Operator News
US – Scientific Q1 revenue up six per cent
By Phil - 2 May 2017
Scientific Games reported that its first quarter revenue rose six per cent to $725.4m, up from $682m a year ago. The growth was led by a 24 per cent increase in global new unit shipments of gaming machines and a 33 per cent increase in interactive revenue. Foreign exchange had an $8.1m, or one per cent, unfavorable impact on revenue.
Operating income in the first quarter increased 75 per cent to $88m from $50.3m a year ago as a result of the revenue growth and lower cost structure.
“Our continued steady improvement in revenue and margin are a direct result of our focus on creating innovative products that drive demand and our commitment to operational excellence,” said Kevin Sheehan, Chief Executive Officer of Scientific Games. “This is a great start to the year, with all three of our business segments contributing to growth. We have a tremendous global team firmly focused on unlocking the power of our brands, strengthening our commitment to innovation, and executing a disciplined fiscal approach to enhance long-term shareholder value. We are building for our future.”
Michael Quartieri, Chief Financial Officer of Scientific Games, added:”All across our global businesses, we are improving our operational excellence that parlays our strength in innovation to drive enhanced financial results and stronger cash flow. We expect these initiatives will drive profitable growth and increased cash flow that will provide further opportunities to deleverage in 2017 and beyond.”
Gaming operations revenue declined seven per cent, largely reflecting an 832 unit reduction in the ending installed base of WAP, premium, and daily-fee participation gaming machines coupled with a $1.72 per unit decline in the average daily revenue compared to the prior year. On a quarterly sequential basis, gaming operations revenue was flat. A 322 unit decline of lower-earning units in the installed footprint of WAP, premium, and daily-fee participation units was offset by a $1.73 increase in the average daily revenue per unit.
The ending installed base of other participation and leased units decreased by 632 units compared to the prior year, primarily reflecting the conversion of VLTs at a casino in New York and a decrease in the installed base of units in UK betting shops, partially offset by the installation of VLTs in Greece. The average daily rate declined by $0.42 per unit, largely reflecting the initial ramp up of VLTs in Greece and an unfavorable foreign exchange impact related to the UK installed base. On a quarterly sequential basis, the installed footprint was essentially flat.
Gaming machine sales revenue increased 16 per cent year over year, reflecting a 24 per cent increase in shipments of new units and higher average selling price, partially offset by lower sales of parts, game conversion kits and used units. US and Canadian shipments increased 1,497 units, or 34 percent, to 5,862 gaming machines, including 3,139 replacement units, 250 VLTs to Oregon, and 2,723 gaming machines for new casino openings and expansions, inclusive of 861 VGTs for the Illinois market. In the prior-year period, U.S. and Canadian shipments totalled 4,365 units, which comprised 3,092 replacement units, 840 VLTs to Oregon, and 433 VGTs for the Illinois market. International shipments increased 114 units, or five per cent, to 2,497 units, including 2,073 replacement units and 424 units for new casino openings, up from 2,383 units in the prior year. The average sales price increased to $17,015 from $16,719 in the prior year, reflecting a favorable mix of units.
Gaming systems revenue increased to $61.5m, primarily reflecting an increase in hardware sales, including shipment of innovative new iVIEW4 player-interface display units.
Table products revenue increased to $49.9m, principally reflecting growth in leased shufflers, proprietary table games, and progressives, including the benefit from the acquisition of DEQ Systems Corp. completed on January 18, 2017.
