Light & Wonder (LNW) 1 Mar 182017 Q4 Earnings call transcript

Good morning. And welcome to the Scientific Games Corporation Fourth Quarter and Year End 2017 Investor Call [Operator Instructions]. After today’s presentation, there will be an opportunity to ask questions [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference over to Bill Pfund, Investor Relations. ahead. go Please

Good Daniel. Thank day, you, everyone.

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

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

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

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

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

Now, call let me over turn the to Kevin.

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

and EBITDA. Xth marked fourth of quarter attributable Our results year-over-year operating were of our consecutive quarter our income in strong segments and each business across increases revenue,

team gratifying results. performing results consistent solid see and achieving is momentum the to It team our is to Our continues strengthen. how well and is driving

a top exceptional In business breaking EBITDA line quarterly and of our units. gaming, each our increased XX%. shipments, was delivered the attributable shipment record gaming strength a growth together driven revenue net Let few reduced me our machines share from that loss of XX,XXX of highlights of by by X% segments

games of to replacement over performance, the Canada. strong prior year. very a quarter up contributing XX% grow Casinos the Also including of in a U.S. that, of systems a third instant games’ business, We to X% was across in did leading quarterly revenue, iLottery sales by offering systems our and XX% the lottery by including Canada focus customer increase our year-over-year, helped holiday customers and in customers technology, customers broad the Adding were retail advanced rollout of unit expansive gaming including capabilities. fourth our our Alberta, our to selection the record the with supporting quarter centric wide offer game themed lottery beginning games. our services instant instant this mobile of providing our level shipments growth Following U.S. In a games, we revenue. reflecting and

in today app. U.S. four global one In lotteries an fact, SG lottery have

capability Xth. is new me leads growth the improvement. line another XX% evidence platforms in real And experience. accomplishment, of which and online to a with of and January to gaming a year-over-year, a money to Our reintroduction player exciting best this the along interactive and waitering has enhanced step improved strengths increase is results increase of in segment NYX XX% a NYX revenue continues revenue version Party the of were year, in providing solid and a This player social our gaming first sport quarter strategy casino the content. app. And with in the social attributable own on focus that on acquisition our engaging most a continue in our including Jackpot in increase completion business. leading EBITDA XX% we forward roll took Segment in

NYX many and online growth own in highly that the compelling in we and the at a to approximately we nature the of part million checks gaming. save any to and XXXX, start. completed began off positioned excellent liberalization interest $X.X pushing cost years, sports their XXXX both Most find record annual participate rare are out it track to maturities solid of of recently, our transaction integration activities of and globally, strategic XXXX on current of both believe is billion of building completion financially resulted setting and over well an year we our transaction efforts in a are We refinancing is And in acquisitions I've to addition been $XX following from boxes. series In in also debt one. through rates. will that to as

EBITDA, and which interest is our continue cost and during attributable to also grow cash grow of expected down free and we capital be the smart profitably businesses, to net meaningfully will flow to use XXXX cash debt bring our we our XXXX. As our to in disciplined

Now the let to Mike. me turn call over

Hello, Thanks, Kevin. everyone.

X% Consolidated As increased our XX%. revenue Kevin noted, attributable were and results solid. EBITDA rose

focused on growth our line improving top Importantly, in processes disciplined to segments priorities business enhance we and our experienced our and growth strategic remaining margins. each improvement and and by streamlining drive business of are to

turn operating Now, segments. me our let to

quarter X%. $XX Fourth prior million business. revenue the grew gaming by our over First, year or

improved AEBITDA points a and to result, margin XX XX.X% as million. by increased segment basis Our $XX AEBITDA to

second units XX% prior half new and XXX replacement in Illinois. shipped we X,XXX a new half X,XXX from the X,XXX in strength casino expansions Canada, ago units, our replacement X,XXX new compared in period. newer of a X,XXX selling breaking more U.S. shipments XXX down we units XXXX quarter, the As was record totaled from revenue The gaming of second quarter Kevin ago, coupled increased down units Overall, and year expansions XX,XXX is XXX the the also reflecting primarily third U.S. shipped units of units units the increase XXX year. total fourth a rose the in with the of from average replacement to openings or units, in quarter shipments. shift units in JXX. up and our units Shipments from XXXX. of for $XX machine sales fourth openings noted, globally. this of total resulted units in TwinStar increase our the including International Canadian quarter as the Year-over-year, machines, for new which and million cabinets XXX gaming to casino in X,XXX Shipments casino XXX price VGTs like year the fourth influence reflecting X%, in we positive for to totaled XXX year’s up quarter, from a

and performance as decline sequential the strength by expanding we TwinStar floors of higher generated and lien casino JXX the on quarter strong portfolio of international favorable with throughout continued replacement TwinStar XXXX. of shipments and ongoing the the platforms. demand on machine our the gains of strong we While the on Waves cabinets, in Dualos along particularly screen in reflects noted our original cabinet, the the Pro shipments, performance, performance a expect strong Based other sales family locket our gaming on TwinStar XXXX, gains innovative content reflects continued mix dual ever being solid the

openings including while in a note are quarter. a the business expected your couple XXXX openings, Tribal for you of after in last would models Asia, the casino in shipments State large review as I the as gaming that reminder casino several Washington in new iLani' to However, just and quarter of Casino the new year timing occur the properties first included first

and In expected had of to third numerous fully in Rock of share course, in also with quarter. expansions whereas share to down casinos that’s casino Springfield City openings rate half fully will quarters of get of XXXX, we operations, our about put during And gaming example or new large that in experienced XXXX. the fair X% the operator commercial Hard the we Atlantic To get the the openings Massachusetts our year. fair the second no throughout MGM year-over-year. expect For the expect that we of tribal was and decline revenue within perspective, occur third

remain a largely and of The We strategic on premium are units sequential on wide-area our quarter basis, participation was base executing reflecting in machines our accelerated install on down units the improvements. making XXX install and base. older focused fully progressive of gaming replacement progress

high cabinets. of continue a we experiencing of churn quarter, as the games are even install retired, being in As we noted units base install relatively last to more older level

units new QX. remainder XXXX, new new pace by continue Casino of TwinStar including driven cabinet the introductory end JXX replacing We older iReels BXX of extra the of the on only the launch innovative curve cabinet large the to expect floors products, over steady and with our screen at

pace increase hurricane in the offset install million several systems With and associated was the themed we Revenue of system are Caribbean second in being unit, a offset primarily an the in was table units introduction of incremental unit than openings, decrease for VLTs WAP year-over-year XXXX. Maria and year-over-year, higher essentially the X% James machine year nearly and for $X premium $X unit Gaming year offset sales basis to other was products. per revenue was level related decline of revenue games, in from Table Asia Greece rollout increased participation of install units million VLTs. units the in units declined year-over-year. and more average Bond X,XXX performance record a quarter of approximately expected of new compared product than other and launch increase proprietary the our reflecting decrease from in result which placements the year-over-year period participation daily of $XX accelerate prior of more as damage. to essentially our to million base base million reflecting expect revenue half the casino Greece increase largely as sales The flat Alberta. highly daily average products flat with mid-year, casino XXX ago beginning revenue anticipated the in customers, On the offline of the the yielding per $XX by sequential a from lower table games new in by a in impact other unit X,XXX the revenue

system first The XXXX. on across out we through province to went casinos and expect casino roll to XXXX XXth the to the live and continue November

system In reflect X the continues I in iVIEW out point new sales, success would as of out Ontario ongoing addition, display 'XX well. driven by XXXX the we revenue unit. through roll to continue hardware also new that the casinos to and our to higher

Turning to lottery.

ago multi-state included U.S. a grew revenue AEBITDA Instant quarter, as to strong of and XX% revenue quarter the $X sales In year compared the Our new growth $XX $XXX GOLDEN response revenue of The of million. to U.S. game, related WONKA as year-over-year partially the to well solid higher theme games. license to reflecting games, lower well TICKET a X% reflecting WILLY mix strength or was million or profitable record quarterly instant games more our globally. revenue holiday XX% Segment revenue as operating as the fourth grew revenue a up X%. increase cost. million

Our year-over-year our at blend of help aimed lotteries and X% helping grow lottery services sales customers. for drive products retail increase in

services or Our international business and in Year-over-year, reflecting by revenues quarter. multistate increased U.S. the due that million higher X% revenue Powerball to partially jackpot the large fourth revenue increased, in the Millions $X occurred the Mega year-over-year.

call, was term. for nine the the the years related segment with same being impact within third of A with quarter and storm joint Italian Games results or The LNS, pro-rata the maintained fourth We when total our estimate in concession in to XX% million Rico AEBITDA the €XXX quarter. impacted fourth Win the $X Scratch fourth share same Instant on noted renewed heavily concession next venture activity as the million. a quarter was our fee the accomplished at the the lottery Additionally, cost the during approximately lottery fall in also earnings the during was hurricane Italian loss at milestone in key of quarter. hurricane Puerto total

same In supply remained XX% being supplier, with contract preferred tickets. addition, the of instant Games the the the providing Scientific

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

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

keep By completed As paying that players. the and we to significant example, continuously of engagement player to enhancements app, to working the our re-launched quarter, player Jackpot an in we Social enjoyment continue XXXX. of Casino the the app established Party of important base enhance first during app growing our quarter

As gaming business XX% social was up revenue a BXC result, our year-over-year.

increase itself in from by manifest driven in earnings cash performance flow. XX% increase primarily or improve our quarter cash the non-cash Importantly, continues was and fourth Operating incremental to after $XX million to of the increased year $XXX at adjustments. XXXX $XX higher net prior This million. flow million earnings

of year, were changes million use only and quarter, capital were the capital the million fund $XX in For in of for aggregate revenue. increase despite million use $XXX changes working full fund in working $XX

quarter, NYX the transaction. million of million XXXX worth drew million fourth acquisition the due secured on issued securities for the senior $XXX we largely later quarter of the revolver, on and During of the the $XXX XXXX. We completed our NYXs during X% X of and acquired $XX January funding fourth notes

our initial Italy’s share we Instant addition, payment and the In paid pro-rata of the of $XX concession of Win during Games million Scratch quarter.

our we XXst, to of we de-leveraging billion continued XXXX, net December in efforts. had Although At significant make progress debt. $X.X

upsizing series B refinancing included year LIBOR reprising to trailing XXXX. declined Loan debt to plus basis LIBOR And XXX. lower times attributable end rate and we X.X completed of AEBITDA noted, a X.X XXX ratio the net EBITDA plus with Kevin These Term months transactions. times Our XX points transactions as at our from recently from

cost our senior redeem secured the net Prepay being European proceeds associated annualized secured and our offering prospect also these revolver and of added our our notes senior with $X.X with and XXXX. these points rate unsecured annual -- billion due bond to $XX interest reduce senior are current approximately will due and and secured a We fees notes. of transactions notes from average on expenses XX eight rate cash with our lower swaps, to X% interest by interest transactions. years senior higher million used our rates an by had basis. basis of refinancing rates XXXX aggregate, pay The In portion priced cost first attractive transactions, at the on approximately premiums interest accrued along X% the the

note Additionally, to out steps billion interest would callable potential conditions the our our senior XXXX. extended the have depending cost maturities to our when market that to from take become Xst. XXXX also unsecured notes we $X.X of through reduce in XXXX XXXX December on I XX% further additional on debt

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

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

[Operator you Thank Instructions].

Union The Gaming. first ahead. comes question from with John Please go DeCree

I so like half replacement units was competitors refreshing a refreshing you we've wanted the you the talk bit about to quite some an have start little a more their And looks bit in the I if bit floor historical first heard accomplishment on color you and one quarterly customer in sales the little customer quarter back a their over and of than for of spoke floor more least they on particularly seeing what guys, you're stimulated some could at a unit replacement the a large of same. their if previously. about lot demand. than to XX,XXX, what’s about, be that more wondering bit 'XX corporate record about increase, talking

see has that be enabled XXXX. as fact the see continue games currently operators momentum take coming we with the we out of behind investment now the machines. we’ve The period back sense being the right at the in us and all we through that looking that now, have the and out way activity can was that. in industry is that with and the And same a we seasons mode. through very very the new been experiencing economic see things us operators these that place go can strong. great protracted the we're you I right now are other And to And continue, we’re with way bankruptcy seeing

the position our optimistic very of will market. situation we’re our in where that be So vis-à-vis

you Kevin, trends Are in the more more of a end could more up. customers? your replacement. bit bound your little it Are has for one and a if process event strategy enquiries is coming occurring looking Or going little getting they been getting seeing from or similar than on sales follow you performance more I a If other? and more? to bit out

they beyond games. than all Well of we’re products products I the -- on all out some are coming that in they great and helping at excitement higher this just are bit momentum more how also sales a good couple starting pavement. XXXX of we rate that. to the And think we down and successful beginning of the the the of those games could new see in have have casino that economics I of And of them is would see fact our and it’s to the a us that in coming are existing out and that say of out obviously, in guys a And play always change. the some and we the be

So to an that’s have road enabling us well. easier as

and combination sales products. teams So I it’s think both great of a good

where more unit per I the basis. year-over-year flat relatively op on side, If could on one quarters revenue some the gamin premium two has consecutive stability shown lap

I revenue stuff install talked older you the replacing on games could and the stuff wondering some if some GAMESCAPE about you when go process floor? of was to you into the year-over-year And some how positive base basis might think territory of this the the remarks I about new relative through a on in inflection upgrade accelerated well per GAMESCAPE is you color your on some unit as can the with doing point see older talk maybe year? shift that think But the you Mike in you’ve of that if see stuff.

gaming sales well. have game in the everyone You we position major part got as and knows and to just about was market phenomenal four systems there, your we share games as business, the one first table strong a with pieces have the as and And of real our business. number and the whole remember talking gaming question

the and of And three riding during the have on I ’XX, big X,XXX pieces GAMESCAPE new four ’XX, launch. on talked new very And past for in and then apps about GAMESCAPE we we been launched game ’XX and have today as platform several had we success really times did So you as not underinvested were has and overdrive. have a know as a XXXX, installed. are of platforms

real Simpsons XRM I over [Science a and phenomenal And the the is news coming as and effort fix signature saw would now, our behind X.X though So it. on Bond going that’s out Mechanics. GXE, out between good on mean game games the quarter all and be take to was the WONKA, significant three different at you games reality success James WILLY a are Gamefield launch good continues and time out. as rolled the and have and be games the amount to James an to the are ops it’s as new The iReels we Bond which we O] brand in on games and second from well to got there and fact Blade under we’ve on a a of platforms path

out a third got the So three Jumbo XX quarter, then with PRIZM XXX. second we coming our and the in new things in quarter and game then

and three as bond we’re So the games continuing over still and there fourth massive putting quarter see clearly juice through is half we games efforts the in second We that. of into loads this be is riding I would then ride third thing, And the new well. which we’re see as that then this into that a light let know quarters of couple churn that the the effort get efforts with we’re through. good say and the for extra we very would of and navigating light, but

as just couple going right this the through to in quarters with I the new navigate be good is a we But of story through platforms. next think XXXX.

Thank you.

with from Our Barry go of ahead. question comes Bank America. next Please Jonas

your discussions then tax starters, maybe love how, longer enjoy. a I that For forward. is Thanks. payer tax this to wanted Would to to love business. around but talk to reform. influencing not get know specifically just with they will thoughts any the I cash now A, about operators, Mike’s the you’re tax going impact deductibility term talk about would on the side, on see now And CapEx flip the how reform I influence if financials

be which million us the flow was overall an have at rate. the tax the in pretty taxes down is lower the reform books look more the from to to neutral than deferred So that a the revaluation five $XX sale holistically rate the the we When through line, provision statutory next about it’s benefit quarter, XX% years, on really from of over to which to us. much basis, nothing the you going

CapEx detriment of by some be pretty have the of is of the interest to do you loss deductibility offset the much of So expense, the deductibility the which of going spend.

major back the free other So big other each actually a U.S. just the manner. to being about those Then component for earnings two in repatriate able items to wash out tax us.

the five your $X.X NOL. billion we're my us. loss, pretty your part this Given look then were point, the the CFO operating would products. years does what advantage I more over neutral using fact net out already question, be that the it to And an to I of to have of it’s company, essentially buy tax utilize if at operating second of to we back money granted But free at bringing that next we this

going think be definitely to it’s So for I a us. positive

about little understand. bit sure a to ops, make want talked game I We just

reduction quarter base about WAP This and the X% on the premium. install for sequential of

this -- the it through overall older for just basis? wise the the next segment you're of are the Bond more a operators games in like But it newer just function James quarters. replacing still market just Is You're timing or issues real a with that of new on games is come games. issue there for some is couple waiting to

are the of look their the those performing. at report games day, how of think at they end I card

coming around all of got old, around games doing putting that’s five we’re orders pressure coming six stuff on the also bit initiatives a lot we right you’re have in of the looking a quarters. that the And older are and bonds energy launches. we’ve at years that so exciting And the little out that but they’re new

the going to those. to of waiting the both as of lot are So of or And casinos are that’s you’re the stuff it’s now just start whether I of of coming decisions new they all whether a out. making momentum said half because a second year combination individual see

me. last just from one then And

You a just in side Can Brazil. as in the acquisition what’s on there gaming small side on maybe potential talk made maybe you opportunity lottery about us privatization the well? update and on going

the first pushing -- part. market. I’ll now have in successfully we amazing Yes, it’s smart this when games were product why our what those and there. was and to works take into all not it’s but makes that different a came to were be that to to do work in Brazil, I was down first very a me with stuff, of entrants able that mathematics in that we we successful if so I gaming developers as formulary

in to opens be was that market it markets but enable we’re us of today. to product helps that the this us if way successful right eloquent mix up, getting other also So in

think Brazil. the at regards a perspective for And part to business I your in then through from in Brazil, of market ticket second on the the question instant looking the come RFP we’re to anticipating

business. get and hoping submission that through that we’re to end to stand QX by we think our I into that ready of the submit comes

next Jefferies. Our comes with Katz Please from go ahead. question David

early a a is which are week? it betting have is What would and place? Meaning And that any respect betting specific NYX. total it with for today sports operators an should with this A, the as are would you the interface? specifically sport pieces could capabilities I think NYX. and to offerings come at love understand in What casino So solution operating for everyone have platform? down user point, better next I Does you pipe, operators offering begin as or to

a offering product through to available NYX the is us now full suite. that’s So

not that interface. the does also supports analytic but the It So system actual user has the that backend has tools it. around tracking the the its as it everything only betting all process, accounting,

basically allows our fully customers operators it to are to those So book who operate the functional be system. sports a

sure of say that this book make only sports The I’ll component of line should Or I a suite full of reiterate. business operations. I

it’s times of no different instances we in a up couple book. So the actual sports of to be going come operator the are

we will do received from customer not questions how you your your be around the I that effect taking bets about we're others think to get So actually all know case. from when individuals, that arms

provider We the system to basis the the itself. BXB on are operator

talk if bit can the obstacles can the And much which at you up? systems systems business little And benefits there or those a what what that? I is, for essentially you you degree And getting are are about integrate am to likely today. that that or casino betting casino solution, any offering with to your sports easily should customers more come more favor to opportunities have

the sides But are NYX this. so have And may a been own on gaming the to I with person side, believe we of not state a case the handling acquisition, we're basis, think lottery be we platform, land working both out this equation. we because only the being doing by that we on state our believe that that’s coupled the and would to efforts logical be on

And that by because little continuing the that pretty was a release a more about just as eight Alberta. quarter in well revenue big bit quarter the ask the next over how know commentary you that and systems business, can four And Ontario the there lives some or qualitative to of and year, the the business thoughts say Can contract. the around Turning roll us give about the just if the obviously go I Stone can quarters? announcement through rollout was in remainder was driven of then

out it, out going the gets not rolled individual provinces. any that I of will next, call anticipating a we're XXXX. say, those spikes would it go of within to of I would large mean be casino each to locations out within how -- the we just of I because quarters It’s did process through any eight coming two

So there there. here might and be a little bit of bump

revenue of process variation only has the that that So be line quarters. making the casino the don’t relatively but installed, a ready that you would over online, on But components be lost quarter-to-quarter Turning is will of it’s see once to where the and online, that straight have come next of lumpiness of be smooth one There operator to bit that just with see much complete problem a we it important kick to newer be shouldn’t maintenance we in when some like trajectory are But sure at as some fully the not little the resources be it other or these eight and future. that done, start fact get in and as you lives. going come their out And dedicated be are that’s a timing variation based going think more everything the this whole process casino go items to the also which well. Stone not will line locations straight will I point. a maintenance said

follow the that spike? Stone If quickly, that to in deal, reported that expect And is timing I the a Turning Would up which of million you quarter. just it on $XX.X what consider you this be? be can is the to of revenue currently,

was QX initial itself. Usually the the live in for go system the initial

revenues of as far goes bit quarter. would a spike the that a So be within as

when they We’ve spike systems each with of got the in on ’XX ’XX. big other similar and come

go as this on customer. the based of as at on sign Turning the timeframe at far Stone so live specific And point, this recognition have the off point a the by system don’t we

Steven Our go Please comes question ahead. with Wieczynski Stifel. from next

ask priorities. been questions here asked, Most you just around have allocation guys of but my a to wanted capital question already

firmer seems point at where much to business We’re a the on now footing. underlying be

a balance refinanced portion You’ve the of significant sheet.

how thoughts you’re here? of Kevin thinking your to NYX, hear curious on allocation about out going coming forward Thank capital you. Just

critically job continuing one improve debt and this it’s our that net organization EBITDA. think to is to important me to is I to

you’ve premium, a some But that’s think We’re much this at much once the going at XX% through to you towards of down confident of along taking we ’XX a done. is And dramatically sometime with some out that completely has more your different be go XXXX. goes on where feeling as with the financing I’m know I frankly, as comfortable better deal in XXXX, formula year. models, then we here we are early, good prospectively about run economic big cost turns the dramatically XXXX. and that at very out that’s sudden to it effective the one EBITDA to you our want cost interest got the savings. of same net time you come momentum very we taking some just with the cost, XXX have look massive could And then the from make And that and where of end stead these continuation done later more getting as news at the a XXXX. the year. we but When refinancings earlier continue with noise interest debt of debt to And where you the rates are end improvements that focused to of quite as to those I’m because and down Mike beyond. alluded end went XXXX all this sure of for And to the of different,

so say first is capital the last or when done the months the into as XX get year. that transactions seen, discipline I would you accretive you’ve in been The the over on we’ve allocation, have that all other acquisitions

even possible. maintain to thing a business, and buying spending what of I more that’s there opportunity being EBITDA in much are in deciding net good and making more continue say So are you’re of we the to you’re the just and our say a the improve debt ’XX kind ’XX money what side as your returns enough initiatives on business, there around the to would on we’re focused in and EBITDA. be was lot is discipline, areas prudent the expenditure or for they I rigor because last that a would And And if capital things. smartly sure where of building as business do

it’s business a really the So capital allocation, operating at or the them, all whether Scientific there moving parts direction. right Games is lot of the here in are all moving of but

way the really So are I’m things about going. excited

Mike go ahead. Craig-Hallum. with comes question next Our from Malouf Please

update the am And If if I wondering with your you on know talked you’ve I strategic just potentially some thoughts. could focus that interactive past in an the Thanks. you business, us division. just about moves give could I quickly that on

experience and and the a us we that’s and value that Really of as to the for expertly. is a keep are we're quite be at of But expect a opportunistic down, in synergies head so happens is experiencing business growing the we listen business. end now line possible. continue we’ll is if in to been to continue there be doing with run us just there And we’ve growth run one business lot to as be of business smartly right have course, and rapidly the smartest EBITDA job certainly creation to making that would our to And now, the day, something right with carefully business. really top thing successful that the But it.

give obviously regards with bit saw color pop as little up level Could go in bit XXXX? SG&A of cost. quarter. on think or overall then us And you where the a unusual we We to is you fourth that and commentary into at that a level little

look you is couple when of a at So it, things. there

one be spilling QX this into also forward which so some QX bit higher wouldn’t the spike associated ago. incentive is on would quarter, year a normal in cost rate in with is what's run for market year a have There over the in comp increase go normally in So October comp a some GXE in a year-end of basis. the versus been there QX a was that bonus with our September of programs, versus a

you cost the SG&A which the have just the year those of restructuring prior as, actions think a line. into November some down remember, if prospective from well that in did also we charge you took, I moves As

looking probably with the a is rate level general reflective that, based on think slight increases first CIP type SG&A more basis of I run a rate across at just go quarters on for forward view a to the a is on basis So uptick what run three the board.

And we look betting? the do sports then And a with regards change for frame into indeed to CapEx any color there XXXX. in specifically need if of work on legal as get is we CapEx any that

that the of triggering model. some below. looking that what into where the we look range, to now year ended slightly a if we below the systems, Maryland up, was we in Part to at -- if XXXX look slightly lottery ago to contract of protest, if guiding CapEx, of the spend So low that we CapEx were at end not were you because the delayed of the which

on been a So cabinet of CapEx at well to as that for little that the throughout rollout game Kevin call. has continue talking more projected is end you see higher we the on will bit there point, this being 'XX as of the

to well. CapEx We don’t those have important make have for budgeted We that’s as cabinets completely so But cabinets casino that of orders the it’s higher that variable. for a amount spend we out note floor. on and

have. type we Now it’s it But us of downside other to that. some believe really protection significant the number. hardware your to of on as that more there with Getting and the spend opposed that associated don’t regarding that server a yes that sports back rollout will I gives be else CapEx your betting, on little anything be spend bit point technology will question CapEx type and

Bannon Please from Our Chad Macquarie. final will with be ahead. question go

lottery I the things. wanted side to start of on

with think take that making in expectations the systems? you’re a business XXXX to and your nice you did this And Can lottery does in CapEx had And the I share You smartly. CapEx. you’re Kevin, know you a spending new win about lottery quarter mention system. sure on us require help some that opportunity

if think right new there how for about RFPs? you ROI So Thanks. opportunities do the there is the and

Kansas the the to on that you benchmarks our provide is belief based ROIs. us choosing that And But mean us. this value certain done for is -- even single that being they benefits we based whatever our thing see the states we us I their on and whoever whether and to on comfort bids got gives the key choosing every bids, meet based all ROI look technology our at, us. incremental of not it sell its stuff ingredient. It’s low state

spring to same for that help this starting broadly And improvement. think you’re if grow. like see then the interactive to vision given But us most you this year if grow, should and think could looks at But revenues leverage us you’re or leverage, about if just to pace just we your about up revenues think continue that the reinvesting above Thanks. operating it going that margin expectations. people’s you that see segment. talked BXC And to continue I help back business, to about still

correct, it start what will I Mike correctly. me say Let then don’t and

a only imagine years side. part few As group of as in games a you new can when started were bigger expense a there the spectrum. games spend smaller this added BXC we’ve games, trip of And the the few marketing becomes on a

that launching XXXX about We excited And lead improvement products that them. do should so to and we’re in overtime. we’re have continual margin new

improve. to So would continue will the margins that. with that account taken has But be to that into I expect

last units in being the impact able impact are to in offline quantify for then know Rico those you I were units And me, quantify fourth the from these And service? you one X,XXX with lottery. for question. Puerto quarter the Caribbean, just a the back that housekeeping offline? The the Are

those the and say Yes, is just as recovery process coming island entire to Rico of a so speed. then Puerto I’ll online to back units gets up the going be slower back

units There So I back going growth -- it’s a not don’t course throughout XXXX the of today. to going is not just -- ’XX. be online the slow are

was the gaming, it million. goes As far impact $X as under QX in for

material lottery. because was gaming what it didn’t hence the of operations it to for So of the we call as out,

today. joining everybody Thanks us for

offside our by that It’s tell, the more of year senior and really exist just our improved growth. few build grow, we By deliver flow the can opportunities products We’ll meaningful development, also cash to years. session. innovative opportunities I the ahead importantly us in additional top weeks, that focus getting on further like strategic for focusing we've energized our power line of last strong that progress our leveraging. us. weekend In our the results, consistent leaders to you an are and In and a location. developing As further of and second in meaningful turn we’re financial is for together grow, made increased performance possible that in technologies reiterate quarter and discuss closing, order coming value would on the by provided fourth enable helping momentum the explore customer us evidence highly for to performance

continuing call. we accomplishments do all so, important remains in continuous future processes conference to our execute bright. on and XXXX, on quarter a the performance in to first have I'm As to our forward grow We we that and emphasize priorities. additional our continue day. nice you next updating will look By Thank on act to our did revenues business confident smartly you and

us Thank conference this you all for joining today. for call

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