Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2022 | May 04, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-32622 | |
Entity Registrant Name | EVERI HOLDINGS INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-0723270 | |
Entity Address, Address Line One | 7250 S. Tenaya Way | |
Entity Address, Address Line Two | Suite 100 | |
Entity Address, City or Town | Las Vegas | |
Entity Address, State or Province | NV | |
Entity Address, Postal Zip Code | 89113 | |
City Area Code | 800 | |
Local Phone Number | 833-7110 | |
Title of 12(b) Security | Common Stock, $0.001 par value | |
Trading Symbol | EVRI | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 92,179,652 | |
Entity Central Index Key | 0001318568 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Revenues | |||
Total revenues | $ 175,616 | $ 139,113 | |
Costs and expenses | |||
Operating expenses | 49,825 | 38,043 | |
Research and development | 12,519 | 8,413 | |
Depreciation | 15,220 | 16,177 | |
Amortization | 13,633 | 14,715 | |
Total costs and expenses | 123,025 | 98,919 | |
Operating income | 52,591 | 40,194 | |
Other expenses | |||
Interest expense, net of interest income | 11,348 | 18,471 | |
Total other expenses | 11,348 | 18,471 | |
Income before income tax | 41,243 | 21,723 | |
Income tax provision | 9,721 | 1,189 | |
Net income | 31,522 | 20,534 | |
Foreign currency translation gain (loss) | 580 | (221) | |
Comprehensive income | $ 32,102 | $ 20,313 | |
Earnings per share | |||
Basic (in dollars per share) | $ 0.34 | $ 0.24 | |
Diluted (in dollars per share) | $ 0.31 | $ 0.21 | |
Weighted average common shares outstanding | |||
Basic (in shares) | 91,408 | 86,984 | |
Diluted (in shares) | 101,471 | 97,968 | |
Games | |||
Revenues | |||
Total revenues | $ 98,336 | $ 76,151 | |
Costs and expenses | |||
Cost of revenues | [1] | 22,777 | 15,066 |
Operating expenses | 17,346 | 14,595 | |
Research and development | 7,630 | 5,667 | |
Depreciation | 12,981 | 14,563 | |
Amortization | 9,805 | 10,984 | |
Total costs and expenses | 70,539 | 60,875 | |
Operating income | 27,797 | 15,276 | |
Games | Gaming operations | |||
Revenues | |||
Total revenues | 70,297 | 58,141 | |
Costs and expenses | |||
Cost of revenues | [1] | 5,995 | 4,759 |
Games | Gaming equipment and systems | |||
Revenues | |||
Total revenues | 27,998 | 17,988 | |
Costs and expenses | |||
Cost of revenues | [1] | 16,782 | 10,307 |
Games | Gaming other | |||
Revenues | |||
Total revenues | 41 | 22 | |
FinTech | |||
Revenues | |||
Total revenues | 77,280 | 62,962 | |
Costs and expenses | |||
Cost of revenues | [1] | 9,051 | 6,505 |
Operating expenses | 32,479 | 23,448 | |
Research and development | 4,889 | 2,746 | |
Depreciation | 2,239 | 1,614 | |
Amortization | 3,828 | 3,731 | |
Total costs and expenses | 52,486 | 38,044 | |
Operating income | 24,794 | 24,918 | |
FinTech | Financial access services | |||
Revenues | |||
Total revenues | 49,879 | 38,712 | |
Costs and expenses | |||
Cost of revenues | [1] | 2,175 | 1,473 |
FinTech | Software and other | |||
Revenues | |||
Total revenues | 17,867 | 17,246 | |
Costs and expenses | |||
Cost of revenues | [1] | 935 | 1,004 |
FinTech | Hardware | |||
Revenues | |||
Total revenues | 9,534 | 7,004 | |
Costs and expenses | |||
Cost of revenues | [1] | $ 5,941 | $ 4,028 |
[1] | (1) Exclusive of depreciation and amortization. |
UNAUDITED CONDENSED CONSOLIDA_2
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash and cash equivalents | $ 269,400 | $ 302,009 |
Settlement receivables | 60,348 | 89,275 |
Trade and other receivables, net of allowances for credit losses of $5,023 and $5,161 at March 31, 2022 and December 31, 2021, respectively | 113,087 | 104,822 |
Inventory | 45,699 | 29,233 |
Prepaid expenses and other current assets | 27,856 | 27,299 |
Total current assets | 516,390 | 552,638 |
Non-current assets | ||
Property and equipment, net | 119,295 | 119,993 |
Goodwill | 695,436 | 682,663 |
Other intangible assets, net | 221,737 | 214,594 |
Other receivables | 15,742 | 13,982 |
Deferred tax assets, net | 22,972 | 32,121 |
Other assets | 24,450 | 19,659 |
Total non-current assets | 1,099,632 | 1,083,012 |
Total assets | 1,616,022 | 1,635,650 |
Current liabilities | ||
Settlement liabilities | 208,491 | 291,861 |
Accounts payable and accrued expenses | 192,554 | 173,933 |
Current portion of long-term debt | 6,000 | 6,000 |
Total current liabilities | 407,045 | 471,794 |
Non-current liabilities | ||
Long-term debt, less current portion | 974,642 | 975,525 |
Other accrued expenses and liabilities | 22,623 | 13,831 |
Total non-current liabilities | 997,265 | 989,356 |
Total liabilities | 1,404,310 | 1,461,150 |
Commitments and contingencies (Note 13) | ||
Stockholders’ equity | ||
Convertible preferred stock, $0.001 par value, 50,000 shares authorized and no shares outstanding at March 31, 2022 and December 31, 2021, respectively | 0 | 0 |
Common stock, $0.001 par value, 500,000 shares authorized and 117,221 and 91,519 shares issued and outstanding at March 31, 2022, respectively, and 116,996 and 91,313 shares issued and outstanding at December 31, 2021, respectively | 117 | 117 |
Additional paid-in capital | 511,267 | 505,757 |
Accumulated deficit | (110,233) | (141,755) |
Accumulated other comprehensive loss | (875) | (1,455) |
Treasury stock, at cost, 25,702 and 25,683 shares at March 31, 2022 and December 31, 2021, respectively | (188,564) | (188,164) |
Total stockholders’ equity | 211,712 | 174,500 |
Total liabilities and stockholders’ equity | $ 1,616,022 | $ 1,635,650 |
UNAUDITED CONDENSED CONSOLIDA_3
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets | ||
Allowances for doubtful accounts | $ 5,023 | $ 5,161 |
Stockholders’ equity | ||
Convertible preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Convertible preferred stock authorized (in shares) | 50,000,000 | 50,000,000 |
Convertible preferred stock outstanding (in shares) | 0 | 0 |
Common stock par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock issued (in shares) | 117,221,000 | 116,996,000 |
Common stock outstanding (in shares) | 91,519,000 | 91,313,000 |
Treasury stock (in shares) | 25,702,000 | 25,683,000 |
UNAUDITED CONDENSED CONSOLIDA_4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flows from operating activities | ||
Net income | $ 31,522 | $ 20,534 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation | 15,220 | 16,177 |
Amortization | 13,633 | 14,715 |
Non-cash lease expense | 1,014 | 1,196 |
Amortization of financing costs and discounts | 713 | 1,172 |
Loss on sale or disposal of assets | 29 | 743 |
Accretion of contract rights | 2,427 | 2,318 |
Provision for credit losses | 1,947 | 1,999 |
Deferred income taxes | 9,398 | 820 |
Reserve for inventory obsolescence | 55 | 467 |
Stock-based compensation | 4,811 | 3,005 |
Changes in operating assets and liabilities: | ||
Settlement receivables | 28,958 | 14,832 |
Trade and other receivables | (6,123) | (7,673) |
Inventory | (11,069) | (2,438) |
Prepaid expenses and other assets | (6,812) | (1,863) |
Settlement liabilities | (83,427) | 25,105 |
Accounts payable and accrued expenses | 2,978 | 20,497 |
Net cash provided by operating activities | 5,274 | 111,606 |
Cash flows from investing activities | ||
Capital expenditures | (23,639) | (20,035) |
Acquisitions, net of cash acquired | (13,318) | (10,000) |
Proceeds from sale of property and equipment | 57 | 80 |
Net cash used in investing activities | (36,900) | (29,955) |
Cash flows from financing activities | ||
Proceeds from exercise of stock options | 699 | 2,285 |
Treasury stock | (400) | (173) |
Net cash (used in) provided by financing activities | (1,201) | 1,799 |
Effect of exchange rates on cash and cash equivalents | 136 | (120) |
Cash, cash equivalents and restricted cash | ||
Net (decrease) increase for the period | (32,691) | 83,330 |
Balance, beginning of the period | 303,726 | 252,349 |
Balance, end of the period | 271,035 | 335,679 |
Supplemental cash disclosures | ||
Cash paid for interest | 14,439 | 12,026 |
Cash refunded for income tax, net | (41) | (197) |
Supplemental non-cash disclosures | ||
Accrued and unpaid capital expenditures | 2,987 | 2,786 |
Transfer of leased gaming equipment to inventory | 1,358 | 1,407 |
Term Loan | ||
Cash flows from financing activities | ||
Repayments of secured debt | (1,500) | 0 |
Incremental Term Loan | ||
Cash flows from financing activities | ||
Repayments of secured debt | $ 0 | $ (313) |
UNAUDITED CONDENSED CONSOLIDA_5
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Treasury Stock |
Balance, beginning of period (in shares) at Dec. 31, 2020 | 111,872 | |||||
Balance, beginning of period at Dec. 31, 2020 | $ (7,898) | $ 112 | $ 466,614 | $ (294,620) | $ (1,191) | $ (178,813) |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | 20,534 | 20,534 | ||||
Foreign currency translation | (221) | (221) | ||||
Stock-based compensation expense | 3,005 | 3,005 | ||||
Exercise of warrants (in shares) | 378 | |||||
Exercise of options (in shares) | 561 | |||||
Exercise of options | 2,285 | $ 1 | 2,284 | |||
Restricted share vesting and withholding (in shares) | 41 | |||||
Restricted share vesting and withholding | (173) | (1) | (172) | |||
Balance, end of period (in shares) at Mar. 31, 2021 | 112,852 | |||||
Balance, end of period at Mar. 31, 2021 | $ 17,532 | $ 113 | 471,902 | (274,086) | (1,412) | (178,985) |
Balance, beginning of period (in shares) at Dec. 31, 2021 | 91,313 | 116,996 | ||||
Balance, beginning of period at Dec. 31, 2021 | $ 174,500 | $ 117 | 505,757 | (141,755) | (1,455) | (188,164) |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | 31,522 | 31,522 | ||||
Foreign currency translation | 580 | 580 | ||||
Stock-based compensation expense | 4,811 | 4,811 | ||||
Exercise of options (in shares) | 164 | |||||
Exercise of options | 699 | 699 | ||||
Restricted share vesting and withholding (in shares) | 61 | |||||
Restricted share vesting and withholding | $ (400) | (400) | ||||
Balance, end of period (in shares) at Mar. 31, 2022 | 91,519 | 117,221 | ||||
Balance, end of period at Mar. 31, 2022 | $ 211,712 | $ 117 | $ 511,267 | $ (110,233) | $ (875) | $ (188,564) |
BUSINESS
BUSINESS | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS | BUSINESS Everi Holdings Inc. (“Everi Holdings,” or “Everi”) is a holding company, the assets of which are the issued and outstanding shares of capital stock of each of Everi Payments Inc. (“Everi FinTech” or “FinTech”) and Everi Games Holding Inc., which owns all of the issued and outstanding shares of capital stock of Everi Games Inc. (“Everi Games” or “Games”). Unless otherwise indicated, the terms the “Company,” “we,” “us,” and “our” refer to Everi Holdings together with its consolidated subsidiaries. Everi is a supplier of entertainment and technology solutions for the casino and digital gaming industry. The Company develops game content and gaming machines, gaming systems and services for land-based and iGaming operators. The Company is also a provider of financial technology solutions that power the casino floor, including products and services that facilitate cash and cashless financial transactions, self-service player loyalty tools and applications, and regulatory and intelligence software. Everi reports its financial performance, and organizes and manages its operations, across the following two business segments: (i) Games and (ii) Financial Technology Solutions (“FinTech”). Everi Games provides gaming operators with gaming technology and entertainment products and services, including: (i) gaming machines, primarily comprising Class II and Class III slot machines placed under participation or fixed-fee lease arrangements or sold to casino customers; (ii) providing and maintaining the central determinant systems for the video lottery terminals (“VLTs”) installed in the State of New York and similar technology in certain tribal jurisdictions; and (iii) business-to-business (“B2B”) digital online gaming activities. Everi FinTech provides gaming operators with financial technology products and services, including: (i) financial access and related services supporting digital, cashless and physical cash options across mobile, assisted and self-service channels; (ii) loyalty and marketing software and tools, regulatory and compliance (“RegTech”) software solutions, other information-related products and services, and hardware maintenance services; and (iii) associated casino patron self-service hardware that utilizes our financial access, software and other services. Our services operate as part of an end-to-end security suite to protect against cyber-related attacks and maintain the necessary secured environments to maintain compliance with applicable regulatory requirements. These solutions include: access to cash and cashless funding at gaming facilities via Automated Teller Machine (“ATM”) debit withdrawals, credit card financial access transactions, and point of sale (“POS”) debit card purchases at casino cages, kiosk and mobile POS devices; accounts for the CashClub Wallet, check warranty services, self-service ATMs and fully integrated kiosk and maintenance services; self-service loyalty tools and promotion management software; compliance, audit, and data software; casino credit data and reporting services; marketing and promotional offering subscription-based services; and other ancillary offerings. Impact of the Coronavirus Disease 2019 (“COVID-19”) Pandemic The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains, lowered equity market valuations, created significant volatility in the financial markets, increased unemployment levels, and caused temporary, and in certain cases, permanent closures of many businesses. The initial impacts from the COVID-19 pandemic have begun to subside with certain aspects of the global economy, equity market valuations, and increased unemployment levels showing signs of recovery. The gaming industry was not immune to these factors as our casino customers closed their gaming establishments in the first quarter of 2020, with many beginning to reopen their operations over the remainder of 2020 and throughout 2021. Since the onset of COVID-19, we have implemented measures to mitigate our exposure throughout the global pandemic. While there may be further uncertainty facing our customers as a result of COVID-19, we continue to evaluate our business strategies and the impacts of the global pandemic on our results of operations and financial condition and make business decisions to mitigate further risk. While gaming industry conditions have improved significantly in the first quarter of 2022 and year ended December 31, 2021, compared to 2020, it is unclear if the customer equipment purchases will consistently return to pre-COVID levels. Resurgences of COVID-19 and its variants could impact future customer operations or our own; however, we continue to monitor the impacts of the global pandemic and make adjustments to our business, accordingly. Our revenues and liquidity for the first quarter of 2022 exceeded the first quarter of 2021, as nearly all of our casino customer locations have again reopened. With various limitations still in effect, we expect that demand and supply for our products and services may be tempered in the short-term, to the extent gaming activity decreases at our customers’ locations, or fails to increase at expected rates, and to the extent our customers decide to continue to restrict their capital spending as a result of uncertainty in the industry, or that supply chain disruptions might impact customer deliveries or otherwise. The impact of the COVID-19 pandemic also exacerbates the risks disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021 (the “Annual Report”), including, but not limited to: our ability to generate revenues and, earn profits, our ability to service existing and attract new customers and maintain our overall competitiveness in the market; the potential for significant fluctuations in demand for our products and services; overall trends in the gaming industry impacting our business, and potential volatility in our stock price, among other concerns such as cybersecurity exposure. |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation Our unaudited condensed consolidated financial statements included herein have been prepared by us pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Some of the information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) have been condensed or omitted pursuant to such rules and regulations, although we believe the disclosures are adequate to make the information presented not misleading. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary for a fair statement of results for the interim periods have been made. The results for the three months ended March 31, 2022 are not necessarily indicative of results to be expected for the full fiscal year. The Financial Statements should be read in conjunction with the consolidated financial statements and notes thereto included in the most recently filed Annual Report. We evaluate the composition of our revenues to maintain compliance with SEC Regulation S-X Section 210.5-3, which requires us to separately present certain categories of revenues that exceed the quantitative threshold on our Statements of Operations. Revenue Recognition Overview We evaluate the recognition of revenue based on the criteria set forth in Accounting Standards Codification (“ASC”) 606 — Revenue from Contracts with Customers and ASC 842 — Leases, as appropriate. We recognize revenue upon transferring control of goods or services to our customers in an amount that reflects the consideration we expect to receive in exchange for those goods or services. We enter into contracts with customers that include various performance obligations consisting of goods, services, or combinations of goods and services. Timing of the transfer of control varies based on the nature of the contract. We recognize revenue net of any sales and other taxes collected from customers, which are subsequently remitted to governmental authorities and are not included in revenues or operating expenses. We measure revenue based on the consideration specified in a contract with a customer and adjusted, as necessary. Disaggregation of Revenues We disaggregate revenues based on the nature and timing of the cash flows generated by such revenues as presented in “Note 18 — Segment Information.” Contract Balances Since our contracts may include multiple performance obligations, there is often a timing difference between cash collections and the satisfaction of such performance obligations and revenue recognition. Such arrangements are evaluated to determine whether contract assets and liabilities exist. We generally record contract assets when the timing of billing differs from when revenue is recognized due to contracts containing specific performance obligations that are required to be met prior to a customer being invoiced. We generally record contract liabilities when cash is collected in advance of us satisfying performance obligations, including those that are satisfied over a period of time. Balances of our contract assets and contract liabilities may fluctuate due to timing of cash collections. The following table summarizes our contract assets and contract liabilities arising from contracts with customers (in thousands): Three Months Ended March 31, 2022 2021 Contract assets (1) Balance at January 1 - current $ 9,927 $ 9,240 Balance at January 1 - non-current 5,294 8,321 Total 15,221 17,561 Balance at March 31 - current 10,662 9,796 Balance at March 31 - non-current 3,852 7,299 Total 14,514 17,095 Decrease $ (707) $ (466) Contract liabilities (2) Balance at January 1 - current $ 36,238 $ 26,980 Balance at January 1 - non-current 377 289 Total 36,615 27,269 Balance at March 31 - current 38,877 27,887 Balance at March 31 - non-current 213 98 Total 39,090 27,985 Increase $ 2,475 $ 716 (1) The current portion of contract assets is included within trade and other receivables, net, and the non-current portion is included within other receivables in our Balance Sheets. (2) The current portion of contract liabilities is included within accounts payable and accrued expenses, and the non-current portion is included within other accrued expenses and liabilities in our Balance Sheets. We recognized approximately $12.7 million and $10.5 million in revenue that was included in the beginning contract liability balance during the three months ended March 31, 2022 and 2021, respectively. Games Revenues Our products and services include electronic gaming devices, such as Native American Class II offerings and other electronic bingo products, Class III slot machine offerings, VLTs, B2B digital online gaming activities, accounting and central determinant systems, and other back office systems. We conduct our Games segment business based on results generated from the following major revenue streams: (i) Gaming Operations; (ii) Gaming Equipment and Systems; and (iii) Gaming Other. We recognize our Gaming Operations revenue based on criteria set forth in ASC 842 or ASC 606, as applicable. The amount of lease revenue included in our Gaming Operations revenues and recognized under ASC 842 was approximately $47.1 million and $40.8 million for the three months ended March 31, 2022 and 2021, respectively. FinTech Revenues Our FinTech products and services include solutions that we offer to gaming establishments to provide their patrons with financial access and funds-based services supporting digital, cashless and physical cash options across mobile, assisted and self-service channels along with related loyalty and marketing tools, and other information-related products and services. In addition, our services operate as part of an end-to-end se curity suite to protect against cyber-related attacks and maintain the necessary secured environments to maintain compliance with applicable regulatory requirements. These solutions include: access to cash and cashless funding at gaming facilities via ATM debit withdrawals, credit card financial access transactions, and POS debit card purchases at casino cages, kiosk and mobile POS devices; accounts for the CashClub Wallet, check warranty services, self-service ATMs and fully integrated kiosk and maintenance services; self-service loyalty tools and promotion management software; compliance, audit, and data software; casino credit data and reporting services; marketing and promotional offering subscription-based services; and other ancillary offerings. We conduct our FinTech segment business based on results generated from the following major revenue streams: (i) Financial Access Services; (ii) Software and Other; and (iii) Hardware. Hardware revenues are derived from the sale of our financial access and loyalty kiosks and related equipment and are accounted for under ASC 606, unless such transactions meet the definition of a sales type or direct financing lease, which are accounted for under ASC 842. We did not have any material financial access kiosk and related equipment sales contracts accounted for under ASC 842 during the three months ended March 31, 2022 and 2021. Restricted Cash Our restricted cash primarily consists of: (i) funds held in connection with certain customer agreements; (ii) funds held in connection with a sponsorship agreement; (iii) wide area progressive (“WAP”)-related restricted funds; and (iv) financial access activities related to cashless balances held on behalf of patrons. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Balance Sheets that sum to the total of the same such amounts shown in the statement of cash flows for the three months ended March 31, 2022 (in thousands). Classification on our Balance Sheets At March 31, 2022 At December 31, 2021 Cash and cash equivalents Cash and cash equivalents $ 269,400 $ 302,009 Restricted cash - current Prepaid expenses and other current assets 1,534 1,616 Restricted cash - non-current Other assets 101 101 Total $ 271,035 $ 303,726 Allowance for Credit Losses We continually evaluate the collectability of outstanding balances and maintain an allowance for credit losses related to our trade and other receivables and notes receivable that have been determined to have a high risk of uncollectability, which represents our best estimates of the current expected credit losses to be incurred in the future. To derive our estimates, we analyze historical collection trends and changes in our customer payment patterns, current and expected conditions and market trends along with our operating forecasts, concentration, and creditworthiness when evaluating the adequacy of our allowance for credit losses. In addition, with respect to our check warranty receivables, we are exposed to risk for the losses associated with warranted items that cannot be collected from patrons issuing these items. We evaluate the collectability of the outstanding balances and establish a reserve for the face amount of the current expected credit losses related to these receivables. Account balances are charged against the provision when the Company believes it is probable the receivable will not be recovered. The provision for doubtful accounts receivable is included within operating expenses and the check warranty loss reserves are included within financial access services cost of revenues in the Statements of Operations. Goodwill Goodwill represents the excess of the purchase price over the identifiable tangible and intangible assets acquired plus liabilities assumed arising from business combinations. We test for impairment annually on a reporting unit basis, at the beginning of our fourth fiscal quarter and between annual tests if events and circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The annual impairment test is completed using either: a qualitative “Step 0” assessment based on reviewing relevant events and circumstances; or a quantitative “Step 1” assessment, which determines the fair value of the reporting unit, using both an income approach that discounts future cash flows based on the estimated future results of our reporting units and a market approach that compares market multiples of comparable companies to determine whether an impairment exists. To the extent the carrying amount of a reporting unit is less than its estimated fair value, an impairment charge is recorded. The evaluation of impairment of goodwill requires the use of estimates about future operating results. Changes in forecasted operations can materially affect these estimates, which could materially affect our results of operations and financial condition. The estimates of expected future cash flows require significant judgment and are based on assumptions we determined to be reasonable; however, they are unpredictable and inherently uncertain, including, estimates of future growth rates, operating margins and assumptions about the overall economic climate as well as the competitive environment within which we operate. There can be no assurance that our estimates and assumptions made for purposes of our impairment assessments as of the time of evaluation will prove to be accurate predictions of the future. If our assumptions regarding business plans, competitive environments, or anticipated growth rates are not correct, we may be required to record non-cash impairment charges in future periods, whether in connection with our normal review procedures periodically, or earlier, if an indicator of an impairment is present prior to such evaluation. Our reporting units are identified as operating segments or one level below. Reporting units must: (i) engage in business activities from which they earn revenues and incur expenses; (ii) have operating results that are regularly reviewed by our segment management to ascertain the resources to be allocated to the segment and assess its performance; and (iii) have discrete financial information available. As of March 31, 2022, our reporting units included: (i) Games; (ii) Financial Access Services; (iii) Kiosk Sales and Services; (iv) Central Credit Services; (v) Compliance Sales and Services; and (vi) Loyalty Sales and Services. Fair Values of Financial Instruments The fair value of a financial instrument represents the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Fair value estimates are made at a specific point in time, based upon relevant market information about the financial instrument. The carrying amount of cash and cash equivalents, restricted cash, settlement receivables, short-term trade and other receivables, settlement liabilities, accounts payable, and accrued expenses approximate fair value due to the short-term maturities of these instruments. The fair value of the long-term trade and loans receivable is estimated by discounting expected future cash flows using current interest rates at which similar loans would be made to borrowers with similar credit ratings and remaining maturities. The fair value of long-term accounts payable is estimated by discounting the total obligation using the appropriate interest rates. As of March 31, 2022 and December 31, 2021, the fair value of trade and loans receivable approximated the carrying value due to contractual terms generally being slightly over 12 months. The fair value of our borrowings is estimated based on various inputs to determine a market price, such as: market demand and supply, size of tranche, maturity, and similar instruments trading in more active markets. The estimated fair value and outstanding balances of our borrowings are as follows (dollars in thousands): Level of Hierarchy Fair Value Outstanding Balance March 31, 2022 $600 million New Term Loan 2 $ 591,030 $ 597,000 $400 million 2021 Unsecured Notes 2 $ 378,000 $ 400,000 December 31, 2021 $600 million New Term Loan 2 $ 598,171 $ 598,500 $400 million 2021 Unsecured Notes 2 $ 404,000 $ 400,000 Our borrowings’ fair values were determined using Level 2 inputs based on quoted market prices for these securities. Reclassification of Prior Year Balances Certain amounts in the accompanying consolidated financial statements and accompanying notes have been reclassified to be consistent with the current year presentation. These reclassifications had no effect on net income for the prior periods. Recent Accounting Guidance Recently Adopted Accounting Guidance Standard Description Date of Adoption Effect on Financial Statements ASU 2021-05 , 'Leases (Topic 842): Lessors—Certain Leases with Variable Lease Payments This ASU amends the lease classification requirements for lessors to align them with practice under ASC Topic 840 January 1, 2022 The adoption of this ASU did not have a material effect on our Financial Statements or on our disclosures. Recent Accounting Guidance Not Yet Adopted As of March 31, 2022, we do not anticipate recently issued accounting guidance to have a significant future impact on our consolidated financial statements. |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
LEASES | LEASES We determine if a contract is, or contains, a lease at the inception, or modification, of a contract based on whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Control over the use of an asset is predicated upon the notion that a lessee has both the right to (i) obtain substantially all of the economic benefit from the use of the asset; and (ii) direct the use of the asset. Operating lease right-of-use (“ROU”) assets and liabilities are recognized based on the present value of minimum lease payments over the expected lease term at commencement date. Lease expense is recognized on a straight-line basis over the expected lease term. Our lease arrangements have both lease and non-lease components, and we have elected the practical expedient to account for the lease and non-lease elements as a single lease. Certain of our lease arrangements contain options to renew with terms that generally have the ability to extend the lease term to a range of approximately one Lessee We enter into operating lease agreements for real estate purposes that generally consist of buildings for office space and warehouses for manufacturing purposes. Certain of our lease agreements consist of rental payments that are periodically adjusted for inflation. Our lease agreements do not contain material residual value guarantees or material restrictive covenants. Our lease agreements do not generally provide explicit rates of interest; therefore, we use our incremental collateralized borrowing rate, which is based on a fully collateralized and fully amortizing loan with a maturity date the same as the length of the lease that is based on the information available at the commencement date to determine the present value of lease payments. Leases with an initial term of 12 months or less (short-term) are not accounted for on our Balance Sheets. As of March 31, 2022 and December 31, 2021, our finance leases were not material. Supplemental balance sheet information related to our operating leases is as follows (in thousands): Classification on our Balance Sheets At March 31, 2022 At December 31, 2021 Assets Operating lease ROU assets Other assets, non-current $ 17,483 $ 12,692 Liabilities Current operating lease liabilities Accounts payable and accrued expenses $ 5,842 $ 5,663 Non-current operating lease liabilities Other accrued expenses and liabilities $ 16,099 $ 11,869 Supplemental cash flow information related to leases is as follows (in thousands): Three Months Ended March 31, 2022 2021 Cash paid for: Long-term operating leases $ 1,668 $ 1,625 Short-term operating leases $ 409 $ 430 Right-of-use assets obtained in exchange for lease obligations: Operating leases (1) $ 5,947 $ — (1) The amounts are presented net of current year terminations and exclude amortization for the period. Other information related to lease terms and discount rates is as follows: At March 31, 2022 At December 31, 2021 Weighted Average Remaining Lease Term (in years): Operating leases 3.79 3.52 Weighted Average Discount Rate: Operating leases 4.55 % 5.04 % Components of lease expense, which are included in operating expenses, are as follows (in thousands): Three Months Ended March 31, 2022 2021 Operating Lease Cost: Operating lease cost $ 1,362 $ 1,460 Variable lease cost $ 279 $ 250 Maturities of lease liabilities are summarized as follows as of March 31, 2022 (in thousands): Year Ending December 31, Amount 2022 (excluding the three months ended March 31, 2022) $ 4,958 2023 6,377 2024 5,749 2025 5,043 2026 1,587 Thereafter 154 Total future minimum lease payments 23,868 Amount representing interest 1,927 Present value of future minimum lease payments 21,941 Current operating lease obligations 5,842 Long-term lease obligations $ 16,099 Lessor We generate lease revenues primarily from our gaming operations activities, and the majority of our leases are month-to-month leases. Under these arrangements, we retain ownership of the electronic gaming machines (“EGMs”) installed at customer facilities. We receive recurring revenues based on a percentage of the net win per day generated by the leased gaming equipment or a fixed daily fee. Such revenues are generated daily and are limited to the lesser of the net win per day generated by the leased gaming equipment or the fixed daily fee and the lease payments that have been collected from the lessee. Certain of our leases have terms and conditions with options for a lessee to purchase the underlying assets. Refer to " Note 9 - Property and Equipment " for details of our rental pool assets cost and accumulated depreciation. We did not have material sales transactions that qualified for sales-type lease accounting treatment during the three months ended March 31, 2022 and 2021 . Our interest income recognized in connection with sales-type leases executed in the prior periods was not material. Supplemental balance sheet information related to our sales-type leases is as follows (in thousands): Classification on our Balance Sheets At March 31, 2022 At December 31, 2021 Assets Net investment in sales-type leases - current Trade and other receivables, net $ 898 $ 1,331 |
LEASES | LEASES We determine if a contract is, or contains, a lease at the inception, or modification, of a contract based on whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Control over the use of an asset is predicated upon the notion that a lessee has both the right to (i) obtain substantially all of the economic benefit from the use of the asset; and (ii) direct the use of the asset. Operating lease right-of-use (“ROU”) assets and liabilities are recognized based on the present value of minimum lease payments over the expected lease term at commencement date. Lease expense is recognized on a straight-line basis over the expected lease term. Our lease arrangements have both lease and non-lease components, and we have elected the practical expedient to account for the lease and non-lease elements as a single lease. Certain of our lease arrangements contain options to renew with terms that generally have the ability to extend the lease term to a range of approximately one Lessee We enter into operating lease agreements for real estate purposes that generally consist of buildings for office space and warehouses for manufacturing purposes. Certain of our lease agreements consist of rental payments that are periodically adjusted for inflation. Our lease agreements do not contain material residual value guarantees or material restrictive covenants. Our lease agreements do not generally provide explicit rates of interest; therefore, we use our incremental collateralized borrowing rate, which is based on a fully collateralized and fully amortizing loan with a maturity date the same as the length of the lease that is based on the information available at the commencement date to determine the present value of lease payments. Leases with an initial term of 12 months or less (short-term) are not accounted for on our Balance Sheets. As of March 31, 2022 and December 31, 2021, our finance leases were not material. Supplemental balance sheet information related to our operating leases is as follows (in thousands): Classification on our Balance Sheets At March 31, 2022 At December 31, 2021 Assets Operating lease ROU assets Other assets, non-current $ 17,483 $ 12,692 Liabilities Current operating lease liabilities Accounts payable and accrued expenses $ 5,842 $ 5,663 Non-current operating lease liabilities Other accrued expenses and liabilities $ 16,099 $ 11,869 Supplemental cash flow information related to leases is as follows (in thousands): Three Months Ended March 31, 2022 2021 Cash paid for: Long-term operating leases $ 1,668 $ 1,625 Short-term operating leases $ 409 $ 430 Right-of-use assets obtained in exchange for lease obligations: Operating leases (1) $ 5,947 $ — (1) The amounts are presented net of current year terminations and exclude amortization for the period. Other information related to lease terms and discount rates is as follows: At March 31, 2022 At December 31, 2021 Weighted Average Remaining Lease Term (in years): Operating leases 3.79 3.52 Weighted Average Discount Rate: Operating leases 4.55 % 5.04 % Components of lease expense, which are included in operating expenses, are as follows (in thousands): Three Months Ended March 31, 2022 2021 Operating Lease Cost: Operating lease cost $ 1,362 $ 1,460 Variable lease cost $ 279 $ 250 Maturities of lease liabilities are summarized as follows as of March 31, 2022 (in thousands): Year Ending December 31, Amount 2022 (excluding the three months ended March 31, 2022) $ 4,958 2023 6,377 2024 5,749 2025 5,043 2026 1,587 Thereafter 154 Total future minimum lease payments 23,868 Amount representing interest 1,927 Present value of future minimum lease payments 21,941 Current operating lease obligations 5,842 Long-term lease obligations $ 16,099 Lessor We generate lease revenues primarily from our gaming operations activities, and the majority of our leases are month-to-month leases. Under these arrangements, we retain ownership of the electronic gaming machines (“EGMs”) installed at customer facilities. We receive recurring revenues based on a percentage of the net win per day generated by the leased gaming equipment or a fixed daily fee. Such revenues are generated daily and are limited to the lesser of the net win per day generated by the leased gaming equipment or the fixed daily fee and the lease payments that have been collected from the lessee. Certain of our leases have terms and conditions with options for a lessee to purchase the underlying assets. Refer to " Note 9 - Property and Equipment " for details of our rental pool assets cost and accumulated depreciation. We did not have material sales transactions that qualified for sales-type lease accounting treatment during the three months ended March 31, 2022 and 2021 . Our interest income recognized in connection with sales-type leases executed in the prior periods was not material. Supplemental balance sheet information related to our sales-type leases is as follows (in thousands): Classification on our Balance Sheets At March 31, 2022 At December 31, 2021 Assets Net investment in sales-type leases - current Trade and other receivables, net $ 898 $ 1,331 |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 3 Months Ended |
Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
BUSINESS COMBINATIONS | BUSINESS COMBINATIONS We account for business combinations in accordance with ASC 805, which requires that the identifiable assets acquired and liabilities assumed be recorded at their estimated fair values on the acquisition date separately from goodwill, which is the excess of the fair value of the purchase price over the fair values of these identifiable assets and liabilities. We include the results of operations of an acquired business as of the acquisition date. On March 1, 2022 (the “Closing Date”), the Company acquired the stock of ecash Holdings Pty Limited and wholly-owned subsidiaries Global Payment Technologies Australia Pty Limited, and ACN 121 187 068 Pty Limited (collectively “ecash”), a privately owned, Australia-based developer and provider of innovative cash handling and financial payment solutions for the broader gaming industry in Australia, Asia, Europe, and the United States. The acquisition of ecash’s products and services represents a strategic extension of Everi’s current suite of financial technology solutions within the FinTech segment. The acquisition provides Everi with a complementary portfolio of new customer locations throughout Australia, the United States, and other geographies. Under the terms of the stock purchase agreement, we paid the seller AUD$20 million (approximately USD$15 million) on the Closing Date of the transaction and we will pay an additional AUD$6.5 million one year following the Closing Date and another AUD$6.5 million two years following the Closing Date. In addition, we expect to pay approximately AUD$9.0 million for the excess net working capital within a year from the Closing Date. Pursuant to the arrangement, there is an earn-out provision of up to AUD$10 million, to the extent certain growth targets are achieved. The payment, if any, is subject to certain employment restrictions and will be accounted for as compensation expense in accordance with GAAP. The acquisition did not have a significant impact on our results of operations or financi al condition for the three months ended March 31, 2022. The total preliminary purchase consideration for ecash was as follows (in thousands, at fair value): Amount in USD Purchase consideration Cash consideration paid at closing $ 14,980 Cash consideration to be paid in subsequent periods 15,905 Total purchase consideration $ 30,885 The transaction was accounted for using the acquisition method of accounting, which requires, among other things, the assets acquired and liabilities assumed be recognized at their respective fair values as of the acquisition date. The excess of the purchase price over those fair values was recorded as goodwill, which will be amortized over a period of 15 years for tax purposes. The estimates and assumptions used include the projected timing and amount of future cash flows and discount rates reflecting risk inherent in the future cash flows. The estimated fair values of assets acquired and liabilities assumed and resulting goodwill are subject to adjustment as the Company finalizes its purchase price accounting. The significant items for which a final fair value has not been determined include, but are not limited to: the valuation and estimated useful lives of intangible assets, deferred and unearned revenues, and deferred income taxes. We do not expect our fair value determinations to materially change; however, there may be differences between the amounts recorded at the Closing Date and the final fair value analysis, which we expect to complete no later than the first quarter of 2023. The information below reflects the preliminary amounts of identifiable assets acquired and liabilities assumed as of the closing date of the transaction (in thousands): Amount in USD Current assets $ 14,168 Property and equipment 1,435 Other intangible assets 11,600 Goodwill 10,661 Other assets 549 Total Assets 38,413 Accounts payable and accrued expenses 6,416 Other accrued expenses and liabilities 1,112 Total liabilities 7,528 Net assets acquired $ 30,885 Current assets acquired included approximately $2.8 million in cash. Trade receivables acquired of approximately $5.8 million were short-term in nature and considered to be collectible, and therefore, the carrying amounts of these assets represented their fair values. Inventory acquired of approximately $5.5 million consisted of raw materials and finished goods and was recorded at fair value based on the estimated net realizable value of these assets. Property, equipment, and leased assets acquired were not material in size or scope, and the carrying amounts of these assets approximated their fair values. The following table summarizes preliminary values of acquired intangible assets (dollars in thousands): Useful Life (Years) Estimated Fair Value (USD) Other Intangible Assets Trade name 3 $ 700 Developed technology 3 3,600 Customer relationships 9 7,300 Total other intangible assets $ 11,600 The fair value of intangible assets was determined by applying the income approach. The financial results included in our Statements of Operations since the acquisition date and through March 31, 2022 reflected revenues of approximately $1.2 million and net income of approximately $0.2 million. We incurred acquisition-related costs of approximately $0.2 million for the three months ended March 31, 2022. |
FUNDING AGREEMENTS
FUNDING AGREEMENTS | 3 Months Ended |
Mar. 31, 2022 | |
A T M Funding Agreement Disclosure [Abstract] | |
FUNDING AGREEMENTS | FUNDING AGREEMENTS We have commercial arrangements with third-party vendors to provide cash for certain of our fund dispensing devices. For the use of these funds, we pay a usage fee on either the average daily balance of funds utilized multiplied by a contractually defined usage rate or the amounts supplied multiplied by a contractually defined usage rate. These fund usage fees, reflected as interest expense within the Statements of Operations, were approximately $1.0 million and $0.7 million for the three months ended March 31, 2022 and 2021, respectively. We are exposed to interest rate risk to the extent that the applicable rates increase. Under these agreements, the currency supplied by third party vendors remains their sole property until the funds are dispensed. As these funds are not our assets, supplied cash is not reflected in our Balance Sheets. The outstanding balance of funds provided from the third parties were approximately $390.4 million and $401.8 million as of March 31, 2022 and December 31, 2021, respectively. Our primary commercial arrangement, the Contract Cash Solutions Agreement, as amended, is with Wells Fargo, N.A. (“Wells Fargo”). Wells Fargo provides us with cash up to $300 million with the ability to increase the amount as defined within the agreement or otherwise permitted by the vault cash provider. The term of the agreement expires on June 30, 2023 and will automatically renew for additional one-year periods unless either party provides a ninety-day written notice of its intent not to renew. We are responsible for losses of cash in the fund dispensing devices under this agreement, and we self-insure for this type of risk. There were no material losses for the three months ended March 31, 2022 and 2021. |
TRADE AND OTHER RECEIVABLES
TRADE AND OTHER RECEIVABLES | 3 Months Ended |
Mar. 31, 2022 | |
Receivables [Abstract] | |
TRADE AND OTHER RECEIVABLES | TRADE AND OTHER RECEIVABLESTrade and other receivables represent short-term credit granted to customers and long-term loans receivable in connection with our Games and FinTech equipment and compliance products. Trade and loans receivables generally do not require collateral. The balance of trade and loans receivables consists of outstanding balances owed to us by gaming establishments. Other receivables include income tax receivables and other miscellaneous receivables. The balance of trade and other receivables consisted of the following (in thousands): At March 31, At December 31, 2022 2021 Trade and other receivables, net Games trade and loans receivables $ 78,349 $ 77,053 FinTech trade and loans receivables 26,989 21,504 Contract assets (1) 14,514 15,221 Other receivables 8,079 3,695 Net investment in sales-type leases 898 1,331 Total trade and other receivables, net 128,829 118,804 Non-current portion of receivables Games trade and loans receivables 1,265 1,348 FinTech trade and loans receivables 10,625 7,340 Contract assets (1) 3,852 5,294 Total non-current portion of receivables 15,742 13,982 Total trade and other receivables, current portion $ 113,087 $ 104,822 (1) Refer to “Note 2 — Basis of Presentation and Summary of Significant Accounting Policies” for a discussion on the contract assets. Allowance for Credit Losses The activity in our allowance for credit losses for the three months ended March 31, 2022 and 2021 is as follows (in thousands): Three Months Ended March 31, 2022 2021 Beginning allowance for credit losses $ (5,161) $ (3,689) Provision (1,947) (1,999) Charge-offs and recoveries 2,085 1,239 Ending allowance for credit losses $ (5,023) $ (4,449) |
INVENTORY
INVENTORY | 3 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORY | INVENTORY Our inventory primarily consists of component parts as well as work-in-progress and finished goods. The cost of inventory includes cost of materials, labor, overhead and freight, and is accounted for using the first in, first out method. The inventory is stated at the lower of cost or net realizable value. Inventory consisted of the following (in thousands): At March 31, At December 31, 2022 2021 Inventory Component parts, net of reserves of $2,098 and $2,422 at March 31, 2022 and December 31, 2021, respectively $ 33,646 $ 22,490 Work-in-progress 4,179 554 Finished goods 7,874 6,189 Total inventory $ 45,699 $ 29,233 |
PREPAID EXPENSES AND OTHER ASSE
PREPAID EXPENSES AND OTHER ASSETS | 3 Months Ended |
Mar. 31, 2022 | |
Prepaid Expense and Other Assets [Abstract] | |
PREPAID EXPENSES AND OTHER ASSETS | PREPAID EXPENSES AND OTHER ASSETS Prepaid expenses and other assets include the balance of prepaid expenses, deposits, debt issuance costs on our New Revolver (as defined below), restricted cash, operating lease ROU assets, and other assets. The current portion of these assets is included in prepaid expenses and other current assets and the non-current portion is included in other assets, both of which are contained within the Balance Sheets. The balance of the current portion of prepaid expenses and other assets consisted of the following (in thousands): At March 31, At December 31, 2022 2021 Prepaid expenses and other current assets Prepaid expenses $ 15,738 $ 14,389 Deposits 8,102 7,709 Restricted cash (1) 1,534 1,616 Other 2,482 3,585 Total prepaid expenses and other current assets $ 27,856 $ 27,299 (1) Refer to “Note 2 — Basis of Presentation and Summary of Significant Accounting Policies” for discussion on the composition of the restricted cash balance. The balance of the non-current portion of other assets consisted of the following (in thousands): At March 31, At December 31, 2022 2021 Other assets Operating lease ROU assets $ 17,483 $ 12,692 Prepaid expenses and deposits 4,948 4,789 Debt issuance costs of revolving credit facility 1,664 1,760 Other 355 418 Total other assets $ 24,450 $ 19,659 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment consist of the following (dollars in thousands): At March 31, 2022 At December 31, 2021 Useful Life Cost Accumulated Net Book Cost Accumulated Net Book Property and equipment Rental pool - deployed 2-4 $ 253,441 $ 171,562 $ 81,879 $ 248,958 $ 166,075 $ 82,883 Rental pool - undeployed 2-4 24,676 19,730 4,946 23,284 18,285 4,999 FinTech equipment 1-5 33,265 21,978 11,287 32,802 21,257 11,545 Leasehold and building improvements Lease Term 12,622 9,612 3,010 12,598 9,234 3,364 Machinery, office, and other equipment 1-5 47,352 29,179 18,173 45,277 28,075 17,202 Total $ 371,356 $ 252,061 $ 119,295 $ 362,919 $ 242,926 $ 119,993 Depreciation expense related to property and equipment totaled approximately $15.2 million and $16.2 million for the three months ended March 31, 2022 and 2021, respectively. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill Goodwill represents the excess of the purchase price over the identifiable tangible and intangible assets acquired plus liabilities assumed arising from business combinations. The balance of goodwill was approximately $695.4 million and $682.7 million at March 31, 2022 and December 31, 2021, respectively. We have the following reporting units: (i) Games; (ii) Financial Access Services; (iii) Kiosk Sales and Services; (iv) Central Credit Services; (v) Compliance Sales and Services; and (vi) Loyalty Sales and Services. In accordance with ASC 350 (“Intangibles—Goodwill and Other”), we test goodwill at the reporting unit level, which is identified as an operating segment or one level below, for impairment on an annual basis and between annual tests if events and circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount. We test our goodwill for impairment on October 1 each year, or more frequently if events or changes in circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The annual impairment test is completed using either: a qualitative “Step 0” assessment based on reviewing relevant events and circumstances or a quantitative “Step 1” assessment, which determines the fair value of the reporting unit, using both an income approach that discounts future cash flows based on the estimated future results of our reporting units and a market approach that compares market multiples of comparable companies to determine whether or not any impairment exists. To the extent the carrying amount of a reporting unit is less than its estimated fair value, an impairment charge is recorded. There was no impairment identified for our goodwill for the three months ended March 31, 2022 and 2021. Other Intangible Assets Other intangible assets consist of the following (dollars in thousands): At March 31, 2022 At December 31, 2021 Useful Life Cost Accumulated Net Book Cost Accumulated Net Book Other intangible assets Contract rights under placement fee agreements 2-7 $ 59,376 $ 6,664 $ 52,712 $ 58,837 $ 4,237 $ 54,600 Customer relationships 3-14 310,613 212,542 98,071 303,238 206,273 96,965 Developed technology and software 1-6 355,920 286,665 69,255 342,309 280,412 61,897 Patents, trade names, and other 2-18 21,247 19,548 1,699 20,547 19,415 1,132 Total $ 747,156 $ 525,419 $ 221,737 $ 724,931 $ 510,337 $ 214,594 Amortization expense related to other intangible assets was approximately $13.6 million and $14.7 million for the three months ended March 31, 2022 and 2021, respectively. We evaluate our other intangible assets for potential impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. During the three months ended March 31, 2022 and 2021, there were no material write-downs of intangible assets. |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 3 Months Ended |
Mar. 31, 2022 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | ACCOUNTS PAYABLE AND ACCRUED EXPENSES The following table presents our accounts payable and accrued expenses (in thousands): At March 31, At December 31, 2022 2021 Accounts payable and accrued expenses Customer commissions payable $ 65,764 $ 57,515 Accounts payable - trade 47,184 25,453 Contract liabilities 38,877 36,238 Payroll and related expenses 17,893 29,125 Operating lease liabilities 5,842 5,663 Accrued interest 5,816 9,273 Financial access processing and related expenses 3,865 3,619 Accrued taxes 3,317 2,756 Other 3,996 4,291 Total accounts payable and accrued expenses $ 192,554 $ 173,933 |
LONG-TERM DEBT
LONG-TERM DEBT | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT The following table summarizes our outstanding indebtedness (dollars in thousands): Maturity Interest At March 31, At December 31, Date Rate 2022 2021 Long-term debt $600 million New Term Loan 2028 LIBOR+2.50% $ 597,000 $ 598,500 $125 million New Revolver 2026 LIBOR+2.50% — — Senior secured credit facilities 597,000 598,500 $400 million 2021 Unsecured Notes 2029 5.00% 400,000 400,000 Total debt 997,000 998,500 Debt issuance costs and discount (16,358) (16,975) Total debt after debt issuance costs and discount 980,642 981,525 Current portion of long-term debt (6,000) (6,000) Total long-term debt, net of current portion $ 974,642 $ 975,525 New Credit Facilities Our Senior Secured Credit Facilities consist of: (i) a seven-year $600 million senior secured term loan due 2028 issued at 99.75% of par (the “New Term Loan ” ); and (ii) a $125 million senior secured revolving credit facility due 2026, which was undrawn at closing (the “ New Revolver” and together with the New Term Loan, the “New Credit Facilities”). The Company, as borrower, entered into the credit agreement dated as of August 3, 2021 (the “Closing Date”), among the Company, the lenders party thereto and Jefferies Finance LLC, as administrative agent, collateral agent, swing line lender and a letter of credit issuer (the “New Credit Agreement”). The interest rate per annum applicable to the New Credit Facilities will be, at the Company’s option, either the Eurodollar rate with a 0.50% LIBOR floor plus a margin of 2.50% or the base rate plus a margin of 1.50%. The New Revolver is available for general corporate purposes, including permitted acquisitions, working capital and the issuance of letters of credit. Borrowings under the New Revolver are subject to the satisfaction of customary conditions, including the absence of defaults and the accuracy of representations and warranties. The Company is required to make periodic payments on the New Term Loan in an amount equal to 0.25% per quarter of the initial aggregate principal, with the final principal repayment installment on the maturity date. Interest is due in arrears on each interest payment date applicable thereto and at such other times as may be specified in the New Credit Agreement. As to any loan other than a base rate loan, the interest payment dates shall be the last day of each interest period applicable to such loan and the maturity date (provided, however, that if any interest period for a Eurodollar Rate loan exceeds three months, the respective dates that fall every three months after the beginning of such interest period shall also be interest payment dates). As to any base rate loan, commencing on the last business day of December 2021, the interest payment dates shall be last business day of each of March, June, September and December and the maturity date. Voluntary prepayments of the New Term Loan and the New Revolver and voluntary reductions in the unused commitments are permitted in whole or in part, in minimum amounts as set forth in the New Credit Agreement governing the New Credit Facilities, with prior notice, and without premium or penalty, except that certain refinancings or repricings of the New Term Loan within six months after the Closing Date will be subject to a prepayment premium of 1.00% of the principal amount repaid. The New Credit Agreement contains certain covenants that, among other things, limit the Company’s ability, and the ability of certain of its subsidiaries, to incur additional indebtedness, sell assets or consolidate or merge with or into other companies, pay dividends or repurchase or redeem capital stock, make certain investments, issue capital stock of subsidiaries, incur liens, prepay, redeem or repurchase subordinated debt, and enter into certain types of transactions with its affiliates. The New Credit Agreement also requires the Company, together with its subsidiaries, to comply with a maximum consolidated secured leverage ratio of 4.25:1.00 as of the measurement date. The weighted average interest rate on the New Term Loan was 3.00% for the three months ended March 31, 2022. Senior Unsecured Notes Our Senior Unsecured Notes (the “2021 USN”) had an outstanding balance of approximately $400.0 million as of March 31, 2022, for which interest accrues at a rate of 5.00% per annum and is payable semi-annually in arrears on each January 15 and July 15. Compliance with Debt Covenants |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES We are involved in various legal proceedings in the ordinary course of our business. While we believe resolution of the claims brought against us, both individually and in the aggregate, will not have a material adverse impact on our financial condition or results of operations, litigation of this nature is inherently unpredictable. Our views on these legal proceedings, including those described below, may change in the future. We intend to vigorously defend against these actions, and ultimately believe we should prevail. Legal Contingencies We evaluate matters and record an accrual for legal contingencies when it is both probable that a liability has been incurred and the amount or range of the loss may be reasonably estimated. We evaluate legal contingencies at least quarterly and, as appropriate, establish new accruals or adjust existing accruals to reflect: (i) the facts and circumstances known to us at the time, including information regarding negotiations, settlements, rulings, and other relevant events and developments; (ii) the advice and analyses of counsel; and (iii) the assumptions and judgment of management. Legal costs associated with such proceedings are expensed as incurred. Due to the inherent uncertainty of legal proceedings as a result of the procedural, factual, and legal issues involved, the outcomes of our legal contingencies could result in losses in excess of amounts we have accrued. We did not have any material legal matters that were accrued for as of March 31, 2022. We received service of process on one (1) new legal matter ( Mary Parrish matter ) described below. FACTA-related matter: Geraldine Donahue, et al. v. Everi Payments Inc., et al. (“Donahue”) is a putative class action matter filed on December 12, 2018, in the Circuit Court of Cook County, Illinois County Division, Chancery Division. The original defendant was dismissed and Everi Holdings and FinTech (the “Defendants”) were substituted as the defendants on April 22, 2019. The plaintiff, on behalf of herself and others similarly situated, alleges that Everi Holdings and Everi FinTech (i) have violated certain provisions of FACTA by their failure, as agent to the original defendant, to properly truncate patron credit card numbers when printing financial access receipts as required under FACTA, and (ii) have been unjustly enriched through the charging of service fees for transactions conducted at the original defendant’s facilities. The plaintiff sought an award of statutory damages, attorneys’ fees, and costs. The parties settled this matter on a nationwide class basis. On December 3, 2020, the court entered the Final Order and Judgment approving the settlement and dismissing all claims asserted against the Defendants with prejudice. Everi Holdings and Everi FinTech have paid all funds required pursuant to the settlement. Distributions were made to class members and remaining unclaimed funds were distributed to nonprofit charitable organizations in compliance with the court’s October 4, 2021, Defense counsel for Everi Payments Inc. has asked the court provide a final closing order/entry as this matter is now closed. NRT matter: NRT Technology Corp., et al. v. Everi Holdings Inc., et al. is a civil action filed on April 30, 2019 against Everi Holdings and Everi FinTech in the United States District Court for the District of Delaware by NRT Technology Corp. and NRT Technology, Inc., alleging monopolization of the market for unmanned, integrated kiosks in violation of federal antitrust laws, fraudulent procurement of patents on functionality related to such unmanned, integrated kiosks and sham litigation related to prior litigation brought by Everi FinTech (operating as Global Cash Access Inc.) against the plaintiff entities. The plaintiffs are seeking compensatory damages, treble damages, and injunctive and declaratory relief. Discovery is closed and this case is currently set for trial on September 26, 2022. We are currently unable to determine the probability of the outcome or estimate the range of reasonably possible loss, if any, in this matter. Zenergy Systems, LLC matter: Zenergy Systems, LLC v. Everi Payments Inc. is a civil action filed on May 29, 2020, against Everi FinTech in the United States District Court for the District of Nevada, Clark County by Zenergy Systems, LLC, alleging breach of contract, breach of a non-disclosure agreement, breach of the covenant of good faith and fair dealing, and breach of a confidential relationship related to a contract with Everi FinTech that expired in November 2019. The plaintiff is seeking compensatory and punitive damages. Everi FinTech has counterclaimed against Zenergy alleging breach of contract, breach of implied covenant of good faith and fair dealing, and for declaratory relief. The case is set for trial in June 2022. We are currently unable to determine the probability of the outcome or estimate the range of reasonably possible loss, if any, in this matter . Sadie Saavedra matter: Sadie Saavedra, et al. v. Everi Payments Inc., et al. is a civil action filed on August 30, 2021, against Everi Holdings and Everi FinTech in the United States District Court, Central District of California (Western Division) by Sadie Saavedra, individually and on behalf of a class of similarly situated individuals, alleging violations of the Unfair Competition Law (California Business & Professions Code § 17200) and unjust enrichment. The plaintiffs allege that certain of Everi’s ATMs screen are deceptive and designed to maximize the number of transaction fees and mislead consumers into incurring fees for additional transactions. The plaintiffs are seeking restitution, injunctive relief and attorneys’ fees. On April 11, 2022, the Court entered an Order granting the Motion to Dismiss on behalf of Everi Holdings and Everi FinTech. It is unclear at this time if the plaintiff will appeal the Court’s Order and we are currently unable to determine the probability of the outcome or estimate the range of reasonably possible loss, if any, in this matter . Sightline Payments matter: S ightline Payments LLC v. Everi Holdings Inc., et al. is a civil action filed on September 30, 2021, against Everi Holdings, Everi FinTech, Everi Games Holding Inc., and Everi Games in the United States District Court, Western District of Texas (Waco Division) by Sightline Payments LLC alleging patent infringement in violation of 35 U.S.C. § 271 et seq. The plaintiff’s complaint alleges that Everi’s CashClub Wallet product infringes on certain patents owned by the plaintiff. The plaintiff is seeking compensatory damages. Everi filed a Motion to Dismiss or Transfer for Lack of Venue. The court has not yet set a hearing date for the pending motion. We are in the early stages of litigation and currently unable to determine the probability of the outcome or estimate the range of reasonably possible loss, if any, in this matter. Mary Parrish matter: Mary Parrish v. Everi Holdings Inc., et al. is a civil action filed on December 28, 2021, against Everi Holdings and Everi FinTech in the District Court of Nevada, Clark County by Mary Parrish alleging violation of the Fair and Accurate Credit Transactions Act (FACTA) amendment to the Fair Credit Reporting Act (FCRA) . Plaintiff’s complaint alleges she received a printed receipt for cash access services performed at an Everi Payments’ ATM which displayed more than four (4) digits of the account number. Plaintiff seeks statutory damages, punitive damages, injunctive relief, attorneys’ fees, and other relief as the court deems proper. Everi filed a Petition for Removal to the United States District Court, District of Nevada. Thereafter, Everi filed a Motion to Dismiss, which is pending in the United States District Court. Due to the early stages of the litigation, we are In addition, we have commitments with respect to certain lease obligations discussed in “Note 3 — Leases” and installment payments under our purchase agreements discussed in “Note 4 — Business Combinations.” |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY On February 28, 2020, our Board of Directors authorized and approved a new share repurchase program granting us the authority to repurchase an amount not to exceed $10.0 million of outstanding Company common stock with no minimum number of shares that the Company is required to repurchase. This repurchase program commenced in the first quarter of 2020 and authorizes us to buy our common stock from time to time in open market transactions, block trades or in private transactions in accordance with trading plans established in accordance with Rules 10b5-1 and 10b-18 of the Securities Exchange Act of 1934, as amended, or by a combination of such methods, including compliance with the Company’s finance agreements. The share repurchase program is subject to available liquidity, general market and economic conditions, alternate uses for the capital and other factors, and may be suspended or discontinued at any time without prior notice. In light of COVID-19, we have suspended our share repurchase program. There were no share repurchases during the three months ended March 31, 2022 and 2021 , respectively. |
WEIGHTED AVERAGE SHARES OF COMM
WEIGHTED AVERAGE SHARES OF COMMON STOCK | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
WEIGHTED AVERAGE SHARES OF COMMON STOCK | WEIGHTED AVERAGE SHARES OF COMMON STOCK The weighted average number of common stock shares outstanding used in the computation of basic and diluted earnings per share is as follows (in thousands): Three Months Ended March 31, 2022 2021 Weighted average shares Weighted average number of common shares outstanding - basic 91,408 86,984 Potential dilution from equity awards (1) 10,063 10,984 Weighted average number of common shares outstanding - diluted (1) 101,471 97,968 |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION Equity Incentive Awards Generally, we grant the following types of awards: (i) restricted stock units with either time- or performance-based criteria; (ii) time-based options; and (iii) market-based options. We estimate forfeiture amounts based on historical patterns. A summary of award activity is as follows (in thousands): Stock Options Restricted Stock Units Outstanding, December 31, 2021 7,073 3,540 Granted — 25 Exercised options or vested shares (164) (61) Canceled or forfeited — (13) Outstanding, March 31, 2022 6,909 3,491 |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The income tax provision for the three months ended March 31, 2022, reflected an effective income tax rate of 23.6%, which was greater than the statutory federal rate of 21.0%, primarily due to state taxes and an accrual for foreign withholding tax, partially offset by both a research credit and the benefit from stock option exercises. The income tax provision for the three months ended March 31, 2021 reflected an effective income tax rate of 5.5%, which was less than the statutory federal rate of 21.0%, primarily due to a decrease in our valuation allowance for our deferred tax assets and the benefit from both stock option exercises and from a research credit. We have analyzed filing positions in all of the federal, state, and foreign jurisdictions where we are required to file income tax returns, as well as all open tax years in these jurisdictions. As of March 31, 2022, we recorded approximately $2.2 million of unrecognized tax benefits, all of which would impact our effective tax rate, if recognized. We do not anticipate that our unrecognized tax benefits will materially change within the next 12 months. We have not accrued any penalties and interest for our unrecognized tax benefits. We may, from time to time, be assessed interest or penalties by tax jurisdictions, although any such assessments historically have been minimal and immaterial to our financial results. Our policy for recording interest and penalties associated with audits and unrecognized tax benefits is to record such items as a component of income tax in our Statements of Operations. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-making group (the “CODM”). Our CODM generally consists of the Chief Executive Officer and the Chief Financial Officer. Our CODM allocates resources and measures profitability based on our operating segments, which are managed and reviewed separately, as each represents products and services that can be sold separately to our customers. Our segments are monitored by management for performance against our internal forecasts. We have reported our financial performance based on our segments in both the current and prior periods. Our CODM determined that our operating segments for conducting business are: (i) Games and (ii) FinTech: • Everi Games primarily provides gaming operators with gaming technology products and services, including: (i) gaming machines, primarily comprising Class II and Class III slot machines placed under participation or fixed-fee lease arrangements or sold to casino customers; (ii) provision and maintenance of the central determinant systems for the VLTs installed in the State of New York and similar technology in certain tribal jurisdictions; and (iii) B2B digital online gaming activities. • Everi FinTech provides gaming operators with financial technology and entertainment products and services, including: (i) financial access and related services supporting digital, cashless and physical cash options across mobile, assisted and self-service channels; (ii) loyalty and marketing software and tools, RegTech software solutions, other information-related products and services, and hardware maintenance services; and (iii) associated casino patron self-service hardware that utilizes our financial access, software and other services. Corporate overhead expenses have been allocated to the segments either through specific identification or based on a reasonable methodology. In addition, we record depreciation and amortization expenses to the business segments. Our business is predominantly domestic with no specific regional concentrations and no significant assets in foreign locations. The following tables present segment information (in thousands)*: Three Months Ended March 31, 2022 2021 Games Revenues Gaming operations $ 70,297 $ 58,141 Gaming equipment and systems 27,998 17,988 Gaming other 41 22 Total revenues 98,336 76,151 Costs and expenses Cost of revenues (1) Gaming operations 5,995 4,759 Gaming equipment and systems 16,782 10,307 Cost of revenues 22,777 15,066 Operating expenses 17,346 14,595 Research and development 7,630 5,667 Depreciation 12,981 14,563 Amortization 9,805 10,984 Total costs and expenses 70,539 60,875 Operating income $ 27,797 $ 15,276 (1) Exclusive of depreciation and amortization. * Rounding may cause variances. Three Months Ended March 31, 2022 2021 FinTech Revenues Financial access services $ 49,879 $ 38,712 Software and other 17,867 17,246 Hardware 9,534 7,004 Total revenues 77,280 62,962 Costs and expenses Cost of revenues (1) Financial access services 2,175 1,473 Software and other 935 1,004 Hardware 5,941 4,028 Cost of revenues 9,051 6,505 Operating expenses 32,479 23,448 Research and development 4,889 2,746 Depreciation 2,239 1,614 Amortization 3,828 3,731 Total costs and expenses 52,486 38,044 Operating income $ 24,794 $ 24,918 (1) Exclusive of depreciation and amortization. * Rounding may cause variances. At March 31, At December 31, 2022 2021 Total assets Games $ 909,584 $ 913,880 FinTech 706,438 721,770 Total assets $ 1,616,022 $ 1,635,650 Major Customers. No sin gle customer accounted for more than 10% of our revenues for the three months ended March 31, 2022 and 2021. Our five largest customers accounted for approximately 15% and 18% of our revenues for the three months ended March 31, 2022 and 2021, respectively. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Acquisition The Company acquired the stock of Intuicode Gaming Corporation (“Intuicode”), a privately owned game development and engineering firm focused on Historical Horse Racing (“HHR”) games, effective on April 30, 2022. The acquisition of Intuicode provides Everi with additional HHR expertise that will help the Company accelerate its entry into and growth in the expanding HHR market that will benefit the Games segment. U nder the terms of the stock purchase agreement, the acquisition cost includes an initial payment of $12.5 million, with two additional payments based on future revenue to be made on each of the first and second anniversaries of the acquisition's closing in 2023 and 2024, which is expected to increase the total consideration to be between $22 million and $27 million. Everi expects to fund the total purchase price from existing cash on hand and future cash flow. This transaction will be accounted for as a business combination under the acquisition method of accounting. The acquisition is not expected to have a material impact on our results of operations or financial condition. Share Repurchase Program On May 4, 2022, our Board of Directors authorized and approved a new share repurchase program in an amount not to exceed $150 million pursuant to which we may purchase outstanding Company common stock in open market or privately negotiated transactions over a period of eighteen (18) months through November 4, 2023, in accordance with Company and regulatory policies and trading plans established in accordance with Rules 10b5-1 and 10b-18 of the Securities Exchange Act of 1934. The actual number of shares to be purchased will depend upon market conditions and is subject to available liquidity, general market and economic conditions, alternative uses for the capital and other factors. All shares purchased will be held in the Company’s treasury for possible future use. As of March 31, 2022, Everi had approximately 91.5 million shares issued and outstanding, net of 25.7 million shares held in the Company’s treasury. There is no minimum number of shares that the Company is required to repurchase, and the program may be suspended or discontinued at any time without prior notice. This new repurchase program supersedes and replaces, in its entirety, the previous share repurchase program. |
BASIS OF PRESENTATION AND SUM_2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Our unaudited condensed consolidated financial statements included herein have been prepared by us pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Some of the information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) have been condensed or omitted pursuant to such rules and regulations, although we believe the disclosures are adequate to make the information presented not misleading. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary for a fair statement of results for the interim periods have been made. The results for the three months ended March 31, 2022 are not necessarily indicative of results to be expected for the full fiscal year. The Financial Statements should be read in conjunction with the consolidated financial statements and notes thereto included in the most recently filed Annual Report. |
Revenue Recognition | Revenue Recognition Overview We evaluate the recognition of revenue based on the criteria set forth in Accounting Standards Codification (“ASC”) 606 — Revenue from Contracts with Customers and ASC 842 — Leases, as appropriate. We recognize revenue upon transferring control of goods or services to our customers in an amount that reflects the consideration we expect to receive in exchange for those goods or services. We enter into contracts with customers that include various performance obligations consisting of goods, services, or combinations of goods and services. Timing of the transfer of control varies based on the nature of the contract. We recognize revenue net of any sales and other taxes collected from customers, which are subsequently remitted to governmental authorities and are not included in revenues or operating expenses. We measure revenue based on the consideration specified in a contract with a customer and adjusted, as necessary. Disaggregation of Revenues We disaggregate revenues based on the nature and timing of the cash flows generated by such revenues as presented in “Note 18 — Segment Information.” Contract Balances Since our contracts may include multiple performance obligations, there is often a timing difference between cash collections and the satisfaction of such performance obligations and revenue recognition. Such arrangements are evaluated to determine whether contract assets and liabilities exist. We generally record contract assets when the timing of billing differs from when revenue is recognized due to contracts containing specific performance obligations that are required to be met prior to a customer being invoiced. We generally record contract liabilities when cash is collected in advance of us satisfying performance obligations, including those that are satisfied over a period of time. Balances of our contract assets and contract liabilities may fluctuate due to timing of cash collections. The following table summarizes our contract assets and contract liabilities arising from contracts with customers (in thousands): Three Months Ended March 31, 2022 2021 Contract assets (1) Balance at January 1 - current $ 9,927 $ 9,240 Balance at January 1 - non-current 5,294 8,321 Total 15,221 17,561 Balance at March 31 - current 10,662 9,796 Balance at March 31 - non-current 3,852 7,299 Total 14,514 17,095 Decrease $ (707) $ (466) Contract liabilities (2) Balance at January 1 - current $ 36,238 $ 26,980 Balance at January 1 - non-current 377 289 Total 36,615 27,269 Balance at March 31 - current 38,877 27,887 Balance at March 31 - non-current 213 98 Total 39,090 27,985 Increase $ 2,475 $ 716 (1) The current portion of contract assets is included within trade and other receivables, net, and the non-current portion is included within other receivables in our Balance Sheets. (2) The current portion of contract liabilities is included within accounts payable and accrued expenses, and the non-current portion is included within other accrued expenses and liabilities in our Balance Sheets. We recognized approximately $12.7 million and $10.5 million in revenue that was included in the beginning contract liability balance during the three months ended March 31, 2022 and 2021, respectively. Games Revenues Our products and services include electronic gaming devices, such as Native American Class II offerings and other electronic bingo products, Class III slot machine offerings, VLTs, B2B digital online gaming activities, accounting and central determinant systems, and other back office systems. We conduct our Games segment business based on results generated from the following major revenue streams: (i) Gaming Operations; (ii) Gaming Equipment and Systems; and (iii) Gaming Other. We recognize our Gaming Operations revenue based on criteria set forth in ASC 842 or ASC 606, as applicable. The amount of lease revenue included in our Gaming Operations revenues and recognized under ASC 842 was approximately $47.1 million and $40.8 million for the three months ended March 31, 2022 and 2021, respectively. FinTech Revenues Our FinTech products and services include solutions that we offer to gaming establishments to provide their patrons with financial access and funds-based services supporting digital, cashless and physical cash options across mobile, assisted and self-service channels along with related loyalty and marketing tools, and other information-related products and services. In addition, our services operate as part of an end-to-end se curity suite to protect against cyber-related attacks and maintain the necessary secured environments to maintain compliance with applicable regulatory requirements. These solutions include: access to cash and cashless funding at gaming facilities via ATM debit withdrawals, credit card financial access transactions, and POS debit card purchases at casino cages, kiosk and mobile POS devices; accounts for the CashClub Wallet, check warranty services, self-service ATMs and fully integrated kiosk and maintenance services; self-service loyalty tools and promotion management software; compliance, audit, and data software; casino credit data and reporting services; marketing and promotional offering subscription-based services; and other ancillary offerings. We conduct our FinTech segment business based on results generated from the following major revenue streams: (i) Financial Access Services; (ii) Software and Other; and (iii) Hardware. Hardware revenues are derived from the sale of our financial access and loyalty kiosks and related equipment and are accounted for under ASC 606, unless such transactions meet the definition of a sales type or direct financing lease, which are accounted for under ASC 842. We did not have any material financial access kiosk and related equipment sales contracts accounted for under ASC 842 during the three months ended March 31, 2022 and 2021. |
Restricted Cash | Restricted CashOur restricted cash primarily consists of: (i) funds held in connection with certain customer agreements; (ii) funds held in connection with a sponsorship agreement; (iii) wide area progressive (“WAP”)-related restricted funds; and (iv) financial access activities related to cashless balances held on behalf of patrons. |
Allowance for Credit Losses | Allowance for Credit Losses We continually evaluate the collectability of outstanding balances and maintain an allowance for credit losses related to our trade and other receivables and notes receivable that have been determined to have a high risk of uncollectability, which represents our best estimates of the current expected credit losses to be incurred in the future. To derive our estimates, we analyze historical collection trends and changes in our customer payment patterns, current and expected conditions and market trends along with our operating forecasts, concentration, and creditworthiness when evaluating the adequacy of our allowance for credit losses. In addition, with respect to our check warranty receivables, we are exposed to risk for the losses associated with warranted items that cannot be collected from patrons issuing these items. We evaluate the collectability of the outstanding balances and establish a reserve for the face amount of the current expected credit losses related to these receivables. Account balances are charged against the provision when the Company believes it is probable the receivable will not be recovered. The provision for doubtful accounts receivable is included within operating expenses and the check warranty loss reserves are included within financial access services cost of revenues in the Statements of Operations. |
Goodwill | Goodwill Goodwill represents the excess of the purchase price over the identifiable tangible and intangible assets acquired plus liabilities assumed arising from business combinations. We test for impairment annually on a reporting unit basis, at the beginning of our fourth fiscal quarter and between annual tests if events and circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The annual impairment test is completed using either: a qualitative “Step 0” assessment based on reviewing relevant events and circumstances; or a quantitative “Step 1” assessment, which determines the fair value of the reporting unit, using both an income approach that discounts future cash flows based on the estimated future results of our reporting units and a market approach that compares market multiples of comparable companies to determine whether an impairment exists. To the extent the carrying amount of a reporting unit is less than its estimated fair value, an impairment charge is recorded. |
Fair Values of Financial Instruments | Fair Values of Financial Instruments The fair value of a financial instrument represents the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Fair value estimates are made at a specific point in time, based upon relevant market information about the financial instrument. |
Recent Accounting Guidance | Recently Adopted Accounting Guidance Standard Description Date of Adoption Effect on Financial Statements ASU 2021-05 , 'Leases (Topic 842): Lessors—Certain Leases with Variable Lease Payments This ASU amends the lease classification requirements for lessors to align them with practice under ASC Topic 840 January 1, 2022 The adoption of this ASU did not have a material effect on our Financial Statements or on our disclosures. Recent Accounting Guidance Not Yet Adopted As of March 31, 2022, we do not anticipate recently issued accounting guidance to have a significant future impact on our consolidated financial statements. |
BASIS OF PRESENTATION AND SUM_3
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Contract Asset and Liability | The following table summarizes our contract assets and contract liabilities arising from contracts with customers (in thousands): Three Months Ended March 31, 2022 2021 Contract assets (1) Balance at January 1 - current $ 9,927 $ 9,240 Balance at January 1 - non-current 5,294 8,321 Total 15,221 17,561 Balance at March 31 - current 10,662 9,796 Balance at March 31 - non-current 3,852 7,299 Total 14,514 17,095 Decrease $ (707) $ (466) Contract liabilities (2) Balance at January 1 - current $ 36,238 $ 26,980 Balance at January 1 - non-current 377 289 Total 36,615 27,269 Balance at March 31 - current 38,877 27,887 Balance at March 31 - non-current 213 98 Total 39,090 27,985 Increase $ 2,475 $ 716 (1) The current portion of contract assets is included within trade and other receivables, net, and the non-current portion is included within other receivables in our Balance Sheets. (2) The current portion of contract liabilities is included within accounts payable and accrued expenses, and the non-current portion is included within other accrued expenses and liabilities in our Balance Sheets. |
Reconciliation of Cash, Cash Equivalents, and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Balance Sheets that sum to the total of the same such amounts shown in the statement of cash flows for the three months ended March 31, 2022 (in thousands). Classification on our Balance Sheets At March 31, 2022 At December 31, 2021 Cash and cash equivalents Cash and cash equivalents $ 269,400 $ 302,009 Restricted cash - current Prepaid expenses and other current assets 1,534 1,616 Restricted cash - non-current Other assets 101 101 Total $ 271,035 $ 303,726 |
Reconciliation of Cash, Cash Equivalents, and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Balance Sheets that sum to the total of the same such amounts shown in the statement of cash flows for the three months ended March 31, 2022 (in thousands). Classification on our Balance Sheets At March 31, 2022 At December 31, 2021 Cash and cash equivalents Cash and cash equivalents $ 269,400 $ 302,009 Restricted cash - current Prepaid expenses and other current assets 1,534 1,616 Restricted cash - non-current Other assets 101 101 Total $ 271,035 $ 303,726 |
Estimated Fair Value and Outstanding Balances of Borrowings | The estimated fair value and outstanding balances of our borrowings are as follows (dollars in thousands): Level of Hierarchy Fair Value Outstanding Balance March 31, 2022 $600 million New Term Loan 2 $ 591,030 $ 597,000 $400 million 2021 Unsecured Notes 2 $ 378,000 $ 400,000 December 31, 2021 $600 million New Term Loan 2 $ 598,171 $ 598,500 $400 million 2021 Unsecured Notes 2 $ 404,000 $ 400,000 |
Summary of Recent Accounting Guidance | Recently Adopted Accounting Guidance Standard Description Date of Adoption Effect on Financial Statements ASU 2021-05 , 'Leases (Topic 842): Lessors—Certain Leases with Variable Lease Payments This ASU amends the lease classification requirements for lessors to align them with practice under ASC Topic 840 January 1, 2022 The adoption of this ASU did not have a material effect on our Financial Statements or on our disclosures. |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Balance Sheet Information | Supplemental balance sheet information related to our operating leases is as follows (in thousands): Classification on our Balance Sheets At March 31, 2022 At December 31, 2021 Assets Operating lease ROU assets Other assets, non-current $ 17,483 $ 12,692 Liabilities Current operating lease liabilities Accounts payable and accrued expenses $ 5,842 $ 5,663 Non-current operating lease liabilities Other accrued expenses and liabilities $ 16,099 $ 11,869 |
Cash Flow Information | Supplemental cash flow information related to leases is as follows (in thousands): Three Months Ended March 31, 2022 2021 Cash paid for: Long-term operating leases $ 1,668 $ 1,625 Short-term operating leases $ 409 $ 430 Right-of-use assets obtained in exchange for lease obligations: Operating leases (1) $ 5,947 $ — |
Lease Costs | Other information related to lease terms and discount rates is as follows: At March 31, 2022 At December 31, 2021 Weighted Average Remaining Lease Term (in years): Operating leases 3.79 3.52 Weighted Average Discount Rate: Operating leases 4.55 % 5.04 % Components of lease expense, which are included in operating expenses, are as follows (in thousands): Three Months Ended March 31, 2022 2021 Operating Lease Cost: Operating lease cost $ 1,362 $ 1,460 Variable lease cost $ 279 $ 250 |
Payments Due | Maturities of lease liabilities are summarized as follows as of March 31, 2022 (in thousands): Year Ending December 31, Amount 2022 (excluding the three months ended March 31, 2022) $ 4,958 2023 6,377 2024 5,749 2025 5,043 2026 1,587 Thereafter 154 Total future minimum lease payments 23,868 Amount representing interest 1,927 Present value of future minimum lease payments 21,941 Current operating lease obligations 5,842 Long-term lease obligations $ 16,099 |
Sales-type lease | Supplemental balance sheet information related to our sales-type leases is as follows (in thousands): Classification on our Balance Sheets At March 31, 2022 At December 31, 2021 Assets Net investment in sales-type leases - current Trade and other receivables, net $ 898 $ 1,331 |
Business Combinations and Asset
Business Combinations and Asset Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Total Purchase Consideration | The total preliminary purchase consideration for ecash was as follows (in thousands, at fair value): Amount in USD Purchase consideration Cash consideration paid at closing $ 14,980 Cash consideration to be paid in subsequent periods 15,905 Total purchase consideration $ 30,885 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The information below reflects the preliminary amounts of identifiable assets acquired and liabilities assumed as of the closing date of the transaction (in thousands): Amount in USD Current assets $ 14,168 Property and equipment 1,435 Other intangible assets 11,600 Goodwill 10,661 Other assets 549 Total Assets 38,413 Accounts payable and accrued expenses 6,416 Other accrued expenses and liabilities 1,112 Total liabilities 7,528 Net assets acquired $ 30,885 The following table summarizes preliminary values of acquired intangible assets (dollars in thousands): Useful Life (Years) Estimated Fair Value (USD) Other Intangible Assets Trade name 3 $ 700 Developed technology 3 3,600 Customer relationships 9 7,300 Total other intangible assets $ 11,600 |
TRADE AND OTHER RECEIVABLES (Ta
TRADE AND OTHER RECEIVABLES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Receivables [Abstract] | |
Schedule of Components of Trade and Other Receivables | The balance of trade and other receivables consisted of the following (in thousands): At March 31, At December 31, 2022 2021 Trade and other receivables, net Games trade and loans receivables $ 78,349 $ 77,053 FinTech trade and loans receivables 26,989 21,504 Contract assets (1) 14,514 15,221 Other receivables 8,079 3,695 Net investment in sales-type leases 898 1,331 Total trade and other receivables, net 128,829 118,804 Non-current portion of receivables Games trade and loans receivables 1,265 1,348 FinTech trade and loans receivables 10,625 7,340 Contract assets (1) 3,852 5,294 Total non-current portion of receivables 15,742 13,982 Total trade and other receivables, current portion $ 113,087 $ 104,822 (1) Refer to “Note 2 — Basis of Presentation and Summary of Significant Accounting Policies” for a discussion on the contract assets. |
Activity in Allowance for Credit Losses | The activity in our allowance for credit losses for the three months ended March 31, 2022 and 2021 is as follows (in thousands): Three Months Ended March 31, 2022 2021 Beginning allowance for credit losses $ (5,161) $ (3,689) Provision (1,947) (1,999) Charge-offs and recoveries 2,085 1,239 Ending allowance for credit losses $ (5,023) $ (4,449) |
INVENTORY (Tables)
INVENTORY (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Components of Inventory | Inventory consisted of the following (in thousands): At March 31, At December 31, 2022 2021 Inventory Component parts, net of reserves of $2,098 and $2,422 at March 31, 2022 and December 31, 2021, respectively $ 33,646 $ 22,490 Work-in-progress 4,179 554 Finished goods 7,874 6,189 Total inventory $ 45,699 $ 29,233 |
PREPAID EXPENSES AND OTHER AS_2
PREPAID EXPENSES AND OTHER ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Prepaid Expense and Other Assets [Abstract] | |
Schedule of Components of Current Portion of Prepaid and Other Assets | The balance of the current portion of prepaid expenses and other assets consisted of the following (in thousands): At March 31, At December 31, 2022 2021 Prepaid expenses and other current assets Prepaid expenses $ 15,738 $ 14,389 Deposits 8,102 7,709 Restricted cash (1) 1,534 1,616 Other 2,482 3,585 Total prepaid expenses and other current assets $ 27,856 $ 27,299 (1) Refer to “Note 2 — Basis of Presentation and Summary of Significant Accounting Policies” for discussion on the composition of the restricted cash balance. |
Schedule of Components of Non-Current Portion of Prepaid and Other Assets | The balance of the non-current portion of other assets consisted of the following (in thousands): At March 31, At December 31, 2022 2021 Other assets Operating lease ROU assets $ 17,483 $ 12,692 Prepaid expenses and deposits 4,948 4,789 Debt issuance costs of revolving credit facility 1,664 1,760 Other 355 418 Total other assets $ 24,450 $ 19,659 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Components of Property, Equipment and Leased Assets | Property and equipment consist of the following (dollars in thousands): At March 31, 2022 At December 31, 2021 Useful Life Cost Accumulated Net Book Cost Accumulated Net Book Property and equipment Rental pool - deployed 2-4 $ 253,441 $ 171,562 $ 81,879 $ 248,958 $ 166,075 $ 82,883 Rental pool - undeployed 2-4 24,676 19,730 4,946 23,284 18,285 4,999 FinTech equipment 1-5 33,265 21,978 11,287 32,802 21,257 11,545 Leasehold and building improvements Lease Term 12,622 9,612 3,010 12,598 9,234 3,364 Machinery, office, and other equipment 1-5 47,352 29,179 18,173 45,277 28,075 17,202 Total $ 371,356 $ 252,061 $ 119,295 $ 362,919 $ 242,926 $ 119,993 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Other Intangible Assets | Other intangible assets consist of the following (dollars in thousands): At March 31, 2022 At December 31, 2021 Useful Life Cost Accumulated Net Book Cost Accumulated Net Book Other intangible assets Contract rights under placement fee agreements 2-7 $ 59,376 $ 6,664 $ 52,712 $ 58,837 $ 4,237 $ 54,600 Customer relationships 3-14 310,613 212,542 98,071 303,238 206,273 96,965 Developed technology and software 1-6 355,920 286,665 69,255 342,309 280,412 61,897 Patents, trade names, and other 2-18 21,247 19,548 1,699 20,547 19,415 1,132 Total $ 747,156 $ 525,419 $ 221,737 $ 724,931 $ 510,337 $ 214,594 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | The following table presents our accounts payable and accrued expenses (in thousands): At March 31, At December 31, 2022 2021 Accounts payable and accrued expenses Customer commissions payable $ 65,764 $ 57,515 Accounts payable - trade 47,184 25,453 Contract liabilities 38,877 36,238 Payroll and related expenses 17,893 29,125 Operating lease liabilities 5,842 5,663 Accrued interest 5,816 9,273 Financial access processing and related expenses 3,865 3,619 Accrued taxes 3,317 2,756 Other 3,996 4,291 Total accounts payable and accrued expenses $ 192,554 $ 173,933 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Indebtedness | The following table summarizes our outstanding indebtedness (dollars in thousands): Maturity Interest At March 31, At December 31, Date Rate 2022 2021 Long-term debt $600 million New Term Loan 2028 LIBOR+2.50% $ 597,000 $ 598,500 $125 million New Revolver 2026 LIBOR+2.50% — — Senior secured credit facilities 597,000 598,500 $400 million 2021 Unsecured Notes 2029 5.00% 400,000 400,000 Total debt 997,000 998,500 Debt issuance costs and discount (16,358) (16,975) Total debt after debt issuance costs and discount 980,642 981,525 Current portion of long-term debt (6,000) (6,000) Total long-term debt, net of current portion $ 974,642 $ 975,525 |
WEIGHTED AVERAGE SHARES OF CO_2
WEIGHTED AVERAGE SHARES OF COMMON STOCK (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of weighted average number of common shares outstanding used in computation of basic and diluted earnings per share | The weighted average number of common stock shares outstanding used in the computation of basic and diluted earnings per share is as follows (in thousands): Three Months Ended March 31, 2022 2021 Weighted average shares Weighted average number of common shares outstanding - basic 91,408 86,984 Potential dilution from equity awards (1) 10,063 10,984 Weighted average number of common shares outstanding - diluted (1) 101,471 97,968 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Award Activity | A summary of award activity is as follows (in thousands): Stock Options Restricted Stock Units Outstanding, December 31, 2021 7,073 3,540 Granted — 25 Exercised options or vested shares (164) (61) Canceled or forfeited — (13) Outstanding, March 31, 2022 6,909 3,491 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | The following tables present segment information (in thousands)*: Three Months Ended March 31, 2022 2021 Games Revenues Gaming operations $ 70,297 $ 58,141 Gaming equipment and systems 27,998 17,988 Gaming other 41 22 Total revenues 98,336 76,151 Costs and expenses Cost of revenues (1) Gaming operations 5,995 4,759 Gaming equipment and systems 16,782 10,307 Cost of revenues 22,777 15,066 Operating expenses 17,346 14,595 Research and development 7,630 5,667 Depreciation 12,981 14,563 Amortization 9,805 10,984 Total costs and expenses 70,539 60,875 Operating income $ 27,797 $ 15,276 (1) Exclusive of depreciation and amortization. * Rounding may cause variances. Three Months Ended March 31, 2022 2021 FinTech Revenues Financial access services $ 49,879 $ 38,712 Software and other 17,867 17,246 Hardware 9,534 7,004 Total revenues 77,280 62,962 Costs and expenses Cost of revenues (1) Financial access services 2,175 1,473 Software and other 935 1,004 Hardware 5,941 4,028 Cost of revenues 9,051 6,505 Operating expenses 32,479 23,448 Research and development 4,889 2,746 Depreciation 2,239 1,614 Amortization 3,828 3,731 Total costs and expenses 52,486 38,044 Operating income $ 24,794 $ 24,918 (1) Exclusive of depreciation and amortization. * Rounding may cause variances. At March 31, At December 31, 2022 2021 Total assets Games $ 909,584 $ 913,880 FinTech 706,438 721,770 Total assets $ 1,616,022 $ 1,635,650 |
BUSINESS - Narrative (Details)
BUSINESS - Narrative (Details) | 3 Months Ended |
Mar. 31, 2022segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of business segments | 2 |
BASIS OF PRESENTATION AND SUM_4
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Contract Asset and Liability (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Contract assets | ||||
Contract assets, current | $ 10,662 | $ 9,796 | $ 9,927 | $ 9,240 |
Contract assets, noncurrent | 3,852 | 7,299 | 5,294 | 8,321 |
Total | 14,514 | 17,095 | 15,221 | 17,561 |
Decrease | (707) | (466) | ||
Contract liabilities | ||||
Contract liabilities, current | 38,877 | 27,887 | 36,238 | 26,980 |
Contract liabilities, noncurrent | 213 | 98 | 377 | 289 |
Total | 39,090 | 27,985 | $ 36,615 | $ 27,269 |
Increase | $ 2,475 | $ 716 |
BASIS OF PRESENTATION AND SUM_5
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Contract with customer liability | $ 12,700 | $ 10,500 |
Total revenues | $ 175,616 | 139,113 |
Contractual terms of trade and loans receivable | 12 months | |
Games | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 98,336 | 76,151 |
Games | Gaming operations, leased equipment | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 47,100 | $ 40,800 |
BASIS OF PRESENTATION AND SUM_6
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Cash (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | $ 269,400 | $ 302,009 | ||
Restricted cash - current | 1,534 | 1,616 | ||
Total | 271,035 | 303,726 | $ 335,679 | $ 252,349 |
Cash and Cash Equivalents | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | 269,400 | 302,009 | ||
Prepaid Expenses and Other Current Assets | ||||
Cash and Cash Equivalents [Line Items] | ||||
Restricted cash - current | 1,534 | 1,616 | ||
Other Assets | ||||
Cash and Cash Equivalents [Line Items] | ||||
Restricted cash - non-current | $ 101 | $ 101 |
BASIS OF PRESENTATION AND SUM_7
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Estimated Fair Value and Outstanding Balances of Borrowings (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 | Aug. 03, 2021 | Dec. 31, 2019 |
Senior secured notes | New Revolver | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Principal amount of debt | $ 600,000,000 | $ 600,000,000 | $ 600,000,000 | |
Senior unsecured notes | 2021 Unsecured Notes | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Principal amount of debt | 400,000,000 | 400,000,000 | $ 400,000,000 | |
Fair Value | Level 2 | Term Loan | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Long-term debt | 591,030,000 | 598,171,000 | ||
Fair Value | Level 2 | Incremental Term Loan | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Long-term debt | 378,000,000 | 404,000,000 | ||
Outstanding Balance | Level 2 | Term Loan | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Long-term debt | 597,000,000 | 598,500,000 | ||
Outstanding Balance | Level 2 | Incremental Term Loan | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Long-term debt | $ 400,000,000 | $ 400,000,000 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Lessee, Lease, Description [Line Items] | ||
Sales-type lease, revenue | $ 0 | $ 0 |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Renewal term | 1 year | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Renewal term | 10 years |
LEASES - Balance Sheet Informat
LEASES - Balance Sheet Information (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other assets | Other assets |
Operating lease ROU assets | $ 17,483 | $ 12,692 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accounts payable and accrued expenses | Accounts payable and accrued expenses |
Current operating lease liabilities | $ 5,842 | $ 5,663 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other accrued expenses and liabilities | Other accrued expenses and liabilities |
Non-current operating lease liabilities | $ 16,099 | $ 11,869 |
LEASES - Cash Flow Information
LEASES - Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash paid for: | ||
Long-term operating leases | $ 1,668 | $ 1,625 |
Short-term operating leases | 409 | 430 |
Right-of-use assets obtained in exchange for lease obligations: | ||
Operating leases | $ 5,947 | $ 0 |
LEASES - Lease Costs (Details)
LEASES - Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Leases [Abstract] | |||
Weighted average remaining lease term, operating leases | 3 years 9 months 14 days | 3 years 6 months 7 days | |
Weighted average discount rate, operating leases | 4.55% | 5.04% | |
Operating lease cost | $ 1,362 | $ 1,460 | |
Variable lease cost | $ 279 | $ 250 |
LEASES - Payments Due (Details)
LEASES - Payments Due (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Amount | ||
2022 (excluding the three months ended March 31, 2022) | $ 4,958 | |
2023 | 6,377 | |
2024 | 5,749 | |
2025 | 5,043 | |
2026 | 1,587 | |
Thereafter | 154 | |
Total future minimum lease payments | 23,868 | |
Amount representing interest | 1,927 | |
Present value of future minimum lease payments | 21,941 | |
Current operating lease liabilities | 5,842 | $ 5,663 |
Long-term lease obligations | $ 16,099 | $ 11,869 |
LEASES - Sales-type lease (Deta
LEASES - Sales-type lease (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
Net investment in sales-type leases - current | $ 898 | $ 1,331 |
BUSINESS COMBINATIONS - Narrati
BUSINESS COMBINATIONS - Narrative (Details) - ecash Holdings Pty Limited $ in Thousands, $ in Millions | Mar. 01, 2022AUD ($) | Mar. 01, 2022USD ($) | Mar. 31, 2022USD ($) | Mar. 31, 2022USD ($) |
Business Acquisition [Line Items] | ||||
Cash consideration paid at closing | $ 20 | $ 14,980 | ||
Contingent consideration | 10,000 | |||
Payments for excess net working capital | 9 | |||
Goodwill, amortization period | 15 years | |||
Cash | 2,800 | |||
Trade receivables | 5,800 | |||
Inventory | $ 5,500 | |||
Revenue since acquisition date | $ 1,200 | |||
Net income since acquisition date | $ 200 | |||
Transaction costs | $ 200 | |||
Tranche One | ||||
Business Acquisition [Line Items] | ||||
Contingent consideration | $ 6.5 | |||
Contingent consideration, period since closing | 1 year | 1 year | ||
Tranche Two | ||||
Business Acquisition [Line Items] | ||||
Contingent consideration | $ 6.5 | |||
Contingent consideration, period since closing | 2 years | 2 years |
BUSINESS COMBINATIONS - Summary
BUSINESS COMBINATIONS - Summary of Total Purchase Consideration (Details) - Mar. 01, 2022 - ecash Holdings Pty Limited $ in Thousands, $ in Millions | AUD ($) | USD ($) |
Business Acquisition [Line Items] | ||
Cash consideration paid at closing | $ 20 | $ 14,980 |
Cash consideration to be paid in subsequent periods | 15,905 | |
Total purchase consideration | $ 30,885 |
BUSINESS COMBINATIONS - Summa_2
BUSINESS COMBINATIONS - Summary of Identifiable Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Mar. 01, 2022 | Dec. 31, 2021 |
Business Acquisition [Line Items] | |||
Goodwill | $ 695,436 | $ 682,663 | |
ecash Holdings Pty Limited | |||
Business Acquisition [Line Items] | |||
Current assets | $ 14,168 | ||
Property and equipment | 1,435 | ||
Other intangible assets | 11,600 | ||
Goodwill | 10,661 | ||
Other assets | 549 | ||
Total Assets | 38,413 | ||
Accounts payable and accrued expenses | 6,416 | ||
Other accrued expenses and liabilities | 1,112 | ||
Total liabilities | 7,528 | ||
Net assets acquired | $ 30,885 |
BUSINESS COMBINATIONS - Summa_3
BUSINESS COMBINATIONS - Summary of Acquired Intangible Assets (Details) - ecash Holdings Pty Limited - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 01, 2022 | |
Business Acquisition [Line Items] | ||
Other intangible assets | $ 11,600 | |
Trade name | ||
Business Acquisition [Line Items] | ||
Useful Life (Years) | 3 years | |
Other intangible assets | 700 | |
Developed technology | ||
Business Acquisition [Line Items] | ||
Useful Life (Years) | 3 years | |
Other intangible assets | 3,600 | |
Customer relationships | ||
Business Acquisition [Line Items] | ||
Useful Life (Years) | 9 years | |
Other intangible assets | $ 7,300 |
FUNDING AGREEMENTS (Details)
FUNDING AGREEMENTS (Details) - Indemnification Guarantee - USD ($) | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Contract Cash Solutions Agreement | |||
Funding Agreements | |||
Cash usage fees incurred | $ 1,000,000 | $ 700,000 | |
Outstanding balance | 390,400,000 | $ 401,800,000 | |
Contract Cash Solutions Agreement, as amended | |||
Funding Agreements | |||
Maximum amount | $ 300,000,000 | ||
Renewal period | 1 year | ||
Guarantor obligations, non-renewal notice period | 90 days |
TRADE AND OTHER RECEIVABLES - B
TRADE AND OTHER RECEIVABLES - Balance of Trade and Other Receivables (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Trade and other receivables, net | ||
Contract assets | $ 14,514 | $ 15,221 |
Other receivables | 8,079 | 3,695 |
Net investment in sales-type leases | 898 | 1,331 |
Total trade and other receivables, net | 128,829 | 118,804 |
Non-current portion of receivables | 15,742 | 13,982 |
Contract assets | 3,852 | 5,294 |
Total trade and other receivables, current portion | 113,087 | 104,822 |
Gaming operations | ||
Trade and other receivables, net | ||
Trade receivables, net | 78,349 | 77,053 |
Non-current portion of receivables | 1,265 | 1,348 |
FinTech | ||
Trade and other receivables, net | ||
Trade receivables, net | 26,989 | 21,504 |
Non-current portion of receivables | $ 10,625 | $ 7,340 |
TRADE AND OTHER RECEIVABLES - A
TRADE AND OTHER RECEIVABLES - Allowance for Credit Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning allowance for credit losses | $ (5,161) | $ (3,689) |
Provision | (1,947) | (1,999) |
Charge-offs and recoveries | 2,085 | 1,239 |
Ending allowance for credit losses | $ (5,023) | $ (4,449) |
INVENTORY (Details)
INVENTORY (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Inventory | ||
Component parts, net of reserves of $2,098 and $2,422 at March 31, 2022 and December 31, 2021, respectively | $ 33,646 | $ 22,490 |
Work-in-progress | 4,179 | 554 |
Finished goods | 7,874 | 6,189 |
Total inventory | 45,699 | 29,233 |
Component parts, reserves | $ 2,098 | $ 2,422 |
PREPAID EXPENSES AND OTHER AS_3
PREPAID EXPENSES AND OTHER ASSETS (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Prepaid expenses and other current assets | ||
Prepaid expenses | $ 15,738 | $ 14,389 |
Deposits | 8,102 | 7,709 |
Restricted cash | 1,534 | 1,616 |
Other | 2,482 | 3,585 |
Total prepaid expenses and other current assets | 27,856 | 27,299 |
Other assets | ||
Operating lease ROU assets | 17,483 | 12,692 |
Prepaid expenses and deposits | 4,948 | 4,789 |
Debt issuance costs of revolving credit facility | 1,664 | 1,760 |
Other | 355 | 418 |
Total other assets | $ 24,450 | $ 19,659 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||
Cost | $ 371,356 | $ 362,919 | |
Accumulated Depreciation | 252,061 | 242,926 | |
Net Book Value | 119,295 | 119,993 | |
Depreciation | 15,220 | $ 16,177 | |
FinTech | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation | 2,239 | $ 1,614 | |
Rental pool - deployed | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 253,441 | 248,958 | |
Accumulated Depreciation | 171,562 | 166,075 | |
Net Book Value | $ 81,879 | 82,883 | |
Rental pool - deployed | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life (Years) | 2 years | ||
Rental pool - deployed | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life (Years) | 4 years | ||
Rental pool - undeployed | |||
Property, Plant and Equipment [Line Items] | |||
Cost | $ 24,676 | 23,284 | |
Accumulated Depreciation | 19,730 | 18,285 | |
Net Book Value | $ 4,946 | 4,999 | |
Rental pool - undeployed | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life (Years) | 2 years | ||
Rental pool - undeployed | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life (Years) | 4 years | ||
Machinery, office, and other equipment | |||
Property, Plant and Equipment [Line Items] | |||
Cost | $ 47,352 | 45,277 | |
Accumulated Depreciation | 29,179 | 28,075 | |
Net Book Value | 18,173 | 17,202 | |
Machinery, office, and other equipment | FinTech | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 33,265 | 32,802 | |
Accumulated Depreciation | 21,978 | 21,257 | |
Net Book Value | $ 11,287 | 11,545 | |
Machinery, office, and other equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life (Years) | 1 year | ||
Machinery, office, and other equipment | Minimum | FinTech | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life (Years) | 1 year | ||
Machinery, office, and other equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life (Years) | 5 years | ||
Machinery, office, and other equipment | Maximum | FinTech | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life (Years) | 5 years | ||
Leasehold and building improvements | |||
Property, Plant and Equipment [Line Items] | |||
Cost | $ 12,622 | 12,598 | |
Accumulated Depreciation | 9,612 | 9,234 | |
Net Book Value | $ 3,010 | $ 3,364 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Narrative (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill | $ 695,436,000 | $ 682,663,000 | |
Impairment of goodwill | 0 | $ 0 | |
Amortization of intangible assets | 13,600,000 | 14,700,000 | |
Impairment of intangible assets | $ 0 | $ 0 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Other Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 747,156 | $ 724,931 |
Accumulated Amortization | 525,419 | 510,337 |
Net Book Value | 221,737 | 214,594 |
Contract rights under placement fee agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 59,376 | 58,837 |
Accumulated Amortization | 6,664 | 4,237 |
Net Book Value | $ 52,712 | 54,600 |
Contract rights under placement fee agreements | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (Years) | 2 years | |
Contract rights under placement fee agreements | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (Years) | 7 years | |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 310,613 | 303,238 |
Accumulated Amortization | 212,542 | 206,273 |
Net Book Value | $ 98,071 | 96,965 |
Customer relationships | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (Years) | 3 years | |
Customer relationships | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (Years) | 14 years | |
Developed technology and software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 355,920 | 342,309 |
Accumulated Amortization | 286,665 | 280,412 |
Net Book Value | $ 69,255 | 61,897 |
Developed technology and software | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (Years) | 1 year | |
Developed technology and software | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (Years) | 6 years | |
Patents, trade names, and other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 21,247 | 20,547 |
Accumulated Amortization | 19,548 | 19,415 |
Net Book Value | $ 1,699 | $ 1,132 |
Patents, trade names, and other | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (Years) | 2 years | |
Patents, trade names, and other | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (Years) | 18 years |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||||
Customer commissions payable | $ 65,764 | $ 57,515 | ||
Accounts payable - trade | 47,184 | 25,453 | ||
Contract liabilities | 38,877 | 36,238 | $ 27,887 | $ 26,980 |
Payroll and related expenses | 17,893 | 29,125 | ||
Operating lease liabilities | 5,842 | 5,663 | ||
Accrued interest | 5,816 | 9,273 | ||
Financial access processing and related expenses | 3,865 | 3,619 | ||
Accrued taxes | 3,317 | 2,756 | ||
Other | 3,996 | 4,291 | ||
Total accounts payable and accrued expenses | $ 192,554 | $ 173,933 |
LONG-TERM DEBT - Summary of Ind
LONG-TERM DEBT - Summary of Indebtedness (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2022 | Dec. 31, 2021 | Aug. 03, 2021 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | ||||
Total debt | $ 997,000,000 | $ 998,500,000 | ||
Debt issuance costs and discount | (16,358,000) | (16,975,000) | ||
Total debt after debt issuance costs and discount | 980,642,000 | 981,525,000 | ||
Current portion of long-term debt | (6,000,000) | (6,000,000) | ||
Total long-term debt, net of current portion | 974,642,000 | 975,525,000 | ||
Senior secured notes | New Revolver | ||||
Debt Instrument [Line Items] | ||||
Principal amount of debt | $ 600,000,000 | 600,000,000 | $ 600,000,000 | |
Senior secured notes | New Revolver | London Interbank Offered Rate (LIBOR) | ||||
Debt Instrument [Line Items] | ||||
Basis spread | 2.50% | |||
Revolving credit facility | New Revolver | ||||
Debt Instrument [Line Items] | ||||
Total debt | $ 0 | 0 | ||
Principal amount of debt | $ 125,000,000 | |||
Revolving credit facility | New Revolver | London Interbank Offered Rate (LIBOR) | ||||
Debt Instrument [Line Items] | ||||
Basis spread | 2.50% | |||
Senior secured notes | ||||
Debt Instrument [Line Items] | ||||
Total debt | $ 597,000,000 | 598,500,000 | ||
Senior secured notes | Senior secured notes | New Revolver | ||||
Debt Instrument [Line Items] | ||||
Total debt | 597,000,000 | 598,500,000 | ||
Senior unsecured notes | 2021 Unsecured Notes | ||||
Debt Instrument [Line Items] | ||||
Total debt | 400,000,000 | 400,000,000 | ||
Principal amount of debt | $ 400,000,000 | $ 400,000,000 | $ 400,000,000 | |
Interest rate | 5.00% |
LONG-TERM DEBT - Narrative (Det
LONG-TERM DEBT - Narrative (Details) | Aug. 03, 2021USD ($) | Mar. 31, 2022USD ($) | Dec. 31, 2021USD ($) | Mar. 31, 2021USD ($) | Dec. 31, 2017 |
Senior unsecured notes | FinTech Segment | |||||
Debt Instrument [Line Items] | |||||
Principal amount of debt | $ 400,000,000 | ||||
New Credit Facilities | Eurodollar | |||||
Debt Instrument [Line Items] | |||||
Basis spread | 0.50% | ||||
New Credit Facilities | London Interbank Offered Rate (LIBOR) | |||||
Debt Instrument [Line Items] | |||||
Basis spread | 2.50% | ||||
New Credit Facilities | Base Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread | 1.50% | ||||
Credit Agreement Dated May 9, 2017 | |||||
Debt Instrument [Line Items] | |||||
Leverage ratio, maximum | 4.25 | ||||
2017 Unsecured Notes | Senior unsecured notes | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 5.00% | ||||
Senior secured notes | New Revolver | |||||
Debt Instrument [Line Items] | |||||
Debt term | 7 years | ||||
Principal amount of debt | $ 600,000,000 | $ 600,000,000 | $ 600,000,000 | ||
Percentage of par amount issued | 0.9975 | ||||
Senior secured notes | New Revolver | London Interbank Offered Rate (LIBOR) | |||||
Debt Instrument [Line Items] | |||||
Basis spread | 2.50% | ||||
Revolving credit facility | New Revolver | |||||
Debt Instrument [Line Items] | |||||
Principal amount of debt | $ 125,000,000 | ||||
Maximum borrowing capacity | $ 125,000,000 | ||||
Periodic payment, percentage of principal | 0.0025 | ||||
Period for prepayment premium from closing date | 6 months | ||||
Prepayment penalty, percentage of principal amount repaid | 1.00% | ||||
Revolving credit facility | New Revolver | London Interbank Offered Rate (LIBOR) | |||||
Debt Instrument [Line Items] | |||||
Basis spread | 2.50% | ||||
Incremental Term Loan | Incremental Term Loan Credit Agreement April 21, 2020 | |||||
Debt Instrument [Line Items] | |||||
Weighted average interest rate during period | 3.00% |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) | Feb. 28, 2020USD ($) |
February Twenty Twenty Stock Repurchase Program | |
Class of Stock [Line Items] | |
Stock repurchase program, authorized amount | $ 10,000,000 |
WEIGHTED AVERAGE SHARES OF CO_3
WEIGHTED AVERAGE SHARES OF COMMON STOCK (Details) - shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Weighted average shares | ||
Weighted average number of common shares outstanding - basic (in shares) | 91,408,000 | 86,984,000 |
Potential dilution from equity awards (in shares) | 10,063,000 | 10,984,000 |
Weighted average number of common shares outstanding - diluted (in shares) | 101,471,000 | 97,968,000 |
Anti-dilutive equity awards excluded from computation of earnings per share (in shares) | 0 | 0 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) shares in Thousands | 3 Months Ended |
Mar. 31, 2022shares | |
Stock Options | |
Stock Options | |
Outstanding (in shares) | 7,073 |
Granted (in shares) | 0 |
Exercised options (in shares) | (164) |
Canceled or forfeited (in shares) | 0 |
Outstanding (in shares) | 6,909 |
Restricted Stock Units | |
Restricted Stock Units | |
Outstanding (in shares) | 3,540 |
Granted (in shares) | 25 |
Vested (in shares) | (61) |
Canceled or forfeited (in shares) | (13) |
Outstanding (in shares) | 3,491 |
Common Stock | |
Restricted Stock Units | |
Number of shares available for grant (in shares) | 5,100 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 23.60% | 5.50% |
Statutory federal rate | 21.00% | 21.00% |
Unrecognized tax benefits | $ 2.2 |
SEGMENT INFORMATION - Revenues,
SEGMENT INFORMATION - Revenues, Operating Income, and Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | ||
Revenues | ||||
Total revenues | $ 175,616 | $ 139,113 | ||
Costs and expenses | ||||
Operating expenses | 49,825 | 38,043 | ||
Research and development | 12,519 | 8,413 | ||
Depreciation | 15,220 | 16,177 | ||
Amortization | 13,633 | 14,715 | ||
Total costs and expenses | 123,025 | 98,919 | ||
Operating income | 52,591 | 40,194 | ||
Total assets | ||||
Total assets | 1,616,022 | $ 1,635,650 | ||
Games | ||||
Revenues | ||||
Total revenues | 98,336 | 76,151 | ||
Costs and expenses | ||||
Cost of revenues | [1] | 22,777 | 15,066 | |
Operating expenses | 17,346 | 14,595 | ||
Research and development | 7,630 | 5,667 | ||
Depreciation | 12,981 | 14,563 | ||
Amortization | 9,805 | 10,984 | ||
Total costs and expenses | 70,539 | 60,875 | ||
Operating income | 27,797 | 15,276 | ||
Total assets | ||||
Total assets | 909,584 | 913,880 | ||
Games | Gaming operations | ||||
Revenues | ||||
Total revenues | 70,297 | 58,141 | ||
Costs and expenses | ||||
Cost of revenues | [1] | 5,995 | 4,759 | |
Games | Gaming equipment and systems | ||||
Revenues | ||||
Total revenues | 27,998 | 17,988 | ||
Costs and expenses | ||||
Cost of revenues | [1] | 16,782 | 10,307 | |
Games | Gaming other | ||||
Revenues | ||||
Total revenues | 41 | 22 | ||
FinTech | ||||
Revenues | ||||
Total revenues | 77,280 | 62,962 | ||
Costs and expenses | ||||
Cost of revenues | [1] | 9,051 | 6,505 | |
Operating expenses | 32,479 | 23,448 | ||
Research and development | 4,889 | 2,746 | ||
Depreciation | 2,239 | 1,614 | ||
Amortization | 3,828 | 3,731 | ||
Total costs and expenses | 52,486 | 38,044 | ||
Operating income | 24,794 | 24,918 | ||
Total assets | ||||
Total assets | 706,438 | $ 721,770 | ||
FinTech | Financial access services | ||||
Revenues | ||||
Total revenues | 49,879 | 38,712 | ||
Costs and expenses | ||||
Cost of revenues | [1] | 2,175 | 1,473 | |
FinTech | Software and other | ||||
Revenues | ||||
Total revenues | 17,867 | 17,246 | ||
Costs and expenses | ||||
Cost of revenues | [1] | 935 | 1,004 | |
FinTech | Hardware | ||||
Revenues | ||||
Total revenues | 9,534 | 7,004 | ||
Costs and expenses | ||||
Cost of revenues | [1] | $ 5,941 | $ 4,028 | |
[1] | (1) Exclusive of depreciation and amortization. |
SEGMENT INFORMATION - Major Cus
SEGMENT INFORMATION - Major Customers (Details) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Five largest customers | Customer risk | Revenue from Contract with Customer | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 15.00% | 18.00% |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) $ in Millions | May 04, 2022shares | May 03, 2022USD ($)payment | Mar. 31, 2022shares | Dec. 31, 2021shares |
Subsequent Event [Line Items] | ||||
Common stock issued (in shares) | 117,221,000 | 116,996,000 | ||
Common stock outstanding (in shares) | 91,519,000 | 91,313,000 | ||
Treasury stock (in shares) | 25,702,000 | 25,683,000 | ||
Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Number of shares authorized to be repurchased | 150,000,000 | |||
Stock repurchase program, period in force | 18 years | |||
Intuicode | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Cash consideration paid at closing | $ | $ 12.5 | |||
Number of additional contingent consideration payments | payment | 2 | |||
Intuicode | Subsequent Event | Minimum | ||||
Subsequent Event [Line Items] | ||||
Total purchase consideration | $ | $ 22 | |||
Intuicode | Subsequent Event | Maximum | ||||
Subsequent Event [Line Items] | ||||
Total purchase consideration | $ | $ 27 |