81 percent revenue growth in successful vertical
Scientific Games has reported reduced losses in its third quarter results, thanks partly to revenue growth of 81 percent in social gaming and larger machine sales.
Group financial highlights from the company included:
* Revenue up 7 percent year-on-year at $720 million;
* Operating income of $33.5 million compared to a loss of $988.2 million in the prior-year period, which included a $935 million goodwill impairment charge and $103.6 million of impairment charges for certain intangible assets;
* Net loss of $98.9 million compared to a net loss of $1,078.2 million in the prior-year period;
* Attributable EBITDA up 3 percent year-on-year at $271.6 million, reflecting higher revenue but partially offset by higher marketing and product development-related expenses in the Interactive division relating to the anticipated launch of future new social gaming apps;
* Net cash from operating activities up 7 percent to $150.9 million. Free cash flow increased 57 percent y-o-y to $61.1 million;
* The company paid down $42.4 million of debt in the third quarter, including $30 million in voluntary repayments on its credit facility and $10.8 million in mandatory amortisation of its term loans.
* Cash and cash equivalents increased to $19.5 million. Cash and availability under the company's revolving credit facility totaled $607.3 million as at September 30, 2016.
Kevin Sheehan, CEO and President, reported to shareholders: "Scientific Games is focused on building momentum. The breadth and depth of our new products showcased at the Global Gaming Expo ("G2E") and National Association of State and Provincial Lotteries ("NASPL") tradeshows demonstrate our commitment to innovation and solutions that help our customers more fully engage with their players to create growth.
"As we look forward, it is time to transform the way we operate by creating a simpler, more efficient and nimble organization with a laser focus on our core businesses. Our priorities are:
1) drive further innovation to create new, differentiated products for our customers that power growth,
2) focus on prudent fiscal management to improve financial returns and free cash flow to accelerate deleveraging, and
3) build a corporate culture open to new ideas and opportunities that help to accelerate our progress."
CFO Michael Quartieri, revealed that the company has just embarked on a business improvement initiative to manage expenses more efficiently, and he expects this to reduce annualised cost structure by $75 million by the end of 2016 at a cost of approximately $20 million.
Interactive highlights in the group report included:
* Total Interactive revenue up 66 percent y-o-y to $85.2 million, despite a $1.2 million unfavorable foreign currency translation impact;
* Social gaming revenue up 81 percent from Jackpot Party Social Casino operations and the success of the newer Quick Hit Slots, Hot Shot Social Casino and Blazing 7s Hot Shot Slots social gaming apps;
* Interactive operating income increased to $9.6 million and adjusted EBITDA rose to $13.6 million, reflecting higher revenue partially offset by more marketing, increased selling, general and administrative costs and research and development expenses.
* Average DAU (daily average users) and MAU (monthly average users) rose due to the growth in users from additional new game apps, while the 55 percent increase in ARPDAU (average revenue per daily average user) reflects a greater proportion of paying players as a result of continuous improvements in player experience and retention activity.
Online Casino News Courtesy of Infopowa
