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US – Bally smashes more records as US replacement cycle recovers

By - 12 May 2014

Record quarterly revenue of US$338m was driven at Bally Technologies by record revenues from Wide Area Progressives along with a 22 per cent jump in replacement sales in the US.

The three months ended March 31, 2014, also saw systems revenues set a new quarterly record up 27 per cent on the same quarter 12 months ago. Total revenue increased 31 percent to a quarterly record $338m as compared with $259m last year.

Research and development expenses remained constant at 11 per cent of total revenue.
Revenues of electronic gaming devices increased 19 percent to $102m as compared with $86m last year, driven by higher replacement sales and the sale of 930 Equinox units and 211 ETS seats, partially offset by the absence of 788 Canadian VLT units sold in the prior year period. Systems revenues increased 27 per cent to an all-time record $91m as compared with $71mlast year, driven primarily by hardware revenue whilst revenues from Table Products were $44m, with Utility products revenue of $29m and PTG revenue of $15m.

Ramesh Srinivasan, President and Chief Executive Officer, said: “We achieved outstanding financial and operational results in the quarter which helped drive a record 26 per cent adjusted operating margin for the first nine months of fiscal 2014 versus 23 per cent in the prior year. The ongoing SHFL integration has been pivotal in many respects to our results. Our Systems business continues to be a major factor as we gain a greater share of the industry’s increasing technology-related spend. On the EGM front, initial demand for our Pro Wave™ cabinet has been very robust, helping us to grow domestic replacement unit sales by 25 percent over last quarter. Combined with SHFL’s international strength, this was our highest quarterly EGM unit sale level in six years, despite the absence of Canada VLT units. We remain confident that our industry-leading innovation as evidenced by the Pro Wave platform and strength across a broad portfolio of products will help us grow our business into fiscal 2015 and beyond.”

Neil Davidson, Bally’s Chief Financial Officer added: “We continued to set a number of financial records this quarter while generating significant free cash flow. We remain committed to deleveraging our balance sheet, as evidenced by the $68m of debt we repaid during the quarter, for a total of $101m since the acquisition of SHFL, which lowered our leverage ratio to 3.9 times. In addition, we repurchased approximately 150,000 shares of our common stock for $10m during the quarter. We will continue to prudently utilise excess free cash flow to pay down debt with the goal of achieving a leverage ratio of 3.0 times by the end of calendar 2015.”

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