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NEWS 10 November 2015

Impairment charges see Scientific Games losses worsen

By Gareth Bracken
Scientific Games has puts its greatly increased net loss for Q3 2015 down to non-cash goodwill and intangible asset impairment charges.

The provider lost $678.2m in the three months ended 30 September, up from $69.8m in the third quarter of the previous year.

The firm says the enlarged figure was affected by a $535m "non-cash goodwill impairment charge with no tax benefit" and a $103.6m "non-cash impairment charge" for the write down of "certain intangible assets" in its gaming business.

Net loss per share for Q3 rose from $0.82 to $7.88, while operating loss jumped from $7.8m to $588.2m.

Revenue improved 62% to $671.6m, while attributable EBITDA more than doubled to $264.2m.

Scientific Games completed its acquisitions of WMS and Bally Technologies in October 2013 and November 2014 respectively.

Scientific Games president and CEO Gavin Isaacs said the "heavy lifting of integration" was "mostly behind" the firm, with his team having "successfully accomplished in just eight months what we had originally expected to achieve in a year".

The firm paid down $73m of debt in the third quarter, bringing total debt payments for the first nine months of 2015 to $109m.

Total company debt now sits at $8.41bn.

As of the end of Q3, Scientific Games had implemented $194m of its planned $200m annual cost savings for 2015, relating to its acquisition of Bally Technologies.

More than 85% of the expected second-year WMS-related synergies of $30m have also been implemented.

The firm incurred approximately $10m aggregate restructuring and integration costs in Q3 2015.
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