UNITED STATESSECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549 

FORM 8-K 

CURRENT REPORTPursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

 Date of Report (Date of earliest event reported): April 12, 2017 

 

Everi Holdings Inc.(Exact name of registrant as specified in its charter)

        

Delaware       001-32622       20-0723270(State or other jurisdiction of   (Commission File Number)   (IRS Employer Identification No.)

incorporation)         

      

7250 S. Tenaya Way, Suite 100Las Vegas, Nevada   89113

(Address of principal executive offices) (Zip Code) 

Registrant’s telephone number, including area code: (800) 833-7110 

N/A

 (Former name or former address if changed since last report.) 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant underany of the following provisions: ☐  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) ☐  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) ☐  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) ☐  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))    

 

Item 7.01. Regulation FD Disclosure. 

In connection with Everi Holdings Inc.’s (the “Company”) previously announced proposed refinancing of its outstanding $335million  aggregate  principal  amount  of  Senior  Secured  Notes  due  2021  and  its  existing  First  Lien  Term  Loan  that  matures  in  2020,representatives of the Company will make presentations to potential lenders that include the slides attached to this report as Exhibit 99.1(the “Lender Presentation”) and incorporated herein by reference.

 The  Lender  Presentation  contains  proposed  debt  terms,  which  have  not  been  negotiated  and  remain  subject  to  change.  The

consummation and actual terms of the proposed refinancing are subject to a number of factors, including market conditions, negotiationand execution of definitive agreements and satisfaction of customary closing conditions. There can be no assurance that the refinancingwill occur, or, if it does, as to the terms of the refinancing. 

The  Lender  Presentation  also  includes  certain  financial  measures  that  are  not  in  accordance  with  accounting  principlesgenerally  accepted  in  the  United  States  (“GAAP”)  and  a  discussion  of  the  reasons  why  the  Company’s  management  believes  thatpresentation of the non-GAAP financial measures provides useful information to investors regarding the Company’s financial conditionand results of operations. Reconciliations of the non-GAAP financial measures to GAAP appear in the Lender Presentation and certainearning releases located on the Company’s website , as discussed further in the Lender Presentation attached hereto as Exhibit 99.1.

 The  preliminary  unaudited  2017  first  quarter  results  and  last  twelve  months  ended  March  31,  2017  results  set  forth  in  the

Lender  Presentation  are  derived  from  preliminary  internal  financial  reports  and  are  subject  to  revision  upon  the  completion  of  theCompany’s customary financial reporting process, including customary reviews, internal audit procedures and approvals. Accordingly,actual results may differ from these preliminary results and such differences may be material. 

This report, including the Lender Presentation, contains “forward-looking statements” within the meaning of the U.S. PrivateSecurities  Litigation  Reform  Act  of  1995.  These  statements  are  based  upon  management’s  current  expectations,  assumptions  andestimates  and  are  not  guarantees  of  timing,  future  results  or  performance.  These  forward-looking  statements  involve  certain  risks,uncertainties and other factors that could cause actual results to differ materially from those contemplated in this report and the LenderPresentation.

 The information contained in the Lender Presentation is summary information that is intended to be considered in the context of

the Company’s Securities and Exchange Commission (“SEC”) filings and other public announcements that the Company may make, bypress release or otherwise, from time to time. The Company undertakes no duty or obligation to publicly update or revise the informationcontained in this report, although it may do so from time to time as its management believes is warranted. Any such updating may bemade through the filing of other reports or documents with the SEC, through press releases or through other public disclosure. 

The information set  forth in this Item 7.01 and in the attached Exhibit  99.1 is being furnished in this report  and shall  not bedeemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwisesubject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933,as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. 

2

 

Item 9.01. Financial Statements and Exhibits. 

(d) Exhibits 

     

Exhibit No. Document

99.1 Lender Presentation, dated April 2017.  

3

 

SIGNATURES 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed onits behalf by the undersigned hereunto duly authorized. 

EVERI HOLDINGS INC.

Date: April 12, 2017  By: /s/ Todd A. ValliName: Todd A. ValliTitle: Senior Vice President, Corporate Finance and Chief Accounting

Officer    

4

Exhibit 99.1

Exhibit 99.1 

LenderPresentationApril 2017

 

 

DisclaimerForward-LookingStatements;Non-GAAPFinancialMeasures Thispresentationcontains“forward-looking”statementswithin themeaning ofSection 27A ofthe SecuritiesAct of 1933, asamended (the“SecuritiesAct”), Section21E of theSecuritiesExchange Actof 1934, asamended (the“ExchangeAct”), and thePrivateSecuritiesLitigationReform Act of1995. Fromtime to time,we alsoprovideforward-lookingstatements inother materialswe release tothe public, aswell as oralforward-lookingstatements. Wehave tried,whereverpossible, toidentify suchstatements byusing wordssuch as“anticipate,”“believe,”“expect,”“intend,”“estimate,”“project,”“may,”“should,”“will,”“likely,” “willlikely result,”“willcontinue,”“future,”“plan,”“target,”“forecast,”“goal,”“observe,”“seek,”“strategy” andother wordsand terms ofsimilarmeaning.Forward-lookingstatements areneitherhistorical factsnor assurancesof futureperformance.Instead, theyare based onlyon our currentbeliefs,expectationsandassumptionsregarding thefuture of ourbusiness, futureplans andstrategies,projections,anticipatedevents andtrends, theeconomy andother futureconditions.Becauseforward-lookingstatementsrelate to thefuture, they aresubject toinherent risks,uncertaintiesand change incircumstancesthat are oftendifficult topredict andmany of whichare beyond ourcontrol. Ouractual resultsand financialcondition maydiffermateriallyfrom thoseindicated inforward-lookingstatements.Importantfactors thatcould causeour actualresults andfinancialcondition todiffermateriallyfrom thoseindicated inthe forward-lookingstatementsinclude,withoutlimitation, ourability togenerateprofits in thefuture; ourability toexecute onmergers,acquisitionsand/orstrategicalliances,including ourability tointegrate andoperate suchacquisitionsconsistent withour forecasts;expectationsregarding ourexisting andfuture installedbase and winper day;expectationsregardingdevelopmentand placementfeearrangements;inaccuracies inunderlyingoperatingassumptions;expectationsregardingcustomers’preferencesand demandsfor futuregamingofferings;expectationsregarding ourproductportfolio; theoverall growthof the gamingindustry, ifany; our abilityto replacerevenueassociated withterminatedcontracts;margindegradationfrom contractrenewals; ourability tocomply withthe Europay,MasterCardand Visaglobalstandard forcards equippedwith securitychiptechnology;our ability tointroduce newproducts andservices,includingthird-partylicensedcontent;gamingestablishmentand patronpreferences;expendituresand productdevelopment;anticipatedsalesperformance;employeeturnover;national andinternationaleconomicconditions;changes ingamingregulatory,cardassociation andstatutoryrequirements;regulatory andlicensingdifficulties;competitivepressures;operationallimitations;gaming marketcontraction;changes to taxlaws;uncertainty oflitigationoutcomes;interest ratefluctuations;businessprospects;unanticipatedexpenses orcapital needs;technologicalobsolescence;and those otherrisks anduncertaintiesdiscussed inour mostrecent AnnualReport onForm 10-Kfiled with theU.S. Securitiesand ExchangeCommission.In light ofthese risks anduncertainties,there can be noassurance thatthe forward-lookinginformationcontained inthispresentationwill in facttranspire orprove to beaccurate.Readers arecautioned tonot to placeundue relianceon theforward-lookingstatementscontainedherein, whichare based onlyon informationcurrentlyavailable to usand speak onlyas of the datehereof.AdditionalNotes Thispresentationcontainsindustrymarket data,industryforecasts andother statisticalinformation.Suchinformationhas beenobtained frompubliclyavailableinformationand industrypublications.Everi has notindependentlyverified suchinformationand makes norepresentationsas to theaccuracy ofsuchinformation.Non-GAAPFinancialMeasures Inorder toenhanceinvestorunderstandingof theunderlyingtrends in ourbusiness and toprovide forbettercomparabilitybetweenperiods indifferent years,we areproviding inthispresentationAdjustedEBITDA andAdjustedEBITDAMargin, whichare notmeasures ofour financialperformanceor positionunder UnitedStatesGenerallyAcceptedAccountingPrinciples(“GAAP”).Accordingly,these measuresshould not beconsidered inisolation or asa substitutefor, and shouldbe read inconjunctionwith, our netearnings (loss),operatingincome (loss),basic ordilutedearnings (loss)per share andcash flow dataprepared inaccordancewith GAAP.Everi definesAdjustedEBITDA asearnings (loss)before interest,taxes,depreciationandamortization,non-cash stockcompensationexpense,goodwillimpairmentcharges,accretion ofcontract rights,write-down ofnote receivableand warrant,loss on the saleof the aircraft,acquisition andother costsrelated tomergers andpurchaseaccountingadjustments,separationcosts related tothe Company’sformer CEO,andmanufacturingrelocationcosts less abenefit fromone-time legalsettlementproceeds.Everi presentsAdjustedEBITDA as ituses thismeasure tomanage itsbusiness andconsiders thismeasure to besupplementalto its operatingperformance.Everi alsomakes certaincompensationdecisionsbased, in part,on itsoperatingperformance,as measured byAdjustedEBITDA; andits creditfacility, seniorsecured notesand seniorunsecurednotes requireEveri tocomply with aconsolidatedsecuredleverage ratiothat includesperformancemetricssubstantiallysimilar toAdjustedEBITDA. WedefineAdjustedEBITDAMargin asAdjustedEBITDAdivided byrevenues. Areconciliationof Everi’s mostdirectlycomparableGAAPmeasure toAdjustedEBITDA andAdjustedEBITDAMargin isincluded inEveri’s earningreleaseslocated onEveri’swebsite atir.everi.com.Additionally, areconciliationof eachsegment’soperatingincome (loss)to AdjustedEBITDA isalso included.On a segmentlevel,operatingincome (loss)per GAAP,rather than netearnings (loss)per GAAP, isreconciled toAdjustedEBITDA asEveri does notreport netearnings (loss)by segment. Inaddition,AdjustedEBITDAMargin isprovided on asegment level.Managementbelieves thatthispresentation ismeaningful toinvestors inevaluating theperformance ofEveri’ssegments. 2

 

 

Today’sPresenters andAgendaTransactionOverviewBusinessOverview KeyCreditHighlightsHistoricalFinancialOverviewSyndicationOverviewQ&A MichaelD. RumbolzPresident &ChiefExecutiveOfficer RandyL. TaylorExecutiveVice President& ChiefFinancialOfficer MarkF. LabaySenior VicePresident,StrategicDevelopment& InvestorRelations 3PresentersAgenda

 

 

TransactionOverview

 

 

TransactionOverviewEveri HoldingsInc.(NYSE:EVRI)(“Everi” or the“Company”), apubliccompany witha currentmarketcapitalizationof $387(1)million, is aprovider ofvideo andmechanicalreel gamingcontent andtechnologysolutions,integratedgamingpaymentsolutions, andcomplianceand efficiencysoftwaresolutionsServes over1,000 casinosand othergamingproperties inthe US,Canada,Europe, theCarribean,CentralAmerica andAsia Everi’sgames segment(“Games”)provideselectronicgamingmachines tocasinocustomersprimarilythrough leasearrangementsand directsales of playerterminalsLeased orparticipationgames providesignificantrecurringrevenue androbust marginsEveri’spaymentssegment(“Payments”)provides acomprehensivesuite of cashaccess servicesat gamingfacilities,including cashdispensingATMtransactions,credit anddebit card cashaccesstransactions,check cashingand warrantyservices,equipmentsales andservice andother softwaresales andservices forAML and taxcomplianceDominantprovider ofgamingpaymentssolutions inNorth AmericaFor the LTMperiod endedMarch 31,2017, Everigeneratedestimatedconsolidatedrevenue of$889.2(2)million andestimatedAdjustedEBITDA of$205.3(2)million Everihas grownconsolidatedrevenue andAdjustedEBITDA at3.5% and5.6% CAGRs,respectively,from 2012 to2016Approximately90% of Everi’srevenue isrecurring innature, as aresult of theCompany’smarketdominance inthe gamingcash accessspace and itsinstalled baseof over 13,000gaming unitsThe Companyis issuing anew $820million FirstLien TermLoan torefinance itsexisting FirstLien TermLoan andSeniorSecured Notesin theirentirety ProForma for thetransaction,secured netleverage(3)will be 3.4xand total netleverage(4)will be 5.1xbased on LTM1Q17EAdjustedEBITDA of$205.3 million5 Based upon66.1 millionsharesoutstandingand $5.86closing priceas of4/10/2017.AdjustedEBITDA is anon-GAAPmeasure. LTM1Q17E and1Q17Eamounts arebased upon themidpoint ofthe preliminary1Q17managementestimates ofconsolidatedrevenue of$233-$238million ($53 -$55 million forthe Gamessegment and$180 - $183million for thePaymentssegment) andconsolidatedAdjustedEBITDA of$52.0 – $54.0million ($29.5- $30.5 millionfor the Gamessegment and$22.5 - $23.5million for thePaymentssegment). ProForma securednet leverage iscomputed as(total FirstLien TermLoanoutstandingminus Cashand CashEquivalents) /LTM 1Q17EAdjustedEBITDA of$205.3million. ProForma totalnet leverage iscomputed as(total FirstLien TermLoanoutstandingplus totalSeniorUnsecuredNotesoutstandingminus Cashand CashEquivalents) /LTM 1Q17EAdjustedEBITDA of$205.3million.

 

 

Sources &Uses and ProFormaCapitalizationSources andUses ($millions) $35millionRevolvingCreditFacility,undrawn atclose. Includescash held onbehalf ofcustomers. TheDecember 31,2016 balancefor cash andcashequivalents hasbeen used forthe expectedbalance of cashand cashequivalentsPro Forma atClose. Basedupon 66.1million sharesoutstandingand $5.86closing priceas of4/10/2017.AdjustedEBITDA is anon-GAAPmeasure. SeeEBITDAAdjustmentDetail on slide27. LTM1Q17E and1Q17Eamounts arebased upon themidpoint ofthe preliminary1Q17managementestimates ofconsolidatedrevenue of$233-$238million ($53 -$55 million forthe Gamessegment and$180 - $183million for thePaymentssegment) andconsolidatedAdjustedEBITDA of$52.0 – $54.0million ($29.5- $30.5 millionfor the Gamessegment and$22.5 - $23.5million for thePaymentssegment).Interestexpenseincludes cashpaid forinterest onoutstandingdebtobligations aswell as thecash usage feespaid pursuantto the ContractCash SolutionsAgreementwith WellsFargo Bank,N.A. ProFormaCapitalization($ millions)Pro FormaCreditStatistics ($millions) 6Sources ofFundsRevolvingCredit Facility(1) $ - FirstLien TermLoan 820Total Sources$820 Uses ofFundsRefinanceExisting FirstLien TermLoan $465RefinanceExistingSeniorSecured Notes335 FinancingFees 20 TotalUses $820Current ProForma12/31/2016 AtClose LTM1Q17EAdjustedEBITDA (4)$205 $205InterestExpense (5)$92 $84Secured NetLeverage 3.3x3.4x Total NetLeverage 5.0x5.1x AdjustedEBITDA / PFCash InterestExpense 2.2x2.4x CurrentPro Forma12/31/2016 AtClose Cashand CashEquivalents(2) $119 $119RevolvingCredit Facility(1) - - FirstLien TermLoan 465 820SeniorSecured Notes335 - SecuredDebt $800$820 SeniorUnsecuredNotes 350 350Total Debt$1,150 $1,170MarketCapitalization(4/10/2017)(3) 387 387TotalCapitalization$1,537 $1,557

 

 

7 EveriHoldingsInc. EveriGamesHolding Inc.EveriGames Inc.DomesticSubsidiariesForeignSubsidiariesEveriPaymentsInc.DomesticSubsidiariesForeignSubsidiaries$35 millionRevolver$820millionSeniorSecuredTerm Loan$350millionSeniorUnsecuredNotesGuarantorsBorrowerGuarantorandReportingEntityCorporateStructure

 

 

BusinessOverview

 

 

Everi OverviewThe Only SingleSource Providerof RobustPaymentSolutions andEngaging GamesAdjustedEBITDA is anon-GAAPmeasure.Reconciliationsto the mostdirectlycomparableGAAP measurefor historicalperiods can befound inapplicableearnings releaseslocated onEveri’s websiteat ir.everi.comand Pro FormaLTMreconciliationcan be found onslide 27. LTM1Q17E and1Q17E amountsare based uponthe midpoint ofthe preliminary1Q17managementestimates ofconsolidatedrevenue of $233 -$238 million($53 - $55million for theGames segmentand $180 - $183million for thePaymentssegment) andconsolidatedAdjustedEBITDA of$52.0 - $54.0million ($29.5 -$30.5 million forthe Gamessegment and$22.5 - $23.5million for thePaymentssegment). 9Games PaymentsEveri isdedicated toproviding state ofthe art video andmechanical reelgaming contentand technologysolutions,integratedgaming paymentssolutions andcompliance andefficiencysoftware tocasino operatorsLTM 1Q17E(2)consolidatedrevenue of$889.2 millionand consolidatedAdjustedEBITDA of$205.3(1) millionOnly singlesource providerof games andpayments whicharecomplementaryproducts Strongrecurringrevenues fromsubstantial baseof leased andparticipationgaming machinesComplimentarysales of gamingmachines andrelatedequipment Inaddition, Gamesprovides thecentraldeterminantsystem for the~17,600 videolottery terminalsinstalled in theState of NewYork LTM1Q17E Revenueof $219.1(2)million andAdjustedEBITDA of$117.6(1)(2)million Providesstandard ATM,3-in-1 ATM, cashadvance, checkwarranty, fullyintegrated kiosks,informationservices, CentralCredit, and anti-money launderingand taxcompliancesoftware Long-term contracts forrecurring servicesaccount fornearly all ofPaymentsrevenue LTM1Q17E Revenueof $670.1(2)million andAdjustedEBITDA of$87.7(1)(2)million

 

 

Games SegmentOverview StrongRecurringRevenue Basewith RobustMargins 13,264gaming unitsinstalled (8,234Class II and5,030 Class III)as of December31, 2016Revenue derivedfrom revenue-sharingarrangements ordaily fixed leasefees on theinstalled baseSupplies thecentraldeterminantsystem forapproximately17,600 videolottery terminals("VLTs") in NewYork 54%AdjustedEBITDA MarginExpandingProprietary ClassII and Class IIIOfferings Broadportfolio ofgaming machineproductsincluding award-winningTournEvent slottournamentsystem and Wide-area Progressive(“WAP”)platform productsIntroduced newproduct segmentat G2E 2016with debut ofseven new slotthemes based onlicensed, brandedcontent Recentlydebuted Class IIWAP Note: $ inmillions; fiscalyear endedDecember 31.Premier Supplierof ExcitingGames AcrossMultiplePlatformsAdjustedEBITDA andAdjustedEBITDA Marginare non-GAAPmeasures.Reconciliationsto the mostdirectlycomparableGAAP measurefor historicalperiods can befound inapplicableearnings releaseslocated onEveri’s websiteat ir.everi.comand Pro FormaLTMreconciliationcan be found onslide 27. LTM1Q17E and1Q17E amountsare based uponthe midpoint ofthe preliminary1Q17managementestimates ofconsolidatedrevenue of $233 -$238 million($53 - $55million for theGames segmentand $180 - $183million for thePaymentssegment) andconsolidatedAdjustedEBITDA of$52.0 - $54.0million ($29.5 -$30.5 million forthe Gamessegment and$22.5 - $23.5million for thePaymentssegment).AdjustedEBITDA for FY2015 includes again ofapproximately$4.0 million fromthe sale of certainassets ofPokerTek, anelectronic tablegamesmanufacturingcompanypurchased byMultimediaGames in 2014.Excluding thisgain, AdjustedEBITDA wouldhave been $118.8million andAdjustedEBITDA Marginwould have been55.4%. 10 (2) (2)(1) (1) $4.0$122.8 (3) $79.9$106.6 $110.9$118.8 $116.0$117.6 48.2%52.2% 53.6%57.3% 54.4%53.7% 0.0%20.0% 40.0%60.0% 80.0%100.0% $0.0$25.0 $50.0$75.0 $100.0$125.0 $150.02012 2013 20142015 2016 LTM1Q17E AdjustedEBITDA (1)AdjustedEBITDAAdjustedEBITDA Margin% GamingOperations , 18%Machine Sales,7% PaymentsSegment , 75%2016ConsolidatedRevenue

 

 

PaymentsSegmentOverviewDominantprovider ofgaming paymentssolutions inNorth AmericaLong termcontracts providesignificantrecurring revenuederived primarilyfrom ATM cashwithdrawal, cashadvance, andcheck servicefees Processed87.4 milliontransactionstotaling $21.6billion in dollarvolume in FY2016 Best-in-class provider ofsecure paymentssolutionsenhanced by fullyintegrated kiosks,credit reportingservices,compliancesolutions, andcasino marketingservices Allowscasinos to reducelabor, coinhandling andcage cash whileenhancingcompliance andsecurity MarketLeading Providerof Cash Accessand ComplianceProducts andServices 11 (2)(2) (1) (1) Note:$ in millions;fiscal year endedDecember 31.AdjustedEBITDA andAdjustedEBITDA Marginare non-GAAPmeasures.Reconciliationsto the mostdirectlycomparableGAAP measurefor historicalperiods can befound inapplicableearnings releaseslocated onEveri’s websiteat ir.everi.comand Pro FormaLTMreconciliationcan be found onslide 27. LTM1Q17E and1Q17E amountsare based uponthe midpoint ofthe preliminary1Q17managementestimates ofconsolidatedrevenue of $233 -$238 million($53 - $55million for theGames segmentand $180 - $183million for thePaymentssegment) andconsolidatedAdjustedEBITDA of$52.0 - $54.0million ($29.5 -$30.5 million forthe Gamessegment and$22.5 - $23.5million for thePaymentssegment). $79.3$71.2 $76.0$77.6 $82.0$87.7 13.6%12.2% 13.0%12.7% 12.7%13.1% 10.0%12.0% 14.0%16.0% 18.0%20.0% $0.0$20.0 $40.0$60.0 $80.0$100.0 20122013 2014 20152016 LTM1Q17E AdjustedEBITDA (1)AdjustedEBITDAAdjustedEBITDA Margin% Cash Advance, 28% ATM ,39% GamesSegment , 25%Check Services ,3% Other , 5%2016ConsolidatedRevenue

 

 

Strong RecentPerformance 12Revenue GrowthRecentHighlights / WinsAdjustedEBITDAGrowth(1) 5.8%Y/Y Growth8.1% Y/YGrowth 15.2%Y/Y Growth12.0% Y/YGrowth 8.3%Y/Y Growth7.2% Y/YGrowth 32.9%Y/Y Growth5.6% Y/YGrowth Note: $in millions.AdjustedEBITDA is anon-GAAPmeasure.Reconciliationsto the mostdirectlycomparableGAAP measurefor historicalperiods can befound inapplicableearnings releaseslocated onEveri’s websiteat ir.everi.comand Pro FormaLTMreconciliationcan be found onslide 27. LTM1Q17E and1Q17E amountsare based uponthe midpoint ofthe preliminary1Q17managementestimates ofconsolidatedrevenue of $233 -$238 million($53 - $55million for theGames segmentand $180 - $183million for thePaymentssegment) andconsolidatedAdjustedEBITDA of$52.0 - $54.0million ($29.5 -$30.5 million forthe Gamessegment and$22.5 - $23.5million for thePaymentssegment). Sold920 units in4Q16, up 43%Y/Y; thirdconsecutivequarter of Y/Yunit sales growthWent live for thefirst time withATM services inCanada at 29properties in 3provincesLaunchedJackpotLockdown™WAP linkdevelopedexclusively forClass II marketsNew Class IIvideo reel WAPlink featuringlicensed brandsexpected to beintroduced inearly 2H17NewestWashington Statecasino, ilani, willfeature Everi’sindustry-leadingfully integrated3-in-1 kiosks andnewest games onCore HDX®cabinet, includingTournEvent®Won both Gamesand Paymentscontracts at newMGM NationalHarbor and delLago Resortopenings due tolong standingcustomerrelationships In3Q16, enteredAlberta marketwith largest-eversingle quarterGames sale ofnew units tosingle customer(194 units) and54 units placedon a leasearrangementHired DeanEhrlich,accomplishedgaming industryexecutive, asExecutive VicePresident andGames BusinessLeader Added toAustin gamedevelopmentcapabilities withnew studios inChicago andReno (2) (2)6.4% 14.4%16.0% 7.6%$26.5 $28.4$19.4 $21.0$45.9 $49.44Q15 4Q16Payments Games$28.4 $30.0$17.3 $23.0$45.7 $53.01Q16 1Q17E$50.5 $54.6$153.9 $162.9$204.4 $217.54Q15 4Q16Payments Games$48.2 $54.0$157.6 $181.5$205.8 $235.51Q16 1Q17E

 

 

Key CreditHighlights

 

 

Credit Highlights14 ExtensiveReach and Scale1 Stable andDiversifiedRecurringRevenue Business2 HighlyDifferentiated,ComplementaryProducts 3Powerful, Long-Term CustomerRelationships 4SignificantBarriers to Entry5 Strong TrackRecord ofProprietaryTechnology andInnovation 6SuccessfullyExecuting onBusiness Plan 7Experienced andSeasonedLeadership 8

 

 

Standard ATM3-in-1 ATMCash AdvanceCheckWarranty FullyIntegratedKiosksReportingMarketingCentral CreditMarketingAnti-MoneyLaunderingand TaxComplianceSoftware EveriHasSignificantlyExpanded itsFootprint andDiversified itsGeographicReachExtensiveReach andScale 15GamingSegmentEveri’sinstalled baseof leased andparticipationgames includes13,264 units asof December31, 2016Licensed inevery materialjurisdiction inNorth AmericaIn 2016,Companybecamelicensed inColorado,Missouri, WestVirginiaRecentlyexpandedGames andPaymentspresence tomultipleprovinces inCanada Newerpremium gameinstallationshave rampedto 14% ofinstalled baseNew WAPplatformexpected toacceleratefurtherpremiuminstallationsPaymentsSegmentDominantprovider ofgamingpaymentssolutions inNorthAmerica; In2016,processed 87.4milliontransactionstotaling $21.6billion indollar volumeBest-in-classprovider ofintegratedgamingpaymentssolutions 1Everi is NowLicensed inOver 200Jurisdictionsand ServesOver 1,000GamingPropertiesGlobally CashAccessServicesKiosksInformationServices

 

 

LTM PeriodDec-16 Dec-15(1) Dec-16Dec-16 Dec-16 Dec-16LTM Revenue($ millions)$859.5$4,689.1$1,772.7$1,594.7$199.5 $166.8RecurringRevenue ($millions)~$780.0$2,978.9$725.3 $585.3$24.0 $154.9Stable andDiversifiedRecurringRevenueBusiness HighRecurringRevenue FromGamingOperations andLong TermPaymentsContractsProduce StableCash FlowsSource:CompanyFilings. Note:Recurringrevenue isdefined as thetotal revenuefrom acompany’srevenuesegments thatrelateprimarily togaming andpaymentoperations asopposed tomachine sales,non-casinobased lottery,interactive, orother.Aristocrat andAinsworthvaluesconverted toUS dollars.ScientificGamesrecurringrevenueexcludesgamingsystems andtable products.Data based on2015 annualreport as of12/31/2015.Annual reportfor 2016 hasnot yet beenreleased, andtherefore thenecessaryrevenuebreakdownsare notavailable. 16 2~73%Payments;~18% GamesEveri’srecurringrevenue is~91% of 2016consolidatedrevenue Out ofthe ~91%recurringrevenue, ~73%is from thePaymentssegment and~18% from theGamingSegment Everiis highlydifferentiatedfrom itscompetitorswith the sticky,recurringnature of thePaymentssegment

 

 

HighlyDifferentiated,ComplementaryProducts 17TournEventIntegrated KioskJackpot KioskATM ElectronicGamingMachinesPremium GamingMachines EveriHas MultipleTouch PointsAcross DifferentProduct Lines onthe Casino FloorWide AreaProgressive 3

 

 

Powerful,Long-TermCustomerRelationshipsTop TenCustomers ($millions) Everihas strong,InterconnectedCustomerRelationshipsAcross bothGames andPayments 18The company’stop 10customersaccounted for38.8% of 2016consolidatedrevenueLargestcustomeraccounts forless than 10%of 2016consolidatedrevenue Everihas an averagecustomerrelationshiplength of 18years 4 TheNew YorkState Divisionof the Lotterydoes notdirectlycontract forpaymentsservices.Individualcasinos in NYcontract forpaymentsservicesdirectly withthe paymentsvendors andany paymentsservicesprovided inNY would beidentified withthat customerin this listing.CustomerRelationship(years) FY2016 PaymentsRevenue FY2016 GamesRevenue FY2016 TotalRevenue %ConsolidatedRevenueCustomer A 12$28.8 $39.9$68.7 8.0%Customer B 1954.8 3.8 58.66.8%Customer C 1947.4 2.8 50.25.8%Customer D 1933.5 2.7 36.24.2%Customer E 1930.8 0.6 31.43.7%Customer F 1920.8 1.4 22.22.6% NewYork Lottery(1) 15 - 18.118.1 2.1%Customer H 1915.2 1.8 17.02.0%Customer I 1914.3 1.4 15.71.8%Customer J 1613.0 2.2 15.21.8% Top TenCustomers 18$258.6 $74.7$333.3 38.8%Total US andOther Markets$646.2 $213.3$859.5100.0%

 

 

SignificantBarriers toEntryExtensiveRegulationGamingmanufacturersare subject torigorouslicensingrequirementson ajurisdiction-by-jurisdictionbasis Typicallicensingapprovalprocess in eachjurisdictioncan take manymonths tocomplete;certain largercommercialjurisdictionscan take morethan a year tocompleteEveri’s recentMissourilicensure took16 monthsfrom initialsubmissionuntil approvalEveri has apresence inevery materialcommercialand tribaljurisdiction inNorthAmerica, andbelieves it hasdevelopedstrongrelationshipswith regulatorsin thosemarketsEconomies ofScale Everi’sproducts andservices can befound in nearlyall majorcasino marketsacross theUnited StatesEveri’s sizeand scaleacross itsPaymentsrelatedservices, inaddition to asignificantnumber of longterm contractsin place,makes itdifficult forsmallerpaymentoperators togain significantmarket shareSignificantswitching costswhich casinooperators areoften reluctantto incurExpandedinstalled basewith entry intonewcommercialand tribalmarkets aswell as thedevelopmentand placementof premiumproductsCompellingIntellectualProperty andContentLibrary IP iscritical tosuccess in thegamingindustry Over250 patentsand trademarksEveri has beenable todevelop strongslot playerloyalty due toits continuedproduction ofnumerous "hit"titles such asJackpotInferno, HighVoltageBlackout,BlackDiamond,Golden Pig,DoubleJackpot Gems,MegaMeltdown,Kingmaker,Blazin’ Gems,etc. Everiexpects tospend in excessof $40 millionin R&D (bothcapitalized andexpensedsoftware) peryear toproduce 80-90proprietarytitles per year19 5

 

 

Strong TrackRecord ofProprietaryTechnologyand InnovationGames 20 6EILERS-FANTINI SlotSurvey –4Q16.TournEventEveri’sindustryleading,award-winningslottournamenttechnologywas cited asthe best slottournamentsolution in themarket with61% share(1)New YorkState VLTSystemDevelopedone-of-a-kindcentraldeterminantsystem for theNY Lottery,which has theability tointerface with,provideoutcomes to,and manageover ~17,600VLT’s Wide-AreaProgressiveDevelopmentof WAPplatform tosupportbranded andproprietarygame links inthe Class IIand Class IIImarkets NewGameDevelopmentStudios Newstudios inChicago andReno inaddition toAustinStrategicallytargeting third-party contentsuch asCasablanca,Penn & Teller,and FruitNinja, whichlendthemselves toplayer appealand innovativegame playmechanicsPremiumProductsIntroduced HDdual screens,LCD panelsand new topboxtechnology,growingpremiumcabinets to14% ofinstalled baseDevelopedEveri Bet™, anew betconfigurationsoftware thatwas named toCasinoJournal’s MostInnovativeGamingTechnologyProducts for2015

 

 

Strong TrackRecord ofProprietaryTechnology andInnovationPaymentsDedication toNetworkInfrastructure andSecurity Strategicinvestments ininfrastructure andsecurity make Everia best-in-classprovider of securepayments solutionsEveri was the firstpayments providerin the casinoindustry to be fullyend-to-endEuropay,MasterCard® andVisa® (“EMV”)compliantInnovativeSolutions &EnhancementsDeveloped 3-in-1Rollover ATMtechnology whichdrives incrementalcash to the casinofloorUniversalXchangewith UniversalIntegratedManagementprovides anenhanced platformfor Everi’s fullyintegrated kiosksolutions JackpotXpress™,recognized as oneof Casino Journal’sTop 20 MostInnovativeTechnologyProducts for 2016,allows for efficientmobile-based slotjackpot processingCageXchange™andRecyclerXchange™cash managementsolutions designedto acceleratetransaction speedand efficiency,improve cage countaccuracy, andenhance the overallcustomerexperience TheEveri Cares™Giving Modulecreates anopportunity forpatrons to give tocharities while alsoreducing coinhandling on thecasino floorEvolving DigitalCapacity CashClubWallet™decentralizespaymentsthroughout thegaming enterpriseand offers anenhanced,streamlined playerexperience andreduced cashfootprint foroperators 21 6

 

 

Leveraging Long-Term CustomerRelationshipsAcross Games andPayments Products22 Scarlett Pearl –New Customer3Q15 Payments &Games Cash AccessProduct Suite 76games sold and/orleased DesertDiamond Casinos &Entertainment 3Q15Payments & GamesCash AccessProduct Suite 214games sold and/orleased NewPayments Customer/ Existing GamesCustomer AlbertaGaming & LiquorCommission 3Q16Add Games 248games sold and/orleased New GamesCustomer/ ExistingPayments CustomerNational Harbor –New CasinoExisting Customer3Q16 Payments &Games Cash AccessProduct Suite 80games sold and/orleased Ilani – NewCustomer 1Q17Payments & GamesCash AccessProduct Suite 150games sold and/orleased Expandingthe ProductOffering Expansionof Games offeringto include newhardware options(e.g. Core HDX andEmpire HDXcabinets), licensedand brandedpremium gamecontent, WAPproducts, anddigital & interactiveofferings NewPayments productsto complementexisting core cashaccess services:CageXchange™andRecyclerXchange™cash managementsolution, JackpotXpressTM,CashClubWalletTM and theEveri Cares™Giving ModuleSuccessfullyExecuting onBusiness Plan 72015 2016 2017

 

 

23 Growth inthe InstalledBase whileReducingThird-PartyClass III UnitRelianceGrowinginstalled basecontributes tothe recurringrevenue streamTotal installedbase has grown~19% since2012;proprietaryunits in theinstalled basehave grown80% since2012 Totalconcentrationin third-partyClass III gameshas decreasedfrom 40% oftotal installedbase to 10%40% 10%Focus on CostReductionsandContainmentConsolidationof Gameswarehouse andassemblyfunctions inAustin, TXresulting inapproximately$1 million inannual costsavingsExecuted uponintegrationefforts inconnectionwith theMultimediaGamesacquisitionresulting insynergies andcost reductionsrelated tooverlappingcorporatefunctions andoverheadSuccessfullyExecuting onBusiness Plan7 80%Increase 16%CAGR 4,5613,825 3,3042,554 1,3336,627 8,8329,983 10,78611,931 11,18812,657 13,28713,340 13,2642012 20132014 20152016ProprietaryGames 3rdParty Class IIIGames

 

 

Experiencedand SeasonedLeadership 24Our leadershipteam builds theframework forour success.With decadesof gamingindustryexpertise andextensivemanagementexperiences,our executiveteam includessome of theindustry’s toptalent acrosssegmentsMichael D.RumbolzPresident &ChiefExecutiveOfficer JulietA. LimExecutiveVice Presidentand PaymentsBusinessLeader, ChiefLegal Officer,and CorporateSecretaryDean A.EhrlichExecutiveVice Presidentand GamesBusinessLeader DavidJ. LuccheseExecutiveVicePresident,Digital andInteractiveBusinessLeaderEdward A.PetersExecutiveVice Presidentof Sales andMarketingRandy L.TaylorExecutiveVice Presidentand ChiefFinancialOfficerRichard P.HallmanExecutiveVice Presidentand ChiefInformationOfficer MarkF. LabaySenior VicePresident,StrategicDevelopment& InvestorRelations 8

 

 

HistoricalFinancialOverview

 

 

HistoricalFinancialPerformanceCapitalExpenditures ($millions) TotalRevenue ($millions)AdjustedEBITDA(1) ($millions) CAGR4.1% CAGR6.2% 26AdjustedEBITDA andAdjustedEBITDA Marginare non-GAAPmeasures.Reconciliationsto the mostdirectlycomparableGAAP measurefor historicalperiods can befound inapplicableearnings releaseslocated onEveri’s websiteat ir.everi.comand Pro FormaLTMreconciliationcan be found onslide 27.Historicalperiods for 2012– 2014 reflect thecombinedoperations ofMultimediaGames and EveriPayments Inc. ona Pro Formabasis to reflectthe combinationof the companiesthat occurred inDecember 2014.LTM 1Q17E and1Q17E amountsare based uponthe midpoint ofthe preliminary1Q17managementestimates ofconsolidatedrevenue of $233-$238 million($53 - $55million for theGames segmentand $180 - $183million for thePaymentssegment) andconsolidatedAdjustedEBITDA of$52.0 – $54.0million ($29.5 -$30.5 million forthe Gamessegment and$22.5 - $23.5million for thePaymentssegment).AdjustedEBITDA for FY2015 includes again ofapproximately$4.0 million fromthe sale of certainassets ofPokerTek, anelectronic tablegamesmanufacturingcompanypurchased byMultimediaGames in 2014.Excluding thisgain,consolidatedAdjustedEBITDA wouldhave been $196.4million andconsolidatedAdjustedEBITDA Marginwould have been23.8%. PaymentsGames (3) (3)$4.0 (4) (2) (2)(2) (2) (2) (2) (2)(2) (2) $79.3$71.2 $76.0$77.6 $82.0$87.7 $79.9$106.6 $110.9$118.8 $116.0$117.6 $159.2$177.8 $186.9$200.4 $198.0$205.3 21.2%22.6% 23.6%24.2% 23.0%23.2% 2012A2013A 2014A2015A 2016ALTM 1Q17EMargin $74.6$74.5 $68.0$77.0 $80.8$15.6 $2.0 $0.8$2.8 $11.3 $90.2$76.5 $68.7$79.8 $92.12012A 2013A2014A 2015A2016A CapexPlacement Fees$584.5 $582.4$585.6 $612.6$646.2 $670.1$165.7 $204.2$207.0 $214.1$213.3 $219.1$750.2 $786.6$792.6 $826.7$859.5 $889.22012A 2013A2014A 2015A2016A LTM1Q17E PaymentsGames

 

 

Pro FormaAdjustedEBITDA(1)Reconciliation 27Reported andAdjustedEBITDA arenon-GAAPmeasures.Reconciliationsto the mostdirectlycomparableGAAP measurefor historicalperiods can befound inapplicableearnings releaseslocated onEveri’s websiteat ir.everi.com.LTM 1Q17E and1Q17E amountsare based uponthe midpoint ofthe preliminary1Q17managementestimates ofconsolidatedrevenue of $233-$238 million($53 - $55million for theGames segmentand $180 - $183million for thePaymentssegment) andconsolidatedAdjustedEBITDA of$52.0 – $54.0million ($29.5 -$30.5 million forthe Gamessegment and$22.5 - $23.5million for thePaymentssegment).Goodwillimpairment:Based on annualgoodwillimpairmenttesting, theCompanydetermined thatthe carryingamount of itsGames reportingunit exceeded itsestimated fairvalue Accretionof contract rights:Games operationsrevenuesgenerated byplayer terminalsdeployed at sitesunder placementfee agreementsare reduced bythe accretion ofcontract rightsacquiredSeparation costsof former CEO:Legal andseverance costsassociated withthe termination offormer CEO inFebruary 2016Write-down ofnote receivable:Write-down tofair value of anote receivablethat was extendedby MultimediaGames,predecessor toEveri GamesHolding Inc., to apartner Austin-based digital andinteractivecompany whodefaulted on thereceivable Losson the sale of theaircraft:Purchased anaircraft in 2015and upontermination of theformer CEOmade thedecision to sellthe aircraftManufacturingrelocation costs:Costs to relocateand integratecertain Gamesmanufacturingand warehousingfunctions fromLas Vegas andWashington toAustin, Texas (2)EBITDAAdjustmentDetail TotalTotal Total TotalTotal GamesPayments ($millions) 2Q163Q16 4Q161Q17E (2) LTM1Q17E LTM1Q17E LTM1Q17E Net loss($10.8) ($8.3)($217.3) ($5.0)($241.3) Incometax provision(benefit) (7.9)(5.0) 52.6 1.341.1 Interestexpense, net ofinterest income24.7 24.8 24.725.1 99.3Operating (loss)income $6.1$11.6 ($140.0)$21.4 ($100.9)($158.3) $57.4Depreciation andamortization$36.1 $36.5$36.6 $28.2$137.3 $114.7$22.6 ReportedEBITDA (1)$42.1 $48.0($103.4) $49.6$36.4 ($43.6)$80.0Management'sAdjustments 1.Non-cash stockcompensationexpense 1.7 1.42.6 1.4 7.1 1.75.4 2. Goodwillimpairment - -146.3 - 146.3146.3 - 3.Accretion ofcontract rights2.2 2.2 2.2 2.08.6 8.6 - 4.Separation costsfor former CEO -- 1.4 - 1.4 - 1.4 5.Write-down ofnote receivable4.3 - - - 4.3 4.3 -6. Loss on sale ofaircraft 0.9 - - -0.9 - 0.9 7.Manufacturingrelocation costs -- 0.4 - 0.4 0.4 -TotalManagementAdjustments 9.13.6 152.8 3.4168.9 161.2 7.7AdjustedEBITDA (1)$51.2 $51.6$49.4 $53.0$205.3 $117.6$87.7

 

 

Current 2017Outlook 2017AdjustedEBITDA(1)expected to be$204 million -$209 millionFactors inCompany’s2017(2) outlookinclude: FY 2017unit salesexpected toincrease 10%+Y/Y with 1Q17unit salescomparable to4Q16 Installedbase at December31, 2017 isexpected to growY/Y Expectsremoval of ~530third-party ClassIII units in 1H17with ~70% ofremovalsreplaced withproprietary ClassII units; shift bycertain Californiatribal customersmoving to ClassIII units fromClass II unitsestimated toresult in loss of100 - 300 unitsfrom installedbase, primarily in1H17 Installedbase to benefitfrom introductionof Class IImechanical reelWAP andpendingintroduction ofClass II videoreel WAP withlicensed brandsin 2H17 DailyWPU in 1H17expected to bebelow 1H16 withimprovementsbeginning in2H17 Paymentsrevenues andAdjustedEBITDA shouldbenefit fromcontinuedimprovement incash to the floorand Company’srecent expansionof its cash accesscapabilities inCanada Sales ofhigher margincomplianceproducts willoffset flat tomodestly lowerkiosk salesAdjustedEBITDA is anon-GAAPmeasure.Reconciliationsto the mostdirectlycomparableGAAP measurefor historicalperiods can befound inapplicableearnings releaseslocated onEveri’s websiteat ir.everi.comand Pro FormaLTMreconciliationcan be found onslide 27. TheCompanyprovidedadditionalfinancial metricsfor 2017 as partof the FourthQuarter and YearEnd earningspress release,which isavailable onEveri’s websiteat ir.everi.com.28

 

 

Credit Highlights29 ExtensiveReach and Scale1 Stable andDiversifiedRecurringRevenue Business2 HighlyDifferentiated,ComplementaryProducts 3Powerful, Long-Term CustomerRelationships 4SignificantBarriers to Entry5 Strong TrackRecord ofProprietaryTechnology andInnovation 6SuccessfullyExecuting onBusiness Plan 7Experienced andSeasonedLeadership 8

 

 

SyndicationOverview

 

 

TransactionTimeline DateActivity April13th BankMeeting /Launch April27thCommitmentsdue fromLenders Early/ Mid MayClose andFundTransaction 31April May SM T W T F SS M T W T FS 1 1 2 3 4 5 62 3 4 5 6 7 8 78 9 10 11 1213 9 10 11 1213 14 15 14 1516 17 18 19 2016 17 18 19 2021 22 21 22 2324 25 26 27 2324 25 26 27 2829 28 29 30 3132 33 34 30 35DenotesHoliday KeyTransactionDate

 

 

Term Sheet -Senior SecuredCredit FacilitiesBorrower EveriPayments Inc.Facilities $855million SeniorSecured CreditFacilitiesconsisting of: $35million SeniorSecuredRevolver (the“Revolver”)$820 millionSenior SecuredFirst Lien TermLoan (the “1stLien”) TermRevolver: 5 years1st Lien: 7 years(with a springingmaturity 3months inside ofthe existingSenior UnsecuredNotes if notrefinanced)LIBOR FloorRevolver / 1stLien: 1.0%Amortization 1stLien: 1% perannumMandatoryPrepayments 1stLien: Customaryfor the type oftransactionproposed,including but notlimited to asweep of 50% ofexcess cash flowgenerated, withstep-downs to25% and 0%based on leveragelevels to beagreed VoluntaryPrepayments 1stLien: 101% softcall for 6 months;otherwiserepayable at anytime in whole orin part at par,subject to LIBORbreakage fees andthe payment ofaccrued interestand fees SecuritySecured by firstlien securityinterest insubstantially allassets of existing/ future domesticsubsidiariesGuaranteesUnconditionallyguaranteed byeach existing andsubsequentlyacquired ororganizedwholly-ownedsubsidiary of theCompanyFinancialCovenantsMaximumSecured NetLeverageAffirmative andNegativeCovenantsCustomary forfacilities of thistype 32

 

 

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