Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 03, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
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, $0.001 par value | |
Trading Symbol | EVRI | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 89,466,734 | |
Entity Central Index Key | 0001318568 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | ||
Revenues | |||||
Total revenues | $ 204,318 | $ 168,302 | $ 577,156 | $ 479,997 | |
Costs and expenses | |||||
Operating expenses | 56,354 | 47,121 | 161,230 | 133,320 | |
Research and development | 16,803 | 9,598 | 43,386 | 26,799 | |
Depreciation | 17,444 | 14,463 | 48,342 | 46,571 | |
Amortization | 15,303 | 14,596 | 43,582 | 43,680 | |
Total costs and expenses | 149,700 | 113,229 | 415,398 | 330,341 | |
Operating income | 54,618 | 55,073 | 161,758 | 149,656 | |
Other expenses | |||||
Interest expense, net of interest income | 14,880 | 14,257 | 38,522 | 50,488 | |
Loss on extinguishment of debt | 0 | 34,389 | 0 | 34,389 | |
Total other expenses | 14,880 | 48,646 | 38,522 | 84,877 | |
Income before income tax | 39,738 | 6,427 | 123,236 | 64,779 | |
Income tax provision (benefit) | 10,329 | (319) | 29,784 | 1,285 | |
Net income | 29,409 | 6,746 | 93,452 | 63,494 | |
Foreign currency translation loss | (2,639) | (442) | (4,665) | (335) | |
Comprehensive income | $ 26,770 | $ 6,304 | $ 88,787 | $ 63,159 | |
Earnings per share | |||||
Basic (in dollars per share) | $ 0.33 | $ 0.07 | $ 1.03 | $ 0.72 | |
Diluted (in dollars per share) | $ 0.30 | $ 0.07 | $ 0.95 | $ 0.64 | |
Weighted average common shares outstanding | |||||
Basic (in shares) | 90,014 | 90,322 | 91,039 | 88,688 | |
Diluted (in shares) | 96,436 | 101,359 | 98,306 | 99,581 | |
Games | |||||
Revenues | |||||
Total revenues | $ 112,520 | $ 95,833 | $ 323,203 | $ 271,321 | |
Costs and expenses | |||||
Cost of revenues | [1] | 29,102 | 19,178 | 81,395 | 54,834 |
Operating expenses | 19,860 | 16,711 | 57,886 | 48,871 | |
Research and development | 11,298 | 6,445 | 28,395 | 17,966 | |
Depreciation | 15,006 | 12,495 | 41,321 | 41,122 | |
Amortization | 11,472 | 10,805 | 31,744 | 32,464 | |
Total costs and expenses | 86,738 | 65,634 | 240,741 | 195,257 | |
Operating income | 25,782 | 30,199 | 82,462 | 76,064 | |
Games | Gaming operations | |||||
Revenues | |||||
Total revenues | 74,979 | 71,580 | 219,311 | 202,941 | |
Costs and expenses | |||||
Cost of revenues | [1] | 6,557 | 5,675 | 18,674 | 15,776 |
Games | Gaming equipment and systems | |||||
Revenues | |||||
Total revenues | 37,500 | 24,220 | 103,766 | 68,298 | |
Costs and expenses | |||||
Cost of revenues | [1] | 22,545 | 13,503 | 62,721 | 39,058 |
Games | Gaming other | |||||
Revenues | |||||
Total revenues | 41 | 33 | 126 | 82 | |
FinTech | |||||
Revenues | |||||
Total revenues | 91,798 | 72,469 | 253,953 | 208,676 | |
Costs and expenses | |||||
Cost of revenues | [1] | 14,694 | 8,273 | 37,463 | 25,137 |
Operating expenses | 36,494 | 30,410 | 103,344 | 84,449 | |
Research and development | 5,505 | 3,153 | 14,991 | 8,833 | |
Depreciation | 2,438 | 1,968 | 7,021 | 5,449 | |
Amortization | 3,831 | 3,791 | 11,838 | 11,216 | |
Total costs and expenses | 62,962 | 47,595 | 174,657 | 135,084 | |
Operating income | 28,836 | 24,874 | 79,296 | 73,592 | |
FinTech | Financial access services | |||||
Revenues | |||||
Total revenues | 53,296 | 46,421 | 154,051 | 129,973 | |
Costs and expenses | |||||
Cost of revenues | [1] | 2,760 | 1,830 | 7,405 | 4,863 |
FinTech | Software and other | |||||
Revenues | |||||
Total revenues | 22,192 | 17,024 | 59,056 | 49,874 | |
Costs and expenses | |||||
Cost of revenues | [1] | 1,163 | 1,063 | 2,984 | 3,196 |
FinTech | Hardware | |||||
Revenues | |||||
Total revenues | 16,310 | 9,024 | 40,846 | 28,829 | |
Costs and expenses | |||||
Cost of revenues | [1] | $ 10,771 | $ 5,380 | $ 27,074 | $ 17,078 |
[1](1) Exclusive of depreciation and amortization. EVERI HOLDINGS INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - CONTINUED (In thousands, except earnings per share amounts) |
UNAUDITED CONDENSED CONSOLIDA_2
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash and cash equivalents | $ 258,627 | $ 302,009 |
Settlement receivables | 76,854 | 89,275 |
Trade and other receivables, net of allowances for credit losses of $5,977 and $5,161 at September 30, 2022 and December 31, 2021, respectively | 116,843 | 104,822 |
Inventory | 55,890 | 29,233 |
Prepaid expenses and other current assets | 39,009 | 27,299 |
Total current assets | 547,223 | 552,638 |
Non-current assets | ||
Property and equipment, net | 130,545 | 119,993 |
Goodwill | 707,214 | 682,663 |
Other intangible assets, net | 230,928 | 214,594 |
Other receivables | 24,777 | 13,982 |
Deferred tax assets, net | 179 | 32,121 |
Other assets | 28,657 | 19,659 |
Total non-current assets | 1,122,300 | 1,083,012 |
Total assets | 1,669,523 | 1,635,650 |
Current liabilities | ||
Settlement liabilities | 232,147 | 291,861 |
Accounts payable and accrued expenses | 209,766 | 173,933 |
Current portion of long-term debt | 6,000 | 6,000 |
Total current liabilities | 447,913 | 471,794 |
Deferred Income Tax Liabilities, Net | 345 | 0 |
Non-current liabilities | ||
Long-term debt, less current portion | 972,877 | 975,525 |
Other accrued expenses and liabilities | 29,669 | 13,831 |
Total non-current liabilities | 1,002,891 | 989,356 |
Total liabilities | 1,450,804 | 1,461,150 |
Commitments and contingencies (Note 13) | ||
Stockholders’ equity | ||
Convertible preferred stock, $0.001 par value, 50,000 shares authorized and no shares outstanding at September 30, 2022 and December 31, 2021, respectively | 0 | 0 |
Common stock, $0.001 par value, 500,000 shares authorized and 119,258 and 89,972 shares issued and outstanding at September 30, 2022, respectively, and 116,996 and 91,313 shares issued and outstanding at December 31, 2021, respectively | 119 | 117 |
Additional paid-in capital | 522,353 | 505,757 |
Accumulated deficit | (48,303) | (141,755) |
Accumulated other comprehensive loss | (6,120) | (1,455) |
Treasury stock, at cost, 29,286 and 25,683 shares at September 30, 2022 and December 31, 2021, respectively | (249,330) | (188,164) |
Total stockholders’ equity | 218,719 | 174,500 |
Total liabilities and stockholders’ equity | $ 1,669,523 | $ 1,635,650 |
UNAUDITED CONDENSED CONSOLIDA_3
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets | ||
Allowances for doubtful accounts | $ 5,977 | $ 5,161 |
Stockholders’ equity | ||
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) | 119,258,000 | 116,996,000 |
Common stock outstanding (in shares) | 89,972,000 | 91,313,000 |
Treasury stock (in shares) | 29,286,000 | 25,683,000 |
UNAUDITED CONDENSED CONSOLIDA_4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities | ||
Net income | $ 93,452 | $ 63,494 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation | 48,342 | 46,571 |
Amortization | 43,582 | 43,680 |
Non-cash lease expense | 3,599 | 3,400 |
Amortization of financing costs and discounts | 2,140 | 3,234 |
Loss on sale or disposal of assets | 420 | 1,616 |
Accretion of contract rights | 7,367 | 6,966 |
Provision for credit losses | 7,286 | 5,499 |
Deferred income taxes | 28,042 | (174) |
Reserve for inventory obsolescence | 659 | 1,610 |
Loss on extinguishment of debt | 0 | 34,389 |
Stock-based compensation | 15,012 | 12,404 |
Changes in operating assets and liabilities: | ||
Settlement receivables | 12,251 | 10,056 |
Trade and other receivables | (23,845) | (25,522) |
Inventory | (23,026) | (5,569) |
Prepaid expenses and other assets | (26,388) | (8,068) |
Settlement liabilities | (59,432) | 4,371 |
Accounts payable and accrued expenses | 17,453 | 45,543 |
Net cash provided by operating activities | 146,914 | 243,500 |
Cash flows from investing activities | ||
Capital expenditures | (92,225) | (73,288) |
Acquisitions, net of cash acquired | (33,250) | (15,000) |
Proceeds from sale of property and equipment | 115 | 215 |
Placement fee agreements | (547) | 0 |
Net cash used in investing activities | (125,907) | (88,073) |
Cash flows from financing activities | ||
Proceeds from new term loan | 0 | 600,000 |
Proceeds from 2021 unsecured notes | 0 | 400,000 |
Repayments of 2017 unsecured notes | 0 | (285,381) |
Proceeds from exercise of stock options | 1,586 | 14,012 |
Treasury stock - restricted share vestings and withholdings | (11,815) | (8,909) |
Treasury stock - repurchase of shares | (49,351) | 0 |
Payment of contingent consideration, acquisition | 0 | (9,875) |
Net cash used in financing activities | (64,080) | (190,653) |
Effect of exchange rates on cash and cash equivalents | (1,106) | (237) |
Cash, cash equivalents and restricted cash | ||
Net decrease for the period | (44,179) | (35,463) |
Balance, beginning of the period | 303,726 | 252,349 |
Balance, end of the period | 259,547 | 216,886 |
Supplemental cash disclosures | ||
Cash paid for interest | 42,070 | 45,167 |
Cash paid for income tax, net | 846 | 975 |
Supplemental non-cash disclosures | ||
Accrued and unpaid capital expenditures | 5,511 | 32,999 |
Transfer of leased gaming equipment to inventory | 7,758 | 5,636 |
New Term Loan | ||
Cash flows from financing activities | ||
Repayments of secured debt | (4,500) | 0 |
Prior Term Loan | ||
Cash flows from financing activities | ||
Repayments of secured debt | 0 | (735,500) |
Incremental Term Loan | ||
Cash flows from financing activities | ||
Repayments of secured debt | 0 | (124,375) |
New Debt | ||
Cash flows from financing activities | ||
Fees associated with debt transactions | 0 | (19,797) |
Prior Debt | ||
Cash flows from financing activities | ||
Fees associated with debt transactions | $ 0 | $ (20,828) |
UNAUDITED CONDENSED CONSOLIDA_5
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Treasury Stock |
Balance, beginning of period (in shares) at Dec. 31, 2020 | 111,872 | |||||
Balance, beginning of period at Dec. 31, 2020 | $ (7,898) | $ 112 | $ 466,614 | $ (294,620) | $ (1,191) | $ (178,813) |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | 20,534 | 20,534 | ||||
Foreign currency translation | (221) | (221) | ||||
Stock-based compensation expense | 3,005 | 3,005 | ||||
Exercise of warrants (in shares) | 378 | |||||
Exercise of options (in shares) | 561 | |||||
Exercise of options | 2,285 | $ 1 | 2,284 | |||
Restricted share vesting and withholding (in shares) | 41 | |||||
Restricted share vestings and withholdings | (173) | (1) | (172) | |||
Balance, end of period (in shares) at Mar. 31, 2021 | 112,852 | |||||
Balance, end of period at Mar. 31, 2021 | 17,532 | $ 113 | 471,902 | (274,086) | (1,412) | (178,985) |
Balance, beginning of period (in shares) at Dec. 31, 2020 | 111,872 | |||||
Balance, beginning of period at Dec. 31, 2020 | (7,898) | $ 112 | 466,614 | (294,620) | (1,191) | (178,813) |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | 63,494 | |||||
Balance, end of period (in shares) at Sep. 30, 2021 | 116,357 | |||||
Balance, end of period at Sep. 30, 2021 | 72,768 | $ 116 | 493,022 | (231,126) | (1,526) | (187,718) |
Balance, beginning of period (in shares) at Mar. 31, 2021 | 112,852 | |||||
Balance, 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 vestings and withholdings | (8,439) | $ 1 | (3) | (8,437) | ||
Balance, end of period (in shares) at Jun. 30, 2021 | 115,559 | |||||
Balance, 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 | $ 0 | 5,309 | |||
Restricted share vesting and withholding (in shares) | 36 | |||||
Restricted share vestings and withholdings | (297) | $ 0 | (1) | (296) | ||
Balance, end of period (in shares) at Sep. 30, 2021 | 116,357 | |||||
Balance, end of period at Sep. 30, 2021 | $ 72,768 | $ 116 | 493,022 | (231,126) | (1,526) | (187,718) |
Balance, beginning of period (in shares) at Dec. 31, 2021 | 91,313 | 116,996 | ||||
Balance, beginning of period at Dec. 31, 2021 | $ 174,500 | $ 117 | 505,757 | (141,755) | (1,455) | (188,164) |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | 31,522 | 31,522 | ||||
Foreign currency translation | 580 | 580 | ||||
Stock-based compensation expense | 4,811 | 4,811 | ||||
Exercise of options (in shares) | 164 | |||||
Exercise of options | 699 | 699 | ||||
Restricted share vesting and withholding (in shares) | 61 | |||||
Restricted share vestings and withholdings | (400) | (400) | ||||
Balance, end of period (in shares) at Mar. 31, 2022 | 117,221 | |||||
Balance, end of period at Mar. 31, 2022 | $ 211,712 | $ 117 | 511,267 | (110,233) | (875) | (188,564) |
Balance, beginning of period (in shares) at Dec. 31, 2021 | 91,313 | 116,996 | ||||
Balance, beginning of period at Dec. 31, 2021 | $ 174,500 | $ 117 | 505,757 | (141,755) | (1,455) | (188,164) |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | 93,452 | |||||
Repurchase of shares | $ (49,400) | |||||
Balance, end of period (in shares) at Sep. 30, 2022 | 89,972 | 119,258 | ||||
Balance, end of period at Sep. 30, 2022 | $ 218,719 | $ 119 | 522,353 | (48,303) | (6,120) | (249,330) |
Balance, beginning of period (in shares) at Mar. 31, 2022 | 117,221 | |||||
Balance, beginning of period at Mar. 31, 2022 | 211,712 | $ 117 | 511,267 | (110,233) | (875) | (188,564) |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | 32,521 | 32,521 | ||||
Foreign currency translation | (2,606) | (2,606) | ||||
Stock-based compensation expense | 5,500 | 5,500 | ||||
Exercise of options (in shares) | 5 | |||||
Exercise of options | 20 | 20 | ||||
Restricted share vesting and withholding (in shares) | 1,883 | |||||
Restricted share vestings and withholdings | (11,182) | $ 2 | (2) | (11,182) | ||
Repurchase of shares | (33,336) | (33,336) | ||||
Balance, end of period (in shares) at Jun. 30, 2022 | 119,109 | |||||
Balance, end of period at Jun. 30, 2022 | 202,629 | $ 119 | 516,785 | (77,712) | (3,481) | (233,082) |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | 29,409 | 29,409 | ||||
Foreign currency translation | (2,639) | (2,639) | ||||
Stock-based compensation expense | 4,701 | 4,701 | ||||
Exercise of options (in shares) | 115 | |||||
Exercise of options | 867 | 867 | ||||
Restricted share vesting and withholding (in shares) | 34 | |||||
Restricted share vestings and withholdings | (233) | $ 0 | 0 | (233) | ||
Repurchase of shares | $ (16,015) | (16,015) | ||||
Balance, end of period (in shares) at Sep. 30, 2022 | 89,972 | 119,258 | ||||
Balance, end of period at Sep. 30, 2022 | $ 218,719 | $ 119 | $ 522,353 | $ (48,303) | $ (6,120) | $ (249,330) |
BUSINESS
BUSINESS | 9 Months Ended |
Sep. 30, 2022 | |
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 supplier of entertainment and technology solutions for the casino and digital gaming industry. The Company develops game content and gaming machines, gaming systems and services for land-based and iGaming operators. The Company is also a provider of financial technology solutions that power the casino floor, including products and services that facilitate 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) Financial Technology Solutions (“FinTech”). Everi Games provides gaming operators with gaming technology and entertainment products and services, including: (i) gaming machines, primarily comprising Class II and Class III slot machines and Historic Horse Racing (“HHR”) gaming 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: (i) financial access and related services supporting digital, cashless and physical cash options across mobile, assisted and self-service channels; (ii) loyalty and marketing software and tools, regulatory and compliance (“RegTech”) software solutions, other information-related products and services, and hardware maintenance services; and (iii) associated casino patron self-service hardware that utilizes our financial access, software and other 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 loyalty and fully integrated kiosk 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. Impact of the Coronavirus Disease 2019 (“COVID-19”) Pandemic The COVID-19 pandemic negatively impacted the global economy, disrupted global supply chains, and created significant volatility in the financial markets. Initially, it lowered equity market valuations and raised the cost of borrowing funds, 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. As the initial impacts from the COVID-19 pandemic subsided, most of our casino customers began to reopen their operations over the remainder of 2020 and throughout 2021. While some of our customers’ locations have permanently ceased operations, nearly all of our customer base has resumed operations as of September 30, 2022. In addition, the impacts of employment constraints and supply chain disruptions continue to challenge our customers and us. Since the onset of COVID-19, we have implemented measures to mitigate our exposure throughout the global pandemic. While many pandemic impacts have subsided, further uncertainty still challenges our customers and us as a result of COVID-19 and the resurgence of its variants. We continue to evaluate our business strategies and monitor the impacts of the global pandemic, employment constraints and supply chain disruptions on our results of operations and financial condition, and make adjustments to our business, accordingly. Our revenues for the third quarter of 20 22 exceeded the third quarter of 2021. While gaming industry conditions have improved significantly compared to the start of the pandemic, it is unclear if customers’ industry capital allocations will fully return to and remain at pre-COVID levels. With macro-economic volatility and pandemic-related challenges still in effect, we expect that demand and supply for our products and services could be tempered in the short-term, to the extent gaming activity decreases at our customers’ locations, or fails to increase at expected rates, and to the extent our customers decide to restrict their capital spending as a result of uncertainty in the industry, or that supply chain disruptions might impact customer deliveries, or otherwise. 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, 2021 (the “Annual Report”), including, but not limited to: our ability to generate revenues and, earn profits, 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. |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022 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 most recently filed 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 invoicing and cash collections. The following table summarizes our contract assets and contract liabilities arising from contracts with customers (in thousands): 2022 2021 Contract assets (1) Balance at January 1 - current $ 9,927 $ 9,240 Balance at January 1 - non-current 5,294 8,321 Total 15,221 17,561 Balance at September 30 - current 12,223 9,728 Balance at September 30 - non-current 10,589 5,647 Total 22,812 15,375 Increase (decrease) $ 7,591 $ (2,186) Contract liabilities (2) Balance at January 1 - current $ 36,238 $ 26,980 Balance at January 1 - non-current 377 289 Total 36,615 27,269 Balance at September 30 - current 44,460 36,503 Balance at September 30 - non-current 2,246 493 Total 46,706 36,996 Increase $ 10,091 $ 9,727 (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 $25.1 million and $21.0 million in revenue that was included in the beginning contract liabilities balance during the nine months ended September 30, 2022 and 2021, 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, HHR 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 $51.4 million and $148.0 million for the three and nine months ended September 30, 2022, respectively, and $49.2 million and $141.6 million for the three and nine months ended September 30, 2021, 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 loyalty and fully integrated kiosk 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 material financial access kiosk and related equipment sales contracts accounted for under ASC 842 during the three and nine months ended September 30, 2022 and 2021. 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, 2022 (in thousands). Classification on our Balance Sheets At September 30, 2022 At December 31, 2021 Cash and cash equivalents Cash and cash equivalents $ 258,627 $ 302,009 Restricted cash - current Prepaid expenses and other current assets 819 1,616 Restricted cash - non-current Other assets 101 101 Total $ 259,547 $ 303,726 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, 2022, our reporting units included: (i) Games; (ii) Financial Access Services; (iii) Kiosk Sales and Services; (iv) Central Credit Services; (v) Compliance Sales and Services; and (vi) Loyalty Sales and Services. Fair Values of Financial Instruments The fair value of a financial instrument represents the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Fair value estimates are made at a specific point in time, based upon relevant market information about the financial instrument. The carrying amount of cash and cash equivalents, restricted cash, settlement receivables, short-term trade and other receivables, settlement liabilities, accounts payable, and accrued expenses approximate fair value due to the short-term maturities of these instruments. The fair value of the long-term trade and loans receivable is estimated by discounting expected future cash flows using current interest rates at which similar loans would be made to borrowers with similar credit ratings and remaining maturities. The fair value of long-term accounts payable is estimated by discounting the total obligation using the appropriate interest rates. As of September 30, 2022 and December 31, 2021, the fair value of trade and loans receivable approximated the carrying value due to contractual terms generally being slightly ov er 12 months. The f air 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, 2022 $600 million New Term Loan 2 $ 572,972 $ 594,000 $400 million 2021 Unsecured Notes 2 $ 329,984 $ 400,000 December 31, 2021 $600 million New Term Loan 2 $ 598,171 $ 598,500 $400 million 2021 Unsecured Notes 2 $ 404,000 $ 400,000 Our borrowings’ fair values were determined using Level 2 inputs based on quoted market prices for these securities. Reclassification of Prior Year Balances Certain amounts in the accompanying consolidated financial statements and accompanying notes have been reclassified to be consistent with the current year presentation. These reclassifications h ad no effect on net income for the prior periods. Recent Accounting Guidance Recently Adopted Accounting Guidance 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 The adoption of this ASU did not have a material effect on our Financial Statements or on our disclosures. Recent Accounting Guidance Not Yet Adopted As of September 30, 2022, we do not anticipate re cently issued accounting guidance to have a significant future impact on our consolidated financial statements. |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2022 | |
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 one 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 term of 12 months or less (short-term) are not accounted for on our Balance Sheets. As of September 30, 2022 and December 31, 2021, 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, 2022 At December 31, 2021 Assets Operating lease ROU assets Other assets, non-current $ 18,426 $ 12,692 Liabilities Current operating lease liabilities Accounts payable and accrued expenses $ 6,436 $ 5,663 Non-current operating lease liabilities Other accrued expenses and liabilities $ 16,281 $ 11,869 Supplemental cash flow information related to leases is as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Cash paid for: Long-term operating leases $ 1,855 $ 1,660 $ 5,165 $ 5,030 Short-term operating leases $ 398 $ 400 $ 1,205 $ 1,219 Right-of-use assets obtained in exchange for lease obligations: Operating leases (1) $ 997 $ 396 $ 7,448 $ 1,063 (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, 2022 At December 31, 2021 Weighted Average Remaining Lease Term (in years): Operating leases 3.57 3.52 Weighted Average Discount Rate: Operating leases 4.71 % 5.04 % 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, 2022 2021 2022 2021 Operating Lease Cost: Operating lease cost $ 1,663 $ 1,276 $ 4,492 $ 4,192 Variable lease cost $ 259 $ 311 $ 902 $ 946 Maturities of lease liabilities are summarized as follows as of September 30, 2022 (in thousands): Year Ending December 31, Amount 2022 (excluding the nine months ended September 30, 2022) $ 1,750 2023 7,293 2024 6,747 2025 5,834 2026 2,137 Thereafter 967 Total future minimum lease payments 24,728 Less: Amount representing interest 2,011 Present value of future minimum lease payments 22,717 Less: Current operating lease obligations 6,436 Long-term lease obligations $ 16,281 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, 2022 and 2021 . Our 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, 2022 At December 31, 2021 Assets Net investment in sales-type leases - current Trade and other receivables, net $ 366 $ 1,331 |
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 one 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 term of 12 months or less (short-term) are not accounted for on our Balance Sheets. As of September 30, 2022 and December 31, 2021, 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, 2022 At December 31, 2021 Assets Operating lease ROU assets Other assets, non-current $ 18,426 $ 12,692 Liabilities Current operating lease liabilities Accounts payable and accrued expenses $ 6,436 $ 5,663 Non-current operating lease liabilities Other accrued expenses and liabilities $ 16,281 $ 11,869 Supplemental cash flow information related to leases is as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Cash paid for: Long-term operating leases $ 1,855 $ 1,660 $ 5,165 $ 5,030 Short-term operating leases $ 398 $ 400 $ 1,205 $ 1,219 Right-of-use assets obtained in exchange for lease obligations: Operating leases (1) $ 997 $ 396 $ 7,448 $ 1,063 (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, 2022 At December 31, 2021 Weighted Average Remaining Lease Term (in years): Operating leases 3.57 3.52 Weighted Average Discount Rate: Operating leases 4.71 % 5.04 % 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, 2022 2021 2022 2021 Operating Lease Cost: Operating lease cost $ 1,663 $ 1,276 $ 4,492 $ 4,192 Variable lease cost $ 259 $ 311 $ 902 $ 946 Maturities of lease liabilities are summarized as follows as of September 30, 2022 (in thousands): Year Ending December 31, Amount 2022 (excluding the nine months ended September 30, 2022) $ 1,750 2023 7,293 2024 6,747 2025 5,834 2026 2,137 Thereafter 967 Total future minimum lease payments 24,728 Less: Amount representing interest 2,011 Present value of future minimum lease payments 22,717 Less: Current operating lease obligations 6,436 Long-term lease obligations $ 16,281 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, 2022 and 2021 . Our 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, 2022 At December 31, 2021 Assets Net investment in sales-type leases - current Trade and other receivables, net $ 366 $ 1,331 |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
BUSINESS COMBINATIONS | BUSINESS COMBINATIONS We account for business combinations in accordance with ASC 805 — Business Combinations, which requires that the identifiable assets acquired and liabilities assumed be recorded at their estimated fair values on the acquisition date separately from goodwill, which is the excess of the fair value of the purchase price over the fair values of these identifiable assets and liabilities. We include the results of operations of an acquired business as of the acquisition date. ecash Holdings Pty Limited On March 1, 2022 (the “Closing Date”), the Company acquired the stock of ecash Holdings Pty Limited and wholly-owned subsidiaries Global Payment Technologies Australia Pty Limited, and ACN 121 187 068 Pty Limited (collectively “ecash”), a privately owned, Australia-based developer and provider of innovative cash handling and financial payment solutions for the broader gaming industry in Australia, Asia, Europe, and the United States. The acquisition of ecash’s products and services represents a strategic extension of Everi’s current suite of financial technology solutions within the FinTech segment. The acquisition provides Everi with a complementary portfolio of new customer locations throughout Australia, the United States, and other geographies. Under the terms of the stock purchase agreement, we paid the seller AUD$20 million (approximately USD$15 million) on the Closing Date of the transaction and we will pay an additional AUD$6.5 million one year following the Closing Date and another AUD$6.5 million two years following the Closing Date. In addition, we paid approximately AUD$8.7 million (approximately USD$6.0 million) for the excess net working capital during the second quarter of 2022. Pursuant to the arrangement, there is an earn-out provision of up to AUD$10 million, to the extent certain growth targets are achieved. The payment, if any, is subject to certain employment restrictions and will be accounted for as compensation expense in accordance with GAAP. The acquisition did not have a significant impact on our results of operations or financi al condition for the three and nine months ended September 30, 2022. The total preliminary purchase consideration for ecash was as follows (in thousands, at fair value): Amount in USD Purchase consideration Cash consideration paid at closing $ 14,980 Cash consideration post-closing 15,905 Total purchase consideration $ 30,885 Cash consideration to be paid is comprised of a short-term component that is recorded in accounts payable and accrued expenses and a long-term component payable within two years recorded in other accrued expenses and liabilities of our Balance Sheets. The transaction was accounted for using the acquisition method of accounting, which requires, among other things, the assets acquired and liabilities assumed be recognized at their respective fair values as of the acquisition date. The excess of the purchase price over those fair values was recorded as goodwill, which will be amortized over a period of 15 years for tax purposes. The goodwill recognized is primarily attributable to the income potential from the expansion of our footprint in the gaming space by enhancing our financial technology solution portfolio to add new markets and business lines and an assembled workforce, among other strategic benefits. The estimates and assumptions used include the projected timing and amount of future cash flows and discount rates reflecting risk inherent in the future cash flows. The estimated fair values of assets acquired and liabilities assumed and resulting goodwill are subject to adjustment as the Company finalizes its purchase price accounting. The significant items for which a final fair value has not been determined include, but are not limited to: the valuation and estimated useful lives of intangible assets, deferred and unearned revenues, and deferred income taxes. We do not expect our fair value determinations to materially change; however, there may be differences between the amounts recorded at the Closing Date and the final fair value analysis, which we expect to complete no later than the first quarter of 2023. The information below reflects the preliminary amounts o f identifiable assets acquired and liabilities assumed (i n thousands): Amount in USD* Current assets $ 12,850 Property and equipment 1,218 Other intangible assets 11,600 Goodwill 11,861 Other assets 726 Total Assets 38,255 Accounts payable and accrued expenses 7,160 Other accrued expenses and liabilities 210 Total liabilities 7,370 Net assets acquired $ 30,885 _______________________ *Reflects a measurement period adjustment of approximately $1.2 million from the initial allocation as of the closing date of the transaction. Current assets acquired included approximately $2.8 million in cash. Trade receivables acquired of approximately $5.7 million were short-term in nature and considered to be collectible, and therefore, the carrying amounts of these assets represented their fair values. Inventory acquired of approximately $4.2 million consisted of raw materials and finished goods and was recorded at fair value based on the estimated net realizable value of these assets. Property, equipment, and leased assets acquired were not material in size or scope, and the carrying amounts of these assets approximated their fair values. The following table summariz es preliminary values of acquired intangible assets (dollars in thousands): Useful Life (Years) Estimated Fair Value (USD) Other Intangible Assets Trade name 3 $ 700 Developed technology 3 3,600 Customer relationships 9 7,300 Total other intangible assets $ 11,600 The fair value of intangible assets was determined by applying the income app roach. Other intangible assets acquired of approximately $11.6 million were comprised of customer relationships, developed technology and trade name. The fair value of customer relationships of approximately $7.3 million was determined by applying the income approach utilizing the excess earnings methodology using Level 3 inputs in the fair value hierarchy including a discount rate of 17%. The fair value of developed technology of approximately $3.6 million was determined by applying the income approach utilizing the relief from royalty methodology using Level 3 inputs with a royalty rate of 7.5% and a discount rate of 17%. The fair value of trade name of approximately $0.7 million was determined by applying the income approach utilizing the relief from royalty methodology using Level 3 inputs with a royalty rate of 2% and a discount rate of 17%. The financial results included in our Statements of Operations since the acquisition date and through September 30, 2022 reflected revenues of approximately $9.4 million and an immaterial net loss. We incurred acquisition-related costs of approximately $0.2 million for the nine months ended September 30, 2022. Intuicode Gaming Corporation On April 30, 2022 (the “Closing Date”), the Company acquired the stock of Intuicode Gaming Corporation (“Intuicode”), a privately owned game development and engineering firm focused on HHR games. The acquisition of Intuicode provides Everi with additional HHR expertise that will help the Company accelerate its growth in the expanding HHR market that will benefit the Games segment. Under the terms of the stock purchase agreement, we paid the seller $12.5 million on the Closing Date of the transaction and a net working capital payment of $1.6 million during the second quarter of 2022. In addition, we expect to pay approximately $13.0 million in contingent consideration based upon the achievement of certain revenue targets on the first and second anniversaries of the Closing Date. We expect the total consideration for this acquisition, inclusive of contingent consideration, to be approximately $27.1 million. The acquisition did not have a significant impact on our results of operations or financial condition for the three and nine months ended September 30, 2022. The total preliminary purchase consideration for Intuicode was as follows (in thousands, at fair value): Amount in USD Purchase consideration Cash consideration paid at closing $ 12,500 Cash consideration post-closing 1,595 Total cash consideration 14,095 Contingent consideration (at fair value) 12,150 Total purchase consideration $ 26,245 The fair value of the contingent consideration was based on Level 3 inputs utilizing a discounted cash flow methodology. The estimates and assumptions included projected future revenues of the acquired business and a discount rate of approximately 5%. Based on our quarterly review, there were no material adjustments required to our estimates and assumptions with respect to the contingent consideration. Contingent consideration to be paid is comprised of a short-term component that is recorded in accounts payable and accrued expenses and a long-term component payable within two years recorded in other accrued expenses and liabilities of our Balance Sheets. The transaction was accounted for using the acquisition method of accounting, which requires, among other things, the assets acquired and liabilities assumed be recognized at their respective fair values as of the acquisition date. The excess of the purchase price over those fair values was recorded as goodwill, which will be amortized over a period of 15 years for tax purposes. Th e goodwill recognized is primarily attributable to the income potential from the expansion of our footprint in the gaming space by accelerating our entry into and growth in the expanding HHR market and business line, assembled workforce, among other strategic benefits. The estimates and assumptions used include the projected timing and amount of future cash flows and discount rates reflecting risk inherent in the future cash flows. The estimated fair values of assets acquired and liabilities assumed and resulting goodwill are subject to adjustment as the Company finalizes its purchase price accounting. The significant items for which a final fair value has not been determined include, but are not limited to: the valuation and estimated useful lives of intangible assets, deferred and unearned revenues, and deferred income taxes. We do not expect our fair value determinations to materially change; however, there may be differences between the amounts recorded at the Closing Date and the final fair value analysis, which we expect to complete no later than the second quarter of 2023. The information below reflects the preliminary amounts of identifiable assets acquired and liabilities assumed as of the closing date of the transaction (in thousands): Amount in USD Current assets $ 3,944 Other intangible assets 18,757 Goodwill 10,422 Total Assets 33,123 Accounts payable and accrued expenses 2,407 Deferred tax liabilities 4,471 Total liabilities 6,878 Net assets acquired $ 26,245 Current assets acquired included approximately $2.1 million in cash. Trade receivables acquired of approximately $0.6 million were short-term in nature and considered to be collectible, and therefore, the carrying amounts of these assets represented their fair values. Inventory acquired of approximately $0.4 million consisted of raw materials and finished goods and was recorded at fair value based on the estimated net realizable value of these assets. Leased assets acquired were not material in size or scope, and the carrying amounts of these assets approximated their fair values. The following table summarizes preliminary values of acquired intangible assets (dollars in thousands): Useful Life (Years) Estimated Fair Value (USD) Other Intangible Assets Trade name 10 $ 400 Developed technology 2 3,357 Customer relationships 9 15,000 Total other intangible assets $ 18,757 The fair value of intangible assets was determined by applying the income approach. Other intangible assets acquired of approximately $18.8 million were comprised of customer relationships, developed technology and trade name. The fair value of customer relationships of approximately $15.0 million was determined by applying the income approach utilizing the excess earnings methodology using Level 3 inputs in the hierarchy with a discount rate of 40%. The fair value of developed technology of approximately $3.4 million was determined by applying the income approach utilizing the relief from royalty methodology using Level 3 inputs with a royalty rate of 25% and a discount rate of 35%. The fair value of trade name of approximately $0.4 million was determined by applying the income approach utilizing the relief from royalty methodology using Level 3 inputs with a royalty rate of 1% and a discount rate of 40%. The financial results included in our Statements of Operations since the acquisition date and through September 30, 2022 reflected revenues of approximately $3.6 million and net income of approximately $0.7 million. We incurred acquisition-related costs of approximatel y $0.1 million for the nine months ended September 30, 2022. Pro-forma financial information (unaudited) The unaudited pro forma financial data includes the historical operating results of the Company and the two acquired businesses prior to the acquisitions as if the transactions occurred on January 1, 2021. The unaudited pro forma results include increases to depreciation and amortization expense based on the purchased intangible assets and costs directly attributable to the acquisitions. The unaudited pro forma results do not purport to be indicative of results of operations as of the date hereof, for any period ended on the date hereof, or for any other future date or period; nor do they give effect to synergies, cost savings, fair market value adjustments and other changes expected as a result of the acquisitions. |
FUNDING AGREEMENTS
FUNDING AGREEMENTS | 9 Months Ended |
Sep. 30, 2022 | |
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 $2.7 million and $5.5 million for the three and nine months ended September 30, 2022, respectively, and $1.2 million and $2.9 million for the three and nine months ended September 30, 2021, respectively. We are exposed to interest rate risk to the extent the applicable rates increase. Under these agreements, the currency supplied by third party vendors remains 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 $322.0 million and $401.8 million as of September 30, 2022 and December 31, 2021, 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, 2024 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, 2022 and 2021. |
TRADE AND OTHER RECEIVABLES
TRADE AND OTHER RECEIVABLES | 9 Months Ended |
Sep. 30, 2022 | |
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. The balance of trade and other receivables consisted of the following (in thousands): At September 30, At December 31, 2022 2021 Trade and other receivables, net Games trade and loans receivables $ 83,329 $ 77,053 FinTech trade and loans receivables 32,118 21,504 Contract assets (1) 22,812 15,221 Other receivables 2,995 3,695 Net investment in sales-type leases 366 1,331 Total trade and other receivables, net 141,620 118,804 Non-current portion of receivables FinTech trade and loans receivables 12,165 7,340 Games trade and loans receivables 2,023 1,348 Contract assets (1) 10,589 5,294 Total non-current portion of receivables 24,777 13,982 Total trade and other receivables, current portion $ 116,843 $ 104,822 (1) Refer to “Note 2 — Basis of Presentation and Summary of Significant Accounting Policies” for a discussion on the contract assets. Allowance for Credit Losses The activity in our allowance for credit losses for the nine months ended September 30, 2022 and 2021 is as follows (in thousands): Nine Months Ended September 30, 2022 2021 Beginning allowance for credit losses $ (5,161) $ (3,689) Provision (7,286) (5,499) Charge-offs and recoveries 6,470 4,400 Ending allowance for credit losses $ (5,977) $ (4,788) |
INVENTORY
INVENTORY | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022 2021 Inventory Component parts, net of reserves of $2,582 and $2,422 at September 30, 2022 and December 31, 2021, respectively $ 40,063 $ 22,490 Work-in-progress 5,019 554 Finished goods 10,808 6,189 Total inventory $ 55,890 $ 29,233 |
PREPAID EXPENSES AND OTHER ASSE
PREPAID EXPENSES AND OTHER ASSETS | 9 Months Ended |
Sep. 30, 2022 | |
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 (as defined below), 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, 2022 2021 Prepaid expenses and other current assets Prepaid expenses $ 22,632 $ 14,389 Deposits 13,353 7,709 Restricted cash (1) 819 1,616 Other 2,205 3,585 Total prepaid expenses and other current assets $ 39,009 $ 27,299 (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, 2022 2021 Other assets Operating lease ROU assets $ 18,426 $ 12,692 Prepaid expenses and deposits 8,531 4,789 Debt issuance costs of revolving credit facility 1,473 1,760 Other 227 418 Total other assets $ 28,657 $ 19,659 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment consist of the following (dollars in thousands): At September 30, 2022 At December 31, 2021 Useful Life Cost Accumulated Net Book Cost Accumulated Net Book Property and equipment Rental pool - deployed 2-4 $ 273,117 $ 181,886 $ 91,231 $ 248,958 $ 166,075 $ 82,883 Rental pool - undeployed 2-4 30,833 24,456 6,377 23,284 18,285 4,999 FinTech equipment 1-5 36,820 25,267 11,553 32,802 21,257 11,545 Leasehold and building improvements Lease Term 13,227 10,320 2,907 12,598 9,234 3,364 Machinery, office, and other equipment 1-5 51,539 33,062 18,477 45,277 28,075 17,202 Total $ 405,536 $ 274,991 $ 130,545 $ 362,919 $ 242,926 $ 119,993 Depreciation expense related to property and equipment totaled approximately $17.4 million and $48.3 million for the three and nine months ended September 30, 2022, respectively, and $14.5 million and $46.6 million for the three and nine months ended September 30, 2021, respectively. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2022 | |
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 $707.2 million and $682.7 million at September 30, 2022 and December 31, 2021, 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 w as no im pair ment identified for our goodwill for the three and nine months ended September 30, 2022 and 2021. Other Intangible Assets Other intangible assets consist of the following (dollars in thousands): At September 30, 2022 At December 31, 2021 Useful Life Cost Accumulated Net Book Cost Accumulated Net Book Other intangible assets Contract rights under placement fee agreements 2-7 $ 57,946 $ 10,042 $ 47,904 $ 58,837 $ 4,237 $ 54,600 Customer relationships 3-14 324,598 226,164 98,434 303,238 206,273 96,965 Developed technology and software 1-6 383,716 301,164 82,552 342,309 280,412 61,897 Patents, trade names and other 2-18 22,050 20,012 2,038 20,547 19,415 1,132 Total $ 788,310 $ 557,382 $ 230,928 $ 724,931 $ 510,337 $ 214,594 Amortization expense related to other intangible assets was approximately $15.3 million and $43.6 million for the three and nine months ended September 30, 2022, respectively, and $14.6 million and $43.7 million for the three and nine months ended September 30, 2021, respectively. 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, 2022 and 2021, there we r e no material write-downs of intangible assets. |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022 2021 Accounts payable and accrued expenses Customer commissions payable $ 63,012 $ 57,515 Contract liabilities 44,460 36,238 Accounts payable - trade 38,336 25,453 Payroll and related expenses 25,646 29,125 Contingent consideration and acquisition-related liabilities (1) 10,712 — Financial access processing and related expenses 6,782 3,619 Operating lease liabilities 6,436 5,663 Accrued interest 4,316 9,273 Accrued taxes 3,821 2,756 Other 6,245 4,291 Total accounts payable and accrued expenses $ 209,766 $ 173,933 (1) Refer to “Note 4 — Business Combinations.” |
LONG-TERM DEBT
LONG-TERM DEBT | 9 Months Ended |
Sep. 30, 2022 | |
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 2022 2021 Long-term debt $600 million New Term Loan 2028 LIBOR+2.50% $ 594,000 $ 598,500 $125 million New Revolver 2026 LIBOR+2.50% — — Senior secured credit facilities 594,000 598,500 $400 million 2021 Unsecured Notes 2029 5.00% 400,000 400,000 Total debt 994,000 998,500 Debt issuance costs and discount (15,123) (16,975) Total debt after debt issuance costs and discount 978,877 981,525 Current portion of long-term debt (6,000) (6,000) Total long-term debt, net of current portion $ 972,877 $ 975,525 New Credit Facilities Our Senior Secured Credit Facilities consist of: (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 Company, as borrower, entered into the 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 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. Our New Revolver remained fully undrawn as of September 30, 2022. 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 was 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 was 4.76% and 3.66% for the three and nine months ended September 30, 2022, respectively. Senior Unsecured Notes Our Senior Unsecured Notes (the “2021 USN”) had an outstanding balance of $400.0 million as of September 30, 2022, for which interest accrues at a rate of 5.00% per annum and is payable semi-annually in arrears on each January 15 and July 15. Compliance with Debt Covenants We were in compliance with the coven |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES W e 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. FACTA-related matter: Geraldine Donahue, 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 (the “Defendants”) were substituted as the defendants on April 22, 2019. The plaintiff, on behalf of herself 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 the 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 were distributed to nonprofit charitable organizations in compliance with the court’s October 4, 2021 approval, and this matter is now closed. 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. Discovery is closed. The Court removed the case from the September trial calendar and requested briefs from the parties on relevant legal issues. Briefing is underway. Due to the current stage of the litigation, we are currently unable to estimate the probability of the outcome of this matter or reasonably estimate the range of possible damages, if any. 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. The case is set for trial in February 2023. Due to the current stage of the litigation, we are currently unable to estimate the probability of the outcome of this matter or reasonably estimate the range of possible damages, if any. 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. The plaintiffs are seeking restitution, injunctive relief and attorneys’ fees. On April 11, 2022, the Court entered an Order granting the Motion to Dismiss on behalf of Everi Holdings and Everi FinTech. The Plaintiff did not file a timely appeal, and as a result, this matter is closed. Sightline Payments matter: Sightline 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 (collectively referred to herein as “Everi”) 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. Everi filed a Motion to Dismiss or Transfer for Lack of Venue. On June 1, 2022, the Court granted Everi’s Motion to Dismiss ruling that the Western District of Texas was not the proper venue for an action against Everi Fintech, Everi Holdings and Everi Games. The Court granted plaintiff 14 days to file an amended complaint as to Everi Games Holding Inc. Plaintiff did not file an amended complaint. On June 23, 2022, the plaintiff, Sightline Payments LLC, filed an appeal of the Court’s Order. The appeal is underway. Due to the current stage of the litigation, we are currently unable to estimate the probability of the outcome of this matter or reasonably estimate the range of possible damages, if any. Mary Parrish matter: Mary Parrish v. Everi Holdings Inc., et al. is a civil action filed on December 28, 2021, against Everi Holdings and Everi FinTech in the District Court of Nevada, Clark County by Mary Parrish alleging violation of the Fair and Accurate Credit Transactions Act (FACTA) amendment to the Fair Credit Reporting Act (FCRA). Plaintiff’s complaint alleges she received a printed receipt for cash access services performed at an Everi Payments’ ATM which displayed more than four (4) digits of the account number. Plaintiff seeks statutory damages, punitive damages, injunctive relief, attorneys’ fees, and other relief. Everi filed a Petition for Removal to the United States District Court, District of Nevada. Thereafter, Everi filed a Motion to Dismiss, which is pending in the United States District Court. Due to the early stages of the litigation, we are currently unable to estimate the probability of the outcome of this matter or reasonably estimate the range of possible damages, if any. In addition, we have commitments with respect to certain lease obligations discussed in “Note 3 — Leases” and installment payments under our purchase agreements discussed in “Note 4 — Business Combinations.” |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2022 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY On May 4, 2022, our Board of Directors authorized and approved a new share repurchase program in an amount not to exceed $150.0 million pursuant to which we may purchase outstanding Company common stock in open market or privately negotiated transactions over a period of eighteen (18) months through November 4, 2023. The actual number of shares to be purchased will depend upon market conditions and is subject to available liquidity, general market and economic conditions, alternative uses for the capital and other factors. All shares purchased will be held in the Company’s treasury for possible future use. As of September 30, 2022, Everi had approximately 90.0 million shares issued and outstanding, net of 29.3 million shares held in the Company’s treasury. There is no minimum number of shares that the Company is required to repurchase, and the program may be suspended or discontinued at any time without prior notice. This new repurchase program supersedes and replaces, in its entirety, the previous share repurchase program. There were 0.9 million and 2.9 million shares repurchased at an average price of $17.29 and $16.87 per share for an aggregate amount of $16.0 million and $49.4 million during the three and nine ended September 30, 2022, respectively. The remaining availability under the May 2022 $150.0 million share repurchase program was $100.6 million as of September 30, 2022. T here were no share repurchases during the three and nine months ended September 30, 2021. |
WEIGHTED AVERAGE SHARES OF COMM
WEIGHTED AVERAGE SHARES OF COMMON STOCK | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
WEIGHTED AVERAGE SHARES OF COMMON STOCK | WEIGHTED AVERAGE SHARES OF COMMON STOCK The weighted average number of common stock shares outstanding used in the computation of bas ic and diluted earnings pe r share is as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Weighted average shares Weighted average number of common shares outstanding - basic 90,014 90,322 91,039 88,688 Potential dilution from equity awards (1) 6,422 11,037 7,267 10,893 Weighted average number of common shares outstanding - diluted (1) 96,436 101,359 98,306 99,581 (1) There were 0.2 million and 0.1 million shares that were anti-dilutive under the treasury stock method for the three and nine ended September 30, 2022, respectively. T here were no shares that were anti-dilutive under the treasury stock method for the three and nine months ended September 30, 2021. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2022 | |
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 with either time- or performance-based criteria; (ii) time-based options; and (iii) 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, 2021 7,073 3,540 Granted 81 1,276 Exercised options or vested shares (284) (1,978) Canceled or forfeited (25) (34) Outstanding, September 30, 2022 6,845 2,804 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The income tax provision for the three and nine months ended September 30, 2022, reflected an effective income tax rate of 26.0% and 24.2%, respectively, which wa s greater th an th e statutory federal rate of 21.0%, primarily due to state taxes, compensation deduction limitations, a net operating loss limitation and an accrual for a foreign withholding tax, partially offset by both a research credit and the benefit from stock option exercises. 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 less than the statutory federal rate of 21.0%, primarily due to a decrease in our valuation allowance for our deferred tax assets and the benefit from stock option exercises . 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, 2022, we recorded approximately $2.2 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, 2022 | |
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 generally consists of the Chief Executive 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: • Everi Games primarily provides gaming operators with gaming technology products and services, including: (i) gaming machines, primarily comprising Class II and Class III slot machines and HHR gaming machines placed under participation or fixed-fee lease arrangements or sold to casino customers; (ii) provision and maintenance of the central determinant systems for the VLTs installed in the State of New York and similar technology in certain tribal jurisdictions; and (iii) B2B digital online gaming activities. • Everi FinTech provides gaming operators with financial technology and entertainment products and services, including: (i) financial access and related services supporting digital, cashless and physical cash options across mobile, assisted and self-service channels; (ii) loyalty and marketing software and tools, RegTech software solutions, other information-related products and services, and hardware maintenance services; and (iii) associated casino patron self-service hardware that utilizes our financial access, software and other services. Corporate overhead expenses have been allocated to the segments either through specific identification or based on another 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, 2022 2021 2022 2021 Games Revenues Gaming operations $ 74,979 $ 71,580 $ 219,311 $ 202,941 Gaming equipment and systems 37,500 24,220 103,766 68,298 Gaming other 41 33 126 82 Total revenues 112,520 95,833 323,203 271,321 Costs and expenses Cost of revenues (1) Gaming operations 6,557 5,675 18,674 15,776 Gaming equipment and systems 22,545 13,503 62,721 39,058 Cost of revenues 29,102 19,178 81,395 54,834 Operating expenses 19,860 16,711 57,886 48,871 Research and development 11,298 6,445 28,395 17,966 Depreciation 15,006 12,495 41,321 41,122 Amortization 11,472 10,805 31,744 32,464 Total costs and expenses 86,738 65,634 240,741 195,257 Operating income $ 25,782 $ 30,199 $ 82,462 $ 76,064 (1) Exclusive of depreciation and amortization. * Rounding may cause variances. Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 FinTech Revenues Financial access services $ 53,296 $ 46,421 $ 154,051 $ 129,973 Software and other 22,192 17,024 59,056 49,874 Hardware 16,310 9,024 40,846 28,829 Total revenues 91,798 72,469 253,953 208,676 Costs and expenses Cost of revenues (1) Financial access services 2,760 1,830 7,405 4,863 Software and other 1,163 1,063 2,984 3,196 Hardware 10,771 5,380 27,074 17,078 Cost of revenues 14,694 8,273 37,463 25,137 Operating expenses 36,494 30,410 103,344 84,449 Research and development 5,505 3,153 14,991 8,833 Depreciation 2,438 1,968 7,021 5,449 Amortization 3,831 3,791 11,838 11,216 Total costs and expenses 62,962 47,595 174,657 135,084 Operating income $ 28,836 $ 24,874 $ 79,296 $ 73,592 (1) Exclusive of depreciation and amortization. * Rounding may cause variances. At September 30, At December 31, 2022 2021 Total assets Games $ 909,973 $ 913,880 FinTech 759,550 721,770 Total assets $ 1,669,523 $ 1,635,650 Major Customers. No single customer accounted for more than 10% of our revenues for the three and nine months ended September 30, 2022 and 2021. Our five largest customers accounted for approximately 14% of our revenues for the three and nine months ended September 30, 2022, and 16% for the three and nine months ended September 30, 2021. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On October 17, 2022 (the “Closing Date”), the Company acquired certain strategic assets of Venuetize, Inc. (“Venuetize”), a privately owned innovator of mobile-first technologies that provide an advanced guest engagement and m-commerce platform for the sports, entertainment and hospitality industries. The Venuetize acquisition of certain products and services represents a strategic expansion within and beyond casino gaming of Everi’s current suite of solutions for the FinTech segment. The acquisition will help to elevate the capabilities of mobile and wallet offerings, and provide Everi with complementary assets and an established customer base expected to enable further growth into additional entertainment, sports and hospitality venues, and also to create new crossover marketing opportunities within the Company's existing footprint. Under the terms of the asset purchase agreement, the Company made payments totaling $18 million by the time of closing. Subject to achieving certain revenue growth targets over the subsequent thirty-month period post-closing, additional contingent performance payments are expected to be between $2 million and $6 million. The transaction will be accounted for as a business combination und er t he acquisition method of a ccounting in accordance with GAAP. As a result of the timing of the acquisition, the initial accounting treatment is still being determined; and accordingly, certain disclosures were not available at the time the financial statements were issued. The acquisition is not expected to have a material impact on our results of operations or financial condition in 2022. |
BASIS OF PRESENTATION AND SUM_2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022 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 most recently filed 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 invoicing and cash collections. The following table summarizes our contract assets and contract liabilities arising from contracts with customers (in thousands): 2022 2021 Contract assets (1) Balance at January 1 - current $ 9,927 $ 9,240 Balance at January 1 - non-current 5,294 8,321 Total 15,221 17,561 Balance at September 30 - current 12,223 9,728 Balance at September 30 - non-current 10,589 5,647 Total 22,812 15,375 Increase (decrease) $ 7,591 $ (2,186) Contract liabilities (2) Balance at January 1 - current $ 36,238 $ 26,980 Balance at January 1 - non-current 377 289 Total 36,615 27,269 Balance at September 30 - current 44,460 36,503 Balance at September 30 - non-current 2,246 493 Total 46,706 36,996 Increase $ 10,091 $ 9,727 (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 $25.1 million and $21.0 million in revenue that was included in the beginning contract liabilities balance during the nine months ended September 30, 2022 and 2021, 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, HHR 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 $51.4 million and $148.0 million for the three and nine months ended September 30, 2022, respectively, and $49.2 million and $141.6 million for the three and nine months ended September 30, 2021, 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 loyalty and fully integrated kiosk 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 material financial access kiosk and related equipment sales contracts accounted for under ASC 842 during the three and nine months ended September 30, 2022 and 2021. |
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. The provision for doubtful accounts receivable is included within operating expenses and the check warranty loss reserves are included within financial access services cost of revenues in the Statements of Operations. |
Goodwill | Goodwill Goodwill represents the excess of the purchase price over the identifiable tangible and intangible assets acquired plus liabilities assumed arising from business combinations. We test for impairment annually on a reporting unit basis, at the beginning of our fourth fiscal quarter and between annual tests if events and circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The annual impairment test is completed using either: a qualitative “Step 0” assessment based on reviewing relevant events and circumstances; or a quantitative “Step 1” assessment, which determines the fair value of the reporting unit, using both an income approach that discounts future cash flows based on the estimated future results of our reporting units and a market approach that compares market multiples of comparable companies to determine whether 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. |
Fair Values of Financial Instruments | Fair Values of Financial Instruments The fair value of a financial instrument represents the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Fair value estimates are made at a specific point in time, based upon relevant market information about the financial instrument. |
Recent Accounting Guidance | Recently Adopted Accounting Guidance Standard Description Date of Adoption Effect on Financial Statements 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 The adoption of this ASU did not have a material effect on our Financial Statements or on our disclosures. Recent Accounting Guidance Not Yet Adopted As of September 30, 2022, we do not anticipate re cently 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, 2022 | |
Accounting Policies [Abstract] | |
Contract Asset and Liability | The following table summarizes our contract assets and contract liabilities arising from contracts with customers (in thousands): 2022 2021 Contract assets (1) Balance at January 1 - current $ 9,927 $ 9,240 Balance at January 1 - non-current 5,294 8,321 Total 15,221 17,561 Balance at September 30 - current 12,223 9,728 Balance at September 30 - non-current 10,589 5,647 Total 22,812 15,375 Increase (decrease) $ 7,591 $ (2,186) Contract liabilities (2) Balance at January 1 - current $ 36,238 $ 26,980 Balance at January 1 - non-current 377 289 Total 36,615 27,269 Balance at September 30 - current 44,460 36,503 Balance at September 30 - non-current 2,246 493 Total 46,706 36,996 Increase $ 10,091 $ 9,727 (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, 2022 (in thousands). Classification on our Balance Sheets At September 30, 2022 At December 31, 2021 Cash and cash equivalents Cash and cash equivalents $ 258,627 $ 302,009 Restricted cash - current Prepaid expenses and other current assets 819 1,616 Restricted cash - non-current Other assets 101 101 Total $ 259,547 $ 303,726 |
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, 2022 (in thousands). Classification on our Balance Sheets At September 30, 2022 At December 31, 2021 Cash and cash equivalents Cash and cash equivalents $ 258,627 $ 302,009 Restricted cash - current Prepaid expenses and other current assets 819 1,616 Restricted cash - non-current Other assets 101 101 Total $ 259,547 $ 303,726 |
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, 2022 $600 million New Term Loan 2 $ 572,972 $ 594,000 $400 million 2021 Unsecured Notes 2 $ 329,984 $ 400,000 December 31, 2021 $600 million New Term Loan 2 $ 598,171 $ 598,500 $400 million 2021 Unsecured Notes 2 $ 404,000 $ 400,000 |
Summary of Recent Accounting Guidance | Recently Adopted Accounting Guidance 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 The adoption of this ASU did not have a material effect on our Financial Statements or on our disclosures. |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022 At December 31, 2021 Assets Operating lease ROU assets Other assets, non-current $ 18,426 $ 12,692 Liabilities Current operating lease liabilities Accounts payable and accrued expenses $ 6,436 $ 5,663 Non-current operating lease liabilities Other accrued expenses and liabilities $ 16,281 $ 11,869 |
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, 2022 2021 2022 2021 Cash paid for: Long-term operating leases $ 1,855 $ 1,660 $ 5,165 $ 5,030 Short-term operating leases $ 398 $ 400 $ 1,205 $ 1,219 Right-of-use assets obtained in exchange for lease obligations: Operating leases (1) $ 997 $ 396 $ 7,448 $ 1,063 (1) The amounts are presented net of current year terminations and exclude amortization for the period. |
Lease Costs | Other information related to lease terms and discount rates is as follows: At September 30, 2022 At December 31, 2021 Weighted Average Remaining Lease Term (in years): Operating leases 3.57 3.52 Weighted Average Discount Rate: Operating leases 4.71 % 5.04 % 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, 2022 2021 2022 2021 Operating Lease Cost: Operating lease cost $ 1,663 $ 1,276 $ 4,492 $ 4,192 Variable lease cost $ 259 $ 311 $ 902 $ 946 |
Payments Due | Maturities of lease liabilities are summarized as follows as of September 30, 2022 (in thousands): Year Ending December 31, Amount 2022 (excluding the nine months ended September 30, 2022) $ 1,750 2023 7,293 2024 6,747 2025 5,834 2026 2,137 Thereafter 967 Total future minimum lease payments 24,728 Less: Amount representing interest 2,011 Present value of future minimum lease payments 22,717 Less: Current operating lease obligations 6,436 Long-term lease obligations $ 16,281 |
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, 2022 At December 31, 2021 Assets Net investment in sales-type leases - current Trade and other receivables, net $ 366 $ 1,331 |
Business Combinations and Asset
Business Combinations and Asset Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Total Purchase Consideration | The total preliminary purchase consideration for ecash was as follows (in thousands, at fair value): Amount in USD Purchase consideration Cash consideration paid at closing $ 14,980 Cash consideration post-closing 15,905 Total purchase consideration $ 30,885 The total preliminary purchase consideration for Intuicode was as follows (in thousands, at fair value): Amount in USD Purchase consideration Cash consideration paid at closing $ 12,500 Cash consideration post-closing 1,595 Total cash consideration 14,095 Contingent consideration (at fair value) 12,150 Total purchase consideration $ 26,245 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The information below reflects the preliminary amounts o f identifiable assets acquired and liabilities assumed (i n thousands): Amount in USD* Current assets $ 12,850 Property and equipment 1,218 Other intangible assets 11,600 Goodwill 11,861 Other assets 726 Total Assets 38,255 Accounts payable and accrued expenses 7,160 Other accrued expenses and liabilities 210 Total liabilities 7,370 Net assets acquired $ 30,885 _______________________ *Reflects a measurement period adjustment of approximately $1.2 million from the initial allocation as of the closing date of the transaction. The information below reflects the preliminary amounts of identifiable assets acquired and liabilities assumed as of the closing date of the transaction (in thousands): Amount in USD Current assets $ 3,944 Other intangible assets 18,757 Goodwill 10,422 Total Assets 33,123 Accounts payable and accrued expenses 2,407 Deferred tax liabilities 4,471 Total liabilities 6,878 Net assets acquired $ 26,245 |
Finite-Lived Intangible Assets Acquired | The following table summariz es preliminary values of acquired intangible assets (dollars in thousands): Useful Life (Years) Estimated Fair Value (USD) Other Intangible Assets Trade name 3 $ 700 Developed technology 3 3,600 Customer relationships 9 7,300 Total other intangible assets $ 11,600 The following table summarizes preliminary values of acquired intangible assets (dollars in thousands): Useful Life (Years) Estimated Fair Value (USD) Other Intangible Assets Trade name 10 $ 400 Developed technology 2 3,357 Customer relationships 9 15,000 Total other intangible assets $ 18,757 |
TRADE AND OTHER RECEIVABLES (Ta
TRADE AND OTHER RECEIVABLES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022 2021 Trade and other receivables, net Games trade and loans receivables $ 83,329 $ 77,053 FinTech trade and loans receivables 32,118 21,504 Contract assets (1) 22,812 15,221 Other receivables 2,995 3,695 Net investment in sales-type leases 366 1,331 Total trade and other receivables, net 141,620 118,804 Non-current portion of receivables FinTech trade and loans receivables 12,165 7,340 Games trade and loans receivables 2,023 1,348 Contract assets (1) 10,589 5,294 Total non-current portion of receivables 24,777 13,982 Total trade and other receivables, current portion $ 116,843 $ 104,822 (1) Refer to “Note 2 — Basis of Presentation and Summary of Significant Accounting Policies” for a discussion on the contract assets. |
Activity in Allowance for Credit Losses | The activity in our allowance for credit losses for the nine months ended September 30, 2022 and 2021 is as follows (in thousands): Nine Months Ended September 30, 2022 2021 Beginning allowance for credit losses $ (5,161) $ (3,689) Provision (7,286) (5,499) Charge-offs and recoveries 6,470 4,400 Ending allowance for credit losses $ (5,977) $ (4,788) |
INVENTORY (Tables)
INVENTORY (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Components of Inventory | Inventory consisted of the following (in thousands): At September 30, At December 31, 2022 2021 Inventory Component parts, net of reserves of $2,582 and $2,422 at September 30, 2022 and December 31, 2021, respectively $ 40,063 $ 22,490 Work-in-progress 5,019 554 Finished goods 10,808 6,189 Total inventory $ 55,890 $ 29,233 |
PREPAID EXPENSES AND OTHER AS_2
PREPAID EXPENSES AND OTHER ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022 2021 Prepaid expenses and other current assets Prepaid expenses $ 22,632 $ 14,389 Deposits 13,353 7,709 Restricted cash (1) 819 1,616 Other 2,205 3,585 Total prepaid expenses and other current assets $ 39,009 $ 27,299 (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, 2022 2021 Other assets Operating lease ROU assets $ 18,426 $ 12,692 Prepaid expenses and deposits 8,531 4,789 Debt issuance costs of revolving credit facility 1,473 1,760 Other 227 418 Total other assets $ 28,657 $ 19,659 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022 At December 31, 2021 Useful Life Cost Accumulated Net Book Cost Accumulated Net Book Property and equipment Rental pool - deployed 2-4 $ 273,117 $ 181,886 $ 91,231 $ 248,958 $ 166,075 $ 82,883 Rental pool - undeployed 2-4 30,833 24,456 6,377 23,284 18,285 4,999 FinTech equipment 1-5 36,820 25,267 11,553 32,802 21,257 11,545 Leasehold and building improvements Lease Term 13,227 10,320 2,907 12,598 9,234 3,364 Machinery, office, and other equipment 1-5 51,539 33,062 18,477 45,277 28,075 17,202 Total $ 405,536 $ 274,991 $ 130,545 $ 362,919 $ 242,926 $ 119,993 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Other Intangible Assets | Other intangible assets consist of the following (dollars in thousands): At September 30, 2022 At December 31, 2021 Useful Life Cost Accumulated Net Book Cost Accumulated Net Book Other intangible assets Contract rights under placement fee agreements 2-7 $ 57,946 $ 10,042 $ 47,904 $ 58,837 $ 4,237 $ 54,600 Customer relationships 3-14 324,598 226,164 98,434 303,238 206,273 96,965 Developed technology and software 1-6 383,716 301,164 82,552 342,309 280,412 61,897 Patents, trade names and other 2-18 22,050 20,012 2,038 20,547 19,415 1,132 Total $ 788,310 $ 557,382 $ 230,928 $ 724,931 $ 510,337 $ 214,594 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022 2021 Accounts payable and accrued expenses Customer commissions payable $ 63,012 $ 57,515 Contract liabilities 44,460 36,238 Accounts payable - trade 38,336 25,453 Payroll and related expenses 25,646 29,125 Contingent consideration and acquisition-related liabilities (1) 10,712 — Financial access processing and related expenses 6,782 3,619 Operating lease liabilities 6,436 5,663 Accrued interest 4,316 9,273 Accrued taxes 3,821 2,756 Other 6,245 4,291 Total accounts payable and accrued expenses $ 209,766 $ 173,933 (1) Refer to “Note 4 — Business Combinations.” |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Indebtedness | The following table summarizes our outstanding indebtedness (dollars in thousands): Maturity Interest At September 30, At December 31, Date Rate 2022 2021 Long-term debt $600 million New Term Loan 2028 LIBOR+2.50% $ 594,000 $ 598,500 $125 million New Revolver 2026 LIBOR+2.50% — — Senior secured credit facilities 594,000 598,500 $400 million 2021 Unsecured Notes 2029 5.00% 400,000 400,000 Total debt 994,000 998,500 Debt issuance costs and discount (15,123) (16,975) Total debt after debt issuance costs and discount 978,877 981,525 Current portion of long-term debt (6,000) (6,000) Total long-term debt, net of current portion $ 972,877 $ 975,525 |
WEIGHTED AVERAGE SHARES OF CO_2
WEIGHTED AVERAGE SHARES OF COMMON STOCK (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Weighted Average Number of Shares | The weighted average number of common stock shares outstanding used in the computation of bas ic and diluted earnings pe r share is as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Weighted average shares Weighted average number of common shares outstanding - basic 90,014 90,322 91,039 88,688 Potential dilution from equity awards (1) 6,422 11,037 7,267 10,893 Weighted average number of common shares outstanding - diluted (1) 96,436 101,359 98,306 99,581 (1) There were 0.2 million and 0.1 million shares that were anti-dilutive under the treasury stock method for the three and nine ended September 30, 2022, respectively. T here were no shares that were anti-dilutive under the treasury stock method for the three and nine months ended September 30, 2021. |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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, 2021 7,073 3,540 Granted 81 1,276 Exercised options or vested shares (284) (1,978) Canceled or forfeited (25) (34) Outstanding, September 30, 2022 6,845 2,804 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022 2021 2022 2021 Games Revenues Gaming operations $ 74,979 $ 71,580 $ 219,311 $ 202,941 Gaming equipment and systems 37,500 24,220 103,766 68,298 Gaming other 41 33 126 82 Total revenues 112,520 95,833 323,203 271,321 Costs and expenses Cost of revenues (1) Gaming operations 6,557 5,675 18,674 15,776 Gaming equipment and systems 22,545 13,503 62,721 39,058 Cost of revenues 29,102 19,178 81,395 54,834 Operating expenses 19,860 16,711 57,886 48,871 Research and development 11,298 6,445 28,395 17,966 Depreciation 15,006 12,495 41,321 41,122 Amortization 11,472 10,805 31,744 32,464 Total costs and expenses 86,738 65,634 240,741 195,257 Operating income $ 25,782 $ 30,199 $ 82,462 $ 76,064 (1) Exclusive of depreciation and amortization. * Rounding may cause variances. Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 FinTech Revenues Financial access services $ 53,296 $ 46,421 $ 154,051 $ 129,973 Software and other 22,192 17,024 59,056 49,874 Hardware 16,310 9,024 40,846 28,829 Total revenues 91,798 72,469 253,953 208,676 Costs and expenses Cost of revenues (1) Financial access services 2,760 1,830 7,405 4,863 Software and other 1,163 1,063 2,984 3,196 Hardware 10,771 5,380 27,074 17,078 Cost of revenues 14,694 8,273 37,463 25,137 Operating expenses 36,494 30,410 103,344 84,449 Research and development 5,505 3,153 14,991 8,833 Depreciation 2,438 1,968 7,021 5,449 Amortization 3,831 3,791 11,838 11,216 Total costs and expenses 62,962 47,595 174,657 135,084 Operating income $ 28,836 $ 24,874 $ 79,296 $ 73,592 (1) Exclusive of depreciation and amortization. * Rounding may cause variances. At September 30, At December 31, 2022 2021 Total assets Games $ 909,973 $ 913,880 FinTech 759,550 721,770 Total assets $ 1,669,523 $ 1,635,650 |
BUSINESS - Narrative (Details)
BUSINESS - Narrative (Details) | 9 Months Ended |
Sep. 30, 2022 segment | |
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, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Contract assets | ||||
Contract assets, current | $ 12,223 | $ 9,728 | $ 9,927 | $ 9,240 |
Contract assets, noncurrent | 10,589 | 5,647 | 5,294 | 8,321 |
Total | 22,812 | 15,375 | 15,221 | 17,561 |
Increase (decrease) | 7,591 | (2,186) | ||
Contract liabilities | ||||
Contract liabilities, current | 44,460 | 36,503 | 36,238 | 26,980 |
Contract liabilities, noncurrent | 2,246 | 493 | 377 | 289 |
Total | 46,706 | 36,996 | $ 36,615 | $ 27,269 |
Increase | $ 10,091 | $ 9,727 |
BASIS OF PRESENTATION AND SUM_5
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | |||||
Contract with customer liability | $ 25,100 | $ 21,000 | |||
Total revenues | $ 204,318 | $ 168,302 | $ 577,156 | 479,997 | |
Contractual terms of trade and loans receivable | 12 months | 12 months | |||
Games | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenues | 112,520 | 95,833 | $ 323,203 | 271,321 | |
Games | Gaming operations, leased equipment | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenues | $ 51,400 | $ 49,200 | $ 148,000 | $ 141,600 |
BASIS OF PRESENTATION AND SUM_6
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Cash (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | $ 258,627 | $ 302,009 | ||
Restricted Cash, Current, Statement of Financial Position [Extensible Enumeration] | Prepaid expenses and other current assets | Prepaid expenses and other current assets | ||
Restricted cash - current | $ 819 | $ 1,616 | ||
Restricted Cash, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other assets | Other assets | ||
Restricted cash - non-current | $ 101 | $ 101 | ||
Total | 259,547 | 303,726 | $ 216,886 | $ 252,349 |
Cash and Cash Equivalents | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | $ 258,627 | $ 302,009 |
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, 2022 | Dec. 31, 2021 | Aug. 03, 2021 | Dec. 31, 2019 |
Senior secured notes | New Revolver | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Principal amount of debt | $ 600,000,000 | $ 600,000,000 | $ 600,000,000 | |
Senior unsecured notes | 2021 Unsecured Notes | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Principal amount of debt | 400,000,000 | 400,000,000 | $ 400,000,000 | |
Fair Value | Level 2 | New Term Loan | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Long-term debt | 572,972,000 | 598,171,000 | ||
Fair Value | Level 2 | Incremental Term Loan | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Long-term debt | 329,984,000 | 404,000,000 | ||
Outstanding Balance | Level 2 | New Term Loan | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Long-term debt | 594,000,000 | 598,500,000 | ||
Outstanding Balance | Level 2 | Incremental Term Loan | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Long-term debt | $ 400,000,000 | $ 400,000,000 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
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, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other assets | Other assets |
Operating lease ROU assets | $ 18,426 | $ 12,692 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accounts payable and accrued expenses | Accounts payable and accrued expenses |
Current operating lease liabilities | $ 6,436 | $ 5,663 |
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 | $ 16,281 | $ 11,869 |
LEASES - Cash Flow Information
LEASES - Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Cash paid for: | ||||
Long-term operating leases | $ 1,855 | $ 1,660 | $ 5,165 | $ 5,030 |
Short-term operating leases | 398 | 400 | 1,205 | 1,219 |
Right-of-use assets obtained in exchange for lease obligations: | ||||
Operating leases | $ 997 | $ 396 | $ 7,448 | $ 1,063 |
LEASES - Lease Costs (Details)
LEASES - Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Leases [Abstract] | |||||
Weighted average remaining lease term, operating leases | 3 years 6 months 25 days | 3 years 6 months 25 days | 3 years 6 months 7 days | ||
Weighted average discount rate, operating leases | 4.71% | 4.71% | 5.04% | ||
Operating lease cost | $ 1,663 | $ 1,276 | $ 4,492 | $ 4,192 | |
Variable lease cost | $ 259 | $ 311 | $ 902 | $ 946 |
LEASES - Payments Due (Details)
LEASES - Payments Due (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Amount | ||
2022 (excluding the nine months ended September 30, 2022) | $ 1,750 | |
2023 | 7,293 | |
2024 | 6,747 | |
2025 | 5,834 | |
2026 | 2,137 | |
Thereafter | 967 | |
Total future minimum lease payments | 24,728 | |
Less: Amount representing interest | 2,011 | |
Present value of future minimum lease payments | 22,717 | |
Current operating lease liabilities | 6,436 | $ 5,663 |
Long-term lease obligations | $ 16,281 | $ 11,869 |
LEASES - Sales-type lease (Deta
LEASES - Sales-type lease (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
Net investment in sales-type leases - current | $ 366 | $ 1,331 |
BUSINESS COMBINATIONS - Narrati
BUSINESS COMBINATIONS - Narrative (Details) $ in Thousands, $ in Millions | 3 Months Ended | 7 Months Ended | 9 Months Ended | |||||||
Apr. 30, 2022 USD ($) | Mar. 01, 2022 AUD ($) | Mar. 01, 2022 USD ($) | Sep. 30, 2022 USD ($) | Jun. 30, 2022 AUD ($) | Jun. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2022 USD ($) business | Sep. 30, 2021 USD ($) | |
Business Acquisition [Line Items] | ||||||||||
Number of acquired businesses | business | 2 | |||||||||
ecash Holdings Pty Limited | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Cash consideration paid at closing | $ 20 | $ 14,980 | ||||||||
Contingent consideration | $ 10,000 | |||||||||
Payments for excess net working capital | $ 8.7 | $ 6,000 | ||||||||
Cash payments, noncurrent, payment period | 2 years | 2 years | ||||||||
Goodwill, amortization period | 15 years | 15 years | ||||||||
Adjustment assets | $ 1,200 | |||||||||
Cash | $ 2,800 | $ 2,800 | $ 2,800 | |||||||
Trade receivables | 5,700 | 5,700 | 5,700 | |||||||
Inventory | 4,200 | 4,200 | 4,200 | |||||||
Other intangible assets | 11,600 | 11,600 | 11,600 | 11,600 | ||||||
Revenue since acquisition date | 9,400 | |||||||||
Net loss since acquisition date | 0 | |||||||||
Transaction costs | 200 | |||||||||
Cash consideration post-closing | 15,905 | |||||||||
Business combination, consideration transferred | $ 30,885 | |||||||||
ecash Holdings Pty Limited | Customer relationships | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Other intangible assets | $ 7,300 | $ 7,300 | $ 7,300 | |||||||
ecash Holdings Pty Limited | Customer relationships | Measurement Input, Discount Rate | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Finite-lived intangible assets acquired, measurement input | 0.17 | 0.17 | 0.17 | |||||||
ecash Holdings Pty Limited | Developed technology | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Other intangible assets | $ 3,600 | $ 3,600 | $ 3,600 | |||||||
ecash Holdings Pty Limited | Developed technology | Measurement Input, Discount Rate | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Finite-lived intangible assets acquired, measurement input | 0.17 | 0.17 | 0.17 | |||||||
ecash Holdings Pty Limited | Developed technology | Measurement Input, Royalty Rate | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Finite-lived intangible assets acquired, measurement input | 0.075 | 0.075 | 0.075 | |||||||
ecash Holdings Pty Limited | Trade name | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Other intangible assets | $ 700 | $ 700 | $ 700 | |||||||
ecash Holdings Pty Limited | Trade name | Measurement Input, Discount Rate | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Finite-lived intangible assets acquired, measurement input | 0.17 | 0.17 | 0.17 | |||||||
ecash Holdings Pty Limited | Trade name | Measurement Input, Royalty Rate | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Finite-lived intangible assets acquired, measurement input | 0.02 | 0.02 | 0.02 | |||||||
ecash Holdings Pty Limited | Tranche One | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Contingent consideration | $ 6.5 | |||||||||
Contingent consideration, period since closing | 1 year | 1 year | ||||||||
ecash Holdings Pty Limited | Tranche Two | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Contingent consideration | $ 6.5 | |||||||||
Contingent consideration, period since closing | 2 years | 2 years | ||||||||
Intuicode | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Cash consideration paid at closing | $ 12,500 | |||||||||
Cash payments, noncurrent, payment period | 2 years | |||||||||
Goodwill, amortization period | 15 years | |||||||||
Cash | $ 2,100 | $ 2,100 | $ 2,100 | |||||||
Trade receivables | 600 | 600 | 600 | |||||||
Inventory | 400 | 400 | 400 | |||||||
Other intangible assets | 18,757 | 18,757 | 18,757 | |||||||
Revenue since acquisition date | 3,600 | |||||||||
Net loss since acquisition date | $ 700 | |||||||||
Transaction costs | $ 100 | |||||||||
Cash consideration post-closing | $ 1,600 | |||||||||
Business combination, contingent consideration, earn-out liability | $ 13,000 | |||||||||
Business combination, consideration transferred | $ 26,245 | $ 27,100 | ||||||||
Intuicode | Measurement Input, Discount Rate | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Acquired business discount rate | 0.05 | 0.05 | 0.05 | |||||||
Intuicode | Customer relationships | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Other intangible assets | $ 15,000 | $ 15,000 | $ 15,000 | |||||||
Intuicode | Customer relationships | Measurement Input, Discount Rate | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Finite-lived intangible assets acquired, measurement input | 0.40 | 0.40 | 0.40 | |||||||
Intuicode | Developed technology | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Other intangible assets | $ 3,357 | $ 3,357 | $ 3,357 | |||||||
Intuicode | Developed technology | Measurement Input, Discount Rate | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Finite-lived intangible assets acquired, measurement input | 0.35 | 0.35 | 0.35 | |||||||
Intuicode | Developed technology | Measurement Input, Royalty Rate | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Finite-lived intangible assets acquired, measurement input | 0.25 | 0.25 | 0.25 | |||||||
Intuicode | Trade name | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Other intangible assets | $ 400 | $ 400 | $ 400 | |||||||
Intuicode | Trade name | Measurement Input, Discount Rate | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Finite-lived intangible assets acquired, measurement input | 0.40 | 0.40 | 0.40 | |||||||
Intuicode | Trade name | Measurement Input, Royalty Rate | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Finite-lived intangible assets acquired, measurement input | 0.01 | 0.01 | 0.01 | |||||||
ecash Holdings Pty Limited and Intuicode Gaming Corporation | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Pro forma revenue | $ 204,300 | $ 174,900 | $ 587,200 | $ 504,100 | ||||||
Pro forma net income (loss) | $ 29,400 | $ 6,900 | $ 93,200 | $ 65,000 |
BUSINESS COMBINATIONS - Schedul
BUSINESS COMBINATIONS - Schedule of Total Purchase Consideration (Details) $ in Thousands, $ in Millions | 3 Months Ended | |||||
Apr. 30, 2022 USD ($) | Mar. 01, 2022 AUD ($) | Mar. 01, 2022 USD ($) | Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Business Acquisition [Line Items] | ||||||
Contingent consideration (at fair value) | $ 10,712 | $ 0 | ||||
ecash Holdings Pty Limited | ||||||
Business Acquisition [Line Items] | ||||||
Cash consideration paid at closing | $ 20 | $ 14,980 | ||||
Cash consideration post-closing | 15,905 | |||||
Total purchase consideration | $ 30,885 | |||||
Intuicode | ||||||
Business Acquisition [Line Items] | ||||||
Cash consideration paid at closing | $ 12,500 | |||||
Cash consideration post-closing | $ 1,600 | |||||
Cash consideration post-closing | 1,595 | |||||
Total cash consideration | 14,095 | |||||
Contingent consideration (at fair value) | 12,150 | |||||
Total purchase consideration | $ 26,245 | $ 27,100 |
BUSINESS COMBINATIONS - Sched_2
BUSINESS COMBINATIONS - Schedule of Recognized Identified Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Mar. 01, 2022 | Dec. 31, 2021 |
Business Acquisition [Line Items] | |||
Goodwill | $ 707,214 | $ 682,663 | |
ecash Holdings Pty Limited | |||
Business Acquisition [Line Items] | |||
Current assets | $ 12,850 | ||
Property and equipment | 1,218 | ||
Other intangible assets | 11,600 | 11,600 | |
Goodwill | 11,861 | ||
Other assets | 726 | ||
Total Assets | 38,255 | ||
Accounts payable and accrued expenses | 7,160 | ||
Other accrued expenses and liabilities | 210 | ||
Total liabilities | 7,370 | ||
Net assets acquired | $ 30,885 | ||
Intuicode | |||
Business Acquisition [Line Items] | |||
Current assets | 3,944 | ||
Other intangible assets | 18,757 | ||
Goodwill | 10,422 | ||
Total Assets | 33,123 | ||
Accounts payable and accrued expenses | 2,407 | ||
Deferred tax liabilities | 4,471 | ||
Total liabilities | 6,878 | ||
Net assets acquired | $ 26,245 |
BUSINESS COMBINATIONS - Intangi
BUSINESS COMBINATIONS - Intangible Assets Acquired as Part of Business Combination (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Mar. 01, 2022 | |
ecash Holdings Pty Limited | ||
Business Acquisition [Line Items] | ||
Other intangible assets | $ 11,600 | $ 11,600 |
Intuicode | ||
Business Acquisition [Line Items] | ||
Other intangible assets | $ 18,757 | |
Trade name | ecash Holdings Pty Limited | ||
Business Acquisition [Line Items] | ||
Useful Life (Years) | 3 years | |
Other intangible assets | $ 700 | |
Trade name | Intuicode | ||
Business Acquisition [Line Items] | ||
Useful Life (Years) | 10 years | |
Other intangible assets | $ 400 | |
Developed technology | ecash Holdings Pty Limited | ||
Business Acquisition [Line Items] | ||
Useful Life (Years) | 3 years | |
Other intangible assets | $ 3,600 | |
Developed technology | Intuicode | ||
Business Acquisition [Line Items] | ||
Useful Life (Years) | 2 years | |
Other intangible assets | $ 3,357 | |
Customer relationships | ecash Holdings Pty Limited | ||
Business Acquisition [Line Items] | ||
Useful Life (Years) | 9 years | |
Other intangible assets | $ 7,300 | |
Customer relationships | Intuicode | ||
Business Acquisition [Line Items] | ||
Useful Life (Years) | 9 years | |
Other intangible assets | $ 15,000 |
FUNDING AGREEMENTS (Details)
FUNDING AGREEMENTS (Details) - Indemnification Guarantee - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Contract Cash Solutions Agreement | |||||
Funding Agreements | |||||
Cash usage fees incurred | $ 2,700,000 | $ 1,200,000 | $ 5,500,000 | $ 2,900,000 | |
Outstanding balance | 322,000,000 | 322,000,000 | $ 401,800,000 | ||
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, 2022 | Dec. 31, 2021 |
Trade and other receivables, net | ||
Contract assets | $ 22,812 | $ 15,221 |
Other receivables | 2,995 | 3,695 |
Net investment in sales-type leases | 366 | 1,331 |
Total trade and other receivables, net | 141,620 | 118,804 |
Non-current portion of receivables | 24,777 | 13,982 |
Contract assets | 10,589 | 5,294 |
Total trade and other receivables, current portion | 116,843 | 104,822 |
Gaming operations | ||
Trade and other receivables, net | ||
Trade receivables, net | 83,329 | 77,053 |
Non-current portion of receivables | 2,023 | 1,348 |
FinTech | ||
Trade and other receivables, net | ||
Trade receivables, net | 32,118 | 21,504 |
Non-current portion of receivables | $ 12,165 | $ 7,340 |
TRADE AND OTHER RECEIVABLES - A
TRADE AND OTHER RECEIVABLES - Activity in Allowance for Credit Losses (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning allowance for credit losses | $ (5,161) | $ (3,689) |
Provision | (7,286) | (5,499) |
Charge-offs and recoveries | 6,470 | 4,400 |
Ending allowance for credit losses | $ (5,977) | $ (4,788) |
INVENTORY (Details)
INVENTORY (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Inventory | ||
Component parts, net of reserves of $2,582 and $2,422 at September 30, 2022 and December 31, 2021, respectively | $ 40,063 | $ 22,490 |
Work-in-progress | 5,019 | 554 |
Finished goods | 10,808 | 6,189 |
Total inventory | 55,890 | 29,233 |
Component parts, reserves | $ 2,582 | $ 2,422 |
PREPAID EXPENSES AND OTHER AS_3
PREPAID EXPENSES AND OTHER ASSETS (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Prepaid expenses and other current assets | ||
Prepaid expenses | $ 22,632 | $ 14,389 |
Deposits | 13,353 | 7,709 |
Restricted cash | 819 | 1,616 |
Other | 2,205 | 3,585 |
Total prepaid expenses and other current assets | 39,009 | 27,299 |
Other assets | ||
Operating lease ROU assets | 18,426 | 12,692 |
Prepaid expenses and deposits | 8,531 | 4,789 |
Debt issuance costs of revolving credit facility | 1,473 | 1,760 |
Other | 227 | 418 |
Total other assets | $ 28,657 | $ 19,659 |
PROPERTY AND EQUIPMENT - Schedu
PROPERTY AND EQUIPMENT - Schedule of Components of Property, Equipment and Leased Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||||
Cost | $ 405,536 | $ 405,536 | $ 362,919 | ||
Accumulated Depreciation | 274,991 | 274,991 | 242,926 | ||
Net Book Value | 130,545 | 130,545 | 119,993 | ||
Depreciation | 17,444 | $ 14,463 | 48,342 | $ 46,571 | |
FinTech | |||||
Property, Plant and Equipment [Line Items] | |||||
Depreciation | 2,438 | $ 1,968 | 7,021 | $ 5,449 | |
Rental pool - deployed | |||||
Property, Plant and Equipment [Line Items] | |||||
Cost | 273,117 | 273,117 | 248,958 | ||
Accumulated Depreciation | 181,886 | 181,886 | 166,075 | ||
Net Book Value | 91,231 | $ 91,231 | 82,883 | ||
Rental pool - deployed | Minimum | |||||
Property, Plant and Equipment [Line Items] | |||||
Useful Life (Years) | 2 years | ||||
Rental pool - deployed | Maximum | |||||
Property, Plant and Equipment [Line Items] | |||||
Useful Life (Years) | 4 years | ||||
Rental pool - undeployed | |||||
Property, Plant and Equipment [Line Items] | |||||
Cost | 30,833 | $ 30,833 | 23,284 | ||
Accumulated Depreciation | 24,456 | 24,456 | 18,285 | ||
Net Book Value | 6,377 | $ 6,377 | 4,999 | ||
Rental pool - undeployed | Minimum | |||||
Property, Plant and Equipment [Line Items] | |||||
Useful Life (Years) | 2 years | ||||
Rental pool - undeployed | Maximum | |||||
Property, Plant and Equipment [Line Items] | |||||
Useful Life (Years) | 4 years | ||||
Machinery, office, and other equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Cost | 51,539 | $ 51,539 | 45,277 | ||
Accumulated Depreciation | 33,062 | 33,062 | 28,075 | ||
Net Book Value | 18,477 | 18,477 | 17,202 | ||
Machinery, office, and other equipment | FinTech | |||||
Property, Plant and Equipment [Line Items] | |||||
Cost | 36,820 | 36,820 | 32,802 | ||
Accumulated Depreciation | 25,267 | 25,267 | 21,257 | ||
Net Book Value | 11,553 | $ 11,553 | 11,545 | ||
Machinery, office, and other equipment | Minimum | |||||
Property, Plant and Equipment [Line Items] | |||||
Useful Life (Years) | 1 year | ||||
Machinery, office, and other equipment | Minimum | FinTech | |||||
Property, Plant and Equipment [Line Items] | |||||
Useful Life (Years) | 1 year | ||||
Machinery, office, and other equipment | Maximum | |||||
Property, Plant and Equipment [Line Items] | |||||
Useful Life (Years) | 5 years | ||||
Machinery, office, and other equipment | Maximum | FinTech | |||||
Property, Plant and Equipment [Line Items] | |||||
Useful Life (Years) | 5 years | ||||
Leasehold and building improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Cost | 13,227 | $ 13,227 | 12,598 | ||
Accumulated Depreciation | 10,320 | 10,320 | 9,234 | ||
Net Book Value | $ 2,907 | $ 2,907 | $ 3,364 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Goodwill | $ 707,214,000 | $ 707,214,000 | $ 682,663,000 | ||
Impairment of goodwill | 0 | $ 0 | 0 | $ 0 | |
Amortization of intangible assets | 15,300,000 | 14,600,000 | 43,600,000 | 43,700,000 | |
Impairment of intangible assets | $ 0 | $ 0 | $ 0 | $ 0 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Other Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 788,310 | $ 724,931 |
Accumulated Amortization | 557,382 | 510,337 |
Net Book Value | 230,928 | 214,594 |
Contract rights under placement fee agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 57,946 | 58,837 |
Accumulated Amortization | 10,042 | 4,237 |
Net Book Value | $ 47,904 | 54,600 |
Contract rights under placement fee agreements | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (Years) | 2 years | |
Contract rights under placement fee agreements | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (Years) | 7 years | |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 324,598 | 303,238 |
Accumulated Amortization | 226,164 | 206,273 |
Net Book Value | $ 98,434 | 96,965 |
Customer relationships | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (Years) | 3 years | |
Customer relationships | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (Years) | 14 years | |
Developed technology and software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 383,716 | 342,309 |
Accumulated Amortization | 301,164 | 280,412 |
Net Book Value | $ 82,552 | 61,897 |
Developed technology and software | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (Years) | 1 year | |
Developed technology and software | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (Years) | 6 years | |
Patents, trade names and other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 22,050 | 20,547 |
Accumulated Amortization | 20,012 | 19,415 |
Net Book Value | $ 2,038 | $ 1,132 |
Patents, trade names and other | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (Years) | 2 years | |
Patents, trade names and other | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (Years) | 18 years |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||||
Customer commissions payable | $ 63,012 | $ 57,515 | ||
Contract liabilities | 44,460 | 36,238 | $ 36,503 | $ 26,980 |
Accounts payable - trade | 38,336 | 25,453 | ||
Payroll and related expenses | 25,646 | 29,125 | ||
Contingent consideration and acquisition-related liabilities | 10,712 | 0 | ||
Financial access processing and related expenses | 6,782 | 3,619 | ||
Operating lease liabilities | 6,436 | 5,663 | ||
Accrued interest | 4,316 | 9,273 | ||
Accrued taxes | 3,821 | 2,756 | ||
Other | 6,245 | 4,291 | ||
Total accounts payable and accrued expenses | $ 209,766 | $ 173,933 |
LONG-TERM DEBT - Schedule of Ou
LONG-TERM DEBT - Schedule of Outstanding Indebtedness (Details) - USD ($) | 9 Months Ended | |||
Sep. 30, 2022 | Dec. 31, 2021 | Aug. 03, 2021 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | ||||
Total debt | $ 994,000,000 | $ 998,500,000 | ||
Debt issuance costs and discount | (15,123,000) | (16,975,000) | ||
Total debt after debt issuance costs and discount | 978,877,000 | 981,525,000 | ||
Current portion of long-term debt | (6,000,000) | (6,000,000) | ||
Total long-term debt, net of current portion | 972,877,000 | 975,525,000 | ||
Senior secured notes | New Revolver | ||||
Debt Instrument [Line Items] | ||||
Principal amount of debt | $ 600,000,000 | 600,000,000 | $ 600,000,000 | |
Senior secured notes | New Revolver | London Interbank Offered Rate (LIBOR) | ||||
Debt Instrument [Line Items] | ||||
Basis spread | 2.50% | |||
Revolving credit facility | New Revolver | ||||
Debt Instrument [Line Items] | ||||
Total debt | $ 0 | 0 | ||
Principal amount of debt | $ 125,000,000 | |||
Revolving credit facility | New Revolver | London Interbank Offered Rate (LIBOR) | ||||
Debt Instrument [Line Items] | ||||
Basis spread | 2.50% | |||
Senior secured notes | ||||
Debt Instrument [Line Items] | ||||
Total debt | $ 594,000,000 | 598,500,000 | ||
Senior secured notes | Senior secured notes | New Revolver | ||||
Debt Instrument [Line Items] | ||||
Total debt | 594,000,000 | 598,500,000 | ||
Senior unsecured notes | 2021 Unsecured Notes | ||||
Debt Instrument [Line Items] | ||||
Total debt | 400,000,000 | 400,000,000 | ||
Principal amount of debt | $ 400,000,000 | $ 400,000,000 | $ 400,000,000 | |
Interest rate | 5% |
LONG-TERM DEBT - Narrative (Det
LONG-TERM DEBT - Narrative (Details) | 3 Months Ended | 9 Months Ended | ||
Aug. 03, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Senior unsecured notes | FinTech Segment | ||||
Debt Instrument [Line Items] | ||||
Principal amount of debt | $ 400,000,000 | $ 400,000,000 | ||
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% | |||
Credit Agreement Dated May 9, 2017 | ||||
Debt Instrument [Line Items] | ||||
Leverage ratio, maximum | 4.25 | 4.25 | ||
2017 Unsecured Notes | Senior unsecured notes | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 5% | 5% | ||
Senior secured notes | New Revolver | ||||
Debt Instrument [Line Items] | ||||
Debt term | 7 years | |||
Principal amount of debt | $ 600,000,000 | $ 600,000,000 | $ 600,000,000 | $ 600,000,000 |
Percentage of par amount issued | 0.9975 | |||
Senior secured notes | New Revolver | London Interbank Offered Rate (LIBOR) | ||||
Debt Instrument [Line Items] | ||||
Basis spread | 2.50% | |||
Revolving credit facility | New Revolver | ||||
Debt Instrument [Line Items] | ||||
Principal amount of debt | $ 125,000,000 | |||
Maximum borrowing capacity | $ 125,000,000 | |||
Periodic payment, percentage of principal | 0.0025 | |||
Period for prepayment premium from closing date | 6 months | |||
Prepayment penalty, percentage of principal amount repaid | 1% | |||
Revolving credit facility | New Revolver | London Interbank Offered Rate (LIBOR) | ||||
Debt Instrument [Line Items] | ||||
Basis spread | 2.50% | |||
Incremental Term Loan | Incremental Term Loan Credit Agreement April 21, 2020 | ||||
Debt Instrument [Line Items] | ||||
Weighted average interest rate during period | 4.76% | 3.66% |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | May 04, 2022 | Dec. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |||||||
Stock repurchase program, authorized amount | $ 150,000,000 | ||||||
Stock repurchase program, period in force | 18 months | ||||||
Common stock outstanding (in shares) | 89,972,000 | 89,972,000 | 91,313,000 | ||||
Treasury stock (in shares) | 29,286,000 | 29,286,000 | 25,683,000 | ||||
Treasury stock acquired (in shares) | 900,000 | 0 | 2,900,000 | 0 | |||
Treasury stock acquired (in usd per share) | $ 17.29 | $ 16.87 | |||||
Repurchase of shares | $ 16,015,000 | $ 33,336,000 | $ 49,400,000 | ||||
Stock repurchase program, remaining authorized repurchase amount | $ 100,600,000 | $ 100,600,000 |
WEIGHTED AVERAGE SHARES OF CO_3
WEIGHTED AVERAGE SHARES OF COMMON STOCK - Schedule of Weighted Average Number of Shares (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Weighted average shares | ||||
Weighted average number of common shares outstanding - basic (in shares) | 90,014,000 | 90,322,000 | 91,039,000 | 88,688,000 |
Potential dilution from equity awards (in shares) | 6,422,000 | 11,037,000 | 7,267,000 | 10,893,000 |
Weighted average number of common shares outstanding - diluted (in shares) | 96,436,000 | 101,359,000 | 98,306,000 | 99,581,000 |
Anti-dilutive equity awards excluded from computation of earnings per share (in shares) | 200,000 | 0 | 100,000 | 0 |
SHARE-BASED COMPENSATION - Summ
SHARE-BASED COMPENSATION - Summary of Award Activity (Details) - shares shares in Thousands | 9 Months Ended |
Sep. 30, 2022 | |
Stock Options | |
Stock Options | |
Outstanding (in shares) | 7,073 |
Granted (in shares) | 81 |
Exercised options (in shares) | (284) |
Canceled or forfeited (in shares) | (25) |
Outstanding (in shares) | 6,845 |
Restricted Stock Units | |
Restricted Stock Units | |
Outstanding (in shares) | 3,540 |
Granted (in shares) | 1,276 |
Vested (in shares) | (1,978) |
Canceled or forfeited (in shares) | (34) |
Outstanding (in shares) | 2,804 |
Common Stock | |
Restricted Stock Units | |
Number of shares available for grant (in shares) | 3,700 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 26% | (5.00%) | 24.20% | 2% |
Statutory federal rate | 21% | 21% | ||
Unrecognized tax benefits | $ 2.2 | $ 2.2 |
SEGMENT INFORMATION - Revenues,
SEGMENT INFORMATION - Revenues, Operating Income, and Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | ||
Revenues | ||||||
Total revenues | $ 204,318 | $ 168,302 | $ 577,156 | $ 479,997 | ||
Costs and expenses | ||||||
Operating expenses | 56,354 | 47,121 | 161,230 | 133,320 | ||
Research and development | 16,803 | 9,598 | 43,386 | 26,799 | ||
Depreciation | 17,444 | 14,463 | 48,342 | 46,571 | ||
Amortization | 15,303 | 14,596 | 43,582 | 43,680 | ||
Total costs and expenses | 149,700 | 113,229 | 415,398 | 330,341 | ||
Operating income | 54,618 | 55,073 | 161,758 | 149,656 | ||
Total assets | ||||||
Total assets | 1,669,523 | 1,669,523 | $ 1,635,650 | |||
Games | ||||||
Revenues | ||||||
Total revenues | 112,520 | 95,833 | 323,203 | 271,321 | ||
Costs and expenses | ||||||
Cost of revenues | [1] | 29,102 | 19,178 | 81,395 | 54,834 | |
Operating expenses | 19,860 | 16,711 | 57,886 | 48,871 | ||
Research and development | 11,298 | 6,445 | 28,395 | 17,966 | ||
Depreciation | 15,006 | 12,495 | 41,321 | 41,122 | ||
Amortization | 11,472 | 10,805 | 31,744 | 32,464 | ||
Total costs and expenses | 86,738 | 65,634 | 240,741 | 195,257 | ||
Operating income | 25,782 | 30,199 | 82,462 | 76,064 | ||
Total assets | ||||||
Total assets | 909,973 | 909,973 | 913,880 | |||
Games | Gaming operations | ||||||
Revenues | ||||||
Total revenues | 74,979 | 71,580 | 219,311 | 202,941 | ||
Costs and expenses | ||||||
Cost of revenues | [1] | 6,557 | 5,675 | 18,674 | 15,776 | |
Games | Gaming equipment and systems | ||||||
Revenues | ||||||
Total revenues | 37,500 | 24,220 | 103,766 | 68,298 | ||
Costs and expenses | ||||||
Cost of revenues | [1] | 22,545 | 13,503 | 62,721 | 39,058 | |
Games | Gaming other | ||||||
Revenues | ||||||
Total revenues | 41 | 33 | 126 | 82 | ||
FinTech | ||||||
Revenues | ||||||
Total revenues | 91,798 | 72,469 | 253,953 | 208,676 | ||
Costs and expenses | ||||||
Cost of revenues | [1] | 14,694 | 8,273 | 37,463 | 25,137 | |
Operating expenses | 36,494 | 30,410 | 103,344 | 84,449 | ||
Research and development | 5,505 | 3,153 | 14,991 | 8,833 | ||
Depreciation | 2,438 | 1,968 | 7,021 | 5,449 | ||
Amortization | 3,831 | 3,791 | 11,838 | 11,216 | ||
Total costs and expenses | 62,962 | 47,595 | 174,657 | 135,084 | ||
Operating income | 28,836 | 24,874 | 79,296 | 73,592 | ||
Total assets | ||||||
Total assets | 759,550 | 759,550 | $ 721,770 | |||
FinTech | Financial access services | ||||||
Revenues | ||||||
Total revenues | 53,296 | 46,421 | 154,051 | 129,973 | ||
Costs and expenses | ||||||
Cost of revenues | [1] | 2,760 | 1,830 | 7,405 | 4,863 | |
FinTech | Software and other | ||||||
Revenues | ||||||
Total revenues | 22,192 | 17,024 | 59,056 | 49,874 | ||
Costs and expenses | ||||||
Cost of revenues | [1] | 1,163 | 1,063 | 2,984 | 3,196 | |
FinTech | Hardware | ||||||
Revenues | ||||||
Total revenues | 16,310 | 9,024 | 40,846 | 28,829 | ||
Costs and expenses | ||||||
Cost of revenues | [1] | $ 10,771 | $ 5,380 | $ 27,074 | $ 17,078 | |
[1](1) Exclusive of depreciation and amortization. EVERI HOLDINGS INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - CONTINUED (In thousands, except earnings per share amounts) |
SEGMENT INFORMATION - Major Cus
SEGMENT INFORMATION - Major Customers (Details) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2021 | |
Five largest customers | Customer risk | Revenue from Contract with Customer | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk, percentage | 14% | 16% | 16% |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent Event $ in Millions | Oct. 17, 2022 USD ($) |
Subsequent Event [Line Items] | |
Payment for asset acquisition | $ 18 |
Minimum | |
Subsequent Event [Line Items] | |
Total cash consideration | 2 |
Maximum | |
Subsequent Event [Line Items] | |
Total cash consideration | $ 6 |