Lottomatica announces 2011 preliminary consolidated results

Consolidated Revenues and EBITDA were 2.97 billion euros and 970 million euros, respectively, slightly better than the Group’s revised guidance for 2011. The Group’s Consolidated Net Financial Position improved by more than 200 million euros to 2.74 billion euros.

2011 Preliminary Results

For the full year ended December 31, revenues grew across all business segments.  Preliminary Group Consolidated Revenues for the year totaled 2.97 billion euros, compared to 2.31 billion euros in 2010, up 28.5%.  Lottomatica’s Italian Operations generated revenues of 1.88 billion euros for the year, compared to 1.25 billion euros in 2010, driven by the expansion of the VLT market, as well as improvements in Lotto and Scratch & Win performance. 

GTECH revenues were 857 million euros, up 14.9 million euros over the same period last year, due principally to higher product sales. SPIELO International’s revenues were 198.3 million euros, up 4.2% versus the prior year.  GTECH G2’s revenues were 81.2 million euros, up 8.9% compared to the same period in 2010. The revenue amounts include intersegment revenue.

During the year, Capital Expenditures totaled approximately 345 million euros, down from 1.22 billion euros last year, when the 800 million euros investment to renew the Italian Scratch & Win license occurred.  Investing activities in 2011 included spending in Italy for Machine Gaming and Lotto, as well as capital additions for systems, equipment, and other assets principally related to lottery system implementations in Texas, Illinois, and Poland.

At December 31, 2011, Lottomatica Group had a Net Financial Position of 2.74 billion euros, compared to 2.98 billion euros as of December 31, 2010. Lottomatica Group will announce its 2011 results, and a guidance update on March 8, 2012.

In the 2011 fourth quarter, revenues increased 3.8% or us$ 10.1 million year over year to us$ 275.8 million. Fourth quarter performance was driven by Adjusted EBITDA growth at the company's St. Louis, L'Auberge Lake Charles, Boomtown Bossier City and Belterra properties, as well as significant corporate overhead expense reductions. Operating income increased us$ 18.4 million or 98.6% year over year to us$ 37.1 million in the 2011 fourth quarter.  Income from continuing operations was us$ 17.7 million in the 2011 fourth quarter, a significant improvement from a loss of us$ (3.5) million in the prior year period.

For the full year 2011, revenues increased us$ 82.6 million or 7.8% year over year to us$ 1,141.2 million.  Consolidated Adjusted EBITDA increased us$ 38.5 million or 18% year over year to us$ 252.1 million in 2011, including us$ 11 million of severance charges and non-recurring mychoice program re-launch costs.  The prior year included us$ 6.1 million of severance and relocation expenses.

For the full year 2011, operating income increased us$ 76.4 million or 146.5% year over year to us$ 128.6 million. Income from continuing operations increased us$ 71 million year over year to us$ 30.2 million from a loss of us$ (40.8) million in the prior year period.

Anthony Sanfilippo, president and CEO of Pinnacle Entertainment, commented, "In 2011, our team at Pinnacle established a solid foundation of operating excellence.  We made significant strides in implementing revenue growth and operational improvement initiatives across the portfolio, with the re-launched mychoice guest loyalty program gaining significant traction and non-value added expenses reduced across the enterprise.  As we expected, 2011 was a breakout year for Pinnacle, with the Company achieving records in total revenue and Consolidated Adjusted EBITDA.  In addition, our two largest operating segments, L'Auberge Lake Charles and St. Louis, produced record Adjusted EBITDA.

"Pinnacle finished 2011 on a strong note, and we entered 2012 with significant momentum.  During the fourth quarter we increased Consolidated Adjusted EBITDA 22.9% year over year through a combination of profitable revenue growth and reductions in our cost structure. As a result, our Consolidated Adjusted EBITDA margin expanded 350 basis points year over year in the fourth quarter.”

Carlos Ruisanchez, executive VP and CFO of Pinnacle Entertainment, commented, "2011 was a noteworthy year for Pinnacle, as we had across the board improvements in our operating results, cash flow generation, development pipeline and capital structure.  We expect that 2012 could be another milestone year for the company given the opportunities that remain to drive growth in our existing asset portfolio and with several pipeline projects reaching or nearing completion”.

"Finally, construction on the Ho Tram Strip project in Vietnam by Asian Coast Development (Canada), in which the company acquired a 26% ownership stake in August 2011, also continues to make significant progress. The first phase of the development, the MGM Grand Ho Tram, is scheduled to open by the end of the first quarter of 2013," he concluded.