LAS VEGAS, Nov. 9, 2021 /PRNewswire/ -- SciPlay
Corporation (NASDAQ: SCPL) ("SciPlay" or the "Company") today
reported results for the third quarter ended September 30, 2021.
Josh Wilson, Chief
Executive Officer of SciPlay, said, "Our team executed a number
of operational achievements in the quarter, continuing the strong
momentum across key areas of the business. Gold Fish® Casino
delivered another exceptional quarter in Q3 and has huge momentum
going into Q4. The launch of our newly redesigned Quick Hit is
gaining traction, up 30% since June. The quarter was impacted by an
event isolated in Jackpot Party® Casino, which we identified
and addressed quickly, with the impact limited to the third
quarter. With Jackpot Party rebounding, we expect SciPlay to return
to both year over year and sequential growth in the fourth quarter.
Solitaire Pets® Adventure has now launched world-wide and
Project X is tracking ahead of schedule as we continue to expand in
casual and diversify our revenue streams."
Daniel O'Quinn, Interim Chief
Financial Officer of SciPlay, added, "We are very pleased as we
continued to deliver strong monetization metrics, maintaining an
8.5% payer conversion record following 7 consecutive quarters of
growth, in addition to generating ARPDAU of $0.69. Monthly paying users and average monthly
revenue per user were well above pre-COVID-19 levels, with average
quarterly revenue running approximately 25% higher and AMRPPU
approximately $10 higher. There were
a number of significant redesigns and game features that drove
player engagement and growth in our social casino games and we
remain disciplined in managing our cost structure and balance
sheet, generating $58 million in
operating cash flow in the quarter."
SUMMARY RESULTS
|
Three Months
Ended
|
($ in
millions)
|
September
30,
|
|
2021
|
|
2020
|
Revenue
|
$
|
146.6
|
|
|
$
|
151.2
|
|
Net income
|
37.0
|
|
|
35.1
|
|
Net income
margin
|
25.2
|
%
|
|
23.2
|
%
|
Net cash provided by
operating activities
|
58.0
|
|
|
56.4
|
|
Capital
expenditures
|
0.9
|
|
|
1.8
|
|
|
|
|
|
Non-GAAP Financial
Measures (1)
|
|
|
|
Adjusted EBITDA
("AEBITDA")
|
$
|
44.7
|
|
|
$
|
49.3
|
|
AEBITDA
margin
|
30.5
|
%
|
|
32.6
|
%
|
|
|
|
|
|
As of September
30,
|
|
As of December
31,
|
Balance Sheet
Measures
|
2021
|
|
2020
|
Cash and cash
equivalents
|
$
|
330.8
|
|
|
$
|
268.9
|
|
Available
liquidity(2)
|
480.8
|
|
|
418.9
|
|
|
|
|
|
(1) The financial
measures "AEBITDA" and "AEBITDA margin" are non-GAAP financial
measures defined below under "Non-GAAP Financial Measures" and are
reconciled to the most directly comparable GAAP measures in the
accompanying supplemental tables at the end of this
release.
|
(2) Available
liquidity is calculated as cash and cash equivalents plus the
undrawn capacity on our revolver.
|
Key Performance Indicators
(in millions,
except Average Revenue Per Daily Active Users ("ARPDAU"), Average
Monthly Revenue Per Paying User ("AMRPPU"), and
percentages)
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
September
30,
|
|
Increase
/
|
|
2021
|
|
2020
|
|
(Decrease)
|
Mobile
Penetration
|
89%
|
|
87%
|
|
2.0pp
|
Average Monthly
Active Users
|
6.1
|
|
7.3
|
|
(1.2)
|
Average Daily Active
Users
|
2.3
|
|
2.6
|
|
(0.3)
|
ARPDAU
|
$0.69
|
|
$0.63
|
|
$0.06
|
Average Monthly
Paying Users
|
0.5
|
|
0.5
|
|
—
|
AMRPPU
|
$93.67
|
|
$94.10
|
|
($0.43)
|
Payer Conversion
Rate
|
8.5%
|
|
7.3%
|
|
1.2pp
|
pp =
percentage points.
|
Third Quarter 2021 Financial Highlights
- Third quarter revenue was $146.6
million, down 3% from the prior year period, due to an event
isolated in Jackpot Party® Casino, partially offset by
strong monetization metrics and by record growth at Gold Fish®
Casino. We expect SciPlay to return to both year over year and
sequential growth in the fourth quarter.
- Net income was $37.0
million compared to $35.1
million in the prior year period due to lower general and
administrative expenses, partially offset by higher depreciation
and amortization and research and development.
- AEBITDA, a non-GAAP financial measure defined below, was
$44.7 million compared to
$49.3 million in the prior year
period, primarily driven by lower revenue. AEBITDA margin, a
non-GAAP financial measure defined below, was 30.5% for the
quarter.
- Net cash provided by operating activities was
$58.0 million, a $1.6 million increase over the prior year period
primarily related to favorable changes in working capital primarily
related to the timing of collections which was partially offset by
lower earnings.
- Cash and cash equivalents increased $61.9 million to $330.8
million from the fourth quarter 2020.
Third Quarter Key Performance Highlights
- Payer conversion rate remained at record 8.5% validating
our continued payer focus and live-ops strategy to drive increased
monetization.
- Average Monthly Revenue Per Paying User (AMRPPU) was
$93.67, remaining above pre-COVID-19
levels.
- Average Revenue Per Daily Active User (ARPDAU) up 9.5%
to $0.69 compared to $0.63 in the prior year period.
- Mobile penetration increased 200 basis points from the
prior year period to 89%.
About SciPlay
We are a leading developer and publisher of digital games on
mobile and web platforms. We currently offer seven core games,
including four social casino games and three primary casual games,
and recently added a solitaire social game targeted toward casual
game players. Our social casino games typically include slots-style
game play and occasionally include table games-style game play,
while our casual games blend slots-style or bingo game play with
adventure game features. All of our games are offered and played on
multiple platforms, which include Apple, Google, Facebook, Amazon,
and Microsoft. In addition to our internally created game content,
our content library includes recognizable, real-world slot and
table games content from Scientific Games Corporation. This content
allows players who like playing land-based slot machines to enjoy
some of those same titles in our free-to-play games.
You can access our filings with the SEC through the SEC website
at www.sec.gov or through our website, and we strongly encourage
you to do so. We routinely post information that may be important
to investors on our website at www.sciplay.com/investors/, and we
use our website as a means of disclosing material information to
the public in a broad, non-exclusionary manner for purposes of the
SEC's Regulation Fair Disclosure (Reg FD). The information
contained on, or that may be accessed through, our website is not
incorporated by reference into, and is not a part of, this
document, and shall not be deemed "filed" under the Securities
Exchange Act of 1934, as amended.
All ® notices signify marks registered in the United States. © 2021 SciPlay Corporation.
All Rights Reserved.
SCIPLAY
CORPORATION
|
CONSOLIDATED
STATEMENTS OF INCOME
|
(Unaudited,
in millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Revenue
|
$
|
146.6
|
|
|
$
|
151.2
|
|
|
$
|
451.7
|
|
|
$
|
435.1
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Cost of
revenue(1)
|
46.2
|
|
|
48.0
|
|
|
141.3
|
|
|
138.5
|
|
Sales and
marketing(1)
|
32.9
|
|
|
33.7
|
|
|
101.7
|
|
|
97.0
|
|
General and
administrative(1)
|
13.1
|
|
|
21.3
|
|
|
46.8
|
|
|
46.7
|
|
Research and
development(1)
|
9.8
|
|
|
8.8
|
|
|
28.8
|
|
|
24.3
|
|
Depreciation and
amortization
|
4.4
|
|
|
2.7
|
|
|
11.3
|
|
|
6.9
|
|
Restructuring and
other
|
1.7
|
|
|
0.2
|
|
|
3.1
|
|
|
1.7
|
|
Operating
income
|
38.5
|
|
|
36.5
|
|
|
118.7
|
|
|
120.0
|
|
Other income (expense),
net
|
0.1
|
|
|
(0.2)
|
|
|
(0.4)
|
|
|
0.9
|
|
Net income before
income taxes
|
38.6
|
|
|
36.3
|
|
|
118.3
|
|
|
120.9
|
|
Income tax
expense
|
1.6
|
|
|
1.2
|
|
|
5.5
|
|
|
5.9
|
|
Net income
|
37.0
|
|
|
35.1
|
|
|
112.8
|
|
|
115.0
|
|
Less: Net income
attributable to the noncontrolling interest
|
31.1
|
|
|
29.6
|
|
|
95.7
|
|
|
98.5
|
|
Net income
attributable to SciPlay
|
$
|
5.9
|
|
|
$
|
5.5
|
|
|
$
|
17.1
|
|
|
$
|
16.5
|
|
|
|
|
|
|
|
|
|
Basic and diluted net
income attributable to SciPlay per share:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.24
|
|
|
$
|
0.24
|
|
|
$
|
0.71
|
|
|
$
|
0.72
|
|
Diluted
|
$
|
0.24
|
|
|
$
|
0.23
|
|
|
$
|
0.69
|
|
|
$
|
0.69
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares of Class A common stock used in
per share calculation:
|
|
|
|
|
|
|
|
Basic shares
|
24.5
|
|
|
22.8
|
|
|
24.0
|
|
|
22.8
|
|
Diluted
shares
|
24.8
|
|
|
24.1
|
|
|
24.9
|
|
|
24.0
|
|
|
|
|
|
|
|
|
|
(1) Excludes
depreciation and amortization.
|
SCIPLAY
CORPORATION
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Unaudited, in
millions, except par value)
|
|
As
of
|
|
September 30,
2021
|
|
December 31,
2020
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
330.8
|
|
|
$
|
268.9
|
|
Accounts receivable,
net
|
35.6
|
|
|
36.6
|
|
Prepaid expenses and
other current assets
|
17.1
|
|
|
5.9
|
|
Total current
assets
|
383.5
|
|
|
311.4
|
|
Property and
equipment, net
|
3.7
|
|
|
4.4
|
|
Operating lease
right-of-use assets
|
7.2
|
|
|
8.5
|
|
Goodwill
|
130.2
|
|
|
129.8
|
|
Intangible assets and
software, net
|
52.6
|
|
|
30.3
|
|
Deferred income
taxes
|
77.3
|
|
|
82.5
|
|
Other
assets
|
1.8
|
|
|
1.9
|
|
Total
assets
|
$
|
656.3
|
|
|
$
|
568.8
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
21.5
|
|
|
$
|
23.2
|
|
Accrued
liabilities
|
33.2
|
|
|
22.9
|
|
Due to
affiliate
|
2.3
|
|
|
5.5
|
|
Total current
liabilities
|
57.0
|
|
|
51.6
|
|
Operating lease
liabilities
|
5.9
|
|
|
7.5
|
|
Liabilities under
TRA
|
64.3
|
|
|
68.5
|
|
Other long-term
liabilities
|
17.8
|
|
|
5.7
|
|
Total stockholders'
equity(1)
|
511.3
|
|
|
435.5
|
|
Total liabilities and
stockholders' equity
|
$
|
656.3
|
|
|
$
|
568.8
|
|
|
|
|
|
(1) Includes
$415.2 million and $355.5 million in noncontrolling interest as of
September 30, 2021 and December 31, 2020,
respectively.
|
SCIPLAY
CORPORATION
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in
millions)
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net cash provided by
operating activities
|
$
|
58.0
|
|
|
$
|
56.4
|
|
|
$
|
126.3
|
|
|
$
|
131.9
|
|
Net cash used in
investing activities
|
(6.6)
|
|
|
(1.8)
|
|
|
(13.7)
|
|
|
(17.6)
|
|
Net cash used in
financing activities
|
(21.5)
|
|
|
(0.5)
|
|
|
(50.7)
|
|
|
(14.6)
|
|
Effect of exchange
rate changes on cash, cash equivalents
and restricted cash
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
Increase in cash,
cash equivalents and restricted cash
|
30.0
|
|
|
54.2
|
|
|
61.9
|
|
|
99.7
|
|
Cash, cash
equivalents and restricted cash, beginning of period
|
300.8
|
|
|
156.1
|
|
|
268.9
|
|
|
110.6
|
|
Cash, cash
equivalents and restricted cash, end of period
|
$
|
330.8
|
|
|
$
|
156.1
|
|
|
$
|
330.8
|
|
|
$
|
210.3
|
|
|
|
|
|
|
|
|
|
Supplemental cash
flow information:
|
|
|
|
|
|
|
|
Cash paid for income
taxes
|
$
|
0.4
|
|
|
$
|
—
|
|
|
$
|
4.5
|
|
|
$
|
1.5
|
|
Cash paid for
contingent consideration included in
operating activities
|
—
|
|
|
—
|
|
|
—
|
|
|
4.0
|
|
Supplemental non-cash
transactions:
|
|
|
|
|
|
|
|
Non-cash additions to
intangible assets related to license
agreements
|
$
|
3.5
|
|
|
$
|
1.0
|
|
|
$
|
16.8
|
|
|
$
|
1.1
|
|
SCIPLAY
CORPORATION
RECONCILIATION OF
NET INCOME ATTRIBUTABLE TO SCIPLAY TO AEBITDA
(Unaudited,
in millions)
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net income
attributable to SciPlay
|
$
|
5.9
|
|
|
$
|
5.5
|
|
|
$
|
17.1
|
|
|
$
|
16.5
|
|
Net income
attributable to noncontrolling interest
|
31.1
|
|
|
29.6
|
|
|
95.7
|
|
|
98.5
|
|
Net income
|
37.0
|
|
|
35.1
|
|
|
112.8
|
|
|
115.0
|
|
Restructuring and
other
|
1.7
|
|
|
0.2
|
|
|
3.1
|
|
|
1.7
|
|
Depreciation and
amortization
|
4.4
|
|
|
2.7
|
|
|
11.3
|
|
|
6.9
|
|
Income tax
expense
|
1.6
|
|
|
1.2
|
|
|
5.5
|
|
|
5.9
|
|
Stock-based
compensation
|
0.1
|
|
|
9.9
|
|
|
5.4
|
|
|
15.1
|
|
Other (income)
expense, net
|
(0.1)
|
|
|
0.2
|
|
|
0.4
|
|
|
(0.9)
|
|
AEBITDA
|
$
|
44.7
|
|
|
$
|
49.3
|
|
|
$
|
138.5
|
|
|
$
|
143.7
|
|
Revenue
|
$
|
146.6
|
|
|
$
|
151.2
|
|
|
$
|
451.7
|
|
|
$
|
435.1
|
|
Net income margin (Net
income/Revenue)
|
25.2
|
%
|
|
23.2
|
%
|
|
25.0
|
%
|
|
26.4
|
%
|
AEBITDA margin
(AEBITDA/Revenue)
|
30.5
|
%
|
|
32.6
|
%
|
|
30.7
|
%
|
|
33.0
|
%
|
RECONCILIATION OF
NET INCOME MARGIN
TO AEBITDA
MARGIN
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
|
Net income margin
(Net income/Revenue)
|
|
25.2
|
%
|
|
23.2
|
%
|
|
25.0
|
%
|
|
26.4
|
%
|
Restructuring and
other
|
|
1.2
|
%
|
|
0.1
|
%
|
|
0.7
|
%
|
|
0.4
|
%
|
Depreciation and
amortization
|
|
3.0
|
%
|
|
1.8
|
%
|
|
2.5
|
%
|
|
1.6
|
%
|
Income tax
expense
|
|
1.1
|
%
|
|
0.8
|
%
|
|
1.2
|
%
|
|
1.4
|
%
|
Stock-based
compensation
|
|
0.1
|
%
|
|
6.6
|
%
|
|
1.2
|
%
|
|
3.4
|
%
|
Other (income)
expense, net
|
|
(0.1)
|
%
|
|
0.1
|
%
|
|
0.1
|
%
|
|
(0.2)
|
%
|
AEBITDA margin
(AEBITDA/Revenue)
|
|
30.5
|
%
|
|
32.6
|
%
|
|
30.7
|
%
|
|
33.0
|
%
|
Forward-Looking Statements
Throughout this press release, we make "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," "plan," "continue," "believe," "expect,"
"anticipate," "target," "should," "could," "potential,"
"opportunity," "goal," or similar terminology. These statements are
based upon management's current expectations, assumptions and
estimates and are not guarantees of timing, future results or
performance. Therefore, you should not rely on any of these
forward-looking statements as predictions of future events. 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:
- the impact of the COVID-19 pandemic and any resulting social,
political, economic and financial complications;
- risks and uncertainties related to the proposed acquisition of
our public shares, including regarding the terms and consummation
of such a transaction, whether it will yield additional value for
our stockholders and whether it will adversely impact our business,
financial results, results of operations, cash flows or stock
price;
- our ability to attract and retain players;
- expectations of growth in total consumer spending on social
gaming, including social casino gaming;
- our reliance on third-party platforms;
- our ability to continue to launch and enhance games that
attract and retain a significant number of paying players;
- our reliance on a small percentage of our players for nearly
all of our revenue;
- our ability to adapt to, and offer games that keep pace with,
changing technology and evolving industry standards;
- competition;
- our dependence on the optional purchases of coins, chips and
cards to supplement the availability of periodically offered free
coins, chips and cards;
- restrictions and covenants in debt agreements, including those
that could result in acceleration of the maturity of our
indebtedness;
- the discontinuation or replacement of LIBOR, which may
adversely affect interest rates;
- fluctuations in our results due to seasonality and other
factors;
- dependence on skilled employees with creative and technical
backgrounds;
- our ability to use the intellectual property rights of our
parent, Scientific Games Corporation, and other third parties,
including the third-party intellectual property rights licensed to
Scientific Games Corporation, under our intellectual property
license agreement with our parent;
- protection of our proprietary information and intellectual
property, inability to license third-party intellectual property
and the intellectual property rights of others;
- security and integrity of our games and systems;
- security breaches, cyber-attacks or other privacy or data
security incidents, challenges or disruptions;
- reliance on or failures in information technology and other
systems;
- the impact of legal and regulatory restrictions on our
business, including significant opposition in some jurisdictions to
interactive social gaming, including social casino gaming, and how
such opposition could lead these jurisdictions to adopt legislation
or impose a regulatory framework to govern interactive social
gaming or social casino gaming specifically, and how this could
result in a prohibition on interactive social gaming or social
casino gaming altogether, restrict our ability to advertise our
games, or substantially increase our costs to comply with these
regulations;
- laws and government regulations, both foreign and domestic,
including those relating to our parent, Scientific Games
Corporation, and to data privacy and security, including with
respect to the collection, storage, use, transmission, sharing and
protection of personal information and other consumer data, and
those laws and regulations that affect companies conducting
business on the internet, including ours;
- the continuing evolution of the scope of data privacy and
security regulations, and our belief that the adoption of
increasingly restrictive regulations in this area is likely within
the U.S. and other jurisdictions;
- risks related to foreign operations, including the complexity
of foreign laws, regulations and markets; the uncertainty of
enforcement of remedies in foreign jurisdictions; the effect of
currency exchange rate fluctuations; the impact of foreign labor
laws and disputes; the ability to attract and retain key personnel
in foreign jurisdictions; the economic, tax and regulatory policies
of local governments; and compliance with applicable anti-money
laundering, anti-bribery and anti-corruption laws;
- influence of certain stockholders, including decisions that may
conflict with the interests of other stockholders;
- our ability to achieve some or all of the anticipated benefits
of being a standalone public company;
- our dependence on distributions from SciPlay Parent Company,
LLC to pay our taxes and expenses, including substantial payments
we will be required to make under the Tax Receivable Agreement (the
"TRA");
- failure to establish and maintain adequate internal control
over financial reporting;
- stock price volatility;
- litigation and other liabilities relating to our business,
including litigation and liabilities relating to consumer
protection, gambling-related matters, employee matters, alleged
service and system malfunctions, alleged intellectual property
infringement and claims relating to our contracts, licenses and
strategic investments;
- our ability to complete acquisitions and integrate businesses
successfully;
- our ability to pursue and execute new business
initiatives;
- natural events and health crises that disrupt our operations or
those of our providers or suppliers;
- changes in tax laws or tax rulings, or the examination of our
tax positions;
- our dependence on certain key providers; and
- U.S. and international economic and industry conditions.
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 our filings with the SEC, including under
"Risk Factors" in Part II, Item 1A of our Quarterly Reports on Form
10-Q and Part I, Item 1A "Risk Factors" in our 2020 Annual Report
on Form 10-K filed with the SEC on March 1,
2021. Forward-looking statements speak only as of the date
they are made and, except for our ongoing obligations under the
U.S. federal securities laws, we undertake no and expressly
disclaim any obligation to publicly update any forward-looking
statements whether as a result of new information, future events or
otherwise.
This press release may contain references to industry market
data and certain industry forecasts. Industry market data and
industry forecasts are obtained from publicly available information
and industry publications. Industry publications generally state
that the information contained therein has been obtained from
sources believed to be reliable, but that the accuracy and
completeness of that information is not guaranteed. Although we
believe industry information to be accurate, it is not
independently verified by us and we do not make any representation
as to the accuracy of that information. In general, we believe
there is less publicly available information concerning
international social gaming industries than the same industries in
the U.S. Some data is also based on our good faith estimates, which
are derived from our review of internal surveys or data, as well as
the independent sources referenced above. Assumptions and estimates
of our and our industry's future performance are necessarily
subject to a high degree of uncertainty and risk due to a variety
of factors, including those described under "Risk Factors" in Part
II, Item 1A of our Quarterly Reports on Form 10-Q and Part I, Item
1A "Risk Factors" in our 2020 Annual Report on Form 10-K. These and
other factors could cause future performance to differ materially
from our assumptions and estimates.
Non-GAAP Financial Measures
Adjusted EBITDA, or AEBITDA, as used herein, is a non-GAAP
financial measure that is presented as supplemental disclosure and
is reconciled to net income attributable to SciPlay as the most
directly comparable GAAP measure as set forth in the below table.
We define AEBITDA to include net income attributable to SciPlay
before: (1) net income attributable to noncontrolling interest; (2)
interest expense; (3) income tax expense; (4) depreciation and
amortization; (5) restructuring and other, which includes charges
or expenses attributable to: (a) employee severance; (b) management
changes; (c) restructuring and integration; (d) M&A and other,
which includes: (i) M&A transaction costs; (ii) purchase
accounting adjustments; (iii) unusual items (including certain
legal settlements) and (iv) other non-cash items; (e) contingent
acquisition consideration and (f) cost-savings initiatives; (6)
stock-based compensation; (7) loss (gain) on debt financing
transactions; and (8) other expense (income) including foreign
currency (gains) and losses. We also use AEBITDA margin, a non-GAAP
measure, which we calculate as AEBITDA as a percentage of
revenue.
Our management uses AEBITDA and AEBITDA margin to, among other
things: (i) monitor and evaluate the performance of our business
operations; (ii) facilitate our management's internal comparisons
of our historical operating performance and (iii) analyze and
evaluate financial and strategic planning decisions regarding
future operating investments and operating budgets. In addition,
our management uses AEBITDA and AEBITDA margin to facilitate
management's external comparisons of our results to the historical
operating performance of other companies that may have different
capital structures and debt levels. Our management believes that
AEBITDA and AEBITDA margin are useful as they provide investors
with information regarding our financial condition and operating
performance that is an integral part of our management's reporting
and planning processes. In particular, our management believes that
AEBITDA is helpful because this non-GAAP financial measure
eliminates the effects of restructuring, transaction, integration
or other items that management believes have less bearing on our
ongoing underlying operating performance. Management believes
AEBITDA margin is useful as it provides investors with information
regarding the underlying operating performance and margin generated
by our business operations.
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SOURCE SciPlay Corporation