NEW YORK, Nov. 7, 2013 /PRNewswire/ -- Scientific Games
Corporation (Nasdaq: SGMS) (the "Company") today announced results
for the third quarter ended September 30,
2013.
Summary Financial
Results(1) ($ in millions, except per share
amounts)
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Three Months
Ended
September 30,
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Nine Months
Ended
September
30,
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2013
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2012
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2013
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2012
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Revenue
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$234.4
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$224.6
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$689.0
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$681.8
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Operating
income(2)
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25.7
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16.5
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49.2
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52.8
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Attributable
EBITDA:
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Continuing operations
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$91.9
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$82.3
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$257.1
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$252.3
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Discontinued operations
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(0.1)
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0.2
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(0.8)
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0.5
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Attributable
EBITDA
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$91.8
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$82.5
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$256.3
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$252.8
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Net
loss(2):
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Continuing operations
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$(0.4)
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$(24.6)
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$(25.0)
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$(31.6)
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Discontinued operations
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(0.1)
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(2.6)
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(1.6)
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(6.3)
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Net
loss
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$(0.5)
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$(27.2)
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$(26.6)
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$(37.9)
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Net loss per
share(2):
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Continuing operations
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$(0.01)
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$(0.27)
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$(0.29)
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$(0.34)
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Discontinued operations
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(0.00)
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(0.03)
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(0.02)
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(0.07)
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Net loss per
share
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$(0.01)
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$(0.30)
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$(0.31)
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$(0.41)
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Capital
expenditures
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$31.9
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$29.7
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$112.3
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$80.0
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Free cash
flow(2)
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(6.2)
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(5.1)
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(16.7)
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27.9
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(1)
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All financial results
referenced herein reflect those of Scientific Games through the
periods ended September 30, 2013 and do not reflect the acquisition
of WMS Industries Inc. ("WMS") on October 18, 2013.
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(2)
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In connection with
the WMS acquisition, the Company incurred professional fees and
other expenses for the three and nine months ended September 30,
2013 of approximately $2.5 million and $8.7 million, respectively,
which impacted operating income, net loss, net loss per share and
free cash flow for those periods.
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Attributable EBITDA and free cash flow are non-GAAP financial
measures defined below under "Non-GAAP Financial Measures" and
reconciled to GAAP financial measures in the accompanying
tables.
Scientific Games sold its installed base of gaming terminals
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
all periods presented. All financial results referenced in this
press release are for continuing operations only, unless otherwise
noted.
Business Highlights
- On October 18, 2013, Scientific
Games completed the acquisition of WMS, creating a leading company
in the lottery and gaming industries with innovative content,
world-class technology and an expansive geographic footprint,
enabling the combined company to supply an extensive range of
products and services to customers throughout the world
- In connection with the WMS acquisition, the Company terminated
its prior credit agreement and entered into new senior secured
credit facilities in an aggregate principal amount of $2.6 billion, comprised of a $300 million revolving credit facility and a
$2.3 billion term loan facility
- The Company extended its contract with Ladbrokes, a major U.K.
bookmaker, pursuant to which the Company will be the sole provider
of approximately 9,000 server-based gaming machines to Ladbrokes
through March 2019
- On October 1, 2013, the Northstar
New Jersey Lottery Group, a joint venture in which Scientific Games
owns an approximate 18% equity interest, commenced marketing and
sales services for the New Jersey Lottery
- This week, Scientific Games, in conjunction with bidding
partners 888 Holdings and Williams Interactive, a subsidiary of
Scientific Games, launched iGaming for the Delaware Lottery and
casinos, offering poker, casino table games and casino slots
games
- Scientific Games recently signed a number of lottery contract
extensions, including the following:
- A contract extension with the Florida Lottery to continue
supplying instant tickets and cooperative services ("CSP") through
September 2018
- A contract extension with the Missouri Lottery to continue
supplying instant tickets on a percentage of sales ("POS") basis
and our Properties Plus® loyalty and rewards program
through June 2015 and October 2014, respectively
"Our strong third quarter results and recent contract wins and
extensions reflect the strength of our core businesses and our
focus on delivering results," Chairman and Chief Executive Officer
A. Lorne Weil commented. "We are
also elated to welcome WMS employees to the Scientific Games
family. Closing the WMS acquisition marks a new chapter for all of
us. The strength and momentum of our combined operations
establishes an excellent platform for near- and long-term
growth. We are uniting two companies with highly
complementary businesses and excellent management and operating
talent to create a leading lottery and gaming company with a
comprehensive portfolio of products and services for customers
around the world."
Jeffrey S. Lipkin, Senior Vice
President and Chief Financial Officer, added, "We are proud of our
team for delivering strong quarterly operating results, while also
remaining focused on the execution of a number of important
contract wins and completing the acquisition of WMS. We are now
well underway in executing on our comprehensive integration plans
and remain confident in our ability to deliver on the expected
synergies. We expect the combined company to benefit from the
strength of both companies' innovative content and offerings,
visible and recurring revenue streams and a solid capital
structure."
Business Update
The Company's third quarter results reflected the strong overall
performance of its core businesses, which led to a 4% increase in
revenue and 12% rise in attributable EBITDA year-over-year.
Third quarter instant ticket and draw game retail sales of the
Company's U.S. customers increased 4.2% and 7.6%, respectively.
Instant ticket performance was generally stronger in states where
the Company provides instant game product management services while
draw game sales benefited from two large Powerball®
jackpots in the quarter.
The Company's licensed properties business, including its
Properties Plus program, was also an important contributor to the
quarter's results and benefited from several promotional games,
anniversary-themed games and linked games.
Instant ticket retail sales results in Italy continued to demonstrate signs of
stabilization. Third quarter retail sales increased 0.4% compared
to the prior-year period, reflecting an improvement on the
year-over-year decreases that occurred in the first and second
quarters of 2013. In China,
instant ticket retail sales declined 2.3% in the third quarter
compared to the prior-year period. The Company is pursuing a number
of initiatives to further diversify its business in China.
The Company's U.K. gaming business faced difficult
year-over-year comparisons against strong gross win levels in the
prior-year period. Additionally, we believe weather-related and
economic conditions in the U.K. affected player activity and gross
win in betting shops, resulting in a 4.7% year-over-year decline in
gross win per terminal per day in the third quarter. Betting shop
results were most significantly impacted by weather conditions in
July. However, the Company recently completed its roll-out of more
than 7,000 Infinity terminals to the entire Gala Coral estate and is seeing a positive
player response to the enhanced functionality of the terminal.
The Company is planning the roll-out of approximately 9,000
new Clarity terminals to Ladbrokes' entire U.K. estate in the first
half of 2014.
A number of important company initiatives for 2013 recently
launched, including sales of instant games in Panama and the Dominican Republic, and Northstar New Jersey's commencement of marketing
and sales services for the New Jersey Lottery, and the Delaware
Lottery's launch of iGaming, with Scientific Games and 888 Holdings
serving as the primary vendor.
The most significant recent development was Scientific Games'
acquisition of WMS, which closed on October
18, 2013. Integration implementation is now well
underway and is focused on positioning the Company to realize the
expected synergies.
In connection with the WMS acquisition, the Company incurred
professional fees and other expenses totaling approximately
$2.5 million in the third quarter of
2013, with additional transaction-related fees and expenses related
to the closing incurred or anticipated to be incurred in the fourth
quarter of 2013.
Third Quarter 2013
Operating Results by Segment ($ in millions)
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Revenue
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Operating Income
(Loss)
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Three Months
Ended
September
30,
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Three Months
Ended
September
30,
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2013
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2012
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2013
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2012
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Printed
Products
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$132.7
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$127.4
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$39.2
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$30.3
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Lottery
Systems
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69.0
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61.9
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8.3
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8.9
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Gaming
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32.7
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35.4
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0.9
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(4.4)
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Printed Products
Revenue
- Revenue growth of 4% was primarily driven by a $7.2 million increase from our licensed
properties business, consisting of a $1.9
million increase in revenue from our Properties Plus
customers and a $5.3 million increase
in revenue from licensed games. Revenue growth also reflected a
$3.9 million increase in revenue from
customers that purchase tickets on a CSP and POS basis, and a
$2.8 million increase in revenue from
international customers who purchase tickets on a
price-per-thousand basis
- These increases were partially offset by an $8.0 million decrease in revenue primarily due to
lower revenue from U.S. customers that purchase tickets on a
price-per-thousand basis, as well as a $0.7
million negative foreign exchange impact
Operating Income
- The $8.9 million or 29% increase
in operating income was driven by:
- a $7.4 million benefit from a
higher and more profitable revenue mix
- a $1.3 million decrease in
depreciation and amortization as the prior-year period was
negatively impacted by $1.9 million
of accelerated depreciation related to closing of our Australia printing facility
Lottery Systems
Revenue
- Sales revenue increased $5.3
million or 43%, largely due to higher sales of hardware and
software to international customers
- Service revenue increased $1.8
million or 4%, primarily driven by higher international
service revenue and two large Powerball jackpots
Operating Income
- Operating income decreased $0.6
million or 7%, as the $3.6
million benefit of a higher and more profitable revenue mix
was offset by a $3.0 million increase
in depreciation and amortization primarily related to new hardware
development and terminal deployments, along with a $1.3 million increase in selling, general and
administrative expenses principally due to higher accounts
receivable reserves and investments in growth initiatives
Gaming
Revenue
- The $1.9 million decline in sales
revenue primarily reflected lower sales of gaming terminals to
bingo and arcade customers and customers outside the U.K.
- The $0.7 million decline in
service revenue was principally due to a $0.7 million negative foreign exchange impact and
a decrease in gross win levels, partially offset by an increase in
our installed base of gaming terminals
Operating Income
- The $5.4 million increase in
operating income was largely due to:
- a $2.6 million reduction in
selling, general and administrative expenses primarily related to
lower net accounts receivable reserves and cost savings
initiatives
- a $2.2 million decrease in
depreciation and amortization, reflecting the write-down of gaming
terminals in the prior-year period
- the absence of $1.5 million of
employee termination and restructuring costs recorded in the
prior-year period
- The increase in operating income was partially offset by lower
revenue
Interest Expense and Other Income
(Expense)
- Interest expense decreased by $0.9
million due to additional interest expense incurred in the
prior-year period in connection with the refinancing of
$200 million of 7.875% senior
subordinated notes
- The prior-year period reflected a write-off of $15.5 million of deferred financing costs
associated with the refinancing of the senior subordinated
notes
- Other income decreased by $0.7
million principally due to an increase in foreign exchange
transaction expense
Earnings and EBITDA from Equity Investments
- Earnings from equity investments decreased by $2.3 million, primarily due to lower results from
the Company's International Terminal Leasing ("ITL") joint venture
due to a change in the estimated useful lives of certain gaming
terminals
- EBITDA from equity investments increased by $1.3 million, primarily reflecting higher results
from the Company's joint venture in Italy
Liquidity and Capital Resources
- At September 30, 2013, we had
cash and cash equivalents of $73.5
million and availability under our revolving credit facility
of $210.3 million
- We had total debt of $1,459.1
million at September 30, 2013
compared to $1,468.2 million at
December 31, 2012
- In connection with the WMS acquisition, the Company terminated
its prior credit agreement on October 18,
2013 and entered into new senior secured credit facilities
in aggregate principal amount of $2.6
billion, comprised of a $300
million revolving credit facility and a $2.3 billion term loan facility. The term loan
facility was used, in part, to finance the WMS acquisition, to pay
off all indebtedness under our and WMS's prior credit agreements
and to pay related acquisition and financing fees and expenses
- Free cash flow for the third quarter was $(6.2) million compared to $(5.1) million in the prior-year period,
principally reflecting increased working capital usage that was
timing-related and an increase in capital expenditures driven
primarily by printing press upgrades and gaming terminal purchases
for the U.K.
- We received $3.1 million of
return of capital payments from equity investments in the third
quarter, which are not included in the free cash flow metric:
- Italy joint venture -
$2.0 million
- ITL - $1.1 million
- We received $0.6 million in cash
dividends in the third quarter from our equity investment in
Roberts Communications Network
- We made the following equity investments in the third quarter:
- Greece joint venture -
$42.9 million, partially from
previously restricted cash
- Northstar New Jersey joint
venture - $0.9 million
Conference Call Details
Scientific Games will host a conference call today at
5:00 pm Eastern Time to review these
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 (877)
415-3186 (U.S. and Canada) or
(857) 244-7329 (international). The conference ID is 14501704.
A presentation summarizing the results will also be provided in
the Investor Information section on our website prior to the
conference call. A replay of the webcast and accompanying
presentation 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:
Cindi Buckwalter, (212) 754-2233
William Pfund, (847) 785-3167
Media Relations:
Aimee Remey, (212) 754-2233
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," "should," "could,"
"potential," "opportunity," or similar terminology. Forward-looking
statements may contain expectations regarding activities, financial
position, operations, synergies and other results following our
acquisition of WMS. 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; material
adverse changes in economic and industry conditions; technological
change; retention and renewal of existing contracts and entry into
new or revised contracts; effect of indebtedness on our operations
and financial condition; availability and adequacy of cash flows to
satisfy obligations and indebtedness or future needs; protection of
our intellectual property; ability to license third party
intellectual property; intellectual property rights of others;
security and integrity of software and systems; reliance on
information technology systems; laws and government regulation,
including those relating to gaming licenses, permits and
operations; inability to identify, complete and integrate future
acquisitions; 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; the seasonality of our business;
disruption of our current plans and operations in connection with
our acquisition of WMS; 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; inability to identify
and capitalize on trends and changes in the lottery and gaming
industries, including the potential expansion of regulated gaming
via the internet; inability to enhance and develop successful
gaming concepts; slow growth of gaming jurisdictions or the casino
industry; decline in the replacement cycle of gaming machines;
consolidation or ownership changes in the casino industry;
dependence on suppliers and manufacturers; liability for product
defects; fluctuations in foreign currency exchange rates and other
factors associated with international operations; influence of
certain stockholders; dependence on key personnel; failure to
perform under our contracts; resolution of pending or future
litigation; labor matters; 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 in our Annual Report on Form 10-K
filed with the SEC on March 12, 2013
and in our subsequent 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
All references in the
section below to our "credit agreement" refer to the Company's
prior credit agreement that was in effect as of September 30, 2013 and, as discussed above, was
subsequently terminated on October 18,
2013 in connection with the Company's entry into its new
credit facilities.
"Attributable EBITDA," as used herein, is based on the
definition of "consolidated EBITDA" in our credit agreement
(summarized below), except that attributable EBITDA as used herein
includes our share of the EBITDA of all of our equity investments
(whereas "consolidated EBITDA" for purposes of the credit agreement
generally includes our share of the EBITDA of our Italian joint
venture but only the income of our other equity investments to the
extent it has been distributed to us). Attributable EBITDA is
a non-GAAP financial measure that is presented herein as a
supplemental disclosure and is reconciled to net income (loss) in a
schedule below.
Attributable EBITDA includes adjustments only to the extent
contemplated by the definition of "consolidated EBITDA" in our
credit agreement (which adjustments are summarized in the paragraph
below). For purposes of calculating our financial ratios under the
credit agreement, consolidated EBITDA is calculated over a trailing
period of four consecutive fiscal quarters and more recent
adjustments may replace older adjustments within such four-quarter
period, subject to any caps specified in the credit agreement with
respect to particular categories of adjustments (as discussed
below). Accordingly, the aggregate amount of any such
adjustments within a particular category reported in our quarterly
earnings releases over a four-quarter period may exceed such cap
over such period (but will not exceed such cap in any particular
quarter).
"Consolidated EBITDA" means, for any period, "consolidated net
income" as defined in the credit agreement (i.e., generally our
consolidated net income (or loss) excluding the income (or deficit)
of our equity investments (other than our Italian joint venture)
except to the extent that such income has been distributed to us)
for such period plus, to the extent deducted in calculating such
consolidated net income for such period, the sum of (1) income tax
expense, (2) depreciation and amortization expense, (3) interest
expense (other than any interest expense of our Italian joint
venture in respect of debt for borrowed money of such joint venture
if such debt exceeds $25,000,000 in
the aggregate), (4) amortization or write-off of debt discount and
debt issuance costs and commissions, discounts and other fees and
charges associated with debt (see line item captioned "Debt-Related
Fees and Charges" in the schedules below), (5) amortization of
intangibles (including goodwill) and organization costs (see line
item captioned "Amortization of Intangibles" in the schedules
below), (6) earn-out payments with respect to certain acquisitions
that we have made or any other "permitted acquisitions" (generally,
acquisitions of companies that are primarily engaged in the same or
related line of business and that become subsidiaries of ours, or
acquisitions of all or substantially all of the assets of another
company or division or business unit of another company), including
any loss or expense with respect to such earn-out payments (see
line item captioned "Earn-Outs for Permitted Acquisitions" in the
schedules below), (7) extraordinary charges or losses determined in
accordance with GAAP, (8) non-cash stock-based compensation
expenses, (9) any cash compensation expense incurred but not paid
in such period so long as no cash payment in respect thereof is
made or required to be made prior to the scheduled maturity of the
borrowings under the credit agreement (provided that up to
$993,000 of non-cash compensation
expense accrued prior to August 25,
2011 may be added back notwithstanding that cash payments
may be required to be made in respect thereof prior to the
scheduled maturity of the borrowings) (see line item captioned
"Deferred Contingent Compensation Expense" in the schedules below),
(10) up to $3,000,000 of expenses,
charges or losses resulting from certain Peru investments (see line item captioned
"Peru Investment Expenses, Charges or Losses" in the schedules
below), (11) the non-cash portion of any non-recurring write-offs
or write-downs as required in accordance with GAAP (see line item
captioned "Non-Recurring Write-Offs under GAAP" in the schedules
below), (12) advisory fees and related expenses paid to advisory
firms in connection with "permitted acquisitions" (see line item
captioned "Acquisition Advisory Fees" in the schedules below), (13)
certain specified "permitted add-backs" (i.e., (A) up to
$15,000,000 (less the amount of
certain permitted pro forma adjustments to "consolidated EBITDA" in
connection with material acquisitions) of charges incurred during
any 12-month period in connection with (i) reductions in workforce,
(ii) contract losses, discontinued operations, shutdown expenses
and cost reduction initiatives, (iii) transaction expenses incurred
in connection with potential acquisitions and divestitures, whether
or not consummated, and (iv) restructuring charges and transaction
expenses incurred in connection with certain transactions with
Playtech Limited or its affiliates, and (B) reasonable and
customary costs incurred in connection with amendments to the
credit agreement) (see line item captioned "Specified Permitted
Add-Backs" in the schedules below) (provided that the foregoing
items (1) through (13) do not include write-offs or write-downs of
accounts receivable or inventory and, except with respect to
"permitted add-backs", any write-off or write-down to the extent it
is in respect of cash payments to be made in a future period), (14)
to the extent treated as an expense in the period paid or incurred,
certain payments, costs and obligations made or incurred by us in
connection with any award of a concession to operate the instant
ticket lottery in Italy, including
any up-front fee required under the applicable tender process (see
line item captioned "Italian Concession Obligations" in the
schedules below), (15) restructuring charges, transaction expenses
and shutdown expenses incurred in connection with the disposition
of all or part of our racing and venue management businesses,
together with any charges incurred in connection with discontinued
operations and cost-reduction initiatives associated with such
disposition, in an aggregate amount (for all periods combined) not
to exceed $7,325,000 (see line item
captioned "Racing Disposition Charges and Expenses" in the
schedules below) and (16) up to 5,250,000
pounds Sterling during any four-quarter period of expenses
or charges incurred in connection with the payment of license
royalties or other fees to Playtech Limited or its affiliates and
for software services provided to Global Draw or Games Media by
Playtech Limited or its affiliates (see line item captioned
"Playtech Royalties and Fees" in the schedules below), minus, to
the extent included in the statement of such consolidated net
income for such period, the sum of (1) interest income, (2)
extraordinary income or gains determined in accordance with GAAP
and (3) income or gains with respect to earn-out payments with
respect to acquisitions referred to above (see line item captioned
"Income on Earn-Outs for Permitted Acquisitions" in the schedules
below), provided that the aggregate amount of "consolidated EBITDA"
that is attributable to the Company's interest in its Italian joint
venture that would not have otherwise been permitted to be included
in "consolidated EBITDA" prior to giving effect to the March 11, 2011 amendment to the credit agreement
will be capped at $25,000,000 in any
period of four consecutive fiscal quarters (or $30,000,000 in the case of any such period ending
on or prior to June 30, 2012).
"Consolidated EBITDA" is also subject to certain adjustments in
connection with material acquisitions and dispositions as provided
in the credit agreement. The foregoing definitions of
"consolidated net income" and "consolidated EBITDA" are qualified
in their entirety by reference to the full text of such definitions
in our credit agreement, which was amended and restated on
August 25, 2011, a copy of which is
attached as Exhibit 10.1 to our Current Report on Form 8-K filed
with the Securities and Exchange Commission on August 31, 2011.
Free cash flow, as included 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 a
supplemental disclosure and is reconciled to net cash provided by
operating activities in a schedule below.
EBITDA from equity investments, as included 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 equity
investees. EBITDA from equity investments is a non-GAAP
financial measure that is presented herein as a supplemental
disclosure and is reconciled to earnings from equity investments in
a schedule below.
The Company's management uses the foregoing non-GAAP financial
measures in conjunction with GAAP financial measures to: monitor
and evaluate the performance of the Company's business operations,
as well as the performance of its equity investments, which have
become a more significant part of the Company's business;
facilitate management's internal comparisons of the Company's
historical operating performance of its business operations;
facilitate management's external comparisons of the results of its
overall business to the historical operating performance of other
companies that may have different capital structures and debt
levels; review and assess the operating performance of the
Company's management team; analyze and evaluate financial and
strategic planning decisions regarding future operating
investments; and plan for and prepare future annual operating
budgets and determine appropriate levels of operating
investments. Accordingly, the Company's management believes
that these non-GAAP financial measures are useful to investors to
provide them with disclosures of the Company's operating results on
the same basis as that used by the Company's management.
In addition, the Company's management believes that attributable
EBITDA is helpful in assessing the overall operating performance of
the Company and its equity investments and highlighting trends in
the Company's and its equity investees' core businesses that may
not otherwise be apparent when relying solely on GAAP financial
measures, because this non-GAAP financial measure eliminates from
the Company's and its equity investees' earnings financial items
that management believes have less bearing on the Company's and its
equity investees' performance, such as income tax expense,
depreciation and amortization expense and interest (income)
expense. Moreover, management believes attributable EBITDA is
useful to investors because a significant and increasing amount of
the Company's business is through its equity investments.
Management further 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 believes that EBITDA from equity investments is helpful
in monitoring the financial performance of the Company's equity
investments and eliminates from the equity investees' earnings
financial items that management believes have less bearing on the
equity investments' performance.
The Company's management also believes attributable EBITDA is
useful to investors because the definition is derived from the
definition of "consolidated EBITDA" in our credit agreement, which
is used to calculate the Company's compliance with the financial
covenants contained in the credit agreement. Moreover,
attributable EBITDA and free cash flow (calculated by subtracting
total capital expenditures (which includes lottery and gaming
systems expenditures and other intangible assets and software
expenditures) from attributable EBITDA) are metrics used in
determining performance-based bonuses (subject to certain
additional adjustments in the discretion of the Compensation
Committee (e.g., to take into account changes in applicable
accounting rules during the year)).
Accordingly, the Company's management believes that the
presentation of the non-GAAP financial measures, when used in
conjunction with GAAP financial measures, provides both management
and investors with financial information that can be useful in
assessing the Company's financial condition and operating
performance.
The non-GAAP financial measures used herein 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 this press release
may differ from similarly titled measures presented by other
companies. The non-GAAP financial measures, as well as other
information in this press release, should be read in conjunction
with the Company's financial statements filed with the Securities
and Exchange Commission.
SCIENTIFIC GAMES
CORPORATION AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(Unaudited, in
thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
Revenue:
|
|
|
|
|
|
|
|
|
Instant
tickets
|
|
$
129,647
|
|
$
124,434
|
|
$
378,998
|
|
$
367,385
|
Services
|
|
80,810
|
|
79,782
|
|
247,753
|
|
252,022
|
Sales
|
|
23,950
|
|
20,421
|
|
62,288
|
|
62,431
|
Total
revenue
|
|
234,407
|
|
224,637
|
|
689,039
|
|
681,838
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Cost of instant
tickets(1)
|
|
70,645
|
|
73,085
|
|
210,349
|
|
211,468
|
Cost of services
(1)
|
|
42,583
|
|
41,024
|
|
135,020
|
|
127,253
|
Cost of
sales(1)
|
|
13,311
|
|
12,784
|
|
39,262
|
|
43,949
|
Selling, general and
administrative
|
|
46,994
|
|
43,767
|
|
143,789
|
|
135,529
|
Employee termination
and restructuring
|
|
-
|
|
1,817
|
|
331
|
|
9,868
|
Depreciation and
amortization
|
|
35,219
|
|
35,655
|
|
111,052
|
|
100,941
|
Operating
income
|
|
25,655
|
|
16,505
|
|
49,236
|
|
52,830
|
Other (expense)
income:
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(25,125)
|
|
(25,990)
|
|
(75,271)
|
|
(75,073)
|
Earnings from equity
investments
|
|
3,381
|
|
5,702
|
|
13,012
|
|
21,462
|
Early extinguishment
of debt
|
|
-
|
|
(15,464)
|
|
-
|
|
(15,464)
|
Other income
(expense), net
|
|
(45)
|
|
656
|
|
(850)
|
|
(30)
|
Total other
expense
|
|
(21,789)
|
|
(35,096)
|
|
(63,109)
|
|
(69,105)
|
Net income (loss)
before income tax expense
|
|
3,866
|
|
(18,591)
|
|
(13,873)
|
|
(16,275)
|
Income tax
expense
|
|
4,232
|
|
5,962
|
|
11,163
|
|
15,322
|
Net loss from
continuing operations
|
|
$
(366)
|
|
$
(24,553)
|
|
$
(25,036)
|
|
$
(31,597)
|
|
|
|
|
|
|
|
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
|
Loss from
discontinued operations
|
|
$
(111)
|
|
$
(3,298)
|
|
$
(2,793)
|
|
$
(8,289)
|
Other (expense)
income
|
|
-
|
|
(119)
|
|
(46)
|
|
(63)
|
Gain on sale of
assets
|
|
-
|
|
-
|
|
828
|
|
-
|
Income tax
benefit
|
|
26
|
|
837
|
|
468
|
|
2,046
|
Net loss from
discontinued operations
|
|
$
(85)
|
|
$
(2,580)
|
|
$
(1,543)
|
|
$
(6,306)
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
(451)
|
|
$
(27,133)
|
|
$
(26,579)
|
|
$
(37,903)
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share:
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
(0.01)
|
|
$
(0.27)
|
|
$
(0.29)
|
|
$
(0.34)
|
Discontinued
operations
|
|
(0.00)
|
|
(0.03)
|
|
(0.02)
|
|
(0.07)
|
Basic net
loss
|
|
$
(0.01)
|
|
$
(0.30)
|
|
$
(0.31)
|
|
$
(0.41)
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share:
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
(0.01)
|
|
$
(0.27)
|
|
$
(0.29)
|
|
$
(0.34)
|
Discontinued
operations
|
|
(0.00)
|
|
(0.03)
|
|
(0.02)
|
|
(0.07)
|
Diluted net
loss
|
|
$
(0.01)
|
|
$
(0.30)
|
|
$
(0.31)
|
|
$
(0.41)
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares:
|
|
|
|
|
|
|
|
|
Basic
shares
|
|
85,128
|
|
89,950
|
|
84,919
|
|
91,723
|
Diluted
shares
|
|
85,128
|
|
89,950
|
|
84,919
|
|
91,723
|
|
|
|
|
|
|
|
|
|
(1) Exclusive of
depreciation and amortization.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCIENTIFIC GAMES
CORPORATION AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEET DATA
|
(Unaudited,
in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
|
2013
|
|
2012
|
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
73,461
|
|
$
109,015
|
Other current
assets
|
|
331,680
|
|
375,603
|
Property and
equipment, net
|
|
375,069
|
|
376,877
|
Equity
investments
|
|
353,683
|
|
316,234
|
Other long-term
assets
|
|
1,022,335
|
|
1,009,179
|
Total
assets
|
|
$
2,156,228
|
|
$
2,186,908
|
|
|
|
|
|
Liabilities and
Stockholders' Equity:
|
|
|
|
|
Current portion of
long-term debt
|
|
$
11,085
|
|
$
16,458
|
Other current
liabilities
|
|
209,489
|
|
239,889
|
Long-term debt,
excluding current portion
|
|
1,448,051
|
|
1,451,708
|
Other long-term
liabilities
|
|
132,964
|
|
114,062
|
Stockholders'
equity
|
|
354,639
|
|
364,791
|
Total
liabilities and stockholders' equity
|
|
$
2,156,228
|
|
$
2,186,908
|
SCIENTIFIC GAMES
CORPORATION AND SUBSIDIARIES
|
CONSOLIDATED
SEGMENT OPERATING DATA
|
(Unaudited, in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, 2013
|
|
|
|
|
|
|
|
|
Unallocated
|
|
|
|
|
Printed
|
|
Lottery
|
|
|
|
Corporate
|
|
|
|
|
Products
|
|
Systems
|
|
Gaming
|
|
Expense
|
|
Totals
|
|
|
|
|
|
|
|
|
|
|
|
Instant
tickets
|
|
$
129,647
|
|
$
-
|
|
$
-
|
|
$
-
|
|
$
129,647
|
Services
|
|
-
|
|
51,167
|
|
29,643
|
|
-
|
|
80,810
|
Sales
|
|
3,041
|
|
17,816
|
|
3,093
|
|
-
|
|
23,950
|
Total revenue
|
|
132,688
|
|
68,983
|
|
32,736
|
|
-
|
|
234,407
|
Cost of instant
tickets(1)
|
|
70,645
|
|
-
|
|
-
|
|
-
|
|
70,645
|
Cost of services
(1)
|
|
-
|
|
28,436
|
|
14,147
|
|
-
|
|
42,583
|
Cost of
sales(1)
|
|
2,168
|
|
9,890
|
|
1,253
|
|
-
|
|
13,311
|
Selling, general and
administrative
|
|
10,717
|
|
6,862
|
|
5,145
|
|
18,485
|
|
41,209
|
Stock-based
compensation
|
|
832
|
|
653
|
|
290
|
|
4,010
|
|
5,785
|
Employee termination
and restructuring
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Depreciation and
amortization
|
|
9,151
|
|
14,887
|
|
10,980
|
|
201
|
|
35,219
|
Operating income
(loss) from continuing operations
|
|
$
39,175
|
|
$
8,255
|
|
$
921
|
|
$
(22,696)
|
|
$
25,655
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, 2012
|
|
|
|
|
|
|
|
|
Unallocated
|
|
|
|
|
Printed
|
|
Lottery
|
|
|
|
Corporate
|
|
|
|
|
Products
|
|
Systems
|
|
Gaming
|
|
Expense
|
|
Totals
|
|
|
|
|
|
|
|
|
|
|
|
Instant
tickets
|
|
$
124,434
|
|
$
-
|
|
$
-
|
|
$
-
|
|
$
124,434
|
Services
|
|
-
|
|
49,391
|
|
30,391
|
|
-
|
|
79,782
|
Sales
|
|
2,932
|
|
12,469
|
|
5,020
|
|
-
|
|
20,421
|
Total revenue
|
|
127,366
|
|
61,860
|
|
35,411
|
|
-
|
|
224,637
|
Cost of instant
tickets (1)
|
|
73,085
|
|
-
|
|
-
|
|
-
|
|
73,085
|
Cost of
services(1)
|
|
-
|
|
27,852
|
|
13,172
|
|
-
|
|
41,024
|
Cost of
sales(1)
|
|
1,844
|
|
6,997
|
|
3,943
|
|
-
|
|
12,784
|
Selling, general and
administrative
|
|
10,567
|
|
5,658
|
|
7,565
|
|
14,085
|
|
37,875
|
Stock-based
compensation
|
|
863
|
|
583
|
|
448
|
|
3,998
|
|
5,892
|
Employee termination
and restructuring
|
|
287
|
|
-
|
|
1,530
|
|
-
|
|
1,817
|
Depreciation and
amortization
|
|
10,426
|
|
11,877
|
|
13,202
|
|
150
|
|
35,655
|
Operating income
(loss) from continuing operations
|
|
$
30,294
|
|
$
8,893
|
|
$
(4,449)
|
|
$
(18,233)
|
|
$
16,505
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Exclusive of
depreciation and amortization.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCIENTIFIC GAMES
CORPORATION AND SUBSIDIARIES
|
CONSOLIDATED
SEGMENT OPERATING DATA
|
(Unaudited, in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2013
|
|
|
|
|
|
|
|
|
Unallocated
|
|
|
|
|
Printed
|
|
Lottery
|
|
|
|
Corporate
|
|
|
|
|
Products
|
|
Systems
|
|
Gaming
|
|
Expense
|
|
Totals
|
|
|
|
|
|
|
|
|
|
|
|
Instant
tickets
|
|
$
378,998
|
|
$
-
|
|
$
-
|
|
$
-
|
|
$
378,998
|
Services
|
|
-
|
|
153,427
|
|
94,326
|
|
-
|
|
247,753
|
Sales
|
|
10,099
|
|
42,619
|
|
9,570
|
|
-
|
|
62,288
|
Total revenue
|
|
389,097
|
|
196,046
|
|
103,896
|
|
-
|
|
689,039
|
Cost of instant
tickets(1)
|
|
210,349
|
|
-
|
|
-
|
|
-
|
|
210,349
|
Cost of services
(1)
|
|
-
|
|
86,441
|
|
48,579
|
|
-
|
|
135,020
|
Cost of
sales(1)
|
|
7,132
|
|
26,450
|
|
5,680
|
|
-
|
|
39,262
|
Selling, general and
administrative
|
|
33,486
|
|
19,987
|
|
16,743
|
|
56,284
|
|
126,500
|
Stock-based
compensation
|
|
2,460
|
|
1,906
|
|
973
|
|
11,950
|
|
17,289
|
Employee termination
and restructuring
|
|
331
|
|
-
|
|
-
|
|
-
|
|
331
|
Depreciation and
amortization
|
|
26,963
|
|
42,756
|
|
40,809
|
|
524
|
|
111,052
|
Operating income
(loss)
|
|
$
108,376
|
|
$
18,506
|
|
$
(8,888)
|
|
$
(68,758)
|
|
$
49,236
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2012
|
|
|
|
|
|
|
|
|
Unallocated
|
|
|
|
|
Printed
|
|
Lottery
|
|
|
|
Corporate
|
|
|
|
|
Products
|
|
Systems
|
|
Gaming
|
|
Expense
|
|
Totals
|
|
|
|
|
|
|
|
|
|
|
|
Instant
tickets
|
|
$
367,385
|
|
$
-
|
|
$
-
|
|
$
-
|
|
$
367,385
|
Services
|
|
-
|
|
153,511
|
|
98,511
|
|
-
|
|
252,022
|
Sales
|
|
8,177
|
|
37,446
|
|
16,808
|
|
-
|
|
62,431
|
Total revenue
|
|
375,562
|
|
190,957
|
|
115,319
|
|
-
|
|
681,838
|
Cost of instant
tickets(1)
|
|
211,468
|
|
-
|
|
-
|
|
-
|
|
211,468
|
Cost of services
(1)
|
|
-
|
|
84,174
|
|
43,079
|
|
-
|
|
127,253
|
Cost of
sales(1)
|
|
5,245
|
|
23,681
|
|
15,023
|
|
-
|
|
43,949
|
Selling, general and
administrative
|
|
31,745
|
|
17,791
|
|
19,160
|
|
49,352
|
|
118,048
|
Stock-based
compensation
|
|
2,544
|
|
1,701
|
|
1,258
|
|
11,978
|
|
17,481
|
Employee termination
and restructuring
|
|
4,794
|
|
-
|
|
5,074
|
|
-
|
|
9,868
|
Depreciation and
amortization
|
|
31,242
|
|
35,953
|
|
33,297
|
|
449
|
|
100,941
|
Operating income
(loss)
|
|
$
88,524
|
|
$
27,657
|
|
$
(1,572)
|
|
$
(61,779)
|
|
$
52,830
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Exclusive of
depreciation and amortization.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCIENTIFIC GAMES
CORPORATION AND SUBSIDIARIES
|
RECONCILIATION OF
NET INCOME TO ATTRIBUTABLE EBITDA
|
RECONCILIATION OF
EARNINGS FROM EQUITY INVESTMENTS TO EBITDA FROM EQUITY
INVESTMENTS
|
(Unaudited,
in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss from
continuing operations
|
|
$
(366)
|
|
$
(24,553)
|
|
$
(25,036)
|
|
$
(31,597)
|
|
|
Add: Income tax
expense
|
|
4,232
|
|
5,962
|
|
11,163
|
|
15,322
|
|
|
Add: Depreciation and
amortization
|
|
35,219
|
|
35,655
|
|
111,052
|
|
100,941
|
|
|
Add: Interest
expense
|
|
25,125
|
|
25,990
|
|
75,271
|
|
75,073
|
|
|
Add: Early
extinguishment of debt
|
|
-
|
|
15,464
|
|
-
|
|
15,464
|
|
|
Add/Less: Other
(income) expense
|
|
45
|
|
(656)
|
|
850
|
|
30
|
|
|
EBITDA from
continuing operations
|
|
$
64,255
|
|
$
57,862
|
|
$
173,300
|
|
$
175,233
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit Agreement
adjustments:
|
|
|
|
|
|
|
|
|
|
|
Add: Debt-Related
Fees and Charges (1)
|
|
$
-
|
|
$
15,509
|
|
$
8
|
|
$
15,564
|
|
|
Add: Amortization of
Intangibles
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Add: Earn-outs for
Permitted Acquisitions
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Add: Extraordinary
Charges or Losses under GAAP
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Add: Non-Cash
Stock-Based Compensation Expenses
|
|
5,785
|
|
5,892
|
|
17,289
|
|
17,481
|
|
|
Add: Deferred
Contingent Compensation Expense
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Add: Non-Recurring
Write-Offs under GAAP
|
|
-
|
|
-
|
|
15
|
|
-
|
|
|
Add: Acquisition
Advisory Fees
|
|
2,460
|
|
485
|
|
8,752
|
|
1,156
|
|
|
Add: Specified
Permitted Add-Backs (2)
|
|
162
|
|
2,326
|
|
3,048
|
|
11,241
|
|
|
Add: Italian
Concession Obligations
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Add: Racing
Disposition Charges and Expenses
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Add: Playtech
Royalties and Fees
|
|
2,228
|
|
1,834
|
|
6,379
|
|
5,364
|
|
|
Less: Interest
Income
|
|
(47)
|
|
(296)
|
|
(192)
|
|
(356)
|
|
|
Less: Extraordinary
Income or Gains under GAAP
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Less: Income on
Earn-Outs for Permitted Acquisitions
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to
conform to Credit Agreement definition:
|
|
|
|
|
|
|
|
|
|
|
Add/Less: Other
(income) expense (3)
|
|
(45)
|
|
656
|
|
(850)
|
|
(30)
|
|
|
Less: Early
extinguishment of debt
|
|
-
|
|
(15,464)
|
|
-
|
|
(15,464)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Earnings from
equity investments
|
|
(3,381)
|
|
(5,702)
|
|
(13,012)
|
|
(21,462)
|
|
|
Add: EBITDA from
equity investments
|
|
20,475
|
|
19,202
|
|
62,319
|
|
63,535
|
|
|
Attributable
EBITDA from continuing operations
|
|
91,892
|
|
82,304
|
|
257,056
|
|
252,262
|
|
|
Attributable
EBITDA from discontinued operations
|
|
(111)
|
|
197
|
|
(824)
|
|
483
|
|
|
Attributable
EBITDA
|
|
$
91,781
|
|
$
82,501
|
|
$
256,232
|
|
$
252,745
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA from equity
investments (4):
|
|
|
|
|
|
|
|
|
|
|
Earnings from equity
investments
|
|
$
3,381
|
|
$
5,702
|
|
$
13,012
|
|
$
21,462
|
|
|
Add: Income tax
expense
|
|
2,597
|
|
2,477
|
|
8,337
|
|
9,250
|
|
|
Add: Depreciation and
amortization
|
|
12,943
|
|
10,192
|
|
38,666
|
|
29,884
|
|
|
Add: Interest
expense, net of other
|
|
1,554
|
|
831
|
|
2,304
|
|
2,939
|
|
|
EBITDA from equity
investments
|
|
$
20,475
|
|
$
19,202
|
|
$
62,319
|
|
$
63,535
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA from
discontinued operations
|
|
|
|
|
|
|
|
|
|
|
Net loss from
discontinued operations
|
|
$
(85)
|
|
$
(2,580)
|
|
$
(1,543)
|
|
$
(6,306)
|
|
|
Less: Income tax
benefit
|
|
(26)
|
|
(837)
|
|
(468)
|
|
(2,046)
|
|
|
Add: Depreciation and
amortization
|
|
-
|
|
3,586
|
|
597
|
|
7,904
|
|
|
Add: Credit agreement
adjustments
|
|
-
|
|
28
|
|
590
|
|
931
|
|
|
EBITDA from
discontinued operations
|
|
$
(111)
|
|
$
197
|
|
$
(824)
|
|
$
483
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts reflect
write-off of unamortized deferred financing costs in connection
with early extinguishment
of debt and other debt-related fees and charges.
|
(2) Amounts include
management transition expenses, transaction expenses and
restructuring expenses.
|
|
|
|
|
|
|
|
(3) Amounts include
foreign exchange transactions, interest income, minority interest
and other items.
|
|
|
|
|
|
|
|
|
(4) 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, Sciplay (through January 23, 2012), Beijing Guard Libang
Technology Co., Ltd. and Northstar Lottery Group,
LLC.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCIENTIFIC GAMES
CORPORATION AND SUBSIDIARIES
|
CALCULATION OF
FREE CASH FLOW
|
(Unaudited,
in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
25,654
|
|
$
24,572
|
|
$
95,693
|
|
$
107,928
|
|
|
|
|
|
|
|
|
|
Less: Capital
expenditures
|
|
(7,886)
|
|
(4,883)
|
|
(22,893)
|
|
(9,194)
|
Less: Lottery and
gaming systems expenditures
|
|
(8,269)
|
|
(11,367)
|
|
(51,334)
|
|
(30,723)
|
Less: Other
intangible assets and software expenditures
|
(15,711)
|
|
(13,408)
|
|
(38,116)
|
|
(40,109)
|
Total Capital Expenditures
|
|
$
(31,866)
|
|
$
(29,658)
|
|
$
(112,343)
|
|
$
(80,026)
|
|
|
|
|
|
|
|
|
|
Free cash
flow
|
|
$
(6,212)
|
|
$
(5,086)
|
|
$
(16,650)
|
|
$
27,902
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the third quarter
ended September 30, 2013, the Company received return of capital
payments from its
equity investments in LNS of $2.0 million
and ITL of $1.1 million. For the third quarter ended
September 30, 2012, the Company received
no return of capital payments from its equity
investments.
|
|
|
|
|
|
|
|
|
|
|
|
|
For the second
quarter ended June 30, 2013, the Company received return of capital
payments from its equity
investments in LNS of $13.9 million and
CLN of $2.2 million. For the second quarter ended June 30, 2012,
the
Company received return of capital
payments from its equity investments in LNS of $15.1 million and
ITL of $0.9 million.
|
|
|
|
|
|
|
|
|
|
|
|
For the first quarter
ended March 31, 2013, the Company received no return of capital
payments from its equity investments. For
the first quarter ended March 31, 2012, the Company received return
of
capital payments from its equity
investment in ITL of $2.2 million.
|
|
|
|
|
|
|
|
|
|
|
|
|
These items were not
included in the Company's Free Cash Flow metric.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCIENTIFIC GAMES
CORPORATION AND SUBSIDIARIES
|
KEY PERFORMANCE
INDICATORS
|
(Unaudited, in
millions, except terminals and ASP)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
|
Italy - Gratta e
Vinci (1):
|
|
|
|
|
|
|
|
|
Retail Sales (Euros)
(1)
|
|
2,253
|
|
2,243
|
|
7,173
|
|
7,296
|
|
|
|
|
|
|
|
|
|
China - China Sports
Lottery (1):
|
|
|
|
|
|
|
|
|
Retail Sales
(RMB)
|
|
3,806
|
|
3,897
|
|
12,440
|
|
13,480
|
Tickets
Sold
|
|
497
|
|
510
|
|
1,621
|
|
1,801
|
ASP (RMB)
|
|
7.66
|
|
7.64
|
|
7.67
|
|
7.48
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of September
30,
|
|
|
|
|
Terminal installed
base at end of period:
|
|
2013
|
|
2012
|
|
|
|
|
Global
Draw
|
|
27,230
|
|
24,752
|
|
|
|
|
Games
Media
|
|
-
|
|
2,514
|
|
|
|
|
Barcrest
|
|
3,065
|
|
4,352
|
|
|
|
|
|
|
|
|
|
(1) Information
provided by third-party lottery operators.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE Scientific Games Corporation