PR Newswire
LAS VEGAS, April 22, 2014
LAS VEGAS, April 22, 2014 /PRNewswire/ -- International Game Technology (NYSE: IGT) today reported operating results for the second quarter ended March 31, 2014.
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"During the quarter, we took decisive action to reduce IGT's cost structure and position the company for long-term earnings growth," said Patti Hart, CEO of IGT. "Looking forward, we are confident that we will be able to leverage our leaner cost structure, substantial R&D investments and premium brands to drive shareholder value."
Consolidated Results
Second Quarters |
Six Months | |||||||
Periods Ended March 31, |
2014 |
2013 |
% Change |
2014 |
2013 |
% Change | ||
(In millions, except per share amounts) |
||||||||
GAAP Measures |
||||||||
Revenue |
$ 512.8 |
$ 600.0 |
-15% |
$ 1,054.0 |
$ 1,130.2 |
-7% | ||
Operating income |
72.1 |
129.3 |
-44% |
175.7 |
247.7 |
-29% | ||
Net income |
25.7 |
78.2 |
-67% |
105.0 |
143.5 |
-27% | ||
Earnings per share |
$0.10 |
$0.29 |
-66% |
$0.42 |
$0.54 |
-22% | ||
Net operating cash flows |
$ (65.2) |
$ 182.5 |
-136% | |||||
Non-GAAP Measures |
||||||||
Adjusted operating income |
$ 107.5 |
$ 163.5 |
-34% |
$ 231.2 |
$ 301.0 |
-23% | ||
Adjusted net income |
49.4 |
95.1 |
-48% |
112.4 |
171.5 |
-34% | ||
Adjusted earnings per share |
$0.20 |
$0.36 |
-44% |
$0.45 |
$0.64 |
-30% | ||
Free cash flow (before dividends) |
$ (111.4) |
$ 126.1 |
-188% | |||||
Adjusted operating income, adjusted net income, adjusted earnings per share and free cash flow are non-GAAP financial measures. Reconciliations between GAAP and non-GAAP measures are provided at the end of this release. |
Gaming Operations
Second Quarters |
Six Months | |||||||
Periods Ended March 31, |
2014 |
2013 |
% Change |
2014 |
2013 |
% Change | ||
(In millions, unless otherwise noted) |
||||||||
Revenue |
$ 230.4 |
$ 254.3 |
-9% |
$ 453.4 |
$ 496.9 |
-9% | ||
Gross profit |
140.4 |
156.7 |
-10% |
276.6 |
309.8 |
-11% | ||
Gross margin |
61% |
62% |
-1% |
61% |
62% |
-2% | ||
Installed base ('000) |
53.4 |
56.7 |
-6% |
53.4 |
56.7 |
-6% | ||
Yield (average revenue per unit per day - $0.00) |
$47.00 |
$49.26 |
-5% |
$46.11 |
$47.99 |
-4% |
Product Sales
Second Quarters |
Six Months | |||||||
Periods Ended March 31, |
2014 |
2013 |
% Change |
2014 |
2013 |
% Change | ||
(In millions, unless otherwise noted) |
||||||||
Revenue |
$ 202.6 |
$ 279.0 |
-27% |
$ 446.2 |
$ 513.7 |
-13% | ||
Gross profit |
104.0 |
144.0 |
-28% |
230.9 |
269.5 |
-14% | ||
Gross margin |
51% |
52% |
-1% |
52% |
52% |
0% | ||
Machine units recognized ('000) |
7.9 |
14.3 |
-45% |
20.7 |
25.0 |
-17% | ||
Machine average sales price ('000) |
$ 14.7 |
$ 14.1 |
4% |
$ 13.7 |
$ 14.4 |
-5% |
Interactive
Second Quarters |
Six Months | |||||||
Periods Ended March 31, |
2014 |
2013 |
% Change |
2014 |
2013 |
% Change | ||
(In millions, unless otherwise noted) |
||||||||
Revenue |
$ 79.8 |
$ 66.7 |
20% |
$ 154.4 |
$ 119.6 |
29% | ||
Social gaming |
68.8 |
54.3 |
27% |
133.6 |
95.6 |
40% | ||
IGTi |
11.0 |
12.4 |
-11% |
20.8 |
24.0 |
-13% | ||
Gross Margin |
61% |
61% |
0% |
62% |
60% |
3% | ||
Social gaming |
62% |
61% |
2% |
62% |
61% |
2% | ||
IGTi |
54% |
59% |
-8% |
59% |
55% |
7% | ||
DoubleDown average user statistics* |
||||||||
DAU (Daily active users) ('000) |
1,775 |
1,690 |
5% |
1,745 |
1,575 |
11% | ||
MAU (Monthly active users) ('000) |
6,218 |
6,276 |
-1% |
6,208 |
5,596 |
11% | ||
Bookings per DAU ($0.00) |
$ 0.43 |
$ 0.37 |
16% |
$ 0.42 |
$ 0.34 |
24% | ||
*as a single application with multiple games, active users equal unique users |
Operating Expenses
Second Quarters |
Six Months | |||||||
Periods Ended March 31, |
2014 |
2013 |
% Change |
2014 |
2013 |
% Change | ||
(In millions, unless otherwise noted) |
||||||||
Operating Expenses |
||||||||
Selling, general & administrative |
$ 124.1 |
$ 110.7 |
12% |
$ 242.1 |
$ 210.9 |
15% | ||
Research & development |
58.5 |
58.1 |
1% |
118.8 |
112.5 |
6% | ||
Depreciation & amortization |
16.6 |
19.7 |
-16% |
33.2 |
38.7 |
-14% | ||
Contingent acquisition-related costs |
3.7 |
21.9 |
-83% |
15.0 |
39.3 |
-62% | ||
Impairment and restructuring |
17.8 |
1.6 |
* |
17.8 |
1.6 |
* | ||
Total operating expenses |
$ 220.7 |
$ 212.0 |
4% |
$ 426.9 |
$ 403.0 |
6% | ||
Adjusted Operating Expenses |
||||||||
Total |
$ 188.0 |
$ 180.1 |
4% |
$ 377.4 |
$ 349.3 |
8% | ||
Adjusted operating expenses is a non-GAAP financial measure. Reconciliations between GAAP and non-GAAP measures are provided at the end of this release. |
Balance Sheet and Capital Deployment
March 31, |
September 30, |
||||
2014 |
2013 |
% Change | |||
(In millions, unless otherwise noted) |
|||||
Cash and equivalents (including restricted amounts) |
$ 432.3 |
$ 809.1 |
-47% | ||
Working capital |
(27.2) |
267.5 |
-110% | ||
Contractual debt obligations |
2,150.0 |
2,150.0 |
0% |
Other
References to per share amounts in this release are based on weighted average diluted shares of common stock outstanding, unless otherwise specified.
Outlook
The company is reiterating its fiscal year 2014 revised guidance for adjusted earnings from continuing operations of $1.00 to $1.10 per share.
GAAP earnings per share from continuing operations for fiscal year 2014 will include acquisition-related expenses, primarily related to DoubleDown, severance costs, business realignment expenses, asset impairment charges, legal accrual charges, and certain discrete tax items or benefits, the amount of which is not determinable at this time. The company may also recognize other items that are not currently determinable, but may be significant. For this reason, the company is unable to provide estimates for full-year GAAP earnings per share from continuing operations at this time.
Earnings Conference Call
As previously announced on April 8, 2014, IGT will host a conference call to discuss its second quarter fiscal year 2014 earnings results on Tuesday, April 22, 2014, at 2:00 p.m. PDT. The access numbers are as follows:
Domestic callers dial +1 877-891-6979, passcode IGT
International callers dial +1 773-756-4700, passcode IGT
The conference call will also be broadcast live over the Internet. A link to the webcast is available at the IGT website: http://www.IGT.com/investors. The call will be archived through Tuesday, May 6, 2014 at http://www.IGT.com/investors, for those interested parties that are unable to participate during the live webcast.
A taped replay of the conference call will be available after the conference call. This replay will run through Tuesday, May 6, 2014. The access numbers are as follows:
Domestic callers dial +1 866-566-0708
International callers dial +1 203-369-3622
Q2 FY 2014 PDF of this press release
Forward-Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties. These statements include our expected future financial and operational performance (including our guidance for fiscal year 2014) and our strategic and operational plans. These statements involve a number of risks and uncertainties that could cause actual results to differ materially from the results predicted, and reported results should not be considered an indication of future performance. Among the factors that could cause actual results and outcomes to differ materially from those contained in such forward-looking statements are the following: general economic conditions and changes in economic conditions affecting the gaming industry; new or changing laws or regulations or new interpretations of existing laws or regulations affecting our business; difficulties or delays in obtaining or maintaining necessary licenses or approvals; slow growth in the number of new gaming jurisdictions or new casinos or the rate of replacement of existing gaming machines; changes in operator or player preferences for our products; our ability to compete in the gaming industry with new or existing competitors; our ability to develop and introduce new products and their acceptance by our customers; risks related to our international operations; our ability to protect our intellectual property; adverse results of litigation, including intellectual property infringement claims; our ability to leverage reduction initiatives; risks related to business combinations, investments in intellectual property and the integration of acquisitions; and future developments or changes affecting online gaming or social casino-style gaming, which is a new and evolving industry. A further list and description of these and other risks, uncertainties and other matters can be found in our annual report and other reports filed with the Securities and Exchange Commission, including under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for fiscal 2013 filed with the SEC on November 26, 2013 and our Quarterly Report on Form 10-Q for our quarter ended December 31, 2013 filed with the SEC on February 5, 2014 and available on the SEC website at www.sec.gov and on the investor relations section of our website at www.IGT.com/investors. Additional information will also be set forth in our Quarterly Report on Form 10-Q for our second quarter ended March 31, 2014, which we expect to file with the SEC in the second quarter of calendar 2014. All information provided in this release is as of April 22, 2014, and IGT does not intend, and undertakes no duty, to update this information to reflect subsequent events or circumstances.
IGT Resources:
About IGT
International Game Technology (NYSE: IGT) is a global leader in casino gaming entertainment and continues to transform the industry by translating casino player experiences to social, mobile and interactive environments for markets around the world. IGT's acquisition of DoubleDown Interactive provides engaging social casino style entertainment to more than 6 million players monthly. More information about IGT is available at IGT.com or connect with IGT at @IGTNews or facebook.com/IGT. Anyone can play at the DoubleDown Casino by visiting http://apps.facebook.com/doubledowncasino or doubledowncasino.com
IGT Contacts:
Kate Pearlman
Vice President, Investor Relations and Treasury
+1 866-296-4232
InvestorRelations@IGT.com
CONSOLIDATED STATEMENTS OF INCOME (Unaudited and Condensed)
Second Quarters |
Six Months | |||||
Periods Ended March 31, |
2014 |
2013 |
2014 |
2013 | ||
(In millions, except per share amounts) |
||||||
Revenues |
||||||
Gaming operations |
$ 230.4 |
$ 254.3 |
$ 453.4 |
$ 496.9 | ||
Product sales |
202.6 |
279.0 |
446.2 |
513.7 | ||
Interactive |
79.8 |
66.7 |
154.4 |
119.6 | ||
Total revenues |
512.8 |
600.0 |
1,054.0 |
1,130.2 | ||
Costs and operating expenses |
||||||
Cost of gaming operations |
90.0 |
97.6 |
176.8 |
187.1 | ||
Cost of product sales |
98.6 |
135.0 |
215.3 |
244.2 | ||
Cost of interactive |
31.4 |
26.1 |
59.3 |
48.2 | ||
Selling, general and administrative |
124.1 |
110.7 |
242.1 |
210.9 | ||
Research and development |
58.5 |
58.1 |
118.8 |
112.5 | ||
Depreciation and amortization |
16.6 |
19.7 |
33.2 |
38.7 | ||
Contingent acquisition-related costs |
3.7 |
21.9 |
15.0 |
39.3 | ||
Impairment and restructuring |
17.8 |
1.6 |
17.8 |
1.6 | ||
Total costs and operating expenses |
440.7 |
470.7 |
878.3 |
882.5 | ||
Operating income |
72.1 |
129.3 |
175.7 |
247.7 | ||
Other income (expense) |
||||||
Interest income |
10.7 |
11.1 |
20.9 |
22.4 | ||
Interest expense |
(36.9) |
(30.3) |
(73.3) |
(62.0) | ||
Other |
(3.4) |
(2.5) |
(5.3) |
(2.7) | ||
Total other income (expense) |
(29.6) |
(21.7) |
(57.7) |
(42.3) | ||
Income before tax |
42.5 |
107.6 |
118.0 |
205.4 | ||
Income tax provision |
16.8 |
29.4 |
13.0 |
61.9 | ||
Net income |
$ 25.7 |
$ 78.2 |
$ 105.0 |
$ 143.5 | ||
Basic earnings per share |
$ 0.10 |
$ 0.30 |
$ 0.42 |
$ 0.54 | ||
Diluted earnings per share |
$ 0.10 |
$ 0.29 |
$ 0.42 |
$ 0.54 | ||
Weighted average shares outstanding |
||||||
Basic |
247.7 |
263.6 |
250.2 |
264.7 | ||
Diluted |
248.6 |
265.6 |
251.9 |
266.7 |
CONSOLIDATED BALANCE SHEET (Unaudited and Condensed)
March 31, |
September 30, | ||
2014 |
2013 | ||
(In millions) |
|||
Assets |
|||
Current assets |
|||
Cash and equivalents |
$ 355.8 |
$ 713.3 | |
Investment securities |
15.0 |
28.8 | |
Restricted cash and investments |
61.5 |
67.0 | |
Jackpot annuity investments |
55.0 |
56.5 | |
Receivables, net |
551.5 |
577.9 | |
Inventories |
76.0 |
90.1 | |
Other assets and deferred costs |
284.4 |
242.4 | |
Total current assets |
1,399.2 |
1,776.0 | |
Property, plant and equipment, net |
443.9 |
483.9 | |
Jackpot annuity investments |
253.3 |
268.6 | |
Contracts and notes receivable, net |
143.6 |
165.6 | |
Goodwill and other intangibles, net |
1,577.8 |
1,601.7 | |
Other assets and deferred costs |
483.7 |
317.0 | |
Total Assets |
$ 4,301.5 |
$ 4,612.8 | |
Liabilities and Shareholders' Equity |
|||
Current liabilities |
|||
Short-term debt |
$ 846.4 |
$ 826.6 | |
Accounts payable |
92.9 |
110.0 | |
Jackpot liabilities, current portion |
121.9 |
131.7 | |
Dividends payable |
27.2 |
25.9 | |
Other accrued liabilities |
338.0 |
414.3 | |
Total current liabilities |
1,426.4 |
1,508.5 | |
Long-term debt |
1,357.1 |
1,366.3 | |
Jackpot liabilities |
278.5 |
293.3 | |
Other liabilities |
124.9 |
190.6 | |
Total Liabilities |
3,186.9 |
3,358.7 | |
Total Equity |
1,114.6 |
1,254.1 | |
Total Liabilities and Shareholders' Equity |
$ 4,301.5 |
$ 4,612.8 |
CONSOLIDATED STATEMENTS OF CASH FLOW (Unaudited and Condensed)
Six Months Ended March 31, |
2014 |
2013 | |
(In millions) |
|||
Operating |
|||
Net income |
$ 105.0 |
$ 143.5 | |
Adjustments: |
|||
Depreciation and amortization |
99.4 |
117.8 | |
Acquisition-related contingent earn-out costs |
6.6 |
16.2 | |
Other non-cash items |
64.8 |
54.7 | |
Changes in operating assets and liabilities, excluding acquisitions: |
|||
Receivables |
15.5 |
(21.1) | |
Inventories |
13.4 |
9.4 | |
Accounts payable and accrued liabilities |
(50.2) |
(78.0) | |
Jackpot liabilities |
(32.9) |
(40.7) | |
Income taxes, net of employee stock plans |
(50.4) |
(21.9) | |
Other assets |
(236.4) |
2.6 | |
Net operating cash flows |
(65.2) |
182.5 | |
Investing |
|||
Capital expenditures |
(46.2) |
(56.4) | |
Investment securities, net |
13.9 |
- | |
Jackpot annuity investments, net |
25.0 |
27.1 | |
Changes in restricted cash |
5.6 |
5.8 | |
Loans receivable payments received |
14.9 |
15.1 | |
Proceeds from assets sold |
7.8 |
8.3 | |
Net investing cash flows |
21.0 |
(0.1) | |
Financing |
|||
Debt-related proceeds (payments), net |
(0.6) |
(20.0) | |
Employee stock plan proceeds |
12.0 |
8.3 | |
Share repurchases, including net shares |
(211.3) |
(75.1) | |
Dividends paid |
(53.4) |
(34.7) | |
Acquisition-related contingent consideration |
(56.1) |
(27.9) | |
Net financing cash flows |
(309.4) |
(149.4) | |
Foreign exchange rates effect on cash and equivalents |
(3.9) |
(2.8) | |
Net change in cash and equivalents |
(357.5) |
30.2 | |
Beginning cash and equivalents |
713.3 |
206.3 | |
Ending cash and equivalents |
$ 355.8 |
$ 236.5 |
SUPPLEMENTAL DATA (Unaudited)
Revenue Metrics | |||||
Second Quarters |
Six Months | ||||
Periods Ended March 31, |
2014 |
2013 |
2014 |
2013 | |
In millions, unless otherwise noted |
|||||
Gaming Operations |
|||||
Revenues |
$ 230.4 |
$ 254.3 |
$ 453.4 |
$ 496.9 | |
North America |
200.1 |
220.3 |
391.7 |
428.8 | |
International |
30.3 |
34.0 |
61.7 |
68.1 | |
Gross margin |
61% |
62% |
61% |
62% | |
North America |
58% |
60% |
59% |
61% | |
International |
78% |
69% |
75% |
69% | |
Installed base (units '000) |
53.4 |
56.7 |
53.4 |
56.7 | |
North America |
40.4 |
42.6 |
40.4 |
42.6 | |
International |
13.0 |
14.1 |
13.0 |
14.1 | |
Yield (average revenue per unit per day - $0.00) |
$47.00 |
$49.26 |
$46.11 |
$47.99 | |
Product Sales |
|||||
Revenues |
$ 202.6 |
$ 279.0 |
$ 446.2 |
$ 513.7 | |
North America |
143.8 |
200.6 |
313.8 |
359.5 | |
International |
58.8 |
78.4 |
132.4 |
154.2 | |
Machines |
$ 116.0 |
$ 202.4 |
$ 282.9 |
$ 359.8 | |
North America |
79.1 |
148.7 |
197.2 |
250.5 | |
International |
36.9 |
53.7 |
85.7 |
109.3 | |
Non-machine |
$ 86.6 |
$ 76.6 |
$ 163.3 |
$ 153.9 | |
North America |
64.7 |
51.9 |
116.6 |
109.0 | |
International |
21.9 |
24.7 |
46.7 |
44.9 | |
Gross margin |
51% |
52% |
52% |
52% | |
North America |
56% |
53% |
54% |
54% | |
International |
40% |
49% |
46% |
48% | |
Machine units recognized ('000) |
7.9 |
14.3 |
20.7 |
25.0 | |
North America |
5.7 |
11.1 |
15.3 |
18.3 | |
International |
2.2 |
3.2 |
5.4 |
6.7 | |
Machine units shipped ('000) [includes units where revenues deferred] |
7.6 |
14.3 |
20.6 |
23.7 | |
North America |
5.5 |
11.1 |
15.3 |
18.0 | |
New |
2.1 |
2.7 |
5.8 |
4.4 | |
Replacement |
3.4 |
8.4 |
9.5 |
13.6 | |
International |
2.1 |
3.2 |
5.3 |
5.7 | |
New |
0.6 |
1.0 |
1.2 |
1.9 | |
Replacement |
1.5 |
2.2 |
4.1 |
3.8 | |
Machine ASP ('000) |
$ 14.7 |
$ 14.1 |
$ 13.7 |
$ 14.4 | |
North America |
13.9 |
13.4 |
12.9 |
13.7 | |
International |
16.6 |
16.6 |
15.9 |
16.3 | |
Interactive |
|||||
Revenues |
$ 79.8 |
$ 66.7 |
$ 154.4 |
$ 119.6 | |
North America |
70.3 |
54.8 |
136.1 |
96.7 | |
International |
9.5 |
11.9 |
18.3 |
22.9 | |
Social Gaming |
68.8 |
54.3 |
133.6 |
95.6 | |
North America |
68.8 |
54.3 |
133.6 |
95.6 | |
International |
- |
- |
- |
- | |
IGTi |
11.0 |
12.4 |
20.8 |
24.0 | |
North America |
1.5 |
0.5 |
2.5 |
1.1 | |
International |
9.5 |
11.9 |
18.3 |
22.9 | |
Gross margin |
61% |
61% |
62% |
60% | |
North America |
62% |
61% |
62% |
61% | |
International |
51% |
58% |
58% |
54% | |
DoubleDown average user statistics* |
|||||
DAU (Daily active users) ('000) |
1,775 |
1,690 |
1,745 |
1,575 | |
MAU (Monthly active users) ('000) |
6,218 |
6,276 |
6,208 |
5,596 | |
Bookings per DAU ($0.00) |
$0.43 |
$0.37 |
$0.42 |
$0.34 | |
*as a single application with multiple games, active users equal unique users |
Reconciliations of GAAP to Non-GAAP Adjusted Financial Measures
(in millions, except EPS)
Cost of |
Operating |
Operating |
Net |
Diluted | ||||
Second Quarter Ended March 31, 2014 |
||||||||
GAAP measures |
$ 31.4 |
$ 220.7 |
$ 72.1 |
$ 25.7 |
$0.10 | |||
% of revenue |
43% |
14% |
||||||
Acquisition-related charges: (b) |
||||||||
Contingent retention & earn-out |
- |
(3.7) |
3.7 |
2.5 |
0.01 | |||
Amortization of intangibles |
(2.7) |
(3.4) |
6.1 |
4.1 |
0.02 | |||
Business realignment |
- |
(16.5) |
16.5 |
11.0 |
0.05 | |||
Alabama note impairment |
- |
(1.3) |
1.3 |
0.9 |
- | |||
Legal accrual |
- |
(7.8) |
7.8 |
5.2 |
0.02 | |||
Total non-GAAP adjustments |
(2.7) |
(32.7) |
35.4 |
23.7 |
0.10 | |||
Adjusted measures |
$ 28.7 |
$ 188.0 |
$ 107.5 |
$ 49.4 |
$0.20 | |||
% of revenue |
37% |
21% |
||||||
(a) Adjustments tax effected at 33%; (b) Primarily DoubleDown | ||||||||
Cost of |
Operating |
Operating |
Net |
Diluted | ||||
Second Quarter Ended March 31, 2013 |
||||||||
GAAP measures |
$ 26.1 |
$ 212.0 |
$ 129.3 |
$ 78.2 |
$0.29 | |||
% of revenue |
35% |
22% |
||||||
Acquisition-related charges: (b) |
||||||||
Contingent retention & earn-out |
- |
(21.9) |
21.9 |
14.6 |
0.06 | |||
Amortization of intangibles |
(2.3) |
(4.5) |
6.8 |
4.5 |
0.02 | |||
Proxy Fees |
- |
(3.9) |
3.9 |
2.6 |
0.01 | |||
Alabama note Impairment |
- |
(1.6) |
1.6 |
1.1 |
- | |||
Certain discrete tax items (benefits) |
- |
- |
- |
(5.9) |
(0.02) | |||
Total non-GAAP adjustments |
(2.3) |
(31.9) |
34.2 |
16.9 |
0.07 | |||
Adjusted measures |
$ 23.8 |
$ 180.1 |
$ 163.5 |
$ 95.1 |
$0.36 | |||
% of revenue |
30% |
27% |
||||||
(a) Adjustments tax effected at 34%; (b) Primarily DoubleDown |
Product |
Cost of |
Cost of |
Operating |
Operating |
Net |
Diluted | |
Six Months Ended March 31, 2014 |
|||||||
GAAP measures |
$ 446.2 |
$ 176.8 |
$ 59.3 |
$ 426.9 |
$ 175.7 |
$ 105.0 |
$0.42 |
% of revenue |
41% |
17% |
|||||
Acquisition-related charges: (b) |
|||||||
Contingent retention & earn-out |
- |
- |
- |
(15.0) |
15.0 |
10.0 |
0.04 |
Amortization of intangibles |
- |
- |
(5.4) |
(6.8) |
12.2 |
8.1 |
0.03 |
Business realignment |
- |
- |
- |
(16.5) |
16.5 |
11.0 |
0.05 |
Alabama note impairment |
- |
- |
- |
(1.3) |
1.3 |
0.9 |
- |
Legal accrual |
- |
- |
- |
(7.8) |
7.8 |
5.2 |
0.02 |
Severance |
- |
(0.6) |
- |
(2.1) |
2.7 |
1.8 |
0.01 |
Certain discrete tax items (benefits) |
- |
- |
- |
- |
- |
(29.6) |
(0.12) |
Total non-GAAP adjustments |
- |
(0.6) |
(5.4) |
(49.5) |
55.5 |
7.4 |
0.03 |
Adjusted measures |
$ 446.2 |
$ 176.2 |
$ 53.9 |
$ 377.4 |
$ 231.2 |
$ 112.4 |
$0.45 |
% of revenue |
36% |
22% |
|||||
(a) Adjustments tax effected at 33%; (b) Primarily DoubleDown |
|||||||
Product Sales Revenue |
Cost of |
Cost of |
Operating |
Operating |
Net |
Diluted | |
Six Months Ended March 31, 2013 |
|||||||
GAAP measures |
$ 513.7 |
$ 187.1 |
$ 48.2 |
$ 403.0 |
$ 247.7 |
$ 143.5 |
$0.54 |
% of revenue |
36% |
22% |
|||||
Acquisition-related charges: (b) |
|||||||
Contingent retention & earn-out |
- |
- |
- |
(39.3) |
39.3 |
26.2 |
0.10 |
Amortization of intangibles |
- |
- |
(4.6) |
(8.9) |
13.5 |
9.0 |
0.03 |
Proxy Fees |
- |
- |
- |
(3.9) |
3.9 |
2.6 |
0.01 |
Alabama note impairment |
- |
- |
- |
(1.6) |
1.6 |
1.1 |
- |
Royalty settlement |
(5.0) |
- |
- |
- |
(5.0) |
(5.0) |
(0.02) |
Certain discrete tax items (benefits) |
- |
- |
- |
- |
- |
(5.9) |
(0.02) |
Total non-GAAP adjustments |
(5.0) |
- |
(4.6) |
(53.7) |
53.3 |
28.0 |
0.10 |
Adjusted measures |
$ 508.7 |
$ 187.1 |
$ 43.6 |
$ 349.3 |
$ 301.0 |
$ 171.5 |
$0.64 |
% of revenue |
31% |
27% |
|||||
(a) Adjustments tax effected at 34%, except no tax effect on royalty settlement; (b) Primarily DoubleDown |
Adjusted EBITDA For The Periods Ended March 31, |
|||||||
Second Quarters |
Six Months | ||||||
2014 |
2013 |
2014 |
2013 | ||||
GAAP Net income |
$ 25.7 |
$ 78.2 |
$ 105.0 |
$ 143.5 | |||
Other (income) expense, net |
29.6 |
21.7 |
57.7 |
42.3 | |||
Income tax provision |
16.8 |
29.4 |
13.0 |
61.9 | |||
Depreciation and amortization |
48.1 |
60.1 |
99.4 |
117.8 | |||
Other charges: |
|||||||
Share-based compensation |
7.6 |
9.9 |
16.5 |
18.6 | |||
Contingent acquisition-related costs |
3.7 |
21.9 |
15.0 |
39.3 | |||
Impairment |
17.8 |
1.6 |
17.8 |
1.6 | |||
Adjusted EBITDA |
$ 149.3 |
$ 222.8 |
$ 324.4 |
$ 425.0 | |||
Free Cash Flow For The Six Months Ended March 31, |
|||||||
2014 |
2013 | ||||||
GAAP net operating cash flows |
$ (65.2) |
$ 182.5 | |||||
Investment in property, plant and equipment |
(11.8) |
(8.1) | |||||
Investment in gaming operations equipment |
(31.6) |
(48.1) | |||||
Investment in intellectual property |
(2.8) |
(0.2) | |||||
Free Cash Flow (before dividends) |
(111.4) |
126.1 | |||||
Dividends paid |
(53.4) |
(34.7) | |||||
Free Cash Flow (after dividends) |
$ (164.8) |
$ 91.4 | |||||
We believe that certain non-GAAP financial measures, when presented in conjunction with comparable GAAP (Generally Accepted Accounting Principles) measures, are useful because that information is an appropriate measure for evaluating our operating performance. Non-GAAP information is used to evaluate business performance and management's effectiveness. These measures should be considered in addition to, not as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. Non-GAAP financial measures may not be calculated in the same manner by all companies and therefore may not be comparable. |
SOURCE International Game Technology