Light & Wonder (LNW) 8 Nov 192019 Q3 Earnings call transcript

Good day and welcome to the Scientific Games Third Quarter 2019 Earnings Conference Call and Webcast. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Mr. Trent Kruse, Senior Vice President, Investor Relations. Mr. yours, is floor the sir. Kruse,

and Thank everyone. afternoon you, operator good

this third will results a During Cottle me we our Michael question-and-answer are quarter Quartieri. and With by today’s call, followed discuss XXXX Barry performance and period. morning operating

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

risks please call materials our refer these our earnings and issued earlier the the our and regarding afternoon, release relating information For SEC. uncertainties, filings with website posted to this this to on

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

this webcast are our reminder, scientificgames.com. a our section conference of supplemental A website being materials recorded. website. Relations Investor in on Investors archived slides reference accompanying As be Also and of the is this available at call replay will

company’s used to the to While slides and meant these speaking of facilitate results call. as be the management your directly the to a are reference review following will be not slides, document

turn over let to call the Now, me Barry.

growth debt flow third by driven a Thanks, driven de-leveraging increases Trent. net Good solid as pay-down afternoon, all We and continued for quarter and cash as with well by AEBITDA strong year-over-year on joining everyone had and thanks business revenue, progress income us. further generation. units in in

sports, our goal. on leverage well and our as gaming providing as consume. Games, achieve have At leading de-leveraging players market established the and target the by beyond track will on content net are board, that platform current across We debt leader the of the enabling we as lottery ourselves Scientific key our to focus continue X.X

one-stop deliver ability land gives a three wants platform other however content to experience the the as digital provider player and and significant which across are seamless to only competitor we solution fact, for to of deliver experience our a set us base digital deliver with In all world verticals wherever across partners leading play. evolves. the advantage our a to ability comes this the future No and to close player major

across SG & on our build Reel clear leading wanted portfolio. technology Now, enjoyed among company’s JXX vision show that investors I our products, a well new into Mechanical Service month. Unified quarter bring to X GXE our to an Also the Drop new we how past results, we to and Goldfish this SG feedback new to before we efforts Frenzy shared and others diving together innovation our ecosystem several Vision, the including great with Lock, on We got and and highlight as of strategy GXE, Wheel, Motion our analysts excellent a industry Wallet at Game win. as

Explosion, Dancing with Hot and Ultra Link. starts it First, great all Mega like Drums delivering games MUNCHKINLAND

overall. we sports as Jersey in just are and will iGaming, markets we Second, doing Pennsylvania emerging iLottery betting win New

ultimate single goal partner where across Third, efficiencies especially great and of cuts advantages we in attracts our culture things. table efficient example a the like this we a The is accomplished and innovation product great simple secure proud games, retains that these I people and great bottom approach. top are SG And a talent that digital. sheet top none market A Vision business augmented management. from and Fourth, Unified through management we lastly, strategic am differentiate account and that through player strong wallet best are more. and line without growth, are be cash Fifth, for of because balance and player this above reality creating near-term can and is the retail XSG cost talent, Wallet through creating initiatives do our industry. experiences straightforward. building

to approximately X.X net took across de-leveraging of X.X the year-to-date debt committed end generating track target in are strong XXXX. to quarter in down direction We debt our year achieve our achieving are and paid $XXX ratio net leverage by step debt that decreased We third by leverage another We board. the million in results important to our on and target.

committed this beyond in leverage this to target will and our reducing focus business firmly are continue We X.X. current of

In our the product game and reduced top quarter. game that, the is attract developments roadmap results ops, interoperability. content key approach of line on focused during This the me through With creating efforts maximizing are the ROI such to deployment highlight through we third both CapEx. on best-in-class as let some optimizing yielding franchises, and segments

games are the games of hold Looking X app leased to as ahead, our top premium the X & and XX new the rising of and Krejcik top X games new top new the Eilers of the WAP in charts we report.

number fact, game new house Drums In Explosions around be overall indexing to delivering continues X.X one Dancing the WAP average.

market. about We year, expansion market. in are Class the we X entered a with with into ties to relationship Last deep also future distributor GCG, this strategic excited

that to quarters casino in this We release two X player is games have games targeted Class this and released recently our to plan the last targeted important are market. year additional for local X the specific

and the game In content. driven best by we cabinets two quarter had outstanding portrait sales, industry’s great a

strong JXX, will with one with deliver X,XXX excellent all at continue is the Our shipped units to follow-up strong on results Dualos be sales fact jurisdictions clear number raping two. the continues new number approved the and Internationally, up. JXX results Illinois, very is are XL in major shipments X QX. In expansion we unit over our bill. cabinet and the market TwinStar be WAVE in This process new Australian reinforces which leader WAVE the from in is to now to a charts that XL

in Illinois increase in deliver continued well business. saw a are we to in gaming, as ahead, our Looking international. finally, systems And in We continue as about and products table results we XX% tables in very and excited outstanding XX% the opportunities systems. increase

in innovations deals the never as our James and XXXX internationally. before captured the we last significant and future showcasing our with and instant and team growth. group, imagination of driving domestically of and revenue domestically Recently, show, high win product growth. instant the multi-state has ever in by a and XX% tech. is domestic are and an increase new and growth concepts, market second internationally. in In Bond featuring chance of lottery retail year-over-year instant linked our X new our PlayCentral many The of excitement XX at delivering than and AEBITDA instant and billion sales product a saw iLottery its by a weeks, attention that games glimpse after trade contract profitability the winning HD represented of the strong game, over Within more margin re-bids SGVision, X% game finishes retail SG’s room SG attendees year-over-year of suite had in partners best on rate grown revenue such catching lottery buzzing latest with integrated Nashville driven both systems significant increase with vast X% in like portfolio innovations, we strength products We

and now Arizona. and fact, across stores are deployed Kansas, in In Pennsylvania Wal-Mart self-service PlayCentral’s increased seeing vending placements machines are

implemented continue of be growth. lottery. products lottery sale executed Arizona instant customer accelerate to focus of growth self-service Games Most for that our points the national Scientific retailer that supplier key to and PlayCentral’s profits. distribution another sales switching we game solutions component We of been in is expanding add-on lottery Since of performance. will suite the SCiQ recently, retail all-time has chain lottery to a to key SCiQ our lottery. on units with sales ecosystem sales Arizona vending a and achieved systems innovative the the has maximize to products Arizona their lottery retailers XXXX, for and from allows record A their a

big to by addition are XX% results favorable generated new XX% SCiQ continue instant our result game of the increase to as in data In and Arizona, insights sales retailers SCiQ. of consumer customers a gaining pilots experiencing

handle iLottery single million in launch day. the a with iLottery over has September Pennsylvania, million in in $XXX Our ever a day in successful in sales $X had launch which sales most exceeded record

Games sale better honored SG years. Since an of our in networks recently XX-year Lotex XX,XXX Scientific additional the largest in economy by we SGEP and will be X-year it and XXXX, of extended with has award industry X the excited In Italy, games Brazilian supply perform the an world Turkey in Scientific was Brazil footprint lottery to agreement to lastly, this than awarded a and Games’ wins Italy, lottery opportunity. awarded new XX%. average an lottery to of contract enhanced making lottery Florida, with with are of WAVE compound average a domestically, point partnership XX-year the with our world’s for has eighth And and Florida terminal largest continue the terminals growth continues the exclusive powered instant option expand rate to concession. one partnership is retail which XX% we

In our other higher served that experienced was CAGR lotteries a all than at customers, XX% XX-year fact, of contract by when looking vendors. SGEP have they

gaming, medal GGB peer-to-peer on awards. and features technology, the of Gaming is saw OGS we quarter. digital, technology to as ecosystem AEBITDA our OGS iGaming, with and jackpots, reliable received iGaming innovation-rich and increase which robust a we a solutions gold robust we player growing market. category to revenue an content XXXX year-over-year, in the home plus In rounds, aggregation million ecosystem we & billion digital increased tournaments platform, placed product platform In win placed X XX% management are this and OPS wagers games open XXX this interactive deals across launched which increased best is Technology X%, at free accounts X,XXX trusted wagers gaming. continue our With existing Understanding end-to-end account recently recently in

with take leader in Turkey. to continuing leading when states And future the are America and in our in and to results delivered – in to sports, previously market additional in We international are our in exceptional Oneida like Zealand North leverage are can with well the we partners advantage preeminent iGaming New positioned expanding of and market expansion. grow we player position and markets opportunities be iGaming Caesars, where Nation underserved the launch

and since records. weekly significant seen Turkey, we growth in consistent launch, fact, several smashing have In

Our open Global we Gaming continues Year Digital well-deserved product the recognition sports were Product to of awarded at the Awards. suite as gain

lottery recently a expanded an Netherlands the bring we partnership players lotteries announced sports betting Dutch Lastly, digital with solution. to full

We player our platforms. reliable robust, emerging the and poised in $XX wins investing digital market to iLottery and we be materializing operators sports, believe with comprehensive and pre-eminent the with key are are firmly to support now billion best iGaming

with market saw the As growth delivering increase we outperform in XX% look at continue social in AEBITDA. business, SciPlay increase an We XX% while our XX% revenue. also to a mobile

and average payer at almost strong remain revenue rates monthly reached per quarterly a of payer Our conversion X.X%. $XX record

of exciting best-in-class franchises are and opportunities positioning a geographies, growth new potentially game markets. We growth we updates new as in of emerging lead front near-term across for In adding that evergreen excited we number opportunities us we genres. by games in existing explore our as to the well in new our will continued and are future have closing, as

any path. lottery to As that along with a platform positioned This debt reduce can players for to seamless player Scientific of and best-in-class efficient to with our want more vision they up outstanding, flow a diversified generation market games, across to SG portfolio profitable experience to or sets Games best position, across deliver commitment sports and continue cash player is us significant and businesses, see, betting innovation our only and a to enterprise in the you delivering can play deleveraging deliver. our deliver the channel growth

third Now, Mike over to the his the provide me review turn call let results. of to quarter

afternoon, Good know at at I were everyone. of month. many our GXE you investor Barry. Thanks, presentation last

net free the that on results path cash X.Xx flow in out business, laid reduction leverage and leverage. Our a growth we to our highlight debt our by driven

primarily open shipments segments a mix revenue with in all For improvements. verdict and increased to million, $X million X%. to the was million machines revenue growth in Shuffle Gaming quarter. result our compared and We increased $XXX in business $X experienced legal period units matter. down consolidated compared market. the shipped includes globally, X,XXX charges, a million and to on as to was of of and $XX prior VGT Tech which units, AEBITDA X,XXX of including the and $XXX year-ago million and AEBITDA a and other revenue expansion the X,XXX the U.S. greater restructuring the We in million replacement increased income Canada, shift growth in to including AEBITDA quarter, year Illinois the X% Net $XXX related loss revenue process of

XX% entering Our up the units units year. GCG a replacement with prior sales into Internationally, ago. X,XXX were excluding last the year X,XXX strategic were totaled our year, shipments that when from relationship compared part of to

Our average $XX,XXX. was selling price for the quarter

see quarter Dualos will Australia. by product. U.S. by and to installed great TwinStar is WAVE XXX have basis games XX XL units, regain from primarily X the momentum end expect throughout to in as WAVE and Game was million removal that down our down driven sequential we of and of now on approved XL, are continue legacy revenue some internationally base with We ops released seeing the the XXXX, Canadian $X was JXX, results the share exclusive

a base stake as April increased implementation driven the higher revenue primarily the GBP with limit UK revenue system’s the from services the and offset win prior revenue. our contract XXXX. in erosion in year recurring increased in $X in by million X installed maintenance new of Gaming Internationally, growth

we year the are in Canada, fourth a installations on continue record site was driven revenue remind business. quarter, up the revenue, $X as we the Table QX from a to new to period installations quarter by major last year with continued site the coming and As larger previously prior conclusion. to in million for everyone look systems strength that million $XX to products grow mentioned, I

in and retail $XX primarily separate from increased new AEBITDA exclusively our product in We to Within In or WAVE completed agreement WAVE year-over-year revenue betting recently to for third our the our terminals $X and the up lottery million were sports million, $XXX quarter to quarter. Turning up by contract is betting the systems to revenue driven XX,XXX to Turkey. million sports XX,XXX SISAL quarter, compared increased lottery to awarded was to up national million delivery instant games, of terminals lottery, lottery, to we to million to supply and Turkish $XX a international year-ago our terminals business, sales. $XX the X% Italy. million, $X which

of and markets in to XXXX, in second expect begin these delivery through We continue both the will quarter XXXX. of

content. and lottery Our revenue $XXX of grew X% for revenue million, instant million driven $X mix higher to or contracts products licensed by the

were lottery We we Brazil. along joint with our in are XX:XX pleased to partner announce instant venture awarded contract the

in is a will our few over the market venture amount investment will payable eighth installments. the the two, the Brazil of Just I’d is the XXXX, expected economy to things world; largest joint into manageable is take lottery concession in note, be three, scale; the QX annual to as commence time and eighth but operations cash

million. generated of results to X% revenue For a was to monetization and paying players strong segment, driven million revenue, $XXX a iLottery we market growth we increasing AEBITDA growth to share increased by SciPlay payer operating AEBITDA decreased million. sales XX% in Digital, sports X.X%. was revenue increase in $XX for and expansion. see strong year-over-year mix million with and across flow-through up opportunities generated up of continued $XX a XX% gains In These expenses. driven both and to The $XX through XX% We conversion by and iGaming, number and were higher increase to

Year the Global sports prize end-to-end Awards year, suite. consecutive Product for products Gaming OpenSports, XXXX our we at second received Digital of the the For the betting

$XX had due and we sales ratio debt Moving the and negative in impact net throughout the included to in increase million in At $XX of balance we timing the leverage prior of equivalents down a continued and due free the million $XX sheet, $XXX million to cash cash compared to our and cash timing $XX an as end, we in was million X.Xx receivables year. CapEx was flow in to the our quarter. efforts. to quarter quarter, interests flow cash the generated million which de-leveraging

are $XXX under some to quarter, million the million, to received a during down we year-to-date revolving our to We million to that down our from prior range in our extend X-year of is We million of to debt total to of the period. credit bringing CapEx revolving lenders are $XXX lowering announce we million our $XX $XXX another $XXX from $XXX million. which guidance commitment, for facility commitments pleased million. $XXX paid Also,

are We extended with in additional revolver discussion still other regarding lenders commitment. potential

in to conjunction new front market We our and end flow have in in gains of expansion a target Gaming, growth our of around provide in opportunities Lottery of a retail to share number with and by drivers to of X.Xx our organic free These businesses. get number new grow tool improvements opportunities There business to Digital. are and leverage us growth XXXX. also enhance business cash SciPlay us debt in across the solutions

open This questions? Operator, concludes prepared remarks. our please for up could you the line

sir. Yes,

first now Gaming. begin Instructions] Union question-and-answer will John We Please [Operator ahead. the question session. go have from of will DeCree come we The

on could. Good on questions the spent lottery, GXE everyone. I lot guess will afternoon. at with a solid quarter. slots me I just start Two first. Congratulations if Hey, for having I

I a modeling. we growing bit think quicker has business been than quite were

remarks, contracts announced sales talked that. bit you about driving the a products couple your queue. just some You In of of little a prepared

are kind of could Just speak more now? is accelerating you a bit wondered and it’s it you if seeing how to sustainable why little growth the there that and

of like SGEP number providing across organically growing PlayCentral and and now strategy we business, are domestic this the driving of international. Really Barry. said growing. rate one, win such as Yes, unprecedented for healthy services and driving basically things two, suite John, retail two we delivering you are solutions an SCiQ. Thanks and is right question. as value-added your the lottery And Hey, look, is number it, our

very primarily we sports obviously ones Italy and Italy the of we Turkey, the delivered hardware of In but sales, to beginning next getting of started system Brazil. in see we Florida, terminal part contract, just are proud and and we terms elsewhere year. results Turkey Turkey the sales strong contract really WAVE significant In announced, related our as wins, betting systems as will just internationally sales we are in Turkey,

as awarded years, We the over sizable in another. also SG outlay X proud could is joint payments there’s X Brazil that. also cash be very significant really a concession believe be part market year for on the concession are either Florida the Brazil. venture with so to We spread of no

We will X-year our managed of partnership award with contract. XX-year Lottery continue with a Florida new the services

As call, we XX% the the rate SGEP average better average Florida with than since XXXX, mentioned powered instant industry of has the games to on compound lottery a XX-year Lottery’s perform XXX%. growth

In procurement our our lottery higher are additional just have wins handful are with the for lottery expanding deal by SGEP both with and a served across is SCiQ growth the CAGR, with XX% phenomenal partnering and closed of looking growth engaged retail partners you the team we that us. highlighted XX-year that state they really on in result the significant we footprint We we as state actively contract that working was Arizona are organic of significant where seeing products. domestically with – a by their we lotteries organic a all terminals of doing job PlayCentral see across at as other and And of lot experienced they’ve beyond internationally than vendors. fact, those mentioned board as customers, well

out that I aware that out terminals those remarks be XQ grabs XX of ship lottery growth large we the guess are XX products through not next the contracts probably prepared up over are or starting of XX at to have won of. more you I there contracts for lot months of in of XXXX there could the look you some When think international funding

have one Yes, Brazil working I roughly the in which in here is all about that a exciting I since are yes so, us on here tell we before be out and it Turkey working going specific they a X am because either lottery have and am as speak going is got drawn got its sure would to next well absolutely business do a about I why been been longer got to is contracts is or individuals and on Q XXXX call process for John we team I they it afterwards more they long the dedicated the team have they through that’s sure there on of new so, you

from could much kind is quarter efficiencies flow And accelerate coming am poised your and just business improve if what you little down on curious efforts particularly could here unpack bit about inoperability in opportunity helpful. that’s if so that that about in to are your the CapEx of could a with still lot levels how wondering is seem would little reduction you the Barry is Great, and gaming I I and a you it this cash CapEx ROI plan turn ask about the free growing the you that reduction to a profile it wanted talked front to have like if I driving sustainable. the is coming if driving content of that if talk the CapEx CapEx what is curious just bit

know but of you on working making of natural the John fluctuate of quarter diversity would we just are timing really at where chain being beginning year this areas it last at I anticipated definitely forward, the versus what the this in we're bringing guidance you transaction the look well swing the capital will our of definitely going the you of kind the quarter just anytime or year it's regards CapEx the we that end is negative so, it’s sure company itself Mike really the that of it year so free cabinets Barry’s that you the in the you generating permanent it CapEx everyone we by just is that a progress other say as timing plus timing on said primary as your the demonstrates process within for nearly clearly basis of main year well capital the diligent no But cash returns our than of the at would interest initiatives in so point look piece the very throughout will I really we of this profile on of in make as are the did fundamental of flow we that driver rest the this this in are result quarter, going around supply year on business behind minus see you the lowering everybody earlier content kind a for say change up lower quarter. here free two change quarter is the is so $XXX as for the again driven ROI biggest for key the continuing when absolutely we're at in Barry been leadership. ops look capital where when is almost engineering into our that EBITDA to as XX% aware to very the CapEx the we and Unfortunately, point it of and look based the as from pretty deployed on and progress are sales there requirement working in to the drilling us make are and interoperability. million flow as result to as is in capital addition at cash we about to value based well be our if which game and much that working should some the has in

color. for the great. I the Thank you. commentary. questions That’s appreciate all Thanks

it. got You

Barry we Next Jonas have of SunTrust

guys. Hi,

deleverage turn target is curious tilted gave down feel or EBITDA you towards hitting more just now growing less X be if else that You about your may debt? confident confidence that or paying more if last quarter target and

Look business lower of say emphasize kind of the frankly growth cash first implementing goal lot its it's a X.X and top debt that look repaying to, driving line our top to a in just remain things even line it me let I hitting of balance drive to continue is balance terms bottom is we we management initiatives a efficient quite in point the would from is foremost X.X our alluded and and confident and growth and refinance bottom of doing of the cost very games prioritized like GXE have outlined it now is as that kind on winning as just about talking with focus markets through new more. products got we we innovative the market just emerging but and our the Italy winning ROI markets were PlayCentral, the its right bringing the and the that internationally Turkey sports all focus spoke iLottery ROI with Brazil and drive new that great digital SCiQ, new about were etcetera to then continuing that of business focus, launching gaming so

and to we we and normally as in markets I we mentioned chain operating EBITDA opportunistic on an also new lets the the into higher value, the interoperability flow on walk CapEx so, the beyond growth cost with it paying really so, to CapEx is growth contract L&F cash as out GXE ½ spend where we last see got year winds that some I to the that cash and year through supply and the this Barry to and in the different through adjust end question and capital like minus significant up debt important to down my may earlier as opportunities we capital we on efficiencies, around just us done really through vary experienced have the the a for our that get of flow sizable $XXX little times this cash of million is to drivers DeCree’s do factor just early you drivers an of free really reengineering number the add associated concession legal on really focus of to to always free large that all John to looking X now down see we content, that it on will than going the lower just we just year we prior be settlement enhance any outflows and get presentation When more at itself our are unfortunately focused in bit so had look point eye addition don’t cabinets to in mentioned an year. renewals is and year be down the that over to and of keep that

great. Great,

to very ship range share about may back range of in talked that think think speaking QX you Thanks. who be back So you you solid trying if get your to share to back quarter your curious and in of from? XX% just GXE taking sort XX the I that

first going and so the motion wheeled forward. our unheard years that the more we game really coming about we XXXX with as the up in that recognized of quarter sold nearly think going of really and how about I and its we we XL year exactly we is year calls is three throughout content ship do the have it the about be out as slow are old we WAVE it feel pretty so to that it out JXX said get first half cabinet more will of share everybody but excitement to we we of feel out but pipeline like of the besides a supplement units a first excited there we do report this good are much kind half WAVE took we speed Well from find to and sales good gets XL to

just JV iLottery Great. me you Thanks. if agreement may is And if one more higher curious at supply point curious share and any Brazil be or last an split also be component then then color on the will here? evenly can on the give for there this

is is it that that's build and not take of a obviously time part. to care will XX to I incredible but and last there a key JV XX is believe will shortly to excitement both of that is but this think but greenfield economy potential going iLottery is could year all that’s meaningful cautious we a are joint partner for the it only be we Yes, we component it very that coming with XX largest it with venture opportunity the us the to something going worlds but the given be a of to contract the take partnership thing Xth our is – us be

it. Got

guys. thanks Okay,

are welcome. You

And next David have Jefferies. of Katz we

Hi, everyone. are you? How

Good. you doing? How are

bad provide just it if bad. some discussion CapEx I the as to the double edge little what find run there rate you and going Not be up the is just for often which forward to guidance insight wanted us sides a change can CapEx to decrease with make we not go two to back there discussion

there lottery placements of within good than the at to first number It’s we of that out viewed not were as really proposed that more the cabinets around through had in vast just content a having enough the the to ops in year. well XXXX forward to of projects small previously would as them are bring the out into addition there content addition the those game that our that like the to to some just nature relatively they quantity other interoperability half revised back but of are we rather that say of guidance far we of timing get keep ability say some looking have that XXXX in majority because planned in look and coming spilling down I it like are there

but out any a not in bank expensive your subject we remarks be this are point it. financing Got the some careful on still be whether there refinancing and And always earlier opportunities touched opportunities refi in have replaced could on sure of future. there at you if keeping you that might debt on some am I eye your

important and on work us domino and else was revolver to just to the market monitoring everyone behind with an to will us work was as an lower our improve capital and as October current opportunistic cost step get that getting as We as revolver get for look that year new the constantly that. five will we for in important commitment the overall so of place be to we that

you very nice quarter. thank A Okay, Congratulations much.

you. Thank

And of next Macquarie. we have Chad Beynon

you any inflection find are of operations, are given performing are kind question? here the well that kind first lights with to do heard will and lower games of some coming touched their of yesterday afternoon. you taking we looks Shifting questions. right inflection part Caesars out inflection for to could continuing and that trade it of will offset back second of a Hi, you. of we older games back of that of is out the of are that then push Barry continue of doing some with units legacy leakage Thanks games you gaming that WAP like floor to an starting my kind that the that out that the I balance to this on question you think think size are see here trying they you that point to shooting the the Thank and from we guess so this to newer do

absolutely. Yes

really the WAP have and XX customers WAP really X.X also Mega help business had speed one of the you of X the year number to on have content have a one then Xx the Xx showed we a with will So Xnew merchandising on example talking goal about versus would big last out we to on interoperability in but that basically performing on Hot which helps out drive of it we've year issues go overall interoperability get a it where X that's the and full give round the us and getting Bao we and to older games to priority of we is drive map and we already and according new also category larger number been but that last as By product to at X premium now after with at made under on business not have solves first conversion with us and the road grab Ultra several index coming calls yes we talked our mean X talked great now efficiency plus our excited we performing interoperability move that as and really two Money the may have out GXE be performing of games a great WAP to that getting Link we've great kind are out game lot to a that footprint which there new great really report. the they now outperform for of we focus WAP games there and this way, and is the cabinets it and way is ops flexibility we operators over got great so, all also helps there to around so were the that Link, that games content about games to in our so I XXXX goal about in cabinet relates Eilers are strong ops. floor WAP out overall bonds about that stabilizing earnings we then Drums land way getting at CapEx Eilers about digitalization a replace number that market have the of two and cabinets have have we Xi, hyper we of side flexible X of Dancing with first number floor Jin games that games also here new we which Ji the I the mentioned talking. for are game have performing over October the can these strong is a growth up doing us to so described some top we building performance Explosion had WAP MUNCHKINLAND and games majority you premium and Xx to discussion got of CapEx interoperable as all, were premium have this focused top game as past moving of about where is performance games

better regarding it it of just roughly footprint that had was years certainly sitting just And was was been there Caesars and material Yes. legacy plus reduced to so? public Caesars, out your cabinets our the older over for part point not primarily to units again X XX

this as know quarter game believe that domestic back quarter it going very I has so, just kind are market you and against will heading fourth been which sense know some the Okay, tough replacement could you same and then for quarter? timing share of that data of may and for have point. And just would over we completely on been I helpful. into figure sales that your this Thanks because the more in of the year goes in be units to was instead could October help to been that Thanks. timing is giving getting the soft actually year even some year into third the thinking mid the of quarter our do have of quarter stronger that obviously could have growth if think that last trends year GXE replacement which the fourth these GXE narrative orders everyone push

did good seeing GXE products to like I drove comparison our had unique more road an both is the even strong in XL continues be said relates when you mentioning so that we impact deal to momentum a the of having with with third in that extremely then on we have and as honest map had that know of year WAVE XL year launched to that base the to things we all a two combination terms last the I frankly that with think the know basically last I sales years there it been quarters layered not half I think few and it felt on the it Q year half to content those out we the it of that and strong WAVE Honestly, of with in had don’t have on success highest GXE alluded JXX of strong and along whether pipeline as ever impact that a greater of of we or quarter we coming of has our year are quite much for top since was and over it that don’t year combination of GCG the compare rollout. the as of been I strong back back

Okay, guys. nice thanks. Really, quarter

you. Thank

Stifel. Next have of we Brad Boyer

my taking guys. for questions thanks Yes

First one Illinois. is just around

previously. As explained have you guys

expanding nice nice a the they extent the just with obviously and what that in how wanted helping sales You little kind market see go it’s that forward see you the have you guys, to tale the of from quarter market your Illinois term a product to sort on of a guess expansion basis? year of competitive are for I I market opportunity advantage and VGT kind benefited VGT there growth

sell the probably Yes are for the just better in out have. today fixed I that and there install benefit that replacements are probably rollout of there have XXX inflate our that we as competition to we about and a taking unit during market that take opening is network another share units can that that quoted only the believe the that those and so than guys because to there XXXX so year had should you is being of out locations available that that expansions the those having content and distributorship machine numbers is we rollout XXXX we roughly superior get not have opportunity over pipeline included the timeframe a just much the through we there so in things get locations therefore the going XX% we quarter in to is XX% however

you and actual growth some start it I internally we your see base do think are as when as you And Okay game guess here not of ahead but out mean install point when kind just to that in guys sort appreciate turning guys ops you in look around and itself? the to games the could estimation belabor you of underwrite then that’s guys helpful. order I

the been believe game performing of just that to well. and as as move to have strong able this have is it is Look that we to and a quarters of where gate before we games over last the fairly the some are I stabilized its goal point good business we out is a mentioned hits got several it

we flexible which and model are Our combine goal partnership with markets interoperability, mentioned I before in out with, of the to that things working potentially as X we go have before, our it and – Class things also Oklahoma such is so business some push pricing after in mentioned to attacking GCG. that we of

focus is on to category. that of all-out ours this effort So an

guys Helpful. have you obviously lastly, new And coming products then some out.

thought I, but it maybe in around XX.X little a prominent with looks are half of You last have how back products. kind that push you couple X It I there going market way. might would’ve kind like believe I guess, here of, me Dualos the those quarters. it’s that of, ASP the ASP forward? WAVE priced had you of Illinois, kind about offsets level XL, like hovering can But for lower being bit we correct other if a kind thinking is wrong. higher I’m should that more of be been the some

think Just that. help about us

start look the you if the sales a same at is mean, the time, at Dualos But I X internationally. cabinet, Sure. off its ground a on to X-year-old the Yes. barely you but cabinet. get JXX premium is

to that’s price ASP to going plus it that’s what out. would number, coming around the we this TwinStar a believe come a bit. we But on based Mechanical just have starts of drive years high expect with today. cabinet, pipeline XL X the the is the to is to premium be of after So XX.X where WAVE kind down X and it we old, little Reel

we or state think minus $XXX that XX.X are pretty or plus so and steady here at And there. I

guys. sounds good. for It Thanks your answers,

You welcome. are

of Joe that a there. there And Susquehanna. our appears question from is come connection it gentlemen, lost last And Stauff will

I our Barry for question-and-answer like the So now we’ll remarks. conference Sir? to turn then Cottle any call closing over would conclude to session. back

to and will us our strategic Thanks you. for on Thank our focused laser Great. generate accelerate our growth to priorities set best greatest cash deliver returns industry de-leveraging the priorities These for joining us us support. and stakeholders, appreciate is your extend entire significant to organization continue The for flow on key today. everyone positioning. path. enable profitable We ourselves up progress our our that allow

target you continue leverage We are Thank next this reducing X.X. look speaking you. to focus firmly quarter. this forward current will net leverage debt our we in and beyond to to of I business committed

and we has also And rest you, time, and sir, Again, to time the the everyone great this Thank care, call may disconnect concluded. for conference team Take you At have day. lines. thank of management you. today. now your your a