US – Everi’s President cuts his wage down to zero to help ‘preserve liquidity’By Phil - 26 March 2020
Everi Holdings’ President and CEO Michael Rumbolz has waived his wage and cut those of the company’s executive team by 70 per cent as it looks to reduce expenses to cover the COVID-19 crisis.
Everi Holdings, a premier provider of gaming products and financial technology and loyalty solutions in the gaming industry, said the ‘range of actions that management and the Board of Directors have implemented’ will ‘maintain balance sheet flexibility and preserve liquidity given the business disruption caused by the rapid nationwide spread of the novel COVID-19 virus and the actions by state and tribal governments and businesses to contain the virus.’
Since mid-March, the Company has drawn down $35m on its revolving credit facility to provide additional near-term liquidity and cancelled or delayed material capital expenditures. Most recently, the company implemented targeted furloughs and Company-wide salary reductions. The CEO elected to cut his salary to zero and the executive team elected to reduce their salaries by 70 per cent, amongst those actions. The effect of these actions has lowered the company’s future cash payroll expense to less than $2 million per month.
“As we face the challenges presented by COVID-19, the health and welfare of our teams, our customers, their guests, and people everywhere are of our utmost concern,” said Michael Rumbolz, President and Chief Executive Officer. “While revenue for the first two months of the year increased in line with our forecast compared to the same two-month period a year ago, our customers’ ability to operate has been severely impacted by the nearly universal directives to close facilities across North America to protect the public. With essentially all revenue and the associated workload having been reduced to near zero and limited visibility as to when our customers may reopen for business, we have taken decisive actions appropriate for the current level of business and to prepare our Company to withstand a potentially prolonged period of minimal industry activity. Consequently, we believe these actions are the appropriate steps to preserve our liquidity and manage our business in the current environment. We expect these to be temporary but prudent steps designed to ensure that Everi is best positioned to withstand this disruption and will be prepared to support our customers once they begin to reopen their facilities. We are also reviewing options to obtain additional capital resources on acceptable terms to provide additional financial flexibility.”
“Our hope is that the directions given by our elected officials have the desired outcomes regarding the containment of COVID‐19, so that our economy and way of life can get back to normal as quickly as possible,” added Rumbolz. “We are monitoring developments on a daily, and sometimes on an hour-to-hour basis, in order to be prepared to respond to our customer needs. We believe the pre-COVID-19 strengths Everi was well known for will align with the needs of our customers as they return to normalized operations. These strengths include our FinTech segment’s ability to drive labor productivity and cost efficiencies for our customers while also helping them generate revenue; and our Games segment’s offering of high-performing differentiated games that support customers’ focus on providing the best performing games for their loyal patrons. We’re looking forward to resuming normal operations as soon as conditions permit and regaining our pre‐pandemic momentum to get back on track for a bright and successful future.
“The changes we have had to make across our operations are not easy for those impacted. I, the senior management team and our Board of Directors are committed to doing whatever is necessary to ensure Everi comes out in a solid position on the other side of this crisis. I also look forward to seeing a recovery in the gaming industry, so that we can start returning our employees back to work and regain some normalcy in each of our team members’ lives.”
Given the current operating environment and the uncertain timeline and impact related to the Company’s operations as a result of widespread casino closures across North America, Everi is also withdrawing the 2020 guidance it provided on March 2, 2020.