commitments and Contingencies” for a discussion on the insurance settlement receivable. |
Activity in Allowance for Credit Losses | The activity in our allowance for credit losses for the three months ended March 31, 2021 and 2020 is as follows (in thousands): Three Months Ended March 31, 2021 2020 Beginning allowance for credit losses $ (3,689) $ (5,786) Provision (1,999) (3,750) Charge-offs and recoveries 1,239 3,943 Ending allowance for credit losses $ (4,449) $ (5,593) |
INVENTORY - (Tables)
INVENTORY - (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Components of Inventory | Inventory consisted of the following (in thousands): At March 31, At December 31, 2021 2020 Inventory Component parts, net of reserves of $1,555 and $1,262 at March 31, 2021 and December 31, 2020, respectively $ 21,956 $ 21,560 Work-in-progress 2,408 182 Finished goods 5,365 6,000 Total inventory $ 29,729 $ 27,742 |
PREPAID EXPENSES AND OTHER AS_2
PREPAID EXPENSES AND OTHER ASSETS - (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Prepaid Expense and Other Assets [Abstract] | |
Schedule of Components of Current Portion of Prepaid and Other Assets | The balance of the current portion of prepaid expenses and other assets consisted of the following (in thousands): At March 31, At December 31, 2021 2020 Prepaid expenses and other current assets Prepaid expenses $ 13,178 $ 11,282 Deposits 4,960 4,133 Restricted cash (1) 445 542 Other 1,282 1,391 Total prepaid expenses and other current assets $ 19,865 $ 17,348 (1) Refer to “Note 2 — Basis of Presentation and Summary of Significant Accounting Policies” for discussion on the composition of the restricted cash balance. |
Schedule of Components of Non-Current Portion of Prepaid and Other Assets | The balance of the non-current portion of other assets consisted of the following (in thousands): At March 31, At December 31, 2021 2020 Other assets Operating lease ROU assets $ 14,907 $ 16,104 Prepaid expenses and deposits 4,073 4,952 Debt issuance costs of revolving credit facility 220 267 Other 609 673 Total other assets $ 19,809 $ 21,996 |
PROPERTY AND EQUIPMENT - (Table
PROPERTY AND EQUIPMENT - (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Components of Property, Equipment and Leased Assets | Property and equipment consist of the following (dollars in thousands): At March 31, 2021 At December 31, 2020 Useful Life Cost Accumulated Net Book Cost Accumulated Net Book Property and equipment Rental pool - deployed 2-4 $ 223,409 $ 145,853 $ 77,556 $ 216,775 $ 136,975 $ 79,800 Rental pool - undeployed 2-4 22,769 17,636 5,133 21,974 16,680 5,294 FinTech equipment 1-5 31,985 20,460 11,525 33,349 21,947 11,402 Leasehold and building improvements Lease Term 11,771 8,717 3,054 11,352 8,557 2,795 Machinery, office, and other equipment 1-5 45,981 33,340 12,641 45,085 32,053 13,032 Total $ 335,915 $ 226,006 $ 109,909 $ 328,535 $ 216,212 $ 112,323 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS - (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Other Intangible Assets | Other intangible assets consist of the following (dollars in thousands): At March 31, 2021 At December 31, 2020 Useful Life Cost Accumulated Net Book Cost Accumulated Net Book Other intangible assets Contract rights under placement fee agreements 3-7 $ 60,561 $ 30,426 $ 30,135 $ 60,561 $ 28,108 $ 32,453 Customer contracts 3-14 71,975 55,633 16,342 71,975 54,407 17,568 Customer relationships 3-7 231,100 131,791 99,309 231,100 126,549 104,551 Developed technology and software 1-6 317,621 261,789 55,832 313,957 255,771 58,186 Patents, trademarks, and other 2-18 19,682 18,207 1,475 19,682 17,813 1,869 Total $ 700,939 $ 497,846 $ 203,093 $ 697,275 $ 482,648 $ 214,627 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES - (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | The following table presents our accounts payable and accrued expenses (in thousands): At March 31, At December 31, 2021 2020 Accounts payable and accrued expenses Trade accounts payable $ 79,955 $ 54,531 Contract liabilities 27,887 26,980 Contingent consideration and acquisition-related liabilities (1) 14,935 24,674 Payroll and related expenses 14,924 13,357 Accrued interest 6,414 1,068 Operating lease liabilities 5,605 5,649 Other 3,288 3,605 Financial access processing and related expenses 2,634 1,109 Accrued taxes 1,387 1,329 Litigation accrual (2) — 12,727 Total accounts payable and accrued expenses $ 157,029 $ 145,029 (1) Refer to “Note 4 — Business Combinations.” (2) Refer to “Note 13 — Commitments and Contingencies.” |
LONG-TERM DEBT - (Tables)
LONG-TERM DEBT - (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Indebtedness | The following table summarizes our outstanding indebtedness (dollars in thousands): Maturity Interest At March 31, At December 31, Date Rate 2021 2020 Long-term debt $820 million Term Loan Facility 2024 LIBOR+2.75% $ 735,500 $ 735,500 $125 million Incremental Term Loan Facility 2024 LIBOR+10.50% 124,063 124,375 $35 million Revolving Credit Facility 2022 LIBOR+4.50% — — Senior Secured Credit Facilities 859,563 859,875 $375 million 2017 Unsecured Notes 2025 7.50% 285,381 285,381 Total debt 1,144,944 1,145,256 Debt issuance costs and discount (14,879) (16,003) Total debt after debt issuance costs and discount 1,130,065 1,129,253 Current portion of long-term debt (1,250) (1,250) Total long-term debt, net of current portion $ 1,128,815 $ 1,128,003 |
WEIGHTED AVERAGE SHARES OF CO_2
WEIGHTED AVERAGE SHARES OF COMMON STOCK- (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of weighted average number of common shares outstanding used in computation of basic and diluted earnings per share | The weighted average number of shares of common stock outstanding used in the computation of basic and diluted earnings per share is as follows (in thousands): Three Months Ended March 31, 2021 2020 Weighted average shares Weighted average number of common shares outstanding - basic 86,984 84,624 Potential dilution from equity awards (1) 10,984 — Weighted average number of common shares outstanding - diluted (1) 97,968 84,624 |
SHARE-BASED COMPENSATION - (Tab
SHARE-BASED COMPENSATION - (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Award Activity | A summary of award activity is as follows (in thousands): Stock Options Restricted Stock Units Outstanding, December 31, 2020 10,261 4,250 Granted — 50 Exercised options or vested shares (561) (41) Canceled or forfeited (3) (15) Outstanding, March 31, 2021 9,697 4,244 |
SEGMENT INFORMATION - (Tables)
SEGMENT INFORMATION - (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | The following tables present segment information (in thousands)*: Three Months Ended March 31, 2021 2020 Games Revenues Gaming operations $ 58,141 $ 45,686 Gaming equipment and systems 17,988 11,583 Gaming other 22 21 Total revenues 76,151 57,290 Costs and expenses Cost of revenues (1) Gaming operations 4,759 4,545 Gaming equipment and systems 10,307 6,824 Cost of revenues 15,066 11,369 Operating expenses 14,595 14,805 Research and development 5,667 6,195 Depreciation 14,563 14,728 Amortization 10,984 15,585 Total costs and expenses 60,875 62,682 Operating income (loss) $ 15,276 $ (5,392) (1) Exclusive of depreciation and amortization. * Rounding may cause variances. Three Months Ended March 31, 2021 2020 FinTech Revenues Financial access services $ 38,712 $ 36,973 Software and other 17,246 12,694 Hardware 7,004 6,351 Total revenues 62,962 56,018 Costs and expenses Cost of revenues (1) Financial access services 1,473 3,555 Software and other 1,004 873 Hardware 4,028 3,891 Cost of revenues 6,505 8,319 Operating expenses 23,448 24,467 Research and development 2,746 2,160 Depreciation 1,614 1,515 Amortization 3,731 3,739 Total costs and expenses 38,044 40,200 Operating income $ 24,918 $ 15,818 (1) Exclusive of depreciation and amortization. * Rounding may cause variances. At March 31, At December 31, 2021 2020 Total assets Games $ 816,563 $ 811,523 FinTech 723,251 665,656 Total assets $ 1,539,814 $ 1,477,179 |
BUSINESS - Narrative (Details)
BUSINESS - Narrative (Details) | 3 Months Ended |
Mar. 31, 2021segment | |
Concentration Risk [Line Items] | |
Number of business segments | 2 |
UNITED STATES | Product Concentration Risk | Properties Closed | |
Concentration Risk [Line Items] | |
Percentage of closed casinos | 5.00% |
BASIS OF PRESENTATION AND SUM_4
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Contract Asset and Liability (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Contract assets | ||||
Contract assets, current | $ 9,796 | $ 8,559 | $ 9,240 | $ 8,634 |
Contract assets, noncurrent | 7,299 | 6,902 | 8,321 | 6,774 |
Total | 17,095 | 15,461 | 17,561 | 15,408 |
(Decrease)/increase | (466) | 53 | ||
Contract liabilities | ||||
Contract liabilities, current | 27,887 | 31,226 | 26,980 | 28,510 |
Contract liabilities, noncurrent | 98 | 185 | 289 | 354 |
Total | 27,985 | 31,411 | $ 27,269 | $ 28,864 |
Increase | $ 716 | $ 2,547 |
BASIS OF PRESENTATION AND SUM_5
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Contract with customer liability | $ 10,500 | $ 11,000 |
Total revenues | $ 139,113 | 113,308 |
Contractual terms of trade and loans receivable | 12 months | |
Games | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 76,151 | 57,290 |
Games | Gaming operations, leased equipment | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 40,800 | $ 34,000 |
BASIS OF PRESENTATION AND SUM_6
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Cash (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | $ 335,133 | $ 251,706 | ||
Restricted cash - current | 445 | 542 | ||
Total | 335,679 | 252,349 | $ 57,110 | $ 296,610 |
Cash and Cash Equivalents | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | 335,133 | 251,706 | ||
Prepaid Expenses and Other Current Assets | ||||
Cash and Cash Equivalents [Line Items] | ||||
Restricted cash - current | 445 | 542 | ||
Other Assets | ||||
Cash and Cash Equivalents [Line Items] | ||||
Restricted cash - non-current | $ 101 | $ 101 |
BASIS OF PRESENTATION AND SUM_7
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Estimated Fair Value and Outstanding Balances of Borrowings (Details) - Level 2 - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Fair Value | Term loan | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | $ 731,749 | $ 729,138 |
Fair Value | Incremental term loan | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 130,886 | 129,972 |
Fair Value | Senior unsecured notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 296,454 | 296,083 |
Outstanding Balance | Term loan | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 735,500 | 735,500 |
Outstanding Balance | Incremental term loan | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 124,063 | 124,375 |
Outstanding Balance | Senior unsecured notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | $ 285,381 | $ 285,381 |
LEASES - Additional Information
LEASES - Additional Information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Lessee, Lease, Description [Line Items] | ||
Sales-type lease, revenue | $ 0 | $ 0 |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Renewal term (in years) | 1 year | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Renewal term (in years) | 10 years |
LEASES - Balance Sheet Informat
LEASES - Balance Sheet Information (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Operating lease ROU assets | $ 14,907 | $ 16,104 |
Current operating lease liabilities | 5,605 | 5,649 |
Non-current operating lease liabilities | $ 14,798 | $ 16,077 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other assets | Other assets |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accounts payable and accrued expenses | Accounts payable and accrued expenses |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | us-gaap:OtherLiabilitiesNoncurrent | us-gaap:OtherLiabilitiesNoncurrent |
LEASES - Cash Flow Information
LEASES - Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash paid for: | ||
Long-term operating leases | $ 1,625 | $ 1,299 |
Short-term operating leases | 430 | 489 |
Right-of-use assets obtained in exchange for lease obligations: | ||
Operating leases | $ 0 | $ 704 |
LEASES - Lease Costs (Details)
LEASES - Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Leases [Abstract] | |||
Weighted average remaining lease term, operating leases | 4 years 10 days | 4 years 1 month 28 days | |
Weighted average discount rate, operating leases | 5.15% | 5.16% | |
Operating lease cost | $ 1,460 | $ 1,372 | |
Variable lease cost | 250 | 445 | |
Non-cash lease expense | $ 1,196 | $ 1,056 |
LEASES - Payments Due (Details)
LEASES - Payments Due (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Amount | ||
2021 (excluding the three months ended March 31, 2021) | $ 4,936 | |
2022 | 5,891 | |
2023 | 4,414 | |
2024 | 3,456 | |
2025 | 2,889 | |
Thereafter | 1,043 | |
Total future minimum lease payments | 22,629 | |
Amount representing interest | 2,226 | |
Present value of future minimum lease payments | 20,403 | |
Current operating lease liabilities | 5,605 | $ 5,649 |
Long-term lease obligations | $ 14,798 | $ 16,077 |
LEASES - Sales-type lease (Deta
LEASES - Sales-type lease (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Net investment in sales-type leases — current | $ 1,258 | $ 1,397 |
Net investment in sales-type leases — non-current | $ 575 | $ 803 |
BUSINESS COMBINATIONS - Narrati
BUSINESS COMBINATIONS - Narrative (Details) - USD ($) $ in Millions | Dec. 24, 2021 | Jul. 01, 2021 | Jul. 01, 2020 | Apr. 01, 2020 | Mar. 08, 2020 | Dec. 24, 2019 | Mar. 08, 2019 | Mar. 31, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | |||||||||
Contingent consideration liability | $ 10 | $ 9.9 | |||||||
Atrient | |||||||||
Business Acquisition [Line Items] | |||||||||
Contingent consideration liability | $ 10 | ||||||||
Atrient | FinTech Segment | |||||||||
Business Acquisition [Line Items] | |||||||||
Payments to acquire businesses | $ 10 | $ 20 | $ 10 | ||||||
Micro Gaming Technologies, Inc. | FinTech Segment | |||||||||
Business Acquisition [Line Items] | |||||||||
Payments to acquire businesses | $ 5 | $ 5 | $ 15 | ||||||
Total consideration transferred | $ 25 | ||||||||
Micro Gaming Technologies, Inc. | FinTech Segment | Forecast | |||||||||
Business Acquisition [Line Items] | |||||||||
Payments to acquire businesses | $ 5 | $ 5 |
FUNDING AGREEMENTS - Narrative
FUNDING AGREEMENTS - Narrative (Details) - Indemnification Guarantee - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Contract Cash Solutions Agreement | |||
Funding Agreements | |||
Cash usage fees incurred | $ 700,000 | $ 1,500,000 | |
Outstanding balance | 451,000,000 | $ 340,300,000 | |
Contract Cash Solutions Agreement, as amended | |||
Funding Agreements | |||
Maximum amount | $ 300,000,000 | ||
Renewal period | 1 year | ||
Guarantor obligations, non-renewal notice period | 90 days |
TRADE AND OTHER RECEIVABLES - B
TRADE AND OTHER RECEIVABLES - Balance of Trade and Other Receivables (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Trade and other receivables, net | ||
Contract assets | $ 17,095 | $ 17,561 |
Net investment in sales-type leases | 1,833 | 2,200 |
Insurance settlements receivable | 0 | 7,650 |
Other receivables | 1,377 | 1,923 |
Total trade and other receivables, net | 94,473 | 88,811 |
Non-current portion of receivables | (14,238) | (14,620) |
Contract assets | (7,299) | (8,321) |
Net investment in sales-type leases | (575) | (803) |
Total trade and other receivables, current portion | 80,235 | 74,191 |
Gaming operations | ||
Trade and other receivables, net | ||
Trade receivables, net | 55,770 | 44,794 |
Non-current portion of receivables | (1,082) | (1,333) |
FinTech | ||
Trade and other receivables, net | ||
Trade receivables, net | 18,398 | 14,683 |
Non-current portion of receivables | $ (5,282) | $ (4,163) |
TRADE AND OTHER RECEIVABLES - A
TRADE AND OTHER RECEIVABLES - Allowance for Credit Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning allowance for credit losses | $ (3,689) | $ (5,786) |
Provision | (1,999) | (3,750) |
Charge-offs and recoveries | 1,239 | 3,943 |
Ending allowance for credit losses | $ (4,449) | $ (5,593) |
INVENTORY (Details)
INVENTORY (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Inventory | ||
Component parts, net of reserves of $1,555 and $1,262 at March 31, 2021 and December 31, 2020, respectively | $ 21,956 | $ 21,560 |
Work-in-progress | 2,408 | 182 |
Finished goods | 5,365 | 6,000 |
Total inventory | 29,729 | 27,742 |
Component parts, reserves | $ 1,555 | $ 1,262 |
PREPAID EXPENSES AND OTHER AS_3
PREPAID EXPENSES AND OTHER ASSETS - Other Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Prepaid expenses and other current assets | ||
Prepaid expenses | $ 13,178 | $ 11,282 |
Deposits | 4,960 | 4,133 |
Restricted cash | 445 | 542 |
Other | 1,282 | 1,391 |
Total prepaid expenses and other current assets | 19,865 | 17,348 |
Other assets | ||
Operating lease ROU assets | 14,907 | 16,104 |
Prepaid expenses and deposits | 4,073 | 4,952 |
Debt issuance costs of revolving credit facility | 220 | 267 |
Other | 609 | 673 |
Total other assets | $ 19,809 | $ 21,996 |
PROPERTY AND EQUIPMENT - Schedu
PROPERTY AND EQUIPMENT - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||
Cost | $ 335,915 | $ 328,535 | |
Accumulated Depreciation | 226,006 | 216,212 | |
Net Book Value | 109,909 | 112,323 | |
Depreciation | 16,177 | $ 16,243 | |
FinTech | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation | 1,614 | $ 1,515 | |
Rental pool - deployed | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 223,409 | 216,775 | |
Accumulated Depreciation | 145,853 | 136,975 | |
Net Book Value | $ 77,556 | 79,800 | |
Rental pool - deployed | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life (Years) | 2 years | ||
Rental pool - deployed | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life (Years) | 4 years | ||
Rental pool - undeployed | |||
Property, Plant and Equipment [Line Items] | |||
Cost | $ 22,769 | 21,974 | |
Accumulated Depreciation | 17,636 | 16,680 | |
Net Book Value | $ 5,133 | 5,294 | |
Rental pool - undeployed | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life (Years) | 2 years | ||
Rental pool - undeployed | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life (Years) | 4 years | ||
Leasehold and building improvements | |||
Property, Plant and Equipment [Line Items] | |||
Cost | $ 11,771 | 11,352 | |
Accumulated Depreciation | 8,717 | 8,557 | |
Net Book Value | 3,054 | 2,795 | |
Machinery, office, and other equipment | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 45,981 | 45,085 | |
Accumulated Depreciation | 33,340 | 32,053 | |
Net Book Value | 12,641 | 13,032 | |
Machinery, office, and other equipment | FinTech | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 31,985 | 33,349 | |
Accumulated Depreciation | 20,460 | 21,947 | |
Net Book Value | $ 11,525 | $ 11,402 | |
Machinery, office, and other equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life (Years) | 1 year | ||
Machinery, office, and other equipment | Minimum | FinTech | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life (Years) | 1 year | ||
Machinery, office, and other equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life (Years) | 5 years | ||
Machinery, office, and other equipment | Maximum | FinTech | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life (Years) | 5 years |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Narrative (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill | $ 681,981,000 | $ 681,974,000 | |
Impairment of goodwill | 0 | $ 0 | |
Amortization of intangible assets | 14,700,000 | 19,300,000 | |
Placement fee | 0 | 600,000 | |
Impairment of intangible assets | $ 0 | $ 0 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Other Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 700,939 | $ 697,275 |
Accumulated Amortization | 497,846 | 482,648 |
Net Book Value | 203,093 | 214,627 |
Contract rights under placement fee agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 60,561 | 60,561 |
Accumulated Amortization | 30,426 | 28,108 |
Net Book Value | $ 30,135 | 32,453 |
Contract rights under placement fee agreements | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (Years) | 3 years | |
Contract rights under placement fee agreements | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (Years) | 7 years | |
Customer contracts | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 71,975 | 71,975 |
Accumulated Amortization | 55,633 | 54,407 |
Net Book Value | $ 16,342 | 17,568 |
Customer contracts | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (Years) | 3 years | |
Customer contracts | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (Years) | 14 years | |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 231,100 | 231,100 |
Accumulated Amortization | 131,791 | 126,549 |
Net Book Value | $ 99,309 | 104,551 |
Customer relationships | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (Years) | 3 years | |
Customer relationships | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (Years) | 7 years | |
Developed technology and software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 317,621 | 313,957 |
Accumulated Amortization | 261,789 | 255,771 |
Net Book Value | $ 55,832 | 58,186 |
Developed technology and software | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (Years) | 1 year | |
Developed technology and software | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (Years) | 6 years | |
Patents, trademarks, and other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 19,682 | 19,682 |
Accumulated Amortization | 18,207 | 17,813 |
Net Book Value | $ 1,475 | $ 1,869 |
Patents, trademarks, and other | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (Years) | 2 years | |
Patents, trademarks, and other | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (Years) | 18 years |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | ||||
Trade accounts payable | $ 79,955 | $ 54,531 | ||
Contract liabilities | 27,887 | 26,980 | $ 31,226 | $ 28,510 |
Contingent consideration and acquisition-related liabilities | 14,935 | 24,674 | ||
Payroll and related expenses | 14,924 | 13,357 | ||
Accrued interest | 6,414 | 1,068 | ||
Operating lease liabilities | 5,605 | 5,649 | ||
Other | 3,288 | 3,605 | ||
Financial access processing and related expenses | 2,634 | 1,109 | ||
Accrued taxes | 1,387 | 1,329 | ||
Litigation accrual | 0 | 12,727 | ||
Total accounts payable and accrued expenses | $ 157,029 | $ 145,029 |
LONG-TERM DEBT - Summary of Ind
LONG-TERM DEBT - Summary of Indebtedness (Details) - USD ($) | 3 Months Ended | |||||
Mar. 31, 2021 | Dec. 31, 2020 | Apr. 21, 2020 | Dec. 31, 2018 | Dec. 31, 2017 | May 09, 2017 | |
Debt Instrument [Line Items] | ||||||
Total debt | $ 1,144,944,000 | $ 1,145,256,000 | ||||
Debt issuance costs and discount | (14,879,000) | (16,003,000) | ||||
Total debt after debt issuance costs and discount | 1,130,065,000 | 1,129,253,000 | ||||
Current portion of long-term debt | (1,250,000) | (1,250,000) | ||||
Total long-term debt, net of current portion | $ 1,128,815,000 | 1,128,003,000 | ||||
Senior secured term loan facility | New Credit Agreement, dated May 9, 2017 | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount of debt | $ 820,000,000 | |||||
Senior secured term loan facility | New Credit Agreement, dated May 9, 2017 | London Interbank Offered Rate (LIBOR) | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread | 2.75% | |||||
Incremental term loan | Incremental Term Loan Credit Agreement Dated Twenty One April Two Thousand Twenty | ||||||
Debt Instrument [Line Items] | ||||||
Total debt | $ 124,063,000 | 124,375,000 | ||||
Principal amount of debt | $ 125,000,000 | |||||
Incremental term loan | Incremental Term Loan Credit Agreement Dated Twenty One April Two Thousand Twenty | London Interbank Offered Rate (LIBOR) | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread | 10.50% | |||||
Revolving credit facility | New Credit Agreement, dated May 9, 2017 | ||||||
Debt Instrument [Line Items] | ||||||
Total debt | $ 0 | 0 | ||||
Principal amount of debt | $ 35,000,000 | |||||
Revolving credit facility | New Credit Agreement, dated May 9, 2017 | London Interbank Offered Rate (LIBOR) | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread | 4.50% | |||||
Senior Secured Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Total debt | $ 735,500,000 | 735,500,000 | ||||
Senior secured notes | ||||||
Debt Instrument [Line Items] | ||||||
Total debt | 859,563,000 | 859,875,000 | ||||
Senior unsecured notes | ||||||
Debt Instrument [Line Items] | ||||||
Total debt | $ 285,381,000 | $ 285,381,000 | ||||
Senior unsecured notes | 2017 Unsecured Notes | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount of debt | $ 375,000,000 | $ 375,000,000 | ||||
Interest rate (as a percent) | 7.50% | 7.50% |
LONG-TERM DEBT - Narrative (Det
LONG-TERM DEBT - Narrative (Details) - USD ($) | Feb. 02, 2021 | Apr. 21, 2020 | May 09, 2017 | Mar. 31, 2021 | Feb. 01, 2021 | Dec. 31, 2018 | Dec. 31, 2017 |
Senior unsecured notes | FinTech Segment | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount of debt | $ 285,400,000 | ||||||
Incremental Term Loan Credit Agreement Dated Twenty One April Two Thousand Twenty | Sagard Credit Partners, LP | Common Stock | |||||||
Debt Instrument [Line Items] | |||||||
Number of shares called by warrants | 184,670 | ||||||
Exercise price per share (in dollars per share) | $ 5.37 | ||||||
Incremental Term Loan Credit Agreement Dated Twenty One April Two Thousand Twenty | Sagard Credit Partners (Cayman), LP | Common Stock | |||||||
Debt Instrument [Line Items] | |||||||
Number of shares called by warrants | 40,330 | ||||||
Exercise price per share (in dollars per share) | $ 5.37 | ||||||
Incremental Term Loan Credit Agreement Dated Twenty One April Two Thousand Twenty | Senior secured notes | |||||||
Debt Instrument [Line Items] | |||||||
Debt term | 7 years | ||||||
Credit Agreement Dated February Second Two Thousand Twenty One | Federal Funds Effective Swap Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread | 0.25% | ||||||
Credit Agreement Dated February Second Two Thousand Twenty One | London Interbank Offered Rate (LIBOR) | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread | 2.75% | ||||||
Floor interest rate | 0.75% | 1.00% | |||||
Credit Agreement Dated February Second Two Thousand Twenty One | Base Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread | 1.75% | ||||||
Floor interest rate | 1.75% | 2.00% | |||||
Credit Agreement Dated February Second Two Thousand Twenty One | Senior Secured Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Percentage of prepayment premium of principal amount of term loan | 1.00% | ||||||
Period after closing date prepayment is subject to a prepayment premium | 6 months | ||||||
2017 Unsecured Notes | Senior unsecured notes | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount of debt | $ 375,000,000 | $ 375,000,000 | |||||
Interest rate (as a percent) | 7.50% | 7.50% | |||||
Senior secured term loan facility | New Credit Agreement, dated May 9, 2017 | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount of debt | $ 820,000,000 | ||||||
Debt term | 7 years | ||||||
Weighted average interest rate during period (as a percent) | 3.59% | ||||||
Senior secured term loan facility | New Credit Agreement, dated May 9, 2017 | London Interbank Offered Rate (LIBOR) | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread | 2.75% | ||||||
Senior secured term loan facility | Incremental Term Loan Credit Agreement Dated Twenty One April Two Thousand Twenty | |||||||
Debt Instrument [Line Items] | |||||||
Voluntary prepayments period subject to make-whole premium | 2 years | ||||||
Period after second anniversary subject to premium | 6 months | ||||||
Prepayment penalty | 1.00% | ||||||
Incremental term loan | Incremental Term Loan Credit Agreement Dated Twenty One April Two Thousand Twenty | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount of debt | $ 125,000,000 | ||||||
Weighted average interest rate during period (as a percent) | 11.50% | ||||||
Incremental term loan | Incremental Term Loan Credit Agreement Dated Twenty One April Two Thousand Twenty | London Interbank Offered Rate (LIBOR) | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread | 10.50% | ||||||
Revolving credit facility | New Credit Agreement, dated May 9, 2017 | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount of debt | $ 35,000,000 | ||||||
Debt term | 5 years | ||||||
Revolving credit facility | New Credit Agreement, dated May 9, 2017 | London Interbank Offered Rate (LIBOR) | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread | 4.50% | ||||||
Eurodollar Borrowings | Incremental Term Loan Credit Agreement Dated Twenty One April Two Thousand Twenty | Eurodollar | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread | 10.50% | ||||||
Base Rate Borrowings | Incremental Term Loan Credit Agreement Dated Twenty One April Two Thousand Twenty | Base Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread | 9.50% |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2019 | Dec. 31, 2020 | |
Gain Contingencies [Line Items] | |||
Litigation expense | $ 14 | ||
Expected recovery | 7.7 | $ 7.7 | |
Insurance Settlement | |||
Gain Contingencies [Line Items] | |||
Litigation expense | 4.4 | ||
Proceeds from insurance settlement, operating | 1.9 | ||
Proceeds from insurance settlement | $ 9.6 | ||
Recovery of direct costs | $ 6.3 |
STOCKHOLDERS' EQUITY - Narrativ
STOCKHOLDERS' EQUITY - Narrative (Details) | Feb. 28, 2020USD ($) |
February Twenty Twenty Stock Repurchase Program | |
Class of Stock [Line Items] | |
Stock repurchase program, authorized amount | $ 10,000,000 |
WEIGHTED AVERAGE SHARES OF CO_3
WEIGHTED AVERAGE SHARES OF COMMON STOCK - Narrative (Details) - shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Weighted average common shares outstanding | ||
Weighted average number of common shares outstanding - basic (in shares) | 86,984,000 | 84,624,000 |
Potential dilution from equity awards (in shares) | 10,984,000 | 0 |
Weighted average number of common shares outstanding - diluted (in shares) | 97,968,000 | 84,624,000 |
Anti-dilutive equity awards excluded from computation of earnings per share (in shares) | 0 | 0 |
SHARE-BASED COMPENSATION - Awar
SHARE-BASED COMPENSATION - Award Activity (Details) shares in Thousands | 3 Months Ended |
Mar. 31, 2021shares | |
Stock Options | |
Stock Options Granted | |
Outstanding (in shares) | 10,261 |
Granted (in shares) | 0 |
Exercised options (in shares) | (561) |
Canceled or forfeited (in shares) | (3) |
Outstanding (in shares) | 9,697 |
Restricted Stock Units | |
Restricted Stock Granted | |
Outstanding (in shares) | 4,250 |
Granted (in shares) | 50 |
Vested (in shares) | (41) |
Canceled or forfeited (in shares) | (15) |
Outstanding (in shares) | 4,244 |
Common Stock | |
Restricted Stock Granted | |
Number of shares available for grant (in shares) | 900 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate (as a percent) | 5.50% | 6.90% |
Statutory federal rate (as a percent) | 21.00% | 21.00% |
Unrecognized tax benefits | $ 1.7 |
SEGMENT INFORMATION - Revenues,
SEGMENT INFORMATION - Revenues, Operating Income, and Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | ||
Revenues | ||||
Total revenues | $ 139,113 | $ 113,308 | ||
Costs and expenses | ||||
Operating expenses | 38,043 | 39,272 | ||
Research and development | 8,413 | 8,355 | ||
Depreciation | 16,177 | 16,243 | ||
Amortization | 14,715 | 19,324 | ||
Total costs and expenses | 98,919 | 102,882 | ||
Operating income (loss) | 40,194 | 10,426 | ||
Total assets | ||||
Total assets | 1,539,814 | $ 1,477,179 | ||
Games | ||||
Revenues | ||||
Total revenues | 76,151 | 57,290 | ||
Costs and expenses | ||||
Cost of revenues | [1] | 15,066 | 11,369 | |
Operating expenses | 14,595 | 14,805 | ||
Research and development | 5,667 | 6,195 | ||
Depreciation | 14,563 | 14,728 | ||
Amortization | 10,984 | 15,585 | ||
Total costs and expenses | 60,875 | 62,682 | ||
Operating income (loss) | 15,276 | (5,392) | ||
Total assets | ||||
Total assets | 816,563 | 811,523 | ||
Games | Gaming operations | ||||
Revenues | ||||
Total revenues | 58,141 | 45,686 | ||
Costs and expenses | ||||
Cost of revenues | [1] | 4,759 | 4,545 | |
Games | Gaming equipment and systems | ||||
Revenues | ||||
Total revenues | 17,988 | 11,583 | ||
Costs and expenses | ||||
Cost of revenues | [1] | 10,307 | 6,824 | |
Games | Gaming other | ||||
Revenues | ||||
Total revenues | 22 | 21 | ||
FinTech | ||||
Revenues | ||||
Total revenues | 62,962 | 56,018 | ||
Costs and expenses | ||||
Cost of revenues | [1] | 6,505 | 8,319 | |
Operating expenses | 23,448 | 24,467 | ||
Research and development | 2,746 | 2,160 | ||
Depreciation | 1,614 | 1,515 | ||
Amortization | 3,731 | 3,739 | ||
Total costs and expenses | 38,044 | 40,200 | ||
Operating income (loss) | 24,918 | 15,818 | ||
Total assets | ||||
Total assets | 723,251 | $ 665,656 | ||
FinTech | Financial access services | ||||
Revenues | ||||
Total revenues | 38,712 | 36,973 | ||
Costs and expenses | ||||
Cost of revenues | [1] | 1,473 | 3,555 | |
FinTech | Software and other | ||||
Revenues | ||||
Total revenues | 17,246 | 12,694 | ||
Costs and expenses | ||||
Cost of revenues | [1] | 1,004 | 873 | |
FinTech | Hardware | ||||
Revenues | ||||
Total revenues | 7,004 | 6,351 | ||
Costs and expenses | ||||
Cost of revenues | [1] | $ 4,028 | $ 3,891 | |
[1] | (1) Exclusive of depreciation and amortization. |
SEGMENT INFORMATION - Major Cus
SEGMENT INFORMATION - Major Customers (Details) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Five largest customers | Customer risk | Revenue from Contract with Customer | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk (as a percent) | 18.00% | 15.00% |