Operator News
US – Seventh heaven for Scientific with Q3 revenue up seven per cent
By Phil - 3 November 2017
Scientific Games saw its third quarter revenue rise seven per cent to $768.9m, up from $720m a year ago, driven by revenue increases in each of the Gaming, Lottery and Interactive segments.
Foreign exchange had a $2.1m favorable impact on revenue.Operating income in the third quarter increased 170 per cent to $90.6m from $33.5m a year ago, reflecting revenue growth, a more profitable revenue mix, more effective business processes and lower depreciation and amortization.
“This quarter each business segment achieved revenue and AEBITDA growth, we showcased industry-altering innovation at NASPL and G2E, we were named ‘Industry Land-Based Supplier of the Year’ and announced our intent to acquire NYX, the industry leader in digital real-money gaming and sports betting. We are excited by the acquisition of NYX and the opportunities to grow our digital business,” said Kevin Sheehan, Chief Executive Officer of Scientific Games. “We are growing our businesses, expanding our product portfolio, improving our processes, enhancing our operating margin, paying down debt, and delivering positive results.”
Michael Quartieri, Chief Financial Officer of Scientific Games, added: “Our improved performance is enabling us to strengthen our balance sheet and lower our cost of capital. During the third quarter, we successfully extended our term loan maturity until August 2024 and reduced the term loan interest rate by 75 basis points. Additionally, we established a new benchmark with the issuance of our 5.000% senior secured notes due in 2025. At quarter-end, our net debt leverage ratio decreased to 6.7 times trailing twelve-month AEBITDA, down from 7.4 times a year ago. We remain committed to our path of deleveraging, while capitalizing on meaningful opportunities to grow our business.”
Total gaming revenue increased $6.4m, or one per cent, compared to the strong results of the year-ago period, inclusive of a $2.2 million favorable foreign exchange impact.
Gaming operations revenue declined $6.4m, or four per cent, largely reflecting a year-over- year decrease in the installed base of WAP, premium, and daily-fee participation gaming machines. On a quarterly sequential basis, gaming operations revenue declined $2.4m, primarily related to a decrease in average revenue per day. A 105-unit increase in the WAP, premium and daily-fee participation units installed base at quarter-end – the first quarterly sequential increase since 2014 – was offset by a $0.71 per day seasonal sequential decline in average daily revenue. The installed base of other leased and participation gaming machines was essentially flat on a quarterly sequential basis, as the placement of additional VLTs at New York gaming facilities and the ongoing roll-out of VLTs in Greece was offset by a convert-to-sale of participation units in certain Maryland casinos. The $0.30 decrease in the average daily revenue per unit of other leased and participation units included the impact from the lower-yielding Greek VLTs.
Gaming machine sales revenue increased $3.3m ear over year, largely due to a 30-percent increase in shipments of US and Canadian replacement gaming machines that reflects the strong performance of the TwinStar J43 gaming machine.
The increase in replacement units more than offset the impact from lower global sales related to fewer new casino openings and expansions. The average sales price increased to $17,643 from $16,824 in the prior year, reflecting a more favorable mix of gaming machines. U.S. and Canadian shipments totaled 4,662 gaming machines, including 3,932 replacement units, 251 units for new casino openings and expansions and 479 VGTs for the Illinois market. In the prior-year period, U.S. and Canadian shipments totaled 4,022 units, which comprised 3,033 replacement units, 744 units for new casino openings and expansions and 245 VGTs for the Illinois market. International shipments decreased 998 units, or 25 percent, to 2,940 units, primarily reflecting 915 fewer new units sold for new casino openings, compared with 3,938 units in the prior year, which had included 945 units for new casino openings.
Gaming systems revenue increased eight per cent to $62m, primarily reflecting an increase in hardware sales, including shipment of innovative new iVIEW4 player-interface display units.
Table products revenue increased 11 per cent to $53.5m, including growth in the installed base of shufflers, proprietary table games and progressives, and a benefit from the acquisition of DEQ Systems Corp. completed in January 2017.
