Mark LaBay - Senior Vice President, Strategic Development and Investor Relations Michael Rumbolz - President and Chief Executive Officer Randy Taylor - Chief Financial Officer and Executive Vice President Dean Ehrlich - Executive Vice President and Gaming Business Leader Harper Ko - Executive Vice President and Chief Legal Officer.

David Katz - Jeffries John Davis - Raymond James George Sutton - Craig-Hallum.

Good day, and welcome to the Everi Holdings Incorporated First Quarter 2018 Earnings Conference Call. Today's conference is being recorded. At this time, I like to turn the conference over to Mark Labay, Senior Vice President, Strategic Development and Investor Relations. Please go ahead, sir..

Thank you, Melissa, and welcome to the call. Joining me today are President and Chief Executive Officer, Michael Rumbolz; Executive Vice President and Chief Financial Officer, Randy Taylor; Executive Vice President and Games Business Leader, Dean Ehrlich; and our Executive Vice President and Chief Legal Officer, Harper Ko.

Before I begin, like to remind everyone that the safe harbor disclaimer in our public filings covers this call and our webcast.

Some of the comments to be made during this call contain forward-looking statements and assumptions that are subject to risks and uncertainties, including but not limited to, those contained in our SEC filings, all of which are posted within the Investor Relations section of our corporate website.

These risks and uncertainties could cause actual results to differ materially from those described in our forward-looking statements, and they should not be considered an indication or guarantee of future performance. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of today.

We do not intend to and assume no obligation to update any forward-looking statements. In addition, this call may refer to certain non-GAAP measures, such as adjusted EBITDA and adjusted EBITDA margin.

We reference these non-GAAP measures because management uses them, in part to manage the business and to enhance investor understanding of the underlying trends in our business and to provide better comparability between periods in different years.

We also make certain compensation decisions based in part on our operating performance, as measured by adjusted EBITDA and our credit facility requires us to comply with the consolidated secured leverage ratio that includes performance metrics, substantially similar to adjusted EBITDA.

As a result of our adoption of the new revenue recognitions rules under ASC 606 in 2018, beginning for all periods after January 1, we are now required to net certain amounts as reduction of revenues that have previously been recorded as cost of revenue in 2017 under ASC 605.

To assist understand in the comparability of our reported 2018 revenue and cost of revenue amounts, we will be reporting non-GAAP adjusted revenue and related measures for the prior-year periods. For a reconciliation of these adjusted amounts to be as reported equivalent in our Form 10-Q, please refer to our earnings release.

For more information regarding these adjustments, please see our Form 10-Q for the quarter, which we expect to file within the next couple of days.

For a full reconciliation of non-GAAP measures to GAAP results refer to today, please see our earnings press release and related 8-K, both of which have been filed with the SEC and are available on our corporate website within the section captioned Investors. Finally, this call is also being webcast.

A link to the webcast has been included within the Investor Relations section of our corporate website, and a replay of the call will be archived. With that, I am pleased to introduce our President and Chief Executive Officer, Mike Rumbolz..

Thank you, Mark, and good afternoon, everyone, and thank you for joining us. This afternoon we reported the 2018 first quarter revenue on a comparable basis increased almost 10% to $111 million and adjusted EBITDA rose 7% to $58 million.

We also reported our first profitable quarter since quarter one of 2015, with net income of $4.6 million or $0.06 per diluted share. These strong financial results were driven by areas of a record-setting growth across our entire business. We generated our highest quarterly adjusted EBITDA for our Payments segment in over nine years.

We had record growth in our Games installed base, and the number of units sold was the highest since our acquisition of multimedia games. We also reported our highest year-over-year growth in daily win per unit and our highest quarterly average sales price since that acquisition.

These results provide very clear and compelling evidence that we have transformed Everi into a growth company. Our Games segment continues to build upon the operational achievements we realized in 2017.

We achieved record, or near record results in each of the Games divisions for key operating metrics, installed base unit count, daily win per unit, unit sales and average sales price. Our gaming operations revenue was up $3.6 million from the prior year, or almost 10%.

Installed base unit count closed the quarter at 14,124 units, which is our highest ever ending unit count and revenues from our installed base were at record levels. We continue to diversify our operations, as we expand our products both inside and outside of Oklahoma.

While the Oklahoma and non-Oklahoma footprint both experienced meaningful growth in the period, this quarter was the first time our ending unit count outside of Oklahoma exceeded the ending unit count inside of Oklahoma.

Driving our Games in the first quarter was an impressive 1102-unit year-over-year increase and an 828-unit sequential gain in our installed base. Even with this significant unit growth, we still managed to grow our daily win per unit by 4.5% or $1.23 on a year-over-year basis.

Our first quarter unit sales increased by 45 units over the first quarter of 2017 and our average selling price per unit was up almost $800 year-over-year. It is clear that our investments in and our focus on new games and cabinet form factors is resonating with our customers and resulting in increased market demand and market share for our products.

Our ability to consistently execute and meet this demand is translating into significantly improved returns. Now on the Payments side, our Payments segment continues to deliver strong growth as well. In fact, first quarter payments adjusted EBITDA of $26.3 million represents our highest quarterly performance since the third quarter of 2008.

This is a direct result of our continuing commitment to innovate across our product portfolio in order to provide our customers with the ability to optimize how their guests access funds across the casino floor, to comply with their growing burden of regulatory obligations and to provide great gaming entertainment for their guests.

As I look forward, I'm confident that our investments in our people, new technology and products are now being reflected in our operating results. This is providing us with a strong foundation from which we can generate consistent growth.

To realize the highest return from our operations, we remain committed to growing recurring revenue from our installed base units. Our growth in the premium games category, which was an important factor in our first quarter's success, will continue to be a significant driver of future success.

At the end of March, we had our first placements of two new game themes, Willie Nelson's Shotguns Willie and Willie Nelson's Whiskey River. These were delivered on our highly popular player classic mechanical reel cabinet. Additionally, we have now placed our first new E5527 premium cabinets in several properties.

This new premium cabinet features our newest branded theme, The Brady Bunch. And we will be introducing Fruit Ninja on this cabinet soon. We believe these new game themes and form factors will continue building upon the success we are achieving from our newer premium game installations.

We expect to place additional Willie Nelson themed games and other 5527 premium titles in many of our Class II and Class III tribal casinos over the coming months.

To date, the performance of our current licensed game themes such as Casablanca, Penn & Teller, Casper the Friendly Ghost and Hot Stuff has exceeded our internal expectations, and are also the direct result of the investments that we've made in hardware and game development. We are just beginning to scratch the surface with new title introductions.

I believe that some of our best titles of the year will be released in the back half of 2018. As we continue to expand our wide-area progressive footprint, along with local-area progressive games in the Class III tribal and commercial markets, and we continue to grow our installed base of the premium units.

We expect to see consistent improvement in our overall daily win per unit. On the Game sales side, our E43 cabinet is gaining solid traction with our customers and helping to drive unit sales growth.

The initial success we've achieved with the E43 introduction builds upon our base cabinet offering provided by the more established Core HDX product line, which also continues to be very popular with our customers.

In fact, in just the second quarter as a for-sale cabinet, sales of the E43, which includes some great new game themes such as Fu Xuan, Lightning Zap and Fire Fortunes, were nearly equal to the number of Core HDX units that we sold.

I am also pleased to announce that the number of units on trial at the end of the first quarter is at record levels and has continued to grow through the early part of the second quarter. With our high conversion rate to sale or lease from trials, this a great leading indicator of the success that you should expect from us going forward.

As the proof of our strategy's success continues to mount, we remain confident in our longer-term goal to grow our ship share to double-digits and to grow our installed base to 17,000 units.

Now our key operating priorities for Payments this year are focused on solutions that provide for an enhanced experience for gaming patrons, while at the same time, improving our customers operating efficiency or reducing their operating costs. This is aligned with our customers' core focus on maximizing their patrons experience.

Developing and introducing product solutions, like our e-wallet, designed to assist casino patrons with the ability to seamlessly move financial value across the entire gaming ecosystem is an extremely high priority on our product roadmap.

By providing our best-in-class core cash access foundation to move financial value across both gaming and non-gaming venues, we believe will result in greater patron acceptance and deliver the greatest value to our casino customers.

This type of innovative product creates operational efficiencies for gaming customers and because it's integrated to all parts of their business, it also can assist them in capturing more data about their patron's spending habits.

With this information, a casino can create an enhanced experience for their patron and maximize the return they're able to realize from their best customers. We also expect our ability to expand our services in new markets and introduce our complete integrated product offering, will create opportunities for additional growth.

Last year, we introduced our ATM services into Canada. We believe there is a larger opportunity to grow our revenues as we incorporate these services with our integrated kiosks and our existing Canadian cash-advance services.

We would expect a similar opportunity with other new products and product extensions, such as our compliance products and our Jackpot Xpress product. Now last year, we completed a series of our debt refinancing transactions that improved our capital structure and significantly lowered our overall annual cash interest expense.

Today, we announced an additional effort to achieve further cash interest savings on our term loan.

We believe the continued strength in our operating performance together with a favorable compliance in the overall capital markets may provide for savings on the term loan interest rates spread at the expiration of the soft call provision on our term loan. This is expected to generate additional free cash flow.

Now before I turn the call over to Randy, I wanted to clarify one of the comments that we made on the fourth quarter conference call. On that call, I highlighted a refined description of our business focus is that of a gaming technology company.

While we report our operations in two segments and each of these segments, Games and Payments, can be separated and operated independently, we do not see ourselves in that narrow context.

That two segment definition is really too simplistic for how our business actually creates value for our customers and shareholders, specifically on the Payments side. We're more than just a provider of ATMs and debit and credit card payments.

Our products, particularly those developed for compliance, credit reporting, information services and even gaming payments equipment, provide our gaming customers with tremendous operational and cash efficiency. I want to make it clear. This description merely presents our vision and focus.

We are a single unified company and our employees and customers should understand our purpose. This vision has been the focus of our employees and has led to our current operating strength.

Our customers also see this vision and with our improving and expanding product portfolio, in both Games and Payments, we are now experiencing some revenue generation synergies from the combination of these two businesses. This singular view will drive our thinking as we continue to develop products and services to support our gaming customers.

We believe in the value proposition of our combined entity, and view our growth story as only being in its early stages. However, it is important to know that management and the board have never wavered from a commitment to evaluate any and all opportunities to unlock value for our shareholders. And with that, I'd like to turn the call over to Randy..

Thank you, Mike, and good afternoon, everyone. Before I begin my review of the results, let me remind everyone that the operating results presented in today's release reflect the changes in our financial reporting as a result of our implementation of the new revenue accounting standard.

We have implemented the provisions of the accounting standard under the modified retrospective method. The impact of this new accounting standard primarily impacts the company's Payments business, requiring a net versus gross reporting of revenues and cost of revenues for our cash access services.

These changes had no impact on our operating income, net income or loss, net income or loss per diluted share or reported adjusted EBITDA. We are now also required to provide a more detailed breakout of our revenue and cost of revenue streams for both Games and Payments on the face of our financial statements.

In accordance with the implementation requirements of the new standard, our historical reporting of revenues and cost of revenues have not been revised. In our press release, we have provided a table that reconciles the historical period, revenues and cost of revenues as reported to the as-adjusted amounts that reflect a net versus gross basis.

We believe this provides a better comparison of revenues and cost of revenues for the first quarter of 2018 versus 2017. For more details in the changes, you can refer to our earnings press release filed today and our Form 10-Q that we expect to file with the SEC in the next several days.

We've also filed a Form 8-K with the SEC today to present quarterly and annual historical periods from 2015 to 2017, as if they were reported under the new accounting standard. This should provide a good basis for your modeling efforts going forward.

Please note that the following discussion of our results is based on the comparable revenues and cost of revenues as reported in our press release. For the first quarter of 2018, total revenues were $111 million, comprised of $60.2 million in Games revenues and $50.8 million in Payments revenues.

Payments revenue increased approximately 11% year-over-year on a comparable basis, and Games revenue increased approximately 9% year-over-year. Adjusted EBITDA for the first quarter of 2018 increased $3.8 million or 7% to $58 million.

Adjusted EBITDA for the Games segment was $31.7 million compared to $30.1 million a year ago, and adjusted EBITDA for the Payments segment was $26.3 million compared to $24.1 million last year. In our Games segment, gaming operations revenue increased $3.6 million year-over-year to $40.1 million.

This includes $4.5 million in revenue from our New York Lottery operations, which was up $0.1 million over the prior-year period. On a year-over-year basis, our installed base increased 1,102 units to 14,124, while our 2018 first quarter daily win per unit, before WAP expense, increased by $1.23 to $28.40.

Within the installed base, premium unit placements rose approximately 49% or 913 units year-over-year. This includes 435 WAP units at quarter end. We expect premium games to be an ongoing area of growth, in terms of installations and daily win per unit going forward.

For 2018, we now expect our installed base will grow between 8% and 10%, with a significant portion of this growth coming early in the year. This is an increase from our prior expectation of 7% to 8% growth and reflects the increased unit growth we experienced in the first quarter.

We also expect the new premium banked Renegade and Empire Arena games, which debuted at G2E last year, will be introduced in the second half of 2018. These new games will further support our forecasted growth in premium games and daily win per unit in the second half of the year.

We continue to prioritize the management of our overall installed base this year, and as such, a significant portion of our efforts are focused on optimizing the yield in our current installed base. Revenues from electronic game sales were $20.2 million for the first quarter 2018, which is up approximately 8% year-over-year.

We sold 1,063 units at an ASP of $17,745 compared to 1,018 units in the first quarter last year at an ASP of $16,966. For the full year, we continue to expect unit sales will increase approximately 10%, and we don't expect to see any material change in our average ASP.

Adjusted EBITDA margin for the Games segment was 52.6% in the first quarter of 2018 compared to 54.5% in the first quarter of 2017. For our Payments segment, in the first quarter of 2018, both revenue and adjusted EBITDA grew for the eighth consecutive quarter.

The first quarter also marked the 14th consecutive quarter of same-store growth in both transactions and dollars processed.

The first quarter of 2018, on a comparable revenue basis, revenue from our cash access services increased 8.5%, equipment sales revenue increased 92.2%, and information services and other revenue was relatively flat as compared to the first quarter of 2017.

Equipment sales does not include revenue from our maintenance contracts related to our fully integrated kiosks and related equipment. This revenue is now included as part of the other revenue.

Information services and other revenue also includes sales of our compliance products and other products and services that improve credit decision-making, automate cashier operations and enhance patron marketing activities for gaming establishments.

For 2018, we expect total Payments revenues, on a comparable basis, to increase in the mid-to high-single digits versus 2017. Adjusted EBITDA margin for the Payments segment was 51.9% in the first quarter compared to 52.6% for the first quarter of 2017 on a comparable revenue basis. Moving to the balance sheet.

Long-term debt was $1.19 billion, and we had no amounts outstanding under our revolving credit facility as of the end of the quarter. The weighted average interest rate on our outstanding debt obligations at March 21, 2018, was approximately 6.1%. During the first quarter, we made $2.1 million in required repayments on our term loan.

We obtained cash per use in our ATMs in the United States and Canada through various commercial arrangements, directly from our customers or in certain limited instances, we provide the cash. As of March 31, 2018, the outstanding balance of ATM cash utilized by us from our U.S. vault cash provider was approximately $263.4 million.

Cash usage cost for our other ATM cash providers is approximately 10% of our total cash usage cost and is included in our estimate for interest on vault cash. Our consolidated secured leverage ratio at year-end was 3.5x adjusted EBITDA compared to a maximum senior leverage of 5 times. As we announced, we are pursuing efforts to reprice our term loan.

Every 50 basis points of rate reduction we achieve would save approximately $4.1 million in cash interest savings on an annualized basis.

For 2018, before the impact of any repricing, we expect interest expense of between $83 million and $87 million, which includes interest on vault cash of approximately $7 million, $2 million of imputed interest on the player station agreement and approximately $3.4 million in non-cash amortization of capitalized debt issuance costs.

First quarter capital expenditures of $31 million were comprised of $28.2 million from the Games segment and $2.8 million from the Payments segment.

Games segment capital expenditures related to gaming equipment was approximately $15.3 million and includes growth units added into our installed base, new unit placed on trial, equipment upgrades and replacements for existing installed base units.

Sequentially, the 828 net expansion units represented record level growth in our installed base and the growth of approximately 100 trial units also set another record at the end of the first quarter.

We also incurred approximately $7.1 million in capitalized development cost related to game and platform design, and paid $4.6 million in placement fees for the quarter. For 2018, we continue to forecast total CapEx of between $125 million and $130 million, of which approximately $110 million will be for the Games segment.

Of this total, approximately $58 million will be related to customer equipment, $28 million relates to capitalized development costs, $21 million in placement fees and the remainder would relate to general corporate capital expenditures and CapEx related to our New York Lottery business, following the recent extension of agreement for two years.

As a reminder, placement fees will impact quarterly CapEx through the third quarter of 2019, after which the related unit placements will remain in our installed base for at least another 4.5 years, without additional placement fees. As Mike highlighted, our Games segment CapEx is translating into improved operating results.

To date, we estimate that over the last several years we have replaced upwards of 60% of the installed base with our more current and modern equipment. We will continue to opportunistically refresh units in our installed base.

But looking beyond this year, we do expect required annual CapEx to maintain our existing installed base will come down when compared to our recent run rate. Finally, 2018 CapEx for our Payments segment is expected to be a few million dollars higher than our 2017 spend, which is already included in the full year expectation.

Given the great results in our Payments segment, it's clear that we are getting very strong returns from our investment in new innovation. We expect these new investments to further establish our solutions as the clear industry leader and further establish the pathway for continued success.

As noted in this afternoon's press release, we are reaffirming our outlook for 2018, which includes year-over-year revenue growth and adjusted EBITDA of approximately $225 million to $230 million.

In addition, we were profitable in the first quarter, and considering the outlook we have for the remainder of the year we do expect to be profitable for the full year. I've discussed already many of the underlying metrics and other expectations in our 2018 outlook. However, here are a few other items that may assist you in your modeling.

Concerning our expectation to be profitable for the full year, you should model shares outstanding at no less than 73 million shares and we would expect for the diluted shares to increase, if our stock price increases.

Depreciation expense is expected to be approximately $56 million to $60 million, amortization expense is expected to be approximately $66 million to $70 million, and finally, we expect to record a benefit for income tax of between $3 million and $5 million for 2018 and cash tax payments of approximately $1 million.

With that, I will now turn the call back to the operator for questions..

Thank you. [Operator Instructions] We'll take our first question from David Katz with Jeffries..

Good afternoon, everyone..

Hey, David..

I'd like to just go back to some of the prepared commentary. By - I want to make sure that I heard correctly.

You're talking about some of the new product introductions that you have out there, and that was for the purpose of notionally getting to an installed base that's $17,000 range, did I hear that correctly?.

I don't think we said it in here, but that's always been our goal..

Our goal..

David, to get to $17,000. Correct..

All right.

If you don't mind my asking for some color around the 17, why 17? And what would be sort of the pieces that make that up, is there more growth in Class II side of things or are we expecting more premium Class III, or some of both? How are you thinking about that?.

David, it's Dean. I would say it's an all of the above. And it's a long-term goal, this isn't an end of the year and the next year, this is - when I came into the company, January of prior year, we set targets, where we want to get to and began building our business in order to get there.

And Mike's been messaging that to the investment community for the last 1.5 years basically of what our targets are to what we're trying to attain to..

There's nothing magic in the number, if that's what you're asking, David..

Yes. I would say, look we're building swim lanes, as Dean continue to focus on product and different - both form factors and themes, where we really think will drive to that number..

Right.

And does that represent a certain share of what you see out there? Or is that just a function of having taking attendance where your relationships are today and where they could be a couple of years down the road?.

It actually is, I would say, probably more indicative of our drive to get our - the employees within the company to start focusing on the creation and development of great games and forms that could, in the near term, get us to $17,000 from where we were, which was just at $12,000, $9000 or slightly over that at the time..

All right.

And not to drag the conversation to a near-term focus, but there are a couple of casinos that are opening during the second quarter that you may have some visibility into what your role is? How would you characterize things like Springfield or the Hard Rock in Atlantic City?.

Well, I would say that we are - I'm satisfied we're getting our fair share, or potentially slightly above fair share with some of the new openings that are going to happen in the rest of this year. But we are not prepared to let out any percentages or numbers right now..

Right. Okay.

And then just on the Payments side of the business, one of the questions that, that comes up regularly is around the sustainability of your positioning within that market, related to any IP that you have and any specific functionalities that you have? And how well those are competitively positioned? If you could just sort of talk about your vision for that business, and what you think your competitive positioning is, within Payments, looking out over an undefined longer-term period?.

I think I'll start with the IP. I think we've heard a lot about that in the past. I think everybody is really clear that the 3-in-1 patent has rolled off and that has not impacted us one bit. But we continue to invest in all of our products on the payment side.

Compliance, Mike talked about the Jackpot Xpress, our Contier [ph] product, more products that help efficiency on the Payment side. And I think where we believe we're going to continue to maintain our lead has continued to invest.

I think that's one of the reason that we talked about on this call is that we are going to increase our development cost on the payment sides as well, and that will be across all of our products within there, with the intention of maintaining our position and being at the front-edge of technology and innovation..

And David, one of the nice thing about having at least one of our products in something over 1000 casinos, is it allows us - as we bring new products forward to address existing customers with those new products, and hope to be able to sell into those people that already have our products and know the reliability of our products..

Got it, okay. Thank you very much. And nice quarter..

Thanks, David..

[Operator Instructions] We'll next go to John Davis with Raymond James..

Hey, guys. Good afternoon..

Good to hear from you, John..

Really just wanted to drill down a little bit on this, say, 4.5% increase in the daily win.

Maybe at a high level, talk about what the daily win is at a WAP or premium game versus a non-premium game, is it multiple different? Is 10% different? Just as the mix of the portfolio changes, well, I'm trying to get a good idea of what the trajectory of the win per day is going forward?.

It's difficult to gauge, John. I mean, the bottom line is, depending on where you're at in the country, it's going to have different metrics for it. So we don't report on that..

I mean, you should expect that the premium games are going to do better than just our - as Dean likes to call them, bread-and-butter videos, the ones that we have had in our lease units in the past and our leased installed base in the past.

And that we're - we have to continue to refresh the premiums, are called that for a reason and they get a premium price..

Okay. That makes sense. And then I wanted to maybe hop over to the ASPs. Is that really just the new games and new content? Maybe talk about - I think your ASPs were up 4%. Seems, from what I can tell, industry ASPs are flattish.

Maybe just talk at a high level, is it just mix shift? Or what exactly is that driving? Do you expect to continue?.

Like - I think a couple of thing. I think if you look at Q4, we were - it's not that dramatically above Q4. And I think if you look at year ago, I think the mix of this year compared with the new product coming out, we have a little bit better pricing there. But I think year-over-year, it looks like it's up dramatically.

But look, we love it, but I think if you look form Q4 to Q1, it's pretty much in line. And like I said in the remarks, we think that we'll be able to kind of maintain that price going forward..

The single screen, John, gives you a little bit of a lift, but that's where the Q4 and Q1 are fairly equivalent. But if you look year-over-year, we didn't have a single screen last year..

Got it. Okay. That's helpful. And then on the EBITDA margin, looks like it was down little bit a year-over-year. Randy, anything plain there, other than just investments for growth? Or just any color there would be helpful..

I mean - I'll point out two items on the overall EBITDA growth. If you - it depends on what you're looking at. If - excluding stock comp, if you look at just SG&A on the front of the page, remember we get some stock comp in there and that was a little bit higher than prior period.

We also had about - we had some severance costs in there associated with someone who the left the company. So there's about $600k related to that. But overall, John, I think it really is - it's a growth, and we're investing in people. And I think as everybody knows, wages are rising a little bit.

We're managing that, but I'll take this all day long with the type of growth that we're generating on the top line..

Okay. That's helpful. And then, any color on refi. I know you said every 50 bps is $4 million.

I think you remind me we're currently L plus $450 million, if the memory serves?.

No. We're at L plus $350 million, John..

Sorry, L plus $350 million, apologies.

Any idea where that - where you think you can get that to? Or what your bankers are telling you?.

Here's what I - I'll give you some goalpost. We know Sci-Games redid theirs recently for L plus $275 million. So I'm trying to get as close as I can to there, but I'm probably not at the same level. So we're shooting for as close as we can get..

Okay. And last one for me, Randy, you talked a little bit about Games CapEx coming down longer-term.

Do you think - when you say coming down, is your longer-term run rate maybe what we saw in 2016 or 2017 from a Games CapEx standpoint?.

I guess, what I'm trying to say is, look, as we talked about, we got through about 60% of the older product. I think the maintenance cost will come down, John. If we continue to grow, that will obviously be an ad.

So net-net, I still think we'll bring that CapEx piece down, but it will really depends on how much we can grow the installed base and don't forget the placement fees drop-offs in the fourth quarter of '19, so that also will free up a little bit of cash.

But on the pure CapEx, my expectation is, as we continue to manage that installed base that we've done a good job of working through a fair amount of it. And so now it's just toppers putting out new themes and games and some form factors. We really do think we can manage that downward. I just - putting a dollar number on that is hard to do..

Okay. Thanks, guys..

Thank you..

Thanks, John..

Thank you. We'll next go to George Sutton with Craig-Hallum..

Thank you. I don't know how many of your employees listen to the call, but the fact that Randy Taylor said, I'll take higher cost all day long, probably have shocked a lot of people....

No, if you know George, somebody is going to find something bad, and I'd say if that's the worst thing they wanted to say, I'm all good. As long as they produce my top line, I am there..

Understand. So you mentioned that the performance of licensed games exceeded your internal expectations, since - now this has been out for a couple of years now.

I'm just curious, not knowing your internal expectations, where are you exceeding? In terms of placements? In terms of interest or breadth of interest or win rate per day? Just kind of curious what you mean by that..

Let say, all of the above. I mean, the bottom line is that our footprint grew for a reason. We launched 7 new licensed themes last year. We're going to do 10 this year, of which we've launched two of them out of the 10. And if the trajectory goes to, in accordance to what we've seen to this point, it looks very promising..

Got you. I'm curious, if you mentioned that your units on trial were up quite a bit.

Could you just give us a sense of what that difference looks like? What that increase looks like?.

It's the new single screen is primarily what's driving that. So when you launch a new platform trials are up usually a little bit higher than they otherwise would be. But what we've seen is a great, what I call, convert-to-sale rate on them. So we expect to see that in the future as well..

Part of the reason you see that with a new form factor is a result of the confidence that your customers are feeling about the previous form factors you brought out and the games that you brought out..

Right. Got you. Okay. So you had 11% growth in Payments, which is well above industry rate.

Can you give us some breakdown of kind of our existing customer growth, new customer growth, add-on sales? Just some breakdown might be helpful?.

Okay, so one of the pieces in there, George, would be the equipment sales. So that is driving some of the revenue growth. We had a nice equipment sales. And again, that can be lumpy, but it was very helpful in the quarter - quarter-over-quarter to last year. So that's part of that growth.

I would say, overall, we had Lonnie [ph] that came in, in fourth - in first quarter - like, really second quarter of last year that's now - that - it's going to start lapping in Q2 of this year, so we have a little bit of growth with that one. Overall, the same store is up. Our same-store growth is up. So it's a little bit of combination of all 3.

We're seeing same-store growth, we still have a little bit of a tailwind from a couple of casinos that came on late or I'd say early last year that will start lapping later in this year. So first quarter just was really, really strong..

Got you. That sounds like a consistent theme every quarter. Thanks, guys..

Thanks, George..

Thank you for your questions. If there are no further questions, at this time, I'll like to turn the things - turn things back to Randy Taylor for closing remarks..

Thank you for joining us on the call this afternoon. And before we leave, I wanted to mention that we are in the early stages of planning for an Analyst Day that we expect will take place in mid-September at our Chicago office. We'll provide more details for this event over the coming weeks and certainly before our next earnings call.

We look forward to discussing further progress of our business when we report our second quarter 2018 results in August. Thank you..

Thanks, everyone..

That concludes today's conference and thank you for your participation..