International edition
September 28, 2021

Gaming machine sales revenue increased $4.3 M, against 2017

Scientific Games reports Q2 2018 results

Scientific Games reports Q2 2018 results
"Our core businesses are strong and ready to capitalize on the significant opportunities in the marketplace to drive growth by delivering great games and robust platforms and systems that enable them", said Barry Cottle CEO of Scientific Games.
United States | 08/02/2018

Second quarter revenue rose 10 percent to $844.7 million, up from $766.3 million in the year-ago period, reflecting $50.6 million in revenue from NYX. Consolidated Attributable EBITDA increased 8 percent to $340.4 million from $314.8 million in the prior year period, primarily driven by higher revenue and more efficient business processes throughout the organization. Consolidated AEBITDA margin, a non-GAAP financial measure defined below, was 40.3 percent.

S

econd quarter revenue rose 10 percent to $844.7 million, up from $766.3 million in the year-ago period, reflecting $50.6 million in revenue from NYX, along with growth in all businesses. Gaming and Lottery revenue includes a $10.0 million negative impact from applying the new revenue recognition accounting.

Net loss decreased to $5.8 million compared to $39.1 million in the prior year period, primarily driven by higher revenue and more efficient business processes throughout the organization and reflective of $33.5 million in restructuring and other charges offset by a $34.5 million gain on remeasurement of Euro-denominated debt.

Consolidated Attributable EBITDA, a non-GAAP financial measure defined below, increased 8 percent to $340.4 million from $314.8 million in the prior year period, primarily driven by higher revenue and more efficient business processes throughout the organization. Consolidated AEBITDA margin, a non-GAAP financial measure defined below, was 40.3 percent.

Net cash provided by operating activities decreased to $102.5 million from $168.5 million in the year-ago period driven primarily by the timing of interest payments resulting from the February 2018 refinancing.

Barry Cottle, CEO and President of Scientific Games, said, "I'm very pleased with the firm's accomplishments this quarter and particularly proud that all four businesses continued to experience growth this quarter and are accelerating the firm's financial momentum. Our core businesses are strong and ready to capitalize on the significant opportunities in the marketplace to drive growth by delivering great games and robust platforms and systems that enable them. We remain focused on delivering results, maintaining the firm's financial discipline and strategically investing in the firm's future to maximize shareholder return."

Michael Quartieri, Chief Financial Officer of Scientific Games, added, "This quarter marks the firm's eleventh consecutive quarter of year over year growth in revenue and AEBITDA. We have clear momentum across all of the firm's global businesses. The improvement in the firm's operating results, along with lower interest costs, provides us with a clear path of increasing cash flows, deleveraging, and strengthening the firm's balance sheet."

 

 

 

Total gaming revenue increased $13.5 million, despite an unfavorable $6.5 million impact on Gaming operations revenue from the new revenue recognition accounting effective in 2018, and AEBITDA increased 4 percent, or $8.8 million, to $235.7 million, primarily reflecting a 50 basis point improvement in the AEBITDA margin to 50.1 percent reflecting more efficient business processes.

Gaming operations revenue declined $18.5 million in the second quarter 2018, inclusive of the $6.5 million reduction from the new revenue recognition accounting. On a quarterly sequential basis, we experienced an 8-unit increase in the installed base of Wide-Area Progressive ("WAP") and premium participation gaming machines and a $0.30 increase in average revenue per day, andthe firm'sthe firm's installed base of other leased and participation games increased by 80 units with average daily revenue down $0.29, which reflects the additional placements of lower yielding units in Greece.

Gaming machine sales revenue increased $4.3 million year over year, driven by strong replacement and new opening demand in the U.S. and Canada, which was offset by lower international sales. Replacement units in the U.S. and Canada increased 16 percent year over year to 4,388 units, due to ongoing demand for the TwinStar family of cabinets. The average sales price increased 1 percent to $17,699, reflecting a more favorable mix of gaming machines.

Gaming systems revenue increased $17.2 million to $84.3 million, primarily due to ongoing installations of a new system to casinos in the provinces of Alberta and Ontario, coupled with increased hardware sales, reflecting shipments of innovative iVIEW4 player-interface display units. The deployment of the new system to additional casinos across Alberta and Ontario is expected to continue throughout 2018, and beyond.

Table products revenue increased $10.5 million to $58.9 million, reflecting increased sales of utility products.

 

Total lottery revenue increased $4.8 million, or 2 percent, to $207.1 million, and AEBITDA increased 4 percent to $99.4 million, compared to $95.6 million in the prior year, with AEBITDA margin improving to 48.0 percent, primarily reflecting the revenue increase and a more profitable revenue mix partially offset by higher selling, general and administrative expenses.
Instant products revenue of $150.1 million was driven by a 2 percent increase in U.S. revenue, partially offset by 8 percent decrease internationally.

Lottery systems revenue increased as a result of a $6.0 million, or 12 percent increase in services. The increase in services revenue was driven largely by organic growth domestically.

Social revenue grew 9 percent to $99.7 million, reflecting the ongoing popularity of Bingo Showdown and the success of more recent apps, such as the introduction of the MONOPOLY-themed casino app featuring a new innovative style of play, which was launched during the second quarter of 2018.

AEBITDA rose 15 percent to $25.2 million, and AEBITDA margin increased to 25.3 percent, primarily reflecting the continued rapid growth in revenue and improved operating leverage, partially offset by higher selling, general and administrative expenses primarily related to marketing.


Total digital revenue increased to $67.2 million, primarily reflecting $50.6 million of revenue from NYX. During the second quarter of 2018, we successfully launched the firm's gaming content across 7 new client sites and signed 8 new customers.

AEBITDA was $13.2 million and AEBITDA margin was 19.6 percent. The year-over-year increase primarily reflects the addition of NYX.


Net cash provided by operating activities decreased $66.0 million to $102.5 million, principally related to the timing of interest payments resulting from the February 2018 refinancing, which resulted in a $66.2 million unfavorable change in accrued interest.

Capital expenditures totaled $112.5 million in the second quarter of 2018, compared with $78.9 million in the prior-year period. The increase from the prior year was related to the ongoing acceleration of installed base of participation games and lottery systems installations in Maryland and Kansas, and the addition of keno in Pennsylvania. For 2018, the Company now expects capital expenditures will be within a range of $360-$390 million, based on existing contractual obligations, planned investments and the inclusion of NYX.

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