BUSINESS

Scientific Games, Bally Technologies still dealing with acquisition hangovers

TAGs: bally technologies, Scientific Games, shfl entertainment

bally-technologies-scientific-gamesGaming and lottery technology supplier Scientific Games Corp. (SGMS) saw a huge spike in revenue in Q1, representing the first full quarter of contributions from last year’s $1.5b acquisition of WMS Industries. Revenue in the first three months of 2014 rose 76.7% to $388.1m but costs associated with paying for that acquisition resulted in a net loss of $45m for the quarter.

SGMS’ gaming segment benefited most from the WMS acquisition, with revenue up nearly fivefold to $194.2m. Just under $31m of this came via the Williams Interactive online gaming operations. The social gaming ranks of daily active users more than doubled to 1.3m, thanks in part to the Q1 launch of the Gold Fish Social Slot. The quarter also saw SGMS divest its interest in Sportech PLC, sell its UK B2C real-money gambling operation to SkillOnNet and exit its managed services online business in Belgium.

The Instant Products segment reported revenue up 2.9% to $126.2m on the strength of higher lottery retail sales in the US, offset by decreases in international markets, particularly in Italy. During the quarter, SGMS re-upped its deal as primary lottery supplier to French National Lottery operator Française des Jeux and commenced instant games sales in Greece. The Lottery Systems segment reported a 18.1% revenue gain to $64.6m, with most of the gains coming from SGMS’ international customers.

BALLY REPORTS RECORD REVENUE THANKS TO SHFL ACQUISITION
Gaming device maker Bally Technologies also experienced a spike in numbers in its fiscal Q3 thanks to its recent acquisition of SHFL Entertainment. Bally revenue rose 31% to a record $338.4m but, as with SGMS, the hangover from that acquisition resulted in profit falling to $27.4m from $38.4m in the same period last year.

Gaming machine revenue rose 19% to $102.4m thanks to a surge in new unit sales to international customers, which accounted for 34% of total new shipments, up from 17% a year earlier. Overall shipments hit 5,278 units, the highest level in six years. Gaming operations revenue was basically flat at $101.4m but margins dipped on higher jackpot expenses. Systems revenue rose 27% to a record $91m while the new table products segment – SHFL’s shufflers, chippers, etc. – added $44.1m.

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