LONDON, U.K. – May 26, 2016 – International Game Technology PLC (“IGT”) (NYSE:IGT) today reported financial results for the first quarter ended March 31, 2016. 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.
“We begin 2016 with a solid first quarter, evidenced by good revenue growth with all operating segments contributing to an improvement in profitability,” said Marco Sala, CEO of IGT. “Continuing growth across all regions, especially North America and Italy, propelled our lottery revenues. Gaming revenues were resilient despite challenging market conditions in North America, our largest gaming market. We remain focused on reenergizing gaming operations and strengthening our global leadership in lotteries. We were successful in securing the Italian Lotto concession, one of our largest contracts and a cornerstone of our Italian operations.”
“The diversity of our product and geographic mix is a key element of our first quarter results,” said Alberto Fornaro, CFO of IGT. “Revenue growth, disciplined cost management, and synergy savings all contributed to sharp profit expansion. Even after large interest payments during the period, we generated significant free cash flow, enabling us to reduce debt in constant currency and further improve our leverage profile.”
Note: Pro forma is defined as the combined results of GTECH and legacy IGT for the first quarter of 2015. Adjusted
operating income, adjusted EBITDA, 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
As a result of the combination of GTECH S.p.A. (“GTECH”) and International Game Technology (“legacy IGT”), which was completed on April 7, 2015, a number of items affect the comparability of reported results. Reported financial information for the first quarter of 2016 includes the results of operations of IGT for the entire period, while reported financial information for the first quarter of 2015 includes only GTECH operations. Pro forma figures represent the combined results of both companies.
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 2016 are calculated using the same foreign exchange rates as the corresponding 2015 period.
Management believes that referring to certain pro forma, constant currency, or adjusted measures is a useful way to evaluate the Company’s underlying performance.
Overview of Consolidated First Quarter Results
Reported consolidated revenue grew 51% to $1,282 million from $848 million in the first quarter of 2015, reflecting GTECH’s acquisition of legacy IGT. On a pro forma, constant currency basis, consolidated revenue rose 4%. Revenue growth primarily reflects strong
lottery performance, particularly in North America and Italy. Global lottery same-store revenue, excluding Italy, increased 18% during the first quarter, reflecting the benefit of 3 the record Powerball jackpot in the United States. Revenue from gaming was slightly below the prior-year period. During the quarter, the Company sold 5,695 gaming machines worldwide.
On a reported basis, adjusted EBITDA of $460 million was 43% above the first quarter of 2015. On a pro forma, constant currency basis, adjusted EBITDA was 12% greater than in the prior-year period as overall sales growth was accentuated by favorable revenue mix and synergy savings.
Reported operating income was $188 million compared to $163 million in the first quarter of 2015. On a pro forma, constant currency basis, adjusted operating income was 35% above the first quarter of 2015, which included significant bad debt expense. In addition, revenue growth, overall sales mix, and synergy savings all contributed to the increase in adjusted operating income.
Interest expense was $118 million compared to $94 million in the prior-year period.
Net loss attributable to IGT was $93 million in the first quarter of 2016, reflecting the impact of $162 million in primarily non-cash foreign exchange losses. On an adjusted basis, net income attributable to IGT was $116 million. The Company reported net loss per diluted share of $(0.46) but earned $0.57 per diluted share on an adjusted basis.
Cash from operations was $206 million in the first quarter and capital expenditures were $98 million.
Cash and cash equivalents were $506 million as of March 31, 2016, compared to $627 million as of December 31, 2015. Consolidated shareholders’ equity totaled $3,292 million and net debt was $7,722 million as of March 31, 2016.
The Company will host an investor day on June 21-22, 2016 in Rome, Italy. At the event, presentations will be made by Marco Sala, CEO, and other members of the Company’s executive team. Interested parties may contact Investor_Relations@IGT.com
for additional details and to register for the event.