Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2021 | Oct. 29, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 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 | |
Entity Address, Address Line Two | 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, $0.001 par value | |
Trading Symbol | EVRI | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 90,978,626 | |
Entity Central Index Key | 0001318568 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | ||
Revenues | |||||
Revenues | $ 168,302 | $ 112,098 | $ 479,997 | $ 264,122 | |
Costs and expenses | |||||
Operating expenses | 47,121 | 34,927 | 133,320 | 115,428 | |
Research and development | 9,598 | 7,034 | 26,799 | 20,958 | |
Depreciation | 14,463 | 16,163 | 46,571 | 48,700 | |
Amortization | 14,596 | 18,693 | 43,680 | 57,312 | |
Total costs and expenses | 113,229 | 92,360 | 330,341 | 286,686 | |
Operating income (loss) | 55,073 | 19,738 | 149,656 | (22,564) | |
Other expenses | |||||
Interest expense, net of interest income | 14,257 | 18,905 | 50,488 | 56,226 | |
Loss on extinguishment of debt | 34,389 | 0 | 34,389 | 7,457 | |
Total other expenses | 48,646 | 18,905 | 84,877 | 63,683 | |
Income (loss) before income tax | 6,427 | 833 | 64,779 | (86,247) | |
Income tax (benefit) provision | (319) | 1,711 | 1,285 | (3,434) | |
Net income (loss) | 6,746 | (878) | 63,494 | (82,813) | |
Foreign currency translation | (442) | 359 | (335) | (1,295) | |
Comprehensive income (loss) | $ 6,304 | $ (519) | $ 63,159 | $ (84,108) | |
Earnings (loss) per share | |||||
Basic (in dollars per share) | $ 0.07 | $ (0.01) | $ 0.72 | $ (0.97) | |
Diluted (in dollars per share) | $ 0.07 | $ (0.01) | $ 0.64 | $ (0.97) | |
Weighted average common shares outstanding | |||||
Basic (in shares) | 90,322 | 85,556 | 88,688 | 85,102 | |
Diluted (in shares) | 101,359 | 85,556 | 99,581 | 85,102 | |
Games | |||||
Revenues | |||||
Revenues | $ 95,833 | $ 57,241 | $ 271,321 | $ 135,384 | |
Costs and expenses | |||||
Cost of revenues | [1] | 19,178 | 9,975 | 54,834 | 27,552 |
Operating expenses | 16,711 | 13,078 | 48,871 | 50,597 | |
Research and development | 6,445 | 5,003 | 17,966 | 14,819 | |
Depreciation | 12,495 | 14,777 | 41,122 | 44,349 | |
Amortization | 10,805 | 14,838 | 32,464 | 45,738 | |
Total costs and expenses | 65,634 | 57,671 | 195,257 | 183,055 | |
Operating income (loss) | 30,199 | (430) | 76,064 | (47,671) | |
Games | Gaming operations | |||||
Revenues | |||||
Revenues | 71,580 | 46,968 | 202,941 | 106,513 | |
Costs and expenses | |||||
Cost of revenues | [1] | 5,675 | 4,245 | 15,776 | 10,471 |
Games | Gaming equipment and systems | |||||
Revenues | |||||
Revenues | 24,220 | 10,229 | 68,298 | 28,795 | |
Costs and expenses | |||||
Cost of revenues | [1] | 13,503 | 5,730 | 39,058 | 16,625 |
Games | Gaming other | |||||
Revenues | |||||
Revenues | 33 | 44 | 82 | 76 | |
Costs and expenses | |||||
Cost of revenues | [1] | 0 | 0 | 0 | 456 |
FinTech | |||||
Revenues | |||||
Revenues | 72,469 | 54,857 | 208,676 | 128,738 | |
Costs and expenses | |||||
Cost of revenues | [1] | 8,273 | 5,568 | 25,137 | 16,736 |
Operating expenses | 30,410 | 21,850 | 84,449 | 64,831 | |
Research and development | 3,153 | 2,030 | 8,833 | 6,138 | |
Depreciation | 1,968 | 1,387 | 5,449 | 4,352 | |
Amortization | 3,791 | 3,855 | 11,216 | 11,574 | |
Total costs and expenses | 47,595 | 34,690 | 135,084 | 103,631 | |
Operating income (loss) | 24,874 | 20,167 | 73,592 | 25,107 | |
FinTech | Financial access services | |||||
Revenues | |||||
Revenues | 46,421 | 33,979 | 129,973 | 80,986 | |
Costs and expenses | |||||
Cost of revenues | [1] | 1,830 | 1,161 | 4,863 | 5,227 |
FinTech | Software and other | |||||
Revenues | |||||
Revenues | 17,024 | 14,630 | 49,874 | 31,748 | |
Costs and expenses | |||||
Cost of revenues | [1] | 1,063 | 859 | 3,196 | 2,057 |
FinTech | Hardware | |||||
Revenues | |||||
Revenues | 9,024 | 6,248 | 28,829 | 16,004 | |
Costs and expenses | |||||
Cost of revenues | [1] | $ 5,380 | $ 3,548 | $ 17,078 | $ 9,452 |
[1] | (1) Exclusive of depreciation and amortization. EVERI HOLDINGS INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (In thousands, except earnings (loss) per share amounts) |
UNAUDITED CONDENSED CONSOLIDA_2
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash and cash equivalents | $ 215,551 | $ 251,706 |
Settlement receivables | 50,596 | 60,652 |
Trade and other receivables, net of allowances for credit losses of $4,788 and $3,689 at September 30, 2021 and December 31, 2020, respectively | 95,200 | 74,191 |
Inventory | 31,690 | 27,742 |
Prepaid expenses and other current assets | 25,218 | 17,348 |
Total current assets | 418,255 | 431,639 |
Non-current assets | ||
Property and equipment, net | 114,943 | 112,323 |
Goodwill | 681,975 | 681,974 |
Other intangible assets, net | 216,621 | 214,627 |
Other receivables | 14,068 | 14,620 |
Other assets | 20,181 | 21,996 |
Total non-current assets | 1,047,788 | 1,045,540 |
Total assets | 1,466,043 | 1,477,179 |
Current liabilities | ||
Settlement liabilities | 177,582 | 173,211 |
Accounts payable and accrued expenses | 199,254 | 145,029 |
Current portion of long-term debt | 6,000 | 1,250 |
Total current liabilities | 382,836 | 319,490 |
Non-current liabilities | ||
Long-term debt, less current portion | 976,407 | 1,128,003 |
Deferred tax liability, net | 19,782 | 19,956 |
Other accrued expenses and liabilities | 14,250 | 17,628 |
Total non-current liabilities | 1,010,439 | 1,165,587 |
Total liabilities | 1,393,275 | 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 September 30, 2021 and December 31, 2020, respectively | 0 | 0 |
Common stock, $0.001 par value, 500,000 shares authorized and 116,357 and 90,692 shares issued and outstanding at September 30, 2021, respectively, and 111,872 and 86,683 shares issued and outstanding at December 31, 2020, respectively | 116 | 112 |
Additional paid-in capital | 493,022 | 466,614 |
Accumulated deficit | (231,126) | (294,620) |
Accumulated other comprehensive loss | (1,526) | (1,191) |
Treasury stock, at cost, 25,664 and 25,190 shares at September 30, 2021 and December 31, 2020, respectively | (187,718) | (178,813) |
Total stockholders’ equity (deficit) | 72,768 | (7,898) |
Total liabilities and stockholders’ equity (deficit) | $ 1,466,043 | $ 1,477,179 |
UNAUDITED CONDENSED CONSOLIDA_3
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets | ||
Allowances for doubtful accounts | $ 4,788 | $ 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) | 116,357,000 | 111,872,000 |
Common stock outstanding (in shares) | 90,692,000 | 86,683,000 |
Treasury stock (in shares) | 25,664,000 | 25,190,000 |
UNAUDITED CONDENSED CONSOLIDA_4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash flows from operating activities | ||
Net income (loss) | $ 63,494 | $ (82,813) |
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities: | ||
Depreciation | 46,571 | 48,700 |
Amortization | 43,680 | 57,312 |
Non-cash lease expense | 3,400 | 3,615 |
Amortization of financing costs and discounts | 3,234 | 3,111 |
Loss on sale or disposal of assets | 1,616 | 111 |
Accretion of contract rights | 6,966 | 5,345 |
Provision for credit losses | 5,499 | 6,925 |
Deferred income taxes | (174) | (3,788) |
Reserve for inventory obsolescence | 1,610 | 1,810 |
Write-down of assets | 0 | 11,281 |
Loss on extinguishment of debt | 34,389 | 7,457 |
Stock-based compensation | 12,404 | 10,108 |
Other non-cash items | 0 | 456 |
Changes in operating assets and liabilities: | ||
Settlement receivables | 10,056 | 36,922 |
Trade and other receivables | (25,522) | 6,682 |
Inventory | (5,569) | (10,614) |
Prepaid expenses and other assets | (8,068) | (4,952) |
Settlement liabilities | 4,371 | (93,622) |
Accounts payable and accrued expenses | 45,543 | (5,814) |
Net cash provided by (used in) operating activities | 243,500 | (1,768) |
Cash flows from investing activities | ||
Capital expenditures | (73,288) | (52,428) |
Acquisitions, net of cash acquired | (15,000) | (15,000) |
Proceeds from sale of property and equipment | 215 | 141 |
Placement fee agreements | 0 | (3,021) |
Net cash used in investing activities | (88,073) | (70,308) |
Cash flows from financing activities | ||
Proceeds from prior revolver | 0 | 35,000 |
Repayments of prior revolver | 0 | (35,000) |
Fees associated with debt transactions — new debt | (19,797) | 0 |
Fees associated with debt transactions — prior debt | (20,828) | (11,128) |
Proceeds from exercise of stock options | 14,012 | 3,509 |
Treasury stock | (8,909) | (1,097) |
Payment of acquisition contingent consideration | (9,875) | 0 |
Net cash (used in) provided by financing activities | (190,653) | 12,852 |
Effect of exchange rates on cash and cash equivalents | (237) | (1,370) |
Cash, cash equivalents and restricted cash | ||
Net decrease for the period | (35,463) | (60,594) |
Balance, beginning of the period | 252,349 | 296,610 |
Balance, end of the period | 216,886 | 236,016 |
Supplemental cash disclosures | ||
Cash paid for interest | 45,167 | 45,331 |
Cash paid for income tax, net | 975 | 81 |
Supplemental non-cash disclosures | ||
Accrued and unpaid capital expenditures and placement fees | 32,999 | 2,970 |
Transfer of leased gaming equipment to inventory | 5,636 | 5,493 |
Term Loan | ||
Cash flows from financing activities | ||
Proceeds from secured debt | 600,000 | 0 |
Repayments of secured debt | (735,500) | (13,500) |
Incremental Term Loan | ||
Cash flows from financing activities | ||
Proceeds from secured debt | 0 | 125,000 |
Repayments of secured debt | (124,375) | (313) |
2021 Unsecured Notes | ||
Cash flows from financing activities | ||
Proceeds from secured debt | 400,000 | 0 |
2017 Unsecured Notes | ||
Cash flows from financing activities | ||
Repayments of secured debt | $ (285,381) | $ (89,619) |
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 at beginning of period (in shares) at Dec. 31, 2019 | 109,493 | |||||
Balance at 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 at end of period (in shares) at Mar. 31, 2020 | 109,806 | |||||
Balance at end of period at Mar. 31, 2020 | 44,349 | $ 110 | 450,976 | (226,394) | (2,777) | (177,566) |
Balance at beginning of period (in shares) at Dec. 31, 2019 | 109,493 | |||||
Balance at 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) | (82,813) | |||||
Balance at end of period (in shares) at Sep. 30, 2020 | 111,079 | |||||
Balance at end of period at Sep. 30, 2020 | (15,410) | $ 111 | 460,967 | (295,753) | (2,114) | (178,621) |
Balance at beginning of period (in shares) at Mar. 31, 2020 | 109,806 | |||||
Balance at beginning of period at Mar. 31, 2020 | 44,349 | $ 110 | 450,976 | (226,394) | (2,777) | (177,566) |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | (68,481) | (68,481) | ||||
Foreign currency translation | 304 | 304 | ||||
Stock-based compensation expense | 4,638 | 4,638 | ||||
Issuance of warrants | 502 | 502 | ||||
Exercise of options (in shares) | 149 | |||||
Exercise of options | 473 | $ 1 | 472 | |||
Restricted share vesting and withholding (in shares) | 579 | |||||
Restricted share vesting and withholding | (547) | (547) | ||||
Balance at end of period (in shares) at Jun. 30, 2020 | 110,534 | |||||
Balance at end of period at Jun. 30, 2020 | (18,762) | $ 111 | 456,588 | (294,875) | (2,473) | (178,113) |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | (878) | (878) | ||||
Foreign currency translation | 359 | 359 | ||||
Stock-based compensation expense | 2,985 | 2,985 | ||||
Exercise of options (in shares) | 287 | |||||
Exercise of options | 1,394 | 1,394 | ||||
Restricted share vesting and withholding (in shares) | 258 | |||||
Restricted share vesting and withholding | (508) | (508) | ||||
Balance at end of period (in shares) at Sep. 30, 2020 | 111,079 | |||||
Balance at end of period at Sep. 30, 2020 | $ (15,410) | $ 111 | 460,967 | (295,753) | (2,114) | (178,621) |
Balance at beginning of period (in shares) at Dec. 31, 2020 | 86,683 | 111,872 | ||||
Balance at 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 at end of period (in shares) at Mar. 31, 2021 | 112,852 | |||||
Balance at end of period at Mar. 31, 2021 | $ 17,532 | $ 113 | 471,902 | (274,086) | (1,412) | (178,985) |
Balance at beginning of period (in shares) at Dec. 31, 2020 | 86,683 | 111,872 | ||||
Balance at 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) | $ 63,494 | |||||
Exercise of options (in shares) | 2,681 | |||||
Balance at end of period (in shares) at Sep. 30, 2021 | 90,692 | 116,357 | ||||
Balance at end of period at Sep. 30, 2021 | $ 72,768 | $ 116 | 493,022 | (231,126) | (1,526) | (187,718) |
Balance at beginning of period (in shares) at Mar. 31, 2021 | 112,852 | |||||
Balance at beginning of period at Mar. 31, 2021 | 17,532 | $ 113 | 471,902 | (274,086) | (1,412) | (178,985) |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | 36,214 | 36,214 | ||||
Foreign currency translation | 328 | 328 | ||||
Stock-based compensation expense | 5,447 | 5,447 | ||||
Exercise of options (in shares) | 1,358 | |||||
Exercise of options | 6,418 | $ 2 | 6,416 | |||
Restricted share vesting and withholding (in shares) | 1,349 | |||||
Restricted share vesting and withholding | (8,439) | $ 1 | (3) | (8,437) | ||
Balance at end of period (in shares) at Jun. 30, 2021 | 115,559 | |||||
Balance at end of period at Jun. 30, 2021 | 57,500 | $ 116 | 483,762 | (237,872) | (1,084) | (187,422) |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | 6,746 | 6,746 | ||||
Foreign currency translation | (442) | (442) | ||||
Stock-based compensation expense | 3,952 | 3,952 | ||||
Exercise of options (in shares) | 762 | |||||
Exercise of options | 5,309 | 5,309 | ||||
Restricted share vesting and withholding (in shares) | 36 | |||||
Restricted share vesting and withholding | $ (297) | (1) | (296) | |||
Balance at end of period (in shares) at Sep. 30, 2021 | 90,692 | 116,357 | ||||
Balance at end of period at Sep. 30, 2021 | $ 72,768 | $ 116 | $ 493,022 | $ (231,126) | $ (1,526) | $ (187,718) |
BUSINESS
BUSINESS | 9 Months Ended |
Sep. 30, 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 imaginative entertainment and trusted technology solutions for the casino and digital gaming industry. Everi’s mission is to lead the gaming industry through the power of people, imagination and technology. With a focus on player engagement and helping casino customers operate more efficiently, the Company develops entertaining game content and gaming machines, gaming systems and services for land-based and iGaming operators. The Company is also a preeminent and comprehensive provider of trusted financial technology solutions that power the casino floor while improving operational efficiencies and fulfilling regulatory compliance requirements, including products and services that facilitate convenient and secure cash and cashless financial transactions, self-service player loyalty tools and applications, and regulatory and intelligence software. 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; and (iii) business-to-business (“B2B”) digital online gaming activities. Everi FinTech provides gaming operators with financial technology products and services, including: financial access and related 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. Our services operate as part of 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; 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 the Coronavirus Disease 2019 (“COVID-19”) Pandemic The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains, lowered equity market valuations, created significant volatility i n the financial markets, increased unemployment levels, and 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 in the first quarter of 2020, with many beginning to reopen their operations over the remainder of 2020 and in 2021. As a result, our operations experienced significant disruptions in the first three quarters of 2020. At th e 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. While industry conditions have improved significantly compared to 2020, it is unclear if the customer volumes experienced will continue to exceed pre-COVID levels, to the extent another resurgence of COVID-19 could result in the further closure 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. As of September 30, 2021, excluding the few casinos that have permanently closed, there are only a minimal number of customers whose operations still remain closed. Our revenues, cash flows, and liquidity for the third quarter of 2021 exceeded the third quarter of 2020, which was significantly impacted by the effects of COVID-19. At the onset of the pandemic, our custo mers 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, and limitations on casino operations and amenities, 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. With some limitations still in effect, 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 or 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 on Form 10-K for the year ended December 31, 2020 (the “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 and maintain our overall competitiveness in the market; the potential for significant fluctuations in demand for our products and services; overall trends in the gaming industry impacting our business; and potential volatility in our stock price, among other concerns such as cybersecurity exposure. |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 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 and nine months ended September 30, 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 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): Nine Months Ended September 30, 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 September 30 — current 9,728 8,945 Balance at September 30 — non-current 5,647 7,545 Total 15,375 16,490 (Decrease)/Increase $ (2,186) $ 1,082 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 September 30 — current 36,503 34,846 Balance at September 30 — non-current 493 32 Total 36,996 34,878 Increase $ 9,727 $ 6,014 (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 $21.0 million and $19.3 million in revenue that was included in the beginning contract liability balance during the nine months ended September 30, 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 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 $49.2 million and $141.6 million for the three and nine months ended September 30, 2021, respectively, and $35.9 million and $80.3 million for the three and nine months ended September 30, 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 funds-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, our services operate as part of 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; 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 and nine months ended September 30, 2021 and 2020. Restricted Cash Our restricted cash primarily consists of: (i) funds held in connection with certain customer agreements; (ii) funds held in connection with a sponsorship agreement; (iii) wide area progressive (“WAP”)-related restricted funds; and (iv) financial access activities related to cashless balances held on behalf of patrons. 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 nine months ended September 30, 2021 (in thousands). Classification on our Balance Sheets At September 30, 2021 At December 31, 2020 Cash and cash equivalents Cash and cash equivalents $ 215,551 $ 251,706 Restricted cash — current Prepaid expenses and other current assets 1,234 542 Restricted cash — non-current Other assets 101 101 Total $ 216,886 $ 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. Account balances are charged against the provision when the Company believes it is probable the receivable will not be recovered. 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 an 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 September 30, 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 appropriate interest rates. As of September 30, 2021 and December 31, 2020, the fair value of trade and loans 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 September 30, 2021 $600 million New Term Loan 2 $ 599,430 $ 600,000 $400 million 2021 Unsecured Notes 2 $ 411,000 $ 400,000 December 31, 2020 $820 million Prior Term Loan 2 $ 729,138 $ 735,500 $125 million Prior Incremental Term Loan 2 $ 129,972 $ 124,375 $375 million 2017 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 Standard Description Date of Adoption Effect on Financial Statements ASU 2021-05 , 'Leases (Topic 842): Lessors—Certain Leases with Variable Lease Payments This ASU amends the lease classification requirements for lessors to align them with practice under ASC Topic 840. January 1, 2022 We are currently evaluating the impact of adopting this ASU on our Financial Statements and our disclosures; however, we do not expect the impact to be material. As of September 30, 2021, other than what has been described above, we do not anticipate recently issued accounting guidance to have a significant future impact on our consolidated financial statements. |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 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 is 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 initial expected term of 12 months or less (short-term) are not accounted for on our Balance Sheets. As of September 30, 2021 and December 31, 2020, our finance leases were not material. Supplemental balance sheet information related to our operating leases is as follows (in thousands): Classification on our Balance Sheets At September 30, 2021 At December 31, 2020 Assets Operating lease ROU assets Other assets, non-current $ 13,764 $ 16,104 Liabilities Current operating lease liabilities Accounts payable and accrued expenses $ 5,468 $ 5,649 Non-current operating lease liabilities Other accrued expenses and liabilities $ 13,127 $ 16,077 Supplemental cash flow information related to leases is as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Cash paid for: Long-term operating leases $ 1,660 $ 1,611 $ 5,030 $ 4,892 Short-term operating leases $ 400 $ 465 $ 1,219 $ 1,433 Right-of-use assets obtained in exchange for lease obligations: Operating leases (1) $ 396 $ 7,594 $ 1,063 $ 8,454 (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 September 30, 2021 At December 31, 2020 Weighted Average Remaining Lease Term (in years): Operating leases 3.71 4.16 Weighted Average Discount Rate: Operating leases 5.08 % 5.16 % Components of lease expense, which are included in operating expenses, are as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Operating Lease Cost: Operating lease cost (1) $ 1,276 $ 1,475 $ 4,192 $ 4,212 Variable lease cost $ 311 $ 421 $ 946 $ 1,333 (1) The amount includes approximately $1.0 million and $3.4 million in non-cash lease expense for the three and nine months ended September 30, 2021, respectively, and $1.4 million and $3.6 million for the three and nine months ended September 30, 2020, respectively. Maturities of lease liabilities are summarized as follows as of September 30, 2021 (in thousands): Year Ending December 31, Amount 2021 (excluding the nine months ended September 30, 2021) $ 1,574 2022 6,267 2023 4,893 2024 3,667 2025 2,971 Thereafter 1,041 Total future minimum lease payments 20,413 Amount representing interest 1,818 Present value of future minimum lease payments 18,595 Current operating lease obligations 5,468 Long-term lease obligations $ 13,127 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 material sales transactions that qualified for sales-type lease accounting treatment during the three and nine months ended September 30, 2021 and 2020. Ou r interest income recognized in connection with sales-type leases executed in the prior periods was not material. Supplemental balance sheet information related to our sales-type leases is as follows (in thousands): Classification on our Balance Sheets At September 30, 2021 At December 31, 2020 Assets Net investment in sales-type leases — current Trade and other receivables, net $ 1,157 $ 1,397 Net investment in sales-type leases — non-current Other receivables $ 186 $ 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 is 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 initial expected term of 12 months or less (short-term) are not accounted for on our Balance Sheets. As of September 30, 2021 and December 31, 2020, our finance leases were not material. Supplemental balance sheet information related to our operating leases is as follows (in thousands): Classification on our Balance Sheets At September 30, 2021 At December 31, 2020 Assets Operating lease ROU assets Other assets, non-current $ 13,764 $ 16,104 Liabilities Current operating lease liabilities Accounts payable and accrued expenses $ 5,468 $ 5,649 Non-current operating lease liabilities Other accrued expenses and liabilities $ 13,127 $ 16,077 Supplemental cash flow information related to leases is as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Cash paid for: Long-term operating leases $ 1,660 $ 1,611 $ 5,030 $ 4,892 Short-term operating leases $ 400 $ 465 $ 1,219 $ 1,433 Right-of-use assets obtained in exchange for lease obligations: Operating leases (1) $ 396 $ 7,594 $ 1,063 $ 8,454 (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 September 30, 2021 At December 31, 2020 Weighted Average Remaining Lease Term (in years): Operating leases 3.71 4.16 Weighted Average Discount Rate: Operating leases 5.08 % 5.16 % Components of lease expense, which are included in operating expenses, are as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Operating Lease Cost: Operating lease cost (1) $ 1,276 $ 1,475 $ 4,192 $ 4,212 Variable lease cost $ 311 $ 421 $ 946 $ 1,333 (1) The amount includes approximately $1.0 million and $3.4 million in non-cash lease expense for the three and nine months ended September 30, 2021, respectively, and $1.4 million and $3.6 million for the three and nine months ended September 30, 2020, respectively. Maturities of lease liabilities are summarized as follows as of September 30, 2021 (in thousands): Year Ending December 31, Amount 2021 (excluding the nine months ended September 30, 2021) $ 1,574 2022 6,267 2023 4,893 2024 3,667 2025 2,971 Thereafter 1,041 Total future minimum lease payments 20,413 Amount representing interest 1,818 Present value of future minimum lease payments 18,595 Current operating lease obligations 5,468 Long-term lease obligations $ 13,127 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 material sales transactions that qualified for sales-type lease accounting treatment during the three and nine months ended September 30, 2021 and 2020. Ou r interest income recognized in connection with sales-type leases executed in the prior periods was not material. Supplemental balance sheet information related to our sales-type leases is as follows (in thousands): Classification on our Balance Sheets At September 30, 2021 At December 31, 2020 Assets Net investment in sales-type leases — current Trade and other receivables, net $ 1,157 $ 1,397 Net investment in sales-type leases — non-current Other receivables $ 186 $ 803 |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 9 Months Ended |
Sep. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
BUSINESS COMBINATIONS | BUSINESS COMBINATIONS We had no material acquisitions for the three and nine months ended September 30, 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 nine months ended September 30, 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 $9.9 million in contingent consideration was earned by the Seller based upon the achievement of certain revenue targets over the first two years post-closing, which we paid in June 2021. The related liabilities were recorded at fair value on the acquisition date as part of the consideration transferred and were remeasured each reporting period. The inputs used to measure the fair value of our liabilities were categorized as Level 3 in the fair value hierarchy. Contingent consideration liabilities as of December 31, 2020 were approximately $9.9 million, and were included in accounts payable and accrued expenses in our Balance Sheets as of December 31, 2020. 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. The final payment of $5.0 million due by July 1, 2021 was paid in June 2021. The related liabilities were recorded at fair value on the acquisition date as part of the consideration transferred and was included in accounts payable and accrued expenses as of December 31, 2020. The total consideration for this acquisition was $25.0 million. The acquisition did not have a significant impact on our results of operations or financial condition. |
FUNDING AGREEMENTS
FUNDING AGREEMENTS | 9 Months Ended |
Sep. 30, 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 $1.2 million and $2.9 million for the three and nine months ended September 30, 2021, respectively, and approximately $0.7 million and $2.5 million for the three and nine months ended September 30, 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 $401.5 million and $340.3 million as of September 30, 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 and nine months ended September 30, 2021 and 2020. |
TRADE AND OTHER RECEIVABLES
TRADE AND OTHER RECEIVABLES | 9 Months Ended |
Sep. 30, 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 September 30, At December 31, 2021 2020 Trade and other receivables, net Games trade and loans receivables $ 64,939 $ 44,794 FinTech trade and loans receivables 25,303 14,683 Contract assets (1) 15,375 17,561 Net investment in sales-type leases 1,343 2,200 Insurance settlement receivable (2) — 7,650 Other receivables 2,308 1,923 Total trade and other receivables, net 109,268 88,811 Non-current portion of receivables Games trade and loans receivables (1,237) (1,333) FinTech trade and loans receivables (6,998) (4,163) Contract assets (1) (5,647) (8,321) Net investment in sales-type leases (186) (803) Total non-current portion of receivables (14,068) (14,620) Total trade and other receivables, current portion $ 95,200 $ 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 nine months ended September 30, 2021 and 2020 is as follows (in thousands): Nine Months Ended September 30, 2021 2020 Beginning allowance for credit losses $ (3,689) $ (5,786) Provision (5,499) (6,926) Charge-offs and recoveries 4,400 8,958 Ending allowance for credit losses $ (4,788) $ (3,754) |
INVENTORY
INVENTORY | 9 Months Ended |
Sep. 30, 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 September 30, At December 31, 2021 2020 Inventory Component parts, net of reserves of $2,195 and $1,262 at September 30, 2021 and December 31, 2020, respectively $ 23,908 $ 21,560 Work-in-progress 985 182 Finished goods 6,797 6,000 Total inventory $ 31,690 $ 27,742 |
PREPAID EXPENSES AND OTHER ASSE
PREPAID EXPENSES AND OTHER ASSETS | 9 Months Ended |
Sep. 30, 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 New Revolver, restricted cash, operating lease ROU assets, and other assets. The current portion of these assets is included in prepaid expenses and other current 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 September 30, At December 31, 2021 2020 Prepaid expenses and other current assets Prepaid expenses $ 15,548 $ 11,282 Deposits 5,720 4,133 Restricted cash (1) 1,234 542 Other 2,716 1,391 Total prepaid expenses and other current assets $ 25,218 $ 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 September 30, At December 31, 2021 2020 Other assets Operating lease ROU assets $ 13,764 $ 16,104 Prepaid expenses and deposits 4,080 4,952 Debt issuance costs of New Revolver/Prior Revolver 1,856 267 Other 481 673 Total other assets $ 20,181 $ 21,996 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment consist of the following (dollars in thousands): At September 30, 2021 At December 31, 2020 Useful Life Cost Accumulated Net Book Cost Accumulated Net Book Property and equipment Rental pool — deployed 2-4 $ 238,916 $ 158,984 $ 79,932 $ 216,775 $ 136,975 $ 79,800 Rental pool — undeployed 2-4 22,519 18,152 4,367 21,974 16,680 5,294 FinTech equipment 1-5 32,400 20,560 11,840 33,349 21,947 11,402 Leasehold and building improvements Lease Term 12,502 8,902 3,600 11,352 8,557 2,795 Machinery, office, and other equipment 1-5 41,560 26,356 15,204 45,085 32,053 13,032 Total property and equipment $ 347,897 $ 232,954 $ 114,943 $ 328,535 $ 216,212 $ 112,323 Depreciation expense related to property and equipment totaled approximately $14.5 million and $46.6 million for the three and nine months ended September 30, 2021, and approximately $16.2 million and $48.7 million for the three and nine months ended September 30, 2020, respectively. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 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 September 30, 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 and nine months ended September 30, 2021 and 2020. Other Intangible Assets Other intangible assets consist of the following (dollars in thousands): At September 30, 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 $ 56,234 $ 1,886 $ 54,348 $ 60,561 $ 28,108 $ 32,453 Customer contracts 3-14 71,975 57,730 14,245 71,975 54,407 17,568 Customer relationships 8-12 231,100 142,274 88,826 231,100 126,549 104,551 Developed technology and software 1-6 333,308 274,794 58,514 313,957 255,771 58,186 Patents, trademarks and other 2-18 19,682 18,994 688 19,682 17,813 1,869 Total other intangible assets $ 712,299 $ 495,678 $ 216,621 $ 697,275 $ 482,648 $ 214,627 Amortization expense related to other intangible assets was approximately $14.6 million and $43.7 million for the three and nine months ended September 30, 2021, respectively, and approximately $18.7 million and $57.3 million for the three and nine months ended September 30, 2020, respectively. In September 2021, we entered into a placement fee agreement with a customer for certain of its locations for approximately $28.9 million. There were no payments made in connection with the placement fees for the three and nine months ended September 30, 2021. We paid approximately $2.1 million and $3.0 million in placement fees for the three and nine months ended September 30, 2020. The payment for the three and nine months ended September 30, 2020 did not include imputed interest. 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 and nine months ended September 30, 2021, there were no material write-downs of intangible assets. During the nine months ended September 30, 2020, we recorded a full write-down of assets of approximately $5.9 million , of which $5.5 million and $0.4 million , related to our Games and FinTech business, respectively, for certain of our internally developed and third-party software projects that were not expected to be pursued. This charge was reflected in operating expenses of our Statement of Operations. |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 9 Months Ended |
Sep. 30, 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 September 30, At December 31, 2021 2020 Accounts payable and accrued expenses Vendor commissions payable $ 56,869 $ 39,028 Contract liabilities 36,503 26,980 Trade accounts payable 29,837 15,503 Placement fees 28,862 — Payroll and related expenses 27,597 13,357 Operating lease liabilities 5,468 5,649 Accrued interest 4,274 1,068 Accrued taxes 2,855 1,329 Financial access processing and related expenses 2,864 1,109 Contingent consideration and acquisition-related liabilities (1) — 24,674 Litigation accrual (2) — 12,727 Other 4,125 3,605 Total accounts payable and accrued expenses $ 199,254 $ 145,029 (1) Refer to “Note 4 — Business Combinations.” (2) Refer to “Note 13 — Commitments and Contingencies.” |
LONG-TERM DEBT
LONG-TERM DEBT | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT The following table summarizes our outstanding indebtedness (dollars in thousands): Maturity Interest At September 30, At December 31, Date Rate 2021 2020 Long-term debt $600 million New Term Loan 2028 LIBOR+2.50% $ 600,000 $ — $125 million New Revolver 2026 LIBOR+2.50% — — $820 million Prior Term Loan 2024 LIBOR+2.75% — 735,500 $125 million Prior Incremental Term Loan 2024 LIBOR+10.50% — 124,375 $35 million Prior Revolver 2022 LIBOR+4.50% — — Senior Secured Credit Facilities 600,000 859,875 $400 million 2021 Unsecured Notes 2029 5.00% 400,000 — $375 million 2017 Unsecured Notes 2025 7.50% — 285,381 Total debt 1,000,000 1,145,256 Debt issuance costs and discount (17,593) (16,003) Total debt after debt issuance costs and discount 982,407 1,129,253 Current portion of long-term debt (6,000) (1,250) Total long-term debt, net of current portion $ 976,407 $ 1,128,003 New Credit Facilities The Company, as borrower, entered into a credit agreement dated as of August 3, 2021 (the “Closing Date”), among the Company, the lenders party thereto and Jefferies Finance LLC, as administrative agent, collateral agent, swing line lender and a letter of credit issuer (the “New Credit Agreement”). The New Credit Agreement provides for: (i) a seven-year $600 million senior secured term loan due 2028 issued at 99.75% of par (the “New Term Loan ” ); and (ii) a $125 million senior secured revolving credit facility due 2026, which was undrawn at closing (the “ New Revolver” and together with the New Term Loan, the “New Credit Facilities”). The fees associated with the New Credit Facilities were approximately $13.9 million, which included discounts of approximately $1.5 million. The interest rate per annum applicable to the New Credit Facilities will be, at the Company’s option, either the Eurodollar rate with a 0.50% LIBOR floor plus a margin of 2.50% or the base rate plus a margin of 1.50%. The New Revolver is available for general corporate purposes, including permitted acquisitions, working capital and the issuance of letters of credit. Borrowings under the New Revolver are subject to the satisfaction of customary conditions, including the absence of defaults and the accuracy of representations and warranties. The Company is required to make periodic payments on the New Term Loan in an amount equal to 0.25% per quarter of the initial aggregate principal, with the final principal repayment installment on the maturity date. Interest is due in arrears on each interest payment date applicable thereto and at such other times as may be specified in the New Credit Agreement. As to any loan other than a base rate loan, the interest payment dates shall be the last day of each interest period applicable to such loan and the maturity date (provided, however, that if any interest period for a Eurodollar Rate loan exceeds three months, the respective dates that fall every three months after the beginning of such interest period shall also be interest payment dates). As to any base rate loan, commencing on the last business day of December 2021, the interest payment dates shall be last business day of each of March, June, September and December and the maturity date. Voluntary prepayments of the New Term Loan and the New Revolver and voluntary reductions in the unused commitments are permitted in whole or in part, in minimum amounts as set forth in the New Credit Agreement governing the New Credit Facilities, with prior notice, and without premium or penalty, except that certain refinancings or repricings of the New Term Loan within six months after the Closing Date will be subject to a prepayment premium of 1.00% of the principal amount repaid. The New Credit Agreement contains certain covenants that, among other things, limit the Company’s ability, and the ability of certain of its 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 its affiliates. The New Credit Agreement also requires the Company, together with its subsidiaries, to comply with a maximum consolidated secured leverage ratio of 4.25:1.00 as of the measurement date. The weighted average interest rate on the New Term Loan wa s 3.00% for the three and nine months ended September 30, 2021. 2021 Senior Unsecured Notes On July 15, 2021, the Company, as issuer, completed the previously announced offering (the “Offering”) of $400 million in aggregate principal amount of Everi’s 5.00% senior unsecured notes due 2029 (the “2021 Unsecured Notes”). Pursuant to a Purchase Agreement dated June 30, 2021 (the “Purchase Agreement”) by and among the Company and certain of Everi’s direct and indirect domestic subsidiaries, as guarantors (collectively the “Guarantors”), and Jefferies LLC as representative of the several initial purchasers (collectively the “Initial Purchasers”), the Company issued, at a price of par, and sold the 2021 Unsecured Notes to the Initial Purchasers for resale to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and to certain non-U.S. persons pursuant to Regulation S of the Securities Act. The 2021 Unsecured Notes, and guarantees thereof, have not been and will not be registered under the Securities Act or the securities laws of any state or other jurisdictions, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws. The fees associated with the 2021 Unsecured Notes included debt issuance costs of approximately $5.9 million. The 2021 Unsecured Notes were issued under an indenture (the “Indenture”) dated July 15, 2021 by and among Everi, the Guarantors and Deutsche Bank Trust Company Americas, as trustee (the “Trustee”). The 2021 Unsecured Notes are fully and unconditionally guaranteed on a senior unsecured basis by the Guarantors. Interest on the 2021 Unsecure d Notes accrues at a rate of 5.00% per annum and is payable semi-annually in arrears on each January 15 and July 15 (the “Interest Payment Dates”), commencing on January 15, 2022. The Company will make each interest payment to the holders of record on each January 1 and July 1 immediately preceding the Interest Payment Dates. Th e 2021 Unsecured Notes wi ll mature on July 15, 2029. The 2021 Unsecured Notes and the related guarantees are senior obligations of Everi and the Guarantors, respectively, and rank equally with all of the Company’s and each Guarantor’s present and future senior indebtedness and rank senior in right of payment to all of Everi’s and each Guarantor’s present and future subordinated indebtedness. The 2021 Unsecured Notes and related guarantees are effectively subordinated to all of Everi’s and each Guarantor’s present and future secured indebtedness (to the extent of the value of the assets securing such indebtedness). The 2021 Unsecured Notes are structurally subordinated in right of payment to all present and future indebtedness and other liabilities of the Company’s subsidiaries that do not guarantee th e 2021 Unsecured Notes. The Company will have the option to redeem some, or all, of the 2021 Unsecured Notes at any time on, or after, July 15, 2024 at the redemption prices set forth in the Indenture, plus accrued and unpaid interest, if any, to the date of redemption. Everi will also have the option to redeem some, or all, of th e 2021 Unsecured Notes at any time prior to July 15, 2024 at a redemption price of 100% of the principal amount of the 2021 Unsecured Notes to be redeemed, plus an applicable premium and accrued and unpaid interest, if any, to the date of redemption. In addition, at any time before July 15, 2024, the Company may redeem up to 40% of the aggregate principal amount of the 2021 Unsecured Notes at a redemption price of 105.00% of the principal amount of the 2021 Unsecured Notes redeemed together with accrued and unpaid interest to, but excluding, the redemption date with the proceeds from certain equity issuances. The 2021 Unsecured Notes are also subject to redemption requirements under state and local gaming laws and regulations. If Everi experiences specified changes of control, the Company may be required to offer to purchase the 2021 Unsecured Notes at 101% of their aggregate principal amount, plus accrued and unpaid interest, if any, to the date of purchase. The Indenture contains customary covenants restricting the Company’s ability and the ability of its restricted subsidiaries to, among other things: (i) incur additional indebtedness or issue certain preferred stock; (ii) pay dividends or repurchase or redeem capital stock or make other restricted payments; (iii) limit dividends or other payments by the Company’s restricted subsidiaries to the Company or the Company’s other restricted subsidiaries; (iv) incur certain liens; (v) enter into transactions with affiliates; (vi) become an investment company; (vii) consolidate or merge with or into certain other companies; and (viii) designate certain of the Company’s subsidiaries as unrestricted subsidiaries under the Indenture. These covenants are subject to a number of important limitations and exceptions, including certain provisions permitting the Company, subject to the satisfaction of certain conditions, to transfer assets to certain of the Company’s unrestricted subsidiaries. The Indenture also contains customary events of default. Upon an event of default under the Indenture, the Trustee or the holders of at least 30% in aggregate principal amount of the 2021 Unsecured Notes then outstanding may declare all amounts owing under the 2021 Unsecured Notes to be due and payable. Refinancing and Repayment The proceeds from the New Term Loan incurred on the Closing Date, together with the proceeds of the $400 million in aggregate principal amount of the Company’s 2021 Unsecured Notes, issued at a price of par on July 15, 2021, and cash on hand were used to: (i) prepay in full and terminate all commitments under the Everi Payments Inc. (“Everi Payments”) existing credit facility in the aggregate original principal amount of $820 million with an outstanding balance of approximately $735.5 million with Jefferies Finance LLC, as administrative agent, collateral agent, swing line lender, letter of credit issuer, sole lead arranger and sole book manager (the “Prior Term Loan”); (ii) redeem in full the Everi Payments 7.50% Senior Unsecured Notes due in 2025 (the “2017 Unsecured Notes”) in the aggregate original principal amount of $375.0 million with an outstanding balance of approximately $285.4 million with Everi Payments, the Company and Deutsche Bank Trust Company Americas, as Trustee; (iii) prepay in full and terminate all commitments under the Everi Payments existing incremental term loan facility (the “Prior Incremental Term Loan”) in the aggregate original principal amount of $125 million with an outstanding balance of approximately $123.8 million with the lenders party thereto and Jefferies Finance LLC, as administrative agent and collateral agent; and (iv) pay related transaction fees and expenses with respect to the aforementioned debt instruments. During the three months ended September 30, 2021, in connection with these refinancing and repayment activities, the total fees were approximately $40.6 million, comprised of approximately $20.8 million of early redemption penalties and make-whole interest associated with the prior debt instruments and approximately $19.8 million of capitalized debt issuance costs attributable to the new debt instruments. During the three months ended September 30, 2021, in connection with these refinancing and repayment activities, we recorded a loss on extinguishment of debt of approximately $34.4 million, comprised of cash charges of approximately $20.8 million for prepayment penalties and make-whole interest and non-cash charges of approximately $13.6 million related to the write-off of unamortized debt issuance costs and discounts associated with the Prior Term Loan, the Prior Incremental Term Loan and the 2017 Unsecured Notes. For the period from January 1, 2021 to the Closing Date, the Prior Term Loan and the Prior Incremental Term Loan each had a weighted average interest rate o f 3.54% and 11.50%, resp ectively. Together, the two facilities had a blended weighted average interest rat e of 4.65% and 4.69% f or the three and nine months ended September 30, 2021. Compliance with Debt Covenants |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES We 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 were granted relief from Peleus Insurance Company pursuant to the provisions of our policy. 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 September 30, 2021. We received service of process on two (2) new legal matters ( Sadie Saavedra matter and Sightline Payments matter) described below. FACTA-related matters: Geraldine Don ahu e, et al. v. Everi Payments Inc., 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 Everi Holdings and FinTech were substituted as the defendants on April 22, 2019. The plaintiff, on behalf of himself and others similarly situated, alleges that Everi Holdings and Everi FinTech (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. The plaintiff sought an award of statutory damages, attorneys’ fees, and costs. The parties settled this matter on a nationwide class basis. On December 3, 2020, the Court entered the Final Order and Judgment approving the settlement and dismissing all claims asserted against Defendants with prejudice. Everi Holdings and Everi FinTech have paid all funds required pursuant to the settlement. Distributions were made to class members and remaining unclaimed funds will be distributed to nonprofit charitable organizations in compliance with the Court’s October 4, 2021, approval. When the distribution of unclaimed funds to charitable organizations is complete, the parties will file a joint notice of completion of all settlement terms and ask the Court to close the file. NRT matter: NRT Technology Corp., et al. v. Everi Holdings Inc., et al. is a civil action filed on April 30, 2019 against Everi Holdings 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. The plaintiffs are seeking compensatory damages, treble damages, and injunctive and declaratory relief. This case is currently proceeding through the 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. Zenergy Systems, LLC matter: Zenergy Systems, LLC v. Everi Payments Inc. is a civil action filed on May 29, 2020, against Everi FinTech 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 FinTech that expired in November 2019. The plaintiff is seeking compensatory and punitive damages. Everi FinTech has counterclaimed against Zenergy alleging breach of contract, breach of implied covenant of good faith and fair dealing, and for declaratory relief. This case is currently proceeding through the 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 . Sadie Saavedra matter: Sadie Saavedra, et al. v. Everi Payments Inc., et al. is a civil action filed on August 30, 2021, against Everi Holdings and Everi FinTech in the United States District Court, Central District of California (Western Division) by Sadie Saavedra, individually and on behalf of a class of similarly situated individuals, alleging violations of the Unfair Competition Law (California Business & Professions Code § 17200) and unjust enrichment. The plaintiffs allege that certain of Everi’s ATMs screen are deceptive and designed to maximize the number of transaction fees and mislead consumers into incurring fees for transactions they did not wish to conduct. The plaintiffs are seeking restitution, injunctive relief and attorneys’ fees. We are in the early stages of litigation and currently unable to determine the probability of the outcome or estimate the range of reasonably possible loss, if any, in this matter . Sightline Payments matter: S ightline Payments LLC v. Everi Holdings Inc., et al. is a civil action filed on September 30, 2021, against Everi Holdings, Everi FinTech, Everi Games Holding Inc., and Everi Games in the United States District Court, Western District of Texas (Waco Division) by Sightline Payments LLC alleging patent infringement in violation of 35 U.S.C. § 271 et seq. The plaintiff’s complaint alleges that Everi’s CashClub Wallet product infringes on certain patents owned by the plaintiff. The plaintiff is seeking compensatory damages. We are in the early stages of litigation and 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 | 9 Months Ended |
Sep. 30, 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 and nine months ended September 30, 2021 and 2020 , respectively. |
WEIGHTED AVERAGE SHARES OF COMM
WEIGHTED AVERAGE SHARES OF COMMON STOCK | 9 Months Ended |
Sep. 30, 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 September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Weighted average shares Weighted average number of common shares outstanding — basic 90,322 85,556 88,688 85,102 Potential dilution from equity awards (1) 11,037 — 10,893 — Weighted average number of common shares outstanding - diluted (1) 101,359 85,556 99,581 85,102 (1) The were no shares that were anti-dilutive under the treasury stock method for the three and nine months ended September 30, 2021. We were in a net loss p |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION Equity Incentive Awards Generally, we grant the following types of awards: (i) restricted stock units (“RSUs”) with either time- or performance-based stock units criteria; (ii) time-based restricted stock units; (iii) time-based options; and (iv) market-based options. 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 — 962 Exercised options or vested shares (2,681) (1,426) Canceled or forfeited (7) (52) Outstanding, September 30, 2021 7,573 3,734 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The income tax benefit for the three months ended September 30, 2021, reflected an effective income tax rate of negative 5.0%. The income tax provision for the nine months ended September 30, 2021, reflected an effective income tax rate of 2.0%. Those rates were lower 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 stock option exercises. The decrease in our valuation allowance was primarily due to book income earned during the period. The income tax provision for the three months ended September 30, 2020 reflected an effective income tax rate of 205.4%, which was greater than the statutory federal rate of 21.0%, primarily due to an increase in our valuation allowance as a result of a reduction of certain indefinite-lived deferred tax assets that can be offset against our indefinite-lived deferred tax liabilities. The income tax benefit for the nine months ended September 30, 2020 reflected an effective income tax rate of 4.0%, 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. Our U.S. federal and states operating businesses had deferred tax asset valuation allowances of approximately $64.3 million a s of September 30, 2021 . The deferred tax assets are reviewed on a quarterly basis, and based on our most recent analysis as of September 30, 2021 , we continued to maintain a full valuation allowance in these jurisdictions. The significant positive evidence in our analysis included: improvements in profitability, product mix, capital levels, credit metrics and a stabilizing economy. The most significant negative evidence continued to be a three-year cumulative loss position. We believe the negative evidence continued to outweigh the positive evidence as of September 30, 2021 . To the extent the negative evidence of a three-year cumulative loss is no longer present, and future longer-term forecasts show sustained profitability, our conclusion regarding the need for full valuation allowances could change, which may lead to the reversal of a significant portion of our valuation allowances. 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 September 30, 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 | 9 Months Ended |
Sep. 30, 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 September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Games Revenues Gaming operations $ 71,580 $ 46,968 $ 202,941 $ 106,513 Gaming equipment and systems 24,220 10,229 68,298 28,795 Gaming other 33 44 82 76 Total revenues 95,833 57,241 271,321 135,384 Costs and expenses Cost of revenues (1) Gaming operations 5,675 4,245 15,776 10,471 Gaming equipment and systems 13,503 5,730 39,058 16,625 Gaming other — — — 456 Cost of revenues 19,178 9,975 54,834 27,552 Operating expenses 16,711 13,078 48,871 50,597 Research and development 6,445 5,003 17,966 14,819 Depreciation 12,495 14,777 41,122 44,349 Amortization 10,805 14,838 32,464 45,738 Total costs and expenses 65,634 57,671 195,257 183,055 Operating income (loss) $ 30,199 $ (430) $ 76,064 $ (47,671) (1) Exclusive of depreciation and amortization. * Rounding may cause variances. Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 FinTech Revenues Financial access services $ 46,421 $ 33,979 $ 129,973 $ 80,986 Software and other 17,024 14,630 49,874 31,748 Hardware 9,024 6,248 28,829 16,004 Total revenues 72,469 54,857 208,676 128,738 Costs and expenses Cost of revenues (1) Financial access services 1,830 1,161 4,863 5,227 Software and other 1,063 859 3,196 2,057 Hardware 5,380 3,548 17,078 9,452 Cost of revenues 8,273 5,568 25,137 16,736 Operating expenses 30,410 21,850 84,449 64,831 Research and development 3,153 2,030 8,833 6,138 Depreciation 1,968 1,387 5,449 4,352 Amortization 3,791 3,855 11,216 11,574 Total costs and expenses 47,595 34,690 135,084 103,631 Operating income $ 24,874 $ 20,167 $ 73,592 $ 25,107 (1) Exclusive of depreciation and amortization. * Rounding may cause variances. At September 30, At December 31, 2021 2020 Total assets Games $ 876,842 $ 811,523 FinTech 589,201 665,656 Total assets $ 1,466,043 $ 1,477,179 Major Customers. No sin gle customer accounted for more than 10% of our revenues for the three and nine months ended September 30, 2021 and 2020. Our five largest customers accounted for approximately 16% of our revenues for the three and nine months ended September 30, 2021, and approximately 17% and 16% of our revenues for the three and nine months ended September 30, 2020, respectively. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTSAs of the filing date, we had not identified, and were not aware of, any subsequent event for the period. |
BASIS OF PRESENTATION AND SUM_2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 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 and nine months ended September 30, 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 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): Nine Months Ended September 30, 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 September 30 — current 9,728 8,945 Balance at September 30 — non-current 5,647 7,545 Total 15,375 16,490 (Decrease)/Increase $ (2,186) $ 1,082 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 September 30 — current 36,503 34,846 Balance at September 30 — non-current 493 32 Total 36,996 34,878 Increase $ 9,727 $ 6,014 (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 $21.0 million and $19.3 million in revenue that was included in the beginning contract liability balance during the nine months ended September 30, 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 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 $49.2 million and $141.6 million for the three and nine months ended September 30, 2021, respectively, and $35.9 million and $80.3 million for the three and nine months ended September 30, 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 funds-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, our services operate as part of 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; 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 and nine months ended September 30, 2021 and 2020. |
Restricted Cash | Restricted CashOur restricted cash primarily consists of: (i) funds held in connection with certain customer agreements; (ii) funds held in connection with a sponsorship agreement; (iii) wide area progressive (“WAP”)-related restricted funds; and (iv) financial access activities related to cashless balances held on behalf of patrons. |
Allowance for Credit Losses | 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. Account balances are charged against the provision when the Company believes it is probable the receivable will not be recovered. |
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 an 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. |
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 | 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 Standard Description Date of Adoption Effect on Financial Statements ASU 2021-05 , 'Leases (Topic 842): Lessors—Certain Leases with Variable Lease Payments This ASU amends the lease classification requirements for lessors to align them with practice under ASC Topic 840. January 1, 2022 We are currently evaluating the impact of adopting this ASU on our Financial Statements and our disclosures; however, we do not expect the impact to be material. As of September 30, 2021, other than what has been described above, we do not anticipate recently issued accounting guidance to have a significant future impact on our consolidated financial statements. |
BASIS OF PRESENTATION AND SUM_3
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 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): Nine Months Ended September 30, 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 September 30 — current 9,728 8,945 Balance at September 30 — non-current 5,647 7,545 Total 15,375 16,490 (Decrease)/Increase $ (2,186) $ 1,082 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 September 30 — current 36,503 34,846 Balance at September 30 — non-current 493 32 Total 36,996 34,878 Increase $ 9,727 $ 6,014 (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 nine months ended September 30, 2021 (in thousands). Classification on our Balance Sheets At September 30, 2021 At December 31, 2020 Cash and cash equivalents Cash and cash equivalents $ 215,551 $ 251,706 Restricted cash — current Prepaid expenses and other current assets 1,234 542 Restricted cash — non-current Other assets 101 101 Total $ 216,886 $ 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 nine months ended September 30, 2021 (in thousands). Classification on our Balance Sheets At September 30, 2021 At December 31, 2020 Cash and cash equivalents Cash and cash equivalents $ 215,551 $ 251,706 Restricted cash — current Prepaid expenses and other current assets 1,234 542 Restricted cash — non-current Other assets 101 101 Total $ 216,886 $ 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 September 30, 2021 $600 million New Term Loan 2 $ 599,430 $ 600,000 $400 million 2021 Unsecured Notes 2 $ 411,000 $ 400,000 December 31, 2020 $820 million Prior Term Loan 2 $ 729,138 $ 735,500 $125 million Prior Incremental Term Loan 2 $ 129,972 $ 124,375 $375 million 2017 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 Standard Description Date of Adoption Effect on Financial Statements ASU 2021-05 , 'Leases (Topic 842): Lessors—Certain Leases with Variable Lease Payments This ASU amends the lease classification requirements for lessors to align them with practice under ASC Topic 840. January 1, 2022 We are currently evaluating the impact of adopting this ASU on our Financial Statements and our disclosures; however, we do not expect the impact to be material. |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, 2021 At December 31, 2020 Assets Operating lease ROU assets Other assets, non-current $ 13,764 $ 16,104 Liabilities Current operating lease liabilities Accounts payable and accrued expenses $ 5,468 $ 5,649 Non-current operating lease liabilities Other accrued expenses and liabilities $ 13,127 $ 16,077 |
Cash Flow Information | Supplemental cash flow information related to leases is as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Cash paid for: Long-term operating leases $ 1,660 $ 1,611 $ 5,030 $ 4,892 Short-term operating leases $ 400 $ 465 $ 1,219 $ 1,433 Right-of-use assets obtained in exchange for lease obligations: Operating leases (1) $ 396 $ 7,594 $ 1,063 $ 8,454 |
Lease Costs | Other information related to lease terms and discount rates is as follows: At September 30, 2021 At December 31, 2020 Weighted Average Remaining Lease Term (in years): Operating leases 3.71 4.16 Weighted Average Discount Rate: Operating leases 5.08 % 5.16 % Components of lease expense, which are included in operating expenses, are as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Operating Lease Cost: Operating lease cost (1) $ 1,276 $ 1,475 $ 4,192 $ 4,212 Variable lease cost $ 311 $ 421 $ 946 $ 1,333 (1) The amount includes approximately $1.0 million and $3.4 million in non-cash lease expense for the three and nine months ended September 30, 2021, respectively, and $1.4 million and $3.6 million for the three and nine months ended September 30, 2020, respectively. |
Payments Due | Maturities of lease liabilities are summarized as follows as of September 30, 2021 (in thousands): Year Ending December 31, Amount 2021 (excluding the nine months ended September 30, 2021) $ 1,574 2022 6,267 2023 4,893 2024 3,667 2025 2,971 Thereafter 1,041 Total future minimum lease payments 20,413 Amount representing interest 1,818 Present value of future minimum lease payments 18,595 Current operating lease obligations 5,468 Long-term lease obligations $ 13,127 |
Sales-type Lease | Supplemental balance sheet information related to our sales-type leases is as follows (in thousands): Classification on our Balance Sheets At September 30, 2021 At December 31, 2020 Assets Net investment in sales-type leases — current Trade and other receivables, net $ 1,157 $ 1,397 Net investment in sales-type leases — non-current Other receivables $ 186 $ 803 |
TRADE AND OTHER RECEIVABLES (Ta
TRADE AND OTHER RECEIVABLES (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, At December 31, 2021 2020 Trade and other receivables, net Games trade and loans receivables $ 64,939 $ 44,794 FinTech trade and loans receivables 25,303 14,683 Contract assets (1) 15,375 17,561 Net investment in sales-type leases 1,343 2,200 Insurance settlement receivable (2) — 7,650 Other receivables 2,308 1,923 Total trade and other receivables, net 109,268 88,811 Non-current portion of receivables Games trade and loans receivables (1,237) (1,333) FinTech trade and loans receivables (6,998) (4,163) Contract assets (1) (5,647) (8,321) Net investment in sales-type leases (186) (803) Total non-current portion of receivables (14,068) (14,620) Total trade and other receivables, current portion $ 95,200 $ 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 nine months ended September 30, 2021 and 2020 is as follows (in thousands): Nine Months Ended September 30, 2021 2020 Beginning allowance for credit losses $ (3,689) $ (5,786) Provision (5,499) (6,926) Charge-offs and recoveries 4,400 8,958 Ending allowance for credit losses $ (4,788) $ (3,754) |
INVENTORY (Tables)
INVENTORY (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Components of Inventory | Inventory consisted of the following (in thousands): At September 30, At December 31, 2021 2020 Inventory Component parts, net of reserves of $2,195 and $1,262 at September 30, 2021 and December 31, 2020, respectively $ 23,908 $ 21,560 Work-in-progress 985 182 Finished goods 6,797 6,000 Total inventory $ 31,690 $ 27,742 |
PREPAID EXPENSES AND OTHER AS_2
PREPAID EXPENSES AND OTHER ASSETS (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, At December 31, 2021 2020 Prepaid expenses and other current assets Prepaid expenses $ 15,548 $ 11,282 Deposits 5,720 4,133 Restricted cash (1) 1,234 542 Other 2,716 1,391 Total prepaid expenses and other current assets $ 25,218 $ 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 September 30, At December 31, 2021 2020 Other assets Operating lease ROU assets $ 13,764 $ 16,104 Prepaid expenses and deposits 4,080 4,952 Debt issuance costs of New Revolver/Prior Revolver 1,856 267 Other 481 673 Total other assets $ 20,181 $ 21,996 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, 2021 At December 31, 2020 Useful Life Cost Accumulated Net Book Cost Accumulated Net Book Property and equipment Rental pool — deployed 2-4 $ 238,916 $ 158,984 $ 79,932 $ 216,775 $ 136,975 $ 79,800 Rental pool — undeployed 2-4 22,519 18,152 4,367 21,974 16,680 5,294 FinTech equipment 1-5 32,400 20,560 11,840 33,349 21,947 11,402 Leasehold and building improvements Lease Term 12,502 8,902 3,600 11,352 8,557 2,795 Machinery, office, and other equipment 1-5 41,560 26,356 15,204 45,085 32,053 13,032 Total property and equipment $ 347,897 $ 232,954 $ 114,943 $ 328,535 $ 216,212 $ 112,323 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Other Intangible Assets | Other intangible assets consist of the following (dollars in thousands): At September 30, 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 $ 56,234 $ 1,886 $ 54,348 $ 60,561 $ 28,108 $ 32,453 Customer contracts 3-14 71,975 57,730 14,245 71,975 54,407 17,568 Customer relationships 8-12 231,100 142,274 88,826 231,100 126,549 104,551 Developed technology and software 1-6 333,308 274,794 58,514 313,957 255,771 58,186 Patents, trademarks and other 2-18 19,682 18,994 688 19,682 17,813 1,869 Total other intangible assets $ 712,299 $ 495,678 $ 216,621 $ 697,275 $ 482,648 $ 214,627 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, At December 31, 2021 2020 Accounts payable and accrued expenses Vendor commissions payable $ 56,869 $ 39,028 Contract liabilities 36,503 26,980 Trade accounts payable 29,837 15,503 Placement fees 28,862 — Payroll and related expenses 27,597 13,357 Operating lease liabilities 5,468 5,649 Accrued interest 4,274 1,068 Accrued taxes 2,855 1,329 Financial access processing and related expenses 2,864 1,109 Contingent consideration and acquisition-related liabilities (1) — 24,674 Litigation accrual (2) — 12,727 Other 4,125 3,605 Total accounts payable and accrued expenses $ 199,254 $ 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) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Summary of Outstanding Indebtedness | The following table summarizes our outstanding indebtedness (dollars in thousands): Maturity Interest At September 30, At December 31, Date Rate 2021 2020 Long-term debt $600 million New Term Loan 2028 LIBOR+2.50% $ 600,000 $ — $125 million New Revolver 2026 LIBOR+2.50% — — $820 million Prior Term Loan 2024 LIBOR+2.75% — 735,500 $125 million Prior Incremental Term Loan 2024 LIBOR+10.50% — 124,375 $35 million Prior Revolver 2022 LIBOR+4.50% — — Senior Secured Credit Facilities 600,000 859,875 $400 million 2021 Unsecured Notes 2029 5.00% 400,000 — $375 million 2017 Unsecured Notes 2025 7.50% — 285,381 Total debt 1,000,000 1,145,256 Debt issuance costs and discount (17,593) (16,003) Total debt after debt issuance costs and discount 982,407 1,129,253 Current portion of long-term debt (6,000) (1,250) Total long-term debt, net of current portion $ 976,407 $ 1,128,003 |
WEIGHTED AVERAGE SHARES OF CO_2
WEIGHTED AVERAGE SHARES OF COMMON STOCK (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Weighted Average Number of Common Shares Outstanding | 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 September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Weighted average shares Weighted average number of common shares outstanding — basic 90,322 85,556 88,688 85,102 Potential dilution from equity awards (1) 11,037 — 10,893 — Weighted average number of common shares outstanding - diluted (1) 101,359 85,556 99,581 85,102 (1) The were no shares that were anti-dilutive under the treasury stock method for the three and nine months ended September 30, 2021. We were in a net loss p |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 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 — 962 Exercised options or vested shares (2,681) (1,426) Canceled or forfeited (7) (52) Outstanding, September 30, 2021 7,573 3,734 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | The following tables present segment information (in thousands)*: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Games Revenues Gaming operations $ 71,580 $ 46,968 $ 202,941 $ 106,513 Gaming equipment and systems 24,220 10,229 68,298 28,795 Gaming other 33 44 82 76 Total revenues 95,833 57,241 271,321 135,384 Costs and expenses Cost of revenues (1) Gaming operations 5,675 4,245 15,776 10,471 Gaming equipment and systems 13,503 5,730 39,058 16,625 Gaming other — — — 456 Cost of revenues 19,178 9,975 54,834 27,552 Operating expenses 16,711 13,078 48,871 50,597 Research and development 6,445 5,003 17,966 14,819 Depreciation 12,495 14,777 41,122 44,349 Amortization 10,805 14,838 32,464 45,738 Total costs and expenses 65,634 57,671 195,257 183,055 Operating income (loss) $ 30,199 $ (430) $ 76,064 $ (47,671) (1) Exclusive of depreciation and amortization. * Rounding may cause variances. Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 FinTech Revenues Financial access services $ 46,421 $ 33,979 $ 129,973 $ 80,986 Software and other 17,024 14,630 49,874 31,748 Hardware 9,024 6,248 28,829 16,004 Total revenues 72,469 54,857 208,676 128,738 Costs and expenses Cost of revenues (1) Financial access services 1,830 1,161 4,863 5,227 Software and other 1,063 859 3,196 2,057 Hardware 5,380 3,548 17,078 9,452 Cost of revenues 8,273 5,568 25,137 16,736 Operating expenses 30,410 21,850 84,449 64,831 Research and development 3,153 2,030 8,833 6,138 Depreciation 1,968 1,387 5,449 4,352 Amortization 3,791 3,855 11,216 11,574 Total costs and expenses 47,595 34,690 135,084 103,631 Operating income $ 24,874 $ 20,167 $ 73,592 $ 25,107 (1) Exclusive of depreciation and amortization. * Rounding may cause variances. At September 30, At December 31, 2021 2020 Total assets Games $ 876,842 $ 811,523 FinTech 589,201 665,656 Total assets $ 1,466,043 $ 1,477,179 |
BUSINESS (Details)
BUSINESS (Details) | 9 Months Ended |
Sep. 30, 2021segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of business segments | 2 |
BASIS OF PRESENTATION AND SUM_4
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Contract Asset and Liability (Details) - USD ($) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Contract assets | ||||
Contract assets, current | $ 9,728 | $ 8,945 | $ 9,240 | $ 8,634 |
Contract assets, noncurrent | 5,647 | 7,545 | 8,321 | 6,774 |
Total | 15,375 | 16,490 | 17,561 | 15,408 |
(Decrease)/Increase | (2,186) | 1,082 | ||
Contract liabilities | ||||
Contract liabilities, current | 36,503 | 34,846 | 26,980 | 28,510 |
Contract liabilities, noncurrent | 493 | 32 | 289 | 354 |
Total | 36,996 | 34,878 | $ 27,269 | $ 28,864 |
Increase | $ 9,727 | $ 6,014 |
BASIS OF PRESENTATION AND SUM_5
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | |||||
Contract with customer liability | $ 21,000 | $ 19,300 | |||
Revenues | $ 168,302 | $ 112,098 | $ 479,997 | 264,122 | |
Contractual terms of trade and loans receivable | 12 months | 12 months | |||
Games | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 95,833 | 57,241 | $ 271,321 | 135,384 | |
Games | Gaming operations, leased equipment | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | $ 49,200 | $ 35,900 | $ 141,600 | $ 80,300 |
BASIS OF PRESENTATION AND SUM_6
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Reconciliation of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 |
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | $ 215,551 | $ 251,706 | ||
Restricted cash — current | 1,234 | 542 | ||
Total | 216,886 | 252,349 | $ 236,016 | $ 296,610 |
Cash and cash equivalents | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | 215,551 | 251,706 | ||
Prepaid expenses and other current assets | ||||
Cash and Cash Equivalents [Line Items] | ||||
Restricted cash — current | 1,234 | 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) - USD ($) | Sep. 30, 2021 | Aug. 03, 2021 | Jul. 15, 2021 | Dec. 31, 2020 | Apr. 21, 2020 | Dec. 31, 2018 | May 09, 2017 |
Credit Agreement, dated August 3, 2021 | Senior Secured Notes | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Principal amount of debt | $ 600,000,000 | ||||||
New Credit Agreement, dated May 9, 2017 | Senior Secured Notes | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Principal amount of debt | $ 820,000,000 | $ 820,000,000 | |||||
Incremental Term Loan Credit Agreement, dated April 21, 2021 | $125 million Prior Incremental Term Loan | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Principal amount of debt | 125,000,000 | $ 125,000,000 | |||||
Unsecured Notes | 2021 Unsecured Notes | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Principal amount of debt | $ 400,000,000 | ||||||
Unsecured Notes | 2017 Unsecured Notes | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Principal amount of debt | $ 375,000,000 | $ 375,000,000 | |||||
Fair Value | Level 2 | Term Loan | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Long-term debt | $ 599,430,000 | $ 729,138,000 | |||||
Fair Value | Level 2 | $125 million Prior Incremental Term Loan | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Long-term debt | 129,972,000 | ||||||
Fair Value | Level 2 | Unsecured Notes | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Long-term debt | 411,000,000 | 296,083,000 | |||||
Outstanding Balance | Level 2 | Term Loan | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Long-term debt | 600,000,000 | 735,500,000 | |||||
Outstanding Balance | Level 2 | $125 million Prior Incremental Term Loan | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Long-term debt | 124,375,000 | ||||||
Outstanding Balance | Level 2 | Unsecured Notes | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Long-term debt | $ 400,000,000 | $ 285,381,000 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Lessee, Lease, Description [Line Items] | ||||
Sales-type lease, revenue | $ 0 | $ 0 | $ 0 | $ 0 |
Minimum | ||||
Lessee, Lease, Description [Line Items] | ||||
Renewal term | 1 year | 1 year | ||
Maximum | ||||
Lessee, Lease, Description [Line Items] | ||||
Renewal term | 10 years | 10 years |
LEASES - Balance Sheet Informat
LEASES - Balance Sheet Information (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other assets | Other assets |
Operating lease ROU assets | $ 13,764 | $ 16,104 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accounts payable and accrued expenses | Accounts payable and accrued expenses |
Current operating lease liabilities | $ 5,468 | $ 5,649 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other accrued expenses and liabilities | Other accrued expenses and liabilities |
Non-current operating lease liabilities | $ 13,127 | $ 16,077 |
LEASES - Cash Flow Information
LEASES - Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Cash paid for: | ||||
Long-term operating leases | $ 1,660 | $ 1,611 | $ 5,030 | $ 4,892 |
Short-term operating leases | 400 | 465 | 1,219 | 1,433 |
Right-of-use assets obtained in exchange for lease obligations: | ||||
Operating leases | $ 396 | $ 7,594 | $ 1,063 | $ 8,454 |
LEASES - Lease Costs (Details)
LEASES - Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Weighted Average Remaining Lease Term (in years): | |||||
Operating leases | 3 years 8 months 15 days | 3 years 8 months 15 days | 4 years 1 month 28 days | ||
Weighted Average Discount Rate: | |||||
Operating leases | 5.08% | 5.08% | 5.16% | ||
Operating Lease Cost: | |||||
Operating lease cost | $ 1,276 | $ 1,475 | $ 4,192 | $ 4,212 | |
Variable lease cost | 311 | 421 | 946 | 1,333 | |
Non-cash lease expense | $ 1,000 | $ 1,400 | $ 3,400 | $ 3,615 |
LEASES - Payments Due (Details)
LEASES - Payments Due (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Amount | ||
2021 (excluding the nine months ended September 30, 2021) | $ 1,574 | |
2022 | 6,267 | |
2023 | 4,893 | |
2024 | 3,667 | |
2025 | 2,971 | |
Thereafter | 1,041 | |
Total future minimum lease payments | 20,413 | |
Amount representing interest | 1,818 | |
Present value of future minimum lease payments | 18,595 | |
Current operating lease liabilities | 5,468 | $ 5,649 |
Long-term lease obligations | $ 13,127 | $ 16,077 |
LEASES - Sales-type Lease (Deta
LEASES - Sales-type Lease (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Net investment in sales-type leases — current | $ 1,157 | $ 1,397 |
Net investment in sales-type leases — non-current | $ 186 | $ 803 |
BUSINESS COMBINATIONS (Details)
BUSINESS COMBINATIONS (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 | Sep. 30, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | |||||||||
Revenue target achievement | 2 years | ||||||||
Atrient | |||||||||
Business Acquisition [Line Items] | |||||||||
Contingent consideration liability | $ 9.9 | $ 9.9 | |||||||
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 | $ 5 | $ 15 | |||||
Total consideration transferred | $ 25 | ||||||||
Micro Gaming Technologies, Inc. | FinTech Segment | Forecast | |||||||||
Business Acquisition [Line Items] | |||||||||
Payments to acquire businesses | $ 5 |
FUNDING AGREEMENTS (Details)
FUNDING AGREEMENTS (Details) - Indemnification Guarantee - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Contract Cash Solutions Agreement | |||||
Funding Agreements | |||||
Cash usage fees incurred | $ 1,200,000 | $ 700,000 | $ 2,900,000 | $ 2,500,000 | |
Outstanding balance | 401,500,000 | 401,500,000 | $ 340,300,000 | ||
Contract Cash Solutions Agreement, as amended | |||||
Funding Agreements | |||||
Maximum amount | $ 300,000,000 | $ 300,000,000 | |||
Renewal period | 1 year | ||||
Guarantor obligations, non-renewal notice period | 90 days |
TRADE AND OTHER RECEIVABLES - S
TRADE AND OTHER RECEIVABLES - Schedule of Components of Trade and Other Receivables (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Trade and other receivables, net | ||
Contract assets | $ 15,375 | $ 17,561 |
Net investment in sales-type leases | 1,343 | 2,200 |
Insurance settlement receivable | 0 | 7,650 |
Other receivables | 2,308 | 1,923 |
Total trade and other receivables, net | 109,268 | 88,811 |
Non-current portion of receivables | (14,068) | (14,620) |
Contract assets | (5,647) | (8,321) |
Net investment in sales-type leases | (186) | (803) |
Total trade and other receivables, current portion | 95,200 | 74,191 |
Gaming operations | ||
Trade and other receivables, net | ||
Trade receivables, net | 64,939 | 44,794 |
Non-current portion of receivables | (1,237) | (1,333) |
FinTech | ||
Trade and other receivables, net | ||
Trade receivables, net | 25,303 | 14,683 |
Non-current portion of receivables | $ (6,998) | $ (4,163) |
TRADE AND OTHER RECEIVABLES - A
TRADE AND OTHER RECEIVABLES - Activity in Allowance for Credit Losses (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning allowance for credit losses | $ (3,689) | $ (5,786) |
Provision | (5,499) | (6,926) |
Charge-offs and recoveries | 4,400 | 8,958 |
Ending allowance for credit losses | $ (4,788) | $ (3,754) |
INVENTORY (Details)
INVENTORY (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Inventory | ||
Component parts, reserves | $ 2,195 | $ 1,262 |
Component parts, net of reserves of $2,195 and $1,262 at September 30, 2021 and December 31, 2020, respectively | 23,908 | 21,560 |
Work-in-progress | 985 | 182 |
Finished goods | 6,797 | 6,000 |
Total inventory | $ 31,690 | $ 27,742 |
PREPAID EXPENSES AND OTHER AS_3
PREPAID EXPENSES AND OTHER ASSETS (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Prepaid expenses and other current assets | ||
Prepaid expenses | $ 15,548 | $ 11,282 |
Deposits | 5,720 | 4,133 |
Restricted cash | 1,234 | 542 |
Other | 2,716 | 1,391 |
Total prepaid expenses and other current assets | 25,218 | 17,348 |
Other assets | ||
Operating lease ROU assets | 13,764 | 16,104 |
Prepaid expenses and deposits | 4,080 | 4,952 |
Debt issuance costs of New Revolver/Prior Revolver | 1,856 | 267 |
Other | 481 | 673 |
Total other assets | $ 20,181 | $ 21,996 |
PROPERTY AND EQUIPMENT - Schedu
PROPERTY AND EQUIPMENT - Schedule of Components of Property, Equipment and Leased Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | ||
Cost | $ 347,897 | $ 328,535 |
Accumulated Depreciation | 232,954 | 216,212 |
Net Book Value | 114,943 | 112,323 |
Rental pool — deployed | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 238,916 | 216,775 |
Accumulated Depreciation | 158,984 | 136,975 |
Net Book Value | $ 79,932 | 79,800 |
Rental pool — deployed | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Useful Life | 2 years | |
Rental pool — deployed | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Useful Life | 4 years | |
Rental pool — undeployed | ||
Property, Plant and Equipment [Line Items] | ||
Cost | $ 22,519 | 21,974 |
Accumulated Depreciation | 18,152 | 16,680 |
Net Book Value | $ 4,367 | 5,294 |
Rental pool — undeployed | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Useful Life | 2 years | |
Rental pool — undeployed | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Useful Life | 4 years | |
Machinery, office, and other equipment | ||
Property, Plant and Equipment [Line Items] | ||
Cost | $ 41,560 | 45,085 |
Accumulated Depreciation | 26,356 | 32,053 |
Net Book Value | 15,204 | 13,032 |
Machinery, office, and other equipment | FinTech | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 32,400 | 33,349 |
Accumulated Depreciation | 20,560 | 21,947 |
Net Book Value | $ 11,840 | 11,402 |
Machinery, office, and other equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Useful Life | 1 year | |
Machinery, office, and other equipment | Minimum | FinTech | ||
Property, Plant and Equipment [Line Items] | ||
Useful Life | 1 year | |
Machinery, office, and other equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Useful Life | 5 years | |
Machinery, office, and other equipment | Maximum | FinTech | ||
Property, Plant and Equipment [Line Items] | ||
Useful Life | 5 years | |
Leasehold and building improvements | ||
Property, Plant and Equipment [Line Items] | ||
Cost | $ 12,502 | 11,352 |
Accumulated Depreciation | 8,902 | 8,557 |
Net Book Value | $ 3,600 | $ 2,795 |
PROPERTY AND EQUIPMENT - Narrat
PROPERTY AND EQUIPMENT - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation | $ 14,463 | $ 16,163 | $ 46,571 | $ 48,700 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||||||
Goodwill | $ 681,975,000 | $ 681,975,000 | $ 681,975,000 | $ 681,974,000 | ||
Impairment of goodwill | 0 | $ 0 | 0 | $ 0 | ||
Amortization of intangible assets | 14,600,000 | 18,700,000 | 43,700,000 | 57,300,000 | ||
Placement fee | $ 28,900,000 | $ 2,100,000 | 3,000,000 | |||
Impairment of intangible assets | $ 0 | $ 0 | 5,900,000 | |||
Games | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Impairment of intangible assets | 5,500,000 | |||||
FinTech | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Impairment of intangible assets | $ 400,000 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Other Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 712,299 | $ 697,275 |
Accumulated Amortization | 495,678 | 482,648 |
Net Book Value | 216,621 | 214,627 |
Contract rights under placement fee agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 56,234 | 60,561 |
Accumulated Amortization | 1,886 | 28,108 |
Net Book Value | $ 54,348 | 32,453 |
Contract rights under placement fee agreements | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 3 years | |
Contract rights under placement fee agreements | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 7 years | |
Customer contracts | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 71,975 | 71,975 |
Accumulated Amortization | 57,730 | 54,407 |
Net Book Value | $ 14,245 | 17,568 |
Customer contracts | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 3 years | |
Customer contracts | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 14 years | |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 231,100 | 231,100 |
Accumulated Amortization | 142,274 | 126,549 |
Net Book Value | $ 88,826 | 104,551 |
Customer relationships | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 8 years | |
Customer relationships | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 12 years | |
Developed technology and software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 333,308 | 313,957 |
Accumulated Amortization | 274,794 | 255,771 |
Net Book Value | $ 58,514 | 58,186 |
Developed technology and software | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 1 year | |
Developed technology and software | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 6 years | |
Patents, trademarks and other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 19,682 | 19,682 |
Accumulated Amortization | 18,994 | 17,813 |
Net Book Value | $ 688 | $ 1,869 |
Patents, trademarks and other | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 2 years | |
Patents, trademarks and other | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 18 years |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 |
Accounts payable and accrued expenses | ||||
Vendor commissions payable | $ 56,869 | $ 39,028 | ||
Contract liabilities | 36,503 | 26,980 | $ 34,846 | $ 28,510 |
Trade accounts payable | 29,837 | 15,503 | ||
Placement fees | 28,862 | 0 | ||
Payroll and related expenses | 27,597 | 13,357 | ||
Operating lease liabilities | 5,468 | 5,649 | ||
Accrued interest | 4,274 | 1,068 | ||
Accrued taxes | 2,855 | 1,329 | ||
Financial access processing and related expenses | 2,864 | 1,109 | ||
Contingent consideration and acquisition-related liabilities | 0 | 24,674 | ||
Litigation accrual | 0 | 12,727 | ||
Other | 4,125 | 3,605 | ||
Total accounts payable and accrued expenses | $ 199,254 | $ 145,029 |
LONG-TERM DEBT - Summary of Out
LONG-TERM DEBT - Summary of Outstanding Indebtedness (Details) - USD ($) | 9 Months Ended | ||||||
Sep. 30, 2021 | Aug. 03, 2021 | Jul. 15, 2021 | Dec. 31, 2020 | Apr. 21, 2020 | Dec. 31, 2018 | May 09, 2017 | |
Debt Instrument [Line Items] | |||||||
Total debt | $ 1,000,000,000 | $ 1,145,256,000 | |||||
Debt issuance costs and discount | (17,593,000) | (16,003,000) | |||||
Total debt after debt issuance costs and discount | 982,407,000 | 1,129,253,000 | |||||
Current portion of long-term debt | (6,000,000) | (1,250,000) | |||||
Total long-term debt, net of current portion | $ 976,407,000 | 1,128,003,000 | |||||
Senior Secured Notes | Credit Agreement, dated August 3, 2021 | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount of debt | $ 600,000,000 | ||||||
Senior Secured Notes | Credit Agreement, dated August 3, 2021 | London Interbank Offered Rate (LIBOR) | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread | 2.50% | ||||||
Senior Secured Notes | New Credit Agreement, dated May 9, 2017 | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount of debt | $ 820,000,000 | $ 820,000,000 | |||||
Senior Secured Notes | New Credit Agreement, dated May 9, 2017 | London Interbank Offered Rate (LIBOR) | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread | 2.75% | ||||||
$125 million Prior Incremental Term Loan | Incremental Term Loan Credit Agreement, dated April 21, 2021 | |||||||
Debt Instrument [Line Items] | |||||||
Total debt | $ 0 | 123,800,000 | 124,375,000 | ||||
Principal amount of debt | 125,000,000 | $ 125,000,000 | |||||
$125 million Prior Incremental Term Loan | Incremental Term Loan Credit Agreement, dated April 21, 2021 | London Interbank Offered Rate (LIBOR) | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread | 10.50% | ||||||
Revolving Credit Facility | Credit Agreement, dated August 3, 2021 | |||||||
Debt Instrument [Line Items] | |||||||
Total debt | $ 0 | 0 | |||||
Principal amount of debt | $ 125,000,000 | ||||||
Revolving Credit Facility | Credit Agreement, dated August 3, 2021 | London Interbank Offered Rate (LIBOR) | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread | 2.50% | ||||||
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 Notes | |||||||
Debt Instrument [Line Items] | |||||||
Total debt | $ 600,000,000 | 859,875,000 | |||||
Senior Secured Notes | Senior Secured Notes | Credit Agreement, dated August 3, 2021 | |||||||
Debt Instrument [Line Items] | |||||||
Total debt | 600,000,000 | 0 | |||||
Senior Secured Notes | Senior Secured Notes | New Credit Agreement, dated May 9, 2017 | |||||||
Debt Instrument [Line Items] | |||||||
Total debt | 0 | 735,500,000 | |||||
Unsecured Notes | 2021 Unsecured Notes | |||||||
Debt Instrument [Line Items] | |||||||
Total debt | $ 400,000,000 | 0 | |||||
Principal amount of debt | $ 400,000,000 | ||||||
Interest rate | 5.00% | ||||||
Unsecured Notes | 2017 Unsecured Notes | |||||||
Debt Instrument [Line Items] | |||||||
Total debt | $ 0 | 285,400,000 | $ 285,381,000 | ||||
Principal amount of debt | $ 375,000,000 | $ 375,000,000 | |||||
Interest rate | 7.50% | 7.50% |
LONG-TERM DEBT - Narrative (Det
LONG-TERM DEBT - Narrative (Details) | Aug. 03, 2021USD ($) | Jul. 15, 2021USD ($) | Aug. 03, 2021USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Aug. 03, 2021USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | Apr. 21, 2020USD ($) | Dec. 31, 2018USD ($) | May 09, 2017USD ($) |
Debt Instrument [Line Items] | ||||||||||||
Total debt | $ 1,000,000,000 | $ 1,000,000,000 | $ 1,145,256,000 | |||||||||
Refinancing and repayment fees | 40,600,000 | |||||||||||
Debt issuance costs | 19,800,000 | 19,800,000 | ||||||||||
Loss on extinguishment of debt | 34,389,000 | $ 0 | $ 34,389,000 | $ 7,457,000 | ||||||||
Payment for debt prepayment cost | 20,800,000 | |||||||||||
Make whole and noncash charges | $ 13,600,000 | |||||||||||
New Credit Facilities | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt issuance costs | $ 13,900,000 | $ 13,900,000 | $ 13,900,000 | |||||||||
Debt issuance discount | $ 1,500,000 | 1,500,000 | 1,500,000 | |||||||||
New Credit Facilities | Eurodollar | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread | 0.50% | |||||||||||
New Credit Facilities | London Interbank Offered Rate (LIBOR) | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread | 2.50% | |||||||||||
New Credit Facilities | Base Rate | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread | 1.50% | |||||||||||
New Credit Agreement, dated May 9, 2017 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Leverage ratio | 4.25 | 4.25 | ||||||||||
Senior Unsecured Notes Due 2029 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Trustee percentage of principle amount holdings | 0.30 | |||||||||||
Senior Unsecured Notes Due 2029 | $375 million 2017 Unsecured Notes | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Principal amount of debt | $ 400,000,000 | |||||||||||
Debt issuance costs | $ 5,900,000 | |||||||||||
Interest rate | 5.00% | |||||||||||
Redemption price percentage | 100.00% | |||||||||||
Redemption price percentage of principal amount, redeemed threshold | 0.40 | |||||||||||
Redemption using proceeds from equity issuance | 1.0500 | |||||||||||
Redemption price under change of control | 1.01 | |||||||||||
2017 Unsecured Notes | $375 million 2017 Unsecured Notes | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Principal amount of debt | $ 375,000,000 | $ 375,000,000 | ||||||||||
Interest rate | 7.50% | 7.50% | 7.50% | |||||||||
Total debt | $ 285,400,000 | $ 0 | $ 0 | 285,381,000 | ||||||||
Prior Term Loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Weighted average interest rate, annual rate | 4.65% | |||||||||||
Prior Incremental Term Loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Weighted average interest rate, annual rate | 4.69% | |||||||||||
Senior Secured Notes | Credit Agreement, dated August 3, 2021 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt term | 7 years | |||||||||||
Principal amount of debt | $ 600,000,000 | $ 600,000,000 | $ 600,000,000 | |||||||||
Issuance of par, percentage | 0.9975 | 0.9975 | 0.9975 | |||||||||
Senior Secured Notes | Credit Agreement, dated August 3, 2021 | London Interbank Offered Rate (LIBOR) | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread | 2.50% | |||||||||||
Senior Secured Notes | New Credit Agreement, dated May 9, 2017 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Principal amount of debt | 820,000,000 | $ 820,000,000 | ||||||||||
Weighted average interest rate during period | 3.00% | 3.00% | ||||||||||
Weighted average interest rate, annual rate | 3.54% | |||||||||||
Senior Secured Notes | New Credit Agreement, dated May 9, 2017 | Jeffries Finance LLC | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Total debt | 735,500,000 | |||||||||||
Senior Secured Notes | New Credit Agreement, dated May 9, 2017 | London Interbank Offered Rate (LIBOR) | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread | 2.75% | |||||||||||
Revolving Credit Facility | Credit Agreement, dated August 3, 2021 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Principal amount of debt | $ 125,000,000 | $ 125,000,000 | $ 125,000,000 | |||||||||
Maximum borrowing capacity | $ 125,000,000 | $ 125,000,000 | $ 125,000,000 | |||||||||
Required quarterly principal payment, as a percentage of original principal | 0.0025 | |||||||||||
Period for prepayment premium from closing date | 6 months | |||||||||||
Prepayment penalty | 1.00% | |||||||||||
Total debt | $ 0 | $ 0 | 0 | |||||||||
Revolving Credit Facility | Credit Agreement, dated August 3, 2021 | London Interbank Offered Rate (LIBOR) | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread | 2.50% | |||||||||||
Revolving Credit Facility | New Credit Agreement, dated May 9, 2017 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Principal amount of debt | $ 35,000,000 | |||||||||||
Total debt | 0 | $ 0 | 0 | |||||||||
Revolving Credit Facility | New Credit Agreement, dated May 9, 2017 | London Interbank Offered Rate (LIBOR) | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread | 4.50% | |||||||||||
$125 million Prior Incremental Term Loan | Incremental Term Loan Credit Agreement, dated April 21, 2021 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Principal amount of debt | 125,000,000 | $ 125,000,000 | ||||||||||
Total debt | $ 123,800,000 | $ 0 | $ 0 | $ 124,375,000 | ||||||||
Weighted average interest rate, annual rate | 11.50% | |||||||||||
$125 million Prior Incremental Term Loan | Incremental Term Loan Credit Agreement, dated April 21, 2021 | London Interbank Offered Rate (LIBOR) | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread | 10.50% |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | |
Dec. 31, 2019 | Mar. 31, 2021 | Sep. 30, 2021 | |
Gain Contingencies [Line Items] | |||
Litigation expense | $ 14 | ||
Expected recovery | $ 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 (Details)
STOCKHOLDERS' EQUITY (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Feb. 28, 2020 | |
Class of Stock [Line Items] | |||||
Share repurchases (in shares) | 0 | 0 | 0 | 0 | |
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 (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Weighted average shares | ||||
Weighted average number of common shares outstanding - basic (in shares) | 90,322,000 | 85,556,000 | 88,688,000 | 85,102,000 |
Potential dilution from equity awards (in shares) | 11,037,000 | 0 | 10,893,000 | 0 |
Weighted average number of common shares outstanding - diluted (in shares) | 101,359,000 | 85,556,000 | 99,581,000 | 85,102,000 |
Anti-dilutive equity awards excluded from computation of earnings per share (in shares) | 0 | 0 | 0 | 0 |
SHARE-BASED COMPENSATION - Summ
SHARE-BASED COMPENSATION - Summary of Award Activity (Details) shares in Thousands | 9 Months Ended |
Sep. 30, 2021shares | |
Stock Options | |
Outstanding balance at beginning of period (in shares) | 10,261 |
Granted (in shares) | 0 |
Exercised options or vested (in shares) | (2,681) |
Canceled or forfeited (in shares) | (7) |
Outstanding balance at end of period (in shares) | 7,573 |
Restricted Stock Units | |
Restricted Stock Units | |
Outstanding balance at beginning of period (in shares) | 4,250 |
Granted (in shares) | 962 |
Exercised options or vested (in shares) | (1,426) |
Canceled or forfeited (in shares) | (52) |
Outstanding balance at end of period (in shares) | 3,734 |
SHARE-BASED COMPENSATION - Narr
SHARE-BASED COMPENSATION - Narrative (Details) shares in Millions | Sep. 30, 2021shares |
Common Stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares available for grant (in shares) | 5 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | (5.00%) | 205.40% | 2.00% | 4.00% |
Statutory federal rate | 21.00% | 21.00% | ||
Deferred tax assets, valuation allowance | $ 64.3 | $ 64.3 | ||
Unrecognized tax benefits | $ 1.7 | $ 1.7 |
SEGMENT INFORMATION - Schedule
SEGMENT INFORMATION - Schedule of Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Revenues | |||||
Revenues | $ 168,302 | $ 112,098 | $ 479,997 | $ 264,122 | |
Costs and expenses | |||||
Operating expenses | 47,121 | 34,927 | 133,320 | 115,428 | |
Research and development | 9,598 | 7,034 | 26,799 | 20,958 | |
Depreciation | 14,463 | 16,163 | 46,571 | 48,700 | |
Amortization | 14,596 | 18,693 | 43,680 | 57,312 | |
Total costs and expenses | 113,229 | 92,360 | 330,341 | 286,686 | |
Operating income (loss) | 55,073 | 19,738 | 149,656 | (22,564) | |
Total assets | |||||
Total assets | 1,466,043 | 1,466,043 | $ 1,477,179 | ||
Games | |||||
Revenues | |||||
Revenues | 95,833 | 57,241 | 271,321 | 135,384 | |
Costs and expenses | |||||
Cost of revenues | 19,178 | 9,975 | 54,834 | 27,552 | |
Operating expenses | 16,711 | 13,078 | 48,871 | 50,597 | |
Research and development | 6,445 | 5,003 | 17,966 | 14,819 | |
Depreciation | 12,495 | 14,777 | 41,122 | 44,349 | |
Amortization | 10,805 | 14,838 | 32,464 | 45,738 | |
Total costs and expenses | 65,634 | 57,671 | 195,257 | 183,055 | |
Operating income (loss) | 30,199 | (430) | 76,064 | (47,671) | |
Total assets | |||||
Total assets | 876,842 | 876,842 | 811,523 | ||
Games | Gaming operations | |||||
Revenues | |||||
Revenues | 71,580 | 46,968 | 202,941 | 106,513 | |
Costs and expenses | |||||
Cost of revenues | 5,675 | 4,245 | 15,776 | 10,471 | |
Games | Gaming equipment and systems | |||||
Revenues | |||||
Revenues | 24,220 | 10,229 | 68,298 | 28,795 | |
Costs and expenses | |||||
Cost of revenues | 13,503 | 5,730 | 39,058 | 16,625 | |
Games | Gaming other | |||||
Revenues | |||||
Revenues | 33 | 44 | 82 | 76 | |
Costs and expenses | |||||
Cost of revenues | 0 | 0 | 0 | 456 | |
FinTech | |||||
Revenues | |||||
Revenues | 72,469 | 54,857 | 208,676 | 128,738 | |
Costs and expenses | |||||
Cost of revenues | 8,273 | 5,568 | 25,137 | 16,736 | |
Operating expenses | 30,410 | 21,850 | 84,449 | 64,831 | |
Research and development | 3,153 | 2,030 | 8,833 | 6,138 | |
Depreciation | 1,968 | 1,387 | 5,449 | 4,352 | |
Amortization | 3,791 | 3,855 | 11,216 | 11,574 | |
Total costs and expenses | 47,595 | 34,690 | 135,084 | 103,631 | |
Operating income (loss) | 24,874 | 20,167 | 73,592 | 25,107 | |
Total assets | |||||
Total assets | 589,201 | 589,201 | $ 665,656 | ||
FinTech | Financial access services | |||||
Revenues | |||||
Revenues | 46,421 | 33,979 | 129,973 | 80,986 | |
Costs and expenses | |||||
Cost of revenues | 1,830 | 1,161 | 4,863 | 5,227 | |
FinTech | Software and other | |||||
Revenues | |||||
Revenues | 17,024 | 14,630 | 49,874 | 31,748 | |
Costs and expenses | |||||
Cost of revenues | 1,063 | 859 | 3,196 | 2,057 | |
FinTech | Hardware | |||||
Revenues | |||||
Revenues | 9,024 | 6,248 | 28,829 | 16,004 | |
Costs and expenses | |||||
Cost of revenues | $ 5,380 | $ 3,548 | $ 17,078 | $ 9,452 |
SEGMENT INFORMATION - Narrative
SEGMENT INFORMATION - Narrative (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Five largest customers | Customer risk | Revenue from Contract with Customer | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration risk | 16.00% | 17.00% | 16.00% | 16.00% |