Net annual loss increases for Scientific Games « Casino Online Marketing

American lottery technology provider Scientific Games Corporation has released its financial results for 2012 showing that it posted a seven percent year-on-year rise in overall revenues to $940.6 million.

Scientific Games is currently in the process of purchasing rival WMS Industries Incorporated for $1.5 billion and revealed that operating income for 2012 dropped by 54.4 percent year-on-year to $38.2 million due to an increase of $33.8 million in depreciation and amortisation costs. These were partly offset by an impact to the tune of $6.8 million in its higher and more profitable revenue mix alongside a $1.7 million fall in selling, general and administrative costs and a reduction of $200,000 in employee termination and restructuring fees.

The firm stated that earnings before interest, tax, depreciation and amortisation for 2012 improved by 4.8 percent year-on-year to $343.3 million although its net loss now stands at $62.6 million, which is considerably higher than 2011’s $12.6 million. Free cashflow was down by $33.8 million when compared with the previous twelve-month period to $45.4 million.

“2012 was a productive year for Scientific Games with growth in revenues and attributable earnings before interest, tax, depreciation and amortisation and the securing of a number of key contracts,” said Lorne Weil, Chairman and Chief Executive Officer for New York-based Scientific Games.

“We remain focused on the execution of our numerous business development opportunities as lotteries and gaming operators continue to pursue new sources of revenues.

“We are also excited about the pending acquisition of WMS Industries, which will combine our respective game content, technology, operational capabilities, geographic footprints and financial profiles to create an enterprise poised to capitalise on significant growth opportunities across our global lottery and gaming businesses. The transaction is also expected to be immediately accretive, creating value for our stockholders.”

Looking ahead, Scientific Games declared that it expects the first half of 2013 to ‘start off more slowly’ than its predecessor before accelerating later on. It additionally anticipates incurring regulatory costs, professional fees and other expenses of between $4 million to $6 million in connection with its planned purchase of WMS Industries.

“Our solid fourth-quarter results reflected the benefits of our diverse participation-based business model, which resulted in increases in revenues, attributable earnings before interest, tax, depreciation and amortisation and free cashflow,” said Jeffrey Lipkin, Senior Vice-President and Chief Financial Officer for Scientific Games.

“During 2012 we were also pleased to return over $68 million to stockholders in the form of share repurchases.”

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