Everi Holdings Inc.

Greetings and welcome to the Every Holdings Inc. fourth quarter 2020 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Bill Fund, Senior Vice President, Investor Relations. Please go ahead, sir.

Thank you, Hector. Welcome, everyone. Let me remind everyone of our safe harbor disclaimer that covers today's call and webcast. Our call will contain forward-looking statements and assumptions which involve risks and uncertainties that could cause actual results to differ materially from those discussed during our call. These risks and uncertainties include but are not limited to those contained in our earnings release today and in other SEC filings which are posted in the investor section of our corporate website at every.com. We do not intend and assume no obligation to update any forward-looking statements. You are cautioned not to place undue reliance on forward-looking statements which are made only as of today, March 9th, We will also refer to certain non-GAAP financial measures, such as adjusted EBITDA, free cash flow, total net debt, total net debt leverage ratio, and net cash position. A description of each non-GAAP measure and a reconciliation to the most directly comparable GAAP measure can be found in our earnings release and related 8K, as well as in the investor section on our website. This call is being webcast and recorded. A link to the webcast and replay of today's call can be found in the investor section of our website. Joining me on the call today are Mike Rumbles, our chief executive officer, Randy Taylor, president and chief operating officer, Mark Labai, our chief financial officer, Dean Ehrlich, our games business leader, and Darren Simmons, our fintech business leader. Now it's my pleasure to turn the call over to Mike.

Thank you, Bill, and good afternoon, everyone, and thank you for joining us today. I'd like to begin by sharing a few highlights and observations. Our fourth quarter results were in line with the preliminary numbers that we announced in January. These results demonstrate continued quarterly sequential progress in our recovery from the pandemic-related challenges that began to impact the industry early in 2020 and which continue even today. our improvement occurred despite an increase in jurisdictional restrictions in both November and December, which resulted in increased casino closures and reduced casino activity. Our revenue and adjusted EBITDA improved sequentially from the third quarter, and we generated positive net income, and our free cash flow improved significantly year over year. Now, our impressive fourth quarter performance reflects several of the strengths of our company. The balance of our business between games and our FinTech segments, both of which have a large base of recurring revenue streams. Our focus, investment, and execution in developing innovative products that are increasingly in demand because they help our customers grow revenues, build stronger relationships with their guests, and at the same time, attain greater operating efficiencies. Also, our track record of consistent operating execution, and then, of course, most importantly, the every team whose dedication and collaboration have made it all happen. Now, common to both our fintech and games businesses is the large component of high margin revenues that are recurring in nature. The recurring revenue portions of both businesses' operations have proven to be incredibly resilient as the gaming industry recovers. In the games business, our priority is on developing original, creative, and engaging content. The result of this is a growing portfolio of games that are popular with players and generating strong performance for casino operators. This success is clearly evidenced in the continued sequential growth of our gaming operations installed base. Most significantly, the increase in our installed premium games. Our installed base of premium games has increased every quarter for the past 10 consecutive quarters, including each quarter in 2020, despite the challenges that have been posed by the pandemic. At year end, our installed footprint of premium games was up 1,318 units, or 26%, compared to our then-record installed base, which we had at the end of 2019. This growth came despite the impact of the pandemic, which caused reductions for many of the other suppliers in our space. Premium games now make up more than 41% of our total installed base and have been a driver of our daily win per unit performance. Given the consistent growth achieved in our installed base, our daily win per unit, our growing ship share of unit sales during the last several years, and our pipeline of new products, I am confident that we have the right elements in place to continue to propel the ongoing organic growth of our games business. Said another way, our goal is to become one of the largest premier suppliers of games for casino operators in North America, and we are well on our way. Our iGaming digital business is also showing significant growth, with revenues up 60% year over year, and we are just beginning to ramp it up. From the time we launched our remote game server for B2B service with one customer in April 2019, we are now directly providing slot content to 30 customer sites in three U.S. jurisdictions. And this includes Michigan, which just launched in January of this year. As Michigan opened, we were a launch partner to six of the nine online casinos that went live on day one. On average, we represented about 25% of the content at launch, and we have a number of top-performing games in the market. As an example, we were a key content provider for the BetMGM casino launch. Our Double Ruby game has been one of their most popular titles since then, and we expect to continue to integrate additional innovative content into their offering on a regular basis. As another example, on the Rush Street gaming site, we have the number two top performing game based on average daily wagering since the start. And we have a total of five games among their top 25 best performing games. The interest in iGaming, which is gaining strength as a source of new taxable revenue across multiple U.S. and Canadian jurisdictions, when joined with our proven and growing library of game content, gives us tremendous confidence that our digital business will be an increasing contributor to revenues and earnings in 2021, as well as the years ahead. And in the FinTech business, our strategic focus remains the development and extension of our comprehensive integrated digital neighborhood. During the fourth quarter, two of our large casino customers went live with cashless mobile wallets powered by our digital cash club wallet solution. White labeled to carry each casino's own branding, the cash club wallet is fully customizable to meet the differing needs of our customers. With our flexible system, operators can choose the level of experience that they want to offer to their patrons and the speed at which they move forward. Each of our first two customers began with a soft launch. and then chose initial features and timing to both align with their comfort levels and to fit with their marketing plans for their guests. Our Cash Club wallet enables our customers to deliver integrated digital patron experiences alongside the existing solutions in the casinos. By leveraging operators' investments in infrastructure with the addition of our casino banking as a service capability and our other advanced financial technology, our digital wallet can act as the central hub for payments across the entire breadth of a casino operator's enterprise, from the gaming floor to food and beverage to retail and to hotel and resort amenities. Importantly, the same wallet can be used at each and every one of the operator's casinos. Multiple casinos, multiple jurisdictions, one wallet. For operators with online offerings such as iGaming and sports wagering, it can also provide funding to bridge the patron's online experience with their land-based experience. Our Cash Club wallet solution complements our cash access services. It is fully integrated with all of our loyalty, regulatory, compliance, and financial service offerings and is the next step in providing convenience for players together with a significant cost efficiency for operators. In addition to cost savings, the data and intelligence on patron spending that is gathered through our wallet provides operators with the opportunity to extend their relationship and connection time with their patrons. Our digital wallet fits seamlessly into casinos' existing back of house processes and controls. It also meets the needs of the relevant banking and other financial regulators at the state and federal level, as well as the extensive needs of the various gaming regulators in the United States. We believe we are truly at the forefront of the convergence of payments and loyalty in the digital casino world. With the stringent compliance requirements that we meet and our history of player funding capabilities, we offer the industry a truly differentiated, high-value solution. Now, given the early stage of deployment, we are not yet at a point where it's appropriate to share specific data. However, the initial response from the casino's patrons has been highly positive. and our expectation remains that cashless transactions will increase the total number of transactions performed by patrons, providing yet another growth driver for every in the years ahead. As our cash solution goes live at additional casinos in the coming months, and as the user base expands, we expect to share further insights about these trends with you. Now let me turn the call over to Randy.