Earnings & Events

Initiates FY2013 Adjusted EPS Guidance of $1.20 to $1.30, representing growth of 15% to 25%

LAS VEGAS, Nov. 8, 2012 /PRNewswire/ --

Fourth Quarter Highlights (compared to last year's fourth quarter)

  • Total revenues increased 17% to $631 million
  • North America machine revenue increased 52%
  • GAAP earnings per share from continuing operations increased 65% to $0.33
  • Adjusted earnings per share from continuing operations increased 58% to $0.38
  • North America average machine sales price increased 4% to $14,700
  • Sold 8,500 North America replacement units, up 67%

Fiscal 2012 Highlights (compared to last year)

  • Total revenues increased 10% to $2.15 billion
  • Interactive revenues increased 293% to $144 million
  • Shipped 44,200 total units, an increase of 23%
  • North America average machine sales price increased 2% to $14,500
  • Returned $546 million to shareholders in the form of dividends and share repurchases
  • Delivered third consecutive year of double-digit growth in adjusted earnings per share from continuing operations

International Game Technology (NYSE: IGT) today reported operating results for the fourth quarter and fiscal year ended September 30, 2012.

"Our strong fourth quarter financial results serve to highlight a very solid fiscal year 2012 for IGT.  In the quarter, we leveraged our industry-leading content to increase revenues, ship share, margins and prices in our core North American business," said Patti Hart, CEO of IGT. "For the full year, we increased total revenues by 10%, improved adjusted earnings per share by 12%, improved global machine shipments by 23%, and more than tripled our interactive revenues.  We continue to effectively manage the distribution of our products to a diverse set of customers and we are well positioned to continue generating even greater revenues and earnings growth in fiscal year 2013."  Hart continued, "Fiscal 2012 marked our third consecutive year of double-digit growth in earnings per share from continuing operations, which underscores our success in growing our core business, while pursuing other value-enhancing opportunities.  IGT is pleased to have returned nearly $550 million to shareholders in fiscal year 2012, and we remain focused on delivering superior returns for our shareholders going forward."

Consolidated Results

($ in millions, except per share amounts)

Fourth Quarters Ended



Years Ended


September 30,



September 30,


2012


2011


% Change



2012


2011


% Change

GAAP Measures













Revenue

$ 631.1


$ 539.8


17%



$ 2,150.7


$ 1,957.0


10%

Operating income

$ 108.3


$ 115.8


-6%



$    421.7


$    504.9


-16%

Income from continuing operations

$   90.1


$   60.0


50%



$    249.7


$    292.3


-15%

Earnings per share from continuing operations

$   0.33


$   0.20


65%



$      0.86


$      0.97


-11%

Net operating cash flows








$    446.5


$    612.4


-27%














Non-GAAP Measures













Adjusted operating income

$ 188.6


$ 136.4


38%



$    563.8


$    525.5


7%

Adjusted income from continuing operations

$ 101.9


$   73.0


40%



$    301.1


$    278.9


8%

Adjusted earnings per share from continuing operations

$   0.38


$   0.24


58%



$      1.04


$      0.93


12%

Free cash flow (after dividends)








$    167.2


$    335.6


-50%














Adjusted operating income, adjusted income from continuing operations, adjusted earnings per share from continuing operations and free cash flow are non-GAAP financial measures.  Reconciliations between GAAP and non-GAAP measures are provided at the end of this release.

  • Revenues increased 10% to $2.15 billion for fiscal 2012, primarily due to interactive and machine sales growth in North America.
  • Adjusted earnings per share from continuing operations increased 12% to $1.04 for fiscal 2012.
  • For fiscal 2012, North America revenue increased 11% to $1.64 billion and International revenue increased 6% to $507 million.
  • Free cash flow, after dividends, decreased 50% to $167 million due to the timing of cash tax payments and an increase in trade receivables related to the timing of VLT shipments into Canada.

Gaming Operations (excluding Interactive)

($ in millions, unless otherwise noted)

Fourth Quarters Ended



Years Ended


September 30,



September 30,


2012


2011


% Change



2012


2011


% Change














Revenue

$ 263.8


$ 269.6


-2%



$ 1,040.0


$ 1,036.5


0%

Gross profit

$ 161.7


$ 153.5


5%



$ 634.3


$ 632.6


0%

Gross margin

61%


57%


7%



61%


61%


0%

Installed base

57,100


53,900


6%



57,100


53,900


6%

Average revenue per unit per day (0.00)

$ 50.83


$ 55.33


-8%



$ 51.49


$ 53.34


-3%

  • Revenues were flat at $1.04 billion for the year and down 2% for the fourth quarter, with higher lease operations revenue offset by lower MegaJackpots® revenue.
  • Gross margin increased to 61% from 57% in the fourth quarter, partially due to favorable interest rate changes, which increased gross margin by 150 basis points.
  • Installed base increases were primarily driven by lease operations growth globally.
  • Average revenue per unit per day in the fourth quarter was $50.83, up 1% sequentially and down 8% over the prior year quarter.

Product Sales

($ in millions, unless otherwise noted)

Fourth Quarters Ended



Years Ended


September 30,



September 30,


2012


2011


% Change



2012


2011


% Change














Revenue

$ 313.4


$ 256.8


22%



$ 966.8


$ 883.9


9%

Gross profit

$ 174.3


$ 137.5


27%



$ 522.3


$ 487.2


7%

Gross margin

56%


54%


4%



54%


55%


-2%

Units recognized ('000)

14.5


11.3


28%



43.6


37.5


16%

Average machine sales price ('000)

$ 15.0


$ 15.2


-1%



$ 15.0


$ 14.9


1%

  • Revenues increased 22% to $313 million in the fourth quarter, primarily due to increased North America machine sales related to increased replacement ship share including Canadian VLT sales.
  • Units recognized increased 28% in the fourth quarter, primarily due to Canadian VLT sales.
  • North America gross margin increased to 58% from 56% in the fourth quarter, primarily due to favorable costs resulting from higher production volume.
  • North America average machine sales price in the fourth quarter increased 4% compared to the prior year quarter and increased 12% sequentially, both primarily due to lower discounts.

Interactive

($ in millions, unless otherwise noted)

Fourth Quarters Ended



Years Ended


September 30,



September 30,


2012


2011


% Change



2012


2011


% Change














Revenue

$ 53.9


$ 13.4


302%



$ 143.9


$ 36.6


293%

    Social gaming

$ 35.8


-


 * 



$   87.0


-


 * 

    IGTi

$ 18.1


$ 13.4


35%



$   56.9


$ 36.6


55%














Gross Margin

62%


51%


22%



56%


51%


10%

    Social gaming

61%


-


 * 



61%


-


 * 

    IGTi

65%


51%


27%



49%


51%


-4%














Double Down Average User Statistics*













    Daily users ('000)

1,415


-


*



1,372


-


*

    Monthly users ('000)

5,072


-


*



5,097


-


*

    Bookings per daily user (0.00)

$ 0.28


-


*



$   0.26


-


*




*as a single application with multiple games, active users equal unique users
















  • Social gaming revenues in the fourth quarter increased 20% sequentially to $36 million, primarily driven by an increase in both daily active users and bookings per daily active user.
  • Daily active users (DAUs) were 1.4 million in the fourth quarter, an increase of 4% compared to the prior sequential quarter.
  • User engagement ratio (DAU/MAU) was 28% in the fourth quarter, an increase of 7% compared to the prior sequential quarter.
  • Average bookings per DAU increased 8% sequentially to $0.28 in the fourth quarter.

Operating Expenses and Other Income/Expense

($ in millions)

Fourth Quarters Ended



Years Ended


September 30,



September 30,


2012


2011


% Change



2012


2011


% Change

Operating Expenses













Selling, general & administrative

$ 106.7


$ 99.6


7%



$ 410.4


$ 353.3


16%

Research & development

59.6


48.5


23%



217.0


194.7


11%

Depreciation & amortization

21.1


18.1


17%



76.9


69.7


10%

Contingent acquisition related costs

31.3


-


*



69.1


-


*

Impairment / Restructuring

42.5


15.8


169%



42.5


15.8