UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 8, 2014
SCIENTIFIC GAMES CORPORATION
(Exact name of registrant as specified in its charter)
Delaware | 81-0422894 | |
(State of incorporation) | (IRS Employer | |
Identification No.) |
0-13063
(Commission File Number)
750 Lexington Avenue, New York, New York 10022
(Address of registrant’s principal executive office)
(212) 754-2233
(Registrant’s telephone number)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CPR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition.
The information contained under Item 2.02 in this Current Report on Form 8-K, including Exhibits 99.1, is being furnished and, as a result, such information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
On May 8, 2014, Scientific Games Corporation (the “Company”) issued a press release announcing, among other things, results for the three months ended March 31, 2014. A copy of the press release that will be discussed on the Company’s earnings call is attached hereto as Exhibits 99.1 and is incorporated herein by reference.
The Company’s press release, in addition to containing results that are determined in accordance with accounting principles generally accepted in the United States of America (“GAAP”), contain certain “non-GAAP financial measures” as that term is defined by the rules of the Securities and Exchange Commission (the “SEC”). The Company’s press release includes the most directly comparable financial measures calculated and presented in accordance with GAAP, information reconciling the non-GAAP financial measures to the GAAP financial measures, a statement disclosing the reasons why the Company’s management believes that presentation of the non-GAAP financial measures provides useful information to investors regarding the Company’s financial condition and results of operations, and a statement disclosing the additional purposes for which the Company’s management uses the non-GAAP financial measures.
The non-GAAP financial measures used in the press release should not be considered in isolation of, as a substitute for, or superior to, the financial information prepared in accordance with GAAP. The non-GAAP financial measures as defined in the press release may differ from similarly titled measures presented by other companies. The non-GAAP financial measures, as well as other information in the press release, should be read in conjunction with the Company’s financial statements filed with the SEC.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. | Description | |
99.1 | Press Release of Scientific Games Corporation, dated May 8, 2014. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SCIENTIFIC GAMES CORPORATION | ||
By: | /s/ Scott D. Schweinfurth | |
Name: Scott D. Schweinfurth Title: Executive Vice President and Chief Financial Officer |
Date: May 8, 2014
Exhibit Index
Exhibit No. | Description | |
99.1 | Press Release of Scientific Games Corporation, dated May 8, 2014. |
Scientific Games Reports First Quarter 2014 Results
NEW YORK, May 8, 2014 /PRNewswire/ -- Scientific Games Corporation (Nasdaq: SGMS) ("Scientific Games" or the "Company"), a leading diversified supplier of games and technology to the gaming and lottery industries, today reported financial results for the first quarter ended March 31, 2014.
"First quarter revenue rose to $388 million reflecting the first full quarter of contribution from the WMS acquisition and 7% revenue growth in our lottery business," said President and Chief Executive Officer David L. Kennedy. "Although we are seeing challenging gaming industry conditions that have negatively impacted our gaming product sales results, we believe that Scientific Games is relatively well positioned due to the diversity of revenue streams in our lottery and gaming businesses and the opportunities created by our integration efforts.
"Our first quarter results included a $60 million year-over-year increase in cash flow from operating activities and a $37 million year-over-year increase in free cash flow, reflecting the benefit of the WMS acquisition, favorable working capital changes, distributed earnings from our equity investments and our return-focused approach to capital allocation," Mr. Kennedy commented. "We continued to accelerate our integration initiatives in the 2014 first quarter and believe we remain on track to achieve at least $60 million of cost savings on an annualized run-rate basis by the end of 2014."
Summary Financial Results(1)
($ in millions, except per share amounts) |
| Three Months Ended
|
| Increase/decrease |
| ||||||
|
| 2014 |
| 2013 |
| Amount |
| % |
| ||
Revenue |
| $388.1 |
| $219.6 |
| $168.5 |
| 76.7 |
| ||
|
|
|
|
|
|
|
|
|
| ||
Operating (loss) income |
| (12.1) |
| 11.1 |
| (23.2) |
| n/m |
| ||
|
|
|
|
|
|
|
|
|
| ||
Net loss |
| (45.0) |
| (12.3) |
| (32.7) |
| (265.9) |
| ||
|
|
|
|
|
|
|
|
|
| ||
Net loss per share |
| (0.53) |
| (0.15) |
| (0.38) |
| (253.3) |
| ||
|
|
|
|
|
|
|
|
|
| ||
Net cash provided by operating activities |
| 83.3 |
| 23.2 |
| 60.1 |
| 259.1 |
| ||
|
|
|
|
|
|
|
|
|
| ||
Non-GAAP Financial Measures: |
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| ||
Attributable EBITDA(2) |
| 122.8 |
| 77.6 |
| 45.2 |
| 58.2 |
| ||
|
|
|
|
|
|
|
|
|
| ||
Free cash flow |
| 23.7 |
| (13.1) |
| 36.8 |
| n/m |
| ||
|
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
Attributable EBITDA, free cash flow and EBITDA from equity investments (discussed below) are non-GAAP financial measures defined below under "Non-GAAP Financial Measures" and reconciled to GAAP measures in the accompanying supplemental tables at the end of this release.
(1) Scientific Games sold the installed base of gaming machines in its pub business on March 25, 2013. The related results of operations are presented as discontinued operations in the Company's financial statements for the 2013 first quarter. All financial results referenced in this press release are for continuing operations only, unless otherwise noted.
(2) Our definition of attributable EBITDA, which is derived from the definition in our credit agreement, was modified in the 2013 fourth quarter as a result of the replacement of our prior credit agreement with our new credit agreement in connection with the acquisition of WMS. Historical amounts have been conformed to the revised definition and recast to exclude discontinued operations. Under the revised definition, 2013 first quarter attributable EBITDA decreased by $1.0 million.
Merger Integration Update
Following the completion of the WMS acquisition on October 18, 2013, Scientific Games began executing its detailed integration plans aimed at making operations more effective and reducing the Company's cost structure. Based on the progress of its integration-related actions to date and further integration efforts planned for 2014, the Company continues to expect to achieve at least $60 million of cost synergies on an annualized run-rate basis by the end of 2014. The Company continues to expect to achieve a total of $100 million in cost savings on an annualized run-rate basis by the end of 2015. Included in the expectations for annualized cost synergies is at least $55 million of annualized cost synergies from actions already initiated or completed.
"Our comprehensive integration initiatives have generated significant cost reductions," said Scott D. Schweinfurth, Executive Vice President and Chief Financial Officer. "Across our global operations, we are focused on generating additional efficiencies, executing our strategies to capitalize on new revenue opportunities and identifying additional opportunities to increase free cash flow."
As previously announced, in the 2014 first quarter, the Company took actions to strengthen its focus on its core businesses, including by:
2014 First Quarter Business Update
Gaming Segment
Financial results and revenue metrics presented below include the results of operations for WMS in the 2014 first quarter but not in the 2013 first quarter. All WMS results are included in the Company's Gaming segment. In addition, the results of the Company's video gaming systems operations, previously included in the Lottery Systems segment, are now included in the Gaming segment for all periods presented herein.
Gaming Operating Results (in millions, except unit, per unit data and ARPDAU) | Three Months Ended March 31, |
| Increase/ (Decrease) | |||||||||||||||||||||||
|
| 2014 |
| 2013 |
| Amount(1) | ||||||||||||||||||||
Revenue: |
|
|
|
|
|
| ||||||||||||||||||||
Services |
| $126.7 |
| $ 34.0 |
| $ 92.7 | ||||||||||||||||||||
Product sales |
| 67.5 |
| 4.6 |
| 62.9 | ||||||||||||||||||||
Total revenue |
| $194.2 |
| $ 38.6 |
| $155.6 | ||||||||||||||||||||
|
|
|
|
|
|
| ||||||||||||||||||||
Cost of services |
| $ 36.1 |
| $ 18.4 |
| $ 17.7 | ||||||||||||||||||||
Cost of product sales |
| 32.7 |
| 2.6 |
| 30.1 | ||||||||||||||||||||
Selling, general and administrative |
| 44.4 |
| 7.6 |
| 36.8 | ||||||||||||||||||||
Research and development |
| 25.3 |
| 0.4 |
| 24.9 | ||||||||||||||||||||
Stock-based compensation |
| 1.5 |
| 0.5 |
| 1.0 | ||||||||||||||||||||
Employee termination and restructuring |
| 5.2 |
| - |
| 5.2 | ||||||||||||||||||||
Depreciation and amortization |
| 63.7 |
| 11.1 |
| 52.6 | ||||||||||||||||||||
|
|
|
|
|
|
| ||||||||||||||||||||
Operating loss |
| $(14.7) |
| $ (2.0) |
| $(12.7) | ||||||||||||||||||||
|
|
|
|
|
|
| ||||||||||||||||||||
Loss from equity investments |
| $ (0.3) |
| $ (0.3) |
| - | ||||||||||||||||||||
|
|
|
|
|
|
| ||||||||||||||||||||
Attributable EBITDA(2) |
| $ 62.6 |
| $ 14.3 |
| $ 48.3 | ||||||||||||||||||||
|
|
|
|
|
|
| ||||||||||||||||||||
Revenue metrics |
|
|
|
|
|
| ||||||||||||||||||||
Services revenue: |
|
|
|
|
|
| ||||||||||||||||||||
WAP and premium participation products(3) | $ 57.7 |
| $ - |
| $ 57.7 | |||||||||||||||||||||
Other leased and participation products(4) |
| 29.9 |
| 27.4 |
| 2.5 | ||||||||||||||||||||
Interactive gaming products and services(5) | 30.8 |
| - |
| 30.8 | |||||||||||||||||||||
Other services |
| 8.3 |
| 6.6 |
| 1.7 | ||||||||||||||||||||
Services revenue |
| $126.7 |
| $ 34.0 |
| $ 92.7 | ||||||||||||||||||||
|
|
|
|
|
|
| ||||||||||||||||||||
WAP and premium participation units(3): |
|
|
|
|
|
| ||||||||||||||||||||
Installed base at period end |
| 9,076 |
| - |
| 9,076 | ||||||||||||||||||||
Average installed base |
| 9,142 |
| - |
| 9,142 | ||||||||||||||||||||
Average daily revenue per unit |
| $70.13 |
| - |
| $70.13 | ||||||||||||||||||||
|
|
|
|
|
|
| ||||||||||||||||||||
Other leased and participation units(4): |
|
|
|
|
|
| ||||||||||||||||||||
Installed base at period end |
| 27,645 |
| 26,348 |
| 1,297 | ||||||||||||||||||||
Average installed base |
| 28,989 |
| 25,893 |
| 3,096 | ||||||||||||||||||||
Average daily revenue per unit |
| $11.47 |
| $11.75 |
| $(0.28) | ||||||||||||||||||||
|
|
|
|
|
|
| ||||||||||||||||||||
Interactive gaming products and services - social casino: |
|
|
|
| ||||||||||||||||||||||
Average MAU(6) |
| 4.9 |
| - |
| 4.9 | ||||||||||||||||||||
Average DAU(7) |
| 1.3 |
| - |
| 1.3 | ||||||||||||||||||||
ARPDAU(8) |
| $0.23 |
| - |
| $0.23 | ||||||||||||||||||||
|
|
|
|
|
|
| ||||||||||||||||||||
Product sales revenue: |
|
|
|
|
|
| ||||||||||||||||||||
New gaming machine sales |
| $ 49.9 |
| $ 3.4 |
| $ 46.5 | ||||||||||||||||||||
Other product sales |
| 17.6 |
| 1.2 |
| 16.4 | ||||||||||||||||||||
Product sales revenue |
| $ 67.5 |
| $ 4.6 |
| $ 62.9 | ||||||||||||||||||||
|
|
|
|
|
|
| ||||||||||||||||||||
U.S. and Canadian new unit shipments |
| 2,036 |
| 65 |
| 1,971 | ||||||||||||||||||||
International new unit shipments |
| 1,478 |
| 326 |
| 1,152 | ||||||||||||||||||||
Total new unit shipments |
| 3,514 |
| 391 |
| 3,123 | ||||||||||||||||||||
Average sales price per new unit |
| $14,189 |
| $8,662 |
| $5,527 | ||||||||||||||||||||
| ||||||||||||||||||||||||||
(1) Percentage increase (decrease) amounts are not meaningful due to the impact of the WMS acquisition. (2) The 2014 and 2013 periods include $4.4 million and $3.7 million, respectively, in attributable EBITDA related to our equity investments in International Terminal Leasing ("ITL"), Roberts Communications Network, LLC ("RCN") and Sportech PLC. (3) WAP (wide-area progressive) and premium participation products comprise WMS participation gaming machines (WAP, LAP (local-area progressives) and standalone units) generally available only as leased units. (4) Other leased and participation products are comprised principally of Scientific Games server-based gaming machines, primarily in the U.K., and other leased WMS units, including 100 units that historically had been included in the WAP and premium participation installed base. (5) Social casino revenue is reported on a gross basis before platform fees as a result of a change in the Facebook® payment settlement process (rather than on a net revenue basis as historically reported by WMS). The reporting change represented $6.1 million of the interactive services revenue and an equal amount of cost of services in the current-year period. (6) MAU = Monthly Active Users and is a count of unique visitors to our sites during a month. (7) DAU = Daily Active Users and is a count of unique visitors to our sites during a day. (8) ARPDAU = Average revenue per daily active user and is calculated by dividing revenue for a period by the DAU for the period by the number of days in the period. | ||||||||||||||||||||||||||
| ||||||||||||||||||||||||||
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - |
Supplemental Table: WMS Full Quarter Comparative Results
The information set forth in the supplemental table below presents standalone historical data for WMS relating to the three months ended March 31, 2014 and March 31, 2013, and is provided as supplemental information. The information relating to the three months ended March 31, 2013 has been derived from the books and records of WMS and is not intended to be an indicator of the Company's future results. The supplemental information set forth in the table below should be read in conjunction with the historical financial statements of WMS that are incorporated by reference in the Company's Current Report on Form 8-K/A filed with the SEC on December 17, 2013.
|
| Three Months Ended March 31, |
|
Increase/(Decrease) | |||||||
Revenue metrics |
| 2014 |
| 2013 |
| Amount |
| % | |||
(in millions, except unit, per unit and ARPDAU) |
|
|
|
|
|
|
|
| |||
Services revenue: |
|
|
|
|
|
|
|
| |||
WAP and premium participation units: |
|
|
|
|
|
|
|
| |||
Installed base at period end |
| 9,076 |
| 9,584 |
| (508) |
| (5.3)% | |||
Average installed base |
| 9,142 |
| 9,199 |
| (57) |
| (0.6)% | |||
Average daily revenue per unit |
| $70.13 |
| $69.21 |
| $0.92 |
| 1.3% | |||
|
|
|
|
|
|
|
|
| |||
Other leased and participation units(1): |
|
|
|
|
|
|
|
| |||
Installed base at period end |
| 2,728 |
| 1,546 |
| 1,182 |
| 76.5% | |||
Average installed base |
| 2,609 |
| 1,540 |
| 1,069 |
| 69.4% | |||
Average daily revenue per unit |
| $13.15 |
| $10.39 |
| $2.76 |
| 26.6% | |||
|
|
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
| |||
Interactive gaming products and services - social casino: |
|
|
|
|
|
| |||||
Average MAU |
| 4.9 |
| 2.3 |
| 2.6 |
| 113.0% | |||
Average DAU |
| 1.3 |
| 0.6 |
| 0.7 |
| 116.7% | |||
ARPDAU |
| $0.23 |
| $0.38 |
| $(0.15) |
| (39.5)% | |||
|
|
|
|
|
|
|
|
| |||
Product sales revenue: |
|
|
|
|
|
|
|
| |||
U.S. and Canadian new unit shipments |
| 2,036 |
| 3,619 |
| (1,583) |
| (43.7)% | |||
International new unit shipments |
| 1,197 |
| 1,644 |
| (447) |
| (27.2)% | |||
Total new unit shipments |
| 3,233 |
| 5,263 |
| (2,030) |
| (38.6)% | |||
Average sales price per new unit |
| $15,047 |
| $15,344 |
| $(297) |
| (1.9)% | |||
(1) Other leased and participation units comprise other leased WMS gaming machines, including 100 units that historically had been included in the WMS WAP and premium participation installed base.
|
Gaming Segment First Quarter Financial Highlights
Gaming Segment Business Development Highlights
Instant Products Segment
Instant Products Operating Results ($ and € in millions) |
| Three Months Ended March 31, |
|
Increase/(Decrease) |
| |||||||||||||||||||||
|
| 2014 |
| 2013 |
| Amount |
| % | ||||||||||||||||||
Revenue: |
|
|
|
|
|
|
|
| ||||||||||||||||||
Instant games |
| $126.2 |
| $122.8 |
| $ 3.4 |
| 2.8 % | ||||||||||||||||||
Product sales |
| 3.1 |
| 3.5 |
| (0.4) |
| (11.4)% | ||||||||||||||||||
Total revenue |
| $129.3 |
| $126.3 |
| $ 3.0 |
| 2.4 % | ||||||||||||||||||
|
|
|
|
|
|
|
|
| ||||||||||||||||||
Cost of instant games |
| $ 69.9 |
| $68.2 |
| $ 1.7 |
| 2.5 % | ||||||||||||||||||
Cost of product sales |
| 2.0 |
| 2.5 |
| (0.5) |
| (20.0)% | ||||||||||||||||||
Selling, general and administrative |
| 12.3 |
| 11.5 |
| 0.8 |
| 7.0 % | ||||||||||||||||||
Research and development |
| 0.2 |
| 0.1 |
| 0.1 |
| 100.0 % | ||||||||||||||||||
Stock-based compensation |
| 0.7 |
| 0.8 |
| (0.1) |
| (12.5)% | ||||||||||||||||||
Employee termination and restructuring |
| 0.4 |
| 0.3 |
| 0.1 |
| 33.3 % | ||||||||||||||||||
Depreciation and amortization |
| 8.2 |
| 9.0 |
| (0.8) |
| (8.9)% | ||||||||||||||||||
|
|
|
|
|
|
|
|
| ||||||||||||||||||
Operating income |
| $ 35.6 |
| $33.9 |
| $ 1.7 |
| 5.0 % | ||||||||||||||||||
|
|
|
|
|
|
|
|
| ||||||||||||||||||
Earnings from equity investments |
| $ 5.4 |
| $6.3 |
| $(0.9) |
| (14.3)% | ||||||||||||||||||
|
|
|
|
|
|
|
|
| ||||||||||||||||||
Attributable EBITDA(1) |
| $ 61.8 |
| $61.0 |
| $ 0.8 |
| 1.3 % | ||||||||||||||||||
|
|
|
|
|
|
|
|
| ||||||||||||||||||
Revenue metrics |
|
|
|
|
|
|
|
| ||||||||||||||||||
Instant games by revenue type: |
|
|
|
|
|
|
|
| ||||||||||||||||||
Participation contracts |
| $ 67.3 |
| $63.4 |
| $ 3.9 |
| 6.2 % | ||||||||||||||||||
Price-per-unit contracts |
| 44.4 |
| 46.8 |
| (2.4) |
| (5.1) % | ||||||||||||||||||
Licensing and player loyalty | 14.5 |
| 12.6 |
| 1.9 |
| 15.1 % | |||||||||||||||||||
Instant games revenue | $126.2 |
| $122.8 |
| $ 3.4 |
| 2.8 % | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Instant games revenue by geography: |
|
|
|
|
|
|
| |||||||||||||||||||
United States |
| $ 82.1 |
| $76.2 |
| $ 5.9 |
| 7.7 % | ||||||||||||||||||
International |
| 44.1 |
| 46.6 |
| (2.5) |
| (5.4)% | ||||||||||||||||||
Instant games revenue |
| $126.2 |
| $122.8 |
| $ 3.4 |
| 2.8 % | ||||||||||||||||||
|
|
|
|
|
|
|
|
| ||||||||||||||||||
U.S. lottery customers' retail sales of instant games(2) |
|
$9,820 |
|
$9,467 |
|
$ 353 |
|
3.7 % | ||||||||||||||||||
|
|
|
|
|
|
|
|
| ||||||||||||||||||
Italy retail sales of instant games(2) | €2,476 |
| €2,546 |
| € (70) |
| (2.7)% | |||||||||||||||||||
(1) The 2014 and 2013 periods include $16.9 million and $16.5 million, respectively, in attributable EBITDA from our equity investments in Lotterie Nazionali S.r.l. ("LNS"), Northstar New Jersey Lottery Group, LLC, Northstar Lottery Group, LLC, and Beijing CITIC Scientific Games Technology Co. Ltd. ("CSG"). (2) Information provided by third-party lottery operators. |
| |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Instant Products Segment First Quarter Financial Highlights
Instant Products Segment Business Development Highlights
Lottery Systems Segment
Lottery Systems Operating Results ($ in millions) |
| Three Months Ended March 31, |
|
Increase/(Decrease) |
| ||||||||||
|
| 2014 |
| 2013 |
| Amount |
| % |
| ||||||
Revenue: |
|
|
|
|
|
|
|
|
| ||||||
Services |
| $ 50.1 |
| $ 47.8 |
| $ 2.3 |
| 4.8 % |
| ||||||
Product sales |
| 14.5 |
| 6.9 |
| 7.6 |
| 110.1 % |
| ||||||
Total revenue |
| $ 64.6 |
| $ 54.7 |
| $ 9.9 |
| 18.1 % |
| ||||||
|
|
|
|
|
|
|
|
|
| ||||||
Cost of services |
| $ 30.4 |
| $ 27.8 |
| $ 2.6 |
| 9.4 % |
| ||||||
Cost of product sales |
| 11.7 |
| 5.2 |
| 6.5 |
| 125.0 % |
| ||||||
Selling, general and administrative |
| 5.0 |
| 4.8 |
| 0.2 |
| 4.2 % |
| ||||||
Research and development |
| 0.4 |
| 1.4 |
| (1.0) |
| (71.4)% |
| ||||||
Stock-based compensation |
| 0.6 |
| 0.5 |
| 0.1 |
| 20.0 % |
| ||||||
Employee termination and restructuring |
| - |
| - |
| - |
| - |
| ||||||
Depreciation and amortization |
| 14.3 |
| 12.6 |
| 1.7 |
| 13.5 % |
| ||||||
|
|
|
|
|
|
|
|
|
| ||||||
Operating income |
| $ 2.2 |
| $ 2.4 |
| $ (0.2) |
| (8.3)% |
| ||||||
|
|
|
|
|
|
|
|
|
| ||||||
Earnings from equity investments |
| $ 0.4 |
| $ 0.1 |
| $ 0.3 |
| 300.0 % |
| ||||||
|
|
|
|
|
|
|
|
|
| ||||||
Attributable EBITDA(1) |
| $ 18.6 |
| $ 17.0 |
| $ 1.6 |
| 9.4 % |
| ||||||
|
|
|
|
|
|
|
|
|
| ||||||
Revenue metrics |
|
|
|
|
|
|
|
|
| ||||||
Services revenue by geography: |
|
|
|
| |||||||||||
United States |
| $ 27.6 |
| $ 27.2 |
| $ 0.4 |
| 1.5 % |
| ||||||
International |
| 22.5 |
| 20.6 |
| 1.9 |
| 9.2 % |
| ||||||
Service revenue |
| $ 50.1 |
| $ 47.8 |
| $ 2.3 |
| 4.8 % |
| ||||||
|
|
|
|
|
|
|
|
|
| ||||||
Product sales revenue by geography: |
|
|
|
| |||||||||||
United States |
| $ 1.5 |
| $ 1.2 |
| $ 0.3 |
| 25.0 % |
| ||||||
International |
| 13.0 |
| 5.7 |
| 7.3 |
| 128.1 % |
| ||||||
Product sales revenue |
| $ 14.5 |
| $ 6.9 |
| $ 7.6 |
| 110.1 % |
| ||||||
|
|
|
|
|
|
|
|
|
| ||||||
U.S. lottery customers' retail sales(2) |
| $2,112 |
| $2,088 |
| $ 24 |
| 1.1 % |
| ||||||
|
|
|
|
|
|
|
|
|
| ||||||
(1) The 2014 and 2013 periods include $1.5 million in each period in attributable EBITDA from our investment in Beijing Guard Libang Technology Co. Ltd. (2) U.S. lottery customers' retail sales is provided by third-party lottery operators and primarily includes sales of draw games, keno and instant games validated by the relevant system. In prior releases, the metric presented included sales of draw games only; the prior-year period retail sales information presented above conforms to the new metric. |
| ||||||||||||||
| |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lottery Systems Segment First Quarter Financial Highlights
Lottery Systems Segment Business Development Highlights
Earnings and EBITDA from Equity Investments
Liquidity and Capital Resources
Conference Call Details
Scientific Games will host a conference call today, May 8, at 4:30 pm ET to review results and discuss other topics. To access the call live via a listen-only webcast, please visit www.scientificgames.com and click on the webcast link under the Investor Information section. To access the call by telephone, please dial (800) 510-9691 (U.S. and Canada) or (617) 614-3453 (international). The conference ID is SGMS. A replay of the webcast will be archived in the Investor Information section on our website.
About Scientific Games
Scientific Games Corporation is a leading developer of technology-based products and services and associated content for worldwide gaming and lottery markets. The Company's portfolio includes instant and draw-based lottery games; electronic gaming machines and game content; server-based lottery and gaming systems; sports betting technology; loyalty and rewards programs; and social, mobile and interactive content and services. For more information, please visit: www.scientificgames.com.
Company Contacts
Investor Relations:
Bill Pfund (847) 785-3167
Media Relations:
Mollie Cole (773) 961-1194
Forward-Looking Statements
In this press release, the Company makes "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements describe future expectations, plans, results or strategies and can often be identified by the use of terminology such as "may," "will," "estimate," "intend," "continue," "believe," "expect," "anticipate," "targeted," "should," "could," "potential," "opportunity," or similar terminology. These statements are based upon management's current expectations, assumptions and estimates and are not guarantees of timing, future results or performance. Actual results may differ materially from those contemplated in these statements due to a variety of risks and uncertainties and other factors, including, among other things: competition; U.S. and international economic and industry conditions, including declines in or slow growth of lottery retail sales or gross gaming revenues and reductions in or constraints on capital spending by gaming or lottery operators; slow growth of new gaming jurisdictions; slow addition of casinos in existing jurisdictions; declines in the replacement cycle of gaming machines; ownership changes and consolidation in the casino industry; opposition to legalized gaming or the expansion thereof; technological changes; ability to adapt to, and offer products that keep pace with, evolving technology; ability to develop successful gaming concepts and content; laws and government regulation, including those relating to gaming licenses and environmental laws; inability to identify and capitalize on trends and changes in the lottery and gaming industries, including the expansion of interactive gaming; dependence upon key providers in our social gaming business; retention and renewal of existing contracts and entry into new or revised contracts; level of our indebtedness; availability and adequacy of cash flows to satisfy obligations or future needs; restrictions and covenants in our debt agreements; protection of our intellectual property; ability to license third party intellectual property; intellectual property rights of others; security and integrity of our software and systems; reliance on or failures in our information technology systems; natural events that disrupt our operations or those of our customers, suppliers or regulators; inability to benefit from, and risks associated with, strategic equity investments and relationships; inability of our joint venture to meet the net income targets or otherwise to realize the anticipated benefits under its private management agreement with the Illinois Lottery; inability of our joint venture to meet the net income targets or other requirements under its agreement to provide marketing and sales services to the New Jersey Lottery or otherwise to realize the anticipated benefits under such agreement (including as a result of a protest); failure to realize the anticipated benefits related to the award to our consortium of an instant ticket concession in Greece; inability to complete and integrate future acquisitions; failure to achieve the intended benefits of the WMS acquisition, including due to the inability to realize synergies in the anticipated amounts or within the contemplated time-frames or cost expectations, or at all; restructuring costs; revenue recognition standards; impairment charges; fluctuations in our results due to seasonality and other factors; dependence on suppliers and manufacturers; risks relating to foreign operations, including fluctuations in foreign currency exchange rates and restrictions on the import of our products; dependence on our employees; litigation and other liabilities relating to our business, including relating to our contracts and licenses, our products and systems, our employees, intellectual property and our strategic relationships; influence of certain stockholders; and stock price volatility. Additional information regarding risks and uncertainties and other factors that could cause actual results to differ materially from those contemplated in forward-looking statements is included from time to time in the Company's filings with the Securities and Exchange Commission ("SEC") (including our Annual Report on Form 10-K filed with the SEC on March 17, 2014 and in our subsequent periodic reports), including under the heading "Risk Factors" in the Company's periodic reports. Forward-looking statements speak only as of the date they are made and, except for the Company's ongoing obligations under the U.S. federal securities laws, the Company undertakes no obligation to publicly update any forward-looking statements whether as a result of new information, future events or otherwise.
Non-GAAP Financial Measures
The Company's management uses the following non-GAAP financial measures in conjunction with GAAP financial measures: attributable EBITDA, free cash flow and EBITDA from equity investments (each, as described more fully below). These non-GAAP financial measures are presented as supplemental disclosures. They should not be considered in isolation of, as a substitute for, or superior to, the financial information prepared in accordance with GAAP, and should be read in conjunction with the Company's financial statements filed with the SEC. The non-GAAP financial measures used by the Company may differ from similarly titled measures presented by other companies.
The Company's management uses these non-GAAP financial measures to, among other things: (i) monitor and evaluate the performance of the Company's business operations, as well as the performance of its equity investments; (ii) facilitate management's internal comparisons of the Company's historical operating performance; (iii) facilitate management's external comparisons of the Company's results to the historical operating performance of other companies that may have different capital structures and debt levels; and (iv) analyze and evaluate financial and strategic planning decisions regarding future operating investments and operating budgets. Accordingly, the Company's management believes that these non-GAAP financial measures are useful as they provide investors with information regarding the Company's financial condition and operating performance that is an integral part of management's reporting and planning processes
In particular, the Company's management believes that attributable EBITDA is helpful because this non-GAAP financial measure eliminates the effects of unusual, infrequent or other items that management believes have less bearing on the Company's underlying operating performance. Moreover, management believes attributable EBITDA and EBITDA from equity investments are useful to investors because a significant and increasing amount of the Company's business is conducted through its equity investments, and those measures eliminate financial items from the equity investees' earnings that management believes have less bearing on the equity investees' performance. Management believes that attributable EBITDA and free cash flow provide useful information regarding the Company's liquidity and its ability to service debt and fund investments. Management also believes that free cash flow is useful for investors because it provides them with an important perspective on the cash available for debt repayment and other strategic measures, after making necessary capital investments in property and equipment to support the Company's ongoing business operations. In addition, attributable EBITDA and free cash flow (calculated by subtracting total capital expenditures from attributable EBITDA) are metrics used in determining performance-based bonuses (subject to certain additional adjustments in the discretion of the Company's compensation committee).
Attributable EBITDA
"Attributable EBITDA," as used herein, is a non-GAAP financial measure that is presented herein as supplemental disclosure that is reconciled to net income (loss) as set forth in the schedules titled Reconciliation of Net Loss to Attributable EBITDA below.
Attributable EBITDA is derived from the definition of "consolidated EBITDA" in our credit agreement. In connection with the WMS acquisition, on October 18, 2013, the Company terminated its prior credit agreement and entered into the new credit agreement. The definition of "consolidated EBITDA" in the new credit agreement is different from the definition in the prior credit agreement. As a result, the definition of "attributable EBITDA" as used herein is different from the definition of "attributable EBITDA" used in the Company's pre-acquisition earnings releases. In order to enhance comparability, attributable EBITDA for prior periods presented herein is based on the new definition of attributable EBITDA, and a schedule reconciling the differences between the two attributable EBITDA definitions is set forth in the schedule entitled Reconciliation of Attributable EBITDA Based on Definition under Prior Credit Agreement to Attributable EBITDA Based on Definition under New Credit Agreement below.
Like the definition of attributable EBITDA in our prior earnings releases, attributable EBITDA as used herein includes our consolidated EBITDA plus (without duplication) our pro rata share of the EBITDA of our joint ventures and minority equity investments, subject to adjustments only to the extent contemplated by the definition of "consolidated EBITDA" in our new credit agreement ("credit agreement adjustments"). The credit agreement adjustments that we use for attributable EBITDA have changed to some extent as a result of our new credit agreement, including the following:
The Company anticipates that it will not include certain credit agreement adjustments in attributable EBITDA for purposes of the Company's earnings releases (and has not included those adjustments in the calculation of attributable EBITDA in this earnings release). For example, the Company does not expect to give effect in attributable EBIDTA to certain "pro forma" adjustments contemplated by the new credit agreement (including adjustments for acquisitions or dispositions), expected cost savings and other synergies, franchise taxes or Sarbanes-Oxley compliance costs. Attributable EBIDTA for purposes of the Company's earnings releases will not include any add-backs beyond those contemplated by the credit agreement adjustments.
"Consolidated EBITDA" as defined in our new credit agreement means, for any period, "consolidated net income" as defined in the credit agreement for such period plus, without duplication and, if applicable, except with respect to clauses (9), (10), (16) and (19) below, to the extent deducted in calculating such consolidated net income for such period, the sum of: (1) provisions for income (or similar) taxes, including franchise, excise and similar taxes and foreign withholding taxes; (2) interest expense (net of interest income, other than interest income earned on customer accounts), net losses on interest rate hedging obligations, amortization or write-off of debt discount and debt issuance costs and commissions, premiums, discounts and other fees and charges associated with debt; (3) depreciation and amortization expense and impairment charges; (4) extraordinary, unusual or non-recurring charges, expenses or losses, including severance costs and legal and settlement costs; (5) any other non-cash charges, expenses or losses (except to the extent such charges, expenses or losses represent an accrual of or reserve for cash expenses in any future period or an amortization of a prepaid cash expense paid in a prior period); (6) non-cash stock-based compensation expenses; (7) transaction costs, fees, losses and expenses (whether or not any transaction is consummated); (8) management, monitoring, consulting and advisory fees, and due diligence expense and other transaction fees and expenses and related expenses paid; (9) proceeds from any business interruption insurance (to the extent not reflected as revenue or income); (10) certain pro forma cost savings and other synergies; (11) earn-out and similar obligations incurred in connection with any acquisition or other investment; (12) charges and expenses to the extent indemnified or insured by a third party to the extent that coverage has not been denied (other than any such denial that is being contested in good faith) and so long as such amounts are actually reimbursed within one year; (13) net realized losses relating to amounts denominated in foreign currencies resulting from the application of FASB ASC 830; (14) costs of surety bonds in connection with financing activities, (15) costs associated with compliance with the requirements of the Sarbanes-Oxley Act of 2002; (16) certain identified pro forma adjustments; (17) charges or expenses attributable to cost savings initiatives, business optimization, management changes, restructurings and integrations; (18) (a) any net loss resulting from hedge agreements and the application of FASB ASC 815 or currency translation losses related to currency re-measurements of debt and (b) the amount of loss resulting from a sale of receivables, payment intangibles and related assets in connection with a receivables financing; (19) cash receipts not included in consolidated EBITDA in any period to the extent non-cash gains relating to such receipts were deducted in the calculation of consolidated EBITDA for any previous period and not added back; and (20) up-front fees and certain other costs in connection with certain lottery or gaming licenses or concessions; minus, to the extent reflected in the statement of such consolidated net income for such period, the sum, without duplication, of: (1) any extraordinary, unusual or non-recurring income or gains; (2) non-cash income or gains (other than the accrual of revenue in the ordinary course), subject to specified exceptions; (3) gains realized and income accrued in connection with the effect of currency and exchange rate fluctuations on intercompany balances and other balance sheet items; (4) the amount of cash received in such period in respect of any non-cash income or gain in a prior period (to the extent such non-cash income or gain previously increased consolidated net income in a prior period); (5) net realized gains relating to amounts denominated in foreign currencies resulting from the application of FASB ASC 830; and (6) (a) any net gain resulting from hedge agreements and the application of FASB ASC Topic 815, (b) any net gain resulting in such period from currency translation gains related to currency remeasurements of debt and (c) the amount of gain resulting in such period from a sale of receivables, payment intangibles and related assets in connection with a receivables financing. "Consolidated EBITDA" is subject to certain pro forma adjustments in connection with material acquisitions and dispositions as provided in the new credit agreement. "Consolidated EBITDA" also includes our pro rata share of the EBITDA of our joint ventures and minority equity investments (without duplication of amounts otherwise constituting consolidated net income, as noted above). The foregoing definition of "consolidated EBITDA" is summary in nature and is qualified in its entirety by reference to the full text of such definition in the Company's new credit agreement, a copy of which is attached as Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on October 18, 2013.
For a complete description of the definition of "consolidated EBITDA" in the Company's prior credit agreement, see Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on August 31, 2011.
Free Cash Flow
Free cash flow, as used herein, represents net cash provided by operating activities less total capital expenditures (which includes lottery and gaming systems expenditures and other intangible assets and software expenditures). Free cash flow is a non-GAAP financial measure that is presented herein as supplemental disclosure and is reconciled to net cash provided by operating activities in a schedule below.
EBITDA from Equity Investments
EBITDA from equity investments, as used herein, represents our share of the EBITDA (i.e., earnings (whether or not distributed to us) plus income tax expense, depreciation and amortization expense and interest (income) expense, net of other) of our joint ventures and minority investees. EBITDA from equity investments is a non-GAAP financial measure that is presented herein as supplemental disclosure and is reconciled to earnings from equity investments in a schedule below.
SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES | ||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
(Unaudited, in millions, except per share amounts) | ||||
|
|
|
|
|
|
|
|
|
|
| Three Months Ended March 31, | |||
|
| 2014 |
| 2013 |
Revenue: |
|
|
|
|
Instant games |
| $ 126.2 |
| $ 122.8 |
Services |
| 176.8 |
| 81.8 |
Product sales |
| 85.1 |
| 15.0 |
Total revenue |
| 388.1 |
| 219.6 |
|
|
|
|
|
Operating expenses: |
|
|
|
|
Cost of instant games(1) |
| 69.9 |
| 68.2 |
Cost of services (1) |
| 66.5 |
| 46.2 |
Cost of product sales(1) |
| 46.4 |
| 10.3 |
Selling, general and administrative |
| 91.8 |
| 48.8 |
Research and development |
| 25.9 |
| 1.9 |
Employee termination and restructuring |
| 5.6 |
| 0.3 |
Depreciation and amortization |
| 94.1 |
| 32.8 |
Operating (loss) income |
| (12.1) |
| 11.1 |
Other income (expense): |
|
|
|
|
Interest expense |
| (47.9) |
| (25.0) |
Earnings from equity investments |
| 5.5 |
| 6.1 |
Gain on sale of equity interest |
| 14.5 |
| - |
Other income (expense), net |
| 2.9 |
| (1.0) |
Total other expense |
| (25.0) |
| (19.9) |
Net loss from continuing operations before income taxes |
| (37.1) |
| (8.8) |
Income tax expense |
| (7.9) |
| (3.5) |
Net loss from continuing operations |
| $ (45.0) |
| $ (12.3) |
|
|
|
|
|
Discontinued operations: |
|
|
|
|
Loss from discontinued operations |
| $ - |
| $ (1.9) |
Other expense |
| - |
| (0.1) |
Gain on sale of assets |
| - |
| 0.8 |
Income tax benefit |
| - |
| 0.3 |
Net loss from discontinued operations |
| $ - |
| $ (0.9) |
|
|
|
|
|
Net loss |
| $ (45.0) |
| $ (13.2) |
|
|
|
|
|
Basic net loss per share: |
|
|
|
|
Continuing operations |
| $ (0.53) |
| $ (0.15) |
Discontinued operations |
| - |
| (0.01) |
Total basic net loss per share |
| $ (0.53) |
| $ (0.16) |
|
|
|
|
|
Diluted net loss per share: |
|
|
|
|
Continuing operations |
| $ (0.53) |
| $ (0.15) |
Discontinued operations |
| - |
| (0.01) |
Total diluted net loss per share |
| $ (0.53) |
| $ (0.16) |
|
|
|
|
|
Weighted average number of shares used in per share calculations: |
|
|
| |
Basic shares |
| 84.3 |
| 84.6 |
Diluted shares |
| 84.3 |
| 84.6 |
|
|
|
|
|
(1) Exclusive of depreciation and amortization. |
|
|
|
|
|
|
|
|
|
SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES | ||||
CONDENSED CONSOLIDATED BALANCE SHEET DATA | ||||
(Unaudited, in millions) | ||||
|
|
|
|
|
|
|
|
|
|
|
| March 31, |
| December 31, |
|
| 2014 |
| 2013 |
Assets: |
|
|
|
|
Cash and cash equivalents |
| $ 169.1 |
| $ 153.7 |
Restricted cash |
| 11.8 |
| 10.9 |
Accounts receivable, net |
| 317.8 |
| 346.0 |
Notes receivable, net |
| 143.9 |
| 158.7 |
Inventories |
| 163.2 |
| 137.8 |
Deferred income taxes, current portion |
| 35.2 |
| 35.1 |
Prepaid expenses, deposits and other current assets |
| 112.3 |
| 119.3 |
Total current assets |
| 953.3 |
| 961.5 |
|
|
|
|
|
Property and equipment, net |
| 765.6 |
| 772.6 |
Long-term notes receivable |
| 64.1 |
| 72.6 |
Goodwill |
| 1,190.4 |
| 1,186.9 |
Intangible assets, net |
| 512.8 |
| 411.1 |
Software, net |
| 329.0 |
| 343.5 |
Equity investments |
| 319.0 |
| 367.2 |
Other assets |
| 125.9 |
| 126.5 |
Total assets |
| $ 4,260.1 |
| $ 4,241.9 |
|
|
|
|
|
Liabilities and Stockholders' Equity: |
|
|
|
|
Debt payments due within one year |
| $ 32.9 |
| $ 30.4 |
Accounts payable |
| 108.5 |
| 140.9 |
Accrued liabilities |
| 301.7 |
| 285.8 |
Total current liabilities |
| 443.1 |
| 457.1 |
|
|
|
|
|
Deferred income taxes |
| 145.3 |
| 138.0 |
Other long-term liabilities |
| 217.5 |
| 109.6 |
Long-term debt, excluding current installments |
| 3,168.3 |
| 3,162.2 |
Total stockholders' equity |
| 285.9 |
| 375.0 |
Total liabilities and stockholders' equity |
| $ 4,260.1 |
| $ 4,241.9 |
SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES | ||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||
(Unaudited, in millions) | ||||||
|
|
|
|
|
|
|
|
|
| Three Months Ended |
| ||
|
|
| March 31, |
| ||
|
|
| 2014 |
| 2013 |
|
| Cash flows from operating activities: |
|
|
|
|
|
| Net loss |
| $ (45.0) |
| $ (13.2) |
|
| Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
|
|
| Depreciation and amortization |
| 94.1 |
| 33.3 |
|
| Change in deferred income taxes |
| 1.2 |
| 0.8 |
|
| Stock-based compensation |
| 5.2 |
| 5.9 |
|
| Non-cash interest expense |
| 4.3 |
| 1.7 |
|
| Earnings from equity investments, net |
| (5.5) |
| (6.1) |
|
| Distributed earnings from equity investments |
| 18.2 |
| 2.2 |
|
| Gain on sale of equity interest |
| (14.5) |
| - |
|
| Changes in current assets and liabilities, net of effects of acquisitions and other |
| 25.3 |
| (1.4) |
|
| Net cash provided by operating activities |
| 83.3 |
| 23.2 |
|
|
|
|
|
|
|
|
| Cash flows from investing activities: |
|
|
|
|
|
| Capital expenditures |
| (59.6) |
| (36.3) |
|
| Proceeds from asset disposals |
| - |
| 0.9 |
|
| Change in other assets and liabilities, net |
| (0.1) |
| (0.2) |
|
| Equity method investments |
| (17.7) |
| - |
|
| Distributions of capital on equity investments |
| 22.4 |
| - |
|
| Proceeds from sale of equity interest |
| 44.9 |
| - |
|
| Restricted cash |
| (0.9) |
| 1.0 |
|
| Business acquisitions, net of cash acquired |
| - |
| (0.3) |
|
| Net cash used in investing activities |
| (11.0) |
| (34.9) |
|
|
|
|
|
|
|
|
| Cash flows from financing activities: |
|
|
|
|
|
| Long term debt, net |
| (6.0) |
| (0.7) |
|
| Common stock repurchases |
| (29.5) |
| - |
|
| Contingent earnout payments |
| (1.8) |
| - |
|
| Net redemptions of common stock under stock-based compensation plans |
| (19.2) |
| (2.9) |
|
| Net cash used in financing activities |
| (56.5) |
| (3.6) |
|
| Effect of exchange rate changes on cash and cash equivalents |
| (0.4) |
| (3.7) |
|
| Increase (decrease) in cash and cash equivalents |
| 15.4 |
| (19.0) |
|
| Cash and cash equivalents, beginning of period |
| 153.7 |
| 109.0 |
|
| Cash and cash equivalents, end of period |
| $ 169.1 |
| $ 90.0 |
|
|
|
|
|
|
|
|
SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES | ||||||||||
CONSOLIDATED BUSINESS SEGMENT DATA | ||||||||||
RECONCILIATION OF NET LOSS TO ATTRIBUTABLE EBITDA | ||||||||||
(Unaudited, in millions) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months Ended March 31, 2014 | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Instant |
| Lottery |
|
|
| Total |
|
| Gaming |
| Products |
| Systems |
| Corporate |
| Consolidated |
|
|
|
|
|
|
|
|
|
|
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
Instant games |
| $ - |
| $ 126.2 |
| $ - |
| $ - |
| $ 126.2 |
Services |
| 126.7 |
| - |
| 50.1 |
| - |
| 176.8 |
Product sales |
| 67.5 |
| 3.1 |
| 14.5 |
| - |
| 85.1 |
Total revenue |
| $ 194.2 |
| $ 129.3 |
| $ 64.6 |
| $ - |
| $ 388.1 |
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
Cost of instant games (1) |
| $ - |
| $ 69.9 |
| $ - |
| $ - |
| $ 69.9 |
Cost of services (1) |
| 36.1 |
| - |
| 30.4 |
| - |
| 66.5 |
Cost of product sales (1) |
| 32.7 |
| 2.0 |
| 11.7 |
| - |
| 46.4 |
Selling, general and administrative |
| 44.4 |
| 12.3 |
| 5.0 |
| 24.9 |
| 86.6 |
Research and development |
| 25.3 |
| 0.2 |
| 0.4 |
| - |
| 25.9 |
Stock-based compensation |
| 1.5 |
| 0.7 |
| 0.6 |
| 2.4 |
| 5.2 |
Employee termination and restructuring |
| 5.2 |
| 0.4 |
| - |
| - |
| 5.6 |
Depreciation and amortization |
| 63.7 |
| 8.2 |
| 14.3 |
| 7.9 |
| 94.1 |
Operating (loss) income |
| $ (14.7) |
| $ 35.6 |
| $ 2.2 |
| $ (35.2) |
| $ (12.1) |
|
|
|
|
|
|
|
|
|
|
|
Other (expense) income: |
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
|
|
|
|
|
|
| $ (47.9) |
Earnings (loss) from equity investments |
| $ (0.3) |
| $ 5.4 |
| $ 0.4 |
|
|
| 5.5 |
Gain on sale of equity interest |
|
|
|
|
|
|
| $ 14.5 |
| 14.5 |
Other income (expense), net |
|
|
|
|
|
|
| 2.9 |
| 2.9 |
Total other expense |
|
|
|
|
|
|
|
|
| $ (25.0) |
|
|
|
|
|
|
|
|
|
|
|
Net loss from continuing operations before income taxes |
|
|
|
|
|
|
|
| $ (37.1) | |
Income tax expense |
|
|
|
|
|
|
|
|
| (7.9) |
Net loss from continuing operations |
|
|
|
|
|
|
|
|
| $ (45.0) |
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations: |
|
|
|
|
|
|
|
|
|
|
Net loss from discontinued operations |
|
|
|
|
|
|
|
|
| $ - |
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
|
|
|
|
|
|
| $ (45.0) |
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Loss to Attributable EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
|
|
|
|
|
|
| $ (45.0) |
Employee termination and restructuring (2) |
| $ 5.2 |
| $ 0.4 |
| $ - |
| $ - |
| 5.6 |
M&A and financing costs and charges (2) |
| 2.5 |
| - |
| - |
| 1.2 |
| 3.7 |
Depreciation and amortization: |
|
|
|
|
|
|
|
|
|
|
Impact of purchase price accounting adjustments (2) |
| 8.5 |
| - |
| - |
| - |
| 8.5 |
Impairments and write-offs (2) |
| 0.3 |
| - |
| - |
| 3.1 |
| 3.4 |
Other |
| 54.9 |
| 8.2 |
| 14.3 |
| 4.8 |
| 82.2 |
Gain on sale of equity interest |
| - |
| - |
| - |
| (14.5) |
| (14.5) |
Other expense (income), net |
| - |
| - |
| - |
| 0.6 |
| 0.6 |
Interest expense |
|
|
|
|
|
|
|
|
| 47.9 |
Income tax expense |
|
|
|
|
|
|
|
|
| 7.9 |
Stock-based compensation |
| 1.5 |
| 0.7 |
| 0.6 |
| 2.4 |
| 5.2 |
EBITDA from equity investments |
| 4.4 |
| 16.9 |
| 1.5 |
| - |
| 22.8 |
(Earnings) loss from equity investments |
| 0.3 |
| (5.4) |
| (0.4) |
| - |
| (5.5) |
Attributable EBITDA |
| $ 62.6 |
| $ 61.8 |
| $ 18.6 |
| $ (20.2) |
| $ 122.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Exclusive of depreciation and amortization. |
|
|
|
|
|
|
|
|
|
|
(2) Total income tax expense (benefit) on these items is $0.0 million. |
|
|
|
|
|
|
|
|
SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES | ||||||||||
CONSOLIDATED BUSINESS SEGMENT DATA | ||||||||||
RECONCILIATION OF NET LOSS TO ATTRIBUTABLE EBITDA | ||||||||||
(Unaudited, in millions) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months Ended March 31, 2013 | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Instant |
| Lottery |
|
|
| Total |
|
| Gaming |
| Products |
| Systems |
| Corporate |
| Consolidated |
|
|
|
|
|
|
|
|
|
|
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
Instant games |
| $ - |
| $ 122.8 |
| $ - |
| $ - |
| $ 122.8 |
Services |
| 34.0 |
| - |
| 47.8 |
| - |
| 81.8 |
Product sales |
| 4.6 |
| 3.5 |
| 6.9 |
| - |
| 15.0 |
Total revenue |
| $ 38.6 |
| $ 126.3 |
| $ 54.7 |
| $ - |
| $ 219.6 |
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
Cost of instant games (1) |
| $ - |
| $ 68.2 |
| $ - |
| $ - |
| $ 68.2 |
Cost of services (1) |
| 18.4 |
| - |
| 27.8 |
| - |
| 46.2 |
Cost of product sales (1) |
| 2.6 |
| 2.5 |
| 5.2 |
| - |
| 10.3 |
Selling, general and administrative |
| 7.6 |
| 11.5 |
| 4.8 |
| 19.1 |
| 43.0 |
Research and development |
| 0.4 |
| 0.1 |
| 1.4 |
| - |
| 1.9 |
Stock-based compensation |
| 0.5 |
| 0.8 |
| 0.5 |
| 4.0 |
| 5.8 |
Employee termination and restructuring |
| - |
| 0.3 |
| - |
| - |
| 0.3 |
Depreciation and amortization |
| 11.1 |
| 9.0 |
| 12.6 |
| 0.1 |
| 32.8 |
Operating (loss) income |
| $ (2.0) |
| $ 33.9 |
| $ 2.4 |
| $ (23.2) |
| $ 11.1 |
|
|
|
|
|
|
|
|
|
|
|
Other (expense) income: |
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
|
|
|
|
|
|
| $ (25.0) |
Earnings (loss) from equity investments |
| $ (0.3) |
| $ 6.3 |
| $ 0.1 |
|
|
| 6.1 |
Other income (expense), net |
|
|
|
|
|
|
| $ (1.0) |
| (1.0) |
Total other expense |
|
|
|
|
|
|
|
|
| $ (19.9) |
|
|
|
|
|
|
|
|
|
|
|
Net loss from continuing operations before income taxes |
|
|
|
|
|
|
|
| $ (8.8) | |
Income tax expense |
|
|
|
|
|
|
|
|
| (3.5) |
Net loss from continuing operations |
|
|
|
|
|
|
|
|
| $ (12.3) |
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations: |
|
|
|
|
|
|
|
|
|
|
Net loss from discontinued operations |
|
|
|
|
|
|
|
|
| $ (0.9) |
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
|
|
|
|
|
|
| $ (13.2) |
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Loss to Attributable EBITDA | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
|
|
|
|
|
|
| $ (13.2) |
Employee termination and restructuring (2) |
| $ - |
| $ 0.3 |
| $ - |
| $ - |
| 0.3 |
Other employee severance(2) |
| 1.0 |
| 0.5 |
| - |
| - |
| 1.5 |
M&A/financing costs and charges (2) |
| - |
| - |
| - |
| 4.3 |
| 4.3 |
Depreciation and amortization |
| 11.1 |
| 9.0 |
| 12.6 |
| 0.1 |
| 32.8 |
Other expense (income), net |
| - |
| - |
| - |
| 1.1 |
| 1.1 |
Net loss from discontinued operations |
|
|
|
|
|
|
|
|
| 0.9 |
Interest expense |
|
|
|
|
|
|
|
|
| 25.0 |
Income tax expense |
|
|
|
|
|
|
|
|
| 3.5 |
Non-cash stock-based compensation |
| 0.5 |
| 0.8 |
| 0.5 |
| 4.0 |
| 5.8 |
EBITDA from equity investments |
| 3.7 |
| 16.5 |
| 1.5 |
| - |
| 21.7 |
(Earnings) loss from equity investments |
| 0.3 |
| (6.3) |
| (0.1) |
| - |
| (6.1) |
Attributable EBITDA |
| $ 14.3 |
| $ 61.0 |
| $ 17.0 |
| $ (14.7) |
| $ 77.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Exclusive of depreciation and amortization. |
|
|
|
|
|
|
|
|
|
|
(2) Total income tax expense (benefit) on these items is ($0.4) million. |
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES | ||||
CALCULATION OF FREE CASH FLOW | ||||
(Unaudited, in millions) | ||||
|
|
|
|
|
|
|
|
|
|
|
| Three Months Ended March 31, | ||
|
| 2014 |
| 2013 |
|
|
|
|
|
Net cash provided by operating activities |
| $ 83.3 |
| $ 23.2 |
|
|
|
|
|
Less: Additions to property and equipment |
| (12.2) |
| (7.3) |
Less: Lottery and gaming operations expenditures |
| (24.7) |
| (16.9) |
Less: Intangible assets and software expenditures |
| (22.7) |
| (12.1) |
Total capital expenditures |
| $ (59.6) |
| $ (36.3) |
|
|
|
|
|
Free cash flow |
| $ 23.7 |
| $ (13.1) |
|
|
|
|
|
|
|
|
|
|
During the quarter ended March 31, 2014, the Company received a return of capital payment from LNS of | ||||
$22.4 million and proceeds from the sale of its equity interest in Sportech PLC of $44.9 million, and made an | ||||
investment of $17.7 million in ITL related to UK Gaming's roll-out of terminals for Ladbrokes, which are not | ||||
included above. During the quarter ended March 31, 2013, the Company received no return of capital | ||||
payments related to its equity investments.
|
SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES | ||||||
RECONCILIATION OF ATTRIBUTABLE EBITDA BASED ON DEFINITION UNDER PRIOR CREDIT AGREEMENT | ||||||
TO ATTRIBUTABLE EBITDA BASED ON DEFINITION UNDER NEW CREDIT AGREEMENT | ||||||
(Unaudited, in millions) | ||||||
|
|
|
|
|
|
|
|
| Three Months Ended March 31, |
|
|
|
|
|
| 2013 |
|
|
|
|
|
|
|
|
|
|
|
Attributable EBITDA under prior credit agreement definition (1) |
| $ 78.6 |
|
|
|
|
|
|
|
|
|
|
|
Adjustments to conform to new credit agreement definition: |
|
|
|
|
|
|
Less: Playtech royalties and fees |
| (2.1) |
|
|
|
|
Add: Foreign exchange loss |
| 1.2 |
|
|
|
|
Less: Purchase accounting, restructuring and integration |
| (0.1) |
|
|
|
|
|
|
|
|
|
|
|
Attributable EBITDA under new credit agreement definition |
| $ 77.6 |
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts for three months ended March 31, 2013 have been |
| |||||
adjusted to remove the impact of discontinued operations.
|
|
SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES | ||||||
RECONCILIATION OF EARNINGS FROM EQUITY INVESTMENT TO EBITDA FROM EQUITY INVESTMENTS | ||||||
(Unaudited, in millions) | ||||||
|
|
|
|
|
|
|
|
| Three Months Ended March 31, |
|
| ||
|
| 2014 |
| 2013 |
|
|
EBITDA from equity investments(1): |
|
|
|
|
|
|
Earnings from equity investments |
| $ 5.5 |
| $ 6.1 |
|
|
Add: Income tax expense |
| 3.4 |
| 3.2 |
|
|
Add: Depreciation and amortization |
| 12.1 |
| 11.2 |
|
|
Add: Interest expense, net of other |
| 1.8 |
| 1.2 |
|
|
EBITDA from equity investments |
| $ 22.8 |
| $ 21.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) EBITDA from equity investments includes results from the Company's participation in Lotterie Nazionali S.r.l., Roberts Communications Network, LLC, Beijing CITIC Scientific Games Technology Co., Ltd., Sportech PLC, Beijing Guard Libang Technology Co., Ltd., Northstar Lottery Group, LLC and Northstar New Jersey Lottery Group, LLC (beginning October 1, 2013). |
|
|
SCIENTIFIC GAMES CORPORATION AND SUBSIDIARIES
| ||||||||||
| ||||||||||
The information set forth below presents historical data for the Company and its subsidiaries for the periods presented. The information presented under the heading "Gaming Revenue Metrics" includes the results of WMS only from the date of the Company's acquisition of WMS on October 18, 2013 through December 31, 2013. The information set forth in the table below should be read in conjunction with the historical financial statements of the Company that are included in the Company's Annual Report on Form 10-K filed with the SEC on March 17, 2014. | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| March 31, |
| June 30, |
| September 30, |
| December 31, |
| Year |
|
| 2013 |
| 2013 |
| 2013 |
| 2013 |
| 2013 |
|
|
|
|
|
|
|
|
|
|
|
Gaming Revenue Metrics |
|
|
|
|
|
|
|
|
|
|
Services revenue: |
|
|
|
|
|
|
|
|
|
|
WAP and premium participation products (1) |
| $ - |
| $ - |
| $ - |
| $ 45.5 |
| $ 45.5 |
Other leased and participation products (2) |
| 27.4 |
| 29.0 |
| 26.6 |
| 29.9 |
| 112.9 |
Interactive gaming products and services (3) |
| - |
| - |
| - |
| 28.4 |
| 28.4 |
Other services |
| 6.6 |
| 6.5 |
| 5.6 |
| 6.3 |
| 25.0 |
Services revenue |
| $ 34.0 |
| $ 35.5 |
| $ 32.2 |
| $ 110.1 |
| $ 211.8 |
|
|
|
|
|
|
|
|
|
|
|
WAP and premium participation products (1): |
|
|
|
|
|
|
|
|
|
|
WAP participation units |
| - |
| - |
| - |
| 3,817 |
| 3,817 |
Premium participation units |
| - |
| - |
| - |
| 5,594 |
| 5,594 |
Installed base at period end |
| - |
| - |
| - |
| 9,411 |
| 9,411 |
Average installed base |
| - |
| - |
| - |
| 9,365 |
| 9,365 |
Average daily revenue per unit |
| $ - |
| $ - |
| $ - |
| $ 65.71 |
| $ 65.71 |
|
|
|
|
|
|
|
|
|
|
|
Other leased and participation units (2): |
|
|
|
|
|
|
|
|
|
|
Installed base at period end |
| 26,348 |
| 26,277 |
| 26,829 |
| 29,018 |
| 29,018 |
Average installed base |
| 25,893 |
| 26,168 |
| 26,641 |
| 28,198 |
| 27,242 |
Average daily revenue per unit |
| $ 11.75 |
| $ 12.19 |
| $ 10.87 |
| $ 11.52 |
| $ 11.36 |
|
|
|
|
|
|
|
|
|
|
|
Interactive gaming products and services - social casino: |
|
|
|
|
|
|
|
|
|
|
Average MAU (4) |
| - |
| - |
| - |
| 4.2 |
| 4.2 |
Average DAU (5) |
| - |
| - |
| - |
| 1.2 |
| 1.2 |
ARPDAU (6) |
| $ - |
| $ - |
| $ - |
| $ 0.26 |
| $ 0.26 |
|
|
|
|
|
|
|
|
|
|
|
Product sales revenue: |
|
|
|
|
|
|
|
|
|
|
New gaming machines sales |
| $ 3.4 |
| $ 2.5 |
| $ 1.6 |
| $ 60.0 |
| $ 67.5 |
Other product sales |
| 1.2 |
| 2.5 |
| 5.7 |
| 11.8 |
| 21.2 |
Product sales revenue |
| $ 4.6 |
| $ 5.0 |
| $ 7.3 |
| $ 71.8 |
| $ 88.7 |
|
|
|
|
|
|
|
|
|
|
|
U.S. and Canadian new unit shipments |
| 65 |
| 9 |
| - |
| 2,169 |
| 2,243 |
International new unit shipments |
| 326 |
| 519 |
| 276 |
| 1,724 |
| 2,845 |
Total new unit shipments |
| 391 |
| 528 |
| 276 |
| 3,893 |
| 5,088 |
Average sales price per new unit |
| $ 8,662 |
| $ 4,674 |
| $ 5,818 |
| $ 15,410 |
| $ 13,267 |
|
|
|
|
|
|
|
|
|
|
|
Instant Products Revenue Metrics |
|
|
|
|
|
|
|
|
|
|
Instant games by revenue type: |
|
|
|
|
|
|
|
|
|
|
Participation contracts |
| $ 63.4 |
| $ 62.1 |
| $ 62.0 |
| $ 67.2 |
| $ 254.7 |
Price-per-unit contracts |
| 46.8 |
| 53.9 |
| 46.3 |
| 55.5 |
| 202.5 |
Licensing and player loyalty |
| 12.6 |
| 10.5 |
| 21.4 |
| 14.3 |
| 58.8 |
Instant games revenue |
| $ 122.8 |
| $ 126.5 |
| $ 129.7 |
| $ 137.0 |
| $ 516.0 |
|
|
|
|
|
|
|
|
|
|
|
Instant games revenue by geography: |
|
|
|
|
|
|
|
|
|
|
United States |
| $ 76.2 |
| $ 78.7 |
| $ 79.6 |
| $ 80.6 |
| $ 315.1 |
International |
| 46.6 |
| 47.8 |
| 50.1 |
| 56.4 |
| 200.9 |
Instant games revenue |
| $ 122.8 |
| $ 126.5 |
| $ 129.7 |
| $ 137.0 |
| $ 516.0 |
|
|
|
|
|
|
|
|
|
|
|
U.S. lottery customers' retail sales of instant games (7) |
| $ 9,467 |
| $ 9,419 |
| $ 8,689 |
| $ 9,172 |
| $ 36,747 |
Italy retail sales of instant games (7) |
| € 2,546 |
| € 2,374 |
| € 2,253 |
| € 2,439 |
| € 9,612 |
|
|
|
|
|
|
|
|
|
|
|
Lottery Systems Revenue Metrics |
|
|
|
|
|
|
|
|
|
|
Services revenue by geography: |
|
|
|
|
|
|
|
|
|
|
United States |
| $ 27.2 |
| $ 28.2 |
| $ 27.7 |
| $ 33.2 |
| $ 116.3 |
International |
| 20.6 |
| 21.5 |
| 20.8 |
| 24.0 |
| 86.9 |
Services revenue |
| $ 47.8 |
| $ 49.7 |
| $ 48.5 |
| $ 57.2 |
| $ 203.2 |
|
|
|
|
|
|
|
|
|
|
|
Product sales revenue by geography: |
|
|
|
|
|
|
|
|
|
|
United States |
| $ 1.2 |
| $ 1.9 |
| $ 1.1 |
| $ 0.3 |
| $ 4.5 |
International |
| 5.7 |
| 12.8 |
| 12.5 |
| 22.2 |
| 53.2 |
Product sales revenue |
| $ 6.9 |
| $ 14.7 |
| $ 13.6 |
| $ 22.5 |
| $ 57.7 |
|
|
|
|
|
|
|
|
|
|
|
U.S. lottery customers' retail sales (8) |
| $ 2,088 |
| $ 2,196 |
| $ 2,100 |
| $ 2,174 |
| $ 8,558 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - The information set forth in the supplemental table below presents standalone historical data for WMS and is provided as supplemental information. The information relating to periods prior to the Company's acquisition of WMS on October 18, 2013 has been derived from the books and records of WMS and is not intended to be an indicator of the Company's future results. The supplemental information set forth in the table below relating to periods prior to October 18, 2013 should be read in conjunction with the historical financial statements of WMS that are incorporated by reference in the Company's Current Report on Form 8-K/A filed with the SEC on December 17, 2013. The information set forth below relating to periods following the Company's acquisition of WMS should be read in conjunction with the historical financial statements of the Company that are included in the Company's Annual Report on Form 10-K filed with the SEC on March 17, 2014. | ||||||||||
| ||||||||||
|
| March 31, |
| June 30, |
| September 30, |
| December 31, |
| Year |
|
| 2013 |
| 2013 |
| 2013 |
| 2013 |
| 2013 |
|
|
|
|
|
|
|
|
|
|
|
Standalone Historical Data for WMS - Gaming Revenue Metrics |
|
|
|
|
|
|
|
| ||
Services: |
|
|
|
|
|
|
|
|
|
|
WAP and premium participation products (1): |
|
|
|
|
|
|
|
|
|
|
WAP participation units |
| 3,346 |
| 3,493 |
| 3,682 |
| 3,817 |
| 3,817 |
Premium participation units |
| 6,238 |
| 6,317 |
| 5,755 |
| 5,594 |
| 5,594 |
Installed base at period end |
| 9,584 |
| 9,810 |
| 9,437 |
| 9,411 |
| 9,411 |
Average installed base |
| 9,199 |
| 9,588 |
| 9,669 |
| 9,460 |
| 9,479 |
Average daily revenue per unit |
| $ 69.21 |
| $ 67.46 |
| $ 66.39 |
| $ 64.84 |
| $ 66.95 |
|
|
|
|
|
|
|
|
|
|
|
Other leased and participation units (9): |
|
|
|
|
|
|
|
|
|
|
Installed base at period end |
| 1,546 |
| 1,546 |
| 1,751 |
| 2,198 |
| 2,198 |
Average installed base |
| 1,540 |
| 1,533 |
| 1,713 |
| 1,615 |
| 1,600 |
Average daily revenue per unit |
| $ 10.39 |
| $ 13.26 |
| $ 9.95 |
| $ 9.20 |
| $ 10.66 |
|
|
|
|
|
|
|
|
|
|
|
Interactive gaming products and services - social casino: |
|
|
|
|
|
|
|
|
|
|
Average MAU (4) |
| 2.3 |
| 2.3 |
| 3.4 |
| 4.2 |
| 3.1 |
Average DAU (5) |
| 0.6 |
| 0.6 |
| 0.9 |
| 1.2 |
| 0.8 |
ARPDAU (6) |
| $ 0.38 |
| $ 0.36 |
| $ 0.31 |
| $ 0.26 |
| $ 0.32 |
|
|
|
|
|
|
|
|
|
|
|
Product sales: |
|
|
|
|
|
|
|
|
|
|
U.S. and Canadian new unit shipments |
| 3,619 |
| 4,740 |
| 2,553 |
| 2,201 |
| 13,113 |
International new unit shipments |
| 1,644 |
| 2,055 |
| 1,582 |
| 1,571 |
| 6,852 |
Total new unit shipments |
| 5,263 |
| 6,795 |
| 4,135 |
| 3,772 |
| 19,965 |
Average sales price per new unit |
| $ 15,344 |
| $ 15,443 |
| $ 16,026 |
| $ 15,729 |
| $ 15,592 |
| ||||||||||
(1) WAP (wide-area progressive) and premium participation products comprise WMS participation gaming machines (WAP, LAP (local-area progressives) and standalone units) generally available only as leased units.
|