Scientific Games suffered a net loss of US$128m in its fourth quarter revenue with higher revenues of $737m being offset by the costs of merging Bally Technologies into its cooperate structure.
Net revenues of $737m for the quarter showed an increase of ten per cent on the third quarter and an increase of 4.2 per cent from a year ago.
However, noncash impairment charges of $130m as well as other costs led to the loss. Scientific has reduced its debt by $33m in the quarter, leaving it with total debt of $8.2bn at the end of the year.
The rise in revenue was driven by 8,990 gaming units shipped globally. This included 5,366 units shipped to North America customers, a 46 per cent increase over the third quarter, and an increase in Interactive revenue to $60m, an 18 per cent increase over the third quarter. 2015 revenue increased to $2.8bn
Gavin Isaacs, Scientific Games’ President and Chief Executive Officer, said: “2015 was a transformational year for Scientific Games, culminating in a strong finish for our fourth quarter operating results. We completed the heavy lifting of integration, benefited from $231m of implemented annualized cost synergies, and built a strong foundation for our future. We are one company, with one mission and three strong businesses, offering the broadest product portfolio in the industry. Our innovation was showcased at G2E, NASPL, and most recently at ICE. We believe that our innovation has helped generate our improved fourth quarter performance, and is already driving our momentum into 2016. Our winning edge consists of our people, our innovative new products led by our new TwinStar and Dualos cabinets, our Lottery contract awards, our systems successes, our electronic table growth, and our booming social gaming business. We will not rest on our laurels; we will continue to innovate and to improve our business processes in order to increase cash flow and reduce leverage.”
Michael Quartieri, Scientific Games’ Executive Vice President, Chief Financial Officer, and Corporate Secretary designee, added: “Fiscal discipline, strengthening cash flow, and operational excellence are key strategic priorities for Scientific Games. We made meaningful progress during 2015, as evidenced by the improved margins and cash flow achieved in the second half of the year. After incurring costs associated with accelerating implementation of integration actions early in the year, in the second half of 2015, we increased AEBITDA margin to 40 per cent and reduced debt by $105m. Moving forward, we will remain diligent in reviewing our operational practices to identify additional opportunities for continuous improvement and to drive shareholder value.”
Union Gaming Group Analyst Christopher Jones said: “The challenge here is that given the current environment, it doesn’t appear to be enough to do much beyond treading water. While there is no immediate fear of default, it’s difficult to see a path for Scientific Games that allows it to escape the challenges of a highly levered balance sheet.”