Light & Wonder(LNW) - 2023 Q1 - Quarterly Report

Financial Performance - Total revenue for Q1 2023 was $670 million, a 17.1% increase from $572 million in Q1 2022[23] - Operating income for Q1 2023 was $102 million, compared to $40 million in Q1 2022, representing a 155% increase[23] - Net income from continuing operations was $27 million in Q1 2023, a significant improvement from a net loss of $67 million in Q1 2022[23] - Basic net income per share from continuing operations was $0.24 in Q1 2023, compared to a loss of $0.72 in Q1 2022[23] - For the three months ended March 31, 2023, net income was $27 million, a decrease of 3.57% from $28 million in the same period of 2022[30] - Total revenue for the three months ended March 31, 2023, was $572 million, with Gaming contributing $355 million and SciPlay $158 million[50] - AEBITDA for the three months ended March 31, 2023, was $249 million, compared to $N/A in the previous year[47] - AEBITDA for the same period was $202 million, with Gaming at $171 million and SciPlay at $44 million[50] Cash and Assets - Cash and cash equivalents increased to $931 million as of March 31, 2023, up from $914 million at the end of 2022[27] - Total assets as of March 31, 2023, were $6,022 million, slightly up from $6,009 million at the end of 2022[27] - Total liabilities decreased to $4,838 million as of March 31, 2023, from $4,848 million at the end of 2022[27] - Cash, cash equivalents, and restricted cash at the end of the period totaled $1,030 million, an increase from $670 million at the end of the same period last year[30] - Total receivables as of March 31, 2023, were $472 million, a slight increase from $469 million as of December 31, 2022[52] - Current receivables, net, increased to $458 million from $455 million, while long-term receivables remained stable at $14 million[52] - Total inventories increased to $172 million as of March 31, 2023, compared to $161 million as of December 31, 2022[57] - Property and equipment, net, rose to $214 million from $204 million, with accumulated depreciation increasing to $679 million[58] - Goodwill increased to $2,922 million as of March 31, 2023, from $2,919 million as of December 31, 2022[63] - Software, net, decreased slightly to $141 million as of March 31, 2023, from $145 million as of December 31, 2022[64] Debt and Liabilities - Total long-term debt outstanding as of March 31, 2023, was $3.935 billion, a decrease of $45 million from the previous quarter[66] - The fair value of fixed and variable interest rate debt was estimated at $3.928 billion as of March 31, 2023[66] - Total interest expense for the three months ended March 31, 2023, was $75 million, down from $116 million in the same period of 2022[73] - The balance of contingent acquisition consideration liabilities decreased from $79 million as of December 31, 2022, to $76 million as of March 31, 2023[76] - The company remained in compliance with all financial covenants under its debt agreements as of March 31, 2023[67] Expenses - Research and development expenses were $54 million in Q1 2023, slightly up from $53 million in Q1 2022[23] - Capital expenditures for the period were $53 million, compared to $43 million in the prior year[30] - Stock-based compensation expense for the three months ended March 31, 2023, totaled $26 million, compared to $15 million in 2022[79] - Total operating lease expense for Q1 2023 was $6 million, consistent with Q1 2022, with cash paid for operating leases amounting to $5 million in Q1 2023[85] Legal and Regulatory Matters - The company continues to face risks related to market conditions, including the impact of COVID-19 and regulatory changes in the gaming industry[17] - The Colombian litigation could result in a payment of approximately $30 million plus interest, following a ruling by the Council of State[94] - The company is involved in ongoing litigation regarding antitrust claims related to automatic card shufflers, with proceedings still active and no estimate of possible losses available due to complexity[98] - The Tonkawa Tribe filed a class action complaint alleging an illegal monopoly in the card shuffler market, seeking unspecified damages and costs[99] - Casino Queen, Inc. filed a class action complaint asserting antitrust claims against the company, seeking treble damages for alleged monopoly practices[102] - Mohawk Gaming Enterprises filed a demand for class arbitration, claiming an illegal monopoly in the automatic card shuffler market and seeking treble damages[103] - Hannelore Boorn filed a class action in Kentucky regarding losses from online social casino games, seeking unspecified damages and attorney fees[104][105] - Andrea Sornberger filed a complaint in Alabama against the company for alleged violations of anti-gambling statutes, seeking unspecified damages and relief[108] Shareholder Activities - The company repurchased 0.5 million shares of common stock at an aggregate cost of $28 million during the three months ended March 31, 2023[81] - SciPlay's Board of Directors approved a share repurchase program allowing the repurchase of up to $60 million of Class A common stock through May 3, 2024, with $8 million spent to repurchase 0.5 million shares in Q1 2023[82] Tax Matters - The effective tax rate for Q1 2023 was impacted by tax benefits from internal restructuring transactions, resulting in a tax benefit of $1 million compared to an expense of $3 million in Q1 2022[84]