Casino equipment maker and lottery services provider Scientific Games Corp recorded year-on-year revenue growth of 6.4 percent in the first quarter of 2017, to US$725.4 million.
The growth was led by a 23.9-percent increase in global shipments of new gaming machines and a 32.6-percent increase in revenue from the firm’s interactive segment, the Nasdaq-listed firm said in a Thursday press release.
Operating income in the first quarter increased 75.0 percent to US$88.0 million from US$50.3 million a year ago “as a result of the revenue growth and lower cost structure,” Scientific Games stated.
“Our continued steady improvement in revenue and margin are a direct result of our focus on creating innovative products that drive demand,” Kevin Sheehan, chief executive of Scientific Games, said in a statement included in the release.
The firm however reported a net loss of US$100.8 million for the period between January and March compared with a net loss of US$92.3 million in the prior-year period. The company said its results were negatively impacted by a US$29.7 million loss on extinguishment and modification of debt associated with refinancing transactions and a US$35.9 million increase in income tax provision.
Attributable earnings before interest, taxation, depreciation and amortisation (EBITDA) increased to US$286.6 million from US$258.8 million a year ago, Scientific Games said.
Well Fargo Securities LLC analyst Cameron McKnight said that Scientific Games’ EBITDA and revenue growth in the first quarter were “above expectations”. He added: “There have been a number of recent positives for Scientific Games, including: refinancing last quarter; continued growth in interactive, recent merger and acquisition activity in social gaming; and continued outperformance in table products.”
Scientific Games announced on April 11 the acquisition – under terms that were not made public – of privately held Spicerack Media Ltd, a U.S.-based developer of a tournament-based title social bingo called Bingo Showdown.
Scientific Games reported the completion of a variety of refinancing transactions during the first quarter of 2017 with the aim of lowering cash interest costs at current rates, reducing exposure to variable interest rates and extending debt maturities. At of the end of March, Scientific Games had a total outstanding debt of US$8.19 billion, a decline of US$46.5 million from December-end.
Between 2013 and 2014, Scientific Games was involved in several leveraged acquisitions of rival gaming equipment suppliers totalling billions of U.S. dollars in value. In 2013 it bought Chicago-based slot machine maker WMS Industries Inc for US$1.5 billion. In November 2014, Scientific Games completed a US$5.1-billion deal to acquire Bally Technologies Inc. A year earlier, Bally Technologies had itself taken over Nevada-based SHFL entertainment Inc in a US$1.3-billion transaction.
More recently, in January 2017, Scientific Games completed the acquisition of Canadian gaming supplier DEQ Systems Corp, in a deal valued at CAD27.2 million (US$20.0 million).
In comments included in Thursday’s press release, Michael Quartieri, chief financial officer of Scientific Games, said the firm was implementing a string of measures to further improve its financial results in upcoming quarters. “We expect these initiatives will drive profitable growth and increased cash flow that will provide further opportunities to deleverage in 2017 and beyond,” he was quoted as saying.
Scientific Games’ gaming segment – which includes gaming operations, gaming machine sales, gaming systems, and table products – recorded total revenue of U$440.0 million for the three months ended March 31, up 4.3 percent from a year earlier.
Gaming machine sales revenue increased by 16.1 percent year-on-year to US$156.2 million in the first quarter. The company shipped 8,359 new gaming machines between January and March, including 5,862 new units shipped to North America customers and 2,497 units to international customers. “The average sales price increased to US$17,015 from US$16,719 in the prior year, reflecting a favourable mix of units,” the firm said.
Revenue from sales of table products increased 15.8 percent year-on-year, to US$49.9 million. The segment growth reflected “growth in leased shufflers, proprietary table games, and progressives, including the benefit from the acquisition of DEQ Systems,” said Scientific Games.
First-quarter revenue for Scientific Games’ lottery business went up 0.7 percent year-on-year to US$189.1 million. Total revenue for the interactive segment increased by 32.6 percent year-on-year, to US$96.3 million.
Jan 23, 2018Emergency and other Macau government workers joined a simulation drill overnight on Monday at the Galaxy Macau casino resort operated by Galaxy Entertainment Group Ltd. The government said the drill...
Dec 29, 2017It could be 2024 before a casino resort is opened in Japan,...
Dec 27, 2017The year 2017 could prove to have been a turning point in...
Oct 25, 2017The deployment of radio frequency identification (RFID)...
”We have been given reason to have confidence that that our businesses [in Macau] will continue after the initial concession expiration date”
Chairman and chief executive of Wynn Macau