Gaming equipment provider Everi Holdings gave its balance sheet a much-needed boost Tuesday, securing a $125 million financing agreement and obtaining some changes in the company’s credit agreements with its existing lenders.
Las Vegas-based Everi, which provides casinos with gaming products and systems for financial technology transactions and player loyalty programs, has been hit hard by the nationwide casino shutdown due to the COVID-19 coronavirus pandemic.
In March, the company drew down $35 million on its revolving credit facility to provide additional near-term liquidity, and canceled or delayed material capital expenditures. The drawdown gave Everi $161 million in total liquidity. Adding the loan – $118 million after fees, discounts and expenses – boosted the company’s balance sheet.
Additionally, Everi implemented targeted furloughs and company-wide salary reductions last month in an effort to preserve its cash on hand.
“With our revenue and the associated workload essentially having been reduced to near zero, and (with) limited clarity as to the various timelines when our customers may restart their operations, we have taken prudent actions to position our company to withstand this period of minimal or reduced gaming industry activity,” said Everi CEO Michael Rumbolz, who cut his salary to zero for 2020.
“Our continued hope is that the steps undertaken to contain the novel COVID‐19 virus will prevail and that our economy and way of life can get back to normal as quickly as possible,” Rumbolz said.
The new loan matures in 2024, which is the same time frame as Everi’s existing $1.06 billion in long term debt. The total debt comes due in various increments in 2022, 2024 and 2025.
In addition, Everi’s lenders waived various financial contract provisions to the company’s current credit agreements that will waive or reduce certain payments over the next three quarters for 2020.
Rumbolz said the additional financing, which was announced after the markets closed Tuesday, gives Everi the flexibility to withstand the business disruption brought about by the pandemic.
“As activity resumes, we are positioned to support our customers as they reopen for business, bring our employees back to work, and regain the operating and financial momentum we consistently demonstrated prior to the COVID-19 outbreak,” Rumbolz said in a statement.
Shares of Everi closed at $3.82 Tuesday on the New York Stock Exchange, down 30 cents or 7.28%.
In early April, Eilers & Krejcik Gaming principal Todd Eilers provided some analysis on how the shutdown of nearly 1,000 commercial and tribal casinos in 43 states was hurting the gaming equipment sector.
Eilers told investors most casinos will reopen by June, with the number of players gradually returning. He said equipment providers will feel the impact throughout the second half of 2020, with casino operator capital expenditure budgets for gaming equipment sliced by 30% to 40% during the year.
“With respect to (Everi’s) FinTech, the division exclusively serves the casino gaming industry. Therefore, it will be impacted by the same issues,” Eilers said.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
