 Company Expects to Generate Positive Free Cash Flow in the 2020 Third QuarterLAS VEGAS, Aug. 04, 2020 GLOBE NEWSWIRE -- Everi Holdings Inc. NYSE: EVRI Everi or the Company, a premier provider of gaming products, financial technology and player loyalty solutions to the gaming industry, today reported financial results for the second quarter ended June 30, 2020, which includes the impact of the COVID-19 pandemic and related casino closures. Second Quarter 2020 Results Revenue was 38.7 million compared to 129.7 million a year ago Net loss was 68.5 million, or a loss of 0.80 per diluted share, inclusive of 14.8 million of pre-tax charges associated with asset write-offs and write-downs, severance, facility consolidation and certain business restructuring costs to streamline operations and improve our cost structure; Net income was 5.5 million, or 0.07 per diluted share, in the prior year period Adjusted EBITDA, a non-GAAP financial measure, was 3.3 million compared to 64.1 million a year ago, driven by positive contributions from both the Games and FinTech segments Cash and cash equivalents increased to 257.4 million at June 30, 2020, from 49.9 million at March 31, 2020; Net Cash Position, a non-GAAP financial measure, rose to 133.2 million at June 30, 2020 from 40.4 million at March 31, 2020, reflecting approximately 118 million of net proceeds from an incremental term loan in April and the benefit of changes in working capitalMichael Rumbolz, Chief Executive Officer of Everi, said, We achieved better-than-expected results in the second quarter, including a return to positive Adjusted EBITDA more quickly than we anticipated at the beginning of the quarter. This was the result of several factors, including the swift actions we took in March when the pandemic struck to reduce our operating costs and preserve liquidity during the time casinos were shut down; as well as our focus on enhancing operational efficiencies and pursuing higher-value opportunities. In addition, as our customers began to reopen faster than previously expected, we benefited from our prior investments in technology innovations and game development through the strong performance of our FinTech solutions and installed base of recurring-revenue games. As we move through the third quarter, our products and services continue to reflect a return to the performance momentum we were achieving before COVID-19. The units in our gaming operations installed base that are active are performing at levels comparable to our experience pre-pandemic. In addition, the cash access portion of our FinTech business is processing same-store transactional volumes at levels that are, on average, only moderately below the prior-year. Reflecting these trends, as well as the benefit from the 636-unit growth in installed premium games since the beginning of 2020, we expect quarterly sequential growth in the second half of 2020, including a return to Free Cash Flow generation in the third quarter, which is earlier than we had previously anticipated. Looking forward, the Everi Team continues to focus on helping our customers and prioritizing innovation across our portfolio of products and solutions, from game development to cashless funding solutions, Rumbolz added. We are favorably positioned to leverage our industry leadership in cash access funding and self-service player loyalty products to lead the future evolution toward cashless funding and to successfully capitalize on the additional growth opportunities presented by the increased interest from both casino operators and players for cashless and contactless options. These forward-thinking solutions include the immediate availability of our cashless QuikTicketTM gaming voucher and a unique fully cashless mobile solution with the development of our CashClub Wallet. We believe we have unique high-value FinTech and Games solutions that will help our customers address the new operating environment in their reopened properties, which when combined with our more streamlined operating approach, will help us regain the revenue, earnings and cash flow momentum we consistently demonstrated prior to the pandemic.Consolidated Full Quarter Comparative Results unaudited Three Months Ended June 30, 2020 2019 in millions, except per share amounts Revenues38.7 129.7 Operating loss income 252.7 24.9 Net loss income 1268.5 5.5 Net loss earnings per diluted share0.80 0.07 Diluted shares outstanding85.1 79.2 Adjusted EBITDA 1 3.3 64.1 Free Cash Flow 126.7 7.0 Principal amount of outstanding debt 31,180.9 1,147.2 Total Net Debt 31,130.9 1,097.2 Cash and cash equivalents257.4 123.8 Net Cash Position 4133.2 36.7 1 For a reconciliation of net loss income to Adjusted EBITDA and Free Cash Flow, see the Unaudited Reconciliation of Net Loss Income to EBITDA and Adjusted EBITDA and to Free Cash Flow provided at the end of this release.2 Operating loss and net loss for the three months ended June 30, 2020, include 14.8 million of pre-tax charges, including 11.0 million of business reorganization costs, 2.7 million of employee severance costs, 0.6 million non-recurring professional fees, and 0.5 million in other one-time charges.3 Total Net Debt is the principal face value of the debt outstanding, inclusive of the senior secured term loan facility, the senior secured revolving credit facility and senior unsecured notes, less cash and cash equivalents or 50 million, whichever is smaller, as provided in the Companys Credit Facility. For a reconciliation of Total Net Debt to Principal face value of debt outstanding, see the Unaudited Calculation of Total Net Debt Leverage Ratio at the end of this release.4 Net Cash Position is the sum of cash and cash equivalents plus settlement receivables less settlement liabilities. For a reconciliation of Net Cash Position to Cash and Cash Equivalents, see the Unaudited Reconciliation of Cash and Cash Equivalents to Net Cash Position and Net Cash Available at the end of this release.Second Quarter 2020 Results OverviewThe operating results for the three-month period ended June 30, 2020 presented below, reflect the impact of casino closures that began in March. The closing of casinos due to the COVID-19 pandemic resulted in revenues declining to essentially zero until the casinos began to slowly reopen in May with the pace steadily ramping through June. The Company responded swiftly to the casino closures by reducing costs in March to significantly lower its cash burn rate. These cost reductions were largely in effect by the beginning of the second quarter.Revenues for the three-month period ended June 30, 2020 decreased to 38.7 million from 129.7 million in the second quarter of 2019. Games and FinTech segment revenues were 20.8 million and 17.9 million, respectively, for the second quarter of 2020. Operating loss was 52.7 million for the second quarter of 2020 compared to operating income of 24.9 million in the prior-year period. Net loss was 68.5 million, or a loss of 0.80 per diluted share, compared with net income of 5.5 million, or 0.07 per diluted share, in the second quarter of 2019. The 2020 second quarter net loss includes 14.8 million of pre-tax charges associated with asset write-offs and write-downs, severance, consolidation and other restructuring costs to streamline operations and improve the Companys cost structure. Approximately 11.0 million of the charges are related to non-cash items.Following a full review of the business and evaluation of opportunities, proactive actions were taken to reduce the cost structure and to prioritize high-value opportunities that will drive long-term prosperity and success. The first steps included discontinuing certain developmental efforts no longer seen as appropriate and redirecting resources to higher priority opportunities, evaluating the overall level of organizational staffing, and consolidating corporate office space to reflect a workforce that will increasingly work remotely.Adjusted EBITDA for the second quarter of 2020 was 3.3 million compared to 64.1 million in the second quarter of 2019. Games and FinTech segment Adjusted EBITDA were 3.0 million and 0.3 million, respectively, for the three months ended June 30, 2020, compared with Adjusted EBITDA of 34.7 million and 29.4 million, respectively, for the three months ended June 30, 2019.Games Segment Full Quarter Comparative Results unaudited Three Months Ended June 30, 2020 2019 in millions, except unit amounts and prices Revenues20.8 69.4 Operating loss income 141.8 2.6 Adjusted EBITDA 23.0 34.7 Unit sales: Units sold381 1,270 Average sales price ASP18,044 17,338 Gaming operations installed base: Average units installed during period: Average units installed14,854 13,624 Approximate daily win per unit 39.84 32.26 Units installed at end of period: Class II8,971 9,205 Class III5,967 4,489 Total installed base14,938 13,694 Installed base Oklahoma6,270 6,372 Installed base non-Oklahoma8,668 7,322 Total installed base14,938 13,694 Premium units5,796 3,413 1 Operating loss for the three-month period ended June 30, 2020, includes 11.3 million of pre-tax charges, including 9.2 million of business reorganization costs, 1.6 million of employee severance costs and 0.5 million of other one-time charges.2 For a reconciliation of net loss income to Adjusted EBITDA, see the Unaudited Reconciliation of Net Loss Income to EBITDA and Adjusted EBITDA and to Free Cash Flow provided at the end of this release. 