Light & Wonder (LNW) 5 May 182018 Q1 Earnings call transcript

Good morning and welcome to the Scientific Games First Quarter Earnings Investor Conference 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’d now like to turn the conference over to Bill Pfund, Vice President of Investor Relations. Please go ahead.

Andria. you, Thank everyone. Good day,

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

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

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

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

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

let me Now, turn the Kevin. call to over

us. be more couldn’t for pleased I Thanks, first Good joining thanks our quarter and Bill. accomplishments. everyone morning, with

attributable top success segments year-over-year annual XX% the reduced created February a of each in a our in debt delivered of EBITDA. on business culture. increases interest reflect both XXXX. we attributable across and and of compared winning building on acquisition, NYX to yet our revenue cost refinancings, Collectively, the strong series were results growth third These have the and our which we've successful refinancing is meaningfully EBITDA. cash results of quarter the in another marked completion First quarter steady The line have

processes our maintaining margins steady cash and while our momentum steps line we growth taking Our laser will are simultaneously flow. top business driving operating focus continuing is that our enhance on improve and to

be Interactive CEO. As we announced SG taking we've with the and and last as will over of CEO proud Barry I a of will very Games currently the be what Cottle night, be CEO over of staying Senior as President Capacity. Scientific in several last I stepping company Advisor accomplished years. on I'm down will

Our company of is stronger our than each across and ever growing divisions.

the team, to at the lottery. into for my and forward the entire and I and of future the NYX hard as we commitment. as and mobile and acquisition Games his Games friends industry leadership execute digital has transitions platforms, their business, Barry the efforts at to digital new & lead work Games and Scientific growth extended look rapid entire our is MacAndrews to Forbes, Games lead my executive family future. a the colleagues Scientific been their great partner to thank supporting gaming interactive the continuing Scientific of in gaming poised With Scientific want to while I and

results. So call let our discuss the now to turn quarterly me to Mike over

Thanks, Kevin. Good morning, everyone.

strength segments, This our points We in continuous and global As processes. well. all the offerings experienced XX% from as improvement our growth noted, increased AEBITDA comparisons diversified Kevin streamline XX% our business of were product sales. revenue and ongoing gaming our solid. Consolidated to our results business in some efforts rose to our despite portfolio tough

our let me Now operating segments. to turn

business. our First, gaming

over year. million the $X by prior grew revenue quarter First

adopting property remainder business we revenue impact to XXX in profitable the the Our experienced million. AEBITDA decreased margin basis in demand content by on for $XX of improved of for and U.S year expanded Canada strong in guidance. Pro openings new quarter. replacement from growth Shipments was replacement the more the million with to only slot two $X and of prior the units new machine new our and TwinStar reflecting gaming Wave quarter. of from from thirds Gaming the by about ongoing X% totaled Revenue XX.X% demand of lack AEBITDA segment casino rollout openings. last cabinets or year's U.S enhancement sales The offset increased recognition a points and quarter first a compared first In new the the the the cabinet. expansions and mix XXX Canada, units units in X,XXX family by XX% driven increased the

several State first of noted, large from of new couple Asia. and quarter included Tribal including we Casino shipments in openings, iLani of a As casino the the XXXX previously the in properties

the period. the expect XXX for the selling the units units Rock was Massachusetts. second largely the compared the XXX the Shipments City Springfield and for in up quarter a totaled will Year-over-year, casino JXX in totaled X,XXX shipments strong our shipments quarter, for from Atlantic price of new average include cabinet. demand Hard reflecting units favorable year-ago X,XXX ongoing Internationally, mix units shipped year-ago. TwinStar of quarter opening first We a openings to for in the X%, products, down particular, MGM

and unfavorable along TwinStar and revenue in $X.X to TwinStar We revenue. shipments In solid TwinStar recognition to was the of family QX. Dualos note, locket year-over-year Pro performance with lien adoption driven revenue $XX million other The Of or continued gaming had the of experience content revenue Wave dual and gains cabinets, a cabinets. on demand operations, platforms. original expect JXX billion sales impact in X% continue new down guidance replacement the strong the we by XXXX, strong strength continue of by to our of the throughout for portfolio innovative the

would been For to revenue impact million. in XXXX QX have the comparability, $X

XX country premium recognition flat, jackpots reduction basis, to sequential cost of lower installed unit. largely revenue the daily daily average affected by units casino On With year-over-year services. and quarterly attributable no previously which while February the the of January classification weather to This amount impact results the compared guidance correlation a average revenue such revenue base the much to now winter with classifying as by to AEBITDA noted adoption improved increased in new revenue essentially income as cash offerings. of and $X.XX was our improvement has treated March year. compared WAP reported a our compared harsh casino believe in are progressive or change We conditions to wide-area in or increased meaningful regional visitation prior units on operating in of flow. the participation GGR by a We per

of games including our We cabinets, are TwinStar the BXX success with GAMESCAPE, and newer pleased TwinStar the iReels.

floors. product of launch American theme units surrounding casino very older James the throughout strong. North The newer anticipation our replace to continue We the Bond remains with games

$X merge. contract will cabinets half improvement midyear, to as July year kind Revenue participation June, basis of a The with unit million our basis. reflects year-over-year in are when the Ladbrokes expected down as continue sequential they previously anticipate second the July prior expiration Bond certain and under from And install the that timeframe. of that the U.K sequential We -- to of Greece. on content reflecting on the sorry, James placements of largely both other increased show well rollout be three the from units a was growth yield base quarter The XXXX. in quarterly on units Coral decrease primarily

shops required Those exit to might the they merger, they selling certain a the their with retail did were condition to to have existing expired customers As recall, as which supplier. their and you chose contracts of of by competitors. renew

end the total likely -- word a around everyone in is before the not year-over-year represents or Regarding I sorry been of system games year-over-year and yet, the of increased of official the with our will shufflers on driven even been XXXX and display install require Alberta announcement an a products would June of Gaming new products, units. strong provinces above official was other innovative by that several made growth feedback $XX.X practical and an is there's shipments proprietary systems for implementation XX%. months triennial other impact business or or along review, The before or general that. average may May major $XX of million player U.K decision and customers. there's market to less is talking related increased iView revenue than shufflers sales new early sales ongoing table that that gaming not the new with expectation revenue. hardware Therefore then revenue remind of to both beyond XX%. X% Table products we're the XXXX. about higher us base, our growth million to not installations The coupled interface Ontario in casinos primarily be X increased

we throughout in with will would XXXX roll our new We revenue to XXXX out maintenance and normal and follow-on the the into throughout course, on will XXXX. to those Alberta and into In XXXX. Ontario and additional continue 'XX expect contracts grow associated casinos system

first the $XX as more leveraging revenue standard. our the increased WONKA as year-ago X% while international knowledge. lower of grew revenue games Turning by million increased our the the quarter X% the of Golden X% cost. of and quarter, the to Segment revenue ongoing new In our or and revenue effect and $X lower game grew well was revenue to favorable success the reflecting of AEBITDA an industry-leading XX% profitable U.S., million of operating recognition adoption from multistate Instant compared up strength WILLY reflecting our products lottery, Ticket revenue inclusive and year-over-year. instant revenue content a library X%, business mix

contracts recognition percentage the cash of it a change. of is economics our has sales not -- guidance, not paid we've and the does that arrangements. retail sales. adoption for accounting revenue we get The That the underlying point on new flow of With modified

reflected We now in completed delivery revenue just of standpoint, for to tickets sold XXXX, we of as always the get tickets controlled new made in pickup time impact multistate driven these of that XX, distribution $X we new at largely at an our to earlier to is increased the is by was has reflecting first recognizing ready POS fewer just from services did product associated recognition revenue revenue a in of and the the however, have. lower Thus revenue made the XXXX. business, bid revenue segment of payment shipments year-ago. million through the of $X The quarter channel prior the recognition contracts The December continue loss we XX% revenue record adoption lottery services From the lottery for or the in paid in but recurring sales, a a decrease was maintenance. from increase largely as customers as opportunities. of by due in we an growth will partially sales increased warehouse. offset revenue, number at higher the increase is game customer more tickets international guidance. with Within systems business international than were In offset shipments million of The retail Thus revenue year-over-year. by our those are to be guidance period. our increased partially

to experience revenue continue increased XX% segment, segment, which now reflecting revenue largest Turning the portion year-over-year XX% AEBITDA and Segment, our had previously been growth. to a and $XX of it's expansion. year-over-year segment our standalone interactive separate increased Social to rapid Segment million margin

extensive new leverage to on to enhanced the gaming content Social to the revenue a ramp experience remain Casino the Jackpot maximize launched our driven focused social paying increase We to customers casino revenue players. average continue We app number drive We platform a on of player in the during seen paying Party and technology growth. library in launch. the continually the improving post have player quarter by

are buying another city in equivalent for features styles building. app in in April, fact MONOPOLY are successful we and exciting point with successful portfolio compared simultaneously game to of indications early America slot app very the trending a markets. record several and innovative new level in North comp play, play Slots other time Casino an of in mid games a our in slot global [ph] other -- added an apps. new The concept Casino Social to of The positive reflects Additionally, several launch with our

uniquely new our NYX, AEBITDA. attributable results in guidance. generated legacy revenue in migrating $XX sports We The Our moving and to recognition online million a by complete forward $XX gaming turnkey customers casino flexible standards accounting provide to and new Court. is overturned operations, revenue to lottery NYX suited we U.S PASPA Supreme and smoothly digital the impact BXB with integration of segment the partner are for ultimately BXB system comprised million and our and the of include These believe, is wagering.

experiencing a with into translate already significant quarterly State platform the wagering and Our event prompt wagering The page solution present re-casted base. to to growing there OpenBet [indiscernible] To our potential sports that interactive sports in end the in segment XXXX strong market we're leading of working Jersey further included XXXX sports bet the ensure is expand New approach should smooth world's worldwide operations [ph] and regulatory you information to digital our and results gaming comparative add is a of like and particularly segment earnings we aggregation strong the and gaming to I growth. are the money portion demand is our of -- release our of in the social also as organic an content forward. historical at receive going supplemental will a for customer content that well. our information that a and strength business in would real The we appeal. to

Turning flow. to our cash

changes net working not We offset in gaming million include our accrued the XXXX capital transaction the of capital the so several to changes our contracts. impact all due working by and its the of and receivable recognition February revenue associated $XX refinancing, in million the going prior the items fees NYX other to with change related guidance, refinancing net to compared capital revenue details. $XX recognition acquisition of a the refinancing, liabilities the NYX timing impact of and including last our new POS strong higher These details conference we of assumed of segment partially As February had call, acquisition, lottery collections rehash new our change. reflecting and adoption year. in the assets The I’m million working our result interest the successful of significant $XX and February to the contract were guidance on adoption discussed of

to improving debt XX, acquisition. bring our At our and a the to 'XX. the as However, cost XXXX. success, -- maturities million. XXXX, current rate costs same effective is partially I extending XXXX business March progress we've continue cash credit at we annual 'XX interest and offsetting extended and have $XXX to in of the additional results. rates, interest related financial movements and do point due market we've interest a million general now cash time, includes had run and out out cash our to want interest to in the NYX made to rate And bring $XXX approximately comparative on in In portion down maturities was of This our the make

Additionally and meaningful we further have to later a XX% opportunity the callable become when maturities the extend reduce cost due on year our in XXXX notes X. interest December

open-up and questions? business before remind everyone we firmly focused our that efforts. As anything should accelerate you lines capitalizing in a the ahead looking our flow very like I commitment expected throughout further attractive on to improvements cash our would to to grow in year-end, position growth executing that XXXX smart and remains and to XXXX, leverage. operating be of Kevin drive would result opportunities summary, reduce a we add deleveraging In on for improvements free

Mike proven systems company leading friends win Games all in technology. Scientific As and sports continues. platform established results our capturing success from the a lead processes our betting quarter privilege are we're our our can Group, strong Thanks, and with the customers been and ready sports growth every in you our our wish business betting SG across continued continuous this line and global to continued first colleagues in to with top Yes. driving improvement Digital very momentum help future. at my We're It's have growth, segment, new businesses, see, I

question, the operator. first the line. Please take let's open Now

first begin ahead. America. session. from question question-and-answer of of Jonas go Barry [Operator Please Bank Instructions] comes Our will We the now

would had difficulty]? your successful Hi, involvement [technical a guys. run why I you the hear really It speaks mean, be for Kevin, the you difficulty] here. on great more some [technical joined maybe what very maybe and appreciation since perspective change, to will I think why now Thanks. stock itself.

Barry. on over margin leadership do focus and terrific the the much done focused job. growth results results the continuous We said of and of to team Actually And so our hear own different that we our and from -- is this improvements. Thanks, number Directing I because on. is business as and and statements At we much funny I with lived words. their end are years. own we’ve team and all driving Barry, today the with the stronger a of here the business. my a company evidenced love the very all appreciate organization today the we've had it organization kind income you quarterly and day, the last a our -- this fun I its they it's

be today the BOND I all it many through gotten of We've to and NYX also and some in is position to the done JAMES changes worked in we a years. done, that think for fresh this you at the always and and was a couple things I and a and in ready. at forward. about in Barry somebody not business quarters, seem as think I often And the smart I of hold and transaction we've benefit. people, wants tackling just that when a in and ready and XXXX bring going prior of have very think going I together is for of where the back me to big in that’s bring we’ve technology always will he new as look we're the and thinker I the the done a the timed. in, on the mantle look closely great in as XXXX and thing take the is and everything last work company path look came blood world success much talked And the and now said when so next to only thinking the signing he perfectly company they timing it's you blocking getting franchise years it's continuing stake and strategic can I know I’ve I and new me for you there very get to and it's this fresh number

guide it's to my I kids, I -- little two interested are sure it's lot son So a got there's Big the away very, we got Bang my been very guys going East -- daughter successful. be much just you know in as way mean pretty Coast been that’s making has I'm a mean of stuff. long on married,

just like a perfect it So time. seem

Great.

While be Barry in missed coming onboard. and forward you will a we role look to

Thanks.

So maybe replacements. just question a on

really strong of growth. quarter Another

Just market-wide orders specific? growth? the driving like? curious think or Thanks. large Any look do what company sizes are you it's Maybe order the

Yes.

and at think I'm -- so and next of the number good got guys years. end of day, right you the that over coming I what’s saw the we have GXE excited as building, we the now really stuff we’ve

of or we’re gone we look a of JAMES then allowed road. a bit you stuff it And the market game new a If games, at on part when little the really a think into BOND is upside the we to path share happened of and transactions the I roll. on that the thing

we’ve product to your do market we across rightful it's Now and each that share that? anything gain, don't I you see it's changing. want WMS think not getting Mike, [indiscernible] add values brands a in great back of the to position but because

driving additional on bit the not a particular add one little I mean, replacement It's the the volume gaming color. portions side. customer Yes, demand of unit I all type. coming any just in across that’s the is of will

helpful. can Brazil? one Okay. just on an maybe us last me, you And give That’s really then for update

a It on get next better will to I evolve. also perspective going and what's quarter of think process there. Yes. It a is continues you

is We are percolate. thing the engaged starting and to

to So, about I point. you it do Mike don't say think there's this more …?

No, not at time. this

so you much. right. All Thank

Yes.

ahead. Our next of DeCree Gaming. question Please Union comes from John go

work Kevin, the last two Hi, all congratulations over the on hard the and, so. years guys. Thanks or for question

Appreciate it.

that of of big process kind that’s last Michael the Wanted here and was guess, change both you board focus the been had improvement just and commitment a in and think kind indicated has and deleveraging, one reaffirming on to on this I ask, something, to and when you question I successful. remarks very Kevin, prepared first the came

kind a one wanted of And then, improvement how side, or see perhaps is of to there's follow-up tackling? if saves So more can keep still to left that, process and company? reaffirmation to the if cost I if get there, in the lot much still you just the priorities just runway the on that’s of of a that guess, as blocking continuing it's

I could bits as new together all But the something the Oracle confident forward the move that that. when here. basis opportunity significant pieces, a we just we brought and laser the the number a it on and on we're have happen of tell model systems business and is it very -- These is, in conversion put quarterly there's we of next got will that are No, for feel simply series at focused massive you years. procurement and been people of and look and I honesty all two businesses with done.

lots me. that We as very [indiscernible]. model creation know will I is the I’m we very that for when are building And continue mantle and and here our just I now and not very it's -- I but XXXX of understands of very, and new move they the [ph] that and get forward. exciting in that couple a that we’ve And lots as it exciting the team of value are future, the part that There's got we improving The confident at will years. out-of-the-box quality, quality next the onto opportunities the lottery we guys of so that. on the be as on thinking -- line move look

larger the opportunities. the ask helpful. NYX US lot betting on wanted is just sports that if Got of I we I it. than here And but get one in focus U.S., light much the a That’s to a gets business appreciate NYX, obviously that. green

maybe investors was other a understand NYX, if you some see collaborate guys for might the we notwithstanding get and little wondering that growth that opportunities in U.S? I here bit anything So help you

Yes.

So then stuff. the and start right me let Michael do will

closed If galore Remember, that we there were or there. of they so as in acquisitions weeds when excited got synergies into them we we it you we because so ago about were similar four were accumulation a of to transaction, opportunities the when remember at were what stage Scientific a themselves get and with Games business. I inside to could see potential number years the the the

and So through Games line the then we NYX we at path that between have and successful and then synergies you Scientific on know, those. now. continues top are the opportunity are important But still right way enormous when an working their guys very a as look critically you on

We we have handle at even so much this point. it business, can't

so scientists mathematicians more other and can running. that’s get exciting of technology, we're more and the in planet, from for so really and that this looking we engineers business parts And up of

weeks. to be know the positioned benefit lottery our Mike of number assets beginning, as States and And ruling. you that and said the comes and from business on all that's Court the metrics had we on Supreme this is bought the it if in want day could place it the bought And the very we to see So And you …? will we’ve this seamlessly exciting. as the uniquely we we're next gravy it, this based all happens. that gaming in without given wonderful the in as world

to the the and passed thing that online, seeing is goes that the are there. bit new number that the over I get think that coming on we're plus of of Yes, -- on I top thing OGS of is add new one quite growth to out that the customers content iGaming platform the think a

throughout of Europe. rest is obviously, iGaming So widely more the accepted,

so well seeing will in nice the expand here of of a world And iGaming in rest business as the also and the that expand it level we’re U.S. uptick that as around

question? Next

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

Hi, guys. Good my Thanks taking questions. morning. for

push So amount good done wanted company, short relatively to in a tremendous first just question. the has amount Obviously, Barry's on touch a Kevin, it forward, time. of of I data up

gaming kind detail. to looking for Is departure? the [multiple details of the a the Is speakers] concerns I hold the So evolving are it? we’re suitability about guess further company departure of just some What function the there license? of

just line Yes, years. really have nothing move complex of -- an opportunity stage licenses No, this there is it's no [indiscernible] is me. gaming nothing into gotten The along next about the the over that. for to here two there's it's

to opportunity kind when get, on out, we’ve note high running that got and businesses things start we frankly We all yes, are the whatever formed wonderful the to the the place on and got and, that my just and is role been nothing of overdrive. great under an it. me all on here. now, know an we guys have severance the about and It's contract segments that's It's leave know to a there's Those opportunity. in anything [indiscernible] all secret risk me to

for the help Got there. Thanks it.

Sure.

of parse environment balance sheet operators out? in gaming And of better really content, it just better demand here? kind it would then, would business, a it the for replacements, how matter regional you that turning a to is having the reflection characterize terms your you of how of the better consumer, or is Is

I above. of will take speakers] that. [Multiple the all

laws, things is other the of CapEx. new a of byproduct One deductibility the the tax immediate of

able So their bit bang a extra little little a for buck retailer the more -- getting operators of there sorry, by bit our dollars. to are CapEx get a benefit on

still content we coming line, out said and lot of see good also JXX the We to that's a on good of as across continuing obviously we well. before, the sales but Waves So, feel the board. its sell as

and Corporate. all the Tribal, So segments, it is Regional across

just in historic million business? consistent last with -- out there that on you the called the revenue. one way one any it $XX I margins for to guys the up in Thanks. frame Is that’s housekeeping from you contribution? quarter. a question. And Did EBITDA know NYX Is contribution

NYX AEBITDA reflective from directly million Contribution and of was roughly that $XX about converting. to would be [indiscernible]

If recognition new were GAAP U.S implement that to IFRS right to they so we accounting had remember revenue standard. plus before, you the under convert

thing, other had U.S the and Yes, we report our that. -- to just had we were we able our Board [indiscernible] Board

bought above are we slightly that when had the the we We performing model company.

going surprises is it and the all it It's no So exciting. on we that planned front. way

Thanks me luck, That’s Thanks. for and right. good so all much. All Kevin.

Thanks so much.

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

and Hi. Kevin. morning congratulations, Good

Thank you, David.

different what I not wide-open of little But the my just I And AEBITDA there's argument if and the continue late and growing next that’s is I happen question. about for into growth company you help XXXX to consensus for sort numbers to question of what I'd really at year? You a XXXX. has seemingly business of bit -- and a to X,XXX,XXX,XXX qualitative through and as the the of worked of heading think about it's EBITDA the love like. only a lines but some well talk right, have what context flow know numbers us Obviously, there's the would about cash talk could would into think look look stock

this I little Yes. bit in talked obviously, about quarter. mean, a last I the

side everything. of that an and you I we’re and things If and one office inefficient you Chicago, we give on corporate the small but provide was a items remember, and had one outsize just this are in high a sheet, activities it lots taking And of And I for and [indiscernible] about probably example was a This got we that XX kinds and on to have in to cost taxes, an year talk the happens benefit, be on did benefit actually of on doing. there. that massive WMS talking we took the about big 'XX. it

Vegas Atlanta kind into and relocating group where Reno and -- the people smaller many and area a different. the relevant hot then Las to moving office the where space are of we’re a the salaries and taking of So it's techie

I as we to a going in really million $X don't a we I’m but -- way the confident going And model excited is can provide ourselves, But you the look in ahead very is that how did right current we $XX that long about as numbers we’ve there So for the the got don’t series happy I just said, -- have year, you of math in now. to team but and it we if use are, whole are I as million we -- are be surprised at benefiting when -- that execute. and future a -- kick imagination your the the is year.

the Got sort flow talk could remarks, just it. for prepared went I'll And through the a but apologize we moment? cash of this statement if about in

Sure.

was resumes the few what's in the about we normalized levels trend cash the to that next kind from going this and And ops in more side kind there of expect forward Could the this should of talk quarter. off we quarters? low

you in structure of the did refi, account you it we sure. Yes, happen again that 'XX. and interest the that August February only changed dramatically it payments. the February not of of did into Take again 'XX, And we that when did in

done the the of chunk largest just the going that associated down change refinancings is rest timing year we the in already. is throughout lap fluctuation we've of continue with in of So that up that and to interest million swing CapEx, And $XX the to payments. as go this

accounting NYX, -- Beyond that with with purchase sorry, had associated resulted coming costs. the million a then relieved payments transaction of $XX to you million as associated which our or on liabilities be the had and books result the which $XX the

that piece a will and the of the time normalize is kind going one-time of to this about piece this rev itself impact. So of the run in accounted it It's one-time rec kind was course $XX rest year. for million going quarter. negative and The forward. throughout pieces of That’s

a around of interest working normalized -- have the capital again. payments, outside to So, timing relationship interest expecting we're

I’m outside or year? sorry, this quarter so of this

it relates basically rec it more will payments. of timing this Outside mentioned, I rev get adoption, NYX back the it of interest of year You quarter, and to the the the throughout normal items which were the to of throughout a other two should see year. as course this the rest level

Okay, got Thank it. much. very you

welcome. You’re

comes Our of from Please question Des next Capital go Group. ahead. Craig-Hallum Lauriers Eric

thank Good taking you morning, guys, for questions. my and

the 'XX this there? rest a So just of and into quarter machine bit 'XX see late. the openings casino opportunity I’m if more openings were for wondering obviously you Thanks. about sales new gaming could for you talk casino and

a think planned of which market. two U.S probably going 'XX, Boston for We've Harbor be the got now are full-year. will primary for the Yes, this be these year the next in opening middle for I is word -- openings that the to sizable the

gaming lot and standpoint achieve is the side sales a going growth we're through to a what market. results So of from the on able the come to replacement

Great. you. Thank

Group. go comes from question ahead. next Our Telsey of Advisory Brian Please McGill

been then a I’ve guys. on Thanks, on some that Canadian come talk the Thanks. initial number that VLTs there's kind Yes. you type sales question there? can Where games. the with beginning I up market replacement is note contracts XX,XXX about on continued Is cycle we the share that think guess that, same I strong stand up? in Illinois. continue and And what about that’s market of the have again. on do VLT do

well, VLT Illinois think, will first for I part. the take Yes, I

to are come the seeing it's attracts street have same the what [indiscernible] given one in the replacement kind operator relative are area now, going In We nice attention regards across you where to on this a right put Canada, I through. a to it new operator And kind the but start plus so of the have when ago, and think contract the see continuing cycle we then continued placements new machine of going into level out we’re started that a think years replacement to market get we’ve to the side. past. I seen cycle vertical just to machine, gets

we rollout are especially into when to new cabinets getting think continued I continue the of we've systems. had rollout the as will

through growth each cycles good across in We of seeing board one the the provinces. are replacement the

us much go at say, for nice So I don't that’s a decline of there going all, -- any if be shouldn’t have of modest expect I anything a to basis. be on forward growth be or much should to

Thank you.

next ahead. from Please Bannon of Our comes Macquarie. question go Chad

question Hi. congrats and Thanks for Kevin. taking Good my morning. again everything, on

Thank you so much.

Firstly but that had in kind the we release that that in positive flow no quarter in fall a fourth you particularly cash think of -- has one WAP much I quarter was off bond. on a JAMES surprise, the BOND one ahead first title for I think not the just standpoint, matters improvement saw a from hit of segment, the

have back kind segment the responses? placed in half, I know anticipation around you more So build you And mentioned quarter, the help about just color be that the June think game of up could on should release but the the you given early that you. if any it? up of the the in any us Thank and kind

and Yes, this other. thing company the I most our the see NYX is mean, to that’s exciting happened to maybe probably

you are leave new out. don’t to that three to have want time games -- them all We

that machines as the So as to -- the 'XX be think piece we’ve may will to is will stuff is exciting interest. talked these I perfectly that that's there's we [indiscernible] and working be the of lot positioned kind that is casinos are we of California that July WAP relationship the applied relationships [indiscernible] game after we about more minds and in beyond But and get if have the the be timetable like a Xth have there with we June, changers. really out in of end right the of

big a it the in some coming industry new attention [indiscernible] stuff out been in to then exciting stuff we got seen as to half that’s we So start that's But of year going this lot gets of place Scientific draw the second Games. a way to of before. the in never

about we're the hopefully from the will start a four we and growth about been we we the to year, don't position of of in up really We as second year to acceleration to the where quarters half forward so transitioning upside last in you'll or in what so, second bond and half yes, 'XX where start I start be to talking see step really show wanted be are think excited then move game are over and you so today where we've on 'XX. poised when as to to we see been the and

Okay. to be Thank guided that just contracts about to would renewal believe $XXX up and made you. million. Thanks. lottery work? is month ballpark My decision CapEx, and I you help XXXX is follow-up you respect this coming maybe or are spent awarded be Could if the would the a you with those shortly. number, think $XXX million will just us CapEx rough if 'XX, how contract generally Pennsylvania in

Yes, I a timing RFP from is perspective, think out. the

process are decision the responding We in will made. be of

renewal but We be with my in think CapEx tied understanding come is late the primarily I QX, would would expect very sometime spend into any associated October. in 'XX.

Mike. I Thanks, Okay. appreciate it.

welcome. You’re

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

apologies guys on Good morning, jumped and Hi. I late.

CEO long remarks. the know is prepared there an I transition, for don’t the been internally And question search spot discussed was did to guy CEO your place I was a to Kevin, you Barry you talk guess, known widely should remain is to the in So, then about so or we just when expect if that, a that and follow-up But was in if just this move on? for advisory formal it take role? to how

or and a Barry's And at in-house. process evaluated back from while and he if it and proven look someone get the going that's is background do and being outside we out striking ready. you do that’s Yes. go commodity has we go a is we for There been take a

of And social seen the over he stuff, said what You’ve as a he I scripted the the in has thinker. last done very business strategic he is years. -- is with earlier number

our then supplier towards a a releases a they And say, so oh with that excited being very about put it as we won't like that I'm technology we we transition forward. game always we’re maybe that saying I’ve company, when company out talking about company. as the company move more guy move press our been technology with running us

outside he on all So one I've at Forbes [indiscernible] companies. as or the for decision last was inside number longer investment but from of in we good. in & from unknown a got only proven the and the do period that their not that's The seen of an MacAndrews for executive bring really years other --

said thing earlier in he had very be an sure the helpful. making to he's to that stake was as and I I a it, be decision much Mike clear, clear them Barry want and needs it's its -- pretty right that mentor the wildly guy successful. I’ve I'll So at Obviously, him help easy available as to he big long-term thinks

and the be on to move that day We and going 'XX refinancing, to will EBITDA is the opportunity such then at a Scientific flow keep just to the expect we huge by the and going and debt realized with through it. of this ears it my time. massively to a into eyes Games with I’m in by generated and place 'XX next opportunity be have cash investment but net years this We here becomes it don't be over different as community exciting couple company, over one, that’s

guess business I likely guess since while of us top the Barry, Interactive, has now, guess, just the run or in Social what years I I then for on does he tell we’re And terms that for of to maybe something less inorganic Barry business? growth more less the company additional more or likely that or the Interactive for for -- strategic with being in business or

two, probably We've the of much opportunity. It's right? combination so a got

latter best that's working monopoly of than year are done we've different to the part on Mike that the before. earlier this be ever got talked we fire. a it is a Our cool for on Social being We’ve that anything game segment at thing business really would had. start game we’ve the

Our is than we wildly doing better bought modeled when we company. Spicerack had the business

now the knowledgebase that way that's growth things the but that along you good than way a we business on talk thing. to And a So But think gaming all a at lottery, to look he that is technology news. augment he not our and this, good take [indiscernible] is. has guys pick I conduct tuck-in being a able little I’m me that fresh heard have about

going is drive pontificate he So for, and that’s data-driven the actually would outperformance. the to what hope guy that I that’s guy about

excited this really was transition take as for logical about to it time again, does. I’m prospects we so such watch a Barry he the place, for what So,

forward? think the your you mentioned one you just more, and the what And I reduction key I in terms guess, recent you just for departure largest given value I going the meeting view before, had a Board then a risk or shareholders I in as day priority and you're to leverage us of remind equity just guess driver you yesterday if can may. the reduce Board's

overdrive. I is Yes, model mean, running this on

-- we’ve debt talked refinancing we $X.X time. earlier -- the XX% out billion, the the later this year know, and at Mike [indiscernible] you XX% in right As big points

$XXX that, think give million a you about take. almost opportunity or that's If

into next and growing significant are shoes on growth over think -- the couple very the is I we our that’s our and So of the years. EBITDA going thing to be

cost, So factors, sudden despite of all the the take significant drop in when those flow. interest very game you you a of different and Mike take about you the the that with and talked in interest debt cash are that, our reduced NYX, acquisition talking associated because very, a

So everyone the route that mathematics creation. gets that to and understands that's value

net transactions that So the very been I mean, drives look that I when to stuff and to as those well. each pick that, debt of multiples we other changing. we’ve see you improves at don't course up EBITDA at able acquisitions of look with may attractive that at these

that's as you'll see we future. the think into I of kind what move So

Great. Kevin. good everything, with Thanks and luck

so you Thank much.

ahead. comes Please next from of Fargo. Farrell question Dennis Our go Wells

going you are a to when Kevin, Thank and Great. ambitious out you delivered, you. we you. joined, and was miss set you that first plan

Thank you.

congrats. So

that Would or improving scarce this look at couple you you through point? it, last acquisitions favorable years. you you of amount say acquisitions it's the free your As pretty last landscape say would cash acquisition I the and still a years. the made at really of fair delevered over you’ve is over couple would of flow say

last each we we’re when on transactions, we had each look five show I of a that that did than the what was more tuck the that have fun months, part of at Board at the case or is same think more a you we this we of our which NYX that transaction. if and meetings them. in over the big of business to point four when made thing we But -- excluding its outperforming go it's the XX of and kind we fact these

right? ground about and as we to now basis quarter, may we I leadership as earlier ourselves, quick we had Barry's Because complex have at we're the not have an a These on reprove gotten watching in as So my meeting. and we we’re making biweekly had off them talked we acquisitions now meeting had and a machine leadership ones should sure have. this some

that think are and things shown them So to we’ve smartly do we able do and -- attractively. these now I

So it I more think will smartly. that some -- be more of

ruling that pertain be might or And Jersey open the switching topics, to be you for potential betting, then not ability heard to the if sports states? other kind to New the I’ve you and all Okay. open -- speculation to believe just think, offer of that states just over heard anything potentially betting? sports could some ruling do Have give about you moving

That remains here. seen. Mike Yes, to be

in point I speculating time. are lot think, people at a this

our we’re I and gaming where the hopefully a once will be ruling that So will it customers. comes of it, be of a in think positioned lottery position repeal both to and out, support

Okay. Thank you.

And go there as if out every leads amount we as it's then we’ve just huge New out, Jersey, if quarter. opportunity well. a growth provides this just of And great

is ahead. Our next question follow-up a Katz go Jefferies. from Please of David

for Thanks more Hi. taking questions.

you the slot [multiple opening think technology at some property Rock prior on Just -- of opening a a historically not roll would And as Boston. Hard being the would there big well in side I to is in Are looking some as assume the commentary up that Atlantic There speakers] try that? opening think I'm floor am indication a City, on next about roll the what as I I or company's in be both well. if was I mistaken. significant as to

yes, [indiscernible] confusion. bit -- I little No of the think what was

we're Hard be Rock well the in was in remarks regarding commented comment that as that a we would openings City opening So the Atlantic at is XXXX. MGM The QX in the Boston the as Springfield. opening two that looking

And question of the last focusing Perfect. delevering. one prior The just thing. subject on XXXX? was broaching

ratio expect we in a the mind next or or mind realistically and between in target after? now have of range You end a the leverage and can what year say year

that’s the last And couple all think improve when that run we the expect you’ve really We model, can't do, over we the don’t we focused do have time things we the of business. share years. we significantly improving that I to and over it. change. I it seen does of want structure what the but direction are capital on until But And

very Okay. much. Thank you

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

turning Yes. I a Scientific joining friend, VP over our today. Shore's his investors by Thanks Bill and a responsibilities and very -- a company friend I Thanks, equity close I’d May great you listening professional both for and serve just to of close Bobby Games of you and the we thank retiring of have the successful in credit His and Relations. us, our our like wanted XX efforts passion Scientific were call for for saying our my Games. capable much day. has give miss IR last will and and and the call. Bill I, to Bill guys. to responsibility of you guidance his side. special end on earnings Investor on his on be experience IR all Pfund, Thank thanks expert to Most after tireless to hands. of Mike and been we will appreciate both and He this the in Bill since diapers all vast know good a his years is at [indiscernible]. is so

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

now disconnect. may You