COVER PAGE
COVER PAGE - shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 30, 2019 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-38889 | |
Entity Registrant Name | SciPlay Corporation | |
Entity Incorporation, State or Country Code | NV | |
Entity Tax Identification Number | 83-2692460 | |
Entity Address, Address Line One | 6601 Bermuda Road | |
Entity Address, City or Town | Las Vegas | |
Entity Address, State or Province | NV | |
Entity Address, Postal Zip Code | 89119 | |
City Area Code | 702 | |
Local Phone Number | 897-7150 | |
Title of 12(b) Security | Class A Common Stock, $.001 par value | |
Trading Symbol | SCPL | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Shell Company | false | |
Amendment Flag | false | |
Entity Central Index Key | 0001760717 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Class A common stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 22,720,000 | |
Class B common stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 103,547,021 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | ||
Income Statement [Abstract] | |||||
Revenue | $ 118.1 | $ 99.7 | $ 236.5 | $ 197.2 | |
Operating expenses: | |||||
Cost of revenue | [1] | 40.5 | 38.4 | 86.2 | 76 |
Sales and marketing | [1] | 31.2 | 23.8 | 65.5 | 46.8 |
General and administrative | [1] | 11.1 | 8.7 | 21.4 | 17.2 |
Research and development | [1] | 6 | 6.4 | 11.8 | 12.7 |
Depreciation and amortization | 1.8 | 5.8 | 3.5 | 11.6 | |
Contingent acquisition consideration | 1.4 | 0 | 1.7 | 18 | |
Restructuring and other | 0.2 | 0 | 0.5 | 0.1 | |
Operating income | 25.9 | 16.6 | 45.9 | 14.8 | |
Other expense: | |||||
Other expense, net | (0.4) | (0.7) | (2) | (0.6) | |
Total other (expense) income | (0.4) | (0.7) | (2) | (0.6) | |
Net income (loss) before income taxes | 25.5 | 15.9 | 43.9 | 14.2 | |
Income tax expense (benefit) | (0.7) | 3.7 | 4 | 3.1 | |
Net income | 26.2 | 12.2 | 39.9 | 11.1 | |
Less: Net income attributable to the noncontrolling interest | 13.9 | 0 | 13.9 | 0 | |
Net income attributable to SciPlay | $ 12.3 | $ 12.2 | $ 26 | $ 11.1 | |
Basic and diluted net income attributable to SciPlay per share: | |||||
Basic (in dollars per share) | $ 0.54 | $ 0.54 | $ 1.15 | $ 0.49 | |
Diluted (in dollars per share) | $ 0.54 | $ 0.54 | $ 1.15 | $ 0.49 | |
Weighted average number of shares of Class A common stock used in per share calculation: | |||||
Basic shares (in shares) | 22.7 | 22.7 | 22.7 | 22.7 | |
Diluted shares (in shares) | 22.7 | 22.7 | 22.7 | 22.7 | |
[1] | Excluding depreciation and amortization. |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 26.2 | $ 12.2 | $ 39.9 | $ 11.1 |
Other comprehensive income: | ||||
Foreign currency translation gain, net of tax | 0.3 | 0.2 | 2.2 | 0.2 |
Comprehensive income | 26.5 | 12.4 | 42.1 | 11.3 |
Less: comprehensive income attributable to the noncontrolling interest | 14.2 | 0 | 14.2 | 0 |
Comprehensive income attributable to SciPlay | $ 12.3 | $ 12.4 | $ 27.9 | $ 11.3 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 50.4 | $ 10 |
Accounts receivable, net (allowance for doubtful accounts of $0.7 and $1.1) | 43.1 | 31.5 |
Prepaid expenses and other current assets | 2.7 | 5.6 |
Total current assets | 96.2 | 47.1 |
Non-current assets: | ||
Property and equipment, net | 3.8 | 1.8 |
Operating lease right-of-use assets | 6.7 | 0 |
Goodwill | 120.7 | 120.7 |
Intangible assets, net | 12.1 | 13.6 |
Deferred income taxes | 90 | 6.4 |
Other assets | 7.5 | 5.3 |
Total assets | 337 | 194.9 |
Current liabilities: | ||
Accounts payable | 12.4 | 12.7 |
Accrued liabilities | 21.3 | 28 |
Due to affiliate | 1.9 | 3.7 |
Total current liabilities | 35.6 | 44.4 |
Operating lease liabilities | 6 | 0 |
Liabilities under TRA | 73.7 | 0 |
Other long‑term liabilities | 1.1 | 11.9 |
Total liabilities | 116.4 | 56.3 |
Commitments and contingencies (see Note 8) | ||
Stockholders’ equity/Accumulated net parent investment: | ||
Additional paid-in capital | 40.9 | 0 |
Accumulated net parent investment | 0 | 140.8 |
Retained earnings | 5.6 | 0 |
Accumulated other comprehensive loss | 0 | (2.2) |
Total SciPlay’s stockholders’ equity/accumulated net parent investment | 46.6 | 138.6 |
Noncontrolling interest | 174 | 0 |
Total stockholders’ equity/accumulated net parent investment | 220.6 | 138.6 |
Total liabilities and stockholders’ equity/accumulated net parent investment | 337 | 194.9 |
Class A common stock, par value $0.001 per share - 625.0 shares authorized, 22.7 issued and outstanding as of June 30, 2019, zero issued and outstanding as of December 31, 2018 | ||
Stockholders’ equity/Accumulated net parent investment: | ||
Common stock | 0 | 0 |
Class B common stock, par value $0.001 per share - 130.0 shares authorized, 103.5 issued and outstanding as of June 30, 2019, zero issued and outstanding as of December 31, 2018 | ||
Stockholders’ equity/Accumulated net parent investment: | ||
Common stock | $ 0.1 | $ 0 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts of $1.1 | $ 0.7 | $ 1.1 |
Class A common stock, par value $0.001 per share - 625.0 shares authorized, 22.7 issued and outstanding as of June 30, 2019, zero issued and outstanding as of December 31, 2018 | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 625,000,000 | 625,000,000 |
Common stock, shares issued (in shares) | 22,700,000 | 0 |
Common stock, shares outstanding (in shares) | 22,700,000 | 0 |
Class B common stock, par value $0.001 per share - 130.0 shares authorized, 103.5 issued and outstanding as of June 30, 2019, zero issued and outstanding as of December 31, 2018 | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 130,000,000 | 22,700,000 |
Common stock, shares issued (in shares) | 103,500,000 | 0 |
Common stock, shares outstanding (in shares) | 103,500,000 | 0 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY/ACCUMULATED NET PARENT INVESTMENT - USD ($) shares in Millions, $ in Millions | Total | Accumulated net parent investment | Additional paid-in capital | Retained earnings | Accumulated other comprehensive loss | Noncontrolling interest | Class A common stock | Class A common stockCommon Stock | Class A common stockAdditional paid-in capital | Class A common stockNoncontrolling interest | Class B common stock | Class B common stockCommon Stock |
Stockholders' equity, beginning balance at Dec. 31, 2017 | $ 163 | $ 161.4 | $ 0 | $ 0 | $ 1.6 | $ 0 | $ 0 | $ 0 | ||||
Stockholders' equity, beginning balance (in shares) at Dec. 31, 2017 | 0 | 0 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net income (loss) | (1.1) | (1.1) | ||||||||||
Dividend distributions | (17.4) | (17.4) | ||||||||||
Stockholders' equity, ending balance at Mar. 31, 2018 | 144.5 | 142.9 | 0 | 0 | 1.6 | 0 | $ 0 | $ 0 | ||||
Stockholders' equity, ending balance (in shares) at Mar. 31, 2018 | 0 | 0 | ||||||||||
Stockholders' equity, beginning balance at Dec. 31, 2017 | 163 | 161.4 | 0 | 0 | 1.6 | 0 | $ 0 | $ 0 | ||||
Stockholders' equity, beginning balance (in shares) at Dec. 31, 2017 | 0 | 0 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net income (loss) | 11.1 | |||||||||||
Distributions to Parent and affiliates, net | 30.7 | |||||||||||
Stockholders' equity, ending balance at Jun. 30, 2018 | 149.6 | 147.8 | 0 | 0 | 1.8 | 0 | $ 0 | $ 0 | ||||
Stockholders' equity, ending balance (in shares) at Jun. 30, 2018 | 0 | 0 | ||||||||||
Stockholders' equity, beginning balance at Mar. 31, 2018 | 144.5 | 142.9 | 0 | 0 | 1.6 | 0 | $ 0 | $ 0 | ||||
Stockholders' equity, beginning balance (in shares) at Mar. 31, 2018 | 0 | 0 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net income (loss) | 12.2 | 12.2 | ||||||||||
Dividend distributions | (13.3) | (13.3) | ||||||||||
Transactions with Parent and affiliates, net | 6 | 6 | ||||||||||
Currency translation adjustment | 0.2 | 0.2 | ||||||||||
Stockholders' equity, ending balance at Jun. 30, 2018 | 149.6 | 147.8 | 0 | 0 | 1.8 | 0 | $ 0 | $ 0 | ||||
Stockholders' equity, ending balance (in shares) at Jun. 30, 2018 | 0 | 0 | ||||||||||
Stockholders' equity, beginning balance at Dec. 31, 2018 | 138.6 | 140.8 | 0 | 0 | (2.2) | 0 | $ 0 | $ 0 | ||||
Stockholders' equity, beginning balance (in shares) at Dec. 31, 2018 | 0 | 0 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net income (loss) | 13.7 | 13.7 | ||||||||||
Transactions with Parent and affiliates, net | 6.2 | 6.2 | ||||||||||
Currency translation adjustment | 1.9 | 1.9 | ||||||||||
Stockholders' equity, ending balance at Mar. 31, 2019 | 160.4 | 160.7 | 0 | 0 | (0.3) | 0 | $ 0 | $ 0 | ||||
Stockholders' equity, ending balance (in shares) at Mar. 31, 2019 | 0 | 0 | ||||||||||
Stockholders' equity, beginning balance at Dec. 31, 2018 | 138.6 | 140.8 | 0 | 0 | (2.2) | 0 | $ 0 | $ 0 | ||||
Stockholders' equity, beginning balance (in shares) at Dec. 31, 2018 | 0 | 0 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net income (loss) | 26 | |||||||||||
Distributions to Parent and affiliates, net | 311.7 | |||||||||||
Stockholders' equity, ending balance at Jun. 30, 2019 | 220.6 | 0 | 40.9 | 5.6 | 0 | 174 | $ 0 | $ 0.1 | ||||
Stockholders' equity, ending balance (in shares) at Jun. 30, 2019 | 22.7 | 103.5 | ||||||||||
Stockholders' equity, beginning balance at Mar. 31, 2019 | 160.4 | 160.7 | 0 | 0 | (0.3) | 0 | $ 0 | $ 0 | ||||
Stockholders' equity, beginning balance (in shares) at Mar. 31, 2019 | 0 | 0 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net income (loss) | 6.7 | 6.7 | ||||||||||
Transactions with Parent and affiliates, net | 3 | 3 | ||||||||||
Stockholders' equity, ending balance at May. 07, 2019 | 170.1 | 170.4 | 0 | 0 | (0.3) | 0 | $ 0 | $ 0 | ||||
Stockholders' equity, ending balance (in shares) at May. 07, 2019 | 0 | 0 | ||||||||||
Stockholders' equity, beginning balance at Mar. 31, 2019 | 160.4 | 160.7 | 0 | 0 | (0.3) | 0 | $ 0 | $ 0 | ||||
Stockholders' equity, beginning balance (in shares) at Mar. 31, 2019 | 0 | 0 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net income (loss) | 12.3 | |||||||||||
Stockholders' equity, ending balance at Jun. 30, 2019 | 220.6 | 0 | 40.9 | 5.6 | 0 | 174 | $ 0 | $ 0.1 | ||||
Stockholders' equity, ending balance (in shares) at Jun. 30, 2019 | 22.7 | 103.5 | ||||||||||
Stockholders' equity, beginning balance at May. 07, 2019 | 170.1 | 170.4 | 0 | 0 | (0.3) | 0 | $ 0 | $ 0 | ||||
Stockholders' equity, beginning balance (in shares) at May. 07, 2019 | 0 | 0 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net income (loss) | 19.5 | 5.6 | 13.9 | |||||||||
Issuance of common stock | $ 332.8 | $ 59.9 | $ 272.9 | $ 0.1 | $ 0.1 | |||||||
Issuance of common stock (in shares) | 22.7 | 103.5 | ||||||||||
Allocation of SGC equity to noncontrolling interests | 0 | (170.4) | 30.7 | 0.2 | 139.5 | |||||||
Distributions to Parent and affiliates, net | (311.7) | 0 | (56.1) | (255.6) | ||||||||
Net effect of tax-related organization transactions and other | 5.6 | 0 | 5.6 | |||||||||
Stock-based compensation | 3.9 | 0.8 | 3.1 | |||||||||
Currency translation adjustment | 0.3 | 0.1 | 0.2 | |||||||||
Stockholders' equity, ending balance at Jun. 30, 2019 | $ 220.6 | $ 0 | $ 40.9 | $ 5.6 | $ 0 | $ 174 | $ 0 | $ 0.1 | ||||
Stockholders' equity, ending balance (in shares) at Jun. 30, 2019 | 22.7 | 103.5 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Net cash provided by operating activities | $ 26.5 | $ 24.5 |
Cash flows from investing activities: | ||
Capital expenditures | (4.7) | (1.5) |
Net cash used in investing activities | (4.7) | (1.5) |
Cash flows from financing activities: | ||
Distributions to Scientific Games and affiliates, net | (311.7) | (30.7) |
Payments of deferred offering costs | (7.9) | 0 |
Payments of contingent consideration | (1.8) | 0 |
Payments on license obligations | (1) | 0 |
Payments of debt issuance costs | (1.1) | 0 |
Net cash provided by (used in) financing activities | 18.3 | (30.7) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 0.3 | (0.3) |
Increase (decrease) in cash, cash equivalents and restricted cash | 40.4 | (8) |
Cash, cash equivalents and restricted cash, beginning of period | 10 | 16.8 |
Cash, cash equivalents and restricted cash, end of period | 50.4 | 8.8 |
Supplemental cash flow information: | ||
Cash paid (received) for income taxes | 0.4 | (0.4) |
Cash paid for contingent consideration included in operating activities | 19.2 | 0 |
Payment for Scientific Games’ intellectual property license included in Distributions to Scientific Games and affiliates, net | 255 | 0 |
Non‑cash investing and financing activities: | ||
Non‑cash deferred offering costs | 1 | 0 |
Class A common stock | ||
Cash flows from financing activities: | ||
Net proceeds from issuance of common stock | 341.7 | 0 |
Class B common stock | ||
Cash flows from financing activities: | ||
Net proceeds from issuance of common stock | $ 0.1 | $ 0 |
Description of the Business and
Description of the Business and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of the Business and Summary of Significant Accounting Policies | Description of the Business and Summary of Significant Accounting Policies Background and Nature of Operations SciPlay Corporation was formed as a Nevada corporation on November 30, 2018 as a subsidiary of Scientific Games Corporation (“Scientific Games”, “SGC”, and “the Parent”) for the purpose of completing a public offering and related transactions (the “Transactions”) (collectively referred to herein as the “IPO”) in order to carry on the business of SciPlay Parent LLC and its subsidiaries (collectively referred to as “SciPlay”, the “Company”, “we”, “us”, and “our”). As the managing member of SciPlay Parent LLC, SciPlay operates and controls all of the business affairs of SciPlay Parent LLC and its subsidiaries. We develop, market and operate a portfolio of social games played on various mobile and web platforms, including Jackpot Party Casino, Quick Hit Slots, Gold Fish Casino, Hot Shot Casino, Bingo Showdown, MONOPOLY Slots , and 88 Fortunes Slots , among others. Our games are available in various formats. We have one operating segment with one business activity, developing and monetizing social games. The following are our material subsidiaries: • SciPlay Parent Company, LLC (Nevada) • SciPlay Holding Company, LLC (Nevada) (“SciPlay Holding”) • Phantom EFX, LLC (Nevada) • Dragonplay Ltd (Israel) • Spicerack Media, LLC (Nevada) Initial Public Offering On May 7, 2019, we completed the offering of 22,720,000 shares of Class A common stock at a public offering price of $16.00 per share (the “Offering”), after giving effect to the underwriters’ partial exercise of their over-allotment option on June 4, 2019. We received $341.7 million in proceeds, net of underwriting discount, but before offering expenses of $8.9 million . In connection with the closing of the Offering and partial exercise of over-allotment option, we consummated the following organizational transactions: • We amended and restated the SciPlay Parent LLC Operating Agreement (the “Operating Agreement”) to, among other things: (i) provide for a single class of SciPlay Parent LLC common units (the “LLC Interests”); (ii) exchange all of SG Social Holding Company I, LLC’s (“SG Holding I”) and SG Social Holding Company, LLC’s (each a wholly owned subsidiary of Scientific Games and collectively, the “SG Members”) existing member’s interests in SciPlay Parent LLC for LLC Interests; (iii) provide for the right of the SG Members to have their LLC Interests redeemed or exchanged for shares of our Class A common stock or, at our option, cash; and (iv) appoint SciPlay as the sole manager of SciPlay Parent LLC. • We amended and restated our articles of incorporation to, among other things, provide for Class A common stock and Class B common stock; • We used the net proceeds from the Offering and underwriters’ exercise over-allotment option after deducting the underwriting discount, as follows: Amount Note To acquire 20,725,319 LLC Interests from SG Holding I $ 311.7 (A) To acquire 1,994,681 newly issued LLC interests from SciPlay Parent LLC 30.0 (B) Net proceeds after deducting underwriting discount $ 341.7 (A) SG Holding I subsequently used these proceeds as follows: Acquire IP License from Parent (“Upfront License Payment”) (1) $ 255.0 Distributed as a dividend to Scientific Games Corporation 56.7 $ 311.7 (B) SciPlay Parent LLC subsequently used the proceeds as follows: Fees and expenses incurred in connection with the IPO $ 8.9 To be used for general corporate purposes, including a portion of contingent acquisition consideration 21.1 $ 30.0 (1) Per the Assignment Agreement, dated May 7, 2019, SG Social Holding Company I, LLC assigned its rights, duties, obligations and interest under the IP License Agreement to SciPlay. • We issued shares of Class B common stock to the SG Members, on a one-to-one basis with the number of LLC Interests owned by the SG Members following the IPO; • As a result of the Transactions described above, the SG Members own 82.0% of the outstanding shares and LLC Interests and 97.9% of the combined voting power; and • We, SciPlay Parent LLC and the SG Members entered into the TRA, and we and the SG Members entered into the registration rights agreement, dated May 7, 2019 (“Registration Rights Agreement”). Our corporate structure following the IPO is commonly referred to as an “Up-C” structure, which is often used by partnerships and limited liability companies when they undertake an initial public offering of their business. The Up-C structure will allow the SG Members to continue to realize tax benefits associated with owning interests in an entity that is treated as a partnership, or “passthrough” entity, for U.S. income tax purposes following the IPO. One of these benefits is that future taxable income of SciPlay Parent LLC that is allocated to the SG Members will be taxed on a flow-through basis and therefore will not be subject to corporate taxes at the SciPlay Parent LLC entity level. Additionally, because the SG Members may exchange or redeem their LLC Interests for newly issued shares of our Class A common stock on a one-for-one basis or, at our option, for cash, the Up-C structure also provides the SG Members with potential liquidity that holders of non-publicly traded limited liability companies are not typically afforded. We will receive the same benefits as the SG Members on account of our ownership of LLC Interests in an entity treated as a partnership, or “passthrough” entity, for U.S. income tax purposes. As the SG Members redeem or exchange their LLC Interests, we will obtain a step-up in tax basis in our share of SciPlay Parent LLC assets. This step-up in tax basis will provide us with certain tax benefits, such as future depreciation and amortization deductions that can reduce the taxable income allocable to us. The TRA provides for the payment by us to the SG Members of 85% of the amount of tax benefits, if any, that we actually realize (or in some cases are deemed to realize) as a result of (i) increases in the tax basis of assets of SciPlay Parent LLC (a) in connection with the IPO, (b) resulting from any redemptions or exchanges of LLC Interests pursuant to the Operating Agreement or (c) resulting from certain distributions (or deemed distributions) by SciPlay Parent LLC and (ii) certain other tax benefits related to our making of payments under the TRA. Variable Interest Entities (“VIE”) and Consolidation Subsequent to the IPO, our sole material asset is our member’s interest in SciPlay Parent LLC. In accordance with the Operating Agreement of SciPlay Parent LLC, we have all management powers over the business and affairs of SciPlay Parent LLC and to conduct, direct and exercise full control over the activities of SciPlay Parent LLC. Class A common stock issued in the IPO do not hold majority voting rights but hold 100% of the economic interest in the Company, which results in SciPlay Parent LLC being considered a VIE. Due to our power to control the activities most directly affecting the results of SciPlay Parent LLC, we are considered the primary beneficiary of the VIE. Accordingly, beginning with the IPO, we consolidate the financial results of SciPlay Parent LLC and its subsidiaries. Basis of Presentation The accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). SG Social Holding Company II, LLC is SciPlay’s predecessor for financial reporting purposes, and accordingly, for all periods presented prior to May 7, 2019, the financial statements represent the financial statements of the predecessor. All intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, we have made all adjustments necessary to present fairly our consolidated balance sheets, statements of income, statements of comprehensive income, statements of changes in stockholders’ equity, and statements of cash flows for the periods presented. Such adjustments are of a normal, recurring nature. These unaudited financial statements should be read in conjunction with the financial statements and related notes of SciPlay Corporation and SG Social Holding Company II, LLC in our prospectus dated May 2, 2019, filed with the SEC on May 6, 2019 pursuant to Rule 424(b) of the Securities Act of 1933, as amended (referred to herein as the “Prospectus”). Interim results of operations are not necessarily indicative of results of operations to be expected for a full year. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in our financial statements and the accompanying notes. Actual results may differ materially from our estimates. Significant Accounting Policies There have been no changes to our significant accounting policies described within the SciPlay Corporation financial statement and SG Social Holding Company II, LLC consolidated financial statements and related notes in the Prospectus, other than the adoption of ASC 842 described in Note 3. New Accounting Guidance‑ Adopted The FASB issued ASU No. 2016-02, Leases (Topic 842) in 2016. ASU 2016-02 combined with all subsequent amendments (collectively, “ASC 842”) requires balance sheet recognition for all leases with a lease term greater than one year to be recorded as a lease liability (on a discounted basis) with a corresponding right-of-use asset. This guidance also expands the required quantitative and qualitative disclosures for lease arrangements and gives rise to other changes impacting certain aspects of lessee and lessor accounting. We adopted ASC 842 as of January 1, 2019 using the optional transition method provided by ASU 2018-11 and applied the lessee package of practical expedients. During the first quarter of 2019, the FASB issued ASU 2019-01, Leases (Topic 842) to amend ASU 2016-02. This amendment exempts both lessees and lessors from having to provide certain prior year interim disclosure information in the fiscal year in which a company adopts the new leases standard. We have provided the related transition disclosures as of the beginning of 2019 in accordance with ASU 2019-1. See Note 3 for our lease accounting policy and the impact of our adoption of ASC 842. The FASB issued ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (“AOCI”) in 2018. The standard allows companies to make an election to reclassify from AOCI to retained earnings the stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017. Our adoption of this guidance did not have an effect on our consolidated financial statements. New Accounting Guidance‑ Not yet adopted The FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) in 2016. The new guidance replaces the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. For trade and other receivables, loans and other financial instruments, we will be required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses which reflects losses that are probable. The new guidance will be effective for us beginning January 1, 2020. Application of the amendments is through a cumulative-effect adjustment to retained earnings as of the effective date. We are currently evaluating the impact of adopting this guidance. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. The new guidance amends the disclosure requirements for recurring and nonrecurring fair value measurements by removing, modifying, and adding certain disclosures on fair value measurements in ASC 820. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The new guidance will be effective for us beginning January 1, 2020. We are currently evaluating the impact of adopting this guidance. We do not expect that any other recently issued accounting guidance will have a significant effect on our consolidated financial statements. Revenue Recognition We generate revenue from the sale of virtual coins, chips and bingo cards (collectively referred to as “virtual currency”), which players can use to play casino‑style slot games, table games and bingo games (i.e., spin in the case of slot games, bet in the case of table games and use of bingo cards in the case of bingo games). We distribute our games through various global social web and mobile platforms such as Facebook, Apple, Google, Amazon, and other web and mobile platforms. The games are primarily WMS , Bally , Barcrest ™, and SHFL ® branded games. In addition, we also offer third‑party branded games and original content. Disaggregation of Revenue We believe disaggregation of our revenue on the basis of platform and geographical locations of our players is appropriate because the nature and the number of players generating revenue could vary on such basis, which represents different economic risk profiles. The following table presents our revenue disaggregated by type of platform: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Mobile $ 98.2 $ 76.6 $ 195.1 $ 149.3 Web 19.9 23.1 41.4 47.8 Other — — — 0.1 Total revenue $ 118.1 $ 99.7 $ 236.5 $ 197.2 The following table presents our revenue disaggregated based on the geographical location of our players: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 U.S. $ 111.1 $ 90.7 $ 219.5 $ 179.4 International 7.0 9.0 17.0 17.8 Total revenue $ 118.1 $ 99.7 $ 236.5 $ 197.2 Contract Assets, Contract Liabilities and Other Disclosures We receive customer payments based on the payment terms established in our contracts. Payment for the purchase of virtual currency is made at purchase, and such payments are non‑refundable in accordance with our standard terms of service. Such payments are initially recorded as a contract liability, and revenue is subsequently recognized as we satisfy our performance obligations. The following table summarizes our opening and closing balances in contract assets, contract liabilities and accounts receivable: Accounts Receivable Contract Assets (1) Contract Liabilities (2) Beginning of period balance $ 31.5 $ 0.2 $ 0.7 Balance as of June 30, 2019 43.1 0.2 0.7 (1) Contract assets are included within Prepaid expenses and other current assets in our consolidated balance sheets. (2) Contract liabilities are included within Accrued liabilities in our consolidated balance sheets. During the six months ended June 30, 2019 and 2018, we recognized $0.6 million and $1.3 million , respectively, of revenue that was included in the opening contract liability balance. Substantially all of our unsatisfied performance obligations relate to contracts with an original expected length of one year or less. Concentration of Credit Risk Our revenue and accounts receivable are generated via certain platform providers, which subject us to a concentration of credit risk. The following tables summarize the percentage of revenues and accounts receivable generated via our platform providers in excess of 10% of our total revenues and total accounts receivable: Revenue Three Months Ended Six Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 Apple 44.0 % 42.1 % 43.4 % 41.6 % Google 35.4 % 30.9 % 35.6 % 30.5 % Facebook 16.9 % 23.1 % 17.5 % 24.0 % Accounts June 30, December 31, 2019 2018 Apple 55.3 % 38.6 % Google 22.4 % 31.3 % Facebook 16.0 % 23.7 % Contingent Acquisition Consideration The contingent consideration liability is recorded at fair value on the acquisition date as part of the consideration transferred and is remeasured each reporting period. The changes in fair value of contingent acquisition consideration as a result of remeasurement are included in contingent acquisition consideration expenses. The inputs used to measure the fair value of contingent consideration liability primarily consist of projected earnings‑based measures and probability of achievement (categorized as Level 3 in the fair value hierarchy as established by ASC 820). During the second quarter of 2019, we agreed with the Spicerack selling shareholders to pay them $31.0 million in total contingent acquisition consideration of which $21.0 million was paid in the second quarter of 2019 with the remaining balance being fully paid by February 2020. The following table summarizes our contingent acquisition consideration liabilities: June 30, December 31, 2019 2018 Contingent acquisition consideration included in accrued liabilities $ 10.0 $ 18.8 Contingent acquisition consideration included in other long-term liabilities — 10.5 Deferred Offering costs Through June 30, 2019, we had incurred $8.9 million in costs directly related to pursuing the Offering. These costs were charged against the gross offering proceeds during the second quarter of 2019. Revolving Credit Facility In connection with the IPO, SciPlay Holding, a wholly owned subsidiary of SciPlay Parent LLC, as the borrower, SciPlay Parent LLC, as a guarantor, the subsidiary guarantors party thereto, the lenders party thereto and Bank of America, N.A., as administrative agent and collateral agent, entered into a $150.0 million revolving credit agreement (the “Revolver”) that matures in May 2024. The interest rate is either Adjusted LIBOR (as defined in the Revolver) plus 2.250% (with one 0.250% leverage-based step-down to the margin and one 0.250% leverage-based step-up to the margin) or ABR (as defined in the Revolver) plus 1.250% (with one 0.250% leverage-based step-down to the margin and one 0.250% leverage-based step-up to the margin) at our option. We are required to pay to the lenders a commitment fee of 0.500% per annum on the average daily unused portion of the revolving commitments through maturity, which will be the five -year anniversary of the closing date of the Revolver, which fee varies based on the total net leverage ratio and is subject to a floor of 0.375% . The Revolver provides for up to $15.0 million in letter of credit issuances, which requires customary issuance and administration fees, and a fronting fee of 0.125% . The Revolver contains covenants that, among other things, restrict our ability to incur additional indebtedness; incur liens; sell, transfer or dispose of property and assets; invest; make dividends or distributions or other restricted payments; and engage in affiliate transactions, with the exception of certain payments under the TRA and payments in respect of certain tax distributions under the Operating Agreement. In addition, the Revolver requires us to maintain a maximum total net leverage ratio not to exceed 2.50 :1.00 and to maintain a minimum fixed charge coverage ratio of no less than 4.00 :1.00. Such covenants will be tested quarterly at the end of each fiscal quarter beginning with the third quarter of 2019. The Revolver is secured by a (i) first priority pledge of the equity securities of SciPlay Holding, SciPlay Parent LLC’s restricted subsidiaries and each subsidiary guarantor party thereto and (ii) first priority security interests in, and mortgages on, substantially all tangible and intangible personal property and material fee-owned real property of SciPlay Parent LLC, SciPlay Holding and each subsidiary guarantor party thereto, in each case, subject to customary exceptions. We have presented $1.1 million |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, net | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, net | Goodwill and Intangible Assets, net Goodwill $107.9 million of goodwill reflected in these financial statements was allocated based on an estimate of the relative fair value that existed at the time of origination of goodwill in connection with the Parent’s acquisitions of WMS Industries, Inc. (“WMS”) and Bally Technologies, Inc. (“Bally”). The carrying value of goodwill increased by $12.8 million , as a result of the April 7, 2017 Spicerack acquisition. Intangible Assets, net Intangible assets reflected in these financial statements were allocated based on an estimate of the relative fair value that existed at the time of origination of intangible assets in connection with Parent’s acquisitions of WMS and Bally . The following table presents certain information regarding our intangible assets: Gross Accumulated Net Balance as of June 30, 2019 Amortizable intangible assets: Intellectual property $ 34.4 $ (31.9 ) $ 2.5 Customer relationships 23.2 (17.3 ) 5.9 Licenses 5.1 (2.0 ) 3.1 Brand names 3.8 (3.2 ) 0.6 $ 66.5 $ (54.4 ) $ 12.1 Balance as of December 31, 2018 Amortizable intangible assets: Intellectual property $ 33.0 $ (30.1 ) $ 2.9 Customer relationships 23.2 (16.8 ) 6.4 Licenses 5.1 (1.5 ) 3.6 Brand names 3.7 (3.0 ) 0.7 $ 65.0 $ (51.4 ) $ 13.6 The following reflects amortization expense related to intangible assets included within depreciation and amortization: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Amortization expense (1) $ 0.8 $ 4.8 $ 1.5 $ 9.6 (1) Three months and six months ended June 30, 2018 includes $4.0 million and $8.1 million, respectively, in accelerated amortization expenses of certain Dragonplay intellectual property recorded as a result of a change in estimate of the remaining useful lives. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Leases | Leases On January 1, 2019, we adopted ASC 842 using the optional transition method provided by ASU 2018-11. Our operating leases primarily consist of real estate leases such as offices. Our leases have remaining terms of 1 year to 5 years . We do not have any finance leases. Our total variable and short term lease payments and operating lease expenses were immaterial for all periods presented. Supplemental balance sheet and cash flow information related to operating leases is as follows: June 30, 2019 Operating lease right-of-use assets (1) $ 6.7 Accrued liabilities 1.9 Operating lease liabilities 6.0 Total operating lease liabilities $ 7.9 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases for the six months period ended June 30, 2019 $ 1.0 Weighted average remaining lease term, years 4.5 Weighted average discount rate 5.0 % (1) Right-of-use assets obtained in exchange for lease obligations for the six months ended June 30, 2019 were immaterial. Lease liability maturities: Operating Leases Remainder of 2019 $ 1.1 2020 2.1 2021 1.7 2022 1.7 2023 1.3 Thereafter 0.9 Less Imputed Interest (0.9 ) Total $ 7.9 As of June 30, 2019, we did not have material additional operating leases that have not yet commenced. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We hold an economic interest of 18% in SciPlay Parent LLC subsequent to the IPO. The 82% economic interest that we do not own represents a noncontrolling interest for financial reporting purposes. SciPlay Parent LLC is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As such, SciPlay Parent LLC is not subject to income tax in most jurisdictions, and SciPlay Parent LLC’s members, of which we are one, are liable for income taxes based on their allocable share of SciPlay Parent LLC’s taxable income. The effective income tax rates for the three and six months ended June 30, 2019 were (2.7)% and 9.1% , respectively, and 23.3% and 21.8% for the three and six months ended June 30, 2018, respectively. The effective income tax rates were determined using an estimated annual effective tax rate after considering any discrete items for such periods. Our effective tax rate differs from the statutory rate of 21% primarily because we do not record income taxes for the noncontrolling interest portion of pre-tax income. Additionally, the periods prior to the IPO are presented using historical results of operations and cost basis of the assets and liabilities as if we operated on a standalone basis during those periods, and the tax provision is calculated as if we completed separate tax returns apart from our Parent (“Separate-return Method’’). Certain legal entities that are included in these financial statements under the Separate-return Method were included in tax filings of affiliated entities that are not part of these financial statements. U.S. federal, state and local income tax provision of $6.5 million is included in the income tax expense under the Separate-return Method for the 2019 periods prior to the IPO. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The following is the summary of expenses paid to Scientific Games and settled in cash: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Financial Statement Line Item Royalties for Scientific Games Corporation IP $ 2.9 $ 6.3 $ 10.2 $ 12.6 Cost of revenue Royalties to Scientific Games Corporation for third-party IP 1.8 1.6 4.4 3.3 Cost of revenue Parent services 1.2 1.4 2.6 2.8 General and administrative The following is the summary of balances due to affiliates: June 30, 2019 December 31, 2018 Royalties under intercompany IP License Agreement $ 0.4 $ 4.5 Parent services 0.4 0.5 Reimbursable expenses to (from) Scientific Games and its subsidiaries 1.1 (1.3 ) $ 1.9 $ 3.7 IP Royalties On September 5, 2016, we entered into a license agreement with the Parent pursuant to which we obtained a non‑transferable and non‑exclusive license to use certain intellectual property (“IP”). The Parent frequently licenses IP from third parties, which we use in developing our games pursuant to the IP License Agreement. Royalties allocated for use of third‑party IP are charged to us and are typically based upon net social gaming revenues and the royalty rates defined and stipulated in the third‑party agreements, based on the appropriate valuation methodology performed by a third-party valuation specialist. Royalties under the IP License Agreement represent a charge for the use of the Parent IP related to certain internally developed social games such as Jackpot Party Casino , Gold Fish Casino and Quick Hit Slots . Royalties charged to us are based upon net social gaming revenues with the royalty rate established based on the appropriate valuation methodology performed by a third-party valuation specialist. In connection with the IPO described above, we obtained an exclusive (subject to certain limited exceptions), perpetual, non-royalty-bearing license from Bally Gaming for intellectual property created or acquired by Bally Gaming or its affiliates on or before the third anniversary of the date of the IP License Agreement in any of our currently available or future social games that are developed for mobile platforms, social media platforms, internet platforms or other interactive platforms and distributed solely via digital delivery, and a non-exclusive, perpetual, non-royalty-bearing license for intellectual property created or acquired by Bally Gaming or its affiliates after such third anniversary, for use in our currently available games. So long as the IP License Agreement remains in effect, we do not expect to pay any future royalties or fees for our use of intellectual property owned by Bally Gaming or its affiliates in our currently available games. The purchase price of the license was $255.0 million , which was determined based on the appropriate valuation methodology performed by a third-party valuation specialist. This transaction was treated as a deemed distribution to the Parent as it constitutes a transaction between entities under common control. Parent Services On September 5, 2016, we entered into a Services Agreement with the Parent pursuant to which the Parent and its subsidiaries provide us various corporate services. In connection with the IPO described above, we entered into a new Services Agreement under which the Parent and its subsidiaries will continue to provide us the below services on substantially the same terms. Parent services represent charges of corporate level general and administrative expenses that pay for services related to, but not limited to, finance, corporate development, human resources, legal, information technology, and rental fees for shared assets. These expenses have been charged to us on the basis of direct usage and costs when identifiable, with the remainder charged on the basis of revenues, operating expenses, headcount or other relevant measures, which we believe to be the most meaningful methodologies. TRA As described in Note 1 and in connection with the IPO, we entered into the TRA with SG Members. The annual tax benefits are computed by comparing the income taxes due including such tax benefits and the income taxes due without such benefits. Our estimated liability under the TRA as of June 30, 2019 was $76.3 million , of which $2.6 million was included in Accrued liabilities. The amount of aggregate payments due under the TRA may vary based on a number of factors, including the amount and timing of the taxable income SciPlay Parent LLC generates each year and applicable tax rates, with payments generally due within a specified period of time following the filing of our tax return for the taxable year with respect to which the payment obligation arises. The TRA will remain in effect until all such tax benefits have been utilized or expired unless we exercise our right to terminate the TRA. The TRA will also terminate if we breach our obligations under the TRA or upon certain change of control events specified in the agreement. If the TRA is terminated in accordance with its terms, our payment obligations would be accelerated based upon certain assumptions, including the assumption that we would have sufficient future taxable income to utilize such tax benefits. |
Stockholders_ Equity and Noncon
Stockholders’ Equity and Noncontrolling Interest | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Stockholders’ Equity and Noncontrolling Interest | Stockholders’ Equity and Noncontrolling Interest Stockholders’ Equity Following the closing of the IPO and the partial exercise of the over-allotment option by the underwriters on June 4, 2019, there were 22,720,000 shares of our Class A common stock issued and outstanding and 103,547,021 shares of our Class B common stock issued and outstanding. Holders of our Class A common stock and Class B common stock vote together as a single class on all matters presented to stockholders for their vote or approval, except where separate class voting is required by Nevada law. Each share of Class A common stock entitles its holder to one vote on all matters presented to our stockholders generally. Each share of Class B common stock entitles its holder to ten votes on all matters presented to our stockholders generally, for so long as the number of shares of our common stock beneficially owned by the SG Members and their affiliates represents at least 10% of our outstanding shares of common stock and, thereafter, one vote per share. Immediately following the IPO, all of our outstanding shares of Class B common stock were held by the SG Members on a one-to-one basis with the LLC Interests each SG Member then owned. Following the IPO and the partial exercise of over-allotment option by the underwriters on June 4, 2019, the holders of our issued Class A common stock collectively held 100% of the economic interests in us and 2.1% of the voting power in us, and Scientific Games, through its indirect ownership of all of the outstanding Class B common stock, held the remaining 97.9% of the voting power in us. Noncontrolling Interest We are a holding company, and our sole material assets are LLC Interests that we purchased from SciPlay Parent LLC and SG Holding I, representing an aggregate 18.0% economic interest in SciPlay Parent LLC. The remaining 82.0% economic interest in SciPlay Parent LLC is owned indirectly by SGC, through the ownership of LLC Interests by the SG Members. Stock-Based Compensation During the second quarter of 2019, we adopted a Long-Term Incentive Plan (“LTIP”). The LTIP authorizes the issuance of up to 6.5 million shares of Class A common stock to be granted in connection with awards of incentive and nonqualified stock options, restricted stock and stock units, stock appreciation rights and performance-based awards. The Parent maintains an equity incentive awards plan under which the Parent may issue, among other awards, time‑based and performance‑based stock options and restricted stock units to our employees. Although awards under such plan result in the issuance of shares of the Parent, the amounts are a component of the total compensation for our employees and are included in our stock‑based compensation expense, which is accounted for as a component of Stockholders’ equity. Performance-Based Restricted Stock Units (PRSUs) During the second quarter of 2019, SciPlay employees including our senior executives and a non-employee director were granted PRSUs with respect to our Class A common stock. The performance criteria for vesting of such PRSUs granted is based on revenue and Adjusted EBITDA metrics set through the end of fiscal year 2022. Recipients of these awards generally must be actively employed by and providing services to the Company on the last day of the performance period in order to receive an award payout. In certain cases, upon death, disability or a qualifying termination, all or a pro-rata portion of the PRSUs will remain eligible to vest at the end of the performance period. The fair value of the PRSUs granted was based on the initial offering price of the Company's Class A common stock of $16.00 per share. Stock-based compensation expense associated with these awards is recognized over the service period based on our projection as to the probable outcome of the above specified performance conditions. We reassess the probability of meeting the above specified performance conditions at each reporting period and adjust stock-based compensation expense to reflect current expected results, as necessary. The following table summarizes stock‑based compensation expense that is included in general and administrative expenses: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Related to SciPlay equity awards $ 3.7 $ — $ 3.7 $ — Related to the Parent’s equity awards 0.2 0.7 2.9 1.3 Total $ 3.9 $ 0.7 $ 6.6 $ 1.3 As of June 30, 2019 we had $20.8 million in unrecognized stock-based compensation expense that is expected to be recognized over weighted-average expected vesting period of 1.8 years , of which $18.0 million |
Earnings per Share
Earnings per Share | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share The table below sets forth a calculation of basic earnings per share ("EPS") based on net income attributable to SciPlay for the three and six months ended June 30, 2019, divided by the basic weighted average number of Class A common stock for the three and six months period ended June 30, 2019. Diluted earnings per share of Class A common stock is computed by dividing net income attributable to SciPlay by the weighted average number of shares of Class A common stock outstanding adjusted to give effect to all potentially dilutive securities, using the treasury stock method. For purposes of calculating EPS for periods prior to the IPO, including the three and six months ended June 30, 2019 for which a portion of the periods preceded the IPO, we retrospectively presented EPS as if the IPO had occurred at the beginning of the earliest period presented. We excluded Class B common stock from the computation of basic and diluted EPS, as holders of Class B common stock do not have economic interest in us and separate presentation of EPS of Class B common stock under the two-class method has not been presented. Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Numerator: Net income $ 26.2 $ 12.2 $ 39.9 $ 11.1 Less: net income attributable to the noncontrolling interest 13.9 — 13.9 — Net income attributable to SciPlay $ 12.3 $ 12.2 $ 26.0 $ 11.1 Denominator: Weighted average shares of Class A common stock for basic EPS 22.7 22.7 22.7 22.7 Effect of dilutive securities: Stock-based compensation grants — — — — Weighted average shares of Class A common stock for diluted EPS 22.7 22.7 22.7 22.7 Net income attributable to SciPlay per share of Class A common stock - basic $ 0.54 $ 0.54 $ 1.15 $ 0.49 Net income attributable to SciPlay per share of Class A common stock - diluted $ 0.54 $ 0.54 $ 1.15 $ 0.49 |
Litigation
Litigation | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation | Litigation From time to time, we are subject to various claims, complaints and legal actions in the normal course of business. In addition, we may receive notifications alleging infringement of patent or other intellectual property rights. On April 17, 2018, a plaintiff filed a putative class action complaint, Fife v. Scientific Games Corp., against our Parent, in the United States District Court for the Western District of Washington. The plaintiff seeks to represent a putative class of all persons in the State of Washington who purchased and allegedly lost virtual coins playing our Parent’s online social casino games, including but not limited to Jackpot Party Casino and Gold Fish Casino . The complaint asserts claims for alleged violations of Washington’s Recovery of Money Lost at Gambling Act, Washington’s consumer protection statute, and for unjust enrichment, and seeks unspecified money damages (including treble damages as appropriate), the award of reasonable attorneys’ fees and costs, pre‑ and post‑judgment interest, and injunctive and/or declaratory relief. On July 2, 2018, our Parent filed a motion to dismiss the plaintiff’s complaint with prejudice, which the trial court denied on December 18, 2018. Our Parent filed its answer to the putative class action complaint on January 18, 2019. We are currently unable to determine the likelihood of an outcome or estimate a range of reasonably possible loss. Although the case was brought against Scientific Games, pursuant to the Intercompany Services Agreement, we would expect to cover or contribute to any damage awards due to the matter arising as a result of our business. |
Description of the Business a_2
Description of the Business and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities (“VIE”) and Consolidation | Variable Interest Entities (“VIE”) and Consolidation Subsequent to the IPO, our sole material asset is our member’s interest in SciPlay Parent LLC. In accordance with the Operating Agreement of SciPlay Parent LLC, we have all management powers over the business and affairs of SciPlay Parent LLC and to conduct, direct and exercise full control over the activities of SciPlay Parent LLC. Class A common stock issued in the IPO do not hold majority voting rights but hold 100% of the economic interest in the Company, which results in SciPlay Parent LLC being considered a VIE. Due to our power to control the activities most directly affecting the results of SciPlay Parent LLC, we are considered the primary beneficiary of the VIE. Accordingly, beginning with the IPO, we consolidate the financial results of SciPlay Parent LLC and its subsidiaries. |
Basis of Presentation | Basis of Presentation The accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). SG Social Holding Company II, LLC is SciPlay’s predecessor for financial reporting purposes, and accordingly, for all periods presented prior to May 7, 2019, the financial statements represent the financial statements of the predecessor. All intercompany balances and transactions have been eliminated in consolidation. |
Principles of Consolidation | In the opinion of management, we have made all adjustments necessary to present fairly our consolidated balance sheets, statements of income, statements of comprehensive income, statements of changes in stockholders’ equity, and statements of cash flows for the periods presented. Such adjustments are of a normal, recurring nature. These unaudited financial statements should be read in conjunction with the financial statements and related notes of SciPlay Corporation and SG Social Holding Company II, LLC in our prospectus dated May 2, 2019, filed with the SEC on May 6, 2019 pursuant to Rule 424(b) of the Securities Act of 1933, as amended (referred to herein as the “Prospectus”). Interim results of operations are not necessarily indicative of results of operations to be expected for a full year. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in our financial statements and the accompanying notes. Actual results may differ materially from our estimates. |
New Accounting Guidance | New Accounting Guidance‑ Adopted The FASB issued ASU No. 2016-02, Leases (Topic 842) in 2016. ASU 2016-02 combined with all subsequent amendments (collectively, “ASC 842”) requires balance sheet recognition for all leases with a lease term greater than one year to be recorded as a lease liability (on a discounted basis) with a corresponding right-of-use asset. This guidance also expands the required quantitative and qualitative disclosures for lease arrangements and gives rise to other changes impacting certain aspects of lessee and lessor accounting. We adopted ASC 842 as of January 1, 2019 using the optional transition method provided by ASU 2018-11 and applied the lessee package of practical expedients. During the first quarter of 2019, the FASB issued ASU 2019-01, Leases (Topic 842) to amend ASU 2016-02. This amendment exempts both lessees and lessors from having to provide certain prior year interim disclosure information in the fiscal year in which a company adopts the new leases standard. We have provided the related transition disclosures as of the beginning of 2019 in accordance with ASU 2019-1. See Note 3 for our lease accounting policy and the impact of our adoption of ASC 842. The FASB issued ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (“AOCI”) in 2018. The standard allows companies to make an election to reclassify from AOCI to retained earnings the stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017. Our adoption of this guidance did not have an effect on our consolidated financial statements. New Accounting Guidance‑ Not yet adopted The FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) in 2016. The new guidance replaces the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. For trade and other receivables, loans and other financial instruments, we will be required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses which reflects losses that are probable. The new guidance will be effective for us beginning January 1, 2020. Application of the amendments is through a cumulative-effect adjustment to retained earnings as of the effective date. We are currently evaluating the impact of adopting this guidance. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. The new guidance amends the disclosure requirements for recurring and nonrecurring fair value measurements by removing, modifying, and adding certain disclosures on fair value measurements in ASC 820. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The new guidance will be effective for us beginning January 1, 2020. We are currently evaluating the impact of adopting this guidance. We do not expect that any other recently issued accounting guidance will have a significant effect on our consolidated financial statements. |
Revenue and Contract Related Policies | Contract Assets, Contract Liabilities and Other Disclosures We receive customer payments based on the payment terms established in our contracts. Payment for the purchase of virtual currency is made at purchase, and such payments are non‑refundable in accordance with our standard terms of service. Such payments are initially recorded as a contract liability, and revenue is subsequently recognized as we satisfy our performance obligations. Revenue Recognition We generate revenue from the sale of virtual coins, chips and bingo cards (collectively referred to as “virtual currency”), which players can use to play casino‑style slot games, table games and bingo games (i.e., spin in the case of slot games, bet in the case of table games and use of bingo cards in the case of bingo games). We distribute our games through various global social web and mobile platforms such as Facebook, Apple, Google, Amazon, and other web and mobile platforms. The games are primarily WMS , Bally , Barcrest ™, and SHFL ® branded games. In addition, we also offer third‑party branded games and original content. Disaggregation of Revenue We believe disaggregation of our revenue on the basis of platform and geographical locations of our players is appropriate because the nature and the number of players generating revenue could vary on such basis, which represents different economic risk profiles. |
Concentration of Credit Risk | Concentration of Credit Risk |
Contingent Acquisition Consideration | Contingent Acquisition Consideration |
Deferred Offering Costs | Deferred Offering costs Through June 30, 2019, we had incurred $8.9 million in costs directly related to pursuing the Offering. These costs were charged against the gross offering proceeds during the second quarter of 2019. |
Description of the Business a_3
Description of the Business and Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of the Use of Proceeds From Offering | We used the net proceeds from the Offering and underwriters’ exercise over-allotment option after deducting the underwriting discount, as follows: Amount Note To acquire 20,725,319 LLC Interests from SG Holding I $ 311.7 (A) To acquire 1,994,681 newly issued LLC interests from SciPlay Parent LLC 30.0 (B) Net proceeds after deducting underwriting discount $ 341.7 (A) SG Holding I subsequently used these proceeds as follows: Acquire IP License from Parent (“Upfront License Payment”) (1) $ 255.0 Distributed as a dividend to Scientific Games Corporation 56.7 $ 311.7 (B) SciPlay Parent LLC subsequently used the proceeds as follows: Fees and expenses incurred in connection with the IPO $ 8.9 To be used for general corporate purposes, including a portion of contingent acquisition consideration 21.1 $ 30.0 (1) Per the Assignment Agreement, dated May 7, 2019, SG Social Holding Company I, LLC assigned its rights, duties, obligations and interest under the IP License Agreement to SciPlay. |
Disaggregation of Revenue | The following table presents our revenue disaggregated by type of platform: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Mobile $ 98.2 $ 76.6 $ 195.1 $ 149.3 Web 19.9 23.1 41.4 47.8 Other — — — 0.1 Total revenue $ 118.1 $ 99.7 $ 236.5 $ 197.2 The following table presents our revenue disaggregated based on the geographical location of our players: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 U.S. $ 111.1 $ 90.7 $ 219.5 $ 179.4 International 7.0 9.0 17.0 17.8 Total revenue $ 118.1 $ 99.7 $ 236.5 $ 197.2 |
Summary of Balances in Receivables and Contract Asset and Liability Accounts | The following table summarizes our opening and closing balances in contract assets, contract liabilities and accounts receivable: Accounts Receivable Contract Assets (1) Contract Liabilities (2) Beginning of period balance $ 31.5 $ 0.2 $ 0.7 Balance as of June 30, 2019 43.1 0.2 0.7 (1) Contract assets are included within Prepaid expenses and other current assets in our consolidated balance sheets. (2) Contract liabilities are included within Accrued liabilities in our consolidated balance sheets. |
Schedules of Concentration of Risk | The following tables summarize the percentage of revenues and accounts receivable generated via our platform providers in excess of 10% of our total revenues and total accounts receivable: Revenue Three Months Ended Six Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 Apple 44.0 % 42.1 % 43.4 % 41.6 % Google 35.4 % 30.9 % 35.6 % 30.5 % Facebook 16.9 % 23.1 % 17.5 % 24.0 % Accounts June 30, December 31, 2019 2018 Apple 55.3 % 38.6 % Google 22.4 % 31.3 % Facebook 16.0 % 23.7 % |
Contingent Consideration Classification | The following table summarizes our contingent acquisition consideration liabilities: June 30, December 31, 2019 2018 Contingent acquisition consideration included in accrued liabilities $ 10.0 $ 18.8 Contingent acquisition consideration included in other long-term liabilities — 10.5 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, net (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Information Regarding Intangible Assets | The following table presents certain information regarding our intangible assets: Gross Accumulated Net Balance as of June 30, 2019 Amortizable intangible assets: Intellectual property $ 34.4 $ (31.9 ) $ 2.5 Customer relationships 23.2 (17.3 ) 5.9 Licenses 5.1 (2.0 ) 3.1 Brand names 3.8 (3.2 ) 0.6 $ 66.5 $ (54.4 ) $ 12.1 Balance as of December 31, 2018 Amortizable intangible assets: Intellectual property $ 33.0 $ (30.1 ) $ 2.9 Customer relationships 23.2 (16.8 ) 6.4 Licenses 5.1 (1.5 ) 3.6 Brand names 3.7 (3.0 ) 0.7 $ 65.0 $ (51.4 ) $ 13.6 |
Schedule of Amortization Expense | The following reflects amortization expense related to intangible assets included within depreciation and amortization: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Amortization expense (1) $ 0.8 $ 4.8 $ 1.5 $ 9.6 (1) Three months and six months ended June 30, 2018 includes $4.0 million and $8.1 million, respectively, in accelerated amortization expenses of certain Dragonplay intellectual property recorded as a result of a change in estimate of the remaining useful lives. |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Schedule of Supplemental Operating Lease Information | Supplemental balance sheet and cash flow information related to operating leases is as follows: June 30, 2019 Operating lease right-of-use assets (1) $ 6.7 Accrued liabilities 1.9 Operating lease liabilities 6.0 Total operating lease liabilities $ 7.9 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases for the six months period ended June 30, 2019 $ 1.0 Weighted average remaining lease term, years 4.5 Weighted average discount rate 5.0 % (1) Right-of-use assets obtained in exchange for lease obligations for the six months ended June 30, 2019 were immaterial. |
Maturities of Lease Liabilities | Lease liability maturities: Operating Leases Remainder of 2019 $ 1.1 2020 2.1 2021 1.7 2022 1.7 2023 1.3 Thereafter 0.9 Less Imputed Interest (0.9 ) Total $ 7.9 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | The following is the summary of expenses paid to Scientific Games and settled in cash: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Financial Statement Line Item Royalties for Scientific Games Corporation IP $ 2.9 $ 6.3 $ 10.2 $ 12.6 Cost of revenue Royalties to Scientific Games Corporation for third-party IP 1.8 1.6 4.4 3.3 Cost of revenue Parent services 1.2 1.4 2.6 2.8 General and administrative The following is the summary of balances due to affiliates: June 30, 2019 December 31, 2018 Royalties under intercompany IP License Agreement $ 0.4 $ 4.5 Parent services 0.4 0.5 Reimbursable expenses to (from) Scientific Games and its subsidiaries 1.1 (1.3 ) $ 1.9 $ 3.7 |
Stockholders_ Equity and Nonc_2
Stockholders’ Equity and Noncontrolling Interest (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Summary of Stock-based Compensation Expense | The following table summarizes stock‑based compensation expense that is included in general and administrative expenses: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Related to SciPlay equity awards $ 3.7 $ — $ 3.7 $ — Related to the Parent’s equity awards 0.2 0.7 2.9 1.3 Total $ 3.9 $ 0.7 $ 6.6 $ 1.3 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Numerator: Net income $ 26.2 $ 12.2 $ 39.9 $ 11.1 Less: net income attributable to the noncontrolling interest 13.9 — 13.9 — Net income attributable to SciPlay $ 12.3 $ 12.2 $ 26.0 $ 11.1 Denominator: Weighted average shares of Class A common stock for basic EPS 22.7 22.7 22.7 22.7 Effect of dilutive securities: Stock-based compensation grants — — — — Weighted average shares of Class A common stock for diluted EPS 22.7 22.7 22.7 22.7 Net income attributable to SciPlay per share of Class A common stock - basic $ 0.54 $ 0.54 $ 1.15 $ 0.49 Net income attributable to SciPlay per share of Class A common stock - diluted $ 0.54 $ 0.54 $ 1.15 $ 0.49 |
Description of the Business a_4
Description of the Business and Summary of Significant Accounting Policies - Narrative (Details) | Jun. 04, 2019 | May 07, 2019USD ($)$ / sharesshares | Jun. 30, 2019USD ($) | Jun. 30, 2019USD ($)segment | Jun. 30, 2018USD ($) |
Subsidiary, Sale of Stock [Line Items] | |||||
Number of operating segments | segment | 1 | ||||
Offering expenses | $ 7,900,000 | $ 0 | |||
Economic interests called by common stock units | 18.00% | ||||
Revenue recognized | 600,000 | $ 1,300,000 | |||
Class A common stock | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Economic interests called by common stock units | 100.00% | ||||
IPO | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Shares offered in public offering (in shares) | shares | 22,720,000 | ||||
Amount received in public offering (in dollars per share) | $ / shares | $ 16 | ||||
Proceeds from public offering | $ 341,700,000 | ||||
Offering expenses | $ 8,900,000 | ||||
SG Members ownership percentage | 82.00% | ||||
Percentage of tax benefits | 85.00% | ||||
IPO | Class B common stock | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
SG Members ownership percentage | 97.90% | ||||
IPO | Class A common stock | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Economic interests called by common stock units | 100.00% | ||||
Spicerack Media | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Contingent consideration | $ 31,000,000 | 31,000,000 | |||
Contingent consideration payable at a later date | 21,000,000 | ||||
SciPlay Parent LLC | IPO | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Proceeds from public offering | $ 30,000,000 | ||||
SG Holding I | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Economic interests called by common stock units | 82.00% | ||||
SciPlay Parent LLC | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Offering expenses | $ 8,900,000 | ||||
SciPlay Revolver, Maturing 2024 | Revolving Credit Facility | IPO | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Principal debt amount | $ 150,000,000 | ||||
Commitment fee | 0.50% | ||||
Maturity of debt | 5 years | ||||
Leverage ratio | 0.375% | ||||
Fronting fee | 0.125% | ||||
Net leverage ratio | 2.50 | ||||
Fixed charge coverage ratio (no less than) | 4 | ||||
Deferred offering costs | $ 1,100,000 | $ 1,100,000 | |||
SciPlay Revolver, Maturing 2024 | Letter of Credit | IPO | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Letter of credit issuances available | $ 15,000,000 | ||||
LIBOR | SciPlay Revolver, Maturing 2024 | Revolving Credit Facility | IPO | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Basis spread on variable rate | 2.25% | ||||
LIBOR, Leveraged Base Step Down | SciPlay Revolver, Maturing 2024 | Revolving Credit Facility | IPO | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Basis spread on variable rate | 0.25% | ||||
LIBOR, Leveraged Base Step Up | SciPlay Revolver, Maturing 2024 | Revolving Credit Facility | IPO | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Basis spread on variable rate | 0.25% | ||||
Base Rate | SciPlay Revolver, Maturing 2024 | Revolving Credit Facility | IPO | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Basis spread on variable rate | 1.25% | ||||
Base Rate, Step Down | SciPlay Revolver, Maturing 2024 | Revolving Credit Facility | IPO | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Basis spread on variable rate | 0.25% | ||||
Base Rate, Step Up | SciPlay Revolver, Maturing 2024 | Revolving Credit Facility | IPO | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Basis spread on variable rate | 0.25% |
Description of the Business a_5
Description of the Business and Summary of Significant Accounting Policies - Use of Proceeds From Offering (Details) - IPO $ in Millions | May 07, 2019USD ($)shares |
Subsidiary, Sale of Stock [Line Items] | |
Proceeds from public offering | $ 341.7 |
SG Holding Company I, LLC | |
Subsidiary, Sale of Stock [Line Items] | |
Interest purchased in combination (in shares) | shares | 20,725,319 |
Proceeds from public offering | $ 311.7 |
SciPlay Parent LLC | |
Subsidiary, Sale of Stock [Line Items] | |
Interest purchased in combination (in shares) | shares | 1,994,681 |
Proceeds from public offering | $ 30 |
SG Holding Company I, LLC | |
Subsidiary, Sale of Stock [Line Items] | |
Proceeds from public offering | 311.7 |
SciPlay Parent LLC | |
Subsidiary, Sale of Stock [Line Items] | |
Proceeds from public offering | 30 |
Intellectual property | SG Holding Company I, LLC | |
Subsidiary, Sale of Stock [Line Items] | |
Proceeds from public offering | 255 |
Dividend Paid | SG Holding Company I, LLC | |
Subsidiary, Sale of Stock [Line Items] | |
Proceeds from public offering | 56.7 |
Fees and Expenses, Initial Public Offering | SciPlay Parent LLC | |
Subsidiary, Sale of Stock [Line Items] | |
Proceeds from public offering | 8.9 |
General Corporate Purposes | SciPlay Parent LLC | |
Subsidiary, Sale of Stock [Line Items] | |
Proceeds from public offering | $ 21.1 |
Description of the Business a_6
Description of the Business and Summary of Significant Accounting Policies - Disaggregation of Revenues (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 118.1 | $ 99.7 | $ 236.5 | $ 197.2 |
Mobile | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 98.2 | 76.6 | 195.1 | 149.3 |
Web | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 19.9 | 23.1 | 41.4 | 47.8 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 0 | 0 | 0 | 0.1 |
U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 111.1 | 90.7 | 219.5 | 179.4 |
International | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 7 | $ 9 | $ 17 | $ 17.8 |
Description of the Business a_7
Description of the Business and Summary of Significant Accounting Policies - Balances in Receivables and Contract Asset and Liability Accounts (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accounts Receivable | $ 43.1 | $ 31.5 |
Contract Assets | 0.2 | 0.2 |
Contract Liabilities | $ 0.7 | $ 0.7 |
Description of the Business a_8
Description of the Business and Summary of Significant Accounting Policies - Schedule of Concentration Risk (Details) - Customer Concentration Risk | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Apple | Revenue Concentration | |||||
Concentration Risk [Line Items] | |||||
Concentration risk | 44.00% | 42.10% | 43.40% | 41.60% | |
Apple | Accounts Receivable Concentration | |||||
Concentration Risk [Line Items] | |||||
Concentration risk | 55.30% | 38.60% | |||
Google | Revenue Concentration | |||||
Concentration Risk [Line Items] | |||||
Concentration risk | 35.40% | 30.90% | 35.60% | 30.50% | |
Google | Accounts Receivable Concentration | |||||
Concentration Risk [Line Items] | |||||
Concentration risk | 22.40% | 31.30% | |||
Facebook | Revenue Concentration | |||||
Concentration Risk [Line Items] | |||||
Concentration risk | 16.90% | 23.10% | 17.50% | 24.00% | |
Facebook | Accounts Receivable Concentration | |||||
Concentration Risk [Line Items] | |||||
Concentration risk | 16.00% | 23.70% |
Description of the Business a_9
Description of the Business and Summary of Significant Accounting Policies - Contingent Consideration Classification (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Contingent acquisition consideration included in accrued liabilities | $ 10 | $ 18.8 |
Contingent acquisition consideration included in other long-term liabilities | $ 0 | $ 10.5 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, net - Narrative (Details) - USD ($) $ in Millions | Apr. 07, 2017 | Jun. 30, 2019 | Dec. 31, 2018 |
Goodwill [Line Items] | |||
Goodwill | $ 120.7 | $ 120.7 | |
WMS Industries, Inc. and Bally Technologies, Inc. | |||
Goodwill [Line Items] | |||
Goodwill | $ 107.9 | ||
Spicerack Media | |||
Goodwill [Line Items] | |||
Increase in goodwill | $ 12.8 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, net - Schedule of Information Regarding Intangible Assets (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Amortizable intangible assets: | ||
Amortizable intangible assets, gross carrying amount | $ 66.5 | $ 65 |
Amortizable intangible assets, accumulated amortization | (54.4) | (51.4) |
Amortizable intangible assets, net balance | 12.1 | 13.6 |
Intellectual property | ||
Amortizable intangible assets: | ||
Amortizable intangible assets, gross carrying amount | 34.4 | 33 |
Amortizable intangible assets, accumulated amortization | (31.9) | (30.1) |
Amortizable intangible assets, net balance | 2.5 | 2.9 |
Customer relationships | ||
Amortizable intangible assets: | ||
Amortizable intangible assets, gross carrying amount | 23.2 | 23.2 |
Amortizable intangible assets, accumulated amortization | (17.3) | (16.8) |
Amortizable intangible assets, net balance | 5.9 | 6.4 |
Licenses | ||
Amortizable intangible assets: | ||
Amortizable intangible assets, gross carrying amount | 5.1 | 5.1 |
Amortizable intangible assets, accumulated amortization | (2) | (1.5) |
Amortizable intangible assets, net balance | 3.1 | 3.6 |
Brand names | ||
Amortizable intangible assets: | ||
Amortizable intangible assets, gross carrying amount | 3.8 | 3.7 |
Amortizable intangible assets, accumulated amortization | (3.2) | (3) |
Amortizable intangible assets, net balance | $ 0.6 | $ 0.7 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets, net - Intangible Amortization Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 0.8 | $ 4.8 | $ 1.5 | $ 9.6 |
Dragonplay Intellectual Property | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 4 | $ 8.1 |
Leases - Narrative (Details)
Leases - Narrative (Details) | Jun. 30, 2019 | Jan. 01, 2019 |
Range [Line Items] | ||
Remaining lease terms | 4 years 6 months | |
Minimum | ||
Range [Line Items] | ||
Remaining lease terms | 1 year | |
Maximum | ||
Range [Line Items] | ||
Remaining lease terms | 5 years |
Leases - Supplemental Operating
Leases - Supplemental Operating Lease Information (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Leases [Abstract] | ||
Operating lease right-of-use assets | $ 6.7 | $ 0 |
Accrued liabilities | 1.9 | |
Operating lease liabilities | 6 | $ 0 |
Total operating lease liabilities | 7.9 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases for the six months period ended June 30, 2019 | $ 1 | |
Weighted average remaining lease term, years | 4 years 6 months | |
Weighted average discount rate | 5.00% |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Details) $ in Millions | Jun. 30, 2019USD ($) |
Leases [Abstract] | |
Remainder of 2019 | $ 1.1 |
2020 | 2.1 |
2021 | 1.7 |
2022 | 1.7 |
2023 | 1.3 |
Thereafter | 0.9 |
Less Imputed Interest | (0.9) |
Total | $ 7.9 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | May 07, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | May 07, 2019 | Jun. 30, 2019 | Jun. 30, 2018 |
Income Tax Disclosure [Line Items] | ||||||
Economic interests called by common stock units | 18.00% | |||||
Effective tax rates | (2.70%) | 23.30% | 9.10% | 21.80% | ||
Tax provision under separate-return method | $ 6.5 | |||||
Scientific Games Corporation | ||||||
Income Tax Disclosure [Line Items] | ||||||
Economic interests called by common stock units | 82.00% | |||||
SciPlay Parent LLC | ||||||
Income Tax Disclosure [Line Items] | ||||||
Economic interests called by common stock units | 18.00% | |||||
SciPlay Parent LLC | Scientific Games Corporation | ||||||
Income Tax Disclosure [Line Items] | ||||||
Economic interests called by common stock units | 82.00% |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Millions | May 07, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 |
Related Party Transaction [Line Items] | ||||||
Parent services | $ 1.2 | $ 1.4 | $ 2.6 | $ 2.8 | ||
Total due to (from) related parties | 1.9 | 1.9 | $ 3.7 | |||
Estimated liability under TRA | 73.7 | 73.7 | 0 | |||
IPO | ||||||
Related Party Transaction [Line Items] | ||||||
Estimated liability under TRA | 76.3 | 76.3 | ||||
Intellectual property | ||||||
Related Party Transaction [Line Items] | ||||||
Royalties for IP | 2.9 | 6.3 | 10.2 | 12.6 | ||
Intellectual property | Social Business Segment | IPO | ||||||
Related Party Transaction [Line Items] | ||||||
Purchase price of license | $ 255 | |||||
Intellectual property, Third-party | ||||||
Related Party Transaction [Line Items] | ||||||
Royalties for IP | 1.8 | $ 1.6 | 4.4 | $ 3.3 | ||
Royalties under intercompany IP License Agreement | ||||||
Related Party Transaction [Line Items] | ||||||
Total due to (from) related parties | 0.4 | 0.4 | 4.5 | |||
Parent services | ||||||
Related Party Transaction [Line Items] | ||||||
Total due to (from) related parties | 0.4 | 0.4 | 0.5 | |||
Reimbursable expenses to (from) Scientific Games and its subsidiaries | ||||||
Related Party Transaction [Line Items] | ||||||
Total due to (from) related parties | 1.1 | 1.1 | $ (1.3) | |||
Accrued Liabilities | IPO | ||||||
Related Party Transaction [Line Items] | ||||||
Estimated liability under TRA | $ 2.6 | $ 2.6 |
Stockholders_ Equity and Nonc_3
Stockholders’ Equity and Noncontrolling Interest (Details) $ / shares in Units, $ in Millions | Jun. 04, 2019voteshares | May 07, 2019 | Jun. 30, 2019USD ($)$ / sharesshares | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)$ / sharesshares | Jun. 30, 2018USD ($) | Dec. 31, 2018shares |
Class of Stock [Line Items] | |||||||
Number of votes per common stock | vote | 1 | ||||||
Ownership percentage threshold | 10.00% | ||||||
Economic interests called by common stock units | 18.00% | ||||||
Total compensation expense | $ | $ 3.9 | $ 0.7 | $ 6.6 | $ 1.3 | |||
Unrecognized stock-based compensation expense | $ | $ 20.8 | $ 20.8 | |||||
Period expected to be recognized | 1 year 9 months 18 days | ||||||
Class A common stock | |||||||
Class of Stock [Line Items] | |||||||
Common stock, shares issued (in shares) | shares | 22,720,000 | 22,700,000 | 22,700,000 | 0 | |||
Common stock, shares outstanding (in shares) | shares | 22,720,000 | 22,700,000 | 22,700,000 | 0 | |||
Number of votes per common stock | vote | 1 | ||||||
Economic interests called by common stock units | 100.00% | ||||||
Voting interests held | 2.10% | ||||||
Class B common stock | |||||||
Class of Stock [Line Items] | |||||||
Common stock, shares issued (in shares) | shares | 103,547,021 | 103,500,000 | 103,500,000 | 0 | |||
Common stock, shares outstanding (in shares) | shares | 103,547,021 | 103,500,000 | 103,500,000 | 0 | |||
Number of votes per common stock | vote | 10 | ||||||
Scientific Games Corporation | |||||||
Class of Stock [Line Items] | |||||||
Economic interests called by common stock units | 82.00% | ||||||
Scientific Games Corporation | Class B common stock | |||||||
Class of Stock [Line Items] | |||||||
Voting interests held | 97.90% | ||||||
LTIP | |||||||
Class of Stock [Line Items] | |||||||
Total compensation expense | $ | $ 3.7 | 0 | $ 3.7 | 0 | |||
LTIP | Class A common stock | |||||||
Class of Stock [Line Items] | |||||||
Number of incentive shares authorized (in shares) | shares | 6,500,000 | 6,500,000 | |||||
Equity Incentive Award Plan, Parent | |||||||
Class of Stock [Line Items] | |||||||
Total compensation expense | $ | $ 0.2 | $ 0.7 | $ 2.9 | $ 1.3 | |||
Performance-Based Restricted Stock Units (PRSUs) | |||||||
Class of Stock [Line Items] | |||||||
Unrecognized stock-based compensation expense | $ | $ 18 | $ 18 | |||||
Performance-Based Restricted Stock Units (PRSUs) | Class A common stock | |||||||
Class of Stock [Line Items] | |||||||
Fair value of units granted (in dollars per share) | $ / shares | $ 16 | $ 16 |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 1 Months Ended | 2 Months Ended | 3 Months Ended | 6 Months Ended | ||||
May 07, 2019 | Jun. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Earnings Per Share [Abstract] | ||||||||
Net income | $ 26.2 | $ 12.2 | $ 39.9 | $ 11.1 | ||||
Less: Net income attributable to the noncontrolling interest | 13.9 | 0 | 13.9 | 0 | ||||
Net income attributable to SciPlay | $ 6.7 | $ 19.5 | $ 12.3 | $ 13.7 | $ 12.2 | $ (1.1) | $ 26 | $ 11.1 |
Denominator: | ||||||||
Weighted average shares of Class A common stock for basic EPS (in shares) | 22.7 | 22.7 | 22.7 | 22.7 | ||||
Effect of dilutive securities: | ||||||||
Stock-based compensation grants (in shares) | 0 | 0 | 0 | 0 | ||||
Weighted average shares of Class A common stock for diluted EPS (in shares) | 22.7 | 22.7 | 22.7 | 22.7 | ||||
Net income attributable to SciPlay per share of Class A common stock - basic (in dollars per share) | $ 0.54 | $ 0.54 | $ 1.15 | $ 0.49 | ||||
Net income attributable to SciPlay per share of Class A common stock - diluted (in dollars per share) | $ 0.54 | $ 0.54 | $ 1.15 | $ 0.49 |