UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
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Current assets | ||
Cash and cash equivalents | $ 293,207 | $ 293,394 |
Settlement receivables | 87,771 | 263,745 |
Trade and other receivables, net of allowances for credit losses of $5,195 and $4,855 at March 31, 2023 and December 31, 2022, respectively | 115,243 | 118,895 |
Inventory | 68,608 | 58,350 |
Prepaid expenses and other current assets | 40,461 | 38,822 |
Total current assets | 605,290 | 773,206 |
Non-current assets | ||
Property and equipment, net | 132,272 | 133,645 |
Goodwill | 717,731 | 715,870 |
Other intangible assets, net | 233,475 | 238,275 |
Other receivables | 28,305 | 27,757 |
Deferred tax assets, net | 529 | 1,584 |
Other assets | 25,968 | 27,906 |
Total non-current assets | 1,138,280 | 1,145,037 |
Total assets | 1,743,570 | 1,918,243 |
Current liabilities | ||
Settlement liabilities | 274,218 | 467,903 |
Accounts payable and accrued expenses | 207,221 | 217,424 |
Current portion of long-term debt | 1,500 | 6,000 |
Total current liabilities | 482,939 | 691,327 |
Non-current liabilities | ||
Deferred tax liabilities, net | 8,391 | 5,994 |
Long-term debt, less current portion | 971,112 | 971,995 |
Other accrued expenses and liabilities | 25,881 | 31,286 |
Total non-current liabilities | 1,005,384 | 1,009,275 |
Total liabilities | 1,488,323 | 1,700,602 |
Commitments and contingencies (Note 12) | ||
Stockholders’ equity | ||
Convertible preferred stock, $0.001 par value, 50,000 shares authorized and no shares outstanding at March 31, 2023 and December 31, 2022, respectively | 0 | 0 |
Common stock, $0.001 par value, 500,000 shares authorized and 120,145 and 88,773 shares issued and outstanding at March 31, 2023, respectively, and 119,390 and 88,036 shares issued and outstanding at December 31, 2022, respectively | 120 | 119 |
Additional paid-in capital | 537,523 | 527,465 |
Retained earnings (accumulated deficit) | 6,800 | (21,266) |
Accumulated other comprehensive loss | (4,383) | (4,197) |
Treasury stock, at cost, 31,373 and 31,353 shares at March 31, 2023 and December 31, 2022, respectively | (284,813) | (284,480) |
Total stockholders’ equity | 255,247 | 217,641 |
Total liabilities and stockholders’ equity | $ 1,743,570 | $ 1,918,243 |
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
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Current assets | ||
Allowances for doubtful accounts | $ 5,195 | $ 4,855 |
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) | 120,145,000 | 119,390,000 |
Common stock outstanding (in shares) | 88,773,000 | 88,036,000 |
Treasury stock (in shares) | 31,373,000 | 31,353,000 |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2023 |
Mar. 31, 2022 |
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Cash flows from operating activities | ||
Net income | $ 28,066 | $ 31,522 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation | 18,949 | 15,220 |
Amortization | 14,364 | 13,633 |
Non-cash lease expense | 1,317 | 1,014 |
Amortization of financing costs and discounts | 713 | 713 |
Loss on sale or disposal of assets | 134 | 29 |
Accretion of contract rights | 2,335 | 2,427 |
Provision for credit losses | 3,078 | 1,947 |
Deferred income taxes | 1,860 | 9,398 |
Reserve for inventory obsolescence | 319 | 55 |
Stock-based compensation | 4,825 | 4,811 |
Changes in operating assets and liabilities: | ||
Settlement receivables | 175,988 | 28,958 |
Trade and other receivables | (87) | (6,123) |
Inventory | (10,937) | (11,069) |
Prepaid expenses and other assets | (271) | (6,812) |
Settlement liabilities | (193,698) | (83,427) |
Accounts payable and accrued expenses | (15,247) | 2,978 |
Net cash provided by operating activities | 31,708 | 5,274 |
Cash flows from investing activities | ||
Capital expenditures | (29,821) | (23,639) |
Acquisitions, net of cash acquired | 0 | (13,318) |
Proceeds from sale of property and equipment | 67 | 57 |
Net cash used in investing activities | (29,754) | (36,900) |
Cash flows from financing activities | ||
Repayments of term loan | (6,000) | (1,500) |
Proceeds from exercise of stock options | 5,233 | 699 |
Treasury stock - restricted stock vesting, net of shares withheld | (333) | (400) |
Payment of contingent consideration, acquisition | (47) | 0 |
Net cash used in financing activities | (1,147) | (1,201) |
Effect of exchange rates on cash and cash equivalents | (167) | 136 |
Cash, cash equivalents and restricted cash | ||
Net increase (decrease) for the period | 640 | (32,691) |
Balance, beginning of the period | 295,063 | 303,726 |
Balance, end of the period | 295,703 | 271,035 |
Supplemental cash disclosures | ||
Cash paid for interest | 25,051 | 14,439 |
Cash paid (refunded) for income tax, net | 465 | (41) |
Supplemental non-cash disclosures | ||
Accrued and unpaid capital expenditures | 2,551 | 2,987 |
Transfer of leased gaming equipment to inventory | $ 1,809 | $ 1,358 |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) shares in Thousands, $ in Thousands |
Total |
Common Stock |
Additional Paid-in Capital |
Retained Earnings/Accumulated Deficit |
Accumulated Other Comprehensive Loss |
Treasury Stock |
---|---|---|---|---|---|---|
Balance, beginning of period (in shares) at Dec. 31, 2021 | 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 | $ 0 | 699 | |||
Restricted share vesting and withholding (in shares) | 61 | |||||
Restricted stock vesting, net of shares withheld | (400) | (400) | ||||
Balance, end of period (in shares) at Mar. 31, 2022 | 117,221 | |||||
Balance, end of period at Mar. 31, 2022 | $ 211,712 | $ 117 | 511,267 | (110,233) | (875) | (188,564) |
Balance, beginning of period (in shares) at Dec. 31, 2022 | 88,036 | 119,390 | ||||
Balance, beginning of period at Dec. 31, 2022 | $ 217,641 | $ 119 | 527,465 | (21,266) | (4,197) | (284,480) |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | 28,066 | 28,066 | ||||
Foreign currency translation | (186) | (186) | ||||
Stock-based compensation expense | 4,825 | 4,825 | ||||
Exercise of options (in shares) | 702 | |||||
Exercise of options | 5,234 | $ 1 | 5,233 | |||
Restricted share vesting and withholding (in shares) | 53 | |||||
Restricted stock vesting, net of shares withheld | $ (333) | (333) | ||||
Balance, end of period (in shares) at Mar. 31, 2023 | 88,773 | 120,145 | ||||
Balance, end of period at Mar. 31, 2023 | $ 255,247 | $ 120 | $ 537,523 | $ 6,800 | $ (4,383) | $ (284,813) |
BUSINESS |
3 Months Ended |
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Mar. 31, 2023 | |
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 develops and offers products and services that provide gaming entertainment, improve our customers’ patron engagement, and help our casino customers operate their businesses more efficiently. We develop and supply entertaining game content, gaming machines and gaming systems and services for land-based and iGaming operators. Everi is a provider of financial technology solutions that power casino floors, provide operational efficiencies, and help fulfill regulatory requirements. The Company also develops and supplies player loyalty tools and mobile-first applications that enhance patron engagement for our customers and venues in the casino, sports, entertainment and hospitality industries. 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, Class III and Historic Horse Racing (“HHR”) 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. We also develop and offer mobile-first applications aimed at enhancing patron engagement for customers in the casino, sports, entertainment, and hospitality industries. Our solutions are secured using an end-to-end security suite to protect against cyber-related attacks, allowing us to maintain appropriate levels of security. 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 loyalty and fully integrated kiosk 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 COVID-19, Macro-Economic Volatility and Global Instability, Employment Constraints and Supply Chain Disruptions We continue to monitor the remaining effects of COVID-19 and believe we are prepared to respond appropriately to the extent additional variants surface that disrupt our business. We have experienced an impact from macro-economic volatility as a result of inflation, interest rate movements and global instability, particularly as it relates to our supply chain, both from an upstream and downstream perspective, which impacts the delivery of our products; and we continue to evaluate the effects of interest rate movements on our variable rate debt and pricing pressures on our business. We have experienced an impact from employment constraints as a result of inflation that has significantly increased over prior years. This has placed pressure on competitive wages, which has led to increases in wages and other related costs. We have experienced an impact from supply chain disruptions that have resulted in additional costs incurred to develop, produce, and ship our products.
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BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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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, 2023 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. 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; and (iii) wide-area progressive (“WAP”)-related restricted funds. 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, 2023 (in thousands).
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. As of March 31, 2023 and December 31, 2022, 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):
The fair values of our borrowings were determined using Level 2 inputs based on quoted market prices for these securities. Reclassification of 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 As of March 31, 2023, no recent accounting guidance is expected to have a significant impact on our consolidated financial statements.
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REVENUES |
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Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVENUES | REVENUES 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 17 — 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):
(1) Contract assets are included within trade and other receivables, net and other receivables in our Balance Sheets. (2) Contract liabilities are included within accounts payable and accrued expenses and other accrued expenses and liabilities in our Balance Sheets. We recognized approximately $18.2 million and $12.7 million in revenue that was included in the beginning contract liabilities balance during the three months ended March 31, 2023 and 2022, 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, HHR offerings, VLTs installed in the State of New York and similar technology in certain tribal jurisdictions, 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; and (ii) Gaming Equipment and Systems. 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 $49.4 million and $47.1 million for the three months ended March 31, 2023 and 2022, 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. We also develop and offer mobile-first applications aimed at enhancing patron engagement for customers in the casino, sports, entertainment, and hospitality industries. In addition, our services operate as part of an end-to-end security suite to protect against cyber-related attacks, allowing us to maintain appropriate levels of security. 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 loyalty and fully integrated kiosk 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, 2023 and 2022.
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LEASES |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LEASES | LEASES Lessee Balance sheet information related to our operating leases is as follows (in thousands):
Supplemental cash flow information related to leases is as follows (in thousands):
Other information related to lease terms and discount rates is as follows:
Components of lease expense are as follows (in thousands):
Maturities of lease liabilities are summarized as follows as of March 31, 2023 (in thousands):
As of March 31, 2023, the Company entered into a real estate lease that has not yet commenced with a term of ten years and future minimum lease payments of approximately $27.3 million.
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LEASES | LEASES Lessee Balance sheet information related to our operating leases is as follows (in thousands):
Supplemental cash flow information related to leases is as follows (in thousands):
Other information related to lease terms and discount rates is as follows:
Components of lease expense are as follows (in thousands):
Maturities of lease liabilities are summarized as follows as of March 31, 2023 (in thousands):
As of March 31, 2023, the Company entered into a real estate lease that has not yet commenced with a term of ten years and future minimum lease payments of approximately $27.3 million.
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BUSINESS COMBINATIONS |
3 Months Ended |
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Mar. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
BUSINESS COMBINATIONS | BUSINESS COMBINATIONS We account for business combinations in accordance with ASC 805 — Business Combinations, 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 starting from the acquisition date. eCash Holdings Pty Limited On March 1, 2022 (the “eCash Closing Date”), the Company acquired the stock of eCash Holdings Pty Limited (“eCash”). Under the terms of the stock purchase agreement, we paid the seller AUD$20 million (approximately USD$15 million) on the eCash Closing Date with additional consideration of AUD$6.5 million to be paid approximately one year following the eCash Closing Date and another AUD$6.5 million to be paid approximately two years following the eCash Closing Date. In addition, we paid approximately AUD$8.7 million (approximately USD$6.0 million) for the excess net working capital during the second quarter of 2022. We finalized our measurement period adjustments and recorded approximately $2.3 million primarily related to deferred taxes during the quarter ending March 31, 2023. The acquisition did not have a significant impact on our results of operations or financial condition. Intuicode Gaming Corporation On April 30, 2022 (the “Intuicode Closing Date”), the Company acquired the stock of Intuicode Gaming Corporation (“Intuicode”), a privately owned game development and engineering firm focused on HHR games. Under the terms of the stock purchase agreement, we paid the seller $12.5 million on the Intuicode Closing Date of the transaction and a net working capital payment of $1.6 million during the second quarter of 2022. In addition, we expect to pay approximately $13.0 million in contingent consideration based upon the achievement of certain revenue targets on the first and second anniversaries of the Intuicode Closing Date. We expect the total consideration for this acquisition to be approximately $27.1 million. The acquisition did not have a significant impact on our results of operations or financial condition. The fair value of the contingent consideration was based on Level 3 inputs utilizing a discounted cash flow methodology. The estimates and assumptions included projected future revenues of the acquired business and a discount rate of approximately 5%. Contingent consideration to be paid is comprised of a short-term component that is recorded in accounts payable and accrued expenses and a long-term component payable within two years recorded in other accrued expenses and liabilities in our Balance Sheets. The change in fair value of the contingent consideration during the period ended March 31, 2023 was not material. 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, 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 Intuicode Closing Date and the final fair value analysis, which we expect to complete no later than the second quarter of 2023. The financial results included in our Statements of Operations for the three months ended March 31, 2023 reflected revenues of approximately $3.1 million and net income of approximately $1.2 million. We incurred no acquisition-related costs during the three months ended March 31, 2023. Venuetize, Inc. On October 14, 2022 (the “Venuetize Closing Date”), the Company acquired certain strategic assets of Venuetize, Inc. (“Venuetize”), a privately owned innovator of mobile-first technologies that provide an advanced guest engagement and m-commerce platform for the sports, entertainment and hospitality industries. Under the terms of the asset purchase agreement, we paid the seller $18.2 million on the Venuetize Closing Date. In addition, we expect to pay approximately $2.8 million in contingent consideration based upon the achievement of certain revenue targets on the -month, month and -month anniversaries of the Venuetize Closing Date. We expect the total consideration for this acquisition to be approximately $21.0 million. The acquisition did not have a significant impact on our results of operations or financial condition. The fair value of the contingent consideration was based on Level 3 inputs utilizing a discounted cash flow methodology. The estimates and assumptions included projected future revenues of the acquired business and a discount rate of approximately 7%. Contingent consideration to be paid is comprised of a short-term component that is recorded in accounts payable and accrued expenses and a long-term component payable within three years recorded in other accrued expenses and liabilities in our Balance Sheets. The change in fair value of the contingent consideration during the period ended March 31, 2023 was not material. 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 Venuetize Closing Date and the final fair value analysis, which we expect to complete no later than the fourth quarter of 2023. The financial results included in our Statements of Operations for the three months ended March 31, 2023 reflected revenues of approximately $0.8 million and net loss of approximately $1.2 million. Acquisition-related costs incurred during the three months ended March 31, 2023 were not material. Pro-forma financial information (unaudited) The unaudited pro forma financial data includes the historical operating results of the Company and the three acquired businesses prior to the acquisitions as if the transactions occurred on January 1, 2022. The unaudited pro forma results include increases to depreciation and amortization expense based on the purchased intangible assets and costs directly attributable to the acquisitions. The unaudited pro forma results do not purport to be indicative of results of operations as of the date hereof, for any period ended on the date hereof, or for any other future date or period; nor do they give effect to synergies, cost savings, fair market value adjustments and other changes expected as a result of the acquisitions. The unaudited pro forma financial data on a consolidated basis as if the eCash, Intuicode and Venuetize acquisitions occurred on January 1, 2022 would reflect revenue of approximately $186.1 million and net income of approximately $29.9 million for the three months ended March 31, 2022.
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FUNDING AGREEMENTS |
3 Months Ended |
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Mar. 31, 2023 | |
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 $4.3 million and $1.0 million for the three months ended March 31, 2023 and 2022, 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 remain 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 $339.2 million and $444.6 million as of March 31, 2023 and December 31, 2022, 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 permitted by the vault cash provider. The term of the agreement expires on June 30, 2024 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, 2023 and 2022.
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TRADE AND OTHER RECEIVABLES |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
TRADE AND OTHER RECEIVABLES | TRADE AND OTHER RECEIVABLES Trade and other receivables represent short-term credit granted to customers and long-term loans receivable in connection with our Games and FinTech equipment and software, and compliance products. Trade and loans receivable generally do not require collateral. The balance of trade and loans receivable consists of outstanding balances owed to us by gaming operators. Other receivables include income tax receivables and other miscellaneous receivables. The balance of trade and other receivables consisted of the following (in thousands):
Allowance for Credit Losses The activity in our allowance for credit losses for the three months ended March 31, 2023 and 2022 is as follows (in thousands):
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INVENTORY |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVENTORY | INVENTORYOur 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):
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PROPERTY AND EQUIPMENT |
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PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment consist of the following (in thousands):
Depreciation expense related to property and equipment totaled approximately $18.9 million and $15.2 million for the three months ended March 31, 2023 and 2022, respectively.
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GOODWILL AND OTHER INTANGIBLE ASSETS |
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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 $717.7 million and $715.9 million at March 31, 2023 and December 31, 2022, 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; (vi) Loyalty Sales and Services; and (vii) Mobile Technologies. Other Intangible Assets Other intangible assets consist of the following (in thousands):
Amortization expense related to other intangible assets was approximately $14.4 million and $13.6 million for the three months ended March 31, 2023 and 2022, respectively.
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LONG-TERM DEBT |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LONG-TERM DEBT | LONG-TERM DEBT The following table summarizes our indebtedness (in thousands):
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 “Term Loan”); and (ii) a $125 million senior secured revolving credit facility due 2026, which was undrawn at closing (the “Revolver” and together with the Term Loan, the “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 “Credit Agreement”). The interest rate per annum applicable to the 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%. Our Revolver remained fully undrawn as of March 31, 2023. The weighted average interest rate on the Term Loan was 7.03% for the three months ended March 31, 2023. Senior Unsecured Notes Our Senior Unsecured Notes (the “2029 Unsecured Notes”) had an outstanding balance of $400.0 million as of March 31, 2023 that accrues interest 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 We were in compliance with the covenants and terms of the Credit Facilities and the 2029 Unsecured Notes as of March 31, 2023.
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COMMITMENTS AND CONTINGENCIES |
3 Months Ended |
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Mar. 31, 2023 | |
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. 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. The court removed the case from the September trial calendar and requested briefs from the parties on relevant legal issues. Briefing was completed in December 2022. The parties are awaiting further guidance from the court. Due to the current stage of the litigation, we are currently unable to estimate the probability of the outcome of this matter or reasonably estimate the range of possible damages, if any. 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, conversion, 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 2023. Due to the current stage of the litigation, we are currently unable to estimate the probability of the outcome of this matter or reasonably estimate the range of possible damages, if any. Sightline Payments matter: Sightline 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 (collectively referred to herein the as “Everi Parties”) 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 the Everi Parties’ CashClub Wallet product infringes on certain patents owned by the plaintiff. The plaintiff is seeking compensatory damages. The Everi Parties filed a Motion to Dismiss or Transfer for Lack of Venue. On June 1, 2022, the court granted the Everi Parties’ Motion to Dismiss ruling that the Western District of Texas was not the proper venue for an action against Everi Fintech, Everi Holdings, and Everi Games. On June 23, 2022, the plaintiff, Sightline Payments LLC, filed an appeal of the District Court’s Order. The appeal is underway. Due to the current stage of the litigation, we are currently unable to estimate the probability of the outcome of this matter or reasonably estimate the range of possible damages, if any. Sightline USPTO matters: In a case related to the Sightline Payments matter, in February and March 2022, Everi Payments Inc. filed five Petitions for Inter Partes Review (“IPR”) with the Patent Trial and Appeal Board (the “PTAB”) of the United States Patent and Trademark Office seeking invalidation of certain claims of U.S. Patent Nos. 8,708,809, 8,998,708, 9,196,123, 9,466,176, and 9,785,926 owned by Sightline Partners LLC. In August and September 2022, decisions by the PTAB were issued granting the IPRs. Briefing and discovery is underway. Oral argument is scheduled for June 14, 2023. Due to the current stage of these matters, we are currently unable to estimate the probability of the outcome or reasonably estimate the range of possible damages, if any. 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. Everi filed a Petition for Removal to the United States District Court, District of Nevada. Thereafter, Everi filed a Motion to Dismiss. On May 4, 2023 the United States District Court entered an order remanding the case back to the District Court of Nevada, Clark County and denying the Motion to Dismiss. Due to the early stages of the litigation, we are currently unable to estimate the probability of the outcome of this matter or reasonably estimate the range of possible damages, if any. In addition, we have commitments with respect to certain lease obligations discussed in “Note 4 — Leases” and installment payments under our asset purchase agreements discussed in “Note 5 — Business Combinations.”
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STOCKHOLDERS' EQUITY |
3 Months Ended |
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Mar. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY In May 2022, our Board of Directors authorized and approved the existing share repurchase program in an amount not to exceed $150.0 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, 2023, Everi had approximately 88.8 million shares issued and outstanding, net of 31.4 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. There were no shares repurchased during the three months ended March 31, 2023 and 2022, respectively. Under the existing $150.0 million share repurchase program, the remaining availability was $65.7 million as of March 31, 2023.
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WEIGHTED AVERAGE SHARES OF COMMON STOCK |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
WEIGHTED AVERAGE SHARES OF COMMON STOCK | WEIGHTED AVERAGE SHARES OF COMMON STOCK The weighted average number of common stock outstanding used in the computation of basic and diluted earnings per share is as follows (in thousands):
(1) There were 0.1 million and no shares that were anti-dilutive under the treasury stock method for the three months ended March 31, 2023 and 2022, respectively.
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SHARE-BASED COMPENSATION |
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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; and (ii) time-based options. We estimate forfeiture amounts based on historical patterns. A summary of award activity is as follows (in thousands):
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INCOME TAXES |
3 Months Ended |
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Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The income tax provision for the three months ended March 31, 2023, reflected an effective income tax rate of 17.6%, which was less than the statutory federal rate of 21.0%, primarily due to a research credit and the benefit from equity award activities, partially offset by state 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 equity award activities. We have analyzed our positions in the federal, state and foreign jurisdictions where we are required to file income tax returns, as well as the open tax years in these jurisdictions. As of March 31, 2023, we recorded approximately $2.6 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.
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SEGMENT INFORMATION |
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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 determined that our operating segments for conducting business are: (i) Games and (ii) FinTech. 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. Refer to “Note 1 — Business” for additional information regarding our operating segments. 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 that were material to our results of operations or financial condition, and we had no significant assets in foreign locations. The following tables present segment information (in thousands)*:
(1) Exclusive of depreciation and amortization. * Rounding may cause variances.
(1) Exclusive of depreciation and amortization. * Rounding may cause variances.
Major Customers. No single customer accounted for more than 10% of our revenues for the three months ended March 31, 2023 and 2022. Our five largest customers accounted for approximately 13% and 15% of our revenues for the three months ended March 31, 2023 and 2022, respectively.
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SUBSEQUENT EVENTS |
3 Months Ended |
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Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Acquisition On April 7, 2023, the Company entered into a purchase agreement to acquire certain strategic assets of VKGS LLC (“Video King”), a privately owned leading provider of integrated electronic bingo gaming tablets, video gaming content, instant win games and systems. The transaction closed on May 1, 2023 (the “Video King Closing Date”). The acquisition provides Everi with complementary assets and an established customer base to enable additional growth in its Games segment. Currently licensed in approximately 60 jurisdictions, Video King expands the addressable market for Everi’s player-popular digital gaming content. Under the terms of the purchase agreement, the closing cash consideration was approximately $59 million, inclusive of estimated customary net working capital adjustments. This transaction will be accounted for as a business combination. As a result of the timing of the acquisition, the initial accounting treatment is still being determined; and accordingly, certain disclosures were not available at the time the financial statements were issued. The acquisition is not expected to have a material impact on our results of operations or financial condition. Share Repurchase Program On May 3, 2023, our Board of Directors authorized and approved a new share repurchase program in an amount not to exceed $180 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 3, 2024, 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, 2023, Everi had approximately 88.8 million shares issued and outstanding, net of 31.4 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.
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BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
3 Months Ended |
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Mar. 31, 2023 | |
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, 2023 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.
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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; and (iii) wide-area progressive (“WAP”)-related restricted funds. |
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. 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.
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Reclassification of Balances | Reclassification of 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.
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Recent Accounting Guidance | Recent Accounting Guidance As of March 31, 2023, no recent accounting guidance is expected to have a significant impact on our consolidated financial statements.
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Revenue | 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 17 — 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.
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BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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, 2023 (in thousands).
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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, 2023 (in thousands).
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Estimated Fair Value and Outstanding Balances of Borrowings | The estimated fair value and outstanding balances of our borrowings are as follows (dollars in thousands):
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REVENUES (Tables) |
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Contract Asset and Liability | The following table summarizes our contract assets and contract liabilities arising from contracts with customers (in thousands):
(1) Contract assets are included within trade and other receivables, net and other receivables in our Balance Sheets. (2) Contract liabilities are included within accounts payable and accrued expenses and other accrued expenses and liabilities in our Balance Sheets.
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LEASES (Tables) |
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Balance Sheet Information | Balance sheet information related to our operating leases is as follows (in thousands):
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Cash Flow Information | Supplemental cash flow information related to leases is as follows (in thousands):
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Lease Costs | Other information related to lease terms and discount rates is as follows:
Components of lease expense are as follows (in thousands):
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Payments Due | Maturities of lease liabilities are summarized as follows as of March 31, 2023 (in thousands):
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TRADE AND OTHER RECEIVABLES (Tables) |
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Trade and Other Receivables | The balance of trade and other receivables consisted of the following (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Activity in Allowance for Credit Losses | The activity in our allowance for credit losses for the three months ended March 31, 2023 and 2022 is as follows (in thousands):
|
INVENTORY (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Inventory | Inventory consisted of the following (in thousands):
|
PROPERTY AND EQUIPMENT (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Property, Equipment and Leased Assets | Property and equipment consist of the following (in thousands):
|
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Intangible Assets | Other intangible assets consist of the following (in thousands):
|
LONG-TERM DEBT (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Outstanding Indebtedness | The following table summarizes our indebtedness (in thousands):
|
WEIGHTED AVERAGE SHARES OF COMMON STOCK (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Weighted Average Number of Shares | The weighted average number of common stock outstanding used in the computation of basic and diluted earnings per share is as follows (in thousands):
(1) There were 0.1 million and no shares that were anti-dilutive under the treasury stock method for the three months ended March 31, 2023 and 2022, respectively.
|
SHARE-BASED COMPENSATION (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Award Activity | A summary of award activity is as follows (in thousands):
|
SEGMENT INFORMATION (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Information | The following tables present segment information (in thousands)*:
(1) Exclusive of depreciation and amortization. * Rounding may cause variances.
(1) Exclusive of depreciation and amortization. * Rounding may cause variances.
|
BUSINESS - Narrative (Details) |
3 Months Ended |
---|---|
Mar. 31, 2023
segment
| |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of business segments | 2 |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Dec. 31, 2022 |
|
Disaggregation of Revenue [Line Items] | |||
Contract with customer liability | $ 18,200 | $ 12,700 | |
Total revenues | $ 200,472 | 175,616 | |
Contractual terms of trade and loans receivable | 12 months | 12 months | |
Games | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | $ 107,374 | 98,336 | |
Games | Gaming operations, leased equipment | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | $ 49,400 | $ 47,100 |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Cash (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|---|---|
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | $ 293,207 | $ 293,394 | ||
Restricted Cash, Current, Statement of Financial Position [Extensible Enumeration] | Prepaid expenses and other current assets | Prepaid expenses and other current assets | ||
Restricted cash - current | $ 2,395 | $ 1,568 | ||
Restricted Cash, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other assets | Other assets | ||
Restricted cash - non-current | $ 101 | $ 101 | ||
Total | 295,703 | 295,063 | $ 271,035 | $ 303,726 |
Cash and Cash Equivalents | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | $ 293,207 | $ 293,394 |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Estimated Fair Value and Outstanding Balances of Borrowings (Details) - USD ($) |
Mar. 31, 2023 |
Dec. 31, 2022 |
Aug. 03, 2021 |
---|---|---|---|
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 | |
Fair Value | Level 2 | New Term Loan | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Long-term debt | 584,301,000 | 588,560,000 | |
Fair Value | Level 2 | Incremental Term Loan | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Long-term debt | 358,000,000 | 346,000,000 | |
Outstanding Balance | Level 2 | New Term Loan | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Long-term debt | 586,500,000 | 592,500,000 | |
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 |
REVENUES - Contract Asset and Liability (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Contract assets | ||
Balance, beginning of period | $ 22,417 | $ 15,221 |
Balance, end of period | 22,342 | 14,514 |
Decrease | (75) | (707) |
Contract liabilities | ||
Balance, beginning of period | 53,419 | 36,615 |
Balance, end of period | 51,705 | 39,090 |
(Decrease) increase | $ (1,714) | $ 2,475 |
REVENUES (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Disaggregation of Revenue [Line Items] | ||
Contract with customer liability | $ 18,200 | $ 12,700 |
Total revenues | 200,472 | 175,616 |
Games | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 107,374 | 98,336 |
Gaming operations, leased equipment | Games | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 49,400 | $ 47,100 |
LEASES - Narrative (Details) $ in Millions |
Mar. 31, 2023
USD ($)
|
---|---|
Lessee, Lease, Description [Line Items] | |
Lease not yet commenced, term of contract | 10 years |
Lease not yet commenced | $ 27.3 |
LEASES - Balance Sheet Information (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Leases [Abstract] | ||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other assets | Other assets |
Operating lease right-of-use (“ROU”) assets | $ 15,921 | $ 17,169 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accounts payable and accrued expenses | Accounts payable and accrued expenses |
Current operating lease liabilities | $ 6,489 | $ 6,507 |
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 | $ 13,205 | $ 14,738 |
LEASES - Cash Flow Information (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Cash paid for: | ||
Long-term operating leases | $ 1,712 | $ 1,668 |
Short-term operating leases | 372 | 409 |
Right-of-use assets obtained in exchange for lease obligations: | ||
Operating leases | $ 86 | $ 5,947 |
LEASES - Lease Costs (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Dec. 31, 2022 |
|
Leases [Abstract] | |||
Weighted average remaining lease term, operating leases | 3 years 2 months 1 day | 3 years 4 months 13 days | |
Weighted average discount rate, operating leases | 4.73% | 4.72% | |
Operating lease cost | $ 1,477 | $ 1,362 | |
Variable lease cost | $ 319 | $ 279 |
LEASES - Payments Due (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Amount | ||
2023 (excluding the three months ended March 31, 2023) | $ 5,533 | |
2024 | 6,732 | |
2025 | 5,852 | |
2026 | 2,137 | |
2027 | 608 | |
Thereafter | 359 | |
Total future minimum lease payments | 21,221 | |
Less: Amount representing interest | 1,527 | |
Present value of future minimum lease payments | 19,694 | |
Current operating lease liabilities | 6,489 | $ 6,507 |
Long-term lease obligations | $ 13,205 | $ 14,738 |
BUSINESS COMBINATIONS - Narrative (Details) $ in Millions, $ in Millions |
3 Months Ended | 12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Oct. 14, 2022
USD ($)
|
Apr. 30, 2022
USD ($)
|
Mar. 01, 2022
AUD ($)
|
Mar. 01, 2022
USD ($)
|
Mar. 31, 2023
USD ($)
|
Jun. 30, 2022
AUD ($)
|
Jun. 30, 2022
USD ($)
|
Mar. 31, 2022
USD ($)
|
Dec. 31, 2022
business
|
|
Business Acquisition [Line Items] | |||||||||
Number of acquired businesses | business | 3 | ||||||||
Business Combination, Contingent Consideration, Period One | |||||||||
Business Acquisition [Line Items] | |||||||||
Revenue target anniversary | 12 months | ||||||||
Business Combination, Contingent Consideration, Period Two | |||||||||
Business Acquisition [Line Items] | |||||||||
Revenue target anniversary | 24 months | ||||||||
Business Combination, Contingent Consideration, Period Three | |||||||||
Business Acquisition [Line Items] | |||||||||
Revenue target anniversary | 30 months | ||||||||
ecash Holdings Pty Limited | |||||||||
Business Acquisition [Line Items] | |||||||||
Acquisition business gross | $ 20.0 | $ 15.0 | |||||||
Payments for excess net working capital | $ 8.7 | $ 6.0 | |||||||
Business combination, consideration transfer | $ 2.3 | ||||||||
ecash Holdings Pty Limited | Tranche One | |||||||||
Business Acquisition [Line Items] | |||||||||
Contingent consideration | $ 6.5 | ||||||||
Contingent consideration, period since closing | 1 year | 1 year | |||||||
ecash Holdings Pty Limited | Tranche Two | |||||||||
Business Acquisition [Line Items] | |||||||||
Contingent consideration | $ 6.5 | ||||||||
Contingent consideration, period since closing | 2 years | 2 years | |||||||
Intuicode | |||||||||
Business Acquisition [Line Items] | |||||||||
Acquisition business gross | $ 12.5 | ||||||||
Business Combination, Consideration Transferred, Liabilities Incurred | $ 1.6 | ||||||||
Business combination, contingent consideration, earn-out liability | $ 13.0 | ||||||||
Business combination, consideration transfer | 27.1 | ||||||||
Cash payments, noncurrent, payment period | 2 years | ||||||||
Revenue since acquisition date | 3.1 | ||||||||
Net loss since acquisition date | $ 1.2 | ||||||||
Intuicode | Measurement Input, Discount Rate | |||||||||
Business Acquisition [Line Items] | |||||||||
Acquired business discount rate | 0.05 | ||||||||
Venuetize, Inc. | |||||||||
Business Acquisition [Line Items] | |||||||||
Acquisition business gross | $ 18.2 | ||||||||
Business combination, contingent consideration, earn-out liability | 2.8 | ||||||||
Business combination, consideration transfer | $ 21.0 | ||||||||
Cash payments, noncurrent, payment period | 3 years | ||||||||
Revenue since acquisition date | $ 0.8 | ||||||||
Net loss since acquisition date | $ 1.2 | ||||||||
Venuetize, Inc. | Measurement Input, Discount Rate | |||||||||
Business Acquisition [Line Items] | |||||||||
Acquired business discount rate | 0.07 | ||||||||
ecash Holdings Pty Limited and Intuicode Gaming Corporation | |||||||||
Business Acquisition [Line Items] | |||||||||
Pro forma revenue | $ 186.1 | ||||||||
Pro forma net income (loss) | $ 29.9 |
FUNDING AGREEMENTS (Details) - Indemnification Guarantee - USD ($) |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Dec. 31, 2022 |
|
Contract Cash Solutions Agreement | |||
Funding Agreements | |||
Cash usage fees incurred | $ 4,300,000 | $ 1,000,000 | |
Outstanding balance | 339,200,000 | $ 444,600,000 | |
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 - Schedule of Components of Trade and Other Receivables (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Trade and other receivables, net | ||
Contract assets | $ 22,342 | $ 22,417 |
Other receivables | 4,066 | 6,110 |
Total trade and other receivables, net | 143,548 | 146,652 |
Non-current portion of receivables | 28,305 | 27,757 |
Contract assets | 9,188 | 9,856 |
Total trade and other receivables, current portion | 115,243 | 118,895 |
Gaming operations | ||
Trade and other receivables, net | ||
Trade receivables, net | 73,365 | 78,200 |
Non-current portion of receivables | 892 | 1,382 |
FinTech | ||
Trade and other receivables, net | ||
Trade receivables, net | 43,775 | 39,925 |
Non-current portion of receivables | $ 18,225 | $ 16,519 |
TRADE AND OTHER RECEIVABLES - Activity in Allowance for Credit Losses (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning allowance for credit losses | $ (4,855) | $ (5,161) |
Provision | (3,078) | (1,947) |
Charge-offs, net of recoveries | 2,738 | 2,085 |
Ending allowance for credit losses | $ (5,195) | $ (5,023) |
INVENTORY (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Inventory | ||
Component parts | $ 58,781 | $ 48,688 |
Work-in-progress | 4,073 | 323 |
Finished goods | 5,754 | 9,339 |
Total inventory | $ 68,608 | $ 58,350 |
PROPERTY AND EQUIPMENT - Schedule of Components of Property, Equipment and Leased Assets (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Dec. 31, 2022 |
|
Property, Plant and Equipment [Line Items] | |||
Cost | $ 425,581 | $ 415,256 | |
Accumulated Depreciation | 293,309 | 281,611 | |
Net Book Value | 132,272 | 133,645 | |
Depreciation | 18,949 | $ 15,220 | |
Rental pool - deployed | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 284,028 | 279,524 | |
Accumulated Depreciation | 196,292 | 188,369 | |
Net Book Value | $ 87,736 | 91,155 | |
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 | $ 32,239 | 30,378 | |
Accumulated Depreciation | 24,691 | 23,930 | |
Net Book Value | $ 7,548 | 6,448 | |
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 | $ 58,818 | 55,246 | |
Accumulated Depreciation | 36,191 | 34,456 | |
Net Book Value | $ 22,627 | 20,790 | |
Machinery, office, and other equipment | Minimum | |||
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 | ||
Leasehold and building improvements | |||
Property, Plant and Equipment [Line Items] | |||
Cost | $ 13,747 | 13,666 | |
Accumulated Depreciation | 11,097 | 10,689 | |
Net Book Value | 2,650 | 2,977 | |
FinTech | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation | 2,710 | $ 2,239 | |
FinTech | Machinery, office, and other equipment | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 36,749 | 36,442 | |
Accumulated Depreciation | 25,038 | 24,167 | |
Net Book Value | $ 11,711 | $ 12,275 | |
FinTech | Machinery, office, and other equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life (Years) | 1 year | ||
FinTech | Machinery, office, and other equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life (Years) | 5 years |
GOODWILL AND OTHER INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Dec. 31, 2022 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill | $ 717,731 | $ 715,870 | |
Amortization of intangible assets | $ 14,400 | $ 13,600 |
GOODWILL AND OTHER INTANGIBLE ASSETS - Other Intangible Assets (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Dec. 31, 2022 |
|
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 824,389 | $ 813,241 |
Accumulated Amortization | 590,914 | 574,966 |
Net Book Value | 233,475 | 238,275 |
Contract rights under placement fee agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 57,821 | 57,821 |
Accumulated Amortization | 14,587 | 12,252 |
Net Book Value | $ 43,234 | 45,569 |
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 | $ 331,883 | 331,999 |
Accumulated Amortization | 238,819 | 233,150 |
Net Book Value | $ 93,064 | 98,849 |
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 | $ 410,862 | 401,087 |
Accumulated Amortization | 316,609 | 309,285 |
Net Book Value | $ 94,253 | 91,802 |
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, trademarks, and other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 23,823 | 22,334 |
Accumulated Amortization | 20,899 | 20,279 |
Net Book Value | $ 2,924 | $ 2,055 |
Patents, trademarks, and other | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (Years) | 2 years | |
Patents, trademarks, and other | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (Years) | 18 years |
LONG-TERM DEBT - Schedule of Outstanding Indebtedness (Details) - USD ($) |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Dec. 31, 2022 |
Aug. 03, 2021 |
|
Debt Instrument [Line Items] | |||
Total debt | $ 986,500,000 | $ 992,500,000 | |
Debt issuance costs and discount | (13,888,000) | (14,505,000) | |
Total debt after debt issuance costs and discount | 972,612,000 | 977,995,000 | |
Current portion of long-term debt | (1,500,000) | (6,000,000) | |
Total long-term debt, net of current portion | 971,112,000 | 971,995,000 | |
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 | $ 586,500,000 | 592,500,000 | |
Senior secured notes | Senior secured notes | New Revolver | |||
Debt Instrument [Line Items] | |||
Total debt | 586,500,000 | 592,500,000 | |
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 | |
Interest rate | 5.00% |
LONG-TERM DEBT - Narrative (Details) |
3 Months Ended | ||
---|---|---|---|
Aug. 03, 2021
USD ($)
|
Mar. 31, 2023
USD ($)
|
Dec. 31, 2022
USD ($)
|
|
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% | ||
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 | ||
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 | 7.03% |
STOCKHOLDERS' EQUITY (Details) - USD ($) |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Dec. 31, 2022 |
May 04, 2022 |
|
Stockholders' Equity Note [Abstract] | ||||
Stock repurchase program, authorized amount | $ 150,000,000 | |||
Stock repurchase program, period in force | 18 months | |||
Common stock outstanding (in shares) | 88,773,000 | 88,036,000 | ||
Treasury stock (in shares) | 31,373,000 | 31,353,000 | ||
Treasury stock acquired (in shares) | 0 | 0 | ||
Stock repurchase program, remaining authorized repurchase amount | $ 65,700,000 |
WEIGHTED AVERAGE SHARES OF COMMON STOCK - Schedule of Weighted Average Number of Shares (Details) - shares shares in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Weighted average shares | ||
Weighted average number of common shares outstanding - basic (in shares) | 88,355 | 91,408 |
Potential dilution from equity awards (in shares) | 6,426 | 10,063 |
Weighted average number of common shares outstanding - diluted (in shares) | 94,781 | 101,471 |
Anti-dilutive equity awards excluded from computation of earnings per share (in shares) | 100 | 0 |
SHARE-BASED COMPENSATION - Summary of Award Activity (Details) shares in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2023
shares
| |
Stock Options | |
Stock Options | |
Outstanding (in shares) | 6,793 |
Granted (in shares) | 0 |
Exercised options (in shares) | (703) |
Canceled or forfeited (in shares) | (7) |
Outstanding (in shares) | 6,083 |
Restricted Stock Units | |
Restricted Stock Units | |
Outstanding (in shares) | 2,709 |
Granted (in shares) | 26 |
Vested (in shares) | (53) |
Canceled or forfeited (in shares) | (2) |
Outstanding (in shares) | 2,680 |
Common Stock | |
Restricted Stock Units | |
Number of shares available for grant (in shares) | 3,700 |
INCOME TAXES (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 17.60% | 23.60% |
Statutory federal rate | 21.00% | 21.00% |
Unrecognized tax benefits | $ 2.6 |
SEGMENT INFORMATION - Revenues, Operating Income, and Assets (Details) - USD ($) $ in Thousands |
3 Months Ended | ||||
---|---|---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Dec. 31, 2022 |
|||
Revenues | |||||
Total revenues | $ 200,472 | $ 175,616 | |||
Costs and expenses | |||||
Operating expenses | 59,192 | 49,825 | |||
Research and development | 16,096 | 12,519 | |||
Depreciation | 18,949 | 15,220 | |||
Amortization | 14,364 | 13,633 | |||
Total costs and expenses | 148,426 | 123,025 | |||
Operating income | 52,046 | 52,591 | |||
Total assets | |||||
Total assets | 1,743,570 | $ 1,918,243 | |||
Games | |||||
Revenues | |||||
Total revenues | 107,374 | 98,336 | |||
Costs and expenses | |||||
Total cost of revenues | [1] | 27,055 | 22,777 | ||
Operating expenses | 20,872 | 17,346 | |||
Research and development | 10,653 | 7,630 | |||
Depreciation | 16,239 | 12,981 | |||
Amortization | 10,276 | 9,805 | |||
Total costs and expenses | 85,095 | 70,539 | |||
Operating income | 22,279 | 27,797 | |||
Total assets | |||||
Total assets | 888,114 | 911,907 | |||
Games | Gaming operations | |||||
Revenues | |||||
Total revenues | 75,309 | 70,338 | |||
Costs and expenses | |||||
Total cost of revenues | [1] | 6,806 | 5,995 | ||
Games | Gaming equipment and systems | |||||
Revenues | |||||
Total revenues | 32,065 | 27,998 | |||
Costs and expenses | |||||
Total cost of revenues | [1] | 20,249 | 16,782 | ||
FinTech | |||||
Revenues | |||||
Total revenues | 93,098 | 77,280 | |||
Costs and expenses | |||||
Total cost of revenues | [1] | 12,770 | 9,051 | ||
Operating expenses | 38,320 | 32,479 | |||
Research and development | 5,443 | 4,889 | |||
Depreciation | 2,710 | 2,239 | |||
Amortization | 4,088 | 3,828 | |||
Total costs and expenses | 63,331 | 52,486 | |||
Operating income | 29,767 | 24,794 | |||
Total assets | |||||
Total assets | 855,456 | $ 1,006,336 | |||
FinTech | Financial access services | |||||
Revenues | |||||
Total revenues | 56,214 | 49,879 | |||
Costs and expenses | |||||
Total cost of revenues | [1] | 2,899 | 2,175 | ||
FinTech | Software and other | |||||
Revenues | |||||
Total revenues | 24,215 | 17,867 | |||
Costs and expenses | |||||
Total cost of revenues | [1] | 1,423 | 935 | ||
FinTech | Hardware | |||||
Revenues | |||||
Total revenues | 12,669 | 9,534 | |||
Costs and expenses | |||||
Total cost of revenues | [1] | $ 8,448 | $ 5,941 | ||
|
SEGMENT INFORMATION - Major Customers (Details) |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Five largest customers | Customer risk | Revenue from Contract with Customer | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 13.00% | 15.00% |
SUBSEQUENT EVENTS (Details) - USD ($) |
3 Months Ended | ||||
---|---|---|---|---|---|
May 03, 2023 |
Apr. 07, 2023 |
Mar. 31, 2023 |
Dec. 31, 2022 |
May 04, 2022 |
|
Business Acquisition [Line Items] | |||||
Stock repurchase program, authorized amount | $ 150,000,000 | ||||
Stock repurchase program, period in force | 18 months | ||||
Common stock outstanding (in shares) | 88,773,000 | 88,036,000 | |||
Treasury stock (in shares) | 31,373,000 | 31,353,000 | |||
Subsequent Event | |||||
Business Acquisition [Line Items] | |||||
Stock repurchase program, authorized amount | $ 180,000,000 | ||||
Stock repurchase program, period in force | 18 months | ||||
Video King | Subsequent Event | |||||
Business Acquisition [Line Items] | |||||
Acquisition business gross | $ 59,000,000 |