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 International Game Technology PLC Reports Third Quarter 2018 Results
   Wednesday, October 31, 2018 6:45:00 AM ET

LONDON, Oct. 31, 2018 /PRNewswire/ --International Game Technology PLC ("IGT") (NYSE:IGT) today reported financial results for the third quarter ended September 30, 2018. Today, at 8:00 a.m. EDT, management will host a conference call and webcast to present the third 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...



"Solid performance and important, long-term contracts drove very good third quarter and year-to-date results," said Marco Sala, CEO of IGT. "Global Lottery same-store revenues for instants and draw games rose mid-single digits. The installed base of gaming machines was up, and unit shipments of gaming machines increased 10%. And, we enjoyed particularly strong sales and profit growth in Italy, confirming the vitality of that important market. We are firmly on track to achieve our 2018 financial and operational goals."

"We've delivered Adjusted EBITDA growth of 4% and 7% for the third quarter and year-to-date periods at constant currency and scope," said Alberto Fornaro, CFO of IGT. "As a result, we are narrowing our Adjusted EBITDA outlook for 2018 to $1,740 - $1,780 million, the top half of the prior range."

Overview of Consolidated Third Quarter Results














Consolidated revenue was $1,156 million, down 4% at constant currency

  • $22 million negative impact due to ASC 606
  • Impacted by lumpiness of product sales and timing of multi-state jackpots
  • Strong global Lottery performance, improved Gaming KPIs, and broad-based strength in Italy

Adjusted EBITDA rose 3% to $443 million; Adjusted operating income was unchanged from prior year at $257 million

  • Disciplined expense management more than offset lower revenue
  • Adjusted operating income includes higher depreciation associated with recent Lottery contract extensions and upgrading of Gaming installed base

Interest expense was $107 million compared to $114 million in prior-year quarter

Provision for income taxes was $46 million compared to a benefit of $20 million in the prior-year period

Net income attributable to IGT was $22 million in the quarter; Adjusted net income attributable to IGT was $64 million

Net income per diluted share of $0.11; Adjusted net income per diluted share of $0.31

Cash from operations was $249 million for the first nine months of the year and capital expenditures were $374 million

  • $366 million (gross) upfront payments for the Scratch & Win license in Italy

Cash and cash equivalents were $448 million as of September 30, 2018, compared to $1,057 million as of December 31, 2017

Net debt was $7,570 million as of September 30, 2018, compared to $7,319 million as of December 31, 2017

Operating Segment Review

North America Gaming & Interactive


































































Revenue of $231 million compared to $262 million in the prior-year quarter

  • Decline of $14 million, or 5%, after adjusting for $17 million jackpot expense reclass
  • Gaming services revenue of $152 million compared to $171 million in the prior year
    • Stable after adjusting for jackpot expense reclass
    • Installed base up 433 units from prior year; yields and installed base stable sequentially
  • Product sales revenue of $79 million compared to $91 million in the prior year
    • 16% increase in terminal sale revenue includes growth in casino replacement and VLT units, higher average selling prices
    • Large software sale in prior year

Operating income of $45 million compared to $65 million in the prior-year quarter

  • Large, high-margin product sales mix in the prior year
  • Increased depreciation related to upgrading installed base
  • Timing of jackpots

North America Lottery



















































































































Revenue of $279 million compared to $307 million in prior-year period

  • Lottery service revenue down 5% to $225 million
    • 4.8% same-store revenue growth for instant tickets and draw-based games more than offset by significantly lower multistate jackpot activity
    • Lower LMA revenue from Illinois
  • Lottery product sales of $17 million compared to $22 million in prior year
    • Growth in instant ticket printing
    • Large VLT system and lottery terminal sales in prior year

Operating income of $60 million compared to $75 million in prior-year period

  • Tough jackpot and product sales revenue comparisons
  • Higher depreciation related to recent contract wins and extensions

International




























































































































Revenue down 5% in constant currency to $216 million

  • Stable Lottery service revenue
    • Same-store revenue growth of 3.7%
    • Lower non-wager revenue compared to prior year
  • Significant increase in Lottery product sales from large, multi-year software license
  • Gaming service revenue of $33 million compared to $59 million in the prior year
    • Prior year had benefit of certain discrete, non-recurring items
    • Jackpot expense reclass of $3 million
    • Service revenue from terminals up high single-digits at constant currency from growth in the installed base
  • Gaming product sales revenue down 2% in constant currency to $65 million
    • 14% increase in gaming machine unit shipments; higher average selling prices
    • Lower systems revenue

Operating income up 46% at constant currency to $56 million

  • High-margin software license sale
  • Disciplined expense management

Italy





































































































































































































Revenue up 4% at constant currency to $430 million with growth across all Gaming businesses

  • Lottery Service revenue up to $184 million from $180 million in the prior year
    • Lotto wagers up 5.4% on continued strength in 10eLotto and contribution from MillionDAY
    • Scratch & Win wagers down modestly on comparison with successful relaunch of Miliardario in the prior-year period
  • Gaming Service revenue up 2% at constant currency
    • Higher revenue despite state-mandated reductions in AWP units, incremental taxes, and certain regional restrictions
    • Strong underlying productivity
  • Sports betting wagers increased 9.9% to 225 million, payout 210 basis points better

Operating income increased to $145 million, up 17% at constant currency

  • Strong profit flow-through, especially for Lotteries
  • Disciplined cost management

Other Developments

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

  • Record date of November 14, 2018
  • Payment date of November 28, 2018

Recent Capital Markets Activity

  • Issuance of $750 million 6.25% Senior Secured Notes due 2027
  • Net proceeds used to redeem $600 million 5.625% bonds due 2020, $144 million 7.50% notes due 2019, and $97 million of its 5.5% bonds due 2020, with the balance funded through utilization of the revolving credit facility
  • Average debt maturity extended to over 4 years

Full Year Outlook

  • Narrowing 2018 Adjusted EBITDA outlook to $1,740 - $1,780 million at a EUR/USD rate of 1.19, the top half of the prior range
  • Continue to expect capital expenditures of $575-$625 million

Conference Call and Webcast

October 31, 2018, at 8:00 a.m. 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 9277539
  • 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 9277539

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 Digital 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.

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






















































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































































Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/international-game-technology-plc-reports-third-quarter-2018-results-300741146.html

SOURCE International Game Technology PLC



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