[May 01, 2014] |
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Bally Technologies, Inc. Reports Record Adjusted EPS of $1.10 and GAAP Diluted EPS of $0.70 for the Third Quarter of Fiscal 2014
LAS VEGAS --(Business Wire)--
Bally
Technologies, Inc. (NYSE: BYI)
Neil P. Davidson, CFO of Bally Technologies, Inc. (Photo: Business Wire)
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ADJUSTED EPS, WHICH INCLUDES $0.05 OF FOREIGN CURRENCY LOSSES,
INCREASES TO A RECORD $1.10, UP 18 PERCENT FROM PRIOR YEAR
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WIDE-AREA PROGRESSIVE REVENUE SETS A QUARTERLY RECORD
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ACHIEVES NORTH AMERICA REPLACEMENT-UNIT SALES OF 2,496, UP 22
PERCENT FROM PRIOR YEAR
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SYSTEMS REVENUE SETS A QUARTERLY RECORD FOR THE SIXTH CONSECUTIVE
QUARTER OF $91 MILLION, UP 27 PERCENT FROM PRIOR YEAR
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UPDATES FISCAL 2014 ADJUSTED EPS GUIDANCE TO $4.35 TO $4.50
Bally
Technologies, Inc. (NYSE: BYI) ("Bally" or the "Company"), a
leader in gaming machines, table game products, casino-management
systems, interactive applications, and networked and server-based
systems for the global gaming industry, today announced record quarterly
revenue of $338 million and Adjusted EPS of $1.10 for the three months
ended March 31, 2014, which includes a $0.05 per share loss from
unfavorable foreign currency movements. Diluted earnings per share
("GAAP Diluted EPS") were $0.70 for the three months ended March 31,
2014.
"We achieved outstanding financial and operational results in the
quarter which helped drive a record 26 percent adjusted operating margin
for the first nine months of fiscal 2014 versus 23 percent in the prior
year," said Ramesh Srinivasan, the Company's President and Chief
Executive Officer. "The ongoing SHFL integration has been pivotal in
many respects to our results. Our Systems business continues to be a
major factor as we gain a greater share of the industry's increasing
technology-related spend. On the EGM front, initial demand for our Pro
Wave™ cabinet has been very robust, helping us to grow domestic
replacement unit sales by 25 percent over last quarter. Combined with
SHFL's international strength, this was our highest quarterly EGM unit
sale level in six years, despite the absence of Canada VLT units. We
remain confident that our industry-leading innovation as evidenced by
the Pro Wave platform and strength across a broad portfolio of products
will help us grow our business into fiscal 2015 and beyond."
"We continued to set a number of financial records this quarter while
generating significant free cash flow," said Neil Davidson, the
Company's Chief Financial Officer. "We remain committed to deleveraging
our balance sheet, as evidenced by the $68 million of debt we repaid
during the quarter, for a total of $101 million since the acquisition of
SHFL, which lowered our leverage ratio to 3.9 times. In addition, we
repurchased approximately 150,000 shares of our common stock for $10
million during the quarter. We will continue to prudently utilize excess
free cash flow to pay down debt with the goal of achieving a leverage
ratio of 3.0 times by the end of calendar 2015."
Third Quarter Fiscal Year 2014 Highlights
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Three Months Ended March 31,
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Nine Months Ended March 31,
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2014
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% Rev
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2013
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% Rev
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2014 (3)
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% Rev
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2013
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% Rev
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(dollars in millions, except per share amounts)
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Revenues:
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Electronic Gaming Machines ("EGM")
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$
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102.4
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30%
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$
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85.8
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33%
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$
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261.8
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30%
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$
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251.1
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34
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%
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Gaming Operations
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101.4
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30%
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102.0
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39%
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300.6
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34%
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302.2
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41
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%
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Systems
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90.5
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27%
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71.3
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28%
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252.1
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29%
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179.3
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25
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%
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Table Products
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44.1
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13%
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-
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-
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58.4
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7%
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-
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-
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Total revenues
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$
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338.4
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100%
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$
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259.1
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100%
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$
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872.9
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100%
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$
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732.6
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100
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%
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Gross Margin: (1)
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EGM
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$
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50.2
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49%
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$
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43.5
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51%
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$
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128.3
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49%
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$
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126.6
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50
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%
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Gaming Operations
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66.2
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65%
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72.0
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71%
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205.3
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68%
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211.8
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70
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%
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Systems
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63.9
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71%
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52.2
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73%
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182.1
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72%
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134.9
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75
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%
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Table Products
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31.2
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71%
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-
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39.9
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68%
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-
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-
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Total gross margin
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$
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211.5
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63%
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$
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167.7
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65%
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$
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555.6
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64%
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$
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473.3
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65
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%
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Selling, general and administrative
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$
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88.2
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26%
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$
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72.2
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28%
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$
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251.6
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29%
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$
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204.6
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28
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%
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Research and development costs
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36.7
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11%
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29.1
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11%
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98.9
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11%
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80.8
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11
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%
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Depreciation and amortization
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20.5
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6%
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5.7
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3%
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37.5
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4%
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17.0
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3
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%
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Operating income
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$
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66.1
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20%
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$
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60.7
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23%
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$
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167.6
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19%
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$
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170.9
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23
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%
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GAAP Diluted EPS
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$
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0.70
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$
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0.93
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$
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2.21
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$
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2.50
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Non-GAAP Measures: (2)
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Adjusted Operating Income
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$
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90.6
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27%
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$
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60.7
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23%
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$
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228.7
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26%
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$
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170.9
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23
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%
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Adjusted EBITDA
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$
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117.4
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35%
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$
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85.0
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33%
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$
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306.3
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35%
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$
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244.9
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33
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%
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Adjusted EPS
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$
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1.10
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$
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0.93
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$
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3.12
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$
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2.50
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(1)
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Gross Margin excludes amortization related to intangible assets
which are included in depreciation and amortization ("D&A").
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(2)
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Adjusted Operating Income, Adjusted EBITDA (earnings before
interest, taxes, depreciation and amortization, including
share-based compensation and acquisition-related costs) and
Adjusted EPS are Non-GAAP financial measures. Reconciliation
between GAAP and Non-GAAP measures can be found at the end of this
press release.
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(3)
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Results for the nine months ended March 31, 2014 include SHFL
entertainment, Inc. ("SHFL") results beginning on November 25,
2013.
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As of March 31,
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2014
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2013
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End-of-period installed base:
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Linked progressive systems
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2,478
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2,365
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Rental and daily-fee games
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16,048
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14,953
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Lottery systems (1)
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12,629
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12,059
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Centrally determined systems
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30,649
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37,201
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Utility products
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8,905
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NA
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Proprietary Table Games ("PTG")
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3,016
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NA
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Table game progressive units, table game side bets, and add-ons
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5,434
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NA
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(1)
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Excludes 693 and 636 third-party Electronic Table System ("ETS")
seats operating as of March 31, 2014 and 2013, respectively.
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Three Months Ended March 31,
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Nine Months Ended March 31,
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2014
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2013
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2014
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2013
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Operating Statistics
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Units Sold
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Average Selling Price ("ASP")
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Units Sold
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ASP
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Units Sold
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ASP
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Units Sold
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ASP
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New EGM
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5,278
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$ 17,203
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4,923
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$ 16,051
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14,425
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$ 16,502
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14,096
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$ 16,476
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Utility products
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788
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16,088
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NA
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NA
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926
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16,218
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NA
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NA
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Highlights of Certain Results for the Three Months Ended March 31,
2014
Overall
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Total revenue increased 31 percent to a quarterly record $338 million
as compared with $259 million last year.
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Adjusted EBITDA increased 38 percent to a quarterly record $117
million as compared with $85 million last year.
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Selling, general and administrative expenses ("SG&A") decreased to 26
percent of total revenues from 28 percent last year and includes $6
million of one-time costs associated with the acquisition of SHFL.
After adjusting for these one-time costs, SG&A was 24 percent of total
revenues in the current period, down from 28 percent last year.
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Research and development expenses ("R&D") remained constant at 11
percent of total revenue.
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Operating income increased 9 percent to $66 million as compared with
$61 million last year. Adjusted Operating Income increased by 49
percent to a record $91 million. Adjusted operating margin increased
to a record 27 percent from 23 percent last year.
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GAAP Diluted EPS was $0.70 as compared with $0.93 last year. Adjusted
EPS increased 18 percent to a quarterly record $1.10 from $0.93 last
year. GAAP Diluted and Adjusted EPS for the current period included a
$0.05 per share loss from unfavorable foreign currency movements.
Electronic Gaming Machines
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Revenues increased 19 percent to $102 million as compared with $86
million last year, driven by higher replacement sales and the sale of
930 Equinox™ units and 211 ETS seats, partially offset by the absence
of 788 Canadian VLT units sold in the prior year period.
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ASP of new electronic gaming devices increased 7 percent to $17,203
per unit from $16,051 last year, primarily as a result of geographic
mix and sales of the Pro Wave cabinet, which carry higher ASPs.
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New-unit sales to international customers were 34 percent of total new
unit shipments compared to 17 percent in the prior year period.
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Gross margin decreased to 49 percent from 51 percent last year,
primarily driven by $1 million of inventory-related charges that are
included in acquisition-related costs. After adjusting for these
costs, gross margin was 50 percent.
Gaming Operations
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Revenues decreased slightly to $101 million as compared with $102
million last year, driven by lower yields on certain variable-fee
games, partially offset by record wide-area progressive ("WAP")
revenue and the inclusion of 2,198 leased ETS seats.
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Gross margin decreased to 65 percent from 71 percent last year,
primarily due to higher jackpot expenses and $1 million of
asset-related charges that are included in acquisition-related costs.
After adjusting for asset-related charges, gross margin was 66 percent
Systems
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Revenues increased 27 percent to an all-time record $91 million as
compared with $71 million last year, driven primarily by hardware
revenue.
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Maintenance revenues increased 7 percent to $24 million as compared
with $23 million last year.
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Gross margin decreased to 71 percent from 73 percent last year,
primarily as a result of the change in mix of products. Specifically,
hardware sales were 44 percent of systems revenues, and software and
service sales were 29 percent, as compared to 36 percent for hardware
sales and 32 percent for software and services sales in the same
period last year.
Table Products
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Revenues from Table Products were $44 million, with Utility products
revenue of $29 million and PTG revenue of $15 million.
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Gross margin was 71 percent. Gross margin was impacted by $2 million
of inventory-related charges that are included in acquisition-related
costs. After adjusting for these costs gross margin was 76 percent.
Highlights of Certain Results for the Nine Months Ended March 31, 2014
Overall
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Total revenue increased 19 percent to a record $873 million as
compared with $733 million last year.
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Adjusted EBITDA increased 25 percent to a record $306 million as
compared with $245 million last year.
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SG&A increased to 29 percent of total revenues from 28 percent last
year, primarily driven by $33 million of one-time costs associated
with the acquisition of SHFL. After adjusting for these one-time
costs, SG&A was 25 percent of total revenues in the current period
down from 28 percent last year.
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R&D remained constant at 11 percent of total revenues.
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Operating income decreased 2 percent to $168 million as compared with
$171 million last year. Adjusted Operating Income increased 34 percent
to a record $229 million. Adjusted operating margin increased to a
record 26 percent from 23 percent last year.
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GAAP Diluted EPS was $2.21 as compared with $2.50 last year. Adjusted
EPS increased 25 percent to a record $3.12 from $2.50 last year. GAAP
Diluted and Adjusted EPS for the current period included a $0.09 per
share loss from unfavorable foreign currency movements.
Electronic Gaming Machines
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Revenues increased 4 percent to $262 million as compared with $251
million last year, driven by the shipment of 2,220 units into the
Illinois VGT market, 1,517 Equinox units, and 301 ETS seats, partially
offset by the absence of 2,026 Canadian VLT units sold in the prior
year period.
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ASP of new gaming devices increased to $16,502 per unit from $16,476
last year, primarily as a result of geographic mix and sales of the
Pro Wave cabinet which carry higher ASPs.
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New-unit sales to international customers were 28 percent of total new
unit shipments compared with 17 percent last year.
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Gross margin decreased to 49 percent from 50 percent last year,
primarily driven by $4 million of inventory-related charges that are
included in acquisition-related costs. After adjusting for these
costs, gross margin was 51 percent.
Gaming Operations
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Revenues decreased slightly to $301 million as compared with $302
million last year, driven by lower yields on certain variable-fee
games, partially offset by record WAP revenue and the inclusion of
2,198 leased ETS seats.
-
Gross margin decreased to 68 percent from 70 percent last year,
primarily due to higher-than-expected jackpot expenses and $1 million
of asset-related charges that are included in acquisition-related
costs. After adjusting for asset-related charges, gross margin was 69
percent.
Systems
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Revenues increased 41 percent to a record $252 million as compared
with $179 million last year, driven primarily by hardware revenue.
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Maintenance revenues increased 10 percent to a record $74 million as
compared with $67 million last year.
-
Gross margin decreased to 72 percent from 75 percent last year,
primarily as a result of the change in mix of products. Specifically,
hardware sales were 38 percent of systems revenues, and software and
service sales were 33 percent, as compared to 30 percent for hardware
sales and 33 percent for software and services sales in the same
period last year.
Table Products
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Revenues from Table Products were $58 million, with Utility products
revenue of $38 million and PTG revenue of $20 million.
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Gross margin was 68 percent. Gross margin was impacted by $3 million
of inventory-related charges that are included in acquisition-related
costs. After adjusting for these costs, gross margin was 74 percent.
Fiscal 2014 Business Update
The Company updated full-year fiscal 2014 guidance for Adjusted EPS to
$4.35 to $4.50. Adjusted EPS is calculated in accordance with the table
included in this press release. The range excludes current and expected
losses from unfavorable foreign currency movements. For clarity, this
guidance includes $3.21 per share of results for the nine months ended
March 31, 2014 which is comprised of Adjusted EPS of $3.12 plus an
add-back of $0.09 per share loss from unfavorable foreign currency
movements incurred during the first nine months of fiscal 2014. This
results in a range of Adjusted EPS expected for the remaining three
months of fiscal 2014 of $1.14 to $1.29.
The Company has provided this range of adjusted earnings guidance for
fiscal 2014 to give investors general information on the overall
direction of its business at this time. The guidance provided is subject
to numerous uncertainties, including, among others, overall economic and
capital market conditions, the market for gaming devices and systems,
changes in gaming legislation, the timing of new jurisdictions and
casino openings, the timing and completion of new systems installations,
competitive product introductions, complex revenue recognition
rules related to the Company's business, and assumptions about the
Company's new product introductions and regulatory approvals. The
Company does not intend and undertakes no obligation to update its
forward-looking statements, including forecasts, potential opportunities
for growth in new and existing markets, and future prospects for
proposed new products. Accordingly, the Company does not intend to
update guidance during the quarter. Additional information about the
factors that could potentially affect the Company's financial results
included in today's press release can be found in the Company's Annual
Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the
U.S. Securities and Exchange Commission.
Non-GAAP Financial Measures
The following table reconciles the Company's net income attributable to
Bally Technologies, Inc., as determined in accordance with generally
accepted accounting principles ("GAAP"), to Adjusted EBITDA:
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Three Months Ended
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Nine Months Ended
|
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March 31,
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|
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March 31,
|
|
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|
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2014
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2013
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2014
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|
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2013
|
|
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(in millions)
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Net income attributable to Bally Technologies, Inc.
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$
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27.4
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$
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38.4
|
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$
|
86.4
|
|
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$
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104.1
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Interest expense, net
|
|
|
|
18.8
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|
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3.2
|
|
|
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30.1
|
|
|
9.8
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Income tax expense
|
|
|
|
16.2
|
|
|
17.5
|
|
|
|
44.5
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|
|
55.3
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Depreciation and amortization
|
|
|
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41.3
|
|
|
22.4
|
|
|
|
93.4
|
|
|
66.0
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Share-based compensation
|
|
|
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3.3
|
|
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3.5
|
|
|
|
10.4
|
|
|
9.7
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Acquisition-related costs
|
|
|
|
6.2
|
|
|
-
|
|
|
|
33.1
|
|
|
-
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Inventory step-up and obsolescence
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|
|
|
4.2
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|
|
-
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|
|
|
8.4
|
|
|
-
|
Adjusted EBITDA
|
|
|
|
$
|
117.4
|
|
|
$
|
85.0
|
|
|
|
$
|
306.3
|
|
|
$
|
244.9
|
Adjusted EBITDA is a supplemental Non-GAAP financial measure used by the
Company's management and by some industry analysts to evaluate the
Company's ability to service debt, and is used by some investors and
financial analysts in the gaming industry in measuring and comparing
Bally's leverage, liquidity, and operating performance to other gaming
companies. Adjusted EBITDA should not be considered an alternative to
operating income or net cash from operations as determined in accordance
with GAAP. Not all companies calculate Adjusted EBITDA the same way, and
the Company's presentation may be different from those presented by
other companies.
The following tables reconcile the Company's GAAP to Non-GAAP Financial
Measures:
Three Months Ended March 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
|
|
|
SG&A
|
|
|
|
|
|
Operating
|
|
|
Net
|
|
|
|
|
|
|
|
Revenues
|
|
|
Margin (1)
|
|
|
Expenses
|
|
|
D&A
|
|
|
Income
|
|
|
Income (2)
|
|
|
EPS
|
|
GAAP Measures
|
|
|
|
$
|
338.4
|
|
|
$
|
211.5
|
|
|
$
|
88.2
|
|
|
$
|
20.5
|
|
|
$
|
66.1
|
|
|
$
|
27.4
|
|
|
$
|
0.70
|
GAAP %
|
|
|
|
|
|
|
63%
|
|
|
26%
|
|
|
|
|
|
20%
|
|
|
|
|
|
|
Amortization of purchased intangibles
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(14.1)
|
|
|
14.1
|
|
|
9.1
|
|
|
0.23
|
Acquisition-related costs
|
|
|
|
-
|
|
|
4.2
|
|
|
(6.2)
|
|
|
-
|
|
|
10.4
|
|
|
6.7
|
|
|
0.17
|
Total adjustments
|
|
|
|
-
|
|
|
4.2
|
|
|
(6.2)
|
|
|
(14.1)
|
|
|
24.5
|
|
|
15.8
|
|
|
0.40
|
Adjusted Non-GAAP Measures
|
|
|
|
$
|
338.4
|
|
|
$
|
215.7
|
|
|
$
|
82.0
|
|
|
$
|
6.4
|
|
|
$
|
90.6
|
|
|
$
|
43.2
|
|
|
$
|
1.10
|
Adjusted %
|
|
|
|
|
|
|
64%
|
|
|
24%
|
|
|
|
|
|
27%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Gross Margin excludes amortization related to intangible assets
which are included in depreciation and amortization.
|
(2)
|
|
Adjustments are tax effected at 35.5%.
|
|
|
|
|
|
|
Nine Months Ended March 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
|
|
|
SG&A
|
|
|
|
|
|
Operating
|
|
|
Net
|
|
|
|
|
|
|
|
Revenues
|
|
|
Margin (1)
|
|
|
Expenses
|
|
|
D&A
|
|
|
Income
|
|
|
Income (2)
|
|
|
EPS
|
|
GAAP Measures
|
|
|
|
$
|
872.9
|
|
|
$
|
555.6
|
|
|
$
|
251.6
|
|
|
$
|
37.5
|
|
|
$
|
167.6
|
|
|
$
|
86.4
|
|
|
$
|
2.21
|
GAAP %
|
|
|
|
|
|
|
64%
|
|
|
29%
|
|
|
|
|
|
19%
|
|
|
|
|
|
|
Amortization of purchased intangibles
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(19.6)
|
|
|
19.6
|
|
|
12.7
|
|
|
0.32
|
Acquisition-related costs
|
|
|
|
-
|
|
|
8.4
|
|
|
(33.1)
|
|
|
-
|
|
|
41.5
|
|
|
26.7
|
|
|
0.68
|
IRS audit one-time benefit
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(3.6)
|
|
|
(0.09)
|
Total adjustments
|
|
|
|
-
|
|
|
8.4
|
|
|
(33.1)
|
|
|
(19.6)
|
|
|
61.1
|
|
|
35.8
|
|
|
0.91
|
Adjusted Non-GAAP Measures
|
|
|
|
$
|
872.9
|
|
|
$
|
564.0
|
|
|
$
|
218.5
|
|
|
$
|
17.9
|
|
|
$
|
228.7
|
|
|
$
|
122.2
|
|
|
$
|
3.12
|
Adjusted %
|
|
|
|
|
|
|
65%
|
|
|
25%
|
|
|
|
|
|
26%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Gross Margin excludes amortization related to intangible assets
which are included in depreciation and amortization.
|
(2)
|
|
Adjustments are tax effected at 35.5%, except there is no tax
effect on the IRS audit one-time benefit.
|
Adjusted EPS and other such adjusted measures are supplemental Non-GAAP
financial measures that the Company's management believes more
accurately reflects the Company's operating results for the periods
presented. Adjusted measures should not be considered an alternative to
GAAP measures as determined in accordance with GAAP.
Earnings Conference Call and Webcast
As previously announced, the Company is hosting a conference call and
webcast today at 4:30 p.m. EDT (1:30 p.m. PDT). The conference-call
dial-in number is 866-524-3160 or 412-317-6760 (International); passcode
"Bally". The webcast can be accessed by visiting BallyTech.com
and selecting "Investor Relations." Interested parties should initiate
the call and webcast process at least five minutes prior to the
beginning of the presentation. For those who miss this event, an
archived version will be available at BallyTech.com
until June 2, 2014.
About Bally Technologies, Inc.
Founded in 1932, Bally Technologies (NYSE: BYI) provides the global
gaming industry with innovative games, table game products, systems,
mobile, and iGaming solutions that drive revenue and provide operating
efficiencies for gaming operators. For more information, please contact
Mike Trask, Senior Manager, Marketing & Corporate Communications, at
702-532-7451, or visit http://www.ballytech.com.
Connect with Bally on Facebook,
Twitter,
YouTube,
LinkedIn
and Pinterest.
This press release may contain "forward looking" statements within
the meaning of the Securities Act of 1933, as amended, and the
Securities Exchange Act of 1934, as amended, and is subject to the safe
harbors created thereby. Forward looking statements are subject to
change and involve risks and uncertainties that could significantly
affect future results, including those risks detailed from time to time
in the Company's filings with the Securities and Exchange Commission.
Although the Company believes any expectations expressed in any
forward looking statements are reasonable, future results may differ
materially from those expressed in any forward looking statements. The
Company undertakes no obligation to update the information in this press
release except as required by law and represents that the information
speaks only as of today's date.
- BALLY TECHNOLOGIES, INC. -
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2014 AND 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
Nine Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
|
|
|
March 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in 000s, except per share amounts)
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gaming equipment and systems
|
|
|
|
$
|
209,329
|
|
|
|
$
|
157,102
|
|
|
|
|
$
|
534,114
|
|
|
|
$
|
430,436
|
|
Product lease, operation and royalty
|
|
|
|
129,070
|
|
|
|
102,045
|
|
|
|
|
338,767
|
|
|
|
302,201
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
338,399
|
|
|
|
259,147
|
|
|
|
|
872,881
|
|
|
|
732,637
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of gaming equipment and systems (1)
|
|
|
|
86,307
|
|
|
|
61,419
|
|
|
|
|
213,729
|
|
|
|
168,978
|
|
Cost of product lease, operation and royalty(1)
|
|
|
|
40,537
|
|
|
|
29,992
|
|
|
|
|
103,521
|
|
|
|
90,320
|
|
Selling, general and administrative
|
|
|
|
88,248
|
|
|
|
72,218
|
|
|
|
|
251,661
|
|
|
|
204,586
|
|
Research and development costs
|
|
|
|
36,677
|
|
|
|
29,098
|
|
|
|
|
98,890
|
|
|
|
80,792
|
|
Depreciation and amortization
|
|
|
|
20,523
|
|
|
|
5,755
|
|
|
|
|
37,460
|
|
|
|
17,046
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
272,292
|
|
|
|
198,482
|
|
|
|
|
705,261
|
|
|
|
561,722
|
|
Operating income
|
|
|
|
66,107
|
|
|
|
60,665
|
|
|
|
|
167,620
|
|
|
|
170,915
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
|
1,976
|
|
|
|
1,191
|
|
|
|
|
6,946
|
|
|
|
3,738
|
|
Interest expense
|
|
|
|
(20,861
|
)
|
|
|
(4,389
|
)
|
|
|
|
(37,083
|
)
|
|
|
(13,544
|
)
|
Other, net
|
|
|
|
(3,453
|
)
|
|
|
(1,534
|
)
|
|
|
|
(5,562
|
)
|
|
|
(3,336
|
)
|
Income from operations before income taxes
|
|
|
|
43,769
|
|
|
|
55,933
|
|
|
|
|
131,921
|
|
|
|
157,773
|
|
Income tax expense
|
|
|
|
(16,200
|
)
|
|
|
(17,527
|
)
|
|
|
|
(44,477
|
)
|
|
|
(55,345
|
)
|
Net income
|
|
|
|
27,569
|
|
|
|
38,406
|
|
|
|
|
87,444
|
|
|
|
102,428
|
|
Less net income (loss) attributable to noncontrolling interests
|
|
|
|
125
|
|
|
|
(43
|
)
|
|
|
|
1,005
|
|
|
|
(1,679
|
)
|
Net income attributable to Bally Technologies, Inc.
|
|
|
|
$
|
27,444
|
|
|
|
$
|
38,449
|
|
|
|
|
$
|
86,439
|
|
|
|
$
|
104,107
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted earnings per share attributable to Bally
Technologies, Inc.:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
|
|
$
|
0.71
|
|
|
|
$
|
0.95
|
|
|
|
|
$
|
2.25
|
|
|
|
$
|
2.56
|
|
Diluted earnings per share
|
|
|
|
$
|
0.70
|
|
|
|
$
|
0.93
|
|
|
|
|
$
|
2.21
|
|
|
|
$
|
2.50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
38,614
|
|
|
|
40,483
|
|
|
|
|
38,493
|
|
|
|
40,594
|
|
Diluted
|
|
|
|
39,205
|
|
|
|
41,199
|
|
|
|
|
39,156
|
|
|
|
41,614
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Cost of gaming equipment and systems and product lease, operation
and royalty exclude amortization related to intangible assets
which are included in depreciation and amortization.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2014 AND JUNE 30, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2014
|
|
|
|
June 30, 2013
|
|
|
|
|
|
(in 000s, except share amounts)
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
90,484
|
|
|
|
$
|
63,220
|
|
Restricted cash
|
|
|
|
13,779
|
|
|
|
12,939
|
|
Accounts and notes receivable, net of allowances for doubtful
accounts of $15,772 and $14,813
|
|
|
|
306,637
|
|
|
|
248,497
|
|
Inventories
|
|
|
|
91,812
|
|
|
|
68,407
|
|
Prepaid and refundable income tax
|
|
|
|
31,259
|
|
|
|
21,845
|
|
Deferred income tax assets
|
|
|
|
50,913
|
|
|
|
38,305
|
|
Deferred cost of revenue
|
|
|
|
15,460
|
|
|
|
22,417
|
|
Prepaid assets
|
|
|
|
20,458
|
|
|
|
14,527
|
|
Other current assets
|
|
|
|
5,023
|
|
|
|
2,920
|
|
Total current assets
|
|
|
|
625,825
|
|
|
|
493,077
|
|
Restricted long-term investments
|
|
|
|
16,703
|
|
|
|
14,786
|
|
Long-term accounts and notes receivables, net of allowances for
doubtful accounts of $1,492 and $1,764
|
|
|
|
63,696
|
|
|
|
65,456
|
|
Property, plant and equipment, net of accumulated depreciation of
$70,574 and $60,556
|
|
|
|
71,514
|
|
|
|
35,097
|
|
Leased gaming equipment, net of accumulated depreciation of $242,063
and $209,680
|
|
|
|
131,369
|
|
|
|
113,751
|
|
Goodwill
|
|
|
|
997,522
|
|
|
|
172,162
|
|
Intangible assets, net
|
|
|
|
519,868
|
|
|
|
25,076
|
|
Deferred income tax assets
|
|
|
|
3,683
|
|
|
|
17,944
|
|
Income tax receivable
|
|
|
|
979
|
|
|
|
1,837
|
|
Deferred cost of revenue
|
|
|
|
8,861
|
|
|
|
12,105
|
|
Other assets, net
|
|
|
|
53,979
|
|
|
|
27,974
|
|
Total assets
|
|
|
|
$
|
2,493,999
|
|
|
|
$
|
979,265
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
|
$
|
33,921
|
|
|
|
$
|
25,863
|
|
Accrued and other liabilities
|
|
|
|
110,240
|
|
|
|
91,127
|
|
Jackpot liabilities
|
|
|
|
12,566
|
|
|
|
11,731
|
|
Deferred revenue
|
|
|
|
41,851
|
|
|
|
62,254
|
|
Income tax payable
|
|
|
|
2,225
|
|
|
|
11,345
|
|
Current maturities of long-term debt
|
|
|
|
41,182
|
|
|
|
24,615
|
|
Total current liabilities
|
|
|
|
241,985
|
|
|
|
226,935
|
|
Long-term debt, net of current maturities
|
|
|
|
1,831,061
|
|
|
|
580,000
|
|
Deferred revenue
|
|
|
|
25,038
|
|
|
|
23,696
|
|
Other income tax liability
|
|
|
|
11,448
|
|
|
|
12,658
|
|
Deferred income tax liabilities
|
|
|
|
135,046
|
|
|
|
171
|
|
Other liabilities
|
|
|
|
24,293
|
|
|
|
16,633
|
|
Total liabilities
|
|
|
|
2,268,871
|
|
|
|
860,093
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
|
|
Common stock, $.10 par value; 100,000,000 shares authorized;
65,983,000 and 65,318,000 shares issued and 39,266,000 and
38,855,000 outstanding
|
|
|
|
6,590
|
|
|
|
6,523
|
|
Treasury stock at cost, 26,717,000 and 26,463,000 shares
|
|
|
|
(1,095,737
|
)
|
|
|
(1,058,381
|
)
|
Additional paid-in capital
|
|
|
|
586,224
|
|
|
|
535,759
|
|
Accumulated other comprehensive loss
|
|
|
|
(5,356
|
)
|
|
|
(10,692
|
)
|
Retained earnings
|
|
|
|
732,778
|
|
|
|
646,339
|
|
Total Bally Technologies, Inc. stockholders' equity
|
|
|
|
224,499
|
|
|
|
119,548
|
|
Noncontrolling interests
|
|
|
|
629
|
|
|
|
(376
|
)
|
Total stockholders' equity
|
|
|
|
225,128
|
|
|
|
119,172
|
|
Total liabilities and stockholders' equity
|
|
|
|
$
|
2,493,999
|
|
|
|
$
|
979,265
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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