WMS led a 77% surge in revenues for Scientific Games Corp. in its first quarterly results to reflect a full contribution from the slots giant.
New York-based SciGames (Nasdaq: SGMS) posted revenues of US$388.1 million in the three months ended 31st March, including $156.6 million from Chicago-based WMS, which shipped 2,036 new games in the US and Canada over the period and 1,197 to international customers. WMS also contributed $93.4 million in gaming services revenue from WAP and premium participation games and interactive gaming.
SciGames added, however, that casino market conditions remain “challenging” in the US, and noted this in the fact that the total of new unit shipments was down 38% from the prior year period.
In all, though, cash flow from operating activities was up $60 million, and free cash flow increased by $37 million, “reflecting the benefit of the WMS acquisition,” the company said; while revenue from lottery systems, SciGames’ core business, also enjoyed a robust increase, rising 18.1% to $64.6 million as new product sales more than doubled to $14.5 million.
“We believe that Scientific Games is relatively well positioned due to the diversity of revenue streams in our lottery and gaming businesses and the opportunities created by our integration efforts,” said CEO David Kennedy.
Cash and non-cash charges associated with the WMS acquisition led the company to record an operating loss of $14.7, but Mr Kennedy said SciGames is on track to achieve at least $60 million in cost savings by the end of 2014 on an annualized run-rate basis.
Moves toward this end include divesting out of non-core businesses, and during the quarter, SciGames sold its equity interest in Sportech for $44.9 million in cash and is selling its online real-money gaming operation in the UK and exiting a managed services online gaming business in Belgium.
