• Macroeconomic: Demand for EVRI’s products is dependent on favorable industry conditions in the casino industry. To the
extent gaming revenues decline, this could have a negative effect on EVRI’s revenue and profits.
• Leverage: Everi is currently leveraged at 4.8x TEV / EBITDA and this is plainly too much for the company. The CEO has
suggested that if EVRI sold the Games division it could paydown all it s debt. However, in the absence of this, the company
must work to paydown debt with its expending future free cash flow. Management is currently allocating excess cash to
payign down the debt balance.
• Passage of regulatory change in Texas or at Indian Casinos: As of September 30, 2018, gaming operations units installed
with operators in Oklahoma comprised 48% of the total installed base. Gaming patrons residing in Texas generate a large
portion of Oklahoma operators’ gross gaming revenue. Thus, to the extent Texas were to pass legislation allowing for the
operation of regulated commercial gaming facilities within the state, it would have a material adverse impact on Oklahoma
tribal operators’ gross gaming revenues and, subsequently, Everi’s earnings potential. As of now there is no indiction this is
• Non renewal of FinTech contracts: Everi’s standard cash access contract covers a term of three years. Thus, in an average
year, approximately one-third of the company’s cash access contracts come up for renewal. Although Everi has historically
had success renewing the large majority of its cash access contracts, we believe the loss of a contract, particularly one
involving a large multi-site operator, could adversely impact the company’s revenues and operating profits.