Download - Investor Business Update September 2006
Safe Harbor Statement
Certain statements that may be made today will be considered “forward looking” as that term is defined under the rules of the Securities and Exchange Commission. Such forward looking information and statements involve risks and uncertainties that could lead to the actual results differing from those contained in today’s presentation and discussion. The general factors impacting future results are discussed in detail in our SEC filings. The presentation is only valid for today’s date and Bally undertakes no obligation to update the information contained in this report.
Presentation Outline
• Overview of Bally Technologies, Inc.• Gaming Review• Systems Review• Company and Investment Highlights
Corporate Overview
Worldwide technology company engaged in the design, assembly, distribution and operation of diversified gaming devices and casino systems for traditional and non-traditional markets
75 year history in gaming
Headquarters: Las Vegas, NV
Worldwide Employees: 1,640
Own and operate the Rainbow Casino in Vicksburg, Mississippi
Status of Financial Filings
Step One: RestatementsStep Two: Quarterly Statements FY
06Step Three: Form 10-K FY 06Step Four: Q1 for FY 07
Focused Technology Company
January 2003 -- Announced strategy to sell non-core assets to focus on our Bally Gaming and Systems “core” technology assets Disposed of four businesses with proceeds of $156.5
million Repaid $100M of term debt
Acquisition strategy (2003-2006) targeted technology-based companies in order to expand product offerings to cover the full scope of the gaming floor ACSC Casino MarketPlace Sierra Design Group Micro Clever Consulting MindPlay LLC
Focus Change - Bally Technologies, Inc.
Reflects our business focus on technology and innovation and building the Bally brand
Provides clarity to our stakeholders
Finalizes the company identity subsequent to the completion of non-core asset sales and strategic acquisitions
Longstanding value of the Bally name in the gaming industry
Bally Today
Full service technology provider to the broad gaming industry. Three main business drivers:1. GAMING SALES
Domestic, International, Class II
2. GAMING OPERATIONSWide Area, Daily Fee
3. SYSTEMSSoftware, Hardware, Services
Total Solutions Provider
Bally IGT WMSAristocr
at Atronic Konami
Video Slots
Reel-Spinning Slots
Class II
Video Lottery
Central Determination
International Games
Wide-Area Progressives
Licensed Titles
Proprietary Poker Games
AS400 - Based Systems
Linux - Based Systems
Windows - Based Systems
Group-Play Games
Table Game Systems
Table Game Hardware
Bonusing Technology
System - Based Games
Richard Haddrill — President, Chief Executive Officer 10+ years experience in gaming and technology industry
Gavin Issacs – Chief Operating Officer15+ years experience in gaming and technology industry
Robert Luciano — Chief Technology Officer 15+ years research and development experience in the gaming industry
Ramesh Srinivasan — EVP, Systems20+ years experience in technology and systems
Mark Lipparelli — EVP, Operations 17+ years experience in gaming and technology industry
Robert Caller — EVP, Chief Financial Officer 30+ years finance and accounting experience
Paul Lofgren — EVP, New Business Development13+ years experience in gaming and technology industry
Strong Management Team
Markets: Class III, Class II, Public, and International
Sold over 100,000 devices in the last 5 years
29,000 games on wide-area and daily fee arrangements
Largest systems provider - 240 casino customers
Worldwide licensing in over 260 gaming jurisdictions
Owner of Rainbow Casino - Vicksburg, Mississippi
Recent Company Announcements
Initial placement of Hot Shots March, 2006 (1,000 + Order Backlog)
Lincoln Park System Win Mexico initial order for 2,000 games – 2,000 online 18% share of games at Wynn Las Vegas System win at SouthCoast, 100% iVIEWs, Power Rewards System displacement of competitor system at SunCoast Borgata upgrade to iVIEW’s (4,100 units), Power
Progressive (branded as Power Winner) Initial placement of CineVision - January, 2006 Initial placement of S9000 five reel spinner – March, 2006 Strong share of games sold to reopened Mississippi
casinos Table Technology in Macau + TableView
Gaming Product Line
• Stepper / Mechanical• Video
– Standard + Cinevision + High Profile• Participation & Fee Based Games• Class II and Central Determination• Poker
Consolidation of Multiple Platforms to Alpha
Fully featured
Linux-based operating system
Download capable
Launched in April 2005 in all markets Platform approvals in all jurisdictions
Target titles for each market on plan
Gaming Technology
Domestic game replacement market likely will remain slow in for the remainder of CY 2006
New market / expansion opportunities:Domestic Gulf, FLA, PA
NY Lottery
Diversified portfolio of technology assets allows for faster reaction time for new market opportunities (e.g. Mexico)
Downloadable Gaming Strategy bolstered by C2/CD experiences
New Opportunities in Video for Bally Much Tighter Focus on International Initiatives March 2004 acquisition of Sierra Design Group provided a
strong presence in the Class II and central determination gaming markets (Key Markets – WA, OK, Fla)
International Mexico, Europe, Asia
South America
Domestic and International Expansion
A market share leader 35-40%+ domestic market share
Multiple Platform Options
Strong recurring revenue base 22% of revenues in fiscal 2005
Systems more critical to success Enhance the player experience, and
increase the yield per player
Large client list for upgrades and product expansions
Systems Technology
Selected Customer Portfolio
CORPORATE LEVEL: Harrahs, Boyd/Borgata,
Coast Casinos, Sands/Venetian, Trump, Pinnacle,
Penn, Isle of Capri, Colony Capital (Resorts),
Tropicana, Alladin, Fitzgeralds, Eldorado
NATIVE AMERICA: Foxwoods, Mohegan Sun,
Mystic Lake, Pearl River, Seneca, Barona,
Seminole Tribe, Morongo
INTERNATIONAL: 80+ clients worldwide
Systems Technology
2000’s1990’s1980’s
•First deployment of player tracking
•All bonuses are generally manually or hand-keyed into systems
•Player tracking becomes standard throughout the industry
•Bally SDS introduces bar-coded marketing coupons as player incentive rewards
•ACSC introduces first cashless downloads to the slot machine
•Automated cashless rewards based on slot play
•Elimination of manual drawing tickets and carnival like prizes
•Targeted bonusing based on player demographics
•Interactive Touch Screen
Systems Product Migration
Unix UnixAS400, UNIX, Windows,
Tables, and System Gaming
Evolving Technology iVIEW used to interact with players Peripheral and configuration
management
Game personality downloads
Deployments in non-traditional markets
Game outcomes are already centrally determined
Strong systems presence likely to be an advantage
Systems Technology -- Downloadable Games
Table Technology
Automated Tools - Integrated
Bet Detection Card Dectection Surveillance Player Ratings Card Handling
Patented Technology
MoneyPieces™ gaming chips
Market Potential – 30,000 Table Games
Deep historical and current intellectual patent portfolio in multiple product areas.
Market leading development centers in the US, UK, France, and India.
R&D spending as a percentage of revenues: 9.0% (2005), 7.6% (2004), 5.2%
(2003)
R & D and Patent Focus
Investment Highlights
Leading developer of gaming technology Strong Product Portfolio Hitting Market Cabinet, Platform and Content Focused Corporate Strategy
Industry leader in systems Strong Support History iVIEW gaining traction Bonusing and promotions software
Strong presence in Class II markets Washington, Florida, and Oklahoma
Domestic and International expansion Video Markets Florida, Pennsylvania and NY Lottery Mexico, South America, Asia and Europe