Scientific Games come out ahead in second quarter
Las Vegas-based gaming equipment manufacturer Scientific Games Corp. rode an increase in revenue and improved cash flow to narrow losses for the second straight quarter, company executives said Monday.
The company reported a
5.1 percent increase in revenue to $766.3 million in a morning conference call with investors that kicked off the second-quarter earnings season.
It was the seventh straight quarter of year-over-year growth and enabled the company to post losses of $39.1 million, down from $51.7 million a year earlier.
“We’re disciplined and focused on our priorities,” Scientific CEO Kevin Sheehan said in a conference call with investors Monday.
Sheehan took the helm at Scientific last year after working as the CEO of Norwegian Cruise Line Holdings Ltd.
During the quarter that ended June 30, cash flow climbed 13 percent from a year earlier to $168.5 million. Global gaming machine sales were up 6 percent, even though there were no major casino openings during the period. The average sales price on replacement machines increased to $17,550 from $16,859 last year.
The company also installed software and hardware systems in three casinos, including the Aliante Hotel in North Las Vegas, pushing revenue up in that segment by 13 percent to $67.1 million.
Sheehan said the company is gathering momentum after investing $52 million in new games, including a new “Simpsons” game on its Gamescape platform. Executives hinted Monday that a James Bond-themed game announced earlier would be on a different platform and likely would be introduced at October’s Global Gaming Expo convention in Las Vegas.
Scientific spent more than $6 billion to acquire WMS Industries Inc. in 2013 and Bally Technologies Inc. in 2014. A slowdown in the gaming industry spurred the company to devalue its assets, resulting in paper losses.
The company also announced Monday that it plans to take advantage of its improved performance and favorable market conditions to refinance a portion of its debt to lower cash interest costs, extend debt maturities and reduce its cost of capital.
Investors showed their confidence, bumping the share price up 27.2 percent, or $7.30, in Monday trading and after hours. With volume nearly 10 times the daily average, the price pushed to a 52-week high of $35.20 before retreating to $34.15 a share.
Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @Rickvelotta on Twitter.