Scientific Games reports 2016 Q1 results

First quarter revenue rose four percent to $682 million, up from $659 million a year ago. The increase was driven by a 55-percent growth in interactive revenue and is notable given the $7 million unfavorable impact from currency translation, a decline in gaming systems revenue and the previously disclosed expiration of the China lottery validation contract.

Operating income in the first quarter increased 178 percent to $50 million from $18 million a year ago, reflecting cost synergies from 2015 integration initiatives and lower costs associated with integration and restructuring activities. These savings were partially offset by increased investments in growth and innovation initiatives. Net loss before income taxes declined to $112 million from $149 million in the prior-year period.

Attributable EBITDA ("AEBITDA" and as further defined below) increased to $259 million from $252 million a year ago driven by higher revenue and the benefit from earlier integration actions, which more than offset increased costs of innovation and other growth initiatives.

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Across our global operations, our focus is on fiscal discipline, seeking further process improvements and operating efficiencies, saidMichael Quartieri, Scientific Games' Executive Vice President and CFO

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Net cash from operating activities rose to $101 million from $78 million a year ago. Free cash flow (as defined below) increased to $42 million, up from $1 million a year ago, leading to a $17 million increase in cash and $28 million in debt repayment during the first quarter.

As of March 31, 2016, the Company's cash and availability under its revolving credit facility increased to $605 million.

"Our focus on strategic priorities - product excellence, profitable growth, and strengthening cash flow - is taking hold, as we have generated positive growth for the past two consecutive quarters. We are building momentum and delivering improved business results, clear evidence of the strength of our comprehensive product portfolio. As we move forward, we are committed to continuous improvement to unlock the power of our brands, leverage our unrivaled innovation and serve our customers to provide meaningful, long-term shareholder value," said Gavin Isaacs, President and CEO of Scientific Games.

Michael Quartieri, Scientific Games' Executive Vice President and CFO, added, "Across our global operations, our focus is on fiscal discipline, seeking further process improvements and operating efficiencies, as we continue to prudently invest to sustain our leadership in innovation. By driving profitable growth and increased conversion of AEBITDA into cash flow, we expect to remain on a path to further deleverage in 2016 and beyond."

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