US – Revenues up for Scientific but losses deepen due to restructuringBy Phil - 12 November 2018
Despite third quarter revenue being up by 6.8 per cent, Scientific Games generated a loss of $351.6m in its third quarter, compared to a loss of $59.3m for the same period last year.
Third-quarter revenue reached $821m, boosted by $46.5m in revenues from the company’s SG digital division. The loss was deepened by $338.7m in restructuring and a $309.6m cost from a court case filed by Shuffle Tech International.
Scientific stated: “The restructuring and other charges are inclusive of $309.6 million recorded during the quarter related to the verdict in the Shuffle Tech legal matter, which did not result in any cash outflow as the verdict is subject to post-trial motions and the appeal process.”
The company is considering a possible initial public offering of a minority interest in its social gaming business in 2019. The social gaming business continues to experience rapid growth and has reached significant scale. The Company believes an IPO would provide greater flexibility to pursue additional growth initiatives specifically designed for its social gaming business, as well as unlocking additional value for Scientific Games stakeholders. The company anticipates that the proceeds from the IPO would primarily be used to repay debt.
Barry Cottle, CEO and President of Scientific Games, said: “We are very pleased with the growth we are seeing across our businesses as we continue to lead our industry into the future. Our investments in digital, sports betting, and new games are producing the most innovative and engaging products in the market and we are excited about the customer response here in the US and around the world. For our rapidly growing social business, an IPO would give us greater flexibility to pursue growth for the business and drive value for stakeholders. We remain focused on delivering for our customers and running our business efficiently and effectively to drive revenue, reduce costs and continue to build momentum across the company.”
Michael Quartieri, Chief Financial Officer of Scientific Games, added: “This quarter marks our twelfth consecutive quarter of year over year growth in revenue and Consolidated AEBITDA. Our focus on generating cash flows provides us a clear avenue to strengthen our balance sheet.”