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Edited Transcript of EVRI earnings conference call or presentation 7-May-19 9:00pm GMT

Q1 2019 Everi Holdings Inc Earnings Call

LAS VEGAS May 8, 2019 (Thomson StreetEvents) -- Edited Transcript of Everi Holdings Inc earnings conference call or presentation Tuesday, May 7, 2019 at 9:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Darren D. A. Simmons

Everi Holdings Inc. - Executive VP & FinTech Business Leader

* Dean A. Ehrlich

Everi Holdings Inc. - Executive VP & Games Business Leader

* Mark F. Labay

Everi Holdings Inc. - SVP of Strategic Development

* Michael David Rumbolz

Everi Holdings Inc. - President, CEO & Director

* Randy L. Taylor

Everi Holdings Inc. - Executive VP & CFO

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Conference Call Participants

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* Barry Jonathan Jonas

SunTrust Robinson Humphrey, Inc., Research Division - Research Analyst

* Brad J. Boyer

Stifel, Nicolaus & Company, Incorporated, Research Division - Analyst

* Brian Thomas McGill

Telsey Advisory Group LLC - MD & Senior Research Analyst

* David Brian Katz

Jefferies LLC, Research Division - MD and Senior Equity Analyst of Gaming, Lodging & Leisure

* John Davis

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Presentation

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Operator [1]

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Good day, and welcome to the Everi Holdings, Incorporated First Quarter 2019 Earnings Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mark Labay, Senior Vice President, Finance and Investor Relations. Please go ahead, sir.

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Mark F. Labay, Everi Holdings Inc. - SVP of Strategic Development [2]

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Thank you, and welcome to the call. Joining me today are Mike Rumbolz, our President and CEO; Randy Taylor, our CFO; Dean Ehrlich, our Games Business Leader; Darren Simmons, our FinTech business leader; and Harper Ko, our Chief Legal Officer and General Counsel.

Before we begin, I'd like to remind everyone that the safe harbor disclaimer in our public filings covers this call and our webcast. Some of the comments to be made today during this call contain forward-looking statements and assumptions which are subject to risks and uncertainties, including but not limited to those contained in our SEC filings. All of these filings are posted within the Investor Relations section of our corporate website.

These events could cause actual results to differ materially from those described in our forward-looking statements, and they should not be considered an indication of future performance. We do not intend and assume no obligation to update any forward-looking statements. You are cautioned not to place undue reliance on forward-looking statements which speak only as of today.

This call may also refer to certain non-GAAP measures such as adjusted EBITDA, adjusted EBITDA margin and free cash flow. We reference these non-GAAP measures because management uses them in part to manage the business and to enhance investor understanding of the underlying trends in our business. These measures also provide better comparability between periods in different years.

A full reconciliation of the non-GAAP measures of adjusted EBITDA and free cash flow to their GAAP results is provided in our earnings release and related 8-K, both of which have been filed with the SEC and are available on our corporate website at Everi.com within the section captioned, Investors.

On this call we may also reference adjusted EBITDA margin for the individual business segments. These amounts are computed as the reported segment adjusted EBITDA divided by the segment revenue. Management believes this measure is meaningful to investors in evaluating the performance of the company's segments.

Finally, this call is being webcast. A link to the webcast has been included within the Investor Relations section of our corporate website, and a replay of the call will be archived.

With that, I'm pleased to introduce our President and Chief Executive officer, Mike Rumbolz.

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Michael David Rumbolz, Everi Holdings Inc. - President, CEO & Director [3]

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Thanks, Mark. Good afternoon, everyone, and thank you for joining us.

This afternoon, we reported our 11th consecutive quarter of year-over-year revenue and adjusted EBITDA growth and our fifth consecutive quarter of profitability. First quarter revenue increased 11.5% to a record $123.8 million, and adjusted EBITDA rose 5.7% to a record $61.3 million.

First quarter net income was $5.9 million, or $0.08 per diluted share.

Both FinTech revenue and adjusted EBITDA were quarterly records and our Games division also reported a quarterly record for revenue. This included record gaming operations revenue of $44.3 million and our second highest ever equipment sales revenue.

Randy will review the financial results and details on certain performance metrics in just a few moments, but first I'd like to focus on the key drivers of our business.

We announced the acquisition of certain player loyalty technology and contracts from Atrient late in the first quarter. Given the timing of this acquisition, the initial revenue and adjusted EBITDA contributions from this new line of business were minimal. This means that nearly all of our first-quarter growth, the growth that we've experienced over the last few years, and a major portion of the growth the company expects to achieve this year will be organic in nature. This growth is built on the purposeful investments that we've made to improve and expand our games and fintech product offerings.

Our recent successes and our prospects for continued growth will be even more evident as I review the first quarter and other recent highlights from the Games and FinTech segments.

In our Games business, adjusted EBITDA of $33.1 million reflects continued growth across the majority of our key performance indicators. We sold a record 1,259 games in the first quarter. This quarter was our fourth consecutive quarterly record for unit sales and the sixth consecutive quarter of sequential growth.

More than 80% of our first quarter sales were comprised of our newest for sale cabinet, the Empire MPX, or E43, together with our always-popular Player Classic mechanical reel games. Now, our mechanical reel games are industry-leading and we continue to add new innovations to this product to further distinguish it from the competitive set. The market strength of our Player Classic cabinet is obvious as we continue to receive significant numbers of orders for new games in the high denomination, mechanical-reel segment. We are continuing our robust new content strategy to keep the progress moving forward for these cabinets.

Equipment sales were strong in the first quarter but our progress in gaming operations is even more noteworthy. I already highlighted that gaming operations revenue hit a quarterly record in the first quarter. We achieved this despite the anticipated year-over-year and sequential quarterly decline in our installed base. The key driver for our record gaming operations revenue was the significant increase in daily win per unit, which rose nearly 12% to $31.76.

The vast majority of the daily win per unit improvement was the result of the success that we're generating from investments in our game content and cabinets. The $3.36 gain in daily win per unit to reach $31.76 represents our highest-ever quarterly daily win-per-unit total as well as our highest-ever year-over-year increase on both a percentage and an absolute dollar basis.

While premium units accounted for a majority of this improvement, we still saw win-per-unit growth across our entire installed base. Premium units at March 31 comprised 21.5% of our total installed base compared to 19.8% just a year ago and only 14.5% two years ago.

The highest performing units in the premium segment are from our wide area progressive units. These games are also the fastest-growing component of our premium unit installed base. At March 31 we had an installed base of 723 wide-area progressive units, which is up 119 units, or 20%, from December 2018 and up 80% on a year-over-year basis.

WAP units now comprise a little more than 5% of our total installed base, and this compares to a little less than 3% a year ago and essentially nothing two years ago.

Our Renegade 3600 has been in casinos now for over six months. The average per-unit performance for Diamond Blaze, the first title that we've introduced on this platform, is still holding strong. Follow-up titles, Smokin' Hot Stuff Extra Jackpots and Snoop Dogg Presents the Joker's Wild, will be introduced in the second half of the year.

Another premium game that continues to receive strong positive customer and patron feedback is Smokin' Hot Stuff Wicked Wheel. Since its introduction on our new E5527 cabinet, Smokin' Hot Stuff Wicked Wheel has been a consistently-strong performer. Over the past six months, we have installed 375 Smokin' Hot Stuff Wicked Wheel units and we've seen the game's average win per unit sustain a rate of 3 times the host casino's slot floor average. As a result of this strong performance, we have a large installation backlog for this game.

The recent introduction of the Empire Arena platform is our best-ever new product launch. Discovery Shark Week is our first series of game themes featuring four popular, standard-base video games that include bonus features with actual footage from Discovery Channel Shark Week. These games are featured in a linked bank, or pod, of E5527 cabinets and include bonus play that is displayed across the entire bank. We introduced Empire Arena with Shark Week titles in the first quarter and we now have over 125 units installed. The game performance of these units is exceeding the best performing games in our portfolio.

With Smokin' Hot Stuff Wicked Wheel and the Shark Week titles both featured in different configurations on our E5527 cabinet, I think it's fair to say that this cabinet is quickly becoming a casino floor favorite. We've had great success with our new platform and game introductions, considering gaming operations' already strong margins that we've told you about, and of course there is more yet to come. Clearly, the investments that we've made and continue to make in our new product development are creating value for our business.

The final part of our game segment that I want to touch on is our newest business, interactive. Our new remote game server, or RGS, with six initial game themes, is now live in New Jersey for real-money gaming. Games offered through our RGS also continue to gain traction in the social gaming space, with continued popularity for our Super Jackpot Slots and our High Rollin' Vegas Social Casinos.

We've just introduced a new game, Cash Money, into the social space. This new game theme was recently introduced into land-based casino floors on our Core HDX cabinet. Early results are showing great success in the performance of this game in both of those channels.

We're being very measured in how we expand this business and remain focused on keeping our costs aligned with our financial expectations. To date, the interactive operating results are in line with the plan that we previously discussed. The initial results that we're achieving in both acquiring and retaining players along with the average revenue per daily active user reflect the value that our growing library of content can deliver. We still expect positive interactive adjusted EBITDA for 2019.

Turning now to our FinTech business, the 2019 first quarter was a record ninth consecutive quarter in which we generated year-over-year revenue and adjusted EBITDA growth. Transaction volumes and dollars processed continue to increase and we continue to grow our market share. We've been successful in this by leveraging our innovation, integrated solutions, customer service and broad scale to offer customers great value and reliability.

First quarter FinTech adjusted EBITDA of $28.2 million was up 7.2% and reflected growth across the majority of our key performance indicators. Total face amount processed and the number of transactions were both up for the 18th consecutive quarter, and reflect growth in same-store locations. Over the last six months we have renewed and extended cash access agreements with four of our five largest cash access customers for average terms of almost 4 years.

Equipment sales revenues in the quarter were up nearly 60% over the prior year quarter. On our fourth-quarter call we highlighted our belief that we are in the early stages of what we expect will be the start of a refresh cycle for our kiosk equipment. At the beginning of 2019, we estimated approximately 70% of the kiosks that we have sold to our customers are now more than three years old. If you think about the tremendous volume of self-service transactions these kiosks perform and the critical functionality that they provide on casino floors, it's crucial that these devices are well-maintained and functioning properly at all times.

We believe this high volume of transactions and interaction with patrons will require our customers to start refreshing their older units and maintain or add service agreements for these devices. FinTech revenue growth should benefit this year and for the next several years as customers replace and/or maintain these older units.

Our acquisition of a new product line related to player enrollment and loyalty also creates a new opportunity for incremental equipment sales. While it's still early in the integration of Atrient Solutions into our product portfolio, we are off to a great start. Our breadth of customer contacts has allowed us to rapidly scale up the introduction of this technology to many new customers that were not previously in Atrient's sales pipeline prior to the acquisition. Our sales team has been very active in the market and has received a very enthusiastic response from the operators as we've already secured several new agreements from our existing customers.

We're currently working through the rollout timing for these new agreements as well as for the solid pipeline of business that existed at the time of the acquisition.

Now, the final revenue line item for our FinTech segment comes from information and other services. We continue to grow and expand our kiosk maintenance revenues. Additionally, we've added new revenues from the sale of the player loyalty and enrollment software applications to our customers. Now, although it's off to a little slower start than we'd anticipated, we should also see revenue growth from our compliance solutions throughout the remainder of 2019.

In March, we provided our initial adjusted EBITDA guidance for 2019. As noted in this afternoon's press release, we are reaffirming that outlook for 2019 which includes year-over-year revenue growth and adjusted EBITDA of approximately $252 million to $255 million. Our full-year expectation for adjusted EBITDA growth reinforces our view that free cash flow generation will continue to accelerate. We remain on track to approximately double the free cash flow we generated last year and to double the 2019 free cash flow again in 2020.

As we've said in the past, the priority for us is to use this free cash flow to pay down debt. We anticipate achieving our deleveraging goals through the combination of debt paydown and consistent growth in adjusted EBITDA.

And with that, I'd like to turn the call over to Randy.

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Randy L. Taylor, Everi Holdings Inc. - Executive VP & CFO [4]

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Thank you, Mike, and good afternoon, everyone. For the first quarter of 2019 total revenues were $123.8 million, comprised of $67.5 million from Games and $56.3 million from FinTech. Games revenue increased approximately 12% year-over-year and FinTech revenue increased approximately 11% year-over-year.

Adjusted EBITDA for the first quarter of 2019 increased by $3.3 million or 5.7% to $61.3 million. Adjusted EBITDA for the Games segment was $33.1 million compared to $31.7 million a year ago, while adjusted EBITDA for the FinTech segment was $28.2 million compared to $26.3 million last year.

In our Games segment, gaming operations revenue increased $4.2 million or 10.5% year-over-year to a quarterly record $44.3 million. This includes $4.7 million from our New York Lottery operations and approximately $1 million from our interactive business which is up over $800,000 when compared to the prior-year period.

Our install base declined year-over-year from 14,124 units at March 31, 2018 to 13,644 at March 31, 2019. The decline was primarily driven by the previously-discussed sale of approximately 200 units from our install base to a customer in Indiana, and our decision to remove over 330 of the approximate 400 lower-performing units at a multi-property customer in Oklahoma. The remaining units are expected to be removed early in the second quarter 2019.

Factoring in the growth in our install base at other locations, the net quarterly sequential decline was 355 units. Offsetting the revenue impact of these unit removals and a key factor in our ability to generate record gaming operations revenue in the quarter was the nearly 12% or $3.36 rise in daily win per unit to $31.76. This was our highest-ever daily win per unit. It is important to emphasize that despite the unit count reductions experienced in the first quarter, we expect that our install base unit count will return to its general cadence of growth. Our interactive business remains on-plan to be adjusted EBITDA positive this year. We expect interactive revenue to increase sequentially throughout the year as we expand our B2B, real money and social gaming offerings and expand our direct-to-consumer social gaming platforms of Super Jackpot Slots, and High Rollin' Vegas. We expect to have further penetration of this product into real money jurisdictions in North America over the coming quarters which should drive interactive revenue growth.

Revenues from electronic game machine sales were $23.1 million for the first quarter 2019, up 14% year-over-year. Unit sales grew 18% year-over-year to a record 1,259 units. Average selling price was $17,361 in the quarter compared to $17,745 in last year's first quarter.

For 2019 we continue to expect double-digit growth in unit sales and for ASP to remain in the $17,000 range. As we've noted before, our actual unit sales growth in 2017 and 2018, and our expectations for growth this year, are outpacing the actual or expected unit sales growth rates for the industry in each of these three years. This translates into growing ship share and floor share at very high rates when compared to most other manufacturers.

Adjusted EBITDA margin for the Games segment was 49% in the first quarter of 2019 compared to 52.7% in the first quarter of 2018. The climb primarily relates to higher SG&A and R&D expenses which includes the increase in marketing and payroll costs associated with our interactive operations. The SG&A and R&D spend is more in line with the fourth quarter 2018 which is what we expected based on the investments that we have made in the Games segment throughout 2018.

For our FinTech segment the first quarter marked the 18th consecutive quarter of same-store growth in both transactions and dollars processed. Cash access services revenue increased 6.8% year-over-year. Equipment sales revenue was up 59% in the quarter, primarily from higher sales of our fully-integrated kiosks. Information services and other revenue which includes kiosk maintenance, compliance products, central credit and software sales and support from our newly-acquired player loyalty assets rose 3.7% compared to the prior year period. We continue to expect revenue growth in our FinTech business. The first quarter revenue growth exceeded our expectations as cash access services continued to benefit from the overall macro economy, market share gains and growth in same-store transactions. ES and other equipment sales were also strong, and our pipeline looks good for the remainder of the year.

As Mike mentioned, over the last six months we have renewed and extended four of our five largest customers. While these extensions secure a meaningful portion of recurring revenue, there will be slightly higher commission payments to these customers for the core cash advance services resulting in lower net cash access service revenues. This impact has been factored into our full-year guidance.

While early we remain very optimistic about the potential upside from the Atrient player loyalty solutions which we continue to integrate into our sales offerings, we are executing on the healthy level of business that was already in the pipeline at the time of the acquisition and we've helped to grow that pipeline. In just the first few weeks since we closed the acquisition, we have already signed an additional couple of million dollars in business with this revenue likely recognized over the next several quarters as we install the product.

We recognize approximately $460,000 in revenue and $255,000 in adjusted EBITDA in the first quarter related to this acquisition which closed in early March.

For our legacy FinTech operations we expect FinTech adjusted EBITDA will grow in the mid- to high-single-digits compared to 2018, with incremental upside from the acquisition adding to the segment's full-year adjusted EBITDA. We are maintaining modest expectations for the adjusted EBITDA contributions related to the acquired player loyalty assets this year, somewhere in the several-million-dollar range. This is because it is very new business for us, and we will have less than a full year of results, just slightly more than 9 months of activity for 2019. With each day our conviction grows that there is upside to this estimate and a significant opportunity for growth attributable to the player loyalty business in future years.

Adjusted EBITDA margin for the FinTech segment in the 2019 first quarter was 50% compared to 51.8% for the first quarter of 2018. This decrease primarily reflects the higher kiosk revenue sales which have a lower gross margin and an increase in SG&A and R&D expenses. The SG&A and R&D spend is more in line with the fourth quarter 2018 which is what we expected based on the investments that we've made in the FinTech segment throughout 2018.

Moving to the balance sheet, the outstanding principal of our long-term debt was $1.18 billion and we had no amounts outstanding under our revolving credit facility as of March 31, 2019. The weighted average interest on our total outstanding debt obligation at March 31st was approximately 6.1%. During the first quarter we paid down a total of $2.1 million on our term loan. In April 2019 we paid an additional $10 million down on our term loan. This payment was primarily due to the excess cash flow payment required under the agreement.

Our consolidated secured leverage ratio at quarter end was 3.2 times adjusted EBITDA compared to a maximum senior leverage of 4.75 times. As of March 31, the outstanding balance of ATM cash utilized by us from our vault cash providers was approximately $267 million.

For 2019 we expect interest expense of between $83 million and $86 million which includes interest on bulk cash of approximately $7.5 million and $3.6 million in non-cash amortization of capitalized debt issuance costs.

In the first quarter, placement fees totaled $5.3 million and other capital expenditures totaled $22.2 million. Excluding the placement fees, Games segment CapEx was $19.1 million and FinTech CapEx was $3.1 million. Games segment capital expenditures related to game and platform design was approximately $7.2 million. Gaming equipment CapEx was approximately $11.5 million. This amount includes the equipment upgrades, replacement for existing install base units, and new units placed on trial.

For the full year we expect placement fees will be approximately $17 million. As a reminder, the quarterly payments of over $5 million related to the placement fee arrangement from 2017 and in the third quarter of 2019. After that third quarter payment, we expect minimal payments or placement fees to occur for the foreseeable future.

Our estimate for total 2019 capital expenditures is approximately $107 million which now includes approximately $3 million to $5 million in CapEx related to our newly-acquired player loyalty products. Games CapEx is expected to be approximately $85 million to $88 million and FinTech CapEx is expected to be $19 million to $22 million.

This afternoon we reaffirmed our outlook for 2019 adjusted EBITDA to be in a range of $252 million to $255 million.

For modeling of shares outstanding we expect to remain profitable in each of the quarters in the full year. Therefore, diluted shares outstanding is expected to be at least 75.5 million shares. Depending on the actual average share price in the quarter, we would expect fully-diluted shares to increase slightly if our stock price increases.

We expect total depreciation and amortization expense in 2019 to be approximately $132 million to $136 million. This includes an initial estimate from our acquisition but because we have not yet completed our full purchase accounting analysis that amount could change.

We expect to record an income tax benefit of between $1 million and $2 million and we expect cash tax payments of approximately $1 million.

Finally, we continue to expect the free cash flow will almost double this year compared to the 2018 free cash flow of nearly $25 million.

With that, I will now turn it back to the operator for questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question will come from David Katz with Jefferies.

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David Brian Katz, Jefferies LLC, Research Division - MD and Senior Equity Analyst of Gaming, Lodging & Leisure [2]

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I'm going to apologize for getting on just a couple of minutes late, so I missed a couple of the prepared remarks. But where I -- staring at my model for the outlook for the remainder of the year in terms of units sold, would you mind just going back and talking about or repeating from your -- what you expect in terms of the arc of units sold, what new game concepts are coming out and when? And give us a long-term vision for what that game sales line item should look like going forward?

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Randy L. Taylor, Everi Holdings Inc. - Executive VP & CFO [3]

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Well, David, I would say first of all in the quarter, we did 1,259 units. And we don't really give full-year unit sales, we in our guidance have said they'll be in excess of the prior year. But we did say we would have I would think in excess of --

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Unidentified Company Representative, [4]

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4,513.

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Randy L. Taylor, Everi Holdings Inc. - Executive VP & CFO [5]

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Yeah. We had 4,513 last year and we'd have an increase of I thought we said -- did we give the actual increase in our projection for unit sales? I don't think we did. We just said we'd be up. So I know you want a little bit more guidance than that, but I think we had a strong quarter. We're up 18% in unit sales. We do expect to be up from last year but we really haven't given any firm number on the unit sales for the year yet.

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David Brian Katz, Jefferies LLC, Research Division - MD and Senior Equity Analyst of Gaming, Lodging & Leisure [6]

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I see. And in terms of any impact on pricing, whether that's change in mix or any new product introductions, have you made any comments about what you expect pricing to look like, ASP?

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Randy L. Taylor, Everi Holdings Inc. - Executive VP & CFO [7]

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We expect the pricing to remain in that 17,000 price range, so we don't really expect a lot of change in the ASP.

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Michael David Rumbolz, Everi Holdings Inc. - President, CEO & Director [8]

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But as you know, David, if we have turn event as a larger percentage in any given quarter, then that may change the ASP for the quarter.

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Randy L. Taylor, Everi Holdings Inc. - Executive VP & CFO [9]

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And we did have a little bit higher last quarter so that the AFP is down sequentially. But compared to last year, we're really in line.

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David Brian Katz, Jefferies LLC, Research Division - MD and Senior Equity Analyst of Gaming, Lodging & Leisure [10]

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And if I may, just in terms of the cash flow commentary which I did hear, which should proximate doubling year-over-year, can you talk about the puts and takes or events that may or may not result in that being better than a double, or just short of a double? What is still hanging out there variability-wise for that?

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Randy L. Taylor, Everi Holdings Inc. - Executive VP & CFO [11]

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So just a little extra guidance as you're kind of looking at your information. We did in the press release kind of give a range there, but I would say a couple things. You know, cash interest, we gave a range there. Right now we kind of updated that, and not really expecting any increases for the remainder of the year. We talked about the placement fees which will end in the third quarter so that approximate $5 million a quarter will be done. And then really, it's -- you know, it's CapEx that's going to drive that differential. We're going to have a little bit more with Atrient but again, it's our EBITDA guidance of 252 to 255. So between those you'll see, we've kind of given a range of 47 to 49 in the back of the -- the last page of the press release. So hopefully that gives you the information.

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David Brian Katz, Jefferies LLC, Research Division - MD and Senior Equity Analyst of Gaming, Lodging & Leisure [12]

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I did read the release, and I'm not a completely blank slate. But what I'm taking away from this is, there is a fair amount of confidence around that sort of doubling the free cash flow, and I think that's ultimately what I was getting at.

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Randy L. Taylor, Everi Holdings Inc. - Executive VP & CFO [13]

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Sorry David, I wasn't sure. I didn't know if you -- I know you're -- you've got a couple going on. I didn't mean that, I just wanted to make sure -- look, I think we have kind of laid it out there, and we feel -- we feel pretty good about it. I don't know that there's a whole lot of upside over that, but we feel pretty good about it.

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Operator [14]

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Next we'll go to Barry Jonas with SunTrust.

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Barry Jonathan Jonas, SunTrust Robinson Humphrey, Inc., Research Division - Research Analyst [15]

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Now that you're starting to get some traction in the Games business, I'm just wondering if you're seeing more success with bundling or cross-selling between Games and FinTech?

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Michael David Rumbolz, Everi Holdings Inc. - President, CEO & Director [16]

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Barry, we don't really bundle Games and FinTech together. We've had a few instances where we've been able to work with a customer that is either looking for Games product and didn't necessarily have enough CapEx available for it, where we can have them pay for it as part of their contract, the FinTech side, and vice-versa. But those have been relatively few and we've never bundled the products.

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Barry Jonathan Jonas, SunTrust Robinson Humphrey, Inc., Research Division - Research Analyst [17]

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Got it, okay. That's helpful. And I think in the opening remarks you commented about slightly higher cash access commissions coming, but if we look at cash access revenues per dollar processed in the quarter it looked like they grew for the first time in almost two years. So just curious, what drove that strength in the quarter?

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Michael David Rumbolz, Everi Holdings Inc. - President, CEO & Director [18]

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I'm not sure what you're looking at. We've continued to have increases in transactions processed and dollars to the floor on a same-store basis, Barry. So that's been pretty consistent, and we've had like 18 quarters there. I think what we're -- what I was trying to do -- again, remember, we report net. So it's -- you know, under the new accounting rules, we net out commissions against our net revenues. And I'm just trying to get a little bit of insight there, that we had a good quarter first quarter, but with these new large customers that we renewed in the last six months generally we're going to pay a little bit higher commission. So hopefully transactions will continue to offset that and we'll have volume offset. But if everything was consistent, you'd have some issues growing just because of renewing customers that will probably pay a little bit more on commissions. I don't know if that answers your question, but that's really what I was trying to talk to.

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Barry Jonathan Jonas, SunTrust Robinson Humphrey, Inc., Research Division - Research Analyst [19]

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Got it. Yes, no, that helps. And then just lastly on the Games segment for unit sales in the quarter, any new -- anything you'd call out, any large shipments or specifically new openings, maybe like Encore, that you could call out?

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Michael David Rumbolz, Everi Holdings Inc. - President, CEO & Director [20]

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The one that we talked about is we did have the about 200 units that flipped from install to sale, so that went out of our install unit, our install base, into sales. So there was just under 200 units there. But other than that, I think it was pretty much --

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Unidentified Company Representative, [21]

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Across the board.

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Michael David Rumbolz, Everi Holdings Inc. - President, CEO & Director [22]

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Across the board. There wasn't anything major. I mean, we had I think one opening in -- we also had the one -- although I think that one, the one in border was probably last quarter?

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Unidentified Company Representative, [23]

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Right. And then -- and then Wynn, of course.

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Michael David Rumbolz, Everi Holdings Inc. - President, CEO & Director [24]

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Yes, the Wynn. The Wynn.

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Operator [25]

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(Operator Instructions) Our next question will come from John Davis from Raymond James.

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John Davis, [26]

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Randy, just wanted to talk on the FinTech business for a second. I think it continued to put up double-digit growth. I think you potentially all organic in the first quarter. I think with the outlook for increased kiosk sales, how sustainable is that double-digit revenue growth there and kind of what should we be thinking about as puts and takes as we go through kind of the rest of the year? Anything to call out?

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Randy L. Taylor, Everi Holdings Inc. - Executive VP & CFO [27]

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Well, look. I think we think we're going to be strong in the kiosk sales. I think -- and I've been wrong forever, John, so I'm sure you'll call me on this -- but I do think that the cash access itself won't be quite as strong as it's been in the past. But I think kiosk, I think we've got upside in compliance, we've talked about, and the Atrient will be the add-in there. So with those three, I still think we feel really good about mid-to-upper single digits as we stand. And then if you add in Atrient, you know, I think you'll come up with obviously a better growth than that.

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John Davis, [28]

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Okay. And then on the FinTech margins, obviously I think the kiosk sales weighed on it this quarter. How should we think about it for the full year, especially considering Atrient? How should we think about that impact on the margin, something similar to the impact of the first quarter? Just kind of help us think about the margin on a go-forward basis with the payments business?

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Randy L. Taylor, Everi Holdings Inc. - Executive VP & CFO [29]

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I think it will be. I think it will be closer to what we have this quarter. I think again, we'll have more kiosk sales throughout the year and it just will weigh a little bit. And you know, we've invested a little bit there so the R&D and SG&A will be a little bit higher, but in line with what we've had. So I think it'll be closer to what you've seen this quarter.

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John Davis, [30]

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Okay. And then last one for me, the install base. I think you guys had previously said that we -- like in second quarter, I think you saw 70 units go out but are you guys still fairly confident that the growth in the second quarter will kind of offset that headwind and will start going back in the right direction as far as install base from kind of the watermark here at the first quarter?

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Randy L. Taylor, Everi Holdings Inc. - Executive VP & CFO [31]

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I would say two things. I would say I don't want to get so focused on units. We do expect cadence growth throughout the rest of the year. But I'm as excited about really the growth in the win per day. So I'm focused on hey, where will we be, and I think we're focused on where will we be at the end of the year and the total revenue growth. And we still feel very good about being able to hit our targets through both of those levers.

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Operator [32]

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Brad Boyer from Stifel has our next question.

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Brad J. Boyer, Stifel, Nicolaus & Company, Incorporated, Research Division - Analyst [33]

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Just an extension on JD's question there. So if I back out some of these one-time items that occurred in the first quarter around your install base, so the 200 units flipping in Indiana and the 330 of lower-performing units, I mean, is that net number -- is that a good, solid kind of core growth number that we should think about going forward? Or any more color you can provide there?

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Randy L. Taylor, Everi Holdings Inc. - Executive VP & CFO [34]

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It gives you a target, but my -- the issue is, you always have some, Brad, that will come out. So it's not like you still have 60 that'll come out, 60-plus that'll come out on the one customer. I don't know that you could look at that net being perfect, but I think it's directionally correct. That we should be growing in that kind of a range going forward.

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Dean A. Ehrlich, Everi Holdings Inc. - Executive VP & Games Business Leader [35]

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Brad, I would tell you that if you look at our net backlog, and you don't have any unknown removals or things that are -- that we don't have visibility to today, then we feel very good about what lies down the road for us.

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Brad J. Boyer, Stifel, Nicolaus & Company, Incorporated, Research Division - Analyst [36]

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And then just around your yield performance, I mean, those numbers are pretty staggering. Could you give us some flavor of sort of how games are performing as they sit out in the field? I mean, are some of these newer WAP and premium titles that you have out there, are they sustaining the performance beyond the first several weeks of install? Can you give us some flavor there? Thanks.

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Michael David Rumbolz, Everi Holdings Inc. - President, CEO & Director [37]

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Other than talking about the three time, four average performance that we're getting out of our Wicked Wheel, I mean, Dean can speak to some of the backlog we've got. These are doing -- these are amongst the best products we've ever released and are doing better numbers than any products we've released previously. As a result, we have a lot of customers that are looking for more of these products. But Dean, why don't you speak to the backlogs that we have in these areas?

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Dean A. Ehrlich, Everi Holdings Inc. - Executive VP & Games Business Leader [38]

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I'm not going to go into specifics by each game, but I would tell you if you look at the backlog right now, it's very, very, very strong. I would say stronger than what our install base is currently for those respective products. But we feel very good about it. You know, like we talked about before, you can't control unknown removals or anything that we don't have visibility to. But if you snap the chalk right now, we feel great about where we're at and how we believe the growth from where we currently sit is going to manifest.

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Randy L. Taylor, Everi Holdings Inc. - Executive VP & CFO [39]

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And Brad, I'd add, we spent a lot of CapEx in '18 and we're refreshing some of the older product. And I think that's what you're also seeing reflected in the first quarter, as Mike talked about. It's not just these new products which are doing phenomenal, but even just --

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Michael David Rumbolz, Everi Holdings Inc. - President, CEO & Director [40]

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All of our other products.

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Randy L. Taylor, Everi Holdings Inc. - Executive VP & CFO [41]

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All the other products. You just raise them a little bit and you know, again, very happy with that increase in win per day per unit. And so we -- you know, we think we've got a lot to look forward through in this second quarter.

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Brad J. Boyer, Stifel, Nicolaus & Company, Incorporated, Research Division - Analyst [42]

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Perfect, and then just the last one from me. Similar to David, I may have missed some commentary here. But I didn't hear you guys talk much about sort of the cashless product. I know you had a couple trials out there. Do you have any updates to share there, just kind of sort of how that's trending, or any -- any progression there would be helpful. Thanks.

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Darren D. A. Simmons, Everi Holdings Inc. - Executive VP & FinTech Business Leader [43]

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Yeah, so this is Darren. We continue to work with our tribal customers, a couple tribal customers with respect to the [wall] and a number of other conversations with other customers on it. We're in a sort of a lab sort of UAT with one large tribal customer right now, and we're hoping to actually be live with that towards the second half of this year.

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Operator [44]

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Our next question will come from Brian McGill from Telsey Advisory Group.

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Brian Thomas McGill, Telsey Advisory Group LLC - MD & Senior Research Analyst [45]

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So I wanted to talk a little bit, same thing, kind of what they've been talking about the last couple questions on the win per day, which as everyone has noted was very good in the quarter. And we were lucky enough today to get two slot companies reporting at the same time.

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Michael David Rumbolz, Everi Holdings Inc. - President, CEO & Director [46]

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We have the same moment.

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Brian Thomas McGill, Telsey Advisory Group LLC - MD & Senior Research Analyst [47]

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Yes, it's fantastic. But I do notice that that competitor who changed how they disclose things, was basically saying their U.S./Canada yield came in at $38. And what I'm wondering, as you continue to add more premium games and the play levels Dean was just talking about, would that type of number longer-term be a goal?

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Michael David Rumbolz, Everi Holdings Inc. - President, CEO & Director [48]

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I think our goal may be above that number. But remember, they have a lot of the highest-grossing wide area progressives in their -- in their units, and that's, you know, the best for us as well. And we're only at, as I noted, only at 5% of our installed base in the wide area progressive currently. So as we expand that, I would expect the numbers to continue to increase.

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Brian Thomas McGill, Telsey Advisory Group LLC - MD & Senior Research Analyst [49]

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And then I guess I'm wondering, where are the operators these days in terms of play levels in general, of keeping participation games on the floor? I know you just said three times for many of your newer games that are out there, which is fantastic. But where are they these days on play levels and keeping --

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Michael David Rumbolz, Everi Holdings Inc. - President, CEO & Director [50]

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You know, there's no -- as you know, there's no real rule amongst them. Each one has a slightly different take on it. But they all view it as a multiple of house average in order to stay on the floor with a premium product.

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Brian Thomas McGill, Telsey Advisory Group LLC - MD & Senior Research Analyst [51]

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And it's still typically above 2 times, typically -- at least 2 usually, right?

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Michael David Rumbolz, Everi Holdings Inc. - President, CEO & Director [52]

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I would say that's typical.

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Operator [53]

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Thank you for your questions today. There are no further questions at this time so I'd like to turn things back to Randy Taylor for closing remarks.

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Randy L. Taylor, Everi Holdings Inc. - Executive VP & CFO [54]

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Well, thanks for joining us today and we look forward to discussing further progress on our business when we report our 2019 second quarter results in August. Thank you.

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Operator [55]

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That does conclude our conference for today. Thank you for your participation.