Scientific Games CEO says the company has established a solid foundation in the gaming sector despite posting a third-quarter loss.
Gaming equipment manufacturer Scientific Games Corp. has reported its third quarter earnings, which show a net loss of $678.2m compared to $69.8m in the prior year period. The company said the net loss is mainly attributable by steep noncash goodwill and intangible asset impairment charges this year. However, the company said it remains on track to create substantial cost savings following its merger with Bally.
“As of September 30, 2015, we implemented $194 million of the $200 million of annual cost savings related to the Bally acquisition which were expected to be implemented this year, and we implemented more than 85% of the expected second-year WMS-related synergies of $30 million,” said Scott Schweinfurth, Scientific Games’ Executive Vice President and Chief Financial Officer.
The company acquired Bally Technologies for $5.1b a year ago and took over WMS Industries in 2013 for $1.5b, which increased the company’s debt to $8.4b.
The heavy lifting of integration (is) mostly behind us,” said CEO Gavin Isaacs. “Our team successfully accomplished in just eight months what we had originally expected to achieve in a year.”
“With the integration largely complete, a deep portfolio of innovative solutions across our businesses and the scale to provide high levels of customer service, our strategic priorities remain focused on leveraging our capabilities to support customers’ growth while improving our operating metrics,” Isaacs added.
Scientific Games gaming revenue went from $164.4m in Q3 2014 to $429.1m this year, including $286.7m from Bally, while lottery revenue dropped from $212.7m last year to $191.3m in the third quarter this year. Interactive segment revenue increased $12.7m from last year to $51.2m, which includes $8.6m in revenue from Bally and a $4.1m revenue increase from Scientific Games’ pre-existing interactive business.
EBITDA totaled $264.2m from 128.2m in the third quarter of last year, short of Wall Street projections of $273.3m. Revenue grew to $671.6m from $451.6m last year but missed the $703.8m average estimate from 12 analysts compiled by Bloomberg.
