LONDON, Aug. 4, 2020 /PRNewswire/ -- International
Game Technology PLC ("IGT") (NYSE: IGT) today reported financial
results for the second quarter ended June
30, 2020. Today, at 8:00 a.m.
EDT, management will host a conference call and webcast to
present the results; access details are provided below.
"Our second quarter results reflect the intense impact of global
lockdowns caused by the pandemic," said Marco Sala, CEO of IGT. "That said, thanks
to strong North America Lottery performance and our swift adoption
of cost-saving and avoidance measures, we delivered better cash
flow than we expected back in May. Our resilience is a direct
consequence of the diversity of our global portfolio of products
and solutions. The improving trends we are currently seeing are
encouraging, but we remain prudent with our planning. Our new
organizational structure enhances our readiness to adapt to changes
in market conditions."
"Cash generation and liquidity remain our top financial
priority," said Max Chiara, CFO
of IGT. "The proactive efficiency initiatives and focused
capital markets activity we executed in the quarter have us
tracking ahead of plan on all key measures and we expect to deliver
positive free cash flow this fiscal year. We have the resources we
need to navigate the impact COVID-19 is having on our business and
we are making important, strategic decisions to enhance our
operational flexibility. This includes over $200 million in structural and discretionary cost
savings compared to pre-pandemic levels."
Overview of Consolidated Second Quarter 2020 Results
|
Quarter Ended
June 30,
|
Y/Y
Change
|
Constant
Currency
Change
|
|
2020
|
2019
|
(%)
|
(%)
|
(In $ millions,
unless otherwise noted)
|
|
|
|
|
Revenue
|
637
|
1,234
|
-48%
|
-48%
|
Operating
(loss)/income
|
(94)
|
224
|
NM
|
|
Net (loss)/income per
diluted share
|
($1.37)
|
$0.02
|
NM
|
|
Adjusted
EBITDA
|
168
|
454
|
-63%
|
-63%
|
Adjusted net
(loss)/income per diluted share
|
($0.59)
|
$0.44
|
NM
|
|
Net debt
|
7,289
|
7,637
|
-5%
|
|
Note: Adjusted EBITDA and adjusted net (loss)/income per diluted
share are non-GAAP financial measures. Reconciliations of non-GAAP
financial measures to the most directly comparable GAAP financial
measures are provided at the end of this news release.
Second quarter 2020 results reflect the impact of global
COVID-19 restrictions. Revenue was down across all business
segments and all primary revenue streams except for digital
activities, where revenue increased 35%. Progressive easing of
restrictions during the quarter and cost-saving initiatives helped
mitigate impact.
Financial highlights:
Consolidated revenue of $637 million, down 48% from
the prior year
- Global gaming revenue declined 72%, driven by the closure of
casinos and gaming halls, fewer unit shipments, and lower systems
and software sales compared to the prior year
- Global lottery revenue down 26% on reduced traffic to points of
sale and temporary game shutdowns in Italy
- Gaming and lottery trends improved each month as venues
re-opened and restrictions eased
Operating loss of $94 million, down from income of
$224 million in the prior year
- Lower profit contribution from reduced business volumes
- Includes $43 million in
restructuring expense
- Oklahoma strategic transaction and
high-margin poker and systems sales embedded in the prior year
- Accelerating benefit from actions taken to reduce costs
Net interest expense of $96
million compared to $104
million in the prior year
- Capital market transactions drive lower cost of debt
Benefit from income taxes of $11 million, compared to a
provision of $63 million, driven by lower pre-tax income
Net loss attributable to IGT was $280 million; adjusted net
loss attributable to IGT of $121 million versus adjusted net
income of $91 million in the prior year
- Reflects operating loss and higher foreign exchange and debt
extinguishment losses in the current year
Net loss per diluted share of $1.37; adjusted net loss per diluted share of
$0.59 compared to adjusted net
income of $0.44 in the prior
year
Adjusted EBITDA of $168 million compared to $454 million in the prior-year period
Net debt of $7.29 billion
improved $93 million from
$7.38 billion at December 31, 2019; Net debt to LTM adjusted
EBITDA of 5.52x, up from 4.31x at December 31, 2019, primarily due to lower EBITDA
in the first half of 2020
Cash and Liquidity Update
- Preserving cash and liquidity is the top financial
priority
- At June 30, 2020, liquidity
totalled $2.3 billion, comprised of
$1.3 billion in unrestricted cash and
$1.0 billion available under
revolving credit facilities
Other Developments
- In an effort to accelerate the Company's response to market
conditions, over $200 million has
been identified in structural cost savings compared to pre-pandemic
levels. These savings are mostly expected in 2021 and to come
from:
-
- Eliminating duplicative functions and streamlining back-office
activities
- Optimizing the global investment in technology to focus on
value-accretive know-how
- Rationalizing R&D based on disciplined risk/return
priorities
- Optimizing our supply chain for maximum cost
efficiency
- Issuance of $750 million 5.25%
Notes due 2029, as previously announced
-
- $500 million of net proceeds used
to fund a partial tender of 6.25% Notes due 2022
- Lowest USD-denominated coupon ever issued by the Company
- Longest duration issuance since 2015
Conference Call and Webcast
August 4, 2020, at 8:00 a.m. EDT
Live webcast available under "News, Events & Presentations"
on IGT's Investor Relations website at www.IGT.com; replay
available on the website following the live event
Dial-In Numbers
- US/Canada toll-free dial-in
number: +1 844 842 7999
- Outside the US/Canada
toll-free number: +1 612 979 9887
- Conference ID/confirmation code: 4889985
- A telephone replay of the call will be available for one
week
-
- US/Canada replay number: +1
855 859 2056
- Outside the US/Canada replay
number: +1 404 537 3406
- ID/Confirmation code: 4889985
Comparability of Results
All figures presented in this news release are prepared under
U.S. GAAP, unless noted otherwise. Adjusted figures exclude the
impact of items such as purchase accounting, impairment charges,
restructuring expense, foreign exchange, and certain one-time,
primarily transaction-related items. Reconciliations to the most
directly comparable U.S. GAAP measures are included in the tables
in this news release. Constant currency changes for 2020 are
calculated using the same foreign exchange rates as the
corresponding 2019 period. Management uses non-GAAP financial
measures to understand and compare operating results across
accounting periods, for internal budgeting and forecasting
purposes, and to evaluate the Company's financial performance.
Management believes these non-GAAP financial measures reflect the
Company's ongoing business in a manner that allows for meaningful
period-to-period comparisons and analysis of business trends. These
constant currency changes and non-GAAP financial measures should
however be viewed in addition to, and not as an alternative for,
the Company's reported results prepared in accordance with U.S.
GAAP.
About IGT
IGT (NYSE:IGT) is the global leader in
gaming. We deliver entertaining and responsible gaming experiences
for players across all channels and regulated segments, from Gaming
Machines and Lotteries to Sports Betting and Digital. Leveraging a
wealth of compelling content, substantial investment in innovation,
player insights, operational expertise, and leading-edge
technology, our solutions deliver unrivalled gaming experiences
that engage players and drive growth. We have a well-established
local presence and relationships with governments and regulators in
more than 100 countries around the world, and create value by
adhering to the highest standards of service, integrity, and
responsibility. IGT has approximately 12,000 employees. For more
information, please visit www.IGT.com.
Cautionary Statement Regarding Forward-Looking
Statements
This news release may contain forward-looking
statements (including within the meaning of the Private Securities
Litigation Reform Act of 1995) concerning International Game
Technology PLC and its consolidated subsidiaries (the "Company")
and other matters. These statements may discuss goals, intentions,
and expectations as to future plans, trends, events, dividends,
results of operations, or financial condition, or otherwise, based
on current beliefs of the management of the Company as well as
assumptions made by, and information currently available to, such
management. Forward-looking statements may be accompanied by words
such as "aim," "anticipate," "believe," "plan," "could," "would,"
"should," "shall", "continue," "estimate," "expect," "forecast,"
"future," "guidance," "intend," "may," "will," "possible,"
"potential," "predict," "project" or the negative or other
variations of them. These forward-looking statements speak only as
of the date on which such statements are made and are subject to
various risks and uncertainties, many of which are outside the
Company's control. Should one or more of these risks or
uncertainties materialize, or should any of the underlying
assumptions prove incorrect, actual results may differ materially
from those predicted in the forward-looking statements and from
past results, performance, or achievements. Therefore, you should
not place undue reliance on such statements. Factors that could
cause actual results to differ materially from those in the
forward-looking statements include (but are not limited to) the
uncertainty of the duration, extent, and effects of the COVID-19
pandemic and the response of governments, including
government-mandated property closures and travel restrictions, and
other third parties on the Company's business, results of
operations, cash flows, liquidity and development prospects and the
factors and risks described in the Company's annual report on Form
20-F for the financial year ended December
31, 2019 and other documents filed from time to time with
the SEC, which are available on the SEC's website at www.sec.gov
and on the investor relations section of the Company's website at
www.IGT.com. Except as required under applicable law, the Company
does not assume any obligation to update these forward-looking
statements. You should carefully consider these factors and other
risks and uncertainties that affect the Company's business. Nothing
in this news release is intended, or is to be construed, as a
profit forecast or to be interpreted to mean that the financial
performance of International Game Technology PLC for the current or
any future financial years will necessarily match or exceed the
historical published financial performance or International Game
Technology PLC, as applicable. All forward-looking statements
contained in this news release are qualified in their entirety by
this cautionary statement. All subsequent written or oral
forward-looking statements attributable to International Game
Technology PLC, or persons acting on its behalf, are expressly
qualified in their entirety by this cautionary statement.
Contact:
Phil
O'Shaughnessy, Global Communications, toll free in
U.S./Canada +1 (844) IGT-7452;
outside U.S./Canada +1 (401)
392-7452
Francesco Luti, +39 3485475493; for
Italian media inquiries
James Hurley, Investor Relations, +1
(401) 392-7190
Second Quarter Operating Segment Review
North America Gaming & Interactive
Select Financial
Data
|
|
|
As
|
Constant
|
|
Key Performance
Indicators
|
|
|
%
|
3 Month Period
Ended June 30th
|
Q2
'20
|
Q2
'19
|
Reported
|
FX
|
|
3 Month Period
Ended June 30th
|
Q2
'20
|
Q2
'19
|
Change
|
Gaming
|
|
Total
revenue
|
92
|
268
|
-66%
|
-66%
|
|
Installed base
units (end of period)
|
|
|
|
|
Gaming
services
|
47
|
165
|
-72%
|
-72%
|
|
Casino
|
18,410
|
21,073
|
-12.6%
|
|
|
Terminal
|
22
|
106
|
-79%
|
-79%
|
|
Casino - L/T lease (1)
|
930
|
-
|
|
|
|
Other
|
25
|
59
|
-58%
|
-58%
|
|
Total
Installed base units
|
19,340
|
21,073
|
-8.2%
|
|
Product
sales
|
45
|
104
|
-56%
|
-56%
|
|
(1) Yield
calculations should exclude these units due to
|
|
|
|
Terminal
|
40
|
73
|
-45%
|
-45%
|
|
accounting
treatment as sales-type leases
|
|
|
|
Other
|
5
|
30
|
-84%
|
-84%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Machine units
shipped
|
|
|
|
Other
|
|
Total
revenue
|
4
|
6
|
-30%
|
-30%
|
|
New/expansion
|
1,382
|
438
|
215.5%
|
|
Service
revenue
|
4
|
6
|
-35%
|
-35%
|
|
Replacement
|
1,344
|
4,223
|
-68.2%
|
|
Product
revenue
|
0
|
0
|
0%
|
0%
|
|
Total
machines shipped
|
2,726
|
4,661
|
-41.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
Revenue
|
96
|
274
|
-65%
|
-65%
|
|
|
|
|
|
|
Operating
(Loss)/Income
|
(20)
|
85
|
NM
|
NM
|
|
|
|
|
|
Revenue of $96 million, down from $274 million in the
prior-year period
- Gaming service revenue of $47
million
-
- Casino closures impact terminal revenue
- Drop in other revenue reflects multi-year poker license in the
prior year
- Gaming product sales revenue of $45
million
-
- New/expansion shipments driven by 977 historical horse racing
units
- Shipped 1,344 replacement units
- Systems revenue down from high level in the prior year
Operating loss of $20 million compared to operating income
of $85 million in the prior year
- Impact of casino closures
- Oklahoma strategic transaction and
high-margin poker and systems sales in the prior year
- Partly offset by benefit from cost-saving initiatives
North America Lottery
Select Financial
Data
|
|
|
As
|
Constant
|
|
Key Performance
Indicators
|
|
|
%
|
3 Month Period
Ended June 30th
|
Q2
'20
|
Q2
'19
|
Reported
|
FX
|
|
3 Month Period
Ended June 30th
|
Q2
'20
|
Q2
'19
|
Change
|
Gaming
|
|
Total
revenue
|
20
|
37
|
-47%
|
-46%
|
|
Installed base
units (end of period)
|
|
|
|
|
Gaming
services
|
19
|
37
|
-48%
|
-47%
|
|
VLT - Government sponsored
|
13,559
|
14,215
|
-4.6%
|
|
|
Terminal
|
1
|
25
|
-94%
|
-94%
|
|
|
|
|
|
|
|
Other
|
18
|
12
|
45%
|
48%
|
|
Lottery same-store
revenue growth
|
|
|
|
|
Product
sales
|
1
|
1
|
17%
|
17%
|
|
Instant
ticket & draw games
|
|
|
10.5%
|
|
|
|
|
|
|
|
|
|
Multistate jackpots
|
|
|
-28.0%
|
Lottery
|
|
Total
revenue
|
254
|
270
|
-6%
|
-6%
|
|
Total
lottery same-store revenue growth
|
|
6.2%
|
|
Lottery
services
|
234
|
238
|
-2%
|
-2%
|
|
|
|
|
|
|
|
FMC
|
214
|
202
|
6%
|
6%
|
|
|
|
|
|
|
|
Instant ticket
& draw games
|
184
|
168
|
9%
|
9%
|
|
|
|
|
|
|
|
Other
services
|
29
|
34
|
-13%
|
-13%
|
|
|
|
|
|
|
|
LMA
|
20
|
36
|
-43%
|
-43%
|
|
|
|
|
|
|
Product
sales
|
19
|
32
|
-40%
|
-40%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
Total
revenue
|
0
|
1
|
-87%
|
-87%
|
|
|
|
|
|
|
Service
revenue
|
0
|
1
|
-87%
|
-87%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
Revenue
|
273
|
309
|
-12%
|
-11%
|
|
|
|
|
|
|
Operating
income
|
75
|
78
|
-4%
|
-3%
|
|
|
|
|
|
Revenue of $273 million, down from $309 million in the prior-year period
- Lottery service revenue of $234
million, down 2%
-
- Strong double-digit same-store revenue growth for instant
ticket & draw games nearly offsets impact of mobility
restrictions and lower jackpot activity
- LMA revenue reflects reduced play levels in NJ and lower
pass-through revenue
- Gaming service revenue impacted by closure of VLT venues,
partly offset by growth in Canada
iGaming
- Product sales revenue reflects lower systems revenue
Operating income of $75 million compared to
$78 million in the prior year
- Same-store revenue growth and cost-saving initiatives mostly
offset lower gaming and LMA contributions
International
Select Financial
Data
|
|
|
As
|
Constant
|
|
Key Performance
Indicators
|
|
|
%
|
3 Month Period
Ended June 30th
|
Q2
'20
|
Q2
'19
|
Reported
|
FX
|
|
3 Month Period
Ended June 30th
|
Q2
'20
|
Q2
'19
|
Change
|
Gaming
|
|
Total
revenue
|
21
|
142
|
-85%
|
-85%
|
|
Installed base
units (end of period)
|
|
|
|
|
Gaming
services
|
12
|
28
|
-57%
|
-56%
|
|
Casino
|
9,724
|
10,039
|
-3.1%
|
|
|
Terminal
|
1
|
12
|
-95%
|
-94%
|
|
VLT - Government sponsored
|
5,110
|
4,436
|
15.2%
|
|
|
Other
|
11
|
16
|
-28%
|
-25%
|
|
Total
installed base units
|
14,834
|
14,475
|
2.5%
|
|
Product
sales
|
9
|
114
|
-92%
|
-92%
|
|
|
|
|
|
|
|
Terminal
|
4
|
82
|
-95%
|
-95%
|
|
Machine units
shipped
|
|
|
|
|
|
Other
|
6
|
33
|
-83%
|
-83%
|
|
New/expansion
|
61
|
700
|
-91.3%
|
|
|
|
|
|
|
|
|
|
Replacement
|
208
|
5,863
|
-96.5%
|
Lottery
|
|
Total
revenue
|
55
|
70
|
-22%
|
-19%
|
|
Total
machines shipped
|
269
|
6,563
|
-95.9%
|
|
Lottery
services
|
52
|
67
|
-22%
|
-19%
|
|
|
|
|
|
|
|
FMC
|
52
|
67
|
-22%
|
-19%
|
|
Lottery same-store
revenue growth
|
|
|
|
|
|
Instant ticket
& draw games
|
34
|
53
|
-35%
|
-33%
|
|
Instant
ticket & draw games
|
|
|
-28.2%
|
|
|
Other
services
|
18
|
14
|
27%
|
34%
|
|
Multistate jackpots
|
|
|
-7.8%
|
|
Product
sales
|
2
|
3
|
-22%
|
-21%
|
|
Total
lottery same-store revenue growth
|
|
-27.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
Total
revenue
|
7
|
17
|
-55%
|
-48%
|
|
|
|
|
|
|
Service
revenue
|
7
|
16
|
-55%
|
-48%
|
|
|
|
|
|
|
Product
sales
|
0
|
0
|
-65%
|
-64%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
Revenue
|
84
|
229
|
-64%
|
-62%
|
|
|
|
|
|
|
Operating
(Loss)/Income
|
(20)
|
30
|
NM
|
NM
|
|
|
|
|
|
Revenue of $84 million, down from $229 million in the
prior-year period
- Lottery service revenue of $52
million
-
- Same-store revenue growth impacted by mobility restrictions and
shutdown of games in certain markets; trends progressively
improving as restrictions ease
- Gaming product sales of $9
million
-
- Fewer unit shipments, primarily in Latin America, impact terminal revenue; VLT
shipments to Sweden in prior
year
- Other product sales reflect Italy AWP upgrades in the prior
year
- Gaming service revenue lower on casino closures; installed base
stable
Operating loss of $20 million
compared to operating income of $30
million in the prior year
- Impact of lower unit volume and revenue mix
- Partly offset by benefit from cost-saving initiatives
Italy
Select Financial
Data
|
|
|
As
|
Constant
|
|
Key Performance
Indicators
|
|
|
%
|
3 Month Period
Ended June 30th
|
Q2
'20
|
Q2
'19
|
Reported
|
FX
|
|
3 Month Period
Ended June 30th
|
Q2
'20
|
Q2
'19
|
Change
|
Gaming
|
|
Total
revenue
|
33
|
153
|
-78%
|
-78%
|
|
(In € millions,
except machines)
|
|
|
|
|
Gaming
services
|
33
|
153
|
-78%
|
-78%
|
|
Lottery
|
|
|
|
|
|
Terminal
|
12
|
136
|
-91%
|
-91%
|
|
Lotto
wagers
|
914
|
2,064
|
-55.7%
|
|
|
Other
|
21
|
17
|
25%
|
27%
|
|
10eLotto
|
610
|
1,507
|
-59.5%
|
|
Product
sales
|
0
|
0
|
-98%
|
-98%
|
|
Core
|
256
|
479
|
-46.5%
|
|
|
|
|
|
|
|
|
|
Late
numbers
|
21
|
31
|
-32.4%
|
Lottery
|
|
Total
revenue
|
86
|
190
|
-55%
|
-55%
|
|
MillionDAY
|
26
|
47
|
-43.6%
|
|
Lottery
services
|
86
|
190
|
-55%
|
-55%
|
|
|
|
|
|
|
|
FMC
|
86
|
190
|
-55%
|
-55%
|
|
Scratch & Win
wagers
|
1,649
|
2,257
|
-27.0%
|
|
|
Instant ticket
& draw games
|
133
|
238
|
-44%
|
-44%
|
|
|
|
|
|
|
|
Other
services
|
(47)
|
(48)
|
-1%
|
0%
|
|
Italy lottery
revenue growth
|
|
|
-54.8%
|
|
Product
sales
|
0
|
0
|
0%
|
0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gaming
|
|
|
|
Other
|
|
Total
revenue
|
66
|
79
|
-17%
|
-15%
|
|
Installed base
(end of period)
|
|
|
|
|
Service
revenue
|
66
|
79
|
-17%
|
-15%
|
|
VLT -
Operator (B2C)
|
10,844
|
10,929
|
-0.8%
|
|
Product
sales
|
0
|
0
|
0%
|
0%
|
|
VLT -
Supplier (B2B)
|
7,253
|
7,524
|
-3.6%
|
|
|
|
|
|
|
|
|
|
AWP
|
37,138
|
40,268
|
-7.8%
|
Total
|
|
Revenue
|
184
|
422
|
-56%
|
-56%
|
|
Total
installed base
|
55,235
|
58,721
|
-5.9%
|
|
Operating
(Loss)/Income
|
(7)
|
133
|
NM
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wagers
|
|
|
|
|
|
|
|
|
|
|
|
|
VLT -
Operator (B2C)
|
150
|
1,427
|
-89.5%
|
|
|
|
|
|
|
|
|
|
AWP
|
83
|
916
|
-90.9%
|
|
|
|
|
|
|
|
|
|
Interactive wagers (gaming)
|
729
|
508
|
43.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
Sports
betting wagers (1)
|
79
|
252
|
-68.5%
|
|
|
|
|
|
|
|
|
|
Sports
betting payout (%) (1)
|
88.1%
|
82.2%
|
5.9
pp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes
virtual wagers and pools & horses
|
|
|
Revenue of $184 million, down from $422 million in the
prior-year period
- Lottery service revenue reflects timing of game reopening and
points of sale restrictions; trends improve each month in the
quarter
- Gaming service revenue reflects closure of gaming halls
- Interactive wagers rise 44%
- Commercial services revenue higher, more than offset by lower
sports betting activity
Operating loss of $7 million
compared to operating income of $133
million in the prior year
- Impact of COVID-19 restrictions
- Partly offset by benefit from cost-saving initiatives
International Game
Technology PLC
|
Consolidated
Statements of Operations
|
($ and shares
in thousands, except per share amounts)
|
Unaudited
|
|
|
|
|
|
For the three
months ended
|
|
June
30,
|
|
2020
|
|
2019
|
|
|
|
|
Service
revenue
|
560,338
|
|
980,031
|
Product
sales
|
77,146
|
|
254,222
|
Total
revenue
|
637,484
|
|
1,234,253
|
|
|
|
|
Cost of
services
|
416,660
|
|
594,598
|
Cost of product
sales
|
67,207
|
|
160,786
|
Selling, general and
administrative
|
171,950
|
|
213,263
|
Research and
development
|
31,335
|
|
65,383
|
Restructuring
expense
|
43,429
|
|
2,412
|
Other operating
expense (income), net
|
1,009
|
|
(25,904)
|
Total operating
expenses
|
731,590
|
|
1,010,538
|
|
|
|
|
Operating (loss)
income
|
(94,106)
|
|
223,715
|
|
|
|
|
Interest expense,
net
|
(95,599)
|
|
(103,860)
|
Foreign exchange
loss, net
|
(74,384)
|
|
(41,061)
|
Other (expense)
income, net
|
(29,374)
|
|
23,493
|
Total
non-operating expenses
|
(199,357)
|
|
(121,428)
|
|
|
|
|
(Loss) income
before (benefit from) provision for income taxes
|
(293,463)
|
|
102,287
|
|
|
|
|
(Benefit from)
provision for income taxes
|
(11,321)
|
|
63,300
|
|
|
|
|
Net (loss)
income
|
(282,142)
|
|
38,987
|
|
|
|
|
Less: Net (loss)
income attributable to non-controlling interests
|
(2,526)
|
|
34,131
|
|
|
|
|
Net (loss) income
attributable to IGT PLC
|
(279,616)
|
|
4,856
|
|
|
|
|
|
|
|
|
Net (loss) income
attributable to IGT PLC per common share - basic
|
(1.37)
|
|
0.02
|
Net (loss) income
attributable to IGT PLC per common share - diluted
|
(1.37)
|
|
0.02
|
|
|
|
|
Weighted-average
shares - basic
|
204,748
|
|
204,407
|
Weighted-average
shares - diluted
|
204,748
|
|
204,412
|
International Game
Technology PLC
|
Consolidated
Statements of Operations
|
($ and shares
in thousands, except per share amounts)
|
Unaudited
|
|
|
|
|
|
For the six
months ended
|
|
June
30,
|
|
2020
|
|
2019
|
|
|
|
|
Service
revenue
|
1,343,639
|
|
1,971,062
|
Product
sales
|
234,040
|
|
408,107
|
Total
revenue
|
1,577,679
|
|
2,379,169
|
|
|
|
|
Cost of
services
|
938,487
|
|
1,189,925
|
Cost of product
sales
|
158,306
|
|
260,971
|
Selling, general and
administrative
|
335,543
|
|
415,100
|
Research and
development
|
92,072
|
|
131,501
|
Restructuring
expense
|
47,053
|
|
5,701
|
Goodwill impairment
(1)
|
296,000
|
|
-
|
Other operating
expense (income), net
|
1,603
|
|
(25,896)
|
Total operating
expenses
|
1,869,064
|
|
1,977,302
|
|
|
|
|
Operating (loss)
income
|
(291,385)
|
|
401,867
|
|
|
|
|
Interest expense,
net
|
(196,261)
|
|
(206,929)
|
Foreign exchange
(loss) gain, net
|
(4,024)
|
|
17,541
|
Other (expense)
income, net
|
(32,760)
|
|
22,995
|
Total
non-operating expenses
|
(233,045)
|
|
(166,393)
|
|
|
|
|
(Loss) income
before (benefit from) provision for income taxes
|
(524,430)
|
|
235,474
|
|
|
|
|
(Benefit from)
provision for income taxes
|
(8,189)
|
|
115,992
|
|
|
|
|
Net (loss)
income
|
(516,241)
|
|
119,482
|
|
|
|
|
Less: Net income
attributable to non-controlling interests
|
11,663
|
|
74,372
|
|
|
|
|
Net (loss) income
attributable to IGT PLC
|
(527,904)
|
|
45,110
|
|
|
|
|
|
|
|
|
Net (loss) income
attributable to IGT PLC per common share - basic
|
(2.58)
|
|
0.22
|
Net (loss) income
attributable to IGT PLC per common share - diluted
|
(2.58)
|
|
0.22
|
|
|
|
|
Weighted-average
shares - basic
|
204,591
|
|
204,309
|
Weighted-average
shares - diluted
|
204,591
|
|
204,532
|
|
|
|
|
|
|
|
|
(1)
Reduces the carrying value of the International and North America
Gaming & Interactive segments by $193 million and $103 million,
respectively
|
International Game
Technology PLC
|
Consolidated
Balance Sheets
|
($
thousands)
|
Unaudited
|
|
|
|
|
|
June 30,
|
|
December
31,
|
|
2020
|
|
2019
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
1,346,741
|
|
662,934
|
Restricted cash and
cash equivalents
|
183,021
|
|
231,317
|
Trade and other
receivables, net
|
860,351
|
|
1,006,127
|
Inventories
|
173,022
|
|
161,790
|
Other current
assets
|
574,549
|
|
571,869
|
Total current
assets
|
3,137,684
|
|
2,634,037
|
Systems, equipment
and other assets related to contracts, net
|
1,214,903
|
|
1,307,940
|
Property, plant and
equipment, net
|
139,634
|
|
146,055
|
Operating lease
right-of-use-assets
|
336,561
|
|
341,538
|
Goodwill
|
5,150,931
|
|
5,451,494
|
Intangible assets,
net
|
1,722,325
|
|
1,836,002
|
Other non-current
assets
|
1,791,246
|
|
1,927,524
|
Total non-current
assets
|
10,355,600
|
|
11,010,553
|
Total
assets
|
13,493,284
|
|
13,644,590
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
1,103,975
|
|
1,120,922
|
Current portion of
long-term debt
|
358,336
|
|
462,155
|
Short-term
borrowings
|
79,291
|
|
3,193
|
Other current
liabilities
|
939,440
|
|
882,081
|
Total current
liabilities
|
2,481,042
|
|
2,468,351
|
Long-term debt, less
current portion
|
8,198,124
|
|
7,600,169
|
Deferred income
taxes
|
331,919
|
|
366,822
|
Operating lease
liabilities
|
309,556
|
|
310,721
|
Other non-current
liabilities
|
378,515
|
|
413,549
|
Total non-current
liabilities
|
9,218,114
|
|
8,691,261
|
Total
liabilities
|
11,699,156
|
|
11,159,612
|
Commitments and
contingencies
|
|
|
|
Shareholders'
equity
|
1,794,128
|
|
2,484,978
|
Total liabilities
and shareholders' equity
|
13,493,284
|
|
13,644,590
|
International Game
Technology PLC
|
Consolidated
Statements of Cash Flows
|
($
thousands)
|
Unaudited
|
|
|
|
|
|
For the six
months ended
|
|
|
June 30,
|
|
|
2020
|
|
2019
|
Cash flows from
operating activities
|
|
|
|
|
Net (loss)
income
|
|
(516,241)
|
|
119,482
|
Adjustments to
reconcile net (loss) income to net cash provided by operating
activities:
|
|
|
|
|
Goodwill
impairment
|
|
296,000
|
|
-
|
Depreciation
|
|
198,248
|
|
209,271
|
Amortization
|
|
135,957
|
|
137,201
|
Amortization of
upfront license fees
|
|
101,347
|
|
103,935
|
Loss on
extinguishment of debt
|
|
28,277
|
|
9,628
|
Debt issuance cost
amortization
|
|
10,297
|
|
11,523
|
Foreign exchange loss
(gain), net
|
|
4,024
|
|
(17,541)
|
Loss (gain) on sale
of assets
|
|
66
|
|
(63,239)
|
Stock-based
compensation
|
|
(11,806)
|
|
12,502
|
Deferred income
taxes
|
|
(36,705)
|
|
6,515
|
Other non-cash items,
net
|
|
2,504
|
|
31,392
|
Changes in operating
assets and liabilities, excluding the effects of
acquisitions:
|
|
|
|
|
Trade and other
receivables
|
|
139,578
|
|
49,059
|
Inventories
|
|
(5,978)
|
|
802
|
Accounts
payable
|
|
(5,662)
|
|
(57,317)
|
Other assets and
liabilities
|
|
(14,807)
|
|
38,508
|
Net cash provided
by operating activities
|
|
325,099
|
|
591,721
|
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
|
Capital
expenditures
|
|
(160,179)
|
|
(231,003)
|
Proceeds from sale of
assets
|
|
5,185
|
|
65,429
|
Other
|
|
10,897
|
|
2,545
|
Net cash used in
investing activities
|
|
(144,097)
|
|
(163,029)
|
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
|
Proceeds from
long-term debt
|
|
1,475,071
|
|
846,975
|
Net proceeds from
short-term borrowings
|
|
74,927
|
|
19,573
|
Net receipts from
(payments of) financial liabilities
|
|
36,468
|
|
(11,395)
|
Debt issuance costs
paid
|
|
(19,616)
|
|
(5,934)
|
Payments in
connection with extinguishment of debt
|
|
(25,000)
|
|
(8,598)
|
Dividends
paid
|
|
(40,887)
|
|
(81,729)
|
Principal payments on
long-term debt
|
|
(959,275)
|
|
(833,129)
|
Capital increase -
non-controlling interests
|
|
2,030
|
|
1,075
|
Return of capital -
non-controlling interests
|
|
-
|
|
(70,399)
|
Dividends paid -
non-controlling interests
|
|
(91,376)
|
|
(129,394)
|
Other
|
|
(6,058)
|
|
(6,733)
|
Net cash provided
by (used in) financing activities
|
|
446,284
|
|
(279,688)
|
|
|
|
|
|
Net increase in cash
and cash equivalents and restricted cash and cash
equivalents
|
|
627,286
|
|
149,004
|
Effect of exchange
rate changes on cash and cash equivalents and restricted cash and
cash equivalents
|
|
8,225
|
|
(3,748)
|
Cash and cash
equivalents and restricted cash and cash equivalents at the
beginning of the period
|
|
894,251
|
|
511,777
|
Cash and cash
equivalents and restricted cash and cash equivalents at the end of
the period
|
|
1,529,762
|
|
657,033
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Cash Flow Information:
|
|
|
|
|
Interest
paid
|
|
(230,864)
|
|
(211,591)
|
Income taxes
paid
|
|
(17,795)
|
|
(49,777)
|
International Game
Technology PLC
|
Net
Debt
|
($
thousands)
|
Unaudited
|
|
|
|
|
|
|
|
June 30,
|
|
December
31,
|
|
|
2020
|
|
2019
|
|
|
|
|
|
6.250% Senior Secured
Notes due February 2022 (1)
|
|
1,005,593
|
|
1,491,328
|
4.750% Senior Secured
Notes due February 2023 (2)
|
|
946,301
|
|
948,382
|
5.350% Senior Secured
Notes due October 2023(1)
|
|
60,836
|
|
60,885
|
3.500% Senior Secured
Notes due July 2024 (2)
|
|
555,981
|
|
557,331
|
6.500% Senior Secured
Notes due February 2025 (1)
|
|
1,090,786
|
|
1,089,959
|
3.500% Senior Secured
Notes due June 2026 (2)
|
|
832,943
|
|
835,105
|
6.250% Senior Secured
Notes due January 2027(1)
|
|
743,765
|
|
743,387
|
2.375% Senior Secured
Notes due April 2028 (2)
|
|
554,908
|
|
556,403
|
5.250% Senior Secured
Notes due January 2029 (1)
|
|
742,827
|
|
-
|
Senior Secured
Notes, long-term
|
|
6,533,940
|
|
6,282,780
|
|
|
|
|
|
Term Loan Facilities
due January 2023 (2)
|
|
950,265
|
|
1,317,389
|
Revolving Credit
Facilities due July 2024 (1) (2)
|
|
713,919
|
|
-
|
Long-term debt,
less current portion
|
|
8,198,124
|
|
7,600,169
|
|
|
|
|
|
4.750% Senior Secured
Notes due March 2020 (2)
|
|
-
|
|
434,789
|
5.500% Senior Secured
Notes due June 2020 (1)
|
|
-
|
|
27,366
|
Term Loan Facilities
due January 2023 (2)
|
|
358,336
|
|
-
|
Current portion of
long-term debt
|
|
358,336
|
|
462,155
|
|
|
|
|
|
Short-term
borrowings
|
|
79,291
|
|
3,193
|
Total
debt
|
|
8,635,751
|
|
8,065,517
|
|
|
|
|
|
Less: Cash and cash
equivalents
|
|
1,346,741
|
|
662,934
|
Less: Debt issuance
costs, net - Revolving Credit Facilities due July 2024
|
|
-
|
|
20,464
|
|
|
|
|
|
Net
debt
|
|
7,289,010
|
|
7,382,119
|
|
|
|
|
|
(1) U.S.
dollar-denominated debt
|
|
|
|
|
(2)
Euro-denominated debt
|
|
|
|
|
Note: Net debt is a
non-GAAP financial measure
|
|
|
|
|
International Game
Technology PLC
|
Reconciliations of
Non-GAAP Financial Measures
|
($ and shares in
thousands, except per share amounts)
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months
ended
|
|
|
June 30,
|
|
|
2020
|
|
2019
|
|
|
|
|
|
Net (loss)
income
|
|
(282,142)
|
|
38,987
|
(Benefit from)
provision for income taxes
|
|
(11,321)
|
|
63,300
|
Interest expense,
net
|
|
95,599
|
|
103,860
|
Foreign exchange
loss, net
|
|
74,384
|
|
41,061
|
Other non-operating
expense (income), net
|
|
29,374
|
|
(23,493)
|
Operating (loss)
income
|
|
(94,106)
|
|
223,715
|
Depreciation
|
|
100,228
|
|
103,940
|
Amortization -
purchase accounting
|
|
42,080
|
|
47,514
|
Amortization -
non-purchase accounting (1)
|
|
74,602
|
|
73,249
|
Restructuring
expense
|
|
43,429
|
|
2,412
|
Stock-based
compensation
|
|
1,162
|
|
2,912
|
Other
(2)
|
|
1,011
|
|
(33)
|
Adjusted
EBITDA
|
|
168,406
|
|
453,709
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities
|
|
167,831
|
|
445,107
|
Capital
expenditures
|
|
(60,481)
|
|
(111,818)
|
Free Cash
Flow
|
|
107,350
|
|
333,289
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
attributable to IGT PLC
|
|
(279,616)
|
|
4,856
|
Foreign exchange
loss, net
|
|
74,384
|
|
41,061
|
Depreciation and
amortization - purchase accounting
|
|
42,391
|
|
48,146
|
Restructuring
expense
|
|
43,429
|
|
2,412
|
Loss on
extinguishment of debt
|
|
23,260
|
|
9,628
|
Other
(2)
|
|
1,011
|
|
(33)
|
Income tax impact on
adjustments (3)
|
|
(26,339)
|
|
(15,374)
|
Adjusted net
(loss) income attributable to IGT PLC
|
|
(121,480)
|
|
90,696
|
Weighted-average
shares - diluted
|
|
204,748
|
|
204,412
|
Adjusted
weighted-average shares - diluted (4)
|
|
204,748
|
|
204,412
|
Net (loss) income
attributable to IGT PLC per common share - diluted
|
|
(1.37)
|
|
0.02
|
Adjusted net
(loss) income attributable to IGT PLC per common share -
diluted
|
|
(0.59)
|
|
0.44
|
|
|
|
|
|
(1)
Includes amortization of upfront license fees
|
|
|
|
|
(2)
Primarily includes transaction-related costs
|
|
|
|
|
(3)
Adjustments for income taxes are determined based on the statutory
tax rate in effect in the respective jurisdiction where the
adjustment originated
|
(4)
Adjusted weighted-average shares – diluted includes shares that
were excluded from the GAAP computation, due to the net loss as
reported
|
International Game
Technology PLC
|
Reconciliations of
Non-GAAP Financial Measures
|
($ and shares in
thousands, except per share amounts)
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
For the six months
ended
|
|
|
June 30,
|
|
|
2020
|
|
2019
|
|
|
|
|
|
Net (loss)
income
|
|
(516,241)
|
|
119,482
|
(Benefit from)
provision for income taxes
|
|
(8,189)
|
|
115,992
|
Interest expense,
net
|
|
196,261
|
|
206,929
|
Foreign exchange loss
(gain), net
|
|
4,024
|
|
(17,541)
|
Other non-operating
expense (income), net
|
|
32,760
|
|
(22,995)
|
Operating (loss)
income
|
|
(291,385)
|
|
401,867
|
Goodwill
impairment
|
|
296,000
|
|
-
|
Depreciation
|
|
198,248
|
|
209,271
|
Amortization -
purchase accounting
|
|
88,750
|
|
95,718
|
Amortization -
non-purchase accounting (1)
|
|
148,554
|
|
145,418
|
Restructuring
expense
|
|
47,053
|
|
5,701
|
Stock-based
compensation
|
|
(11,806)
|
|
12,502
|
Other
(2)
|
|
1,505
|
|
(95)
|
Adjusted
EBITDA
|
|
476,919
|
|
870,382
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities
|
|
325,099
|
|
591,721
|
Capital
expenditures
|
|
(160,179)
|
|
(231,003)
|
Free Cash
Flow
|
|
164,920
|
|
360,718
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
attributable to IGT PLC
|
|
(527,904)
|
|
45,110
|
Foreign exchange loss
(gain), net
|
|
4,024
|
|
(17,541)
|
Goodwill
impairment
|
|
296,000
|
|
-
|
Depreciation and
amortization - purchase accounting
|
|
89,373
|
|
96,982
|
Restructuring
expense
|
|
47,053
|
|
5,701
|
Loss on
extinguishment of debt
|
|
23,260
|
|
9,628
|
Other
(2)
|
|
1,505
|
|
(95)
|
Income tax impact on
adjustments (3)
|
|
(38,263)
|
|
(24,778)
|
Adjusted net
(loss) income attributable to IGT PLC
|
|
(104,952)
|
|
115,007
|
Weighted-average
shares - diluted
|
|
204,591
|
|
204,532
|
Adjusted
weighted-average shares - diluted (4)
|
|
204,591
|
|
204,532
|
Net (loss) income
attributable to IGT PLC per common share - diluted
|
|
(2.58)
|
|
0.22
|
Adjusted net
(loss) income attributable to IGT PLC per common share -
diluted
|
|
(0.51)
|
|
0.56
|
|
|
|
|
|
(1)
Includes amortization of upfront license fees
|
|
|
|
|
(2)
Primarily includes transaction-related costs
|
|
|
|
|
(3)
Adjustments for income taxes are determined based on the statutory
tax rate in effect in the respective jurisdiction where the
adjustment originated
|
(4)
Adjusted weighted-average shares – diluted includes shares that
were excluded from the GAAP computation, due to the net loss as
reported
|
INTERNATIONAL GAME
TECHNOLOGY PLC
|
|
|
|
|
|
|
|
|
|
Select Financial
Data
|
|
|
As
|
Constant
|
|
Key Performance
Indicators
|
|
|
%
|
3 Month Period
Ended June 30th
|
Q2
'20
|
Q2
'19
|
Reported
|
FX
|
|
3 Month Period
Ended June 30th
|
Q2
'20
|
Q2
'19
|
Change
|
Gaming
|
|
Total
revenue
|
166
|
601
|
-72%
|
-72%
|
|
Installed base
units (end of period)
|
|
|
|
|
Gaming
services
|
111
|
382
|
-71%
|
-71%
|
|
Casino
|
28,134
|
31,112
|
-9.6%
|
|
|
Terminal
|
37
|
279
|
-87%
|
-87%
|
|
Casino -
L/T lease (1)
|
930
|
-
|
NM
|
|
|
Other
|
75
|
103
|
-28%
|
-27%
|
|
VLT -
Government sponsored (ex-Italy)
|
18,669
|
18,651
|
0.1%
|
|
Product
sales
|
55
|
219
|
-75%
|
-75%
|
|
VLT -
Italy supplier (B2B)
|
7,253
|
7,524
|
-3.6%
|
|
|
Terminal
|
44
|
155
|
-72%
|
-72%
|
|
Total
installed base units
|
54,986
|
57,287
|
-4.0%
|
|
|
Other
|
11
|
64
|
-82%
|
-82%
|
|
Yield
(average gross revenue per unit per day)
|
$
5.41
|
$
27.96
|
-80.7%
|
|
|
|
|
|
|
|
|
|
(1) Yield
calculations should exclude these units due to
|
|
Lottery
|
|
Total
revenue
|
394
|
531
|
-26%
|
-25%
|
|
accounting
treatment as sales-type leases
|
|
|
Lottery
services
|
372
|
495
|
-25%
|
-24%
|
|
|
|
|
|
|
|
FMC
|
352
|
460
|
-23%
|
-23%
|
|
Additional Italian network details:
|
|
|
|
|
|
Instant ticket
& draw games
|
352
|
460
|
-24%
|
-23%
|
|
VLT -
Operator (B2C)
|
10,844
|
10,929
|
-0.8%
|
|
|
Other
services
|
0
|
0
|
0%
|
0%
|
|
AWP
|
37,138
|
40,268
|
-7.8%
|
|
|
LMA
|
20
|
36
|
-43%
|
-43%
|
|
|
|
|
|
|
Product
sales
|
22
|
35
|
-39%
|
-38%
|
|
Machine units
shipped
|
|
|
|
|
|
|
|
|
|
|
|
|
New/expansion
|
1,443
|
1,138
|
26.8%
|
Other
|
|
Total
revenue
|
77
|
102
|
-25%
|
-22%
|
|
Replacement
|
1,552
|
10,086
|
-84.6%
|
|
Service
revenue
|
77
|
102
|
-25%
|
-23%
|
|
Total
machines shipped
|
2,995
|
11,224
|
-73.3%
|
|
Product
sales
|
0
|
0
|
186%
|
186%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global lottery
same-store revenue growth
|
|
|
|
Consolidated
|
|
Revenue
|
637
|
1,234
|
-48%
|
-48%
|
|
Instant
ticket & draw games
|
|
|
0.9%
|
|
Operating
(Loss)/Income:
|
|
|
|
|
|
Multistate jackpots
|
|
|
-25.5%
|
|
|
Segment
total
|
29
|
327
|
-91%
|
-91%
|
|
Total
lottery same-store revenue growth (ex-Italy)
|
-1.7%
|
|
|
Purchase
accounting
|
(42)
|
(48)
|
-12%
|
-12%
|
|
Italy
lottery revenue growth
|
|
|
-54.8%
|
|
|
Corporate
support
|
(80)
|
(55)
|
-46%
|
-47%
|
|
|
|
|
|
|
|
Total
|
(94)
|
224
|
NM
|
NM
|
|
|
|
|
|
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SOURCE International Game Technology PLC