Supplier News
US – Scientific results put to the Blade
By Phil - 14 March 2014
Having completed the acquisition of WMS Industries during the fourth quarter, Scientific Games saw revenue increase by $138.2m due mainly to $144.7m in the quarter from WMS.
Revenue of WMS for the 18-day period between October 1 and October 18, 2013 not reflected in the 2013 fourth quarter results was $20.3m.
Product sales revenue increased $62.4m, primarily attributable to $68.8m in revenue from WMS partially offset by lower legacy SG Gaming product sales, primarily to UK bingo and arcade customers. New gaming machine revenue included shipments of 2,169 new WMS gaming machines to U.S. and Canadian customers, comprised of 1,631 replacement units for casino operators, 352 Illinois video gaming terminals and 186 units for new casino openings and expansions. Shipments to international customers included 1,571 WMS units shipped since the acquisition. Other product sales revenue increased $5.6m principally due to $10.3m from WMS following the acquisition, which included sales of conversion kits, used gaming machines, parts and game content subscription revenue, partially offset by lower other product sales revenues of SG Gaming products.
President and Chief Executive Officer David Kennedy said: “Fourth quarter revenues reflect solid growth in our lottery business and a partial quarter of WMS results. We are focused on growing our customers’ revenues and capturing new growth opportunities by accelerating development of innovative content and technology and continuously improving our core competencies. At the same time, we are focused on achieving the targeted cost synergies related to the acquisition of WMS and driving profit margin and cash flow improvements across all of our businesses.”
During the 2013 fourth quarter, the company began implementing its integration plans to streamline the operations and cost structures of Scientific Games and WMS.
As a result of actions already initiated and further integration efforts planned for 2014, the Company now expects to achieve at least $60m of cost synergies on an annualized run-rate basis by the end of 2014 compared to its previous
estimate of $50m.
Jeffrey Lipkin, Senior Vice President and Chief Financial Officer, said: “Since completing the WMS transaction, we have made good progress implementing our comprehensive integration plans more quickly than originally expected. As a result of the anticipated accelerated realisation of savings, we are raising our target from $50m to now achieve at least $60m of expected annualised cost savings on a run-rate basis by the end of 2014. We continue to expect to realize $100m of annualised cost savings on a run-rate basis and $20m of annualised capital expenditure savings by the end of December 2015.”
For the full 2013 fourth quarter, WMS shipments declined to 3,772 units from 4,858 units in the prior-year quarter; shipments for WMS in the prior-year quarter included 1,170 replacement units for U.S. and Canadian casino operators, 204 Illinois video gaming terminals, 344 units for new casino openings and expansions and 1,060 VLTs for Canadian customers, as well as 2,080 units shipped to international customers
Shipments included 1,577 Blade gaming machines, representing 42 per cent of total new WMS units. With 39 game themes now available for the Blade cabinet, including four game themes developed specifically for the Asian marketplace, the Blade gaming machines continue to perform strongly, with the original six game themes outperforming casino house average by nearly 30 per cent, as reported by customers.
