IGT
$18.25
International Game Technology
($2.75)
(13.10%)
Earnings Details
1st Quarter March 2017
Thursday, May 25, 2017 6:45:00 AM
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Summary

IGT Lowers EBITDA Guidance

International Game Technology (IGT) reported 1st Quarter March 2017 earnings of $0.29 per share on revenue of $1.2 billion. The consensus earnings estimate was $0.47 per share on revenue of $1.2 billion. Revenue fell 10.1% compared to the same quarter a year ago.

The company said it now expects 2017 Adjusted EBITDA of $1.60 billion to $1.68 billion. The company's previous guidance was for Adjusted EBITDA of $1.68 billion to $1.76 billion for the year ending December 31, 2017.

International Game Technology is a gaming company specializing in the design, development, manufacturing and marketing of casino-style gaming equipment, systems technology and game content across multiple platforms.

Results
Reported Earnings
$0.29
Earnings Whisper
-
Consensus Estimate
$0.47
Reported Revenue
$1.15 Bil
Revenue Estimate
$1.19 Bil
Growth
Earnings Growth
Revenue Growth
Guidance
Power Rating
Grade
Earnings Release

International Game Technology PLC Reports First Quarter 2017 Results

Continued growth in instant and draw-based lottery same-store revenue and in global gaming machine installed base

Net loss of $55 million, adjusted Net income of $59 million; adjusted EBITDA of $371 million reflects comparison with unusually high base in prior year

-- Net debt of $7,398 million, down from $7,569 million at 2016 year end

2017 outlook updated for pending DoubleDown transaction and new gaming machine taxation in Italy

-- Cash dividend declared of $0.20 per ordinary share

https://mma.prnewswire.com/media/453980/IGT_Logo.jpg

International Game Technology PLC ("IGT") (IGT) today reported financial results for the first quarter ended March 31, 2017. 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.

"The first quarter of 2017 has been a dynamic period for us," said Marco Sala, CEO of IGT. "Our revenue and profit are consistent with the pattern of the year that we described in March. Year to date, we’ve strengthened our leading positions in global lotteries and begun the rollout of a new generation of gaming machines. We are monetizing non-core assets that will allow us to significantly reduce debt, and we are adopting a new business model for our future participation in the social casino space."

"As we noted in March, a unique combination of elements affected first quarter revenue and profit comparisons, including record jackpot activity in 2016," said Alberto Fornaro, CFO of IGT. "Disciplined asset and operational management are a top priority for the Company, and this is evident in the strong first quarter cash flow. We are updating our outlook to incorporate the DoubleDown transaction and the impact of increased taxation on gaming machines in Italy."

Summary of Consolidated First Quarter 2017 Financial Results

Quarter Ended March 31, Change Constant
Currency
Change
2017
2016
(%)
(%)
(In $ millions, unless otherwise noted)
Revenue
1,153
1,282
-10%
-9%
Operating Income
119
188
-37%
-33%
Net (loss) income per diluted share
(0.27)
(0.46)
41%
NA
Net debt
7,398
7,722
-4%
NA
Adjusted EBITDA
371
460
-19%
-17%
Adjusted Operating Income
238
310
-23%
-21%
Adjusted net income per diluted share
0.29
0.57
-49%
NA
Note: Adjusted EBITDA, adjusted operating income, 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. 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 2017 are calculated using the same foreign exchange rates as the corresponding 2016 period.

Management believes that referring to certain constant currency or adjusted measures is a useful way to evaluate the Company’s underlying performance.

Overview of Consolidated First Quarter Results

Consolidated revenue was $1,153 million compared to $1,282 million in the first quarter of 2016. The decline in revenue reflects comparisons with the high jackpot levels of the prior year, new Italy Lotto concession dynamics, and lower gaming product sales.

Global lottery same-store revenue, excluding Italy, declined 11% in the first quarter, following record jackpot activity in North America and the United Kingdom during the prior-year period. Excluding multi-state jackpot games, global lottery same-store revenue grew nearly 2%. Italy lottery wagers decreased 2% due to higher late numbers activity in the first quarter of 2016.

Gaming service revenue was impacted by lower DoubleDown revenue, and gaming product sales were down due to large system and software sales in the first quarter of 2016. The Company shipped 5,953 gaming machines worldwide during the first quarter, and the global installed base rose to 59,034.

Adjusted EBITDA of $371 million was 19% below the first quarter of 2016. Operating income was $119 million compared to $188 million in the first quarter of 2016, and Adjusted operating income was $238 million compared to $310 million. The declines in Adjusted EBITDA and Adjusted operating income primarily reflect lower revenues, International segment performance, and unfavorable foreign exchange translation.

Interest expense was $115 million compared to $118 million in the prior-year period.

Net loss attributable to IGT was $55 million in the first quarter of 2017, reflecting the after-tax impacts of $70 million in purchase price accounting and $36 million impact in non-cash foreign exchange losses. On an adjusted basis, net income attributable to IGT was $59 million. The Company reported net loss per diluted share of $(0.27) and earned $0.29 per diluted share on an adjusted basis.

In the first three months of the year, cash from operations was $284 million and capital expenditures were $172 million.

Cash and cash equivalents were $463 million as of March 31, 2017, compared to $294 million as of December 31, 2016. Net debt was $7,398 million as of March 31, 2017.

Operating Segment Review

North America Gaming & Interactive Revenue for North America Gaming & Interactive was $305 million compared to $339 million in the first quarter of 2016.

Service revenue was $234 million compared to $258 million in the prior-year period, primarily driven by a year-over-year decrease in the installed base and fewer daily active users at DoubleDown.

Product sales were $71 million compared to $81 million in the first quarter of 2016, which benefitted from a large system sale. The segment shipped 3,944 gaming machine units in the quarter compared to 3,951 units in the prior-year period.

Operating income for North America Gaming & Interactive was $66 million compared to $89 million in the first quarter of 2016. The decline is primarily due to lower revenues, increased depreciation on investments in the installed base, and higher jackpot expense.

North America Lottery North America Lottery revenue was $281 million compared to $315 million in the first quarter of 2016, which benefitted from record multi-state jackpot activity.

Service revenue of $268 million reflects a 14.0% decline in same-store revenue growth on comparisons with record Powerball sales in the prior year. Excluding multi-state jackpot games, same-store revenue for draw-based games and instant tickets grew 1.5%.

Product sales rose to $13 million in the first quarter of 2017 from $11 million in the prior-year period, and included higher instant ticket printing revenue.

Operating income for North America Lottery was $69 million compared to $88 million in the first quarter of 2016 on lower jackpot revenue and associated profit.

International International revenue was $164 million compared to $185 million in the first quarter of 2016. On a constant currency basis, International revenue declined 9%.

Lottery same-store revenue was up 2.0% on broad-based strength in Latin America and Europe, that was partially offset by continued weakness in the United Kingdom, including elevated jackpot activity in the prior-year period.

Gaming service revenue was $41 million compared to $47 million in the first quarter of 2016, down 9% on a constant currency basis, mainly due to the exit from certain interactive operations. The installed base grew sequentially on increased unit placements in Greece and South Africa.

Product sales revenue was lower due to large, high-margin gaming software sales in the first quarter of 2016. The segment shipped a total of 2,009 gaming machine units during the first quarter of 2017 compared to 1,744 units in the prior-year period. A portion of the new and expansion unit revenue was deferred and is expected to be recognized in the second quarter of 2017.

International operating income was below the prior-year period due to lower revenue; product sales mix and discounts; as well as unfavorable foreign exchange translation and bad debt expense.

Italy Italy revenue was $402 million compared to $444 million in the first quarter of 2016. At constant currency, revenue declined 6% as growth in machine gaming was more than offset by the new Lotto concession dynamics, primarily amortization of the upfront payment, and lower sports betting revenue.

Total Lotto wagers in the quarter were EUR 1,873 million compared to EUR 1,928 million in the prior-year period, reflecting significantly lower late numbers activity. 10eLotto performance remained strong, with wagers increasing 4% over the prior-year period. Instant-ticket wagers were essentially unchanged at EUR 2,341 million.

Machine gaming service revenue was up over the first quarter of 2016 on increased vertical integration and higher installed units. Sports betting revenue declined during the first quarter of 2017 on higher payout, consistent with industry trends during the period.

Italy operating income was $125 million compared to $148 million in the first quarter of 2016. The decline was mainly attributable to the new Lotto concession dynamics and sports betting performance, partially offset by machine gaming growth.

Other Developments

As announced on April 17, 2017, the Company has reached a definitive purchase agreement to sell its social casino subsidiary, DoubleDown Interactive, to an affiliate of DoubleU Games, a leading global social casino operator, for a cash purchase price of $825 million. The sale is expected to be completed in the second quarter of 2017. Upon the closing of the sale, the parties will enter into a game development and distribution agreement which will enable DoubleU Games to offer IGT’s extensive casino game library on DoubleU Games’ combined social casino platforms, in exchange for ongoing royalties to IGT.

The board of directors of the Company appointed Heather J. McGregor as a fourth member of the audit committee, effective May 24, 2017. McGregor previously joined the board of directors as an independent director on March 8, 2017.

Additionally, the Company’s board of directors has declared a quarterly cash dividend of $0.20 per ordinary share. The dividend is payable on June 22, 2017 to all shareholders of record as of the close of business on June 8, 2017.

Outlook

The Company updated its outlook to account for the closing of the DoubleDown transaction by the end of the second quarter and the impact of new taxation on gaming machines in Italy. The Company currently expects full year 2017 adjusted EBITDA of $1,600-$1,680 million, compared to its previous outlook of $1,680-$1,760 million. Net debt is now expected to be $6,950-$7,150 million at the end of 2017, compared to the previous $7,600-$7,800 million outlook, as net proceeds from the DoubleDown sale will be used to reduce debt.

Adjusted EBITDA is a non-GAAP measure. Management uses non-GAAP financial measures to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, and to evaluate the Company’s financial performance. Management believes these Non-GAAP financial measures reflect the Company’s ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of business trends.

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 2017 results. Listeners may access a live webcast of the conference call along with accompanying slides under "News, Events & 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 1914 for participants in the United Kingdom and +1 877 280 2342 for listeners outside the United Kingdom. The conference ID/confirmation code is 9529556. 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 9529556.

About IGT IGT (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 International Game Technology PLC and its consolidated subsidiaries (the "Company") 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 the Company 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 speak only as of the date on which such statements are made and are subject to various risks and uncertainties, many of which are outside the Company’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 such 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 sale of Double Down Interactive LLC, as described in the Company’s news release dated April 17, 2017 furnished to the United States Securities and Exchange Commission (the "SEC") on April 18, 2017 (File No. 17765611) (the "DDI Transaction"), may not be consummated in a timely manner or at all, including as a result of a failure to satisfy a condition to closing (including regulatory approvals); the possibility that there may be an adverse effect or disruption from the DDI Transaction that negatively impacts the Company’s remaining businesses; the possibility that the anticipated benefits of the DDI Transaction or the strategic partnership with DoubleU Games may not be realized as presently contemplated or at all; the costs and charges related to the DDI Transaction being greater than anticipated; the possibility that International Game Technology PLC will be unable to pay future dividends to shareholders or that the amount of such dividends may be less than anticipated; the possibility that International Game Technology PLC 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 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 the Company’s business, including those described in the Company’s annual report on Form 20-F for the financial year ended December 31, 2016 and other documents filed from time to time with the SEC, which are available on the SEC’s website at www.sec.gov and on the investor relations section of the Company’s website at www.IGT.com. Except as required under applicable law, the Company does not assume any obligation to update these 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 share of International Game Technology PLC for the current or any future financial years will necessarily match or exceed the historical published earnings per share of International Game Technology PLC, 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 International Game Technology PLC, or persons acting on its behalf, are expressly qualified in its entirety by this cautionary statement.

Contact: Robert K. Vincent, Corporate Communications, toll free in U.S./Canada +1 (844) IGT-7452; outside U.S./Canada +1 (401) 392-7452 James Hurley, Investor Relations, +1 (401) 392-7190 Simone Cantagallo, +39 06 51899030; for Italian media inquiries

International Game Technology PLC
Condensed Consolidated Statements of Operations
($ and shares in thousands, except per share data)
Unaudited
For the three months ended
March 31,
2017
2016
Service revenue
1,026,945
1,135,121
Product sales
125,639
146,440
Total revenue
1,152,584
1,281,561
Cost of services
624,294
648,763
Cost of sales
114,336
121,776
Selling, general and administrative
200,524
227,526
Research and development
82,621
84,707
Restructuring expense
9,267
9,418
Transaction expense, net
2,321
1,474
Total operating expenses
1,033,363
1,093,664
Operating income
119,221
187,897
Interest income
2,626
4,293
Other income (expense), net
2,667
(7,326)
Foreign exchange loss, net
(46,837)
(161,556)
Interest expense
(114,799)
(118,415)
Total non-operating expenses
(156,343)
(283,004)
Loss before benefit from income taxes
(37,122)
(95,107)
Benefit from income taxes
(10,330)
(8,658)
Net loss
(26,792)
(86,449)
Less: Net income attributable to non-controlling interests
27,998
6,325
Net loss attributable to IGT PLC
(54,790)
(92,774)
Net loss attributable to IGT PLC per common share - basic
(0.27)
(0.46)
Net loss attributable to IGT PLC per common share - diluted (0.27)
(0.46)
Weighted-average shares - basic
202,479
200,449
Weighted-average shares - diluted
202,479
200,449
International Game Technology PLC
Condensed Consolidated Balance Sheets
($ thousands)
Unaudited
March 31,
December 31,
2017
2016
Assets
Current assets:
Cash and cash equivalents
463,296
294,094
Restricted cash and investments
262,696
247,222
Trade and other receivables, net
818,944
947,237
Inventories
361,067
347,494
Other current assets
435,275
424,727
Income taxes receivable
25,542
28,792
Total current assets
2,366,820
2,289,566
Systems, equipment and other assets related to contracts, net
1,277,898
1,199,674
Property, plant and equipment, net
207,390
357,841
Goodwill, net
6,819,062
6,810,012
Intangible assets, net
2,763,959
2,874,031
Other non-current assets
1,463,025
1,497,662
Deferred income taxes
33,020
31,376
Total non-current assets
12,564,354
12,770,596
Total assets
14,931,174
15,060,162
Liabilities, redeemable non-controlling interests, and shareholders’ equity
Current liabilities:
Accounts payable
1,223,107
1,216,079
Other current liabilities
1,022,788
1,097,045
Current portion of long-term debt
530,250
77
Short-term borrowings
52
-
Income taxes payable
58,858
28,590
Total current liabilities
2,835,055
2,341,791
Long-term debt, less current portion
7,331,266
7,863,085
Deferred income taxes
714,563
761,924
Other non-current liabilities
447,062
444,556
Total non-current liabilities
8,492,891
9,069,565
Total liabilities
11,327,946
11,411,356
Commitments and contingencies
-
-
Redeemable non-controlling interests and shareholders’ equity
3,603,228
3,648,806
Total liabilities, redeemable non-controlling interests, and shareholders’ equity 14,931,174
15,060,162
International Game Technology PLC
Consolidated Statements of Cash Flows
($ thousands)
Unaudited
For the three months ended
March 31,
2017
2016
Operating activities
Net loss
(26,792)
(86,449)
Adjustments for:
Amortization
116,241
125,496
Depreciation
91,921
98,517
Amortization of upfront payments to customers
49,399
27,409
Foreign exchange loss, net
46,837
161,556
Debt issuance cost amortization
4,678
4,511
Stock-based compensation expense
849
9,302
Other, net
2,964
3,552
Cash flows before changes in operating assets and liabilities
286,097
343,894
Changes in operating assets and liabilities:
Trade and other receivables
136,694
10,259
Inventories
158
1,812
Accounts payable
(14,946)
(1,785)
Other assets and liabilities
(124,335)
(148,575)
Net cash flows from operating activities
283,668
205,605
Investing activities
Capital expenditures
(172,052)
(97,671)
Proceeds from sale of assets
160,924
32,504
Purchases of jackpot annuity investments
-
(1,061)
Proceeds from jackpot annuity investments
-
7,472
Other
(2,570)
(4,894)
Net cash flows used in investing activities
(13,698)
(63,650)
Financing activities
Principal payments on long-term debt
(54,406)
(318,832)
Net (payments of) receipts from financial liabilities
(27,154)
49,564
Dividends paid - non-controlling interest
(13,093)
-
Other
(1,642)
(2,964)
Net cash flows used in financing activities
(96,295)
(272,232)
Net increase (decrease) in cash and cash equivalents
173,675
(130,277)
Effect of exchange rate changes on cash
(4,473)
8,589
Cash and cash equivalents at the beginning of the period
294,094
627,484
Cash and cash equivalents at the end of the period
463,296
505,796
Supplemental Cash Flow Information:
Interest paid
(210,936)
(216,834)
Income taxes paid
(7,933)
(16,319)
International Game Technology PLC
Net Debt
($ thousands)
March 31,
December 31,
2017
2016
6.250% Senior Secured Notes due 2022 1,470,955
1,472,150
6.500% Senior Secured Notes due 2025 1,085,872
1,085,537
4.750% Senior Secured Notes due 2023 897,900
884,917
4.125% Senior Secured Notes due 2020 741,423
730,465
5.625% Senior Secured Notes due 2020 594,397
593,954
7.500% Senior Secured Notes due 2019 519,841
521,894
4.750% Senior Secured Notes due 2020 517,599
509,050
5.500% Senior Secured Notes due 2020 126,148
126,294
5.350% Senior Secured Notes due 2023 61,163
61,187
6.625% Senior Secured Notes due 2018 -
521,556
Senior Secured Notes
6,015,298
6,507,004
Term Loan Facilities due 2019
851,969
839,552
Revolving Credit Facilities due 2021 463,999
516,529
Long-term debt, less current portion 7,331,266
7,863,085
6.625% Senior Secured Notes due 2018 530,210
-
Other
40
77
Current portion of long-term debt
530,250
77
Short-term borrowings
52
-
Total debt
7,861,568
7,863,162
Cash and cash equivalents
463,296
294,094
Net debt
7,398,272
7,569,068
International Game Technology PLC
Condensed Consolidated Statement of Operations
Reconciliation of Non-GAAP Financial Measures
($ and shares in thousands, except per share data)
Q1 2017
Adjustments
Q1 2017
As
Purchase
Foreign
Restructuring
Transaction
As
Reported
Accounting
Exchange
Expense
Expense, net
Adjusted
Total revenue
1,152,584
(178)
-
-
-
1,152,406
Cost of services
624,294
(42,230)
-
-
-
582,064
Cost of sales
114,336
(29,682)
-
-
-
84,654
Selling, general and administrative
200,524
(34,928)
-
-
-
165,596
Research and development
82,621
(201)
-
-
-
82,420
Restructuring expense
9,267
-
-
(9,267)
-
-
Transaction expense, net
2,321
-
-
-
(2,321)
-
Total operating expenses
1,033,363
(107,041)
-
(9,267)
(2,321)
914,734
Operating income
119,221
106,863
-
9,267
2,321
237,672
Foreign exchange loss, net
(46,837)
-
46,837
-
-
-
Other income, net
2,667
34
-
-
-
2,701
Interest expense, net
(112,173)
1,088
-
-
-
(111,085)
Total non-operating expenses
(156,343)
1,122
46,837
-
-
(108,384)
(Loss) income before (benefit from) provision for income taxes
(37,122)
107,985
46,837
9,267
2,321
129,288
(Benefit from) provision for income taxes (a)
(10,330)
38,229
10,668
3,172
853
42,592
Net (loss) income
(26,792)
69,756
36,169
6,095
1,468
86,696
Less: Net income attributable to non-controlling interests
27,998
25
-
-
-
28,023
Net (loss) income attributable to IGT PLC
(54,790)
69,731
36,169
6,095
1,468
58,673
Net (loss) income per common share - diluted
(0.27)
0.29
Weighted-average shares - diluted
202,479
203,052
(a) Provision for income taxes was determined based on the statutory tax rate in effect in the respective jurisdiction where the adjustment originated.
International Game Technology PLC
Condensed Consolidated Statement of Operations
Reconciliation of Non-GAAP Financial Measures
($ and shares in thousands, except per share data)
Q1 2016
Adjustments
Q1 2016
As
Purchase
Foreign
Restructuring
Transaction
As
Reported
Accounting
Exchange
Expense
Expense, net
Adjusted
Total revenue
1,281,561
692
-
-
-
1,282,253
Cost of services
648,763
(45,804)
-
-
-
602,959
Cost of 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 (benefit from) provision for income taxes
(95,107)
116,274
161,556
9,418
1,474
193,615
(Benefit from) provision for income taxes (a)
(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 non-controlling interests
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
(a) Provision for income taxes was determined based on the statutory tax rate in effect in the respective jurisdiction where the adjustment originated.
International Game Technology PLC
Adjusted EBITDA and Free Cash Flow
Reconciliations of Non-GAAP Financial Measures
($ thousands)
For the three months ended
March 31,
2017
2016
Net loss
(26,792)
(86,449)
Benefit from income taxes
(10,330)
(8,658)
Non-operating expenses
156,343
283,004
Amortization
116,241
125,496
Depreciation
91,921
98,517
Amortization of upfront payments to customers
49,399
27,409
Restructuring expense
9,267
9,418
Transaction expense, net
2,321
1,474
Stock-based compensation expense
849
9,302
Non-cash purchase accounting (excluding D&A)
(183)
631
Bad debt recovery
(17,873)
-
Adjusted EBITDA
371,163
460,144
Cash flows from operating activities
283,668
205,605
Capital expenditures
(172,052)
(97,671)
Free Cash Flow
111,616
107,934
International Game Technology PLC Segment Performance
Revenue Detail
($ millions)
INTERNATIONAL GAME TECHNOLOGY PLC
Quarter Change
2016
2017
Percentage Constant FX
Q1
Q1
Q1
Q1
Gaming
Total Revenue
631
596
-5.5%
-4.2%
Gaming Services
500
487
-2.5%
-0.8%
Terminal
315
323
2.4%
4.3%
Social (DDI)
80
68
-15.3%
-14.7%
Other
104
96
-7.6%
-5.7%
Product Sales
131
109
-17.0%
-16.8%
Terminal
79
77
-2.6%
-1.9%
Other
52
32
-38.9%
-39.2%
Lottery
Total Revenue
565
484
-14.3%
-12.8%
Lottery Services
550
470
-14.6%
-13.0%
FM/Concessions
492
433
-12.0%
-10.0%
LMA
39
32
-17.6%
-17.6%
Other Services
19
4
-76.9%
-84.2%
Product Sales
15
14
-4.3%
-3.6%
Terminal
0
0
0.0%
0.0%
Systems/Other
15
14
-5.2%
-4.6%
Other
Total Revenue
86
73
-15.5%
-13.5%
Service Revenue
86
70
-18.0%
-16.3%
Product Sales
0
2
1662.2%
1833.8%
Consolidated Revenue
1,282
1,153
-10.1%
-8.6%
Operating Income:
Segment Total
359
269
-25.1%
-23.0%
Purchase Accounting (111)
(107)
-4.1%
-4.0%
Corporate Support
(59)
(42)
-28.3%
-26.3%
Total
188
119
-36.5%
-33.2%
NORTH AMERICA GAMING & INTERACTIVE
Quarter Change
2016
2017
Percentage Constant FX
Q1
Q1
Q1
Q1
Gaming
Total Revenue
339
305
-9.8%
-9.7%
Gaming Services
258
234
-9.0%
-8.9%
Terminal
134
126
-6.5%
-6.6%
Social (DDI)
80
68
-15.3%
-14.7%
Other
43
41
-5.3%
-5.4%
Product Sales
81
71
-12.2%
-12.2%
Terminal
50
51
2.5%
2.5%
Other
31
20
-35.8%
-35.8%
Total
Revenue
339
305
-9.8%
-9.7%
Operating Income
89
66
-26.1%
-27.9%
NORTH AMERICA LOTTERY
Quarter Change
2016
2017
Percentage Constant FX
Q1
Q1
Q1
Q1
Gaming
Total Revenue
37
36
-3.7%
-4.0%
Gaming Services
37
36
-3.9%
-4.2%
Terminal
25
25
-2.2%
-2.2%
Social (DDI)
0
0
0.0%
0.0%
Other
12
11
-7.4%
-8.3%
Product Sales
0
0
710.8%
710.8%
Terminal
(0)
0
-101.3% -101.3%
Other
0
0
109.2%
109.2%
Lottery
Total Revenue
278
245
-11.9%
-11.9%
Lottery Services
267
232
-13.2%
-13.2%
FM/Concessions
201
166
-17.1%
-17.1%
LMA
39
32
-17.6%
-17.6%
Other Services
27
33
21.9%
21.9%
Product Sales
11
13
19.8%
19.9%
Terminal
0
0
0.0%
0.0%
Systems/Other
11
13
19.3%
19.4%
Total
Revenue
315
281
-10.9%
-11.0%
Operating Income
88
69
-21.3%
-21.7%
INTERNATIONAL
Quarter Change
2016
2017
Percentage Constant FX
Q1
Q1
Q1
Q1
Gaming
Total Revenue
97
78
-19.5%
-17.2%
Gaming Services
47
41
-12.9%
-9.1%
Terminal
13
12
-7.6%
-6.2%
Social (DDI)
0
0
0.0%
0.0%
Other
34
29
-15.0%
-10.2%
Product Sales
50
37
-25.6%
-24.8%
Terminal
29
26
-11.4%
-9.6%
Other
21
12
-45.1%
-45.8%
Lottery
Total Revenue
70
67
-4.0%
-0.7%
Lottery Services
66
66
0.0%
3.3%
FM/Concessions
51
49
-3.5%
0.3%
LMA
0
0
0.0%
0.0%
Other Services
15
16
12.0%
13.9%
Product Sales
4
2
-64.5%
-62.3%
Terminal
0
0
0.0%
0.0%
Systems/Other
4
1
-66.7%
-64.5%
Other
Total Revenue
18
19
6.7%
6.1%
Service Revenue
18
17
-5.8%
-7.6%
Product Sales
0
2
1662.2%
1833.8%
Total
Revenue
185
164
-11.1%
-8.8%
Operating Income
33
8
-76.4%
-64.0%
ITALY
Quarter Change
2016
2017
Percentage Constant FX
Q1
Q1
Q1
Q1
Gaming
Total Revenue
158
176
11.1%
15.2%
Gaming Services
158
176
11.3%
15.3%
Terminal
143
160
12.5%
16.7%
Social (DDI)
0
0
0.0%
0.0%
Other
15
15
-0.1%
3.2%
Product Sales
0
0
-46.9%
-46.1%
Terminal
0
0
-100.0% -100.0%
Other
0
0
-46.1%
-45.3%
Lottery
Total Revenue
217
172
-20.7%
-17.8%
Lottery Services
217
172
-20.7%
-17.8%
FM/Concessions
240
217
-9.5%
-6.2%
LMA
0
0
0.0%
0.0%
Other Services
(23)
(45)
94.2%
101.2%
Product Sales
0
0
0.0%
0.0%
Terminal
0
0
0.0%
0.0%
Systems/Other
0
0
0.0%
0.0%
Other
Total Revenue
68
54
-21.2%
-18.6%
Service Revenue
68
54
-21.2%
-18.6%
Product Sales
0
0
0.0%
0.0%
Total
Revenue
444
402
-9.4%
-6.2%
Operating Income
148
125
-15.2%
-11.6%
Consolidated Key Performance Indicators (KPIs)
First Quarter
Period Ended March 31
2017
2016
% change
Installed base (end of period)
Casino
34,364
34,214
0.4%
VLT - Government Sponsored (ex-Italy)
15,627
15,581
0.3%
VLT - Italy Supplier (B2B)
9,043
8,270
9.3%
Total installed base
59,034
58,065
1.7%
Yield (average revenue per unit per day - $0.00)
30.89
32.79
-5.8%
Additional Italian Network Details:
VLT - Operator (B2C)
10,961
11,120
-1.4%
AWP
58,746
55,991
4.9%
Machine units shipped
New/Expansion
1,752
1,087
61.2%
Replacement
4,201
4,608
-8.8%
Total machines shipped
5,953
5,695
4.5%
Global lottery same-store revenue growth
Instants & draw games
1.9%
Multistate Jackpots
-56.3%
Total lottery same-store revenue growth (ex-Italy)
-10.7%
Italy lottery revenue growth
-17.7%
North America KPIs
First Quarter
Period Ended March 31
2017
2016
% change
Installed base (end of period)
Casino
23,701
24,958
-5.0%
VLT - Government Sponsored
15,009
15,331
-2.1%
Total installed base
38,710
40,289
-3.9%
Machine units shipped
New/Expansion
1,157
902
28.3%
Replacement
2,787
3,049
-8.6%
Total machines shipped
3,944
3,951
-0.2%
DoubleDown
Revenue ($ Thousands)
67,893
80,133
-15.3%
Mobile penetration
58%
54%
8.4%
DAU (Daily Active Users) 1
1,455
1,859
-21.8%
MAU (Monthly Active Users) 1
3,525
4,310
-18.2%
Bookings per DAU ($0.00) 1
$
0.52
$
0.47
10.6%
Lottery same-store revenue growth
Instants & draw games
1.5%
Multistate Jackpots
-59.5%
Total lottery same-store revenue growth
-14.0%
1As a single application with multiple games, active users equal unique users
International KPIs
First Quarter
Period Ended March 31
2017
2016
% change
Installed base (end of period)
Casino
10,663
9,256
15.2%
VLT - Government Sponsored
618
250
147.2%
Total installed base
11,281
9,506
18.7%
Machine units shipped
New/Expansion
595
185
221.6%
Replacement
1,414
1,559
-9.3%
Total machines shipped
2,009
1,744
15.2%
Lottery same-store revenue growth
Instants & draw games
3.2%
Multistate Jackpots
-13.1%
Total lottery same-store revenue growth
2.0%
Italy KPIs
First Quarter
Period Ended March 31
2017
2016
% change
(In EUR
millions, except machines)
Lottery
Lotto wagers
1,873
1,928
-2.8%
10eLotto
1,243
1,193
4.2%
Core
525
559
-6.0%
Late Numbers
106
176
-40.1%
Scratch & Win Wagers
2,341
2,355
-0.6%
Italy lottery revenue growth
-17.7%
Gaming
Installed base (end of period)
VLT - Operator (B2C)
10,961
11,120
-1.4%
VLT - Supplier (B2B)
9,043
8,270
9.3%
AWP
58,746
55,991
4.9%
Total Installed Base
78,750
75,381
4.5%
Wagers
VLT - Operator (B2C)
1,415
1,398
1.2%
AWP
1,009
1,080
-6.6%
Interactive Wagers (Gaming)
468
424
10.3%
Other
Sports Betting Wagers1
257
221
16.7%
Sports Betting Payout (%)1
89.4%
80.9%
8.5 pp
1Includes Virtual Wagers and Pools & Horses

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/international-game-technology-plc-reports-first-quarter-2017

SOURCE International Game Technology PLC

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