Scientific Games 4Q loss impacted by Bally Tech buy
Lottery and casino equipment supplier Scientific Games Corp reported a net loss of US$47.1 million – equal to US$0.55 per share – in the quarter ending December 31, 2014.
The firm said pre-tax expenses and costs totalling US$75.8 million related to the acquisition of casino equipment maker Bally Technologies Inc contributed to the quarterly net loss.
Scientific Games’ net loss for the full year was US$234.3 million, or US$2.77 per share, compared to a net loss in 2013 of US$30.2 million, or US$0.36 per share. In 2013 Scientific Games acquired slot machine maker WMS Industries Inc for US$1.5 billion.
The US$5.1 billion acquisition of Bally Technologies was completed on November 21 last year. That meant the fourth quarter 2014 results of Scientific Games also included 40-days worth of positive economic contribution from the acquired firm.
Group-wide in the fourth quarter, revenue increased almost 29 percent year-on-year to US$565.8 million. The improvement was mainly driven by casino equipment sales and revenue from interactive games.
The gaming segment, including slot machine sales from Bally Technologies-branded and WMS-branded products – and electronic table games from SHFL entertainment Inc, a company that Bally Technologies had acquired in November 2013 for US1.3 billion – nearly doubled to US$301.7 million in the fourth quarter.
Revenue from interactive gaming rose 43 percent year-on-year to US$43 million during the period. Revenue from the lottery segment was nearly flat however, increasing by under 1 percent from the prior-year period, to US$221.1 million.
“With the combination of Scientific Games and Bally, we are focused on becoming the partner of choice for gaming, lottery and interactive customers,” said Scientific Games’ president and chief executive Gavin Isaacs in a commentary on the results.
The CEO stated that the firm planned to launch new products across its Bally Technologies, WMS, Williams, SHFL, Barcrest and lottery brands during 2015.
Scott Schweinfurth, executive vice president and chief financial officer, added the firm had reduced its workforce and job vacancy positions by 5 percent as of December 31, contributing to US$42 million in annualised savings “primarily in selling, general and administrative and research and development expenses through elimination of duplicative positions and redundancies in the gaming and interactive business segments”.
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