INTERNATIONAL GAME TECHNOLOGY LONDON, May 26, 2016 /PRNewswire/ -- International Game Technology PLC ('IGT') (NYSE:IGT) today reported financial results for the first quarter ended March 31, 2016. Today, at 8:00 a.m. EDT / 1:00 p.m. BST / 2:00 p.m. CEST, management will host a conference call and webcast to present the first quarter results; access details are provided below.
'We begin 2016 with a solid first quarter, evidenced by good revenue growth with all operating segments contributing to an improvement in profitability,' said Marco Sala, CEO of IGT. 'Continuing growth across all regions, especially North America and Italy, propelled our lottery revenues. Gaming revenues were resilient despite challenging market conditions in North America, our largest gaming market. We remain focused on reenergizing gaming operations and strengthening our global leadership in lotteries. We were successful in securing the Italian Lotto concession, one of our largest contracts and a cornerstone of our Italian operations.'
'The diversity of our product and geographic mix is a key element of our first quarter results,' said Alberto Fornaro, CFO of IGT. 'Revenue growth, disciplined cost management, and synergy savings all contributed to sharp profit expansion. Even after large interest payments during the period, we generated significant free cash flow, enabling us to reduce debt in constant currency and further improve our leverage profile.'
Summary of Consolidated First Quarter 2016 Financial Results
Reported | Pro forma | ||||||
Constant | |||||||
Quarter Ended March 31, | Change | Change | Currency | ||||
2016 | 2015 | (%) | 2016 | 2015 | (%) | Change (%) | |
(In $ millions, unless otherwise noted) | |||||||
Revenue | 1,282 | 848 | 51% | 1,282 | 1,248 | 3% | 4% |
Adjusted EBITDA | 460 | 321 | 43% | 460 | 415 | 11% | 12% |
Adjusted Operating Income | 310 | 205 | 51% | 310 | 231 | 34% | 35% |
Operating Income | 188 | 163 | 15% | 188 | 156 | 20% | 22% |
Net income (loss) per diluted share ($) | (0.46) | (0.23) | NM | (0.46) | NA | ||
Adjusted net income (loss) per diluted share ($) | 0.57 | 0.43 | 33% | 0.57 | NA | ||
Net debt | 7,722 | 2,792 | NM | 7,722 | NA | ||
Note: Pro forma is defined as the combined results of GTECH and legacy IGT for the first quarter of 2015. Adjusted operating income, adjusted EBITDA, and adjusted net 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. |
Comparability of Results
All figures presented in this news release are prepared under U.S. GAAP, unless noted otherwise.
As a result of the combination of GTECH S.p.A. ('GTECH') and International Game Technology ('legacy IGT'), which was completed on April 7, 2015, a number of items affect the comparability of reported results. Reported financial information for the first quarter of 2016 includes the results of operations of IGT for the entire period, while reported financial information for the first quarter of 2015 includes only GTECH operations. Pro forma figures represent the combined results of both companies.
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 2016 are calculated using the same foreign exchange rates as the corresponding 2015 period.
Management believes that referring to certain pro forma, constant currency, or adjusted measures is a useful way to evaluate the Company's underlying performance.
Overview of Consolidated First Quarter Results
Reported consolidated revenue grew 51% to $1,282 million from $848 million in the first quarter of 2015, reflecting GTECH's acquisition of legacy IGT. On a pro forma, constant currency basis, consolidated revenue rose 4%. Revenue growth primarily reflects strong lottery performance, particularly in North America and Italy. Global lottery same-store revenue, excluding Italy, increased 18% during the first quarter, reflecting the benefit of the record Powerball jackpot in the United States. Revenue from gaming was slightly below the prior-year period. During the quarter, the Company sold 5,695 gaming machines worldwide.
On a reported basis, adjusted EBITDA of $460 million was 43% above the first quarter of 2015. On a pro forma, constant currency basis, adjusted EBITDA was 12% greater than in the prior-year period as overall sales growth was accentuated by favorable revenue mix and synergy savings.
Reported operating income was $188 million compared to $163 million in the first quarter of 2015. On a pro forma, constant currency basis, adjusted operating income was 35% above the first quarter of 2015, which included significant bad debt expense. In addition, revenue growth, overall sales mix, and synergy savings all contributed to the increase in adjusted operating income.
Interest expense was $118 million compared to $94 million in the prior-year period.
Net loss attributable to IGT was $93 million in the first quarter of 2016, reflecting the impact of $162 million in primarily non-cash foreign exchange losses. On an adjusted basis, net income attributable to IGT was $116 million. The Company reported net loss per diluted share of $(0.46) but earned $0.57 per diluted share on an adjusted basis.
Cash from operations was $206 million in the first quarter and capital expenditures were $98 million.
Cash and cash equivalents were $506 million as of March 31, 2016, compared to $627 million as of December 31, 2015. Consolidated shareholders' equity totaled $3,292 million and net debt was $7,722 million as of March 31, 2016.
Operating Segment Review
North America Gaming & Interactive
Revenue for the North America Gaming & Interactive segment was $339 million compared to $30 million in the first quarter of 2015. On a pro forma basis, revenue was essentially in line with the prior year.
Service revenue was $258 million compared to $13 million in the prior-year period. On a pro forma basis, service revenue was in line with the first quarter of 2015 as increased software revenues offset a decline in the installed base. DoubleDown revenue was unchanged from the prior year.
Product sales were $81 million compared to $17 million in the first quarter of 2015. On a pro forma basis, product sales declined 3% as lower machine unit volume was partially offset by higher systems sales. The segment shipped 3,951 units compared to 5,241 units in the first quarter of 2015, which included a large, one-off lease conversion sale in Maryland as well as sizeable VLT sales in Canada and Oregon. Excluding one-time items, commercial casino replacement units were up double-digits from the prior-year period.
Operating income for North America Gaming & Interactive was $89 million compared to $7 million in the first quarter of 2015. On a pro forma basis, North America Gaming & Interactive operating income rose 89%, largely due to the comparison with bad debt expense in the prior-year period as well as favorable revenue mix and synergy savings.
North America Lottery
North America Lottery revenue was $315 million in the first quarter of 2016, 25% higher than the prior year on a reported basis and 16% greater on a pro forma basis.
Service revenue increased 26% on a reported basis and was 16% higher than the prior year on a pro forma basis, reflecting 23% same-store revenue growth and favorable LMA comparisons. The significant increase in same-store revenue was supported by the record Powerball jackpot in the period, in addition to strong instant ticket sales and solid local draw-based game performance. Product sales were $11 million in the quarter compared to $12 million in the prior-year period.
Operating income for North America Lottery was $88 million compared to $43 million in the first quarter of 2015. On a pro forma basis, operating income for North America Lottery rose 61% on strong same-store revenue growth, operating leverage, and cost control. The first quarter results represent record profits for the North America Lottery segment, even without the Powerball benefit.
International
International revenue was $185 million compared to $131 million in the first quarter of 2015 on a reported basis. On a pro forma, constant currency basis, International revenue declined 2% from the prior year.
International lottery same-store revenue was up 2%, with broad-based strength in Europe partially offset by weaker trends in Latin America. Lottery product sales were below the prior-year period, which benefited from large sales in New Zealand and Singapore.
International gaming service revenue was $47 million compared to $13 million in the first quarter of 2015 on a reported basis, and was up 4% on a pro forma, constant currency basis, on growth in interactive and the South Africa installed base. Revenue from gaming product sales was in line with the prior year on a pro forma, constant currency basis. The segment shipped a total of 1,744 gaming machines internationally during the first quarter of 2016 compared to 1,587 units in the prior-year period, reflecting demand for new cabinets.
International operating income was $33 million compared to $27 million in the first quarter of 2015. On a pro forma, constant currency basis, International operating income was up 41%, reflecting favorable revenue mix and lower operating costs.
Italy
Revenue in the Italy segment was $444 million compared to $434 million in the first quarter of 2015.
Total Lotto wagers in the quarter were €1,928 million, a 6% increase from the prior-year period, when wagers had already posted 16% growth. Strong Lotto performance was achieved with double-digit expansion for 10eLotto and a significant contribution from late numbers that more than offset lower core wagers. Instant-ticket wagers rose 2% to €2,355 million, supported by several new product introductions.
Machine gaming service revenue declined 3%, impacted by increased Stability Law taxes and fewer AWP units. Excluding the Stability Law impact, revenues were flat as the overall productivity and mix of gaming machines improved over the prior year.
Operating income for Italy was $148 million, 2% below the first quarter of 2015 on a reported basis but 2% higher on a pro forma, constant currency basis. The increase in operating income was driven by strong lottery performance, lower sports betting payout, and disciplined cost management, partially offset by higher Stability Law taxes.
Other Developments
The Company's Board of Directors has declared a quarterly cash dividend of $0.20 per ordinary share. The dividend is payable on June 23, 2016 to all shareholders of record as of the close of business on June 9, 2016.
On May 17, 2016, the Italian regulator Agenzia delle Dogane e dei Monopoli awarded the concession for the Lotto game to Lottoitalia, a joint venture led by IGT subsidiary Lottomatica. The new concession has a nine-year term, commencing on November 29, 2016. In conjunction with the award, the €350 million first installment of upfront concession payments was made in May.
In the first quarter of 2016, the Company recorded a $15 million reserve related to the anticipated cost of settling certain tax matters in Italy covering the years 2006-2014 and involving the structuring of the original leveraged buyout of GTECH Holdings Corporation by Lottomatica S.p.A. On May 26, 2016, the Company agreed to pay €11 million to the Italian Tax Agency (Agenzia delle Entrate) to settle the claim for tax years 2006-2010.
Investor Day
The Company will host an investor day on June 21-22, 2016 in Rome, Italy. At the event, presentations will be made by Marco Sala, CEO, and other members of the Company's executive team. Interested parties may contact Investor_Relations@IGT.com for additional details and to register for the event.
Outlook
The Company continues to expect to achieve adjusted EBITDA of $1,740-$1,790 million for the full year 2016 period, supported by growth in core operations and using an average euro/dollar exchange rate of 1.10 versus 1.11 last year. A modest headwind is expected from other currencies, notably the British pound, the South African rand, and certain Latin American currencies.
Capital expenditures excluding Lotto concession payments are expected to be $575-$625 million. Lotto-related capital expenditures are estimated at $695 million, including $660 million in upfront payments and approximately $35 million for infrastructure upgrades. Net debt is still expected to be $7,700-$7,900 million at the end of 2016.
Conference Call and Webcast
Today, at 8:00 a.m. EDT / 1:00 p.m. BST / 2:00 p.m. CEST, management will host a conference call to present the first quarter 2016 results. Listeners may access a live webcast of the conference call along with accompanying slides under 'News, Events and Presentations' on IGT's Investor Relations website at www.IGT.com. A replay of the webcast will be available on the website following the live event. To listen by telephone, the dial in number is +44 (0) 20 3427 1907 for participants in the United Kingdom and +1 212 444 0896 for listeners outside the United Kingdom. The conference ID/confirmation code is 7945074. A telephone replay of the call will be available for one week at +44 (0) 20 3427 0598 or +1-347-366-9565 using the conference ID/confirmation code 7945074.
About IGT
IGT (NYSE:IGT) is the global leader in gaming. We enable players to experience their favorite games across all channels and regulated segments, from Gaming Machines and Lotteries to Interactive and Social Gaming. Leveraging a wealth of premium content, substantial investment in innovation, in-depth customer intelligence, operational expertise and leading-edge technology, our gaming solutions anticipate the demands of consumers wherever they decide to play. 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 over 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 IGT 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 IGT 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 are subject to various risks and uncertainties, many of which are outside IGT'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 the forward-looking statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include (but are not limited to) the possibility that the businesses of International Game Technology and GTECH S.p.A. will not be integrated successfully, or that the combined companies will not realize estimated cost savings, synergies, growth or other anticipated benefits or that such benefits may take longer to realize than expected, or that the Company will incur unanticipated costs in connection with the integration; the possibility that the Company will be unable to pay future dividends to shareholders or that the amount of such dividends may be less than anticipated; the possibility that IGT may not obtain its anticipated financial results in one or more future periods; reductions in customer spending; a slowdown in customer payments and changes in customer demand for products and services as a result of changing economic conditions or otherwise; unanticipated changes relating to competitive factors in the industries in which the Company operates; the Company's ability to hire and retain key personnel; the impact of the consummation of the business combination on relationships with third parties, including customers, employees and competitors; the Company's ability to attract new customers and retain existing customers in the manner anticipated; reliance on and integration of information technology systems; changes in legislation or governmental regulations affecting the Company; international, national or local economic, social or political conditions that could adversely affect the Company or its customers; conditions in the credit markets; risks associated with assumptions the Company makes in connection with its critical accounting estimates; the resolution of pending and potential future legal, regulatory or tax proceedings and investigations; and the Company's international operations, which are subject to the risks of currency fluctuations and foreign exchange controls. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties that affect IGT's business, including those described in IGT's annual report on Form 20-F for the financial year ended December 31, 2015 and other documents filed from time to time with the Securities and Exchange Commission (the 'SEC'), which are available on the SEC website at www.sec.gov and on the investor relations section of IGT's website at www.IGT.com. Except as required under applicable law, IGT does not assume any obligation to update the forward-looking statements. Nothing in this news release is intended, or is to be construed, as a profit forecast or to be interpreted to mean that earnings per IGT share for the current or any future financial years will necessarily match or exceed the historical published earnings per IGT share, 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 IGT, or persons acting on its behalf, are expressly qualified in their entirety by this cautionary statement.
Contact:Robert K. Vincent, Corporate Communications, toll free in U.S./Canada (844) IGT-7452; outside U.S./Canada (401) 392-7452James Hurley, Investor Relations, (401) 392-7190Simone Cantagallo, (+39) 06 51899030; for Italian media inquiries
International Game Technology PLC | ||||
Consolidated Statements of Operations | ||||
($ and shares in thousands, except per share data) | ||||
Unaudited | ||||
For the three months ended | ||||
March 31, | ||||
2016 | 2015 | |||
Service revenue | 1,135,121 | 790,262 | ||
Product sales | 146,440 | 57,980 | ||
Total revenue | 1,281,561 | 848,242 | ||
Cost of services | 648,763 | 506,735 | ||
Cost of sales | 121,776 | 35,098 | ||
Selling, general and administrative | 227,526 | 95,551 | ||
Research and development | 84,707 | 22,471 | ||
Restructuring expense | 9,418 | 14,481 | ||
Transaction expense, net | 1,474 | 11,050 | ||
Total operating expenses | 1,093,664 | 685,386 | ||
Operating income | 187,897 | 162,856 | ||
Interest income | 4,293 | 613 | ||
Equity loss, net | - | (228) | ||
Other income | 1,226 | 614 | ||
Other expense | (8,552) | (121,121) | ||
Foreign exchange gain (loss), net | (161,556) | 7,004 | ||
Interest expense | (118,415) | (94,388) | ||
Total non-operating expenses | (283,004) | (207,506) | ||
(Loss) income before provision for income taxes | (95,107) | (44,650) | ||
Provision for (benefit from) income taxes | (8,658) | (9,059) | ||
Net loss | (86,449) | (35,591) | ||
Less: Net income attributable to non-controlling interests | 6,325 | 3,726 | ||
Net loss attributable to IGT PLC | (92,774) | (39,317) | ||
Net loss attributable to IGT PLC per common share -basic | (0.46) | (0.23) | ||
Net loss attributable to IGT PLC per common share - diluted | (0.46) | (0.23) | ||
Weighted-average shares - basic | 200,449 | 172,999 | ||
Weighted-average shares - diluted | 200,449 | 172,999 | ||
International Game Technology PLC | |||
Condensed Consolidated Balance Sheets | |||
($ thousands) | |||
Unaudited | |||
March 31, | December 31, | ||
2016 | 2015 | ||
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | 505,796 | 627,484 | |
Restricted cash and investments | 165,894 | 169,101 | |
Trade and other receivables, net | 975,383 | 959,592 | |
Inventories | 274,212 | 269,982 | |
Other current assets | 442,816 | 423,701 | |
Income taxes receivable | 36,304 | 35,514 | |
Total current assets | 2,400,405 | 2,485,374 | |
Systems, equipment and other assets related to contracts, net | 1,122,456 | 1,127,518 | |
Property, plant and equipment, net | 346,053 | 349,677 | |
Goodwill, net | 6,857,478 | 6,830,499 | |
Intangible assets, net | 3,228,154 | 3,335,633 | |
Other non-current assets | 928,198 | 937,917 | |
Deferred income taxes | 47,741 | 48,074 | |
Total non-current assets | 12,530,080 | 12,629,318 | |
Total Assets | 14,930,485 | 15,114,692 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
Current liabilities: | |||
Accounts payable | 1,087,472 | 1,057,860 | |
Other current liabilities | 909,860 | 922,586 | |
Current portion of long-term debt | 167 | 160 | |
Income taxes payable | 89,810 | 30,020 | |
Total current liabilities | 2,087,309 | 2,010,626 | |
Long-term debt, less current portion | 8,227,845 | 8,334,013 | |
Deferred income taxes | 866,834 | 941,418 | |
Other non-current liabilities | 456,679 | 462,493 | |
Total non-current liabilities | 9,551,358 | 9,737,924 | |
Total Liabilities | 11,638,667 | 11,748,550 | |
Commitments and contingencies | - | - | |
Shareholders' equity | 3,291,818 | 3,366,142 | |
Total liabilities and shareholders' equity | 14,930,485 | 15,114,692 | |
International Game Technology PLC | ||||
Consolidated Statements of Cash Flows | ||||
($ thousands) | ||||
Unaudited | ||||
For the three months ended | ||||
March 31, | ||||
2016 | 2015 | |||
Operating activities | ||||
Net (loss) income | (86,449) | (35,591) | ||
Adjustments for: | ||||
Amortization | 125,496 | 33,371 | ||
Depreciation | 98,517 | 71,854 | ||
Amortization of upfront payments to customers | 27,409 | 26,843 | ||
Loss on early extinguishment of debt | - | 75,511 | ||
Debt issuance cost amortization | 4,511 | 26,847 | ||
Stock-based payment expense | 9,302 | 994 | ||
Foreign exchange loss (gain), net | 161,556 | (7,004) | ||
Other, net | 3,552 | 43,699 | ||
Cash flows before changes in operating assets and liabilities | 343,894 | 236,524 | ||
Changes in operating assets and liabilities: | ||||
Trade and other receivables | 10,259 | (37,459) | ||
Inventories | 1,812 | (16,826) | ||
Accounts payable | (1,785) | (84,139) | ||
Other assets and liabilities | (148,575) | (44,317) | ||
Net cash flows from operating activities | 205,605 | 53,783 | ||
Investing activities | ||||
Capital expenditures | (97,671) | (71,640) | ||
Proceeds from sale of assets | 32,504 | 114 | ||
Purchases of jackpot annuity investments | (1,061) | - | ||
Proceeds from jackpot annuity investments | 7,472 | - | ||
Other | (4,894) | 1,230 | ||
Net cash flows used in investing activities | (63,650) | (70,296) | ||
Financing activities | ||||
Principal payments on long-term debt | (318,832) | (796,443) | ||
Proceeds from issuance of long-term debt | - | 1,180,450 | ||
Payments on bridge facility | - | (51,409) | ||
Payments in connection with the early extinguishment of debt | - | (73,375) | ||
Debt issuance costs paid | - | (72,599) | ||
Dividends paid | - | (129,720) | ||
Net receipts from (payments of) financial liabilities | 49,564 | (24,917) | ||
Other | (2,964) | (30,336) | ||
Net cash flows (used in) provided by financing activities | (272,232) | 1,651 | ||
Net decrease in cash and cash equivalents | (130,277) | (14,862) | ||
Effect of exchange rate changes on cash | 8,589 | (28,306) | ||
Cash and cash equivalents at the beginning of the period | 627,484 | 317,106 | ||
Cash and cash equivalents at the end of the period | 505,796 | 273,938 | ||
Supplemental Cash Flow Information: | ||||
Interest paid | (216,834) | (114,000) | ||
Income taxes paid | (16,319) | (13,466) | ||
International Game Technology PLC | |||
Net Debt | |||
($ thousands) | |||
March 31, | December 31, | ||
2016 | 2015 | ||
Long-term debt, less current portion | |||
6.250% Senior Secured Notes due 2022 | 1,492,852 | 1,468,875 | |
6.500% Senior Secured Notes due 2025 | 1,084,563 | 1,084,249 | |
4.750% Senior Secured Notes due 2023 | 954,551 | 912,418 | |
4.125% Senior Secured Notes due 2020 | 787,193 | 752,212 | |
5.625% Senior Secured Notes due 2020 | 592,663 | 592,245 | |
Senior Secured Notes | 4,911,822 | 4,809,999 | |
6.625% Senior Secured Notes due 2018 | 559,542 | 533,915 | |
4.750% Senior Secured Notes due 2020 | 545,769 | 520,649 | |
Legacy GTECH Notes | 1,105,311 | 1,054,564 | |
7.500% Senior Secured Notes due 2019 | 528,024 | 530,009 | |
5.500% Senior Secured Notes due 2020 | 126,702 | 126,833 | |
5.350% Senior Secured Notes due 2023 | 61,273 | 61,303 | |
Legacy IGT Notes | 715,999 | 718,145 | |
Term Loan Facilities due 2019 | 906,795 | 866,785 | |
Revolving Credit Facilities due 2019 | 587,878 | 834,968 | |
Capital Securities | - | 49,472 | |
Other | 40 | 80 | |
Long-term debt, less current portion | 8,227,845 | 8,334,013 | |
Current portion of long-term debt | 167 | 160 | |
Short-term borrowings | - | - | |
Total debt | 8,228,012 | 8,334,173 | |
Cash and cash equivalents | 505,796 | 627,484 | |
Net debt | 7,722,216 | 7,706,689 | |
International Game Technology PLC | ||||||||||||
Consolidated Statement of Operations | ||||||||||||
Reconciliation of Non-GAAP Financial Measures | ||||||||||||
($ and shares in thousands, except share amounts) | ||||||||||||
Adjustments | ||||||||||||
Q1 2016 | Q1 2016 | |||||||||||
As | Purchase | Foreign | Restructuring | Transaction | As | |||||||
Reported | Accounting | Exchange | Expense | Expense | Adjusted | |||||||
Total revenue | 1,281,561 | 692 | - | - | - | 1,282,253 | ||||||
Cost of services | 648,763 | (45,804) | - | - | - | 602,959 | ||||||
Cost of product sales | 121,776 | (29,664) | - | - | - | 92,112 | ||||||
Selling, general and administrative | 227,526 | (34,746) | - | - | - | 192,780 | ||||||
Research and development | 84,707 | (498) | - | - | - | 84,209 | ||||||
Restructuring expense | 9,418 | - | - | (9,418) | - | - | ||||||
Transaction expense, net | 1,474 | - | - | - | (1,474) | - | ||||||
Total operating expenses | 1,093,664 | (110,712) | - | (9,418) | (1,474) | 972,060 | ||||||
Operating income | 187,897 | 111,404 | - | 9,418 | 1,474 | 310,193 | ||||||
Foreign exchange loss, net | (161,556) | - | 161,556 | - | - | - | ||||||
Other expense, net | (7,326) | 2,832 | - | - | - | (4,494) | ||||||
Interest expense, net | (114,122) | 2,038 | - | - | - | (112,084) | ||||||
Total non-operating expenses | (283,004) | 4,870 | 161,556 | - | - | (116,578) | ||||||
(Loss) income before provision for income taxes | (95,107) | 116,274 | 161,556 | 9,418 | 1,474 | 193,615 | ||||||
Provision for (benefit from) income taxes | (8,658) | 40,571 | 36,277 | 3,126 | 294 | 71,610 | ||||||
Net (loss) income | (86,449) | 75,703 | 125,279 | 6,292 | 1,180 | 122,005 | ||||||
Less: Net income attributable to IGT PLC | 6,325 | 25 | - | - | - | 6,350 | ||||||
Net (loss) income attributable to IGT PLC | (92,774) | 75,678 | 125,279 | 6,292 | 1,180 | 115,655 | ||||||
Net (loss) income per common share - diluted | (0.46) | 0.57 | ||||||||||
Weighted-average shares - diluted | 200,449 | 201,526 | ||||||||||
International Game Technology PLC | ||||||||||||||||
Consolidated Statement of Operations | ||||||||||||||||
Reconciliation of Non-GAAP Financial Measures | ||||||||||||||||
($ and shares in thousands, except share amounts) | ||||||||||||||||
Adjustments | ||||||||||||||||
Q1 2015 | Transaction | Q1 2015 | Q1 2015 | |||||||||||||
As | Purchase | Foreign | Restructuring | and Refinancing | As | Pro Forma | Pro | |||||||||
Reported | Accounting | Exchange | Expense | Expense | Adjusted | Adjustments | Forma | |||||||||
Total revenue | 848,242 | (178) | - | - | - | 848,064 | 399,387 | 1,247,451 | ||||||||
Cost of services | 506,735 | (16,218) | - | - | - | 490,517 | 113,306 | 603,823 | ||||||||
Cost of product sales | 35,098 | (15) | - | - | - | 35,083 | 63,355 | 98,438 | ||||||||
Selling, general and administrative | 95,551 | 3 | - | - | - | 95,554 | 134,166 | 229,720 | ||||||||
Research and development | 22,471 | (568) | - | - | - | 21,903 | 62,760 | 84,663 | ||||||||
Restructuring expense | 14,481 | - | - | (14,481) | - | - | - | - | ||||||||
Transaction expense, net | 11,050 | - | - | - | (11,050) | - | - | - | ||||||||
Total operating expenses | 685,386 | (16,798) | - | (14,481) | (11,050) | 643,057 | 373,587 | 1,016,644 | ||||||||
Operating income | 162,856 | 16,620 | - | 14,481 | 11,050 | 205,007 | 25,800 | 230,807 | ||||||||
Foreign exchange gain, net | 7,004 | - | (7,004) | - | - | - | ||||||||||
Other expense, net | (120,735) | (204) | - | - | 117,244 | (3,695) | ||||||||||
Interest expense, net | (93,775) | 13 | - | - | - | (93,762) | ||||||||||
Total non-operating expenses | (207,506) | (191) | (7,004) | - | 117,244 | (97,457) | ||||||||||
(Loss) income before provision for income taxes | (44,650) | 16,429 | (7,004) | 14,481 | 128,294 | 107,550 | ||||||||||
Provision for (benefit from) income taxes | (9,059) | 5,759 | (1,926) | 4,309 | 30,475 | 29,558 | ||||||||||
Net (loss) income | (35,591) | 10,670 | (5,078) | 10,172 | 97,819 | 77,992 | ||||||||||
Less: Net income attributable to IGT PLC | 3,726 | 25 | - | - | - | 3,751 | ||||||||||
Net (loss) income attributable to IGT PLC | (39,317) | 10,645 | (5,078) | 10,172 | 97,819 | 74,241 | ||||||||||
Net (loss) income per common share - diluted | (0.23) | 0.43 | ||||||||||||||
Weighted-average shares - diluted | 172,999 | 173,880 | ||||||||||||||
International Game Technology PLC | ||||||||
Adjusted EBITDA and Free Cash Flow | ||||||||
Reconciliations of Non-GAAP Financial Measures | ||||||||
($ thousands) | ||||||||
For the three months ended | ||||||||
March 31, 2015 | ||||||||
March 31, 2016 | As Reported | Legacy IGT | Pro Forma | |||||
Net loss | (86,449) | (35,591) | (13,085) | (48,676) | ||||
Provision for income taxes | (8,658) | (9,059) | (4,126) | (13,185) | ||||
Non-operating expenses | 283,004 | 207,506 | 10,057 | 217,563 | ||||
Depreciation | 98,517 | 71,856 | 28,960 | 100,816 | ||||
Amortization | 125,496 | 33,372 | 6,107 | 39,479 | ||||
Impairment | - | - | 6,100 | 6,100 | ||||
Amortization of upfront payments to customers | 27,409 | 26,843 | 3,556 | 30,399 | ||||
Transaction expense, net | 1,474 | 11,050 | 18,782 | 29,832 | ||||
Restructuring expense | 9,418 | 14,481 | - | 14,481 | ||||
Non-cash purchase accounting (excluding D&A) | 631 | - | - | - | ||||
Stock compensation | 9,302 | 994 | 5,951 | 6,945 | ||||
Other | - | - | 30,956 | 30,956 | ||||
Adjusted EBITDA | 460,144 | 321,452 | 93,258 | 414,710 | ||||
Cash flows from operating activities | 205,605 | 53,783 | 82,698 | 136,481 | ||||
Capital expenditures | (97,671) | (71,640) | (26,096) | (97,736) | ||||
Free Cash Flow | 107,934 | (17,857) | 56,602 | 38,745 | ||||
International Game Technology PLC Segment Performance | |||||||||||||
Pro Forma Revenue Detail | |||||||||||||
($ millions) | |||||||||||||
INTERNATIONAL GAME TECHNOLOGY PLC | |||||||||||||
As Reported | Legacy IGT | Pro Forma | Pro Forma Change | ||||||||||
2015 | 2016 | 2015 | 2015 | 2016 | Percentage | Constant FX | |||||||
Q1 | Q1 | Q1 | Q1 | Q1 | Q1 | Q1 | |||||||
Gaming | Total Revenue | 243 | 631 | 399 | 642 | 631 | -1.8% | -0.9% | |||||
Gaming Services | 206 | 500 | 301 | 507 | 500 | -1.5% | -0.5% | ||||||
Terminal | 165 | 312 | 175 | 340 | 312 | -8.1% | -7.0% | ||||||
Social (DDI) | 0 | 80 | 81 | 81 | 80 | -0.6% | -0.6% | ||||||
Other | 41 | 107 | 45 | 87 | 107 | 23.7% | 25.1% | ||||||
Product Sales | 37 | 131 | 99 | 135 | 131 | -2.9% | -2.3% | ||||||
Terminal | 27 | 79 | 62 | 90 | 79 | -11.7% | -11.3% | ||||||
Other | 9 | 52 | 37 | 46 | 52 | 14.3% | 15.2% | ||||||
Lottery | Total Revenue | 523 | 565 | 0 | 523 | 565 | 8.0% | 8.8% | |||||
Lottery Services | 502 | 550 | 0 | 502 | 550 | 9.4% | 10.2% | ||||||
FM/Concessions | 446 | 492 | 0 | 446 | 492 | 10.2% | 10.9% | ||||||
LMA | 33 | 39 | 0 | 33 | 39 | 18.6% | 18.6% | ||||||
Other Services | 23 | 19 | 0 | 23 | 19 | -18.8% | -15.0% | ||||||
Product Sales | 21 | 15 | 0 | 21 | 15 | -27.1% | -26.9% | ||||||
Terminal | 5 | 0 | 0 | 5 | 0 | -100.0% | -100.0% | ||||||
Systems/Other | 15 | 15 | 0 | 15 | 15 | -2.3% | -2.1% | ||||||
Other | Total Revenue | 82 | 86 | 0 | 82 | 86 | 4.6% | 7.2% | |||||
Service Revenue | 81 | 86 | 0 | 81 | 86 | 5.5% | 8.1% | ||||||
Product Sales | 1 | 0 | 0 | 1 | 0 | -84.5% | -84.1% | ||||||
Consolidated | Revenue | 848 | 1,282 | 399 | 1,248 | 1,282 | 2.7% | 3.7% | |||||
Operating Income: | |||||||||||||
Segment Total | 227 | 359 | 59 | 275 | 359 | 30.5% | 31.5% | ||||||
Purchase Accounting | (17) | (111) | (5) | (24) | (111) | 366.7% | 366.9% | ||||||
Corporate Support | (47) | (59) | (61) | (95) | (59) | -37.6% | -36.6% | ||||||
Total | 163 | 188 | (7) | 156 | 188 | 20.5% | 21.7% | ||||||
NAGI | |||||||||||||
As Reported | Legacy IGT | Pro Forma | Pro Forma Change | ||||||||||
2015 | 2016 | 2015 | 2015 | 2016 | Percentage | Constant FX | |||||||
Q1 | Q1 | Q1 | Q1 | Q1 | Q1 | Q1 | |||||||
Gaming | Total Revenue | 30 | 339 | 311 | 341 | 339 | -0.7% | -0.5% | |||||
Gaming Services | 13 | 258 | 245 | 257 | 258 | 0.0% | 0.2% | ||||||
Terminal | 10 | 134 | 141 | 152 | 134 | -11.4% | -11.2% | ||||||
Social (DDI) | 0 | 80 | 81 | 81 | 80 | -0.6% | -0.6% | ||||||
Other | 2 | 43 | 23 | 25 | 43 | 70.7% | 71.0% | ||||||
Product Sales | 17 | 81 | 66 | 83 | 81 | -2.9% | -2.6% | ||||||
Terminal | 15 | 50 | 43 | 57 | 50 | -13.0% | -12.7% | ||||||
Other | 3 | 31 | 23 | 26 | 31 | 19.0% | 19.4% | ||||||
Total | Revenue | 30 | 339 | 311 | 341 | 339 | -0.7% | -0.5% | |||||
Operating Income | 7 | 89 | 20 | 47 | 89 | 88.6% | 85.1% | ||||||
NOTE: Corporate Support allocations are only applied to 'As Reported' and 'Pro Forma' figures. As a result, Pro Forma Operating Income results will differ from the sum of 'As Reported' and 'Legacy IGT' Operating Income. | |||||||||||||
NA Lottery | |||||||||||||
As Reported | Legacy IGT | Pro Forma | Pro Forma Change | ||||||||||
2015 | 2016 | 2015 | 2015 | 2016 | Percentage | Constant FX | |||||||
Q1 | Q1 | Q1 | Q1 | Q1 | Q1 | Q1 | |||||||
Gaming | Total Revenue | 18 | 37 | 19 | 37 | 37 | 0.5% | -0.9% | |||||
Gaming Services | 18 | 37 | 19 | 37 | 37 | 1.0% | -0.3% | ||||||
Terminal | 8 | 25 | 18 | 26 | 25 | -4.5% | -4.5% | ||||||
Social (DDI) | 0 | 0 | 0 | 0 | 0 | 0.0% | 0.0% | ||||||
Other | 9 | 12 | 1 | 11 | 12 | 14.6% | 9.9% | ||||||
Product Sales | 0 | 0 | 0 | 0 | 0 | -95.1% | -96.7% | ||||||
Terminal | 0 | (0) | (0) | (0) | (0) | 2854.0% | 2854.0% | ||||||
Other | 0 | 0 | 0 | 0 | 0 | -81.2% | -82.8% | ||||||
Lottery | Total Revenue | 235 | 278 | 0 | 235 | 278 | 18.1% | 18.1% | |||||
Lottery Services | 224 | 267 | 0 | 224 | 267 | 19.5% | 19.5% | ||||||
FM/Concessions | 165 | 201 | 0 | 165 | 201 | 21.4% | 21.4% | ||||||
LMA | 33 | 39 | 0 | 33 | 39 | 18.6% | 18.6% | ||||||
Other Services | 25 | 27 | 0 | 25 | 27 | 7.9% | 7.9% | ||||||
Product Sales | 12 | 11 | 0 | 12 | 11 | -8.2% | -8.1% | ||||||
Terminal | 0 | 0 | 0 | 0 | 0 | -100.0% | -100.0% | ||||||
Systems/Other | 11 | 11 | 0 | 11 | 11 | -6.3% | -6.2% | ||||||
Total | Revenue | 253 | 315 | 19 | 273 | 315 | 15.7% | 15.5% | |||||
Operating Income | 43 | 88 | 15 | 55 | 88 | 60.7% | 59.3% | ||||||
NOTE: Corporate Support allocations are only applied to 'As Reported' and 'Pro Forma' figures. As a result, Pro Forma Operating Income results will differ from the sum of 'As Reported' and 'Legacy IGT' Operating Income. | |||||||||||||
INTERNATIONAL | |||||||||||||
As Reported | Legacy IGT | Pro Forma | Pro Forma Change | ||||||||||
2015 | 2016 | 2015 | 2015 | 2016 | Percentage | Constant FX | |||||||
Q1 | Q1 | Q1 | Q1 | Q1 | Q1 | Q1 | |||||||
Gaming | Total Revenue | 31 | 97 | 69 | 100 | 97 | -3.1% | 2.1% | |||||
Gaming Services | 13 | 47 | 37 | 49 | 47 | -5.3% | 4.2% | ||||||
Terminal | 2 | 13 | 15 | 17 | 13 | -22.7% | -4.0% | ||||||
Social (DDI) | 0 | 0 | 0 | 0 | 0 | 0.0% | 0.0% | ||||||
Other | 11 | 34 | 21 | 32 | 34 | 3.8% | 8.6% | ||||||
Product Sales | 18 | 50 | 33 | 51 | 50 | -1.0% | 0.1% | ||||||
Terminal | 12 | 29 | 19 | 32 | 29 | -8.2% | -7.5% | ||||||
Other | 6 | 21 | 13 | 19 | 21 | 11.0% | 12.6% | ||||||
Lottery | Total Revenue | 81 | 70 | 0 | 81 | 70 | -13.3% | -8.6% | |||||
Lottery Services | 72 | 66 | 0 | 72 | 66 | -8.5% | -3.2% | ||||||
FM/Concessions | 51 | 51 | 0 | 51 | 51 | 0.3% | 5.9% | ||||||
LMA | 0 | 0 | 0 | 0 | 0 | 0.0% | 0.0% | ||||||
Other Services | 21 | 15 | 0 | 21 | 15 | -30.1% | -25.4% | ||||||
Product Sales | 9 | 4 | 0 | 9 | 4 | -51.9% | -51.6% | ||||||
Terminal | 5 | 0 | 0 | 5 | 0 | -100.0% | -100.0% | ||||||
Systems/Other | 4 | 4 | 0 | 4 | 4 | 9.2% | 10.0% | ||||||
Other | Total Revenue | 19 | 18 | 0 | 19 | 18 | -7.8% | 2.3% | |||||
Service Revenue | 18 | 18 | 0 | 18 | 18 | -4.3% | 6.3% | ||||||
Product Sales | 1 | 0 | 0 | 1 | 0 | -84.5% | -84.1% | ||||||
Total | Revenue | 131 | 185 | 69 | 200 | 185 | -7.7% | -2.2% | |||||
Operating Income | 27 | 33 | 24 | 27 | 33 | 22.3% | 41.4% | ||||||
NOTE: Corporate Support allocations are only applied to 'As Reported' and 'Pro Forma' figures. As a result, Pro Forma Operating Income results will differ from the sum of 'As Reported' and 'Legacy IGT' Operating Income. | |||||||||||||
ITALY | |||||||||||||
As Reported | Legacy IGT | Pro Forma | Pro Forma Change | ||||||||||
2015 | 2016 | 2015 | 2015 | 2016 | Percentage | Constant FX | |||||||
Q1 | Q1 | Q1 | Q1 | Q1 | Q1 | Q1 | |||||||
Gaming | Total Revenue | 164 | 158 | 0 | 164 | 158 | -3.2% | -2.9% | |||||
Gaming Services | 163 | 158 | 0 | 163 | 158 | -3.1% | -2.8% | ||||||
Terminal | 145 | 139 | 0 | 145 | 139 | -3.6% | -3.4% | ||||||
Social (DDI) | 0 | 0 | 0 | 0 | 0 | 0.0% | 0.0% | ||||||
Other | 18 | 19 | 0 | 18 | 19 | 1.5% | 2.0% | ||||||
Product Sales | 1 | 0 | 0 | 1 | 0 | -37.1% | -37.2% | ||||||
Terminal | 0 | 0 | 0 | 0 | 0 | -98.6% | -98.6% | ||||||
Other | 0 | 0 | 0 | 0 | 0 | 69.1% | 68.7% | ||||||
Lottery | Total Revenue | 207 | 217 | 0 | 207 | 217 | 4.8% | 4.9% | |||||
Lottery Services | 207 | 217 | 0 | 207 | 217 | 4.8% | 4.9% | ||||||
FM/Concessions | 230 | 240 | 0 | 230 | 240 | 4.3% | 4.4% | ||||||
LMA | 0 | 0 | 0 | 0 | 0 | 0.0% | 0.0% | ||||||
Other Services | (23) | (23) | 0 | (23) | (23) | 0.2% | 0.5% | ||||||
Product Sales | 0 | 0 | 0 | 0 | 0 | 0.0% | 0.0% | ||||||
Terminal | 0 | 0 | 0 | 0 | 0 | 0.0% | 0.0% | ||||||
Systems/Other | 0 | 0 | 0 | 0 | 0 | 0.0% | 0.0% | ||||||
Other | Total Revenue | 63 | 68 | 0 | 63 | 68 | 8.4% | 8.7% | |||||
Service Revenue | 63 | 68 | 0 | 63 | 68 | 8.4% | 8.7% | ||||||
Product Sales | 0 | 0 | 0 | 0 | 0 | 0.0% | 0.0% | ||||||
Total | Revenue | 434 | 444 | 0 | 434 | 444 | 2.3% | 2.5% | |||||
Operating Income | 150 | 148 | 0 | 145 | 148 | 1.7% | 1.7% | ||||||
NOTE: Corporate Support allocations are only applied to 'As Reported' and 'Pro Forma' figures. As a result, Pro Forma Operating Income results will differ from the sum of 'As Reported' and 'Legacy IGT' Operating Income. |
Key Performance Indicators (KPIs) | ||||
Consolidated Key Performance Indicators (KPIs) | ||||
First Quarter | ||||
Period Ended March 31 | 2016 | 2015 | % change | |
Installed base (end of period) | ||||
Casino | 34,214 | 35,760 | -4.3% | |
VLT - Government Sponsored (ex-Italy) | 15,581 | 16,242 | -4.1% | |
VLT - Italy Supplier (B2B) | 8,270 | 8,529 | -3.0% | |
Total installed base | 58,065 | 60,531 | -4.1% | |
Yield (average revenue per unit per day - $0.00) | 32.79 | 34.28 | -4.6% | |
Additional Italian Network Details: | ||||
VLT - Operator (B2C) | 11,120 | 10,938 | 1.7% | |
AWP | 55,991 | 63,840 | -12.3% | |
Machine units shipped | ||||
New/Expansion | 1,087 | 595 | 82.7% | |
Replacement | 4,608 | 6,233 | -26.1% | |
Total machines shipped | 5,695 | 6,828 | -16.6% | |
Global lottery same-store revenue growth | ||||
Instants & draw games | 7.1% | |||
Multistate Jackpots | 82.9% | |||
Total lottery same-store revenue growth (ex-Italy) | 17.9% | |||
Italy lottery revenue growth | 4.9% | |||
Machine units shipped reflect mixed historical methodologies of legacy companies prior to 2Q 2015 |
North America KPIs | ||||
First Quarter | ||||
Period Ended March 31 | 2016 | 2015 | % change | |
Installed base (end of period) | ||||
Casino | 24,958 | 25,882 | -3.6% | |
VLT - Government Sponsored | 15,331 | 15,992 | -4.1% | |
Total installed base | 40,289 | 41,874 | -3.8% | |
Machine units shipped | ||||
New/Expansion | 902 | 329 | 174.2% | |
Replacement | 3,049 | 4,912 | -37.9% | |
Total machines shipped | 3,951 | 5,241 | -24.6% | |
DoubleDown | ||||
Revenue ($ Thousands) | 80,133 | 80,643 | -0.6% | |
Mobile penetration | 54% | 41% | 30.5% | |
DAU (Daily Active Users) | 1,859 | 1,929 | -3.6% | |
MAU (Monthly Active Users) | 4,310 | 4,734 | -9.0% | |
Bookings per DAU | $ 0.47 | $ 0.47 | 0.8% | |
Lottery same-store revenue growth | ||||
Instants & draw games | 8.8% | |||
Multistate Jackpots | 93.4% | |||
Total lottery same-store revenue growth | 22.7% | |||
Machine units shipped reflect mixed historical methodologies of legacy companies prior to 2Q 2015 | ||||
As a single application with multiple games, active users equal unique users |
International KPIs | ||||
First Quarter | ||||
Period Ended March 31 | 2016 | 2015 | % change | |
Installed base (end of period) | ||||
Casino | 9,256 | 9,878 | -6.3% | |
VLT - Government Sponsored | 250 | 250 | 0.0% | |
Total installed base | 9,506 | 10,128 | -6.1% | |
Machine units shipped | ||||
New/Expansion | 185 | 266 | -30.5% | |
Replacement | 1,559 | 1,321 | 18.0% | |
Total machines shipped | 1,744 | 1,587 | 9.9% | |
Lottery same-store revenue growth | ||||
Instants & draw games | 2.2% | |||
Multistate Jackpots | 4.3% | |||
Total lottery same-store revenue growth | 2.3% | |||
Machine units shipped reflect mixed historical methodologies of legacy companies prior to 2Q 2015 |
Italy KPIs | ||||
First Quarter | ||||
Period Ended March 31 | 2016 | 2015 | % change | |
(In € millions, except machines) | ||||
Lottery | ||||
Lotto wagers | 1,928 | 1,817 | 6.1% | |
10eLotto | 1,193 | 1,074 | 11.1% | |
Core | 559 | 638 | -12.5% | |
Late Numbers | 176 | 105 | 68.5% | |
Scratch & Win Wagers | 2,355 | 2,302 | 2.3% | |
Italy lottery revenue growth | 4.9% | |||
Gaming | ||||
Installed base (end of period) | ||||
VLT - Operator (B2C) | 11,120 | 10,938 | 1.7% | |
VLT - Supplier (B2B) | 8,270 | 8,529 | -3.0% | |
AWP | 55,991 | 63,840 | -12.3% | |
Total Installed Base | 75,381 | 83,307 | -9.5% | |
Wagers | ||||
VLT - Operator (B2C) | 1,398 | 1,373 | 1.9% | |
AWP | 1,080 | 1,131 | -4.4% | |
Interactive Wagers (Gaming) | 424 | 466 | -9.0% | |
Other | ||||
Sports Betting Wagers | 221 | 257 | -14.0% | |
Sports Betting Payout (%) | 80.9% | 84.7% | -3.8 pp | |
Includes Virtual Wagers and Pools & Horses |
Logo - http://photos.prnewswire.com/prnh/20150406/196736LOGO
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/international-game-technology-plc-reports-first-quarter-2016-results-300275451.html
SOURCE International Game Technology PLC
IGT - International Game Technology plc published this content on 26 May 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 26 May 2016 11:00:03 UTC.
Original documenthttp://ir.igt.com/phoenix.zhtml?c=119000&p=irol-newsArticle&ID=2172650
Public permalinkhttp://www.publicnow.com/view/D74404FB52C0C18DDD660F83C277C162592E6BFD
