Bally announced record 1Q revenue

“We were pleased by customer responses to the launch of several new products, including the Pro Wave 360° and Pro Theater, as well as our line-up of powerhouse brands including Friends and Duck Dynasty at last month’s Global Gaming Expo (G2E).  During the quarter, Cash Wheel featuring Quick Hit, which was launched in September 2013, eclipsed a 1,000-unit installed base,” said Richard Haddrill, the company’s Chief Executive Officer. 

“We achieved record first quarter revenue and excellent overall operational results in the quarter, driven primarily by strong Electronic Gaming Machines and Gaming Operations revenue.  With SHFL in the mix, we grew our international new-unit sales by 168 percent, further driving our global presence. Finally, during the quarter, we announced that the Ontario Lottery and Gaming Corporation (OLGC) selected Bally as its central gaming management system provider, further strengthening the long-term prospects for our Systems business.” 

Highlights of Certain Results for the three months ended September 30, 2014

Overall

•    Total revenue increased 29 percent to a first quarter record of US$ 321 million as compared with US$ 249 million last year.

•   Adjusted EBITDA increased 34 percent to a first quarter record of US$ 116 million as compared with US$ 87 million last year.

•      Selling, general and administrative expenses remained constant at 29 percent of total revenues and includes $8 million of one-time acquisition-related costs. After adjusting for these one-time costs, SG&A was 26 percent of total revenues in the current period, down from 27 percent when adjusted for US$ 5 million of one-time acquisition-related costs last year.

•      Research and development expenses decreased to 11 percent of total revenue versus 12 percent last year.

•    Operating income increased to US$ 62 million as compared with US$ 57 million last year.  Adjusted Operating Income increased by 40 percent to a first quarter record of US$ 87 million. Adjusted operating margin increased to 27 percent from 25 percent last year.

•    GAAP Diluted EPS was US$ 0.75 as compared with US$ 0.97 last year.  Adjusted EPS increased 22 percent to a first quarter record of US$ 1.17.

Electronic Gaming Machines

•     Revenues increased 32 percent to US$ 94 million as compared with US$ 71 million last year, primarily driven by the increase in unit sales in Australia coupled with an increase in ASP.

•    ASP of new electronic gaming devices increased 9 percent to US$ 17,767 per unit from US$ 16,307 last year, primarily due to the increase in Australia sales volume and an increase in the sale of the Pro Wave premium cabinet.

•     New-unit sales to international customers were 44 percent of total new-unit shipments as compared to 20 percent in the prior year period.

•     Gross margin increased to 52 percent from 50 percent last year, primarily due to the sale of higher margin Pro Wave cabinets and geographic mix. 

Gaming Operations

•   Revenues increased to a record $106 million as compared with $102 million last year, driven by continued placement of premium games, record wide-area progressive (WAP) revenue, and the inclusion of 2,242 leased ETS seats.

.  Gross margin decreased to 68 percent from 70 percent last year, primarily due to the inclusion of lower margin leased ETS seats.

Systems

•    Revenues were US$ 74 million as compared with US$ 76 million last year, decreasing primarily due to a large system installation recognized in the prior period offset by the inclusion of revenues from the acquisition of Dragonplay during the current period. 

•   Maintenance revenues decreased 8 percent to US$ 23 million as compared with US$ 25 million last year.           

•   Gross margin decreased to 72 percent from 75 percent last year, primarily as a result of the change in mix of products.  Specifically, hardware sales were 33 percent of systems revenues, and software and service sales were 36 percent, as compared to 30 percent for hardware sales and 37 percent for software and services sales in the same period last year.

Table Products

•         Revenues were US$ 46 million, with Utility products revenue of US$ 31 million and PTG revenue of US$ 15 million.