SGMS - Earnings call transcript Q3 2017

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Operator

Good day and welcome to Scientific Games Corporation Third Quarter 2017 Investor Conference Call and Webcast. [Operator Instructions] Please note this event is being recorded. I would like to turn the conference over to William Pfund, Investor Relations. Please go ahead, sir.

William Pfund

Thank you, Francesca. everyone. day, Good

and we and call, With our quarter Executive third this Financial During performance, will followed results Officer Chief Sheehan, operating are period. Quartieri, by XXXX Chief morning Officer. today’s Kevin discuss Mike a me question-and-answer

today risks that include call. will to could actual and Private uncertainties under forward-looking These XXXX. differ statements Act those results the Reform that Litigation of contain discussed materially statements call statements the Our Securities involve during from certain cause

these to For please website to SEC. subsequent as posted X, regarding report the uncertainties, information risks yesterday, with Form filed annual refer reports recent with our on our March and XXXX late SEC, XX-K issued as the on most on the including and filings well earnings this release our materials our relating call filed

comparable also morning. this the a of financial on each will non-GAAP measure as our found well press A as release description directly measure non-GAAP discuss to and We each non-GAAP in our reconciliation GAAP website. measures measure earnings can be certain of most

conference at reminder, materials in call will Investors archived being our a replay recorded this of the this be a As the of section accompanying scientificgames.com. and webcast website and is

over Now, to let the me turn call Kevin.

Kevin Sheehan

day, and Thanks, Bill. Good us. joining everyone thanks for

and Our third and revenue very attributable year-over-year both were marked strong EBITDA. our quarter of results in eighth consecutive increases quarter

continues our performance delivering the achieving in is build. how and momentum and team solid is Our to consistency segments truly of improvement results. achieving each driving to business It in is team see gratifying our

unit growth. the prior strength the unit that third up ago. together segments each quarter from than traditionally growth major of our of and highlight delivered in over was quarter key business remind exceptional the everyone the company’s openings This us, for erosion an the me Let domestic in preceding more the unit base gaming fewer area increase few for a was by offset impact the quarterly share XX% from year’s X daily period strong machines. X% sequential stabilize I gaming above is third line participation top have expansions gaming, a sequential first wide a than the very basis, year. with operations, is year the which On that replacement prior shipments, you’ll quarter In a the highlights the installed to than believe price increased casino X% footprint average premium selling In and we progressive, a in is our recall. slow we quarter, of the XXX more fee shipped seasonally units as and which shipments, quarter in units, we the years. more by than begun and yet

breadth year showcased and high-reels headlined were These JXX units new will in X but significant recent support Gamefield significant launched of putting depth be a casino replace, and ahead Vegas. Bond by demonstrated products were on to have the At older in have cabinets. themed of and Many James the category. TwinStar our floors products strategy more devoted with TwinStar product the showcased we of of GXE a a work us target show, these we products momentum. overall that talent of will significant to the together our plan show games build and management X.X, new innovative at growing We to the that in Las ahead VXX the creative

been U.S. also the offering games, of supporting we pipeline of having in the $XX We game became innovative product of did sales total has half with and helped XX games, states GOLDEN of is those which not the available by quarter as U.S. but XX WILLY highest portfolio advance program. with indexing picked advanced TICKET only new a of customers’ services from such a We offering to-date, our solution integrated providing new grow our launched by new products our third where lottery the by a instant year-over-year. up technology. the broadest this the XX% In states. GOLDEN retail of lottery customers offering proprietary wide more than support and on range our customers our outstanding. provide in more feedback comprehensive business, our game of the through success TICKET. preeminent services we services the and innovative program, cooperative payment products management customers to Importantly, an From cashless retail than games WONKA fully X% technologies The instant that these

performance using per lotteries our sales for contact industry’s a to X-year awarded Kansas More and those a as outpaced contract extension won and capita technology has with recently, Lottery provide that our long-time the with CSP we a the services, technologies XX-year meaningfully Arizona the renewal the were advanced sales. our based ago, services. lottery year a system on the contract, competitor. will replace We For

name gaming business in over to the rapid quarter. gaming game. best prior player the provide achieved our social third continually remains at large By and experience the experiences, player year our revenue period audience, we leveraging a of BXC apps Our XX% new expand library our working the business, growth Interactive to introducing sustained during the increase differentiated of authentic

with real is in a accretive and the acquisition strategic neutral X. NYX compelling financially of leverage both acquisition This is Year excitement it Now and being upcoming Gaming.

to a in digital Games betting Scientific digital transformation perfect of and position we future complement As opportunities, the in capabilities strength content. take advantage significant leading sports NYX’s platforms our to is digital

positioned sports transaction’s investor quarter grow, Following new products evidence enhance remains on or lottery solutions value the that provided By that organization-wide they Games we our player customers, performance enable the focus advantage base differentiated performance help financial take flow productivity. or customer our develops third us to ideally build of our cash and further confident of results, opportunities. through closing, consistent our wants. innovation are gaming to engaging the iLottery, momentum technology-focused is and will be customers content our customers, digital that iGaming I’m to bright. Scientific future on that innovation, drive Overall, deliver the strong whether and the customer our betting helping revenue focusing deleveraging and that

let Now turn to the call over me Mike.

Mike Quartieri

Thanks, Kevin. Good everyone. day,

As momentum attributable build. Kevin noted, our results X% were rose increased and is to and continuing XX%. strong our revenue Consolidated EBITDA

in our experienced we growth segments. and business of Importantly, improvement each

Our and of year-over-year disciplined improvement cost in improving resulted business processes a mix management. by more margin profitable revenue, remaining our from

let Now, me to turn segments. operating our

year-ago revenue of $XX was in unit. several benefit openings grew proprietary Waves, as the sale and the X This of and improvement that to and quarter. in sales favorable the offset VLT AEBITDA replacement domestically. First, base and and The international total XX% decline over units. completed from shufflers, from the innovative X% increase U.S. the XXX $XX in largely Canada, content of new year’s to contributing the strength machines, The the both X,XXX the gaming shipments $X of of performance the a of we year was performance units, by to improved our growth Maryland. to Canadian by the by revenue increase decrease the revenue strong shipped X,XXX major units platforms. Table compared increased, despite Systems higher of new year. XX% a year increase XXX shipped for this quarter table million including improved in Gaming units from The XX X,XXX The in a reflects increase million, Dualos prior a particularly X% experienced on as over lower products units increased the organic QX. casino XXX new was games than games the sales million, and reflecting shipments The improvement sales portfolio cabinet which a growth U.S. price segment largely for from the year Overall, VGTs result, reflected Pro XXX XXX convert million in our with prior up selling up replacement And casino products family basis reflected $XX along to openings margin Illinois. in revenue other X,XXX double-digit were business, the new well XX.X%, of quarter. to due TwinStar acquisition JXX no the in openings. margin DEQ expansions, casino in revenue on to quarter, replacement gaming growth new a average table reflecting units used-game solid units sales the for cabinets, a machine during other Revenue down our and of reflected units revenue. Gaming installed in and X%, casino more expansions being quarter, ago display AEBITDA year-over-year. third ago reflecting was to Also year-ago and XXX period. sales primarily a our floors iVIEW the hardware TwinStar Only casino from shipments the in with of compared breadth a increased continued increase the higher in revenue generated a as point level third

everyone, replacement I year be we X,XXX to year-over-year that just last as what would basis. seasonally expect while globally openings quarter, included While the quarter is down units year York on include revenue, fourth this continued note, strong gaming to in was and about Montreign in revenue expected casino to fourth to reminder performance favorable expect units quarter X% a sequential operations Catskills. we the only in for Casino year-over-year In new New the shipments a X% a

Although of participation quarter XXX machines the on by and down installed basis. units gaming year-over-year, wide a XXX daily increased premium base the area fee installed sequential was units base progressive,

we unit installed the acquisition base, since the While sequential the increase it stabilization does represent of first Bally. view this in

new show the units that the New offset increased WAP, fee daily participation Greece. expansionary essentially and rollout a by booth, per largely game in units level We being in more of participation we continue are as innovative a install retired well even as units from relatively The high of XXX and facilities unit driven other churn to units factors the of other to convert experiencing Maryland. noted. headlined the Gamescape as by cabinets content. be premium new October, of from participation sale months base resulting sequential still leased VLTs basis quarter in footprint older installed on this York and decline James GXE revenue to Kevin On through pipeline of additional themed including a Bond per XX recent new build these launched the during The XXXX, in games year-over-year. the to we early VLTs year-over-year, flat showcased VLTs our participation ongoing were daily in momentum was gaming next deep X as the at And games a of

units convert recall to sequential you when to gaming their from $X.XX to in machines, only on As and lower the in purchase sale the floors. reflects purchase including laws were not per allowed revenue they directly opened the gaming first a already were in enable that, Year-over-year, $X.XX of that their it basis, the yield casinos changed impact declined machines, was Maryland, largely later on casinos a quarter unit Greece. daily VLTs to

quarter. in within in were storm higher lottery WONKA in AEBITDA revenue sales game Puerto by Turning Segment impact instant multi-state up quarter, solid related of segment at revenue the Puerto decrease performance million quarter. the certain loss large the X%. Instant as primarily game. impacted third launches An to Rico in total offset a XX% well gaming of higher international the estimate a the lottery, in to operating U.S. that games, machines perspective, to the our year reflecting quarter year ago as Caribbean. hurricane retail the increased, or revenue and the year-over-year mix due the To partly approximately well The compared compared activity, more the VLT $X on during revenues serious the from X% impact hurricane-related Concerning partially AEBITDA U.S. and Florida during primarily reflecting costs. revenue or included a reflecting revenue countries. that’s jackpot Texas, new GOLDEN Powerball sales growth the impact the as this grew strength the lottery in globally. increased in We as licensed $X to increase of was game a in of year’s profitable million XX% WILLY occurred million difficulties to third U.S. to TICKET $X timing revenue jackpot the Powerball are X% benefit the large services Year-over-year, $XX across still of the multi-state revenue an essentially Rico There markets, quarter. or reflecting facing put that of third million ago. offset revenue lower was

the still working hard quarter We strongest overall. are impact still the to will we believe seasonally in be mitigate what

grow Interactive million, Turning in XX%, and business. ongoing segment, by to $XXX reflecting revenue our Segment to our revenue BXC momentum margin strong social rapidly, segment year-over-year year-over-year continued increased expansion. increased AEBITDA to gaming driven XX%

We continue top growth gaming execute healthy overall and on our rapid line our leverage IP growing to extensive that deliver in marketplace. to of library and strategies content a

of As well our BXC that was Fortunes, Slot more to were XXXX. contributions our revenue as Social business in Jackpot XX% Strong launched app, as a results result, established Quick such Hit gaming up the apps, quarter was Casino social XX our Party posted newest and our in as first year-over-year.

Showdown already acquired second quarter acquisition addition game Bingo app is and continue of existing the by in of the The highly social to pleased the the mobile Bingo XXXX. part complementary are the we as game Spicerack of the future. expect things being Media achieved portfolio was with our good that to in Additionally, app growth we

Turning at million flow million cash $XXX cash flow year. sheet, from the $XX prior down the operating to balance and was

cash dramatically revenue vendor in million venture; million. interest the These to unfavorable the receivable, timing related but just to million previous a timing largely refinancing year performance our was in of related timing for favorable as reflecting to activity that incremental million improved to $XX due to which well $XX of year in ago whether increase receipt loans; Illinois than joint payments, a by term sales overall Northstar and totaled a in we our and adjusted related AP basis. million the changes of debt, earnings million $XX timing basis, accounts part growth in offset non-cash a as year-over-year through sizable through September that’s reduction only $XXX doubled from Our prepaid net as XXXX, included or several a run-rate quarter of earnings our on million $XXX prior more the a capital working year-to-year net adjustments improvement year of story accounts largely million in in $XX quarter changes XX, this that’s $XX a inventory. On achieved have the payments, but $XXX

to are for primarily paid approximately our enhancing flows. related same period, to future in also million costs that incurred acquisitions the our During refinancing we activities our tuck-in interest about accretive $XX and costs cash million the lower $XX

our As declined XX-month a end our period. year X.Xx of result growth leverage the net ago our quarter from our operating AEBITDA, and debt September improvements, X.Xx trailing ongoing focus to down on de-leveraging, in at

capitalizing I smart questions, improvements remains grow leverage. remind commitment operating taking that our everyone on business that focused would reduce and Before and on our executing our opportunities

question. lines. Operator, up the let’s Now, our first please take open

Operator

[Operator America. Instructions] ahead. The of comes from first Jonas of question Barry Bank Please go

Barry Jonas

Great. Hi, guys.

Recognizing replacement of overall thoughts strong pull-forward quarter slower how I ahead any some is quarter. to on from am share saw are this wondering have this you unit was as growth really a growth, expectations typically of first our maybe QX? you on much report, is if just Thanks. market gains, of or another You which the

Kevin Sheehan

Yes, I – QX. let is naturally. is it quarters very would of pull-forward fallout to important That’s that none say we of our me

– have we past, to product you case, share, never that a As say market about thing. wasn’t years in the talk maybe that’s and but portfolio would I it’s want don’t may winning the that know, because I share

look we quite higher was acquisitions I place today. probably are think natural a bit took if when than to you back where our the share

very that would an the And the right. that I else big I would was X% very you’re broad exciting because anyone I suspect is mean we to, healthy. growth other the XX% year-over-year over So, a wouldn’t pricing. point of It reprove increase. have portfolio kind this but important on natural And that they year-over-year do have then, offerings. think, increase, hope our ourselves the the just goal industry product in was market of time, is to

was that mix some So the well, as of that was momentum some strong the of of machines. and the

a ongoing driven it’s family of pro performance by continuing strong of is TwinStar the outlook the the the our market the kind – of shipments WAVE Our cabinets. and is newer of And increasing for prove growth that, the we a up but forward, to market leaves of ourselves that quieter as little think is that cover us continue you? bit, enough for going room on that bit we journey. Does

Barry Jonas

you and with Thanks. of and license structure with contract give fee? the us And update in on great. two, that’s Yes, scratch both, then question, the Italian can government one partners? then financing are how just about any a other your you your then lastly, we thinking I renewal? guess, Thanks. one, win current the And see could changes JV an portion

Kevin Sheehan

Yes.

big calling So, issued this for we renewal interesting the government is us for Italian that of that X-year a very development think is an decree concession. the positive a a

wait we renewing way be And the we would through So that that have under today. on that and decree be just would we based XX-day it to structured, have same terms period. the

the is getting As puts otherwise government that is would earlier than look the cash that, about is this I drive in to at as way earlier they I it. some year it be the far a now – the Italian trying it cash, to this incentive think

And also you to very listen a make which constrained was he flow as by driving So, think articulated way that’s to far want is our than good by very cash or of making income two he that was way, the rates our I it, sure what’s on the by company free one, one, prospective did interest was our tuck-in each we a that comments, bunch more which is we to Mike’s strengthen – and as business efficient. important a the things, thing. our statement case businesses I our out – when better bought paid taking business important and doing by

you a you things. our X equation, to and game is we opportunity big positive the and get some at anything, plan that all are move of us which of next flow, to up when probably on to still is driving the I that buy think are you that thing, then together leads some going And disciplined – cash XXXX. all, that for the the for to synergistic of is months anyone well. enable thing. businesses get honest, then at us have then bit and the couple quarter time to circle side of type those premium forward, us to look as journey cash And So, line ultimately from years, prospectively little bid positive to flow the gives opportunities higher a enable that then in there us runway of these bringing expected have be management it’s through as there EBITDA a virtuous every to significantly because of cost top look And you a because beyond will strong it continuing

am – a – silo, but powerful of is aren’t and of really have as probably at company X something next level want to a business these So, can’t activities all still end I much, on that we focus to of about it’s to point razor all in variety cash you continue our with, foreseeable came to the into future. the are going a because because will of our I journey. using to guys we it for. I That But operations. think going are the be keeping I day, and a our X.Xx when a And our be not below the happy down that we flow our a to then bring next at that we – in think cash you intend obviously, look talking other we get things number

Barry Jonas

yes. Perfect. Yes, Well, guys. so thanks much

Kevin Sheehan

Thank you.

Mike Quartieri

Take care.

Operator

Malouf go Mike from Capital. Please comes question next The ahead. Craig-Hallum of

Mike Malouf

keep was whether quarter? my quite working your capital actually quick get just can of harping see change quarter cash on the done? you could coming of to fourth were already these been Thanks expectations, insight or sort have flow, cash Great. talk CapEx acquisitions any but needs Thanks. the us can with give about regards that we it move of of not the changes taking bit a little the to and might you to – a actually quarter, there the follow-up as has some the we this Is that into third for a in besides on change And lottery Italian given think then bit you into when reverse that on questions as evident any you CapEx fourth relative not on you and just that that mentioned? there flow that, contract quarter

Mike Quartieri

that are your have change with start will There CapEx been that we we we CapEx. forth are tuck-in as intensive. The have acquisitions not right I regarding the no made, Yes, second now. said, question really putting is in guidance acquisitions

year So a we’re capital, think still some from it’s within we ago, I specific think In provided that regard I it. year the range to working the had to a sizable items previously. but ago that change

As I instant really us state provided venture decrease that previous for in number that receivables, was through finally then $XX Illinois a our quarters to had joint passed of tickets we allowed million mentioned, bill the with getting them pay which that. appropriations for associated for the of the had

say, got dynamic that being of large I perspective. favorable benefit have the the accruals QX of then done you of payments from last should to refinancings have interest last – has we changed a quarter ‘XX and the the So timing quarter able been

those take experienced rest normal of what the just in year. timing associated prior you So with the differences out, we two its things

Kevin Sheehan

here this that that’s the that quarter, open it get as the with look, of better created I focus I we And we management? think the continue was to we’ve of lesson change. raise are one-offs path, to of Mike’s – down say, still that one a is to, enough on in comments, little wide prospectively. liability think hopefully our little a most I a bit manage learned we asset was going So bit of the just But and doing as learned a there bit from little things we’ll that eyes

Mike Quartieri

at going But if the for on Yes, each two little a I throughout basis, down with It’s growth first negative mean, flat working relatively capital the it’s capital. look a positive quarter company, all to have our working you million. a quarters. is we year-to-date ‘XX, QX. I the $X was been in had in add, net

So expect and I our of and wildcard are really throughout around on any working don’t QX. in of general, the outside sales think keeping I we changes focus collection is in material capital think, our that’s ‘XX the control The somewhat of only, timing receivables. I

December, So is the in if the of are before weeks you heavy collect with end terms, within that the XX-day sales there year. few a funds to obviously, not last the amount of able of period

Mike Malouf

for Okay, help. great. the Thanks

Kevin Sheehan

You’re welcome.

Operator

Pace The ahead. of Please next JPMorgan. from question Michael comes go

Michael Pace

or on was on And this Hi, think and icing would I sports U.S.? on Kevin, out was and thanks. much to your on thoughts what view in the plays I based then that of Question just the the of there? iGaming Thank iGaming you. morning. belief the to happens acquisition, cake for Good would NYX betting how betting you love your sports hear big hear love how top with picture of your

Kevin Sheehan

not I a any had before when at know into have let that’s me experience. a shot it. to guys as I the Wow, industry question, you you but had I company tell take complicated came

would because some because in to the I believe one the thoughts I those it, future. receive it, business I about we where we we And some of say, me back want not to be It space, they when well, steps. is a and say would at, would next be helpful. So was I be wrong what on could is by would They this reasons, to interesting step need say, the don’t looked to companies – the people as – list couple, multiples ridiculous. to some Kevin, from did you every need our I too for in coming think up steps trying one be received and of variety that let of moving take was different to that say in from this be and – be XX would or a but that this

to and So along saying marriage because the company, it’s were end the the perfect night, comes for Matt came you way. Kevin, the guys one the And Davey, $XX. hey, always day, me just NYX, when stock was we by at dinner it CEO, a at along us hoped this you of perfect was like marriage funny was our and

So you the and like stuff then with what at and we of that can our see look and inventory have games our have the with and platforms, you products look you the what at of acquisition. that, they with possible art

why hard. bets And And their They like, billion we buy to very happened be this after at other with X able to that’s this is company, we and a basis to last it So as couple exciting have sports So that accretive took amazingly, a of pieces platform. a missing? basis they went real long credit-neutral to year. what business. betting and were an for us – on

state of the lot here. this a of very look overachievers, a when at getting lot a of excited. similar stuff the are And puzzle massive us. the should company NYX I at am there of have we future of up really And that we made culture pieces entrepreneurial executives what and is a is you proven So that fall be, to team into bunch

top up well, tenure tee be this will the to get of a a going to successful very as very tenure – be the we are at successful to a it’s very, think I to ready business hopefully we closing start together. And So, the making year. on inroads

Michael Pace

easier an for maybe one you Okay, then.

there guess of signs And Lottery guys further in Were contract set reasons? Kansas come other recently why things you am you low-cost a I business. the to bid? think maybe won You Were I curious that? to and you won just that

Kevin Sheehan

Yes. The part not the two low and both of states were that we were the we call referenced won in bidder. the formal

that’s industry, the the we’ll fighting look think mistake, if that’s in success are hurts not bottom because the to them way do at intellectually at think were that is Games else we that, very, we do So what for gets bidder get of all the point? to enable thing. against we are look us The kind a of for by because best rated solely the they think right Sci we heap. that the of – just the I who actually. of very with because way proposition, It’s industry, to the as opposed huge say, what formula can is in the the be deals. pricing states one way, anyone well. price to they tools the of I get it, actual it, and at outcome, why their can the the to way performance that provide what to which to is fare and and I high The looking many winning that to And is plain these are when

for line more of drive the the together So we better top better outcome effectively. parts because states a sum is and the the

Michael Pace

Thank you.

Operator

of next question ahead. Please Dan The Politzer JPMorgan. go comes from

Dan Politzer

my Hey, good morning guys. questions. taking Thanks for

more And your here – large are replacements is around where want in your pickup? obviously single to first, or gaming sustainable Is among being a mean, are to up high nicely were widespread by buyer? thoughts touch cycle? as XX%. where noticed have a segment, driven customers on this this level we the just So What this I your you is I

Kevin Sheehan

after at they turn, you I wrong Yes. can at downturn I outside the said When as stopped way. the somebody then, in had be the saw that – from here stopped investing had industry, by started and completely that the been. stopped, as as again in, a since well. coming I looked things, they Caesars economic the after other the of bankruptcy couple players And when after they levels and I

average age to increase. the significantly So machines on started the of floor

but hopefully, an and of could I are So or think the build is enhances is going has don’t improves and as whether the And I The an as the improves that, reform going rate change look here to outlook and rates the foreseeable to the future, opportunity about we help is, for a all as them, but big then, The whatever me, up. improvement. us to it think the improvement. of it’s games in being tax do change, I growth an a past. improvement. been think think step restarting when the the guys. be the be benign bankruptcy it’s economic economy, complete of it’s forward, that, suppliers that The you that other margin on profile employment not Herculean what

better. going be think to little I it’s a bit

Dan Politzer

mix dispersed V-shaped pretty customer Okay. And kind buyer that’s there is driving it is any this the really or of then inflection? one just on

Mike Quartieri

one on and Yes. And it’s what’s the No, God, A Casino a that would games are what the healthy XX% And happens we goes have not. jump to up puts that question that’s And a like in C funny, these then B, my them goes again, and to spending spiriting of their and mix. to that kind games then out. oh come is we is this. really and it’s up, is rolling and thought of God, these Casino It’s floor D really got person I there back word oh say, us say, my when you growth it’s great it of mouth.

Dan Politzer

the Got and It’s discernible side, you as it. one there how point, turning then there gaming is here as your one quarter? is sustainable stabilization? to backlog but far turn And the any data ops could operations, just discuss

Kevin Sheehan

Yes.

machines. important it’s quarter and a ultimately WMS were suspect So is is on not when I and got of towards last stuff, you more skewed have am the together, saw the capital probably I as the machine one expectations a And but what this I what talked you Ballys and the know, answers that I and expenditure I don’t happened, selling this came feeling little lot about authoritative And point. and make sell companies you – bit an profit. you

critically a was a acquisition build you getting platform. to nevertheless, are But a no You fee game from date fee Gamescape, the important launch stream. machine for we there new ops until me, the the around stream,

games, different bit coming the very that number is kind each we that and of of better rolling news the new get to back. significantly Gamefield was Kevin’s the you machines will well, Bond old world coming so X coming what – of getting excited some really of rollout with and building had first a in show and will time, new to on top think really disciplined something lot floor, if of obviously, and casinos we is the opportunity Gamescape, it we and GXE that’s excited I’d based going seen we I to what the then I the opportunities the have some be and the talk stuff rightful will that this that very feelings we’re we move our machines. people think from which Seinfeld of the a good right opportunity forward opportunity or muted that but By think damage the know, key look WONKA we’ve momentum it’s we is and have out, that, about the to as But I There’s back the the field is is have as The as to doing So, we share. going got And we for. and have. a a year of for Simpsons big that towards ourselves years, this with did getting time. we the view WILLY onto that dwarf get that we is successful think the about did the as a I’m should is very something X cool coming, out our stuff thought we on the X.X stuff some of guys year get the thing But other. and are the from are because about be continuing stuff reclaim coming, than it that, is platforms to I the X from lot company you we we little And or not push is the – going the that’s with – based Gamescape got little next it James are right to those and of hopefully, been the there continue unexpected. hit old there this through back That and building – really in

of We a have could to remember who we’re suit. that our lot current but demographic people into fall that missing is,

Dan Politzer

can left refresh Okay, the there on just are thanks far that? the What’s and what us as And give how a sheet, quick balance one, tranches? of to for is there last your on XXXX as quick optionality timeline you that. about one you kind refinance thinking

Kevin Sheehan

thing the are have in the talking we about we of the that taken about obviously things, those type then you... could out give Mike XX%, our X% Are you be can year thoughtful end and

Mike Quartieri

Yes, provision of to X% of look cautious advantage that January make-whole are at the December I mean of market ‘XX and are opportunities The in just ‘XX. us. of the make-whole be to the outside provision available outside I XX% and callable become think and we take going are any of in the callable

they market So going opportunities present and to of we take the as themselves. are watch advantage

Dan Politzer

so Thanks guys. much, Alright.

Operator

Please go The Susquehanna. sir. Stauff question comes of ahead, next from Joe

Joe Stauff

just questions wanted some wanted I morning, Okay. before Good and just clarification. I for to to specific Thank maybe asked maybe follow-up just were the on of on add just that ones you. that everyone.

chunky. indicated more that? Is it more you on any us So of there can broad not and concentrated regionally? us further especially on there was whether Is or the maybe demand, replacements that commentary versus it Vegas the was you you Kevin, strong can any give give versus clarification demand for

Kevin Sheehan

It was really the across network.

Joe Stauff

Italian terms, will obviously, but into difficult you always government government that need payment be the it’s to the anticipate payment? to a mid-December in that lottery a Italian the get Okay. And to would of a there end? be year is decisions, decision, largely the proposed decision XX-day need made period – there Under a prior then and would payment kind smaller to

Kevin Sheehan

piece a out. decree a they this let be that ‘XX then approved that Yes, it’s be Yes, XX-day of go at for to go small end period. and the the it least and blah, piece government. happens, a the a mid-December and would the in if just there. ouple the that then opportunity and a those of in date is then blah, year is blah, would to – is And points They ‘XX there Italian so that further at for bids wouldn’t economics and have has come if out difference that’s

the the them. to suspect for this cash of of reason that’s for part some So, I is accelerate

Joe Stauff

then… And it. Got

Kevin Sheehan

intention remember, sort would least yes, we – are renewing same active same. the at we The the deal And just there. on just be of are XX%

Joe Stauff

renew the XXXX to Right. after years for And that expiration still then run and that. that period Is would accurate? X

Mike Quartieri

Correct.

Kevin Sheehan

yes. long-term correct, That’s this relationship a And back that is goes XXXX. to

Joe Stauff

that quick game ones, the later is sometime, game side, in And you ops okay. James Right, would three then the Bond it expectation launch guess, on XXXX? your I

Kevin Sheehan

are this best want Well, you of generation first course, on developing stuff, games, to are want you team kick-ass, our sure so off that a with – make foot. start goal make sure debate my that’s to my the you get new games these to it of because is is you your as

towards is beginning forward closer the working trying second and where bit quarter. the now, second to that toward we right the to of move we So quarter towards the somewhat looking are end of a are the –

So, it it’s second see somewhere in is today. the quarter where we

Joe Stauff

the you. is And then sometime first would get obviously, pathway shareholder kind NYX deal fair will quarter? end, vote before Okay. just to assume try it you that year put done on of to this the close Thank on their NYX to in a that

Kevin Sheehan

looking early we are quarter. first and Yes for

Joe Stauff

lot. a thanks Okay,

Operator

conference for to would back question-and-answer to Sheehan like thank Kevin you turn remarks. our This over and session. to any closing concludes the I

Kevin Sheehan

guys, the just support the appreciate thanks us for today. and Yes, We joining following.

last can us. I am highly energized by in made ahead the progress and opportunities for excited really tell, you the significant As year have we by the

the and year, ‘XX to and executing on execution and priorities. into we remainder look focused we next of As disciplined our remain

a and as will act next accomplishments have great call. continue you Thanks conference maintain cash our We identifying additional incremental to We look performance opportunities forward generate fourth day. and that smartly on updating to on in de-leveraging flows the focus additional and quarter at and value. we

Operator

you now today’s conference for The attending presentation. has concluded. Thank

disconnect. may You now

Light & Wonder (LNW) 5 Nov 172017 Q3 Earnings call transcript