International edition
September 27, 2020

For the nine months ended last September 30, revenues were us$ 854.9 million

Scientific Games third quarter revenues rose 9% to us$ 292 million

(US).- Scientific Games Corporation reported third quarter 2008 revenues of us$ 291.9 million, up 9% from us$ 266.9 million in the third quarter of 2007. Net income was us$ 25.4 million, up from a net loss of us$ 2.9 million in the third quarter of 2007. EBITDA for the third quarter of 2008 was us$ 88.6 million, up from us$ 73.7 million in the third quarter of 2007.

E

xcluding stock compensation expense, earnings were us$ 31.3 million, compared to non-GAAP adjusted net income, excluding us$ 26.1 million of asset impairment charges and us$ 6.3 million of stock compensation expense, of us$ 20.9 million in the third quarter of 2007.

EBITDA for the third quarter of 2008 was us$ 88.6 million, up from us$ 73.7 million in the third quarter of 2007. Adjusted EBITDA increased 21% to us$ 96.8 million for the third quarter of 2008, compared to adjusted EBITDA of us$ 80 million for the third quarter of 2007.

For the nine months ended last September 30, revenues were us$ 854.9 million, compared to us$ 778.7 million for the nine months ended September 30, 2007, an increase of 10%. Net income was us$ 74.3 million, compared to us$ 49 million in 2007. EBITDA increased to us$ 258.5 million from us$ 233.8 million in 2007. Adjusted EBITDA increased 15% to us$ 290.7 million.

Printed Products Group service revenue increased by about 6% in the third quarter of 2008 to us$ 147.1 million. While licensed product revenues showed solid sequential growth from the second to third quarter of 2008, year-to-year licensed product revenue declined sharply due primarily to the unusually high revenues associated with the launch of Deal or No Deal in 2007.

Excluding licensed product revenues, which in the past has tended to fluctuate far more significantly from quarter to quarter than the underlying core instant ticket business, overall printed product service revenues grew by more than 12% in the third quarter of 2008 as compared to the corresponding 2007 quarter. Further, excluding from total service revenue sales to China and other year to year anomalies, same store sales growth was about 4.5%.

Instant tickets sales to China increased slightly from the second to the third quarter in 2008, but by less than anticipated. Largely because of the national preoccupation with the Olympics in August, there was a significant delay in the introduction of new games, the optimization of inventory levels throughout the country, the expansion of the retailer base and the movement to a higher average price point. In the last few weeks there has been excellent progress in each of these areas and as a result there have been strong week-to-week increases in retail sales.

Lottery Systems Group service revenues grew by 14% in the third quarter of 2008 to us$ 62.4 million from us$ 54.6 million last year and at the same time service gross margins improved from 47% to 48%. Essentially all of the revenue and margin improvement was driven by the national contract for ticket activation, validation and tracking services with the China Sports Lottery.

Excluding China revenue as well as revenue from expired contracts, "same store" sales growth in lottery services was about 5% with virtually all of the growth coming in Europe and Latin America. The progress being made in Puerto Rico is particularly pleasing where revenues have increased by 33% year over year. The Televisa Mexican lottery contract negatively impacted earnings by us$ 2.9 million in the third quarter of 2008; during the third quarter the company began exploring various new strategies for alleviating this loss and is actively working to determine the best course of action.

Diversified Gaming Group revenues increased by 8% overall in the third quarter of 2008 to us$ 59.9 million from us$ 55.4 million, with a 38% increase in Global Draw revenues offset by a decline in revenues from Games Media and the racing related businesses.

During the third quarter of 2008, Scientific Games was awarded the primary instant ticket contract with New South Wales (NSW) Lotteries Corporation and the Montana Lottery as well as a secondary instant ticket contract with the Kansas Lottery. In addition, the company signed instant ticket contract extensions with Washington, Colorado and Delaware and online extensions with Delaware and Iowa. The company also signed an extension with Puerto Rico for online field marketing services.

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