EX-99.1 3 v93391exv99w1.txt EXHIBIT 99.1 Exhibit 99.1 ALLIANCE GAMING CORPORATION AND SUBSIDIARIES UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET AND STATEMENT OF OPERATIONS The following unaudited pro forma condensed consolidated financial statements as of and for the year ended June 30, 2003, have been derived from the historical financial statements of Alliance Gaming Corporation and subsidiaries (collectively, "Alliance Gaming" or the "Company") to give effect to the sale of 100% of the stock of Alliance Automaten GmbH & Co. KG, a German company doing business as Bally Wulff ("Bally Wulff") to Orlando Management GmbH. The operations of Bally Wulff are included in discontinued operations in the historical financial statements and the Bally Wulff assets and liabilities are classified as held for sale. The unaudited pro forma condensed consolidated statement of operations for the year ended June 30, 2003 reflects adjustments as if the transaction had taken place on July 1, 2002. The unaudited pro forma condensed consolidated balance sheet as of June 30, 2003, gives effect to the transaction as if the transaction had occurred on June 30, 2003. Certain pro forma adjustments described in the accompanying notes are based on estimates and various assumptions that the Company believes are reasonable under the circumstances. The pro forma information below is provided for informational purposes only and is not necessarily indicative of what the actual financial position or results of operations of the Company would have been had the transaction actually occurred on the dates indicated, nor does it purport to indicate the future financial position or results of operations of the Company. The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the Alliance Gaming financial statements, including the notes thereto, as of and for the year ended June 30, 2003, and the related Management's Discussion and Analysis of Financial Condition and Results of Operations, contained in its Annual Report on Form 10-K for the year ended June 30, 2003. ALLIANCE GAMING CORPORATION AND SUBSIDIARIES UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 2003 (In 000's, except share amounts) ASSETS
As Pro Forma Reported Adjustments Pro Forma -------- ----------- --------- Current assets: Cash and cash equivalents $ 40,158 $ 16,500 (a) $ 51,658 (5,000)(b) Accounts and notes receivable, net 98,408 98,408 Inventories, net 32,172 32,172 Deferred tax assets, net 44,821 44,821 Other current assets 8,516 8,516 --------- ------------- --------- Total current assets 224,075 $ 11,500 235,575 --------- ------------- --------- Long-term investments (restricted) 864 864 Long-term receivables, net 14,865 14,865 Leased gaming equipment, net 25,792 25,792 Property, plant and equipment, net 66,530 66,530 Goodwill, net 64,794 64,794 Intangible assets, net 26,890 26,890 Assets of discontinued operations held for sale 100,775 (16,500)(a) 84,275 Other assets, net 580 5,000 (b) 5,580 --------- ------------- --------- Total assets $ 525,165 $ -- $ 525,165 ========= ============= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 22,912 $ 22,912 Accrued liabilities 30,913 30,913 Jackpot liabilities 10,604 10,604 Current maturities of long-term debt 3,537 3,537 Liabilities of discontinued operations held for sale 13,494 13,494 --------- --------- Total current liabilities 81,460 81,460 --------- --------- Long-term debt, net 341,678 341,678 Deferred tax liabilities 5,680 5,680 Other liabilities 3,387 3,387 --------- --------- Total liabilities 432,205 432,205 --------- --------- Minority interest 1,330 1,330 Commitments and contingencies Stockholders' equity: Special Stock, 10,000,000 shares authorized: Series E, $100 liquidation value; 115 shares issued and outstanding 12 12 Common Stock, $.10 par value; 100,000,000 shares authorized; 49,933,000 shares issued 4,996 4,996 Treasury stock at cost, 513,000 shares (501) (501) Additional paid-in capital 163,267 163,267 Accumulated other comprehensive income 1,287 1,287 Accumulated deficit (77,431) (77,431) --------- --------- Total stockholders' equity 91,630 91,630 --------- ------------- --------- Total liabilities and stockholders' equity $ 525,165 $ -- $ 525,165 ========= ============= =========
See accompanying notes to unaudited pro forma condensed consolidated balance sheet and statement of operations. ALLIANCE GAMING CORPORATION AND SUBSIDIARIES UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED JUNE 30, 2003 (In 000's, except per share amounts)
As Pro Forma Reported Adjustments Pro Forma -------- ----------- --------- Revenues: Gaming equipment and systems $335,436 $335,436 Casino operations 72,124 72,124 -------- -------- 407,560 407,560 -------- -------- Costs and expenses: Cost of gaming equipment and systems 144,352 144,352 Cost of casino operations 32,643 32,643 Selling, general and administrative 99,071 99,071 Research and development costs 19,955 19,955 Depreciation and amortization 21,603 21,603 -------- -------- 317,624 317,624 -------- -------- Operating income 89,936 89,936 Other income (expense): Interest income 221 221 Interest expense (25,645) (25,645) Minority interest (2,009) (2,009) Other, net 242 242 -------- -------- Income from continuing operations before income taxes 62,745 62,745 Income tax expense 22,316 22,316 -------- -------- Net income from continuing operations 40,429 40,429 -------- -------- Discontinued operations: Loss on sale of wall machines and amusement games unit, net (d) (25,358) 25,358 (c) -- Loss from discontinued operations of wall machines and amusement games business unit, net (895) 895 (c) -- Income from discontinued operations of Nevada Route, net 4,059 4,059 Income from discontinued operations of Louisiana Route, net 1,288 1,288 -------- ------- -------- Income (loss) from discontinued operations (20,906) 26,253 5,347 -------- ------- -------- Net income $ 19,523 $26,253 $ 45,776 ======== ======= ======== Basic earnings (loss) per share: Continuing operations $ 0.82 $ 0.82 Discontinued operations (0.42) 0.53 0.11 -------- ------- ------- $ 0.40 0.53 $ 0.93 ======== ======= ======= Diluted earnings (loss) per share: Continuing operations $ 0.81 $ 0.81 Discontinued operations (0.42) 0.52 0.10 -------- ------- ------- $ 0.39 $ 0.52 $ 0.91 ======== ======= ======= Weighted average common shares outstanding 49,153 49,153 ======== ======= Weighted average common and common share equivalents outstanding 50,139 50,139 ======== =======
See accompanying notes to unaudited pro forma condensed consolidated balance sheet and statement of operations. ALLIANCE GAMING CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET AND STATEMENT OF OPERATIONS AS OF AND FOR THE YEAR ENDED JUNE 30, 2003 The above unaudited pro forma condensed consolidated financial statements present financial information for Alliance Gaming Corporation giving effect to the sale of 100% of the stock of Bally Wulff, which was effective July 18, 2003. The amounts included in the columns labeled "As Reported" were derived from the historical financial results of the Company as reported in the Annual Report of the Company filed on Form 10-K as of and for the year ended June 30, 2003. The following are the pro forma adjustments to effect this transaction: (a) To record the disposition of the Bally Wulff net assets, which were included in the sale of the Bally Wulff stock for $16.5 million in cash. (b) To record the portion of cash proceeds which were then used to purchase a certificate of deposit for a bank guarantee related to a tax audit currently underway by the German tax authorities for which Alliance has indemnified the buyer. This CD is treated as a restricted asset and is therefore included in other (non-current) assets in the accompanying unaudited pro forma condensed consolidated balance sheet. (c) To eliminate the discontinued operations of Bally Wulff. (d) The discontinued operations of Bally Wulff, as reported, includes an asset impairment charge of $25.4 million, net of tax, to reduce the carrying value of the Bally Wulff net assets down to the sales price.