In preparation for BYI's F2Q earnings release tomorrow, we’ve put together the recent pertinent forward looking company commentary.
- “Our North America replacement units sales were up year-over-year reflecting what we believe is a refocus by operators in investing in their casino floors and an increase in ship-share resulting from our improved content.”
- “Cash Connection, which ended the quarter with 1,216 units, up 591 units from last quarter. Our ending WAP-installed base increased by 26% over the June quarter and 94% versus last year.”
- “The game orders coming in after the show have been very encouraging.”
- “Bally Mobile continues its strong momentum and has now grown to approximately 6 million users. Thanks to the measurable ROI, these mobile applications are generating for our customers, we are seeing significant growth, both in new customer acquisitions, which has grown by more than 50% year-over-year, and in the delivery of new features for existing customers.”
- “We reached an internal milestone with GREASE and Michael Jackson, each crossing the 750 WAP and NAP placement target by a comfortable distance. MJ and GREASE remain two of our best performing WAP products.”
- “The pipeline of new WAP and premium titles due for release continues to be very strong and will include some very well known Bally and third-party brand names including Beach Boys, NASCAR, Pawn Stars, Hot Shot and Tiki Magic.”
- “We shipped 175 VGT units to Illinois during this quarter and have signed deals for over 4,000 VGT units in this market. We expect the entire rollout to take about two years to complete. As the distribution channel has consolidated, we now expect a higher mix of these missions to be outright sales rather than on lease.”
- “International game sales units during the quarter were at 743 units, below our expectations, due to various market conditions and product approval timeline delays. Game sales in international regions remain an important growth opportunity for us. We have multiple product development initiatives currently underway focused on these markets.”
- “The systems implementations in Canada and Africa are progressing well and we are gearing up for the significant implementations there during the coming months. This combined with growing opportunities for iVIEW DM lead us to be quite bullish on systems for many quarters to come.”
- “We're excited that over the next six to nine months we think we've got some great product roll-outs specifically for those international markets. And of course on the system side of the business starting here in the December and March quarters, we expect some good international growth there from not only some big customers in Africa for example, but also our SDS and Windows. So we're very bullish on international over the next year or two, but you're right, near term some specific market conditions and some product development priorities that we put on domestic market has caused that to slow temporarily.”
- “We'll point out that although we have high ASP on our game sales, our margin is not as high as some of our competitors due to the opportunity for us as we get more of our new cabinet out there to sell conversion kits that should drive the margins higher.”
- “In the near team I think we are shying away from a dividend with the thought that purchasing our own stock remains a good investment, making sure that we have capital for acquisition opportunities if they come up. With our broad infrastructure we've now built support service, international infrastructure, the high cost of regulatory barriers, there could be acquisitions that would be near term accretive that we would want to keep some powder for.”
- “We're very comfortable, our leverage ratio is below 2x, we'd be comfortable with the leverage ratio up to 3x given our high level of recurring revenue”
- “When you think about openings and expansions, our fiscal 2012, I'd say there were probably about 20,000 new units coming on, 2013 at this point would, I'd say probably two Ohio properties plus one or two tracks, and maybe one of the Louisiana properties and Arizona you're at 20,000 units. Looking out to 2014, it's actually looking pretty well for openings and expansions with the remainder of the Ohio tracks. You could probably put in about 8,000 units, the new California tribal property at 2,500. So FY 2014 for us could be another year where you're looking at 15,000 to 20,000 new opening and expansions alone”
- “In Mexico, we – there's been a little slowdown for us because they had moved so strongly to some Class III product a year or so ago. And then there was the sort of freezing up after some violence and some uncertainty in the market. That's starting to improve slowly”
- IL VLT: “The 4,000 odd units we have sold now, I don't think it is front-end loaded; it is fairly even across the 24 months. And it's in fact the other way round, it may be actually light on the front-end because so far if you think about it about 350 establishments have been licensed and about 2,400 are pending, so still a long way to go there in terms of the units. And system connections, we have about 3,000 slot system connections that are signed up for systems and that's not complicated, that will start going live before the end of the calendar year, in fact in the next few weeks or so. And that should proceed in parallel to the game installations. One doesn't come in the way of the other at all.”
- “We have the belief that our overall operating margin can continue to increase as we leverage revenue growth and margin against what should be a lower percent of SG&A against revenue over time. So, over the mid-term or so, we would hope to be able to get a couple more points in operating leverage”
- “We expect our systems business to strengthen from this recently completed September quarter due to some of the visibility and some larger installs and also the September quarter can be seasonally slow for customers wanting to put a new system in during some peak season.”
