You would think that Powerball would add to the bottom line? But management will suck up any profit from any operation! History repeats itself, Q after Q. Investyourbuck
If you can get past 9 and stay there that would be something in itself.
The stockholders were expected to approve, when has the stockholder not approved? name a company.
SGMS has had so many new and exciting "things" most of us have lost count. SGMS has proven it is not good at integrating mergers. They assembled a team but didn't mention who's on it. The merge will prove to be a disappointment to all but the WMS stockholders that get the payout and invest in a real company that makes money. When this acquisition begins to lose money ALW will declare it an internal expectation and announce the next "new thing" that will put them on track. Its 10 - 15 years of promises with nothing to show but conference call transcripts and the families new house, cars and inflated personal savings account. Stockholders get nothing but a write off of up to 3000.00/ year on their investment loses.
SF - One of the 2 analysts representing companies I never heard of asked about internal expectations vs external expectations(like making money, or showing some progress) and whether or not they'd be sharing "internal expectations". ALW is not going to change. Still the pompous CEO he was 10 15 years ago.
He can do no wrong and considers himself the authority of the lottery industry. Over the years he has spoken about many exciting projects and opportunities and none, zero have come to fruition.
This lawsuit pending against WMS could be nothing but then again might be something. It wasn't addressed.
If not settled then sgms would be on the hook for legal fees etc. Given the dismal performance and direction that's occurred for more than a decade. What is holding this stock up? Most mutual funds don't have patience for 1 bad quarter let alone many. Individual investors don't account for much, no dividend, and a delusional management team that has a new buzzword or new "vision" every other quarter? Should be a 2 dollar stock.
I found this little nugget to be of interest:
The top-line decline was primarily attributed to lower sales of lottery systems and terminals and lower-than-expected instant ticket revenues.
Instant ticket revenues remained flat on a year-over-year basis but declined 2.7% sequentially to $122.8 million. Sales of lottery systems and terminals plunged 28.4% from the year-ago quarter and 53.4% from the previous quarter to $15.0 million. Service revenues decreased 5.9% year over year and 9.9% quarter over quarter to $81.8 million.
Scientific Games' U.S. instant ticket retail sales decreased 2.0% year over year in the quarter. U.S. lottery systems customer retail sales plunged 14.9% year over year in the first quarter.
Sentiment: Strong Sell
As SGMS continues to lose money quarter after quarter, the book value of shareholders' equity on the balance sheet continues to fall. At the end of SGMS's fiscal 2009, the company had a book value of shareholders' equity of $620 M. In yesterday's SGMS press release, the balance sheet showed a book value of shareholders' equity of $316 M, meaning that $304 M in book equity had been wiped off the books because of quarterly losses in the past 13 quarters alone. Nearly 50% of SGMS's book equity has been blown away by the current management team that remains in place and will apparently now lead a combined SGMS/WMS entity that will have approximately $3 B in total LTD on the books when the deal is consummated. Wow!
Neither Lorne nor the CFO have ever mentioned this distressing fact in any quarterly cc. No wonder.
Yesterday's Q1 earnings release and conference call show perfectly why SGMS and its management are borrowing $1.5 B (at high cost) to acquire WMS. For the first time in many a quarter, SGMS did not have massive multi-million dollar asset write-offs or huge "one-time/non-recurring" expense charges. But despite this nice surprise, SGMS still lost a lot of money in Q1.
Why? Well the reason why is that the existing SGMS businesses do not (and will not) generate enough EBIT (Earnings Before Interest & Taxes) to cover the massive quarterly interest expense burden that the company's huge $1.6 B in LTD automatically bakes into the P&L every quarter. In Q1 SGMS had a positive EBIT of $11 M. However, after deducting $25 M in Interest expense (the "I") from the EBIT, the resulting EBT was a loss of $14 M. Even if Q1 Revenue had been $10 M higher (with a 40% margin), the EBT still would have been a loss of $10 M; not even close to break-even EBT. As a matter of fact, even if you take out the additional Q1 SG&A expense associated with the WMS acquisition and increase Q1 Revenue by $20 M (at 40% margin), the Company still would have had a net loss (EBT) for the quarter.
Lorne knows this ("Q1 financial performance was in line with our expectations") and he knows it is a trend he cannot reverse in the SGMS business. Luckily for him, interest rates today are low (relatively speaking), WMS has an un-levered balance sheet and WMS management & shareholders are apparently willing to take a cash buyout from SGMS, so Lorne gets to borrow another $1.5 B (primarily against the WMS cash-flow and debt-free balance sheet) and buy something that could "transform SGMS" (Lorne's words, not mine), even if the new debt burden will add another $100 M in annual interest expense to the combined P&L, wiping out 100% of the existing WMS EBIT in the process. Bigger? Yes. More profitable? Not anytime soon IMO.
ALW true to form, took his LSD tab and went before the Microphone.
Yes, very productive, except for the disconnect between external and internal expectations. Way to go guys!.
Keep up the good work.
Sentiment: Strong Sell
The results were not good at all. SGMS missed estimates of EPS and posted another set of losses. It was expected to post a near break even EPS of around $0.02 but lost $0.16 per share. Even the revenue of $219.60 million came in lower than the estimates of $227.59 million. On a YoY basis, the revenue was down 5%. It had posted earnings of 0.02 per share in Q1'12. Sequentially, the revenues declined by 12% from $249.24 million. The net loss in Q4'12 was, however, much higher at $0.29 per share. So though there has been some sequential decline in net loss, the picture remains grim. Consecutive losses have led to weakening of sentiment for the stock. In addition, the $1.5 billion acquisition of WMS Industries (WMS) was also at a significant premium to the market price of WMS. MGT Capital Investments has filed a lawsuit against WMS and other casino gaming companies for patent infringement. That lawsuit is up for Markman hearing later this year. The expected value of the lawsuit (all the defendants put together) is estimated by MGT to be between $300 million to $4.5 billion. This overhang obviously makes the price being paid by SGMS for WMS look even more expensive. WMS is still trading at a discount to the $26 acquisition price, and the shareholder approval for the merger will be sought by WMS in a few days from now. SGMS needs to ensure that WMS settles with MGT so that it is saved the risk of having to pay damages and royalty to MGT later. The cost of the lawsuit will itself be an unnecessary burden. But with such a short time left, some news from WMS has to come out soon. Meanwhile, even WMS missed analysts estimates of $0.25 per share significantly by reporting an EPS of $0.14 per share.
Big miss. Nothing good. However, ALW is excited. I lost count on the # 1/4's SGMS has missed.
Not miss. Lost money. They always lose every quarter. Id sell early before it goes to 6.
Sentiment: Strong Sell
More bonuses, More spending, More losses. Sounds like it is government run.
How many more quarters before we break even? Not with this greedy management!
I think MGT will settle for $3,000,000. . If it goes to court they will get nothing.
100's of millions. When you are a thief, eventually you get caught. Admit guilt, or risk much greater punishment.
Did Lorne keep going "Gollum" every time he tried to talk? (he used to all the time)