Everi (EVRI) - 2022 Q2 - Quarterly Report

Revenue Performance - Total revenues for Q2 2022 reached $197.2 million, a 14.3% increase from $172.6 million in Q2 2021[7] - FinTech total revenues grew to $84.9 million, a 15.5% increase compared to $73.2 million in Q2 2021[7] - Revenues for the second quarter of 2022 exceeded those of the second quarter of 2021, indicating significant improvement in gaming industry conditions compared to 2020[26] - Total revenues increased by approximately $24.6 million, or 14%, to approximately $197.2 million for the three months ended June 30, 2022, compared to the same period in the prior year[194] - Games revenues increased by approximately $13.0 million, or 13%, to approximately $112.3 million, driven by higher machine sales and contributions from the newly acquired Intuicode[195] - FinTech revenues increased by approximately $11.6 million, or 16%, to approximately $84.9 million, primarily due to increased transaction volumes and contributions from the newly acquired ecash[196] Income and Expenses - Operating income for the six months ended June 30, 2022, was $107.1 million, compared to $94.6 million for the same period in 2021, reflecting a 13.3% increase[7] - Net income for Q2 2022 was $32.5 million, a decrease from $36.2 million in Q2 2021, resulting in diluted earnings per share of $0.33[7][9] - The company reported a comprehensive income of $29.9 million for Q2 2022, down from $36.5 million in Q2 2021[7] - Operating income increased by approximately $0.2 million, or 0.3%, with an operating income margin of 29% for the three months ended June 30, 2022[202] - Total costs and expenses increased by approximately $24.5 million, or 21%, to approximately $142.7 million for the three months ended June 30, 2022[197] Assets and Liabilities - Total assets as of June 30, 2022, were $1.624 billion, slightly down from $1.636 billion at the end of 2021[11] - Total liabilities decreased to $1.421 billion from $1.461 billion at the end of 2021, primarily due to a reduction in settlement liabilities[11] - The company’s total stockholders' equity as of June 30, 2022, was $202,629,000, compared to $174,500,000 at the beginning of the year, an increase of approximately 16.1%[16] - Total trade and other receivables increased to $129.7 million at June 30, 2022, up from $118.8 million at December 31, 2021, representing a growth of approximately 9.5%[98] - Total inventory rose to $49.2 million at June 30, 2022, from $29.2 million at December 31, 2021, marking a significant increase of 68.3%[101] Cash Flow and Investments - Net cash provided by operating activities decreased to $74,235,000 from $163,518,000 in the previous year, a decline of about 54.6%[14] - Cash and cash equivalents decreased to $238.1 million from $302.0 million at the end of 2021[11] - Net cash used in investing activities was $93,774,000, up from $64,215,000 in the prior year, reflecting a rise of about 46.2%[14] - Capital expenditures for the period amounted to $60,044,000, compared to $49,234,000 in 2021, indicating an increase of approximately 22%[14] Acquisitions - The company acquired ecash Holdings Pty Limited for a total preliminary purchase consideration of approximately $30.9 million, which includes cash consideration paid at closing of $14.98 million and additional payments of $15.9 million[70] - The acquisition of Intuicode Gaming Corporation was completed for a total consideration of approximately $27.1 million, including $12.5 million paid at closing and $13.0 million in contingent consideration based on revenue targets[79] - The acquisition did not have a significant impact on the company's results of operations or financial condition for the three and six months ended June 30, 2022[69] Debt and Financing - The company has a $600 million New Term Loan due in 2028 with an interest rate of LIBOR+2.50% and a $125 million New Revolver due in 2026, which was undrawn as of June 30, 2022[117][119] - The company’s total debt after issuance costs and discounts was $979.76 million as of June 30, 2022[12] - The company issued $400 million in 5.00% senior unsecured notes due 2029, replacing its previous 7.50% notes due in 2025[181] Regulatory and Market Conditions - The company continues to face challenges from employment constraints and supply chain disruptions, which may temper demand and supply for its products and services in the short term[26] - The gaming industry remains uncertain, with potential fluctuations in demand for products and services impacting overall competitiveness and revenue generation[27] - The ongoing COVID-19 pandemic continues to affect customer operations and overall market conditions, creating uncertainty in revenue generation[172] Shareholder Actions - A new share repurchase program was authorized for up to $150 million, with $116.7 million remaining available as of June 30, 2022[138][139] - During the three months ended June 30, 2022, the company repurchased 2.0 million shares at an average price of $16.68 per share, totaling $33.3 million[139]