International edition
September 28, 2020

Gaming operations gross margins were consistent with the prior year at 57%

IGT quarterly profit rises

(US).- Slot machine maker International Game Technology on Thursday said its fiscal first-quarter profit rose slightly, as improved gaming operations offset a drop in product sales. Net income in the first quarter totaled us$ 121 million versus us$ 120.6 million in the same quarter last year.

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irst quarter financial highlights are the following: Consolidated revenues are up 4% to us$ 642.3 million, consolidated gross profits are up 6% to us$ 352 million, gaming operations revenues are up 11% and gross profit up 13%.

Besides, record gaming operations installed base of 53,100 machines, record Adjusted EBITDA of us$ 259.9 million and cash flow from operations is of us$ 223.5 million, up 41%. "IGT posted solid first quarter results, highlighted by continued growth in our gaming operations sector and record Adjusted EBITDA," said Chairman and CEO TJ Matthews.

He added: "Our installed base of recurring revenue machines reached a record 53,100 games worldwide. We saw the first shipments into Pennsylvania, Florida racetracks and Arkansas this quarter and look forward to future development in these emerging markets. IGT continues to invest heavily in new markets and technology, and we remain focused on delivering the most complete line of industry-leading products and service to our global customers."

First quarter revenues and gross profit from gaming operations improved to us$ 324.9 million and us$ 186.7 million, respectively, compared to us$ 291.7 million and us$ 165.5 million for the same period in the prior year. Gaming operations gross margins were consistent with the prior year at 57%.

Revenue and gross profit growth was primarily driven by the increase in our installed base, with 9,800 incremental units from the prior year and 3,500 incremental units from the immediately preceding quarter.

Year-over-year installed base growth was primarily the result of lease operations placements in Mexico, New York and Delaware, and casino operations placements in Oklahoma, California, Florida and Alabama. Sequential installed base growth occurred primarily in the lease operations markets of New York and Mexico, and the casino operations markets of Florida and Oklahoma.

Worldwide product sales revenues produced first quarter gross profits of us$ 165.3 million compared to us$ 166.5 million in the prior year. Non-machine revenues (comprised of gaming systems, parts, service and other fees) totaled us$ 84.8 million or 27% of total product sales versus us$93 million or 29% in the comparable prior year quarter. Non-machine revenues were lower primarily as a result of fewer gaming system sales.

North America product sales revenues improved slightly over prior year levels despite lower machine volume due to the mix of new AVP platform sales. Non-machine revenues totaled us$ 69.2 million or 33% of domestic product sales compared to us$ 73.4 million or 36% in the same quarter last year, mostly due to fewer gaming systems sales partially offset by higher parts and conversion sales. Gross margins improved mainly due to product mix.

International product sales totaled us$ 110.1 million compared to us$ 117.8 million in the prior year. Machine shipments totaled 14,600 versus 14,800 last year, with higher shipments into Japan offset by lower shipments into the UK, Australia and Europe. Non-machine revenues totaled us$ 15.6 million or 14% of international product sales compared to us$ 19.6 million or 17% last year.

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