IGT
$26.37
International Game Technology
($.99)
(3.62%)
Earnings Details
1st Quarter March 2018
Monday, May 21, 2018 4:22:00 PM
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Summary

International Game Technology Misses

International Game Technology (IGT) reported 1st Quarter March 2018 earnings of $0.15 per share on revenue of $1.2 billion. The consensus earnings estimate was $0.27 per share on revenue of $1.2 billion. The Earnings Whisper number was $0.33 per share. Revenue grew 4.7% on a year-over-year basis.

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
$0.15
Earnings Whisper
$0.33
Consensus Estimate
$0.27
Reported Revenue
$1.21 Bil
Revenue Estimate
$1.16 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

International Game Technology PLC Reports First Quarter 2018 Results

LONDON, May 21, 2018 /PRNewswire/ -- International Game Technology PLC ("IGT") (NYSE:IGT) today reported financial results for the first quarter ended March 31, 2018. Tomorrow, at 8:00 a.m. EDT, management will host a conference call and webcast to present the first quarter results; access details are provided below.

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...

"Compelling content and technology solutions are driving our results," said Marco Sala, CEO of IGT.  "Lottery same-store revenue growth was among the highest levels in the last several quarters, even in our largest markets. A sharp increase in systems sales, double-digit growth in global gaming machine replacement unit shipments, and sequential improvement in the North America installed base confirm the good momentum of our global Gaming business.  The positive underlying contribution from each of our operating segments provides a strong start to the year."

"We are solidly positioned to achieve our 2018 strategic and financial goals," said Alberto Fornaro, CFO of IGT.  "With revenue growing 5% and Adjusted EBITDA up 18%, our first quarter results are some of the best we've reported."

Overview of Consolidated First Quarter Results


Quarter Ended
March 31

Y/Y
Change

Constant
Currency
Change 


2018 (1)

2017

(%)

(%)

(In $ millions, unless otherwise noted)





Revenue

1,207

1,153

5%

(-2%)

Operating income

197

119

65%

48%

Net loss per diluted share

($0.51)

($0.27)

N/M


Net debt

7,525

7,398

2%


Adjusted EBITDA

436

371

18%

8%

Adjusted operating income

251

238

6%

(-3%)

Adjusted net income per diluted share

$0.15

$0.29

(-48%)



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.


(1) On January 1, 2018, IGT adopted ASU 2014-09 (Topic 606), Revenue from Contracts with Customers ("ASC 606"). This positively impacted Revenue in the first quarter by $3 million and EBITDA and Adjusted EBITDA by $15 million. Comparative schedules summarizing the impact on the first quarter Condensed Consolidated Statements of Operations and Condensed Consolidated Balance Sheets are included later in this release.   

Consolidated revenue was $1,207 million, up 5% from the prior-year quarter

  • Up 4% at constant currency and scope (adjusted for the sale of Double Down Interactive LLC ("DoubleDown"))
  • Driven by strong global casino systems sales, broad-based momentum in lottery, and Italy sports betting results

Adjusted EBITDA rose 18% to $436 million, up 14% at constant currency and scope

  • Higher underlying revenue and profit across all business segments
  • Includes $15 million timing benefit from adoption of new accounting standard, ASC 606

Adjusted operating income was $251 million, a 6% increase from the prior-year period

  • Increase driven by revenue growth
  • Selling, general and administrative expenses up $15 million compared to the prior year, which had benefited from $18 million in one-off bad debt recovery

Interest expense was $110 million compared to $115 million in the prior-year period

Provision for income taxes rose to $61 million from a $10 million benefit in the prior-year period

  • Reflects increases in valuation allowances in the U.K. and higher tax accruals in the current quarter
  • Prior-year benefit driven by pretax loss in the quarter

Net loss attributable to IGT was $103 million in the quarter; Adjusted net income attributable to IGT was $31 million

Net loss per diluted share of ($0.51); Adjusted net income per diluted share of $0.15

Cash from operations was $77 million compared to $294 million in the prior-year quarter, the decline primarily attributed to

  • A change in accounting standards requiring restricted cash to be included with cash and cash equivalents within the statement of cash flows
  • The timing of Italy receivables and incentive compensation payments

Cash and cash equivalents were $570 million as of March 31, 2018, compared to $1,057 million as of December 31, 2017

  • Maturity of €500 million 6.625% Senior Secured Notes funded in the quarter

Net debt was $7,525 million as of March 31, 2018, compared to $7,319 million as of December 31, 2017

  • $119 million net negative impact from foreign currency adjustments
  • $50 million reclassified from cash to restricted cash due to legislative changes impacting the Italy commercial services business

Operating Segment Review

North America Gaming & Interactive

Select Financial Data



Constant


Key Performance Indicators



%

Period Ended March 31

Q1 '18

Q1 '17

FX


Period Ended March 31

Q1 '18

Q1 '17

Change 

Gaming


Total Revenue

244

305

-20%


Installed base (end of period)





Gaming Services

154

234

-34%


    Casino

23,183

23,701

-2.2%



Terminal 

105

126

-16%








Social (DDI)

0

68

-100%


Machine units shipped






Other

49

41

19%


   New/Expansion

1,024

1,157

-11.5%


Product Sales

89

71

26%


   Replacement 

2,692

2,787

-3.4%



Terminal 

50

51

-2%


   Total machines shipped

3,716

3,944

-5.8%



Other

39

20

96%


















Total


Revenue

244

305

-20%







Operating Income

57

69

-12%






Revenue of $244 million compared to $305 million in the prior-year quarter, which included DoubleDown

  • Up 3% at constant scope, primarily on higher product sales 
  • Gaming service revenue was $154 million compared to $234 million in the prior-year period
    • Decline fully attributable to the sale of DoubleDown and ASC 606 classification of jackpot expense as a contra revenue item (previously included in cost of services)
    • Installed base up approximately 375 units sequentially; down year-over-year due to large conversion sales in 2017
  • Product sales of $89 million, up 26% from the prior year
    • Strong systems sales, for both central systems and add-on solutions
    • Shipped 3,716 gaming machine units in the quarter compared to 3,944 units in the prior-year period
      • New and Expansion units down from 1,157 units to 1,024 units on fewer openings
      • Continued growth in replacement units to casino customers; overall decline due to fewer VLT sales in Canada and Oregon

Operating income of $57 million compared to $69 million in the prior-year quarter

  • Up 17% at constant scope
    • Increased revenues
    • Higher-margin business mix

North America Lottery

Select Financial Data



Constant


Key Performance Indicators



%

Period Ended March 31

Q1 '18

Q1 '17

FX


Period Ended March 31

Q1 '18

Q1 '17

Change 

Gaming


Total Revenue

38

36

5%


Installed base (end of period)





Gaming Services

38

36

5%


    VLT - Government Sponsored

15,101

15,009

0.6%



Terminal 

25

25

0%








Other

13

11

16%


Lottery same-store revenue growth





Product Sales

0

0

0%


   Instants & draw games



5.4%









   Multistate Jackpots



51.6%

Lottery


Total Revenue

257

245

5%


   Total lottery same-store revenue growth


11.0%


Lottery Services

241

232

4%








FM/Concessions

176

166

6%








LMA

36

32

11%








Other Services

29

33

-13%







Product Sales

16

13

24%








Terminal 

4

0

N/M








Systems/Other

12

13

-6%


















Total


Revenue

295

281

5%







Operating Income

76

69

11%






Revenue up 5% to $295 million

  • Lottery Service revenue rose 4% to $241 million
    • Same-store revenue up 11.0% on higher jackpot activity and instants innovation
    • Benefit from incentives accrued for New Jersey and Indiana lottery management agreements
    • Impacted by exit of low-margin contracts, lower effective rates on recent contract extensions, and weather-related service disruption
    • Lottery Product Sales increased 27% on a reported basis to $16 million on higher sales of retailer terminals

Operating income rose 11% to $76 million

    • Same-store revenue growth and New Jersey and Indiana incentives
    • Partially offset by increased depreciation and amortization and investment in research and development

International

Select Financial Data



Constant


Key Performance Indicators



%

Period Ended March 31

Q1 '18

Q1 '17

FX


Period Ended March 31

Q1 '18

Q1 '17

Change 

Gaming


Total Revenue

91

78

11%


Installed base (end of period)





Gaming Services

40

41

-8%


    Casino

12,917

10,663

21.1%



Terminal 

14

12

15%


    VLT - Government Sponsored

2,937

618

375.2%



Other

25

29

-18%


   Total installed base

15,854

11,281

40.5%


Product Sales

51

37

32%








Terminal 

30

26

13%


Machine units shipped






Other

21

12

76%


   New/Expansion

91

595

-84.7%









   Replacement 

2,021

1,414

42.9%

Lottery


Total Revenue

74

67

4%


   Total machines shipped

2,112

2,009

5.1%


Lottery Services

72

66

3%








FM/Concessions

57

49

8%


Lottery same-store revenue growth






Other Services

15

17

-14%


   Instants & draw games



4.0%


Product Sales

3

2

62%


   Multistate Jackpots



6.0%



Systems/Other

3

1

73%


   Total lottery same-store revenue growth


4.1%













Other


Total Revenue

19

19

-6%







Service Revenue

19

17

6%







Product Sales

0

2

-95%


















Total


Revenue

184

164

6%







Operating Income

22

7

145%






Revenue grew 12% on a reported basis, and 6% at constant currency, to $184 million

  • Lottery Service revenue increased 9% on a reported basis, and 3% at constant currency, to $72 million
    • Same-store revenue growth of 4.1% on broad-based geographic strength
    • Higher EuroMillions jackpot activity
  • Gaming Product Sales revenue up 37% on a reported basis, and 32% at constant currency, to $51 million
    • Strong systems sales
    • Higher gaming machine unit shipments, including double-digit growth in replacement units
  • Gaming Service revenue dropped 3% on a reported basis, and 8% at constant currency, to $40 million
    • Decline entirely attributable to ASC 606 classification of jackpot expense as contra revenue item (previously included in cost of services)
    • Up 5% on a reported basis, and down 1% at constant currency, before ASC 606
      • Significant installed base growth driven by Greek VLT and video bingo machines
      • Partially offset by exit of certain low margin businesses and lower yields due to geographic mix

Operating income up significantly to $22 million from $7 million

    • Higher revenue, improved product mix, and lower SG&A
    • Unusually low results in prior-year period

Italy

Select Financial Data



Constant


Key Performance Indicators



%

Period Ended March 31

Q1 '18

Q1 '17

FX


Period Ended March 31

Q1 '18

Q1 '17

Change 

Gaming


Total Revenue

191

176

-6%


(In € millions, except machines)





Gaming Services

190

176

-6%


Lottery






Terminal 

172

160

-7%


Lotto wagers

2,034

1,873

8.6%



Other

18

15

1%


   10eLotto

1,451

1,243

16.7%


Product Sales

0

0

0%


   Core

504

525

-4.0%









   Late Numbers

45

106

-57.0%

Lottery


Total Revenue

214

172

8%


   MillionDAY

34

-

N/M


Lottery Services

214

172

8%








FM/Concessions

266

217

6%


Scratch & Win Wagers

2,408

2,341

2.9%



Other Services

(52)

(45)

N/M







Product Sales

0

0

0%


Italy lottery revenue growth



7.6%













Other


Total Revenue

79

54

27%


Gaming





Service Revenue

79

54

27%


Installed base (end of period)





Product Sales

0

0

0%


   VLT - Operator (B2C)

10,931

10,961

-0.3%









   VLT - Supplier (B2B)

8,425

9,043

-6.8%

Total


Revenue

483

402

4%


   AWP

51,315

58,746

-12.6%


Operating Income

147

124

1%


   Total Installed Base

70,671

78,750

-10.3%





















Wagers












   VLT - Operator (B2C)

1,441

1,415

1.8%









   AWP

955

1,009

-5.3%









   Interactive Wagers (Gaming)

493

468

5.3%





















Other












   Sports Betting Wagers1

246

257

-4.4%









   Sports Betting Payout (%)1

81.2%

89.5%

-8.3pp





















1Includes Virtual Wagers and Pools & Horses

Revenue up 20% on a reported basis, and up 4% at constant currency, to $483 million

  • Lottery Service revenue was $214 million, increase of 24% on a reported basis, and 8% at constant currency
    • Lotto wagers up 8.6% to €2,034 million on 17% growth in 10eLotto wagers
    • Scratch & Win wagers up 2.9% to €2.4 billion on Miliardario momentum
  • Gaming Service revenue of $190 million was up 8%; down 6% at constant currency
    • Decline reflects higher gaming machine taxes and regulator-mandated reduction in AWP units
    • Partially offset by improved underlying game performance
  • Sports betting revenue up on payout of 81.2% versus 89.5% in the prior year

Operating income increased to $147 million compared to $124 million in the prior-year period; up 1% at constant currency

  • Revenue growth
  • Partially offset by higher operating expenses
    • Advertising and marketing costs for new Lottery games 
    • Increased depreciation and amortization

Other Developments

The Company's board of directors declared a quarterly cash dividend of $0.20 per ordinary share

  • Record date of June 5, 2018
  • Payment date of June 19, 2018

In a separate news release today, the Company is announcing a derivatives transaction by De Agostini S.p.A. ("De Agostini") relating to IGT ordinary shares

  • De Agostini, IGT's majority shareholder with 103 million ordinary shares, entered into a variable forward transaction relating to 18 million IGT ordinary shares
  • IGT is not a party to the variable forward transaction and is not issuing or selling any IGT ordinary shares in connection with the transaction
  • IGT will be filing a registration statement on Form F-3 (including a base prospectus) and a preliminary prospectus supplement with the U.S. Securities Exchange Commission ("SEC") in connection with the transaction
  • De Agostini has advised IGT that they are not considering any additional transactions involving their IGT ordinary shares, and they intend to remain IGT's controlling shareholder
  • De Agostini will be filing an amendment to its Schedule 13D in connection with the transaction
  • Please refer to IGT's and De Agostini's respective SEC filings for additional details
  • This news release shall not constitute an offer to sell or the solicitation of an offer to buy the securities described herein, nor shall there be any offer or sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction

The Company has consolidated leadership of the North America Gaming & Interactive and North America Lottery segments under Renato Ascoli as CEO of North America

  • Aligns North America with the regional model that already exists for the International and Italy segments
  • Global product and service responsibilities for Lottery, Gaming, and Interactive will continue to be assigned primarily to the North America region; local Gaming product marketing, field services, and operations will remain within each region
  • Better positions the Company to leverage strategic new opportunities, such as sports betting
  • The Company will continue to report financial results and key performance indicators for the North America Gaming & Interactive and North America Lottery segments

IGT will host an Investor Day on August 2, 2018 in New York City

  • Primary focus of the event will be on IGT's global Lottery operations
  • Please contact Investor_Relations@IGT.com for additional details

Outlook

  • Adjusted EBITDA of $1,700-$1,780 million
    • Unchanged from prior outlook
    • Inclusive of $10-$15 million negative impact from treatment of intellectual property contracts under ASC 606
  • Capital expenditures of $575-$625 million
  • Average EUR/USD exchange rate assumption of 1.22

Conference Call and Webcast

May 22, 2018, at 8:00 am EDT

Live webcast available under "News, Events & Presentations" on IGT's Investor Relations website at www.IGT.com; replay available on the website following the live event

Dial-In Numbers

  • US/Canada toll-free dial-in number is +1 844 842 7999
  • Outside the US/Canada toll-free number is +1 612 979 9887
  • Conference ID/confirmation code is 5181158
  • A telephone replay of the call will be available for one week
    • US/Canada replay number is +1 855 859 2056
    • Outside the US/Canada replay number is +1 404 537 3406
    • ID/Confirmation code is 5181158

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 2018 are calculated using the same foreign exchange rates as the corresponding 2017 period. 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. These constant currency changes and non-GAAP financial measures should however be viewed in addition to, and not as an alternative for, the Company's reported results prepared in accordance with U.S. GAAP.

About IGT
IGT (NYSE:IGT) is the global leader in gaming. We enable players to experience their favorite games across all channels and regulated segments, from Gaming Machines and Lotteries to Interactive and Social Gaming. Leveraging a wealth of premium content, substantial investment in innovation, in-depth customer intelligence, operational expertise and leading-edge technology, our gaming solutions anticipate the demands of consumers wherever they decide to play. We have a well-established local presence and relationships with governments and regulators in more than 100 countries around the world, and create value by adhering to the highest standards of service, integrity, and responsibility. IGT has over 12,000 employees. For more information, please visit www.IGT.com.

Cautionary Statement Regarding Forward-Looking Statements
This news release may contain forward-looking statements (including within the meaning of the Private Securities Litigation Reform Act of 1995) concerning 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 factors and risks described in the Company's annual report on Form 20-F for the financial year ended December 31, 2017 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. You should carefully consider these factors and other risks and uncertainties that affect the Company's business. 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, 


2018


2017





Service revenue

1,046,951


1,026,945

Product sales

160,005


125,639

Total revenue

1,206,956


1,152,584





Cost of services

618,058


624,294

Cost of product sales

103,351


114,336

Selling, general and administrative

215,218


200,524

Research and development

71,263


82,621

Restructuring expense

2,016


9,267

Transaction expense, net

55


2,321

Total operating expenses

1,009,961


1,033,363





Operating income

196,995


119,221





Interest income

2,999


2,626

Interest expense

(110,279)


(114,799)

Foreign exchange loss, net

(96,695)


(46,837)

Other income, net

2,981


2,667

Total non-operating expenses

(200,994)


(156,343)





Loss before provision for (benefit from) income taxes

(3,999)


(37,122)





Provision for (benefit from) income taxes

60,505


(10,330)





Net loss

(64,504)


(26,792)





Less: Net income attributable to non-controlling interests

38,642


27,998





Net loss attributable to IGT PLC

(103,146)


(54,790)









Net loss attributable to IGT PLC per common share - basic

(0.51)


(0.27)

Net loss attributable to IGT PLC per common share - diluted

(0.51)


(0.27)





Weighted-average shares - basic

203,597


202,479

Weighted-average shares - diluted

203,597


202,479

 

International Game Technology PLC

Condensed Consolidated Balance Sheets

($ thousands)

Unaudited






March 31


December 31,


2018


2017

Assets




Current assets:




Cash and cash equivalents

569,620


1,057,418

Restricted cash

246,653


248,012

Trade and other receivables, net

953,342


937,854

Inventories, net

320,512


319,545

Other current assets

471,095


407,520

Income taxes receivable

83,483


94,168

  Total current assets

2,644,705


3,064,517

Systems, equipment and other assets related to contracts, net

1,425,976


1,434,194

Property, plant and equipment, net

188,790


193,723

Goodwill

5,739,554


5,723,815

Intangible assets, net

2,220,681


2,273,460

Other non-current assets

2,442,622


2,427,953

Deferred income taxes

42,579


41,546

  Total non-current assets

12,060,202


12,094,691

Total assets

14,704,907


15,159,208





Liabilities, redeemable non-controlling interests, and shareholders' equity




Current liabilities:




Accounts payable

1,192,750


1,240,753

Other current liabilities

1,637,742


1,780,875

Current portion of long-term debt

-


599,114

Short-term borrowings

44,448


-

Income taxes payable

95,671


55,935

  Total current liabilities

2,970,611


3,676,677

Long-term debt, less current portion

8,049,791


7,777,445

Deferred income taxes

462,386


491,460

Income taxes payable

55,665


55,665

Other non-current liabilities

469,919


446,113

  Total non-current liabilities

9,037,761


8,770,683

Total liabilities

12,008,372


12,447,360

Commitments and contingencies




Redeemable non-controlling interests and shareholders' equity

2,696,535


2,711,848

Total liabilities, redeemable non-controlling interests, and shareholders' equity

14,704,907


15,159,208

 

International Game Technology PLC

Condensed Consolidated Statements of Cash Flows

($ thousands)

Unaudited






 For the three months ended 



March 31,  



2018


2017

Cash flows from operating activities





Net loss


(64,504)


(26,792)

Adjustments to reconcile net loss to net cash provided by operating activities:





Depreciation 


98,087


91,921

Foreign exchange loss, net


96,695


46,837

Amortization 


68,392


116,241

Service revenue amortization


56,650


49,399

Stock-based compensation expense


14,178


849

Debt issuance cost amortization


6,099


4,678

Deferred income tax provision


(22,914)


(49,480)

Other non-cash costs, net


5,529


2,964

Changes in operating assets and liabilities:





Trade and other receivables


11,968


136,694

Inventories


(11,657)


158

Accounts payable


(35,545)


(14,946)

Other assets and liabilities


(145,768)


(64,971)

Net cash provided by operating activities


77,210


293,552






Cash flows from investing activities





Capital expenditures


(134,661)


(172,052)

Proceeds from sale of assets


2,473


160,924

Other


347


432

Net cash used in investing activities


(131,841)


(10,696)






Cash flows from financing activities





Principal payments on long-term debt


(625,500)


(54,406)

Net payments of financial liabilities


(32,702)


(27,154)

Dividends paid - non-controlling interests


(13,316)


(13,093)

Net proceeds from short-term borrowings


44,429


797

Proceeds from long-term debt


164,681


-

Other


(825)


(2,439)

Net cash used in financing activities


(463,233)


(96,295)






Net (decrease) increase in cash and cash equivalents, and restricted cash


(517,864)


186,561

Effect of exchange rate changes on cash and cash equivalents, and restricted cash


28,707


(1,885)

Cash and cash equivalents, and restricted cash at the beginning of the period


1,305,430


541,316

Cash and cash equivalents, and restricted cash at the end of the period


816,273


725,992











Supplemental Cash Flow Information:





Interest paid


(227,356)


(210,936)

Income taxes paid


(13,691)


(7,933)

 

International Game Technology PLC

Net Debt

($ thousands)






March 31,


December 31,


2018


2017





6.250% Senior Secured Notes due 2022

1,460,285


1,470,075

6.500% Senior Secured Notes due 2025

1,087,272


1,086,913

4.750% Senior Secured Notes due 2023

1,036,659


1,008,601

4.125% Senior Secured Notes due 2020

857,133


833,655

4.750% Senior Secured Notes due 2020

602,779


585,171

5.625% Senior Secured Notes due 2020

596,238


595,767

7.500% Senior Secured Notes due 2019

147,567


148,231

5.500% Senior Secured Notes due 2020

125,553


125,709

5.350% Senior Secured Notes due 2023

61,060


61,082

Senior Secured Notes, long-term

5,974,546


5,915,204





Term Loan Facilities due 2023

1,834,878


1,785,361

Revolving Credit Facilities due 2021

240,367


76,880

Long-term debt, less current portion

8,049,791


7,777,445





6.625% Senior Secured Notes due 2018

-


599,114

Current portion of long-term debt 

-


599,114





Short-term borrowings

44,448


-

Total debt

8,094,239


8,376,559





Cash and cash equivalents

569,620


1,057,418





Net debt

7,524,619


7,319,141


Note:  Net debt is a non-GAAP financial measure


 

International Game Technology PLC

Adjusted EBITDA and Free Cash Flow

Reconciliations of Non-GAAP Financial Measures

($ thousands)








For the three months ended



March 31,



2018


2017






Net loss


(64,504)


(26,792)

Provision for (benefit from) income taxes


60,505


(10,330)

Non-operating expenses


200,994


156,343

Depreciation 


98,087


91,921

Amortization


68,392


116,241

Service revenue amortization


56,650


49,399

Stock-based compensation expense


14,178


849

Restructuring expense


2,016


9,267

Transaction expense, net


55


2,321

Non-cash purchase accounting (excluding D&A)


(217)


(183)

Bad debt recovery


-


(17,873)

Adjusted EBITDA


436,156


371,163
















Cash flows from operating activities


77,210


293,552

Capital expenditures


(134,661)


(172,052)

Free Cash Flow


(57,451)


121,500

 

International Game Technology PLC

ASC 606 - Revenue Recognition Q1 2018 Impact

Condensed Consolidated Statements of Operations

($ thousands, except per share data)

Unaudited










Under Prior
Accounting


Revenue
Recognition
Adjustment


As Adjusted








Revenue


1,203,907


3,049


1,206,956

Operating expenses


(1,022,099)


12,138


(1,009,961)

Provision for income taxes


58,613


1,892


60,505

Net loss attributable to IGT PLC


(116,441)


13,295


(103,146)








Net loss attributable to IGT PLC per common share - basic


(0.57)


0.06


(0.51)

Net loss attributable to IGT PLC per common share - diluted


(0.57)


0.06


(0.51)

 

International Game Technology PLC

ASC 606 - Revenue Recognition Adoption Impact

Condensed Consolidated Balance Sheets

($ thousands)

Unaudited










Under Prior
Accounting


Revenue
Recognition
Adjustment


As Adjusted








Trade and other receivables, net


952,238


1,104


953,342

Inventories


341,921


(21,409)


320,512

Other current assets


436,410


34,685


471,095

Other non-current assets


2,415,763


26,859


2,442,622








Other current liabilities


1,654,349


(16,607)


1,637,742

Other non-current liabilities


473,231


(3,312)


469,919

Retained deficit


(1,151,665)


61,158


(1,090,507)

 

 International Game Technology PLC 

 Condensed Consolidated Statement of Operations 

 Reconciliation of Non-GAAP Financial Measures 

 ($ and shares in thousands, except per share data) 
















Q1 2018


Adjustments


Q1 2018



As


Purchase


Foreign


Restructuring


Transaction


As



Reported


Accounting


Exchange


Expense


Expense, net


Adjusted














 Total revenue 


1,206,956


(177)


-


-


-


1,206,779














 Cost of services 


618,058


(21,155)


-


-


-


596,903

 Cost of product sales 


103,351


(3,869)


-


-


-


99,482

 Selling, general and administrative 


215,218


(26,849)


-


-


-


188,369

 Research and development 


71,263


(235)


-


-


-


71,028

 Restructuring expense 


2,016


-


-


(2,016)


-


-

 Transaction expense, net 


55


-


-


-


(55)


-

 Total operating expenses 


1,009,961


(52,108)


-


(2,016)


(55)


955,782














 Operating income 


196,995


51,931


-


2,016


55


250,997














 Interest expense, net 


(107,280)


504


-


-


-


(106,776)

 Foreign exchange loss, net 


(96,695)


-


96,695


-


-


-

 Other income, net 


2,981


(2,185)


-


-


-


796

 Total non-operating expenses 


(200,994)


(1,681)


96,695


-


-


(105,980)














 (Loss) income before provision for income taxes 


(3,999)


50,250


96,695


2,016


55


145,017














 Provision for income taxes (a) 


60,505


11,910


2,646


552


-


75,613














 Net (loss) income 


(64,504)


38,340


94,049


1,464


55


69,404














 Less: Net income attributable to non-controlling interests 


38,642


25


-


-


-


38,667














 Net (loss) income attributable to IGT PLC 


(103,146)


38,315


94,049


1,464


55


30,737














 Net (loss) income per common share - diluted 


(0.51)










0.15

 Weighted-average shares - diluted (b) 


203,597










204,171



























(a) Adjustments for income taxes are determined based on the statutory tax rate in effect in the respective jurisdiction where the adjustment originated. 

(b) Weighted-average shares – diluted, as adjusted, include shares that were excluded from the as reported computation, due to the net loss as reported.   

 

 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


Adjusted














 Total revenue 


1,152,584


(178)


-


-


-


1,152,406














 Cost of services 


624,294


(42,230)


-


-


-


582,064

 Cost of product 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














 Interest expense, net 


(112,173)


1,088


-


-


-


(111,085)

 Foreign exchange loss, net 


(46,837)


-


46,837


-


-


-

 Other income, net 


2,667


34


-


-


-


2,701

 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 (b) 


202,479










203,052



























(a) Adjustments for income taxes are determined based on the statutory tax rate in effect in the respective jurisdiction where the adjustment originated. 

(b) Weighted-average shares – diluted, as adjusted, include shares that were excluded from the as reported computation, due to the net loss as reported.   

 

INTERNATIONAL GAME TECHNOLOGY PLC


















Select Financial Data



Constant


Key Performance Indicators



%

Period Ended March 31

Q1 '18

Q1 '17

FX


Period Ended March 31

Q1 '18

Q1 '17

Change 

Gaming


Total Revenue

563

596

-11%


Installed base (end of period)





Gaming Services

422

487

-19%


   Casino

36,100

34,364

5.1%



Terminal 

317

323

-9%


   VLT - Government Sponsored (ex-Italy)

18,038

15,627

15.4%



Social (DDI)

0

68

-100%


   VLT - Italy Supplier (B2B)

8,425

9,043

-6.5%



Other

105

96

5%


   Total installed base

62,563

59,034

6.0%


Product Sales

141

109

28%


   Yield 

$ 28.24

$ 30.92

-9.0%



Terminal 

80

77

3%


      (average revenue per unit per day)






Other

61

32

87%














   Additional Italian Network Details:




Lottery


Total Revenue

546

484

6%


   VLT - Operator (B2C)

10,931

10,961

-0.3%


Lottery Services

527

470

5%


   AWP

51,315

58,746

-12.6%



FM/Concessions

500

432

6%








LMA

36

32

11%


Machine units shipped






Other Services

(9)

5

-133%


   New/Expansion

1,115

1,752

-36.4%


Product Sales

19

14

28%


   Replacement 

4,713

4,201

12.2%



Terminal 

4

0

N/M


   Total machines shipped

5,828

5,953

-2.1%



Systems/Other

15

14

2%














Global lottery same-store revenue growth



Other


Total Revenue

98

73

19%


   Instants & draw games



5.1%


Service Revenue

98

70

22%


   Multistate Jackpots



45.9%


Product Sales

0

2

-95%


   Total lottery same-store revenue growth (ex-Italy)

9.4%









   Italy lottery revenue growth



7.6%

Consolidated


Revenue

1,207

1,153

-2%







Operating Income:











Segment Total

302

269

4%








Purchase Accounting

(52)

(107)

-52%








Corporate Support

(53)

(42)

19%








Total

197

119

48%






 

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SOURCE International Game Technology PLC