Excludes 727 and 537 electronic table games operating as of September 30, 2013 and 2012, respectively.
Highlights of Certain Results for the Three Months Ended September 30, 2013
Fiscal 2014 Business Update
The Company has made significant progress toward completing the planned acquisition of SHFL entertainment since announcing the transaction on July 16, 2013. During the first quarter of fiscal 2014, the applicable waiting period under the Hart-Scott-Rodino Antitrust Act of 1976 expired. The Company also successfully syndicated the Term Loan B financing and continued to make very good progress in securing required gaming regulatory approvals. Key executives from both companies are leading detailed integration planning efforts to ensure a seamless transition plan for customers and employees. The Company also announced earlier this week that Kevin Verner resigned from the Board of Directors to serve as a consultant and oversee the planning and post-integration efforts for the acquisition. As a result of all the efforts undertaken by key personnel in both companies, the acquisition is expected to close prior to the end of this calendar year. The completion of the SHFL entertainment acquisition remains subject to SHFL shareholder approval, the approval of certain gaming regulatory authorities, and other customary closing conditions.
In connection with the pending acquisition of SHFL entertainment, the Company incurred professional and other fees totaling approximately $5.2 million during the first quarter of fiscal 2014, with additional acquisition-related fees and expenses anticipated to be incurred throughout the balance of fiscal 2014.
The Company increased its fiscal 2014 guidance for Diluted EPS to a range of $3.80 to $4.10 and now expects that quarterly Diluted EPS will be fairly equally weighted during fiscal 2014. This guidance does not reflect the impact of the planned acquisition of SHFL entertainment or any acquisition-related costs or savings or the effect of the favorable tax settlement realized during the first quarter of fiscal 2014.
The Company has provided this range of earnings guidance for fiscal 2014 to give investors general information on the overall direction of its business at this time. The guidance provided is subject to numerous uncertainties, including, among others, overall economic and capital-market conditions, the market for gaming devices and systems, changes in gaming legislation, the timing of new jurisdictions and casino openings, the timing and completion of new systems installations, competitive product introductions, complex revenue-recognition rules�related to the Company's business, and assumptions about the Company's new product introductions and regulatory approvals. The Company does not intend and undertakes no obligation to update its forward-looking statements, including forecasts, potential opportunities for growth in new and existing markets, and future prospects for proposed new products. Accordingly, the Company does not intend to update guidance during the quarter. Additional information about the factors that could potentially affect the Company's financial results included in today's press release can be found in the Company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.
Non-GAAP Financial Measures
The following table reconciles the Company's net income attributable to Bally Technologies, Inc., as determined in accordance with generally accepted accounting principles ("GAAP"), to Adjusted EBITDA:
Adjusted EBITDA is a supplemental non-GAAP financial measure used by the Company's management and by some industry analysts to evaluate the Company's ability to service debt, and is used by some investors and financial analysts in the gaming industry in measuring and comparing Bally's leverage, liquidity, and operating performance to other gaming companies. Adjusted EBITDA should not be considered an alternative to operating income or net cash from operations as determined in accordance with GAAP. Not all companies calculate Adjusted EBITDA the same way, and the Company's presentation may be different from those presented by other companies.
The following table reconciles the Company's Diluted EPS, as determined in accordance with GAAP, to non-GAAP EPS:
Non-GAAP EPS is a supplemental non-GAAP financial measure that the Company's management believes more accurately reflects the Company's operating results for the periods presented. Non-GAAP EPS should not be considered an alternative to Diluted EPS as determined in accordance with GAAP.
The one-time tax benefit relates to the reduction of unrecognized tax benefits and a corresponding reduction of income tax expense of approximately $3.6 million in the three months ended September 30, 2013 related to settlement of the IRS examination of the Company's United States federal income tax returns for 2006 through 2009.
Earnings Conference Call and Webcast
As previously announced, the Company is hosting a conference call and webcast today at 4:30 p.m. EDT (1:30 p.m. PDT). The conference-call dial-in number is 866-524-3160 or 412-317-6760 (International). The webcast can be accessed by visiting BallyTech.com and selecting "Investor Relations." Interested parties should initiate the call and webcast process at least five minutes prior to the beginning of the presentation. For those who miss this event, an archived version will be available at BallyTech.com until November 30, 2013.
Founded in 1932, Bally Technologies (NYSE: BYI) provides the global gaming industry with innovative games, systems, mobile, and iGaming solutions that drive revenue and provide operating efficiencies for gaming operators. For more information, please contact Laura Olson-Reyes, Senior Director, Marketing & Corporate Communications, at 702-584-7742, or visit http://www.ballytech.com. Connect with Bally on Facebook, Twitter, YouTube, LinkedIn, and Pinterest.
This news release may contain "forward-looking" statements within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, and is subject to the safe harbors created thereby. Forward looking-statements are subject to change and involve risks and uncertainties that could significantly affect future results, including those risks detailed from time to time in the Company's filings with the Securities and Exchange Commission. Although the Company believes any expectations expressed in any forward-looking statements are reasonable, future results may differ materially from those expressed in any forward-looking statements. The Company undertakes no obligation to update the information in this press release except as required by law and represents that the information speaks only as of today's date.
- BALLY TECHNOLOGIES, INC. -
BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2013 AND 2012
Cost of gaming equipment and systems excludes amortization related to certain intangibles, including core technology and license rights, which are included in depreciation and amortization.
BALLY TECHNOLOGIES, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 2013 AND JUNE 30, 2013
Common stock, $.10 par value; 100,000,000 shares authorized; 65,472,000 and 65,318,000 shares issued and 38,956,000 and 38,855,000 outstanding
Treasury stock at cost, 26,516,000 and 26,463,000 shares