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Bally Technologies annual profit impacted by higher costs and expenses

28th August 2014 7:10 am GMT

US gaming supplier Bally Technologies has reported a 22 per cent increase in total revenue to $1,215.1m for the year ended June 30th, with growth across all four of its business segments.

Bally’s record results were boosted by last November’s acquisition of SHFL entertainment, which contributed revenue of $100.2m to the company’s Table Products business.

“Fiscal 2014 highlights our commitment to our partners and customers in delivering world-class player experiences through innovative products and services,” said Bally CEO Richard Haddrill.

FY 2013/14 Results

US Dollars (US$) FY 2012/13FY 2013/14
    
Electronic Gaming Machines 339.8m381.7m
Gaming Operations 405.0m405.4m
Systems 252.2m327.8m
Table Products --100.2m
TOTAL 997.0m1,215.1m

Revenue from Electronic Gaming Machines rose 12 per cent to $381.7m, driven by the shipment of 2,834 units into the Illinois video game terminal (VGT) market, which offset a decrease in Canadian video lottery terminal (VLT) units sold from 2,226 units last year to 25 units this year.

Revenue from Gaming Operations was up marginally by 0.1 per cent to $405.4m, following significant investments made in its game development studios and game platforms over the past few years. The business also benefited from the continued placement of premium games and record WAP revenue.

Systems revenue rose 30 per cent to a record $327.8m, due primarily to large system installations and continued growth of its recurring customer base.

“Our Systems technology continues to present a compelling value proposition to our customers as evidenced by another year of record revenue,” said Haddrill.

Total cost and expenses increased by 30 per cent to $987.9m. Bally, which is in the process of being acquired by Scientific Games, also revealed that restructuring and acquisition-related costs amounted to $60.5m during the year.

Cost of gaming equipment and systems was up 30 per cent to $298.3m, while cost of product lease, operation and royalty increased 25 per cent to $153.0m.

Selling, general and administrative expenses climbed 24 per cent to $343.2m, while research and development costs were up 22 per cent to $135.9m.

As a result, Bally recorded a 4 per cent drop in operating income to $227.2m. A significant increase in interest expenses, as well as a loss on extinguishment of debt, meant that the company posted a 30 per cent drop in net income for the year to $98.6m.

As at June 30th the company held cash and cash equivalents of $77.4m compared to $63.2m a year ago.

Shares in Bally Technologies Inc (Co. Data) (NYSE:BYI) closed Wednesday at $78.00 per share in New York.

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