EVRI - Earnings call transcript Q1 2020

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Operator

Hello, everyone. Thank you for standing by and welcome to the Everi Holdings Inc.

First Quarter 2020 Earnings Conference Call.

During today's presentation, all parties would be in a listen-only mode.

Following the prepared remarks, the call will open for a question-and-answer session. recorded being is discussion today. This would And over turn conference to Bill now, Pfund, I to Vice the Relations. like President Investor Please sir. ahead go

Bill Pfund

Thank welcome, and you, everyone. James,

the covers Let Harbor everyone by me of begin disclaimer call today's that and webcast. reminding Safe

SEC and our forward-looking uncertainties cause and are do our include, call. filings, to These will results involve from materially Investors obligation not in could those and statements. earnings forward-looking in corporate and which but other assume any statements are risks release the which contained call risks section website assumptions, limited Our today those posted actual differ contain at not and that discussed no to, our of during update everi.com. uncertainties to We intend

not on are reliance cautioned are forward-looking today X, undue place only made XXXX. to which June of as statements, You

to description be being will free replay total our and to be financial and related X-K, is Investors section Investors In website. A as recorded. comparable in found A of and ratio. section on cash today's refer can non-GAAP the GAAP reconciliation our most the earnings measure total directly to call such the EBITDA, net This in net call as webcast within link website. our flow, addition, well release the webcast certain can of debt and measure and of as leverage adjusted a found non-GAAP we each debt measures,

Leader; Dean Ko, the Games Harper Taylor, Counsel. President Mark leader; Vice on Ehrlich, me are Labay, Rumbolz, Officer; President Officer; FinTech General Simmons, Randy our Business Chief Joining today Operating Officer; our Financial business Darren and Mike Chief and Chief our call and Executive Executive

call from this on locations. are We separate

glitch, I is there a advance. if So in apologize technical

turn as moderator to pleasure who also to today's will call act Taylor, for call. our the my over Randy it's Now,

Randy Taylor

joining. Thank and you Good you, afternoon, everyone, for thank Bill.

as by COVID-XX those quarter have since continue sympathies in globe the gaming in our March just virus well the down. tragically who upside first be In to three would communities has like been discussing the the Before impacted industry, world pandemic. results, call individuals months, those earnings as around the our we or turned on to X, last extend our to

first of the in the gaming being green as communities country. are as revival in the However, shoots across seen well industry,

today's more call, For my are you we less comparison. prepared our cover QX going normal a in so remarks. results quarterly probably will we call do to relevant change recognize little. highlights a on focused Instead, are structure will I of the results, not normal some Mark our

base up Ferrari the of the a increase open more growth two quarter, an consolidated first XX, installed XX% quarter largest in quarterly the a results two year. two of of impact very key our daily it unit as of the comprise base games gaming the performance up first first last to reflect These Our in were performance but full compared understand XX% Premium the closing first driving of operating more over trends as mid-March. going quarter, market, performance base in results compared unit than revenue year-over-year installed year-over-year win our during sequential units win stretch quarter for In two at months first casinos had to of our to with XX% relative to the our health higher increase in is throttle to increase relevant in on open only was performance per and highly our months our business, believe the basis, year-over-year. highlight per portions we prior months an than two element the time XXXX, better in performance March the in months on the customers' helped are in correlated drive be two of period. strong daily overall the operating we across installed believe quarter. XX% reflect the the XXXX We prior not year. our down win strong gains of expect in the the casinos in begin they the these contributed continued daily we and Oklahoma, our XX% like growth, operations, the to was first unit at the same per our strong shutting of To In months. customers Overall, revenue company's to the months. actually the of These yielding a the gaming certain total first the XX% part In first wide of to a country first road. reopen. as increased

games FinTech the on machines. across diversification overly businesses, we the and our slot Given are sale of not dependent

XXXX sales, from equipment as for year the ship Everi came of a industry percentage gaming total was for and In only of increased, share yet XXXX our terms overall revenue consolidated good unit sales. XX% of our

the offerings XXXX, features us expect curve Flex play will cabinet other for XXX to launched cabinet reports, very climbed attractive encouraging and top-performing performance that the of large we Flex in we Gaming the most purchase FinTech cabinet early of our & in sold last it's term, each half fair selling has category. a Having Eilers early future Cabinet well quarter. Even performance Krejcik with grown be In into look the share our size perform year will this feedback surpassing our very to the encouraged very believe Early combines we the These portrait been quickly single-screen customers the the we segment, the and in very the near and our the in The competitive reopen as game we closures. was also are our content, units our prior slot mechanics. in several with recent gotten well-known exciting three proven to are this units first are the results optimistic back initial category business be as casinos to but share positioned with as ship an we basis the we mode customers, that reflect new combined market, budgets. a performance and are casino relative Beginning differentiated with to of and and on from years, well capital we've gain Flex of conservation our of strong recover. we in beyond. continue

dollars the increased XX% cash rose XX%. transactions year-over-year, amount the months, For two total total first of process access while

recurring revenue and competitive takeaways. also casino we from we openings same-store In into increased from new from business sales addition and and information growth, products these of the software sales to incremental player as full license loyalty the increases support and the $X.X Revenues software others following marketing XXXX. of were our as for services to player $X.X compared initial year loyalty prior revenue million from benefited quarter, in the experiencing entry million the reflect in March for

believe near facilities casinos contributor continue business when we great as will player to contactless marketing the the to installing be term. a a longer in business we were support. player is period both customers' equipment the and some kiosks Even self-service at loyalty meaningful during performance our reopen were loyalty and and with We and our they selling it prepare to closed, expect

operators to FinTech with new the that value and they the both cash existing continue and reopen as access can signed customers agreements appreciate also service real bring product their facilities. We solutions as casino our

could measures what liquidity rapid precautionary As a we minimal our to to three, we safety industry, employees, prolonged the control cash including; click to rate; we protect took our sure withstand cushion to taking took potentially impact began focus aggressively action this COVID-XX period our pandemic increase industry of burn on the reduced activity. one, making to gaming and steps quickly,

their workforce as hard furloughed to decision health make, continuing of our costs. associated XX% As care to and we the while plans cover was

created an relief have and than to support we dispersed to employee members. and To funded relief provide additional also Most date, working to been furloughed have access employees. of payments plan funds employees our XXX remaining to team remotely. our emergency more We

Additionally approximately eliminated expenses. company-wide temporary travel Mike nonessential we and Directors to reduced the the which executive salaries who team, Board led XX%, other and and reduced reductions pay implemented by zero salaries and by of their their

for moves allowed austerity million yielded month. became and all together for approximately would of of burn it that apparent These other cash operating a costs all to operating $X month per and utilities $X expenses, to payroll casinos close period time, some reduce we rate eventually As us CapEx. required also with costs approximately nonessential rent, per for million overhead deferred

as estimate that end targets. an is of our liquidity actions, solid an be we able was borrowing, we as April, $XX also In fully we result amended term maximum through quarter number. an per XXXX maintenance borrowed quarter the of loan. We of the covenant bond a believe month, $XXX position not by our this and just Concurrent interest line. audited approximately first a financial our in runs facilities on down payments drawing customers reset to our cash to to $XXX credit million incremental leverage In improved borrowings. total, credit million decisive $X I would with sluggishness of reopen new the million million. to they short-term In addition, we recovery. way in any the average facility their operating the two-thirds our eliminate includes for as And million weather rapid support maintaining of semiannual position the our which secured while revolving go-forward and to this well measures emphasize May, net our flexibility another the interest cash as our our position and $X cash are position completing in

across the EBITDA schedules will quarter. As watermark pandemic, casinos low major expect revenue achieve the wave no we we the the we and second third and positive quarter assuming Based on will we be there adjusted seen, reopen is on have of cash the to for flow. believe in reopening be second pace the country

the quarter. the continues, generate poised we flow be should More cash recovery importantly free to as in positive fourth

the to so pandemic. like the to share positioned had over I'd is how the to momentum we on prior can Everi the turn and Mike? he to Mike, his perspective industry, Now, call regain

Mike Rumbolz

eye number to And afternoon, a different share for that honestly and time and I say I've held industry having time this in change. for the close seen toward been excellence catalyst planning wide everything from Alongside But challenge, here embrace critical responsibilities. that more Thanks, to critical positions everyone. strategies new to a with reviewing had with and I've and is Randy, under do this deliver impact we both as business tragic casino be adjusting Everi anything our our an gaming normal. range the it at never years. of of conditions, we're processes a that services our good and have products pandemic. you to recessionary than extraordinary with while experienced that Based four during can of this my we now opportunity a customers, and I this

our that we we and safe. realized industry early were to position our the that begins our the As to and employees to swiftly that on first and our customers support when company, our acted to support to making their are to Randy be We as sure possible mentioned, employees patrons, protect sure best we make customers have able in recover.

projects actions for and new development distancing. that cashless that new that we anticipated there spending, the innovation that significant demand contactless, would a solutions and we took we support making We in our as be the also it are progress normal. reduce social with align costs were furthered and capital Even to

continue major work our As on digital teams to neighborhood. of portions an example, our

in that are discussions offerings, our about customers several mobile active we features a today, cashless contactless result, a benefits. product including wallet digital and with digital neighborhood As core

floors. for are into integrated bypass cashless Additionally, increased product, to that for directly favorite our as handling our quick option machine, cash. of allows to a and ticket a kiosks from interest inserted card players we solutions, their our loyalty operators receive their existing enabling seeing them self-service debit ticket slot player any casino their Similar to into quick can insert be ticket of one

two address our additional kiosks, self-service as including solutions, these of customers expected limit added Now, to as functionality desire that interactions. many player well loyalty players we've programs, the to our face-to-face to help

employees stand real-time by with today's a products to casino that players provide eliminating club cage We programs. for an have to launching the at or up solutions for for existing environment operator's need in line engage sign players can

best also ticket however to and success solution an patron excellent solutions position customers continue video on a slots in Of experience, course, what or a having spinning cash opportunity element it's We Everi a floor. real want still how truly leads Enabling provide possible key have and casino supports Whether and always and casino back across in of these products patron, both the a consumer slots, in it for of an the and deliver our guests. give the cashless, or their to patron they cash successful cost-effective at the choice wherever, products. to is they time, for digital employee-facing sustainable those prefer a industry. integration products to welcomes enable is array options. our our of And but choice. choices choice, who players help whenever our consumer-facing house same do that

our the based additional estimates, some have reopened. and Gaming color our me our early XX% casinos reports approximately regarding U.S. of on let Today, restart Now, performance own Association as customers operations. their American share

as entertainment options enjoy their were enter reopen, Importantly, players casino. the doors and to on eager

it again, operating initial while me generating we let say products very that pre-COVID Now average slot exceeding most early still it's are indicate is on reports very early, that is of daily our levels. that win our

We value year and and news processing trend transactions cash will this in news. levels access initially that are jurisdictions. casinos number more open, levels. believe also access This is of newly reopened are pre-COVID will cash prior exceeding as tempered become the that transactions closer to we Additionally great

continue will development. in we forward invest Going and innovation to

pipeline coming today. augment I of fintech that game strong game will addition already new for to content the In game in the a still expect These market interest launch in games solutions seeing already new studios the have months. heightened we that our to exciting our are mentioned, we're that that performing forward-thinking our themes

endure Randy borrowed our we of for an liquidity could million most negative as scenarios. even the Now incremental company so the extra to $XXX an cushion noted, provide

that more success consistently and that this likely less as view appreciate we as regain This begin a Now country, borrowing cash confidence that stream free again of in gives incremental and demonstrated while a look leverage road in more liquidity. those the our momentum net leverage. and me future. the reopen we the steady in reduce less reducing stay total to having have outcomes will success generate the across and and to casinos we prior near strong great our open flow our once bump temporary We

the the with Now, that, operator for call to I'd questions. turn like back your to

Operator

our first Boyer today take Brad question We'll with Stifel. Instructions] [Operator from

Brad Boyer

Thanks Yes. very for there detail all guys, the helpful.

know of margin of First question sort for lot me is just have us. around you breakeven sort peers pretty of your this level of that businesses. different also appreciate profiles have detail it's guys levels. a for dramatically gross I provided I and your helpful across

back get you of here? give online a little sense to be say out. might operation it achieve us breakeven what back level to a of the can bit you to you period harder of prior revenue So sort tease bring as need But EBITDA to guys

Mike Rumbolz

address Yes. We think Mark? our that CFO should probably

Mark Labay

Mike. Thanks

how different. we and revenue you head a streams revenues think access cash operations the and hit is revenue experienced business I'm Obviously, growth that our with not with at. high-margin and on look the number are sure little very to profile good our the metric in a margin our I again XXXX gaming

coming is spend let of where different it on try you here. the little about in So view a and way our focus and kind kind we me of go to how spend

with to current of was our costs. the of ATM $X about another $X business at debt vault on million top we're interest Looking that's cash cash our annualized part interest kind cash million that. probably million easy $XX in returning the on interest rates expecting with And

the annualized on interest $XX in an probably cash basis. -- So for range million our total

challenging of Now as ramping little in reopening. it as our see, help you a highlighted expenses, kind to bit into comments. his gets prepared Randy get more as we've you'll our employees customers up of kind support been What

and coming to that to we're goes. more our So back as you're employee base the more customers seeing more work the costs, of of support and incurring

to on assumes will this quarter you And we'll of really positive. open costs most you we no kind In kind start third in of the focus have, we some more the EBITDA casinos that I on of to going With point. So QX, and direct And be at that our the any furlough longer as have estimation. sales excluding our of at we're QX. the any said a we related employees that equipment this falls range rest of profile we remaining backdrop if third to expense will into expect cash $XX at free getting more into probably the for move us the $XX in million quarter. million where the QX flow as to think And positive is of we start point remain been of that EBITDA positive. a fashion casinos opening some have all would that ramping casinos little or have gaining assume and that more. revenues that the This and the the in still up rest from reopened kind

again, is that So base at point. our employee full

a I of higher at think on of range million a that the end range similar top fall of couple we of with kind probably in probably dollars that.

So our it hopefully kind that you frames but... of

Brad Boyer

Yes, that's helpful.

just there's is a color cashless. on I -- question of good of mean a you lot guys the around lot Second provided call.

you about today. you fully of, if appetite embracing regard amongst but could of, could, technology. with regulators And cashless I that curious to it's talk sort Just early, still sort appreciate provide Any the there? thoughts

Mike Rumbolz

Yes.

regulators. out those cashless to seeing or for solutions them virtually as quick if to And the casinos and a I think review I give they're regulatory forward includes gaming yes, I think the on feel we Brad is willing to receptiveness had commercial in possible our go laboratories floor. travel receptiveness their allow all are the -- trying gaming paper from in helpful before regulators. this every jurisdiction the take be us from to think contactless into Mike. We've We're them that as And along as allowing safe. systems

that I'm today. heartened very we're environment regulatory So by seeing the

Brad Boyer

in if is or going other of then whether impaired know operator I answer balance on to Mike capacity think lastly, we in sheets little it's don't to how landscape the guys knows this on the here that's to the Okay. capital to Dean all limitations I budgets fact this side who change the next And normal strategically the but is of, this are you the But that here appreciate or sort bit the facing you. win sort have Randy, how be how some you guys Thanks. slot line, And me. long, new or over want of, but here a near-term what we're that positioning the going near-term? in do business all for certainly

Randy Taylor

Thanks, since over it line Dean he him so can and it is Dean Look Brad. and on there to the turn reply. I'll directed

Dean Ehrlich

a others when end coming try I new well-poised in this what's in versus we're going going preparation so for amazing It's on about in continue with to to launched have took forth. to are turn to has Okay. we close limiting Thanks we as it is standpoint the the some best invest we get pipeline that to our believe as the their Brad business question. not to the that that focus make machines but available. players come day, so the tremendous and the we very our of provide pandemic that's have not different. also the from only the that think is from At best to And are been as very situations respective of greatest approved, can sense make that product. couple sure is been they're we continue continue a their through ready hardware of major on off the the product product before have that operate makes place the amount factors product from that and what with customers and ROI is usual to standpoint, to sure form and XXXX. them on bottom-line key in it it's only on out to the and to success And here of

with going still poised is product we're out the component. an trajectory important be the to of have, coming And me, to I we current that well very think, this. So

Randy Taylor

premium being And as look, I I'll things couple Randy. that's that And Brad into is is at our mean, XXXX. XX% my XXXX this tack remarks, our a product. in revenue. of -- footprint of we our have just sales now opening again strong end And big being, strong on talk been portion what had the really about not of of and a

I the premium shown So well. think I as I positioned well of team, stay going what come the we Games we floor Dean, that products, have are very is And we're the produced, that, doing out going will because best-performing think be this, we've just to those that on really or forward think under think products.

where will know shake positioned. don't we're think again, I out, So, everything well but

Brad Boyer

here. for back Thanks best getting guys on luck and color of things up Perfect. the ground the the

Randy Taylor

Thanks Brad.

Bill Pfund

Thanks Brad.

Brad Boyer

Thank Pfund. Mr. Yes. you Perfect.

Operator

Next hear we'll Jefferies. from David Katz with

David Katz

everyone. Hi. evening, Good

Randy Taylor

Hi, David.

David Katz

that and and so Hi. because effectively the of would the -- cost really all contemplated anyway at out I us their for I or admit talk wanted what sort FinTech months puts equalizer shut the just be shut quarter period least event ability the I takes for not it Can that time different in down. focus I couple pieces of me think this earn of will to and please. down? looks of is of the that mostly what an is through start to quarter had since the you segment, of business second does, like, And a that it as to this for are on first helpful

Randy Taylor

addressing Hi, David, your sure I'm Make this question. is Randy.

start we FinTech business, business. from revenue great casinos think I as to piece immediately that, open the start that transacting earning on business of the up, is

on to generate add is board, we did shutdown, we revenue. have the it's payroll we is place, when back remarks, that what standpoint. that at said about But a as as but business major that, come in -- the the going during shut on the and we're -- casinos people don't Now loyalty had on one, from even on cost And bring the that, talked we as a to transactions furlough down. we've day the in have were we we I interest look, board, we start product that then take casinos will

addressing want I your question appropriately. make to So sure I'm

David Katz

the periods The understanding -- that are ability all. is from revenue than just simpler are the Only things down shut any perspective I earn time the And, during asking? question probably of costs words, to that for you self-evident that other shut the its entirely revenue are In it's zero think. any at day down. every obviously, become does suppose is what I'm

Randy Taylor

Okay. some would think yes, yes, businesses would other you Well, I we been were a connected would it's you There I'll in than although, would transacting have still may and relatively station say, was that David. small give that casino to locations. we be -- say, some a gas some have business that just still examples. I had very

would or access shut no transactions. kiosks, cash But looked reopen. we're once are I because casinos selling casinos have we the the there's to So, down, check say at again, want -- still

And so Darren, were cash ahead. as But basically loyalty. go zero, exactly as access close down right a you're goes from correct. buying Yes, standpoint, well kiosks they revenue to within

You got it.

Darren Simmons

Yeah.

they want that customers just we're they agreements, were to Because and think supporting add mean support which reopen obviously when so support to still business that. and that I billing all expect still Randy reopen. I paying. our they I to think maintenance we were continue software

there. did we have revenues So some

David Katz

now to what then Okay. or found about were kind you of visibility on have gaming side, going revisited an for on backlog into before be sale that wanted portions opening that things to order some did resurrected ask that I And have things could had start conversations down? the out placements we Appreciate we any of you have again? day backlog shutting the that. And or what

Michael Rumbolz

maybe to he's the Again, into the I'll it closer little going end of Dean, over was a backlog Sure. quarter. to what probably because turn the

impact. know and it important that big and Dean March to to us XX you days a are go of last those is turn March But I'll there. from had As over --

Dean Ehrlich

on before And that was news on we hasn't happening. lot news the robust the good a or what's been of predicates as into David, on pretty and it's look of And backlog happened there the Hey, turn fortified. customers the cancellations lot started to the levels is basically how numbers exact been so And is going -- our without quick great that it this postponement. seeing people a backlog didn't a is returns. -- all as back is, that

hasn't be So, has cancellations you operating of pretty where be -- think there'll of has direction forth, been case. and surprisingly so would products would in new it not kind me, been the a terms been to To truly point personally the other a surprising.

on there's the answered from on their to bringing comfortable our So property. to shows we're I before what that time well, at customer encouraged question it Then very towards been great demand how it it that and is get Brad's a the side. that, products have is performed extraordinary an

as It's given direct So, number answer of if your a direct they I they aside want backlog them just know well. comfortable out I'm numbers when, that, matter but not not those still. the if. what's

Randy come if it's but it do that's on not me. from to So, going to him, wants

So…

Randy Taylor

Yeah.

we I think, look, we'll those. And think still we and in David immediately. optimistic he is, had that about answered backlog I had would, fulfill which a way it you still I ultimately there, it the orders we're out shut the very strong as down whether

David Katz

Okay.

Mike Rumbolz

see full we a premium and to performance. of have We'd March, seen units we've going Okay. also yet a – our units quarter those into in increase large seen

we're well So come that, out as as anticipating of we this.

David Katz

Yeah. Excuse that, in install base. Thank you very much.

Randy Taylor

David. Thanks,

Operator

Next, SunTrust. with we'll Barry Jonas hear from

Barry Jonas

versus realistic with of think more some part on – moving is you to that floors land-based at outside virtual a see in they the all around now guess you discussions remote where wanted your casinos start say Hey, guys. cashless could I what maybe traditional FinTech second future? the focus can And is, support FinTech on I of business to the is the cash do casino gaming, point mix cashless gaming fixed?

Mike Rumbolz

start Darren hear question. see I'll Hey, that Barry or you to Okay. from good let you. And

Darren Simmons

been of what days So of transformation is would that you on cost-effective early digital still talked I ticket. What has low real versus your approach quick cashless, customers' say we've would lift simple of about to mix a is, first released help I cashless. help think question the anticipate it's I way products what that's cash flows And would our say them our with casino sort quicker. on operations. cash go achieve of kind And

require you experience, longer about talk does more the digital if that's think Now, some that to term want investment. I

app mobile Now, that around to allows customers for complete accounts player their and through card we pivoted these link their our a have their offering access, is do of ticket it wallet the to add all operators something a cashless. to provide little of to it download a bit and transactions be and with and basically patrons, kiosks their profiles, and it, simple, with our perform their mobilely our easy as strategy to part

be. it's new around a early growth you've of and months. of what on are ticket mature early early the Mike's and think the But order more have. So with what that helping longer-term on which we'll some think what kind some sort of in the to that months, within transformational points we've low still customers, But There and retail Other with industries low working to it's it's tell think, are think I wagering as the sort achieve I with this in but travel because are. going the that seen accounts, process. transactions data operators will and our the days we we're part coming been a but of – that. see systems world in to tech, journeys integrations and of world are larger some quick over We've few of, got I I past – to kind of

second that guess Yeah, around, patrons to online. be versus be not to that offer. an Your I land-based amenities that land-based the would going say question I and love replace properties I online. could all expect that there you mean, to you're increase in probably I would able say with But experience

operators. different in I of a the see So in offerings and different states, you'll think as with those mix increase that terms

Barry Jonas

Darren. Sorry,

what was strategy of I saying high and perspective? was some a sort second somewhat offerings those to see the FinTech could from change think more, its casino I of Everi address question we

Darren Simmons

standpoint. do provide Sure, from an We pure online absolutely. to have experience ability yes. to digital mobile able the be that Yes, and

that. we see with So Yes, absolutely, growth

Barry Jonas

more for this the talked the a few And and need past the Mike. the perspective maybe on In together. be not Games over at FinTech your change all? you've about events past Does business, Great. then necessarily months having to

Mike Rumbolz

together it's our next proving They I with a something able tell to I've is need don't now. on for places I question, deal a a pandemic said casino different initially kiosks in our you business that's And matter anything able case, games if complementary for think, going ultimately, their floor. to whether another being the their smartphones are two our know is FinTech respect that's And to floor. it changed Barry. my in to but highly of over long to continue directly the they vendors time and years. Now at that the machines and of on our opinion I coalescing year to this that – of be our this that's and can with be. has it's great enabled And Thanks. address to to be multitude one have occur a casinos a by

Barry Jonas

so Great. Thank guys. much, you

Mike Rumbolz

Barry. Thanks,

Operator

James. with hear John We'll from now Davis Raymond

John Davis

we Hey, kind the thanks. if dig there. guys. in commentary a that on opened bit wondered, Good the can of pre-COVID. versus Appreciate afternoon, of the have the casinos maybe trend But little

I of you we today? properties a just Maybe about little like, look where seen are and it a couple bit talk for of what kind weekend of couple week that as a start opening we open off opening weeks has maybe trail been or opening still are Have think a have to of early? where of couple it first of over were, weeks, the Just volumes percentage that yet trended And how kind weekend? today? what was it's pre-COVID realizing what now.

Randy Taylor

the are games, he revenues it again, or said is than what Mike a they are that equal our seeing have our have – is a were early right pre-COVID. Games but where Look, opened John. either we're that FinTech we're that to lease early this sometimes casinos seeing this and said think, better Yes, in or that I now

floor. – issue We having may one out supply on even same we're the example still of that demand I we revenue give spaced all have distancing, think pent-up of may they there. off the turn in an customers. just though our or games type think there's units the some have there of games we a think Now, I'll that of But portion a even We're with our there's of were larger there. seeing social they because at their

run may Even I cash the we is letting show you it period though to of period consistent floor the many right pre-COVID. Darren cash it's the continues some restrictions on try door, get now, seeing cash similar. either the – how they reports people what to same holidays with at And they're match think the of we floor. year On at the John look in is or we're because of that can same because differences the side, access with have prior

Now, I just alternative, be come And because going be about. because to how now the want it's more – guess, guess, it's long that right think know than talking long I don't were encouraging caution last. but to I will that we term it's think there'll just down we we there'll more better still we supply very I what think,

and volume cash how just both from far, our transactions. standpoint so the our of how products So, are performing, of at encouraged FinTech Games access very

John Davis

weekend fairly early, shoots been, it's an I Okay. but But it consistent. -- immediately know up off. you been opening haven't where It's a it's seen lot like falls and

Mike Rumbolz

though, it John. Memorial steady. been point But would mean, There's positions, strong that demand speaks XX% of did that times. in the gaming curve kind only well normal people were to continuing. think revenue of the fairly no your a that it. I about I to mean, I And No. to been yeah, produce steady, It's it's was they strong the doubt Day -- with John fact obviously weekend. fairly be able

Randy Taylor

compare Yeah. was some or would exclusive that compared say And as Day it a holiday. a to either I it cases -- of to weekend year we period seven-day we just John, prior Memorial in a have

we still our and again, can we and seeing -- daily taking as So that it we unit our pass what can. And volumes that above up per out that, slightly win is some line we're best to more and try was. it

John Davis

side, just down different to shut have of floor or some of would machines it the down you Okay. kind kind your down that less shut to average. commentary of of caused like or of the for does to assume of casino know any down XX% half of have are do they of, now of on, that if would machines the given on XX% have like the performance? on look you a idea ballpark shut your And then, machines distancing? of to that if What gaming units, information only, social they XX% speak specifically were your casino were because I I their sounds properties if -- don't right if kind your of machines stats than and kind the kind shut performance you? there

Randy Taylor

look, of ours had It location across. again same per wasn't to I equal was so to or we've that daily But, still so. shutdown. unit. portion or on XX% data the or a been where based get XX% a I at have, units come remained, XX% maybe average win the but we And limited there. that Yeah. And let's pick that a on number we didn't trying we were

bit there right? clearly be is that casino lot little better, on, games, And up with our expectation premium again keeping the ours is dark, I that also we're a are which really are will those units are us. it may older, the And have. clearly we do probably think to staying helping of that maybe machines units that has but the premium performing So they a

it's that's again, early, very what we've So but seen.

Mike Rumbolz

going producing think head, better, while those nail operator. are about John. It's the they darken hit well. I or the aren't lit, all to else's as And performance machines you machines they're If stay on machines our somebody want performing that the for to

John Davis

then lastly, And Okay. for me...

Mike Rumbolz

itself pods, to units premium some John units lend social our configured distancing. which also -- in appropriate premium Also also of are

as as So XXX% those in well. that by respect pod with those Bulk bank or much of smoking stay And on. Suffield on. configuration they them really how footprint, helped of with will also we're our highly Week they especially or default out all keep But that's Shark if a to X,XXX well encouraging can us

John Davis

on economics flow a scanning? service? can are from are this Thanks. the kind cash little flows would are to And provide me. from not current close to dead any the technology Or but else you, we business? regulatory who last Mike, concerned, in in different to this how a close we, remiss being came for on angle. be but only standpoint? at And think cash I your bit just talent standpoint, point actually technology be I'd that commentary a different the maybe horse a regulatory able game a or how of, to standpoint implement then be cash taking and access here, wise, similar I'm one then side how of on And finally, Okay. not touch less cash to access

Mike Rumbolz

at floors cashless I or on I'm decide or QuickTicket for to infections cash. Look, efficiencies in this concerns require customers turn Darren. cashless being Well, of that in going operations, over touch looking don't there to ever the our between touching power North you the with aspect but our had they I'll our now that give wallet that or the be customers' to accounts, to that anyone digital germs not -- transaction closure, dance not understand first the the us to answer QuickTicket today so bit to the the America. behind going around a talking product But tied casinos third of some of in But well. to does the we're go also quarter to of during you may John, I'll say as already if you'll close addressing QuickTicket And been have wants or leave your digital wallet. expressed out customers we've on product both I'm into their economics had or and whatever. that he probably end of would -- in what bacteria comes to about There's a an say, cash. And we let And it’s or up I much Because iteration that it. is terms we wanted. a QuickTicket will the of as Darren today. that as and I more digital QuickTicket yeah, when about Darren neighborhood, think core with But and it of

that? you Darren So to some of address want

Darren Simmons

what's around of customers in I to mean Yeah, have have QuickTicket, implementations that increase already We've Mike's I doors QuickTicket. that that the current opened transaction seen is great point the that type. think actually

in how So more an of to as play. people selecting are getting funds they're option terms that their

good about flow transaction today. that they easy So familiar using unhanded. are low It's and tech. simple, infrastructure a cash It's again it's technology using they feel and with an

think thinking to I mobile more you So was maybe thinking going around question and more your pure from be cash mobile down a game. and direct may

customers we've again to little not also those but more on journey into working and only systems and extending gaming floor again more And think some that integrations are areas. the other been parties with -- that's retail third with involved. other transformational I a a

a of, regulatory to to any pivoted that now operators just and wallet to completed again where integration reduce little go whole that somebody a transactions concerns guess the digital doesn't of sort have that cage have application facilitate can implementing. bit protocol a provide that support consume mobile the social our -- new we again are interaction having I to doesn't these, we to they simple with approach so And or

we look can that try have --look do what now to we at facilitate we So just this.

systems a implications. Those other do to to supporting especially and the we're you want very customers. they actually these the providers we think a that little with require Mike's to But wagering account are fast solutions longer a just operator like point, third-party bit purely track intent, implement with working some And those have little and integrated pull -- regulatory compatible are to other look pull I when little system and regulators to they're a providers those with and But whatnot. intent, work. and products be they're because to And able trying and of more these they do because integrating those complementary have are funding wallet longer those.

of terms days three So these I of in sort see of couple the early quarters probably think in see of term earnest I yet, start or next think point, a a would And more it's been out. what but a kind may would to five-year Mike's in have we investment get from I to rolled operators.

John Davis

And cash of Are my market kind access this is of knowledge of product? offer first have Okay. Thanks. transmitter on there or to don't competitors your here. similar be to could side ability, working any advantage But your money competitors I chance on license. to the any think the the so, to that

Mike Rumbolz

John. Yes,

Darren Simmons

few a Yes, comments.

of that back beauty guess Sorry, within we is your is based we of infrastructure solutions that I them. it we all And really was the what the got have provide today. are offering customer I a from existing

those this. and settlement all responsible the levered provide we in AML, all reporting, funding KYC, So, we support today, that provide the all of is gaming all the all that

patron of then with all us So they that from their being it's using sort to support because And able standpoint, for the staff, you're an leveraging the be a have existing have service again, with low of a relationship lift existing operator they're tools consume this their provider. to kind own business. that they a

because, both adopt need teams And ability it again, it. to our adopt patrons their so the to get I and on with to needs sides, operator the adoption think

place in position deliver in good we're to be to really really, a a to So this. be able

John Davis

for color Okay. Thanks the all guys.

Mike Rumbolz

Thanks, John.

Operator

Macquarie Beynon Chad has with next our question.

Chad Beynon

for taking Good my Thanks to afternoon. well. are you Good guys see questions.

Mike Rumbolz

Chad. Hi,

Chad Beynon

I helpful, Mark, on free your XQ Randy cash both positive financial model noted response, know which was you and flow.

normal eliminated recover CapEx, flow about, medium-term near-term in CapEx Or picture addressed that's as guided which something back years But it in ask focus piece assume to still I nobody couple your you cash Does noted, bigger you’ve make you'll casinos here, with debt So then and the firstly $XXX in that that what CapEx that I on the raise that know obviously following over missing quarter, that's bringing to guess, should the after spent sense? that wanted average reopened? of March. third deleveraging, you've and guess, on million we positive you've non-essential Thanks. assumes, CapEx. back is a past free things a below the guess, I and I has I that and address

Mark Labay

and free of tried the said, positive expense let of accumulating positive. EBITDA that point be numbers R&D we not I was on QX was we just suspect how the with cash probably so cash hopefully I this QX million with we're $XX me my where That's Yes. flow ops side. at works. really what to I And gaming very cost and total this going Hey, will heard ramp-up are you. the framed think, terms Chad, positive I then we to I $XX spending positive. be and free of cash just to what flow flow out revenue EBITDA we will were -- you QX my expenses. correct million clear OpEx again, and are, that's be convey the in altogether that's of on -- first

free flow up at we positive cash that think I point. end being not

is, we have lot great the your the we CapEx. question thing Now, core control is spend of goes. to of and in The a your optionality how spend which

of And our and have that. how we unit I pipeline the million spent return our this. really the still growth coming to right of in units. think customers on some of the premium fill that, kind out needs, CapEx premium demand their as growth you're we of $XX had can So, support depending for premium But we demand for units the up some unit pump nice we certainly on QX

in to deploy of capital that and smart So, to relative manage our we'll casino the make point. CapEx where that some kind at customers' we choices numbers operations

now but to think little answer more it's shake where right to no, even So, $XXX million out. your specifically, see early a still to $XXX its question million, we I don't

at probably goes where be $XX as there. of really if million, more at reduced looking QX least think one-third a think equipment not I how guide we just you'll depending customer of on I flow were on the

Chad Beynon

I Perfect. for you and My your are a for clarifying products. is CFOs who FinTech for hypothetical, in Okay. that. purchasing Thank guess thanks your question operator slots second

this hopefully higher XXXX? revenues partners. Or the we're for of know But as year, So, all nominal managers a to and the these expecting I you've there's get when focused slot move light, be their certainly up the kiosk on I and order? in back extremely of Do some CFOs efficiencies everybody. half think actually the back slots a replenishing for second stack the that budgets into come and be budget potentially lot the just you think about kiosks drive business, FinTech could into could think, your quarter back which CapEx purchases do you actually they'll in talked for in pushed selling

Randy Taylor

one throw is other there. I'll Randy. out item this Chad,

the think to marketing of we're on I I the play what thing interesting that loyalty the think is on really into our kiosk kind usually focusing falls budget.

will actually extra who's right kind to they able then at we'll to be buy make in allows our going been without on. and can get as customers get least experience they there's so, -- want and has much dollars look that they and as And club are contactless to whatever kiosk some it see enrollment been which get in to to our going which that them can, here there, sure, think of I their promotions is players card booth would means casinos

they're that and and the indication should continue they again, of ticket in more during cycle other pretty this as player what we kiosk integrated refresh them any of fully what they kiosks, the Because we whole say. quick casino have of modules shutdown have feel level? again, our a I'll still we Hard getting in amount interested still so some installing So, -- loyalty that our happened if old were -- and were so a the kiosk. to even shutdown and with believe before just we out wants selling are we integrated our and to efficient, standard at during charity is want and pandemic, to felt that to kiosk buying talked if those reduce the things and say be comfortable And somewhat there. can want fully

payment them that Don't know, to Don't to many? do as maybe know. there's Will CapEx they're buy to have is my is spend it they than want a that year? guess make they -- a will Now, still want they're buy do to period not think we extended terms, some it push them going or over to just it of next all. this year more try but longer it to extended going is time they

Chad Beynon

guys. sense. Best Make luck. Randy. Thanks, it Appreciate of

Randy Taylor

Yes. Chad. Thanks,

Operator

last Chinchilla Deutsche with Ricardo Bank. Our from question come will

Ricardo Chinchilla

Quick the for Hey, guys. question. Thanks one taking for me.

us be installed you some stable? installed base, end In Do helpful? to be are they guys Could might the remind will think of the please terms now mean, operators currently of you get placement reducing it base will of your the of that be guys the some there's is year? you that you about installed thinking the protected under how And into much fees? do your shrink? Do trouble, guys base color of largely of always I it how the versus Any placements.

Randy Taylor

I still covers our fee correct, think Mark Sure. This And but machines. -- again. is can or our placement XXXX-plus Randy, Dean

So it's somewhere that neighborhood. in

So to year? there. we'll Look hard very It's will a if where right? product it's and had a continues not up I the premium still I our end math impress pipeline one-third think I'm our to end the doing -- demand And -- then quite say our of I very right we good at good about for units. customers think the and

is we expectation hopefully that flat or something out slightly least we'll -- somehow hopefully my But me asking be up. there. you're if squeeze So at of

Mike Rumbolz

witnessed and last I well, mean casinos the previous are previous more in since they they by casinos money perform is – our one that for Mike. is participation machine are times is participation than for that themselves making are the that This inclined on first things and this can hard pandemic with unit me, hopefully well. replacing previous we've units floor pandemic, recessions to extremely bringing for is look excuse of that a make their that

of gives And we that games producing are how and me for will products not our kind they even perhaps perform so them. and in casino-owned on see well at great that look place operators their revenue of that putting hope premium that consider them floors

Mark Labay

Mark. is this Ricardo, And

one. clarify under of Oklahoma. We about placement Randy's X,XXX had little Just to placement now related fees to a bit growth actually of in under in the Oklahoma that one fees units plus covered are

Ricardo Chinchilla

Thank you. Perfect. just... And

Mike Rumbolz

that one well field the thing we look other removals to in in at you would be if have take coming out I some. out placements of a would say -- our comparison still last that coming color. -- are backlog, for one Is that everything from

about very look start up. So as out if are at you as you this marathon coming well-positioned a block talk we getting of casinos the out the of block

Obviously about, our we which not from else. good current very only take able to feel to opportunity feel predicated potentially footprint somebody product an about is. performance we So what great hold some having even share being --

Ricardo Chinchilla

I it. Great. That's color. great appreciate

terms how cadence, the in for on your your cadence payment north to your opening of XX% currently or XXX%? both to just of like the would end any the side? much the of be opening current expect side the helpful? you have be businesses of In like month is operations Or guys the of particular in participation portfolio online by And an and idea

Darren Simmons

we but fairly open. market -- FinTech there share early, Mike the about a -- about, of I'd have I there's side had we So, -- now it's have right And on would give FinTech there. side market the very good as look some again you talked casinos XX% on the say

right So, our about XX% of and we are -- are now up customers operate.

that footprint tribal Now, a who because may which they we've there may they just more in. good of be are be got

on up game side, So, on in we're little and we've because a the again, that it's on set FinTech smaller the gives this a the set of an -- a you it's side, is of our the but they're operating. side, idea customer customers different on of got And a that smaller lot casinos. customers, customer

gains right. that are locations those -- saying don't We know that again of that if games some So, XX% at the customers XXX-plus basically customers customer. at have of open. I'm and we're we we are open, -- of our XXX-plus in. that about our XX% I have But about we're in where the XXX locations

both FinTech XX% would we're games. again, kind I of So, range in help? Does that say that in and

Ricardo Chinchilla

helpful. one. Yes, that's can last If squeeze one very I

or related that believe you of could to going XXXX guys some do that next for you Or Any You to delayed guys work strong. out earn-out is I possibility that that? like have way delay payment an your on one feel gets acquisitions be to year.

that earn-out little have a there's any weak recover? gaming We if making is will just as bit does not even we payment it issue

Mark Labay

it's the here. take question can this I'll Ricardo, one Randy in well. Mark on as and feed color some

due of all performs earn-out reflective does we to been of to business of worth the The has portion of March would do of in anyways. XXXX have that would left and the of of performing price XXXX, expect Again, related that's pointed in you in loyalty Atrient be of and the business volume payment we the -- business earn-out final March from that $XX is very well. be the an payments. acquisition As be business; volume assets purchase that and out million that

expect that owe we in full would payments due will pay the amount to when March. under we we those those and would in expect So amounts March

improve. expect volume that late you enough and on only quarter QX, returned should a business positive us has position clearly cash of level as into move We flow sufficient fourth the free that by to keep

Ricardo Chinchilla

appreciate so color. you really I Thank the much. all Great.

Mark Labay

Thank you.

Operator

George from question a Craig-Hallum. with have do Sutton we And

George Sutton

make I already I dropped that's you. don't sure Thank something got And off. to I want ask been asked.

Randy following ask will I So, the question.

could to now? an be I'm when Ferrari up the from you're the that Ferrari the February back driving And you throttle a open plan Given were driving in what the on road, lender? month curious, with I'm you the pick do quarter curious car if wide you specific or to open

Randy Taylor

I'm that. for me. going Bill to blame Killing

that realize You because...

George Sutton

know they're to came the up Ferrari. if sponsoring not Well, with I'd you how call. sure love I'm

Randy Taylor

your no. drive it's -- No, Ferrari do would a right to I I go -- Look have now? just I What you question. say know don't so not just know I it's car, car it's I as a don't do faster answer there. early. but how

and and two like much products just we expect what being see car performing open. before to were feel going on very how be those we're open. our months still the transactions were we be put what going Fintech, going. to were we're determined. loyalty positioned they to We how say and performing trying what to well that, their But we very to well we level first be the How casinos much, I of -- George product want casinos So activity in road we the very think to But is see we and decide the want well come the fast look have just we're up. on up we're game activity? That's as we're well side, to is side performing in

are just in we should So level a be. normal I casinos at like great position that whatever in it. up car we What have when the to and back will be and good think operating about a is, position we feel were

George Sutton

Jeep now, driving road you're but rugged forward get like guys. to to better that. a we Sounds Thanks on and is going it right a look

Randy Taylor

Thanks.

Operator

Thank this you Mr. there for to further your questions. things at If I closing remarks. turn for Taylor would back no to are like questions time,

Randy Taylor

like us thank everyone call. We'd to joining today on the for

Games company. beginning and expect the other quarterly We you our With we our a stronger who out updates next and further the as segments unique on the to providing side recovery in come places balance Thank look position to you. forward of efficient us wasn't green call. gaming happen Fintech now that in pandemic between more a industry, and shoots

Mike Rumbolz

everyone. Thanks

Operator

participation. your Thank you today's That conference. for does conclude

disconnect. now may You

Everi (EVRI) 2 Jun 202020 Q1 Earnings call transcript