EX-99.1 2 a14-12098_1ex99d1.htm EX-99.1

Exhibit 99.1

 

GRAPHIC

 

Investor Contact: Michael J. Carlotti

 

Media Contact: Mike Trask

(702) 532-7995

 

(702) 532-7451

mcarlotti@ballytech.com

 

mtrask@ballytech.com

 

BALLY TECHNOLOGIES, INC. REPORTS RECORD ADJUSTED EPS OF $1.10 AND GAAP DILUTED EPS OF $0.70 FOR THE THIRD QUARTER OF FISCAL 2014

 

·                  ADJUSTED EPS, WHICH INCLUDES $0.05 OF FOREIGN CURRENCY LOSSES, INCREASES TO A RECORD $1.10, UP 18 PERCENT FROM PRIOR YEAR

 

·                  WIDE-AREA PROGRESSIVE REVENUE SETS A QUARTERLY RECORD

 

·                  ACHIEVES NORTH AMERICA REPLACEMENT-UNIT SALES OF 2,496, UP 22 PERCENT FROM PRIOR YEAR

 

·                  SYSTEMS REVENUE SETS A QUARTERLY RECORD FOR THE SIXTH CONSECUTIVE QUARTER OF $91 MILLION, UP 27 PERCENT FROM PRIOR YEAR

 

·                  UPDATES FISCAL 2014 ADJUSTED EPS GUIDANCE TO $4.35 TO $4.50

 

LAS VEGAS, May 1, 2014 — Bally Technologies, Inc. (NYSE: BYI) (“Bally” or the “Company”), a leader in gaming machines, table game products, casino-management systems, interactive applications, and networked and server-based systems for the global gaming industry, today announced record quarterly revenue of $338 million and Adjusted EPS of $1.10 for the three months ended March 31, 2014, which includes a $0.05 per share loss from unfavorable foreign currency movements.  Diluted earnings per share (“GAAP Diluted EPS”) were $0.70 for the three months ended March 31, 2014.

 

“We achieved outstanding financial and operational results in the quarter which helped drive a record 26 percent adjusted operating margin for the first nine months of fiscal 2014 versus 23 percent in the prior year,” said Ramesh Srinivasan, the Company’s President and Chief Executive Officer.  “The ongoing SHFL integration has been pivotal in many respects to our results.  Our Systems business continues to be a major factor as we gain a greater share of the industry’s increasing technology-related spend.  On the EGM front, initial demand for our Pro Wave™ cabinet has been very robust, helping us to grow domestic replacement unit sales by 25 percent over last quarter.  Combined with SHFL’s international strength, this was our highest quarterly EGM unit sale level in six years, despite the absence of Canada VLT units.  We remain confident that our industry-leading innovation as evidenced by the Pro Wave platform and strength across a broad portfolio of products will help us grow our business into fiscal 2015 and beyond.”

 

“We continued to set a number of financial records this quarter while generating significant free cash flow,” said Neil Davidson, the Company’s Chief Financial Officer.  “We remain committed to deleveraging our balance sheet, as evidenced by the $68 million of debt we repaid during the quarter, for a total of $101 million since the acquisition of SHFL, which lowered our leverage ratio to 3.9 times.  In addition, we repurchased approximately 150,000 shares of our common stock for $10 million during the quarter.  We will continue to prudently utilize excess free cash flow to pay down debt with the goal of achieving a leverage ratio of 3.0 times by the end of calendar 2015.”

 


 

Bally Technologies, Inc. Reports Adjusted EPS of $1.10 and Diluted EPS of $0.70 for the Third Quarter of Fiscal 2014

 

Third Quarter Fiscal Year 2014 Highlights

 

 

 

Three Months Ended March 31,

 

Nine Months Ended March 31,

 

 

 

2014

 

%
Rev

 

2013

 

%
Rev

 

2014 (3)

 

%
Rev

 

2013

 

%
Rev

 

 

 

(dollars in millions, except per share amounts)

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Electronic Gaming Machines (“EGM”)

 

$

102.4

 

30

%

$

85.8

 

33

%

$

261.8

 

30

%

$

251.1

 

34

%

Gaming Operations

 

101.4

 

30

%

102.0

 

39

%

300.6

 

34

%

302.2

 

41

%

Systems

 

90.5

 

27

%

71.3

 

28

%

252.1

 

29

%

179.3

 

25

%

Table Products

 

44.1

 

13

%

—

 

—

 

58.4

 

7

%

—

 

—

 

Total revenues

 

$

338.4

 

100

%

$

259.1

 

100

%

$

872.9

 

100

%

$

732.6

 

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Margin: (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EGM

 

$

50.2

 

49

%

$

43.5

 

51

%

$

128.3

 

49

%

$

126.6

 

50

%

Gaming Operations

 

66.2

 

65

%

72.0

 

71

%

205.3

 

68

%

211.8

 

70

%

Systems

 

63.9

 

71

%

52.2

 

73

%

182.1

 

72

%

134.9

 

75

%

Table Products

 

31.2

 

71

%

—

 

—

 

39.9

 

68

%

—

 

—

 

Total gross margin

 

$

211.5

 

63

%

$

167.7

 

65

%

$

555.6

 

64

%

$

473.3

 

65

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

$

88.2

 

26

%

$

72.2

 

28

%

$

251.6

 

29

%

$

204.6

 

28

%

Research and development costs

 

36.7

 

11

%

29.1

 

11

%

98.9

 

11

%

80.8

 

11

%

Depreciation and amortization

 

20.5

 

6

%

5.7

 

3

%

37.5

 

4

%

17.0

 

3

%

Operating income

 

$

66.1

 

20

%

$

60.7

 

23

%

$

167.6

 

19

%

$

170.9

 

23

%

GAAP Diluted EPS

 

$

0.70

 

 

 

$

0.93

 

 

 

$

2.21

 

 

 

$

2.50

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Measures: (2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Operating Income

 

$

90.6

 

27

%

$

60.7

 

23

%

$

228.7

 

26

%

$

170.9

 

23

%

Adjusted EBITDA

 

$

117.4

 

35

%

$

85.0

 

33

%

$

306.3

 

35

%

$

244.9

 

33

%

Adjusted EPS

 

$

1.10

 

 

 

$

0.93

 

 

 

$

3.12

 

 

 

$

2.50

 

 

 

 

(1)         Gross Margin excludes amortization related to intangible assets which are included in depreciation and amortization (“D&A”).

(2)         Adjusted Operating Income, Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization, including share-based compensation and acquisition-related costs) and Adjusted EPS are Non-GAAP financial measures.  Reconciliation between GAAP and Non-GAAP measures can be found at the end of this press release.

(3)        Results for the nine months ended March 31, 2014 include SHFL entertainment, Inc. (“SHFL”) results beginning on November 25, 2013.

 

 

 

As of March 31,

 

 

 

2014

 

2013

 

End-of-period installed base:

 

 

 

 

 

Linked progressive systems

 

2,478

 

2,365

 

Rental and daily-fee games

 

16,048

 

14,953

 

Lottery systems (1)

 

12,629

 

12,059

 

Centrally determined systems

 

30,649

 

37,201

 

Utility products

 

8,905

 

NA

 

Proprietary Table Games (“PTG”)

 

3,016

 

NA

 

Table game progressive units, table game side bets, and add-ons

 

5,434

 

NA

 

 

(1)         Excludes 693 and 636 third-party Electronic Table System (“ETS”) seats operating as of March 31, 2014 and 2013, respectively.

 

 

 

Three Months Ended
March 31,

 

Nine Months Ended
March 31,

 

 

 

2014

 

2013

 

2014

 

2013

 

Operating Statistics

 

Units
Sold

 

Average Selling
Price (“ASP”)

 

Units
Sold

 

ASP

 

Units
Sold

 

ASP

 

Units
Sold

 

ASP

 

New EGM

 

5,278

 

$

17,203

 

4,923

 

$

16,051

 

14,425

 

$

16,502

 

14,096

 

$

16,476

 

Utility products

 

788

 

16,088

 

NA

 

NA

 

926

 

16,218

 

NA

 

NA

 

 

2


 

Highlights of Certain Results for the Three Months Ended March 31, 2014

 

Overall

 

·                  Total revenue increased 31 percent to a quarterly record $338 million as compared with $259 million last year.

 

·                  Adjusted EBITDA increased 38 percent to a quarterly record $117 million as compared with $85 million last year.

 

·                  Selling, general and administrative expenses (“SG&A”) decreased to 26 percent of total revenues from 28 percent last year and includes $6 million of one-time costs associated with the acquisition of SHFL.  After adjusting for these one-time costs, SG&A was 24 percent of total revenues in the current period, down from 28 percent last year.

 

·                  Research and development expenses (“R&D”) remained constant at 11 percent of total revenue.

 

·                  Operating income increased 9 percent to $66 million as compared with $61 million last year.  Adjusted Operating Income increased by 49 percent to a record $91 million.  Adjusted operating margin increased to a record 27 percent from 23 percent last year.

 

·                  GAAP Diluted EPS was $0.70 as compared with $0.93 last year.  Adjusted EPS increased 18 percent to a quarterly record $1.10 from $0.93 last year.  GAAP Diluted and Adjusted EPS for the current period included a $0.05 per share loss from unfavorable foreign currency movements.

 

Electronic Gaming Machines

 

·                  Revenues increased 19 percent to $102 million as compared with $86 million last year, driven by higher replacement sales and the sale of 930 Equinox™ units and 211 ETS seats, partially offset by the absence of 788 Canadian VLT units sold in the prior year period.

 

·                  ASP of new electronic gaming devices increased 7 percent to $17,203 per unit from $16,051 last year, primarily as a result of geographic mix and sales of the Pro Wave cabinet, which carry higher ASPs.

 

·                  New-unit sales to international customers were 34 percent of total new unit shipments compared to 17 percent in the prior year period.

 

·                  Gross margin decreased to 49 percent from 51 percent last year, primarily driven by $1 million of inventory-related charges that are included in acquisition-related costs.  After adjusting for these costs, gross margin was 50 percent.

 

Gaming Operations

 

·                  Revenues decreased slightly to $101 million as compared with $102 million last year, driven by lower yields on certain variable-fee games, partially offset by record wide-area progressive (“WAP”) revenue and the inclusion of 2,198 leased ETS seats.

 

·                  Gross margin decreased to 65 percent from 71 percent last year, primarily due to higher jackpot expenses and $1 million of asset-related charges that are included in acquisition-related costs.  After adjusting for asset-related charges, gross margin was 66 percent

 

Systems

 

·                  Revenues increased 27 percent to an all-time record $91 million as compared with $71 million last year, driven primarily by hardware revenue.

 

·                  Maintenance revenues increased 7 percent to $24 million as compared with $23 million last year.

 

·                  Gross margin decreased to 71 percent from 73 percent last year, primarily as a result of the change in mix of products.  Specifically, hardware sales were 44 percent of systems revenues, and software and service sales were 29 percent, as compared to 36 percent for hardware sales and 32 percent for software and services sales in the same period last year.

 

Table Products

 

·                  Revenues from Table Products were $44 million, with Utility products revenue of $29 million and PTG revenue of $15 million.

 

·                  Gross margin was 71 percent.  Gross margin was impacted by $2 million of inventory-related charges that are included in acquisition-related costs.  After adjusting for these costs gross margin was 76 percent.

 

3


 

Highlights of Certain Results for the Nine Months Ended March 31, 2014

 

Overall

 

·                  Total revenue increased 19 percent to a record $873 million as compared with $733 million last year.

 

·                  Adjusted EBITDA increased 25 percent to a record $306 million as compared with $245 million last year.

 

·                  SG&A increased to 29 percent of total revenues from 28 percent last year, primarily driven by $33 million of one-time costs associated with the acquisition of SHFL.  After adjusting for these one-time costs, SG&A was 25 percent of total revenues in the current period down from 28 percent last year.

 

·                  R&D remained constant at 11 percent of total revenues.

 

·                  Operating income decreased 2 percent to $168 million as compared with $171 million last year.  Adjusted Operating Income increased 34 percent to a record $229 million.  Adjusted operating margin increased to a record 26 percent from 23 percent last year.

 

·                  GAAP Diluted EPS was $2.21 as compared with $2.50 last year.  Adjusted EPS increased 25 percent to a record $3.12 from $2.50 last year.  GAAP Diluted and Adjusted EPS for the current period included a $0.09 per share loss from unfavorable foreign currency movements.

 

Electronic Gaming Machines

 

·                  Revenues increased 4 percent to $262 million as compared with $251 million last year, driven by the shipment of 2,220 units into the Illinois VGT market, 1,517 Equinox units, and 301 ETS seats, partially offset by the absence of 2,026 Canadian VLT units sold in the prior year period.

 

·                  ASP of new gaming devices increased to $16,502 per unit from $16,476 last year, primarily as a result of geographic mix and sales of the Pro Wave cabinet which carry higher ASPs.

 

·                  New-unit sales to international customers were 28 percent of total new unit shipments compared with 17 percent last year.

 

·                  Gross margin decreased to 49 percent from 50 percent last year, primarily driven by $4 million of inventory-related charges that are included in acquisition-related costs.  After adjusting for these costs, gross margin was 51 percent.

 

Gaming Operations

 

·                  Revenues decreased slightly to $301 million as compared with $302 million last year, driven by lower yields on certain variable-fee games, partially offset by record WAP revenue and the inclusion of 2,198 leased ETS seats.

 

·                  Gross margin decreased to 68 percent from 70 percent last year, primarily due to higher-than-expected jackpot expenses and $1 million of asset-related charges that are included in acquisition-related costs.  After adjusting for asset-related charges, gross margin was 69 percent.

 

Systems

 

·                  Revenues increased 41 percent to a record $252 million as compared with $179 million last year, driven primarily by hardware revenue.

 

·                  Maintenance revenues increased 10 percent to a record $74 million as compared with $67 million last year.

 

·                  Gross margin decreased to 72 percent from 75 percent last year, primarily as a result of the change in mix of products.  Specifically, hardware sales were 38 percent of systems revenues, and software and service sales were 33 percent, as compared to 30 percent for hardware sales and 33 percent for software and services sales in the same period last year.

 

Table Products

 

·                  Revenues from Table Products were $58 million, with Utility products revenue of $38 million and PTG revenue of $20 million.

 

·                  Gross margin was 68 percent.  Gross margin was impacted by $3 million of inventory-related charges that are included in acquisition-related costs.  After adjusting for these costs, gross margin was 74 percent.

 

4


 

Fiscal 2014 Business Update

 

The Company updated full-year fiscal 2014 guidance for Adjusted EPS to $4.35 to $4.50.  Adjusted EPS is calculated in accordance with the table included in this press release.  The range excludes current and expected losses from unfavorable foreign currency movements.  For clarity, this guidance includes $3.21 per share of results for the nine months ended March 31, 2014 which is comprised of Adjusted EPS of $3.12 plus an add-back of $0.09 per share loss from unfavorable foreign currency movements incurred during the first nine months of fiscal 2014.  This results in a range of Adjusted EPS expected for the remaining three months of fiscal 2014 of $1.14 to $1.29.

 

The Company has provided this range of adjusted earnings guidance for fiscal 2014 to give investors general information on the overall direction of its business at this time. The guidance provided is subject to numerous uncertainties, including, among others, overall economic and capital market conditions, the market for gaming devices and systems, changes in gaming legislation, the timing of new jurisdictions and casino openings, the timing and completion of new systems installations, competitive product introductions, complex revenue recognition rules related to the Company’s business, and assumptions about the Company’s new product introductions and regulatory approvals.  The Company does not intend and undertakes no obligation to update its forward-looking statements, including forecasts, potential opportunities for growth in new and existing markets, and future prospects for proposed new products.  Accordingly, the Company does not intend to update guidance during the quarter.  Additional information about the factors that could potentially affect the Company’s financial results included in today’s press release can be found in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the U.S. Securities and Exchange Commission.

 

Non-GAAP Financial Measures

 

The following table reconciles the Company’s net income attributable to Bally Technologies, Inc., as determined in accordance with generally accepted accounting principles (“GAAP”), to Adjusted EBITDA:

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

March 31,

 

March 31,

 

 

 

2014

 

2013

 

2014

 

2013

 

 

 

(in millions)

 

Net income attributable to Bally Technologies, Inc.

 

$

27.4

 

$

38.4

 

$

86.4

 

$

104.1

 

Interest expense, net

 

18.8

 

3.2

 

30.1

 

9.8

 

Income tax expense

 

16.2

 

17.5

 

44.5

 

55.3

 

Depreciation and amortization

 

41.3

 

22.4

 

93.4

 

66.0

 

Share-based compensation

 

3.3

 

3.5

 

10.4

 

9.7

 

Acquisition-related costs

 

6.2

 

—

 

33.1

 

—

 

Inventory step-up and obsolescence

 

4.2

 

—

 

8.4

 

—

 

Adjusted EBITDA

 

$

117.4

 

$

85.0

 

$

306.3

 

$

244.9

 

 

Adjusted EBITDA is a supplemental Non-GAAP financial measure used by the Company’s management and by some industry analysts to evaluate the Company’s ability to service debt, and is used by some investors and financial analysts in the gaming industry in measuring and comparing Bally’s leverage, liquidity, and operating performance to other gaming companies.  Adjusted EBITDA should not be considered an alternative to operating income or net cash from operations as determined in accordance with GAAP.  Not all companies calculate Adjusted EBITDA the same way, and the Company’s presentation may be different from those presented by other companies.

 

5


 

The following tables reconcile the Company’s GAAP to Non-GAAP Financial Measures:

 

Three Months Ended March 31, 2014

 

 

 

 

 

Gross

 

SG&A

 

 

 

Operating

 

Net

 

 

 

 

 

Revenues

 

Margin (1)

 

Expenses

 

D&A

 

Income

 

Income (2)

 

EPS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Measures

 

$

338.4

 

$

211.5

 

$

88.2

 

$

20.5

 

$

66.1

 

$

27.4

 

$

0.70

 

GAAP %

 

 

 

63

%

26

%

 

 

20

%

 

 

 

 

Amortization of purchased intangibles

 

—

 

—

 

—

 

(14.1

)

14.1

 

9.1

 

0.23

 

Acquisition-related costs

 

—

 

4.2

 

(6.2

)

—

 

10.4

 

6.7

 

0.17

 

Total adjustments

 

—

 

4.2

 

(6.2

)

(14.1

)

24.5

 

15.8

 

0.40

 

Adjusted Non-GAAP Measures

 

$

338.4

 

$

215.7

 

$

82.0

 

$

6.4

 

$

90.6

 

$

43.2

 

$

1.10

 

Adjusted %

 

 

 

64

%

24

%

 

 

27

%

 

 

 

 

 

(1)                    Gross Margin excludes amortization related to intangible assets which are included in depreciation and amortization.

(2)                    Adjustments are tax effected at 35.5%.

 

Nine Months Ended March 31, 2014

 

 

 

 

 

Gross

 

SG&A

 

 

 

Operating

 

Net

 

 

 

 

 

Revenues

 

Margin (1)

 

Expenses

 

D&A

 

Income

 

Income (2)

 

EPS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Measures

 

$

872.9

 

$

555.6

 

$

251.6

 

$

37.5

 

$

167.6

 

$

86.4

 

$

2.21

 

GAAP %

 

 

 

64

%

29

%

 

 

19

%

 

 

 

 

Amortization of purchased intangibles

 

—

 

—

 

—

 

(19.6

)

19.6

 

12.7

 

0.32

 

Acquisition-related costs

 

—

 

8.4

 

(33.1

)

—

 

41.5

 

26.7

 

0.68

 

IRS audit one-time benefit

 

—

 

—

 

—

 

—

 

—

 

(3.6

)

(0.09

)

Total adjustments

 

—

 

8.4

 

(33.1

)

(19.6

)

61.1

 

35.8

 

0.91

 

Adjusted Non-GAAP Measures

 

$

872.9

 

$

564.0

 

$

218.5

 

$

17.9

 

$

228.7

 

$

122.2

 

$

3.12

 

Adjusted %

 

 

 

65

%

25

%

 

 

26

%

 

 

 

 

 

(1)                    Gross Margin excludes amortization related to intangible assets which are included in depreciation and amortization.

(2)                    Adjustments are tax effected at 35.5%, except there is no tax effect on the IRS audit one-time benefit.

 

Adjusted EPS and other such adjusted measures are supplemental Non-GAAP financial measures that the Company’s management believes more accurately reflects the Company’s operating results for the periods presented.  Adjusted measures should not be considered an alternative to GAAP measures as determined in accordance with GAAP.

 

Earnings Conference Call and Webcast

 

As previously announced, the Company is hosting a conference call and webcast today at 4:30 p.m. EDT (1:30 p.m. PDT). The conference-call dial-in number is 866-524-3160 or 412-317-6760 (International); passcode “Bally”.  The webcast can be accessed by visiting BallyTech.com and selecting “Investor Relations.” Interested parties should initiate the call and webcast process at least five minutes prior to the beginning of the presentation. For those who miss this event, an archived version will be available at BallyTech.com until June 2, 2014.

 

6


 

About Bally Technologies, Inc.

 

Founded in 1932, Bally Technologies (NYSE: BYI) provides the global gaming industry with innovative games, table game products, systems, mobile, and iGaming solutions that drive revenue and provide operating efficiencies for gaming operators.  For more information, please contact Mike Trask, Senior Manager, Marketing & Corporate Communications, at 702-532-7451, or visit http://www.ballytech.com.  Connect with Bally on Facebook, Twitter, YouTube, LinkedIn and Pinterest.

 

This press release may contain “forward looking” statements within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, and is subject to the safe harbors created thereby.  Forward looking statements are subject to change and involve risks and uncertainties that could significantly affect future results, including those risks detailed from time to time in the Company’s filings with the Securities and Exchange Commission.  Although the Company believes any expectations expressed in any forward looking statements are reasonable, future results may differ materially from those expressed in any forward looking statements. The Company undertakes no obligation to update the information in this press release except as required by law and represents that the information speaks only as of today’s date.

 

— BALLY TECHNOLOGIES, INC. —

 

7


 

BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2014 AND 2013

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

March 31,

 

March 31,

 

 

 

2014

 

2013

 

2014

 

2013

 

 

 

(in 000s, except per share amounts)

 

Revenues:

 

 

 

 

 

 

 

 

 

Gaming equipment and systems

 

$

209,329

 

$

157,102

 

$

534,114

 

$

430,436

 

Product lease, operation and royalty

 

129,070

 

102,045

 

338,767

 

302,201

 

 

 

338,399

 

259,147

 

872,881

 

732,637

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

Cost of gaming equipment and systems (1)

 

86,307

 

61,419

 

213,729

 

168,978

 

Cost of product lease, operation and royalty(1)

 

40,537

 

29,992

 

103,521

 

90,320

 

Selling, general and administrative

 

88,248

 

72,218

 

251,661

 

204,586

 

Research and development costs

 

36,677

 

29,098

 

98,890

 

80,792

 

Depreciation and amortization

 

20,523

 

5,755

 

37,460

 

17,046

 

 

 

272,292

 

198,482

 

705,261

 

561,722

 

Operating income

 

66,107

 

60,665

 

167,620

 

170,915

 

Other income (expense):

 

 

 

 

 

 

 

 

 

Interest income

 

1,976

 

1,191

 

6,946

 

3,738

 

Interest expense

 

(20,861

)

(4,389

)

(37,083

)

(13,544

)

Other, net

 

(3,453

)

(1,534

)

(5,562

)

(3,336

)

Income from operations before income taxes

 

43,769

 

55,933

 

131,921

 

157,773

 

Income tax expense

 

(16,200

)

(17,527

)

(44,477

)

(55,345

)

Net income

 

27,569

 

38,406

 

87,444

 

102,428

 

Less net income (loss) attributable to noncontrolling interests

 

125

 

(43

)

1,005

 

(1,679

)

Net income attributable to Bally Technologies, Inc.

 

$

27,444

 

$

38,449

 

$

86,439

 

$

104,107

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted earnings per share attributable to Bally Technologies, Inc.:

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

$

0.71

 

$

0.95

 

$

2.25

 

$

2.56

 

Diluted earnings per share

 

$

0.70

 

$

0.93

 

$

2.21

 

$

2.50

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

38,614

 

40,483

 

38,493

 

40,594

 

Diluted

 

39,205

 

41,199

 

39,156

 

41,614

 

 

(1)         Cost of gaming equipment and systems and product lease, operation and royalty exclude amortization related to intangible assets which are included in depreciation and amortization.

 

8


 

BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF MARCH 31, 2014 AND JUNE 30, 2013

 

 

 

March 31,
2014

 

June 30,
 2013

 

 

 

(in 000s, except share amounts)

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

90,484

 

$

63,220

 

Restricted cash

 

13,779

 

12,939

 

Accounts and notes receivable, net of allowances for doubtful accounts of $15,772 and $14,813

 

306,637

 

248,497

 

Inventories

 

91,812

 

68,407

 

Prepaid and refundable income tax

 

31,259

 

21,845

 

Deferred income tax assets

 

50,913

 

38,305

 

Deferred cost of revenue

 

15,460

 

22,417

 

Prepaid assets

 

20,458

 

14,527

 

Other current assets

 

5,023

 

2,920

 

Total current assets

 

625,825

 

493,077

 

Restricted long-term investments

 

16,703

 

14,786

 

Long-term accounts and notes receivables, net of allowances for doubtful accounts of $1,492 and $1,764

 

63,696

 

65,456

 

Property, plant and equipment, net of accumulated depreciation of $70,574 and $60,556

 

71,514

 

35,097

 

Leased gaming equipment, net of accumulated depreciation of $242,063 and $209,680

 

131,369

 

113,751

 

Goodwill

 

997,522

 

172,162

 

Intangible assets, net

 

519,868

 

25,076

 

Deferred income tax assets

 

3,683

 

17,944

 

Income tax receivable

 

979

 

1,837

 

Deferred cost of revenue

 

8,861

 

12,105

 

Other assets, net

 

53,979

 

27,974

 

Total assets

 

$

2,493,999

 

$

979,265

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

33,921

 

$

25,863

 

Accrued and other liabilities

 

110,240

 

91,127

 

Jackpot liabilities

 

12,566

 

11,731

 

Deferred revenue

 

41,851

 

62,254

 

Income tax payable

 

2,225

 

11,345

 

Current maturities of long-term debt

 

41,182

 

24,615

 

Total current liabilities

 

241,985

 

226,935

 

Long-term debt, net of current maturities

 

1,831,061

 

580,000

 

Deferred revenue

 

25,038

 

23,696

 

Other income tax liability

 

11,448

 

12,658

 

Deferred income tax liabilities

 

135,046

 

171

 

Other liabilities

 

24,293

 

16,633

 

Total liabilities

 

2,268,871

 

860,093

 

Commitments and contingencies

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

Common stock, $.10 par value; 100,000,000 shares authorized; 65,983,000 and 65,318,000 shares issued and 39,266,000 and 38,855,000 outstanding

 

6,590

 

6,523

 

Treasury stock at cost, 26,717,000 and 26,463,000 shares

 

(1,095,737

)

(1,058,381

)

Additional paid-in capital

 

586,224

 

535,759

 

Accumulated other comprehensive loss

 

(5,356

)

(10,692

)

Retained earnings

 

732,778

 

646,339

 

Total Bally Technologies, Inc. stockholders’ equity

 

224,499

 

119,548

 

Noncontrolling interests

 

629

 

(376

)

Total stockholders’ equity

 

225,128

 

119,172

 

Total liabilities and stockholders’ equity

 

$

2,493,999

 

$

979,265

 

 

9