International Game Technology Reports Operating Results (10-Q)
International Game Technology has a market cap of $5.26 billion; its shares were traded at around $17.71 with a P/E ratio of 22.2 and P/S ratio of 2.5. The dividend yield of International Game Technology stocks is 1.4%. International Game Technology had an annual average earning growth of 18.3% over the past 10 years.IGT is in the portfolios of Private Capital of Private Capital Management, John Rogers of ARIEL CAPITAL MANAGEMENT LLC, Tom Gayner of Markel Gayner Asset Management Corp, Manning & Napier Advisors, Inc, Richard Aster Jr of Meridian Fund, John Buckingham of Al Frank Asset Management, Inc., Bruce Kovner of Caxton Associates, George Soros of Soros Fund Management LLC, Jeremy Grantham of GMO LLC.
Highlight of Business Operations:The adoption of this new accounting guidance increased first quarter noncash interest expense $9.3 million for fiscal 2010 and $5.1 million for fiscal 2009. On an annual basis for fiscal 2010 and 2009, noncash interest expense will increase approximately $30.0 million and fiscal 2009 Debenture repurchase gains decrease approximately $5.0 million, reducing diluted EPS approximately $0.06 for fiscal 2010 and $0.08 for 2009.
Pending legal issues in Alabama have caused several charitable bingo properties to close their operations. At issue is the definition of “bingo.” Our charitable bingo operations and investments in Alabama represented approximately 2% or $9.4 million of quarterly consolidated revenues and 2% or $98.5 million of total assets, primarily development financing notes, as of and for December 31, 2009.
Gross profit and margin improvement was driven by reduced costs, primarily jackpot expense largely due to favorable interest rate changes, depreciation, royalties, and service labor. The prior year quarter gross profit also included approximately $11.5 million related to the extra week. Jackpot expense decreased $27.0 million overall, $19.0 million due to favorable interest rate movement compared to the prior year quarter. Additional information is available about factors affecting jackpot expense in our Annual Report on Form 10-K for the year ended September 30, 2009 under the caption MDA—CRITICAL ACCOUNTING ESTIMATES—Jackpot Liabilities and Expenses.
Deferred revenue decreased $15.2 million during the first quarter of fiscal 2010 to $106.8 million at December 31, 2009, primarily due to the completion of obligations under multi-element contracts. During the current quarter, we shipped 1,900 units for which revenues were deferred and recognized revenues for 2,600 units previously shipped, for a net decrease of 700 units in deferred revenue. “Units shipped” represent all units shipped to customers during the period and include units shipped for which revenues were deferred to future periods.
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