Good afternoon ladies and gentlemen and welcome to Scientific Games 2020 Third Quarter Investor Conference Call. [Operator instructions] Please note this event is being recorded. Now let me turn the conference over to Robert Shore, Senior Director, Investor Relations and Corporate Finance for Scientific Games. Mr. Shore, you may begin..

Thank you, operator. During today's call, we will discuss our third quarter 2020 results and operating performance, followed by a question-and-answer period. With me today are Barry Cottle and Michael Quartieri. Our call today will contain statements that include forward-looking statements under the Private Securities Litigation Reform Act of 1995.

These statements involve certain risks and uncertainties that could cause actual results to differ materially from those discussed during the call.

For information regarding these risks and uncertainties, please refer to our earnings release issued earlier this afternoon, the materials relating to this call posted on our website and our filings with the SEC. We also will discuss certain non-GAAP financial measures.

A description of each non-GAAP measure and a reconciliation of each non-GAAP measure to the most directly comparable GAAP measure can be found in our earnings press release as well as in the Investors section on our website. As a reminder, this conference call is being recorded.

A replay of this webcast and accompanying materials will be archived in the Investors section of our website at scientificgames.com. Also, supplemental reference slides are available on our Investor Relations website.

While management will not be speaking directly to the slides, these slides are meant to facilitate your review of the company's results and to be used as a reference document following the call. Now let me turn the call over to Barry.

Barry?.

Buffalo Grand, Tarzan and Walking Dead. We also recently completed the process of reorganizing our studios with a goal of developing a higher quantity of top performing games. Ted will be leading our Las Vegas location.

This reorganization will help amplify our unique strengths and focus the studios on developing content for the largest market opportunities. Overall, the team is doing a great job, looking at the business with a fresh outlook, enhancing the culture and improving our product roadmap, commercial approach, marketing and analytics.

As a result of these efforts, we expect to see an increased game-ops footprint in 2021 and beyond, which is one of our key priorities. In our Lottery Group; we see strong industry trends continuing and domestic instant ticket sales, where we are the market leader. This led to a 10% growth in revenue from the prior year.

We've also seen great results with our Scientific Games Enhanced Partnership or SGEP program.

For new listeners on the call, this program is one in which the scientific games provides instant game category managed services across the full supply chain providing game design and portfolio management, brand logistics and analytic systems and services and retail optimization.

Base that have converted to our SGEP program outpace industry sales growth by over 40%. During Q3, we continued with major deliveries including converting the national lottery in Turkey with our JV partner with over 5,000 SGs wave lottery terminals, plus retail and digital scratch games and systems.

We continue to win key contracts and extensions, including securing with in Massachusetts for an instant ticket contract for five years, a 10-year Iowa lottery system's contract, a 10-year contract in Oklahoma, which includes both systems and SGEP along with a host of other wins and extensions, both domestically and abroad.

On the product side, we're relaunching our highly successful multi-state really Willy Wonka linked instant game and continue to have success with our retail solutions.

I do want to touch briefly on Brazil, Collectively with our JV partner we have chosen to withdraw from the proposed structure due to a failure to finalize negotiations with a local lottery retailer and an unfavorable Supreme Court ruling. After carefully considering our options.

We determined that proceeding further with the project would not be financially prudent. We didn't make a material capital investment in this market. We will continue to explore opportunities in the country.

In Lottery look for stability and domestic trends coupled with the opportunity for additional SGP conversions, Additional business continues to capture market share and see significant global opportunities across both sports betting and iGaming.

During the quarter, the transformation of our product development and delivery capabilities were evidenced by several new deal announcements and deployments. We signed a new partnership with Hard Rock International for full sports technology stack, and iGaming's ecosystem to power their U.S. growth plans.

We've already launched retail sports in Iowa and New Jersey for them during the quarter with mobile coming soon. We also extended our contract with BetMGM for iGaming signed up [indiscernible] as a partner in the U.S.

and reached an agreement with big time gaming a provider as some of the most sought after games and iGaming to become the sole distributor of their content in the U.S. and Canada. We also signed a multi-year contract renewal with the Flutter Group for our sports product.

Flutter's brand portfolio includes global market leaders in a wide array of regions, including FanDuel, Betfred, Paddy Power, Sky Bet, SportsBet in Australia and PokerStars. This year marks the 20th Anniversary of our partnership with the Flutter Group.

Over the last three year, we've re-engineered our Sports ecosystem to be both fast to market and highly customizable. This has led to increasing customer demand and the velocity of sports deployments, moving from an average of one-per-year in 2017 to launching more than 20 year-to-date.

Our iGaming platform is highly scaled, feature rich and year-to-date has delivered more than 13 billion game rounds to players across the world. We use product strategy similar to Netflix. We create the industry's best iGaming content including our own franchises such as Monopoly [indiscernible] and Raging Rhino.

And then supplement that with the world's leading content from third-party studios. In New Jersey alone, which is the most mature iGaming market in the U.S. we had a 40% market share and our revenue during the quarter was up over 100% from the prior year.

Across both sports and iGaming we are highly scaled cash generative with a loyal customer base in major regulated markets across the UK, EU, APAC and Canada. With that experience and the transformation of our people, products and technology we are well-positioned to capture further market share globally.

And finally with SciPlay, we generated above market growth in revenue and strong growth in AEBITDA again this quarter. Our baseline of revenue remains above pre-COVID-19 levels driven by improvements made to our gains in recent quarters. Our evergreen franchises of social casino games provide a highly reliable and sticky user base of players.

In fact, over the past four years, this business has grown above a 20% CAGR and outperformed the market by approximately 40%, delivering predictable results in AEBITDA growth. In addition to the organic growth in our social casino franchises, we are entering the $20 billion casual game genre with solitaire.

We will provide updates on this exciting initiative with the first step being beta testing in Solitaire Pets Adventure in the first half of 2021. To wrap-up, I'm really pleased with the cash flow we achieved in the business this quarter driven by the breadth of our portfolio, which has enabled strong growth.

The great talent we've assembled, and the governance changes we've implemented. There's a ton of enthusiasm right now throughout the organization, and I've never felt more confident in our position and the team we have than I do right now.

Looking ahead, we continue to execute on our key initiatives that drive growth and profitability as we identify new opportunities to capitalize on Scientific Games leadership and unique market position.

Importantly, we have the flexibility we need to properly position the company for long-term success and are committed to unlocking the full potential of the company's best-in-class collection of products and technologies to deliver outsize returns to investors. With that I'll turn it over to Mike Eklund to provide some financial highlights.

Mike?.

Thanks, Barry and good afternoon, everyone. I appreciate you all taking the time to join the call today. I want to start off today by simply emphasizing how excited I am about this new chapter for Scientific Games under a revitalized board and a revitalized shareholder base.

It's definitely an exciting time of the company's history and I'm delighted to be a part of it. I continue to see a tremendous opportunity to deliver significant value to our shareholders and it's great to know we have a strong and like-minded board and one that will challenge and support this management team to make it happen.

Obviously, the transition to the shareholder base and the board was a major focus area for us in Q3. And it was a major accomplishment for us in Q3.

In addition to supporting the transition, our global teams were also maniacally focused on growing out of a very challenging Q2 environment and positioning the company so that it can be nimble to perform strongly in whatever geopolitical and or macroeconomic environment we find ourselves in through the end of this year and beyond.

For Q3, three areas I'd like to highlight to start-off the call today. First is Barry mentioned, we generated $62 million in free cash flow, which was an $11 million year-over-year improvement. That was in the middle of a very challenging global economic backdrop in slow down.

This was driven by across the board and as I mentioned last quarter and renewed focus by our global teams on working capital management. We will continue to put significant attention and effort towards ensuring we deliver strong free cash flows and future quarters and every quarter.

Second, we ended Q3 with $1.2 billion and available liquidity, just over $1 billion of that was in cash and cash equivalents. This was coupled with a strong support we received from our banking group; many of you are on the phone today. Thank you for your support.

As we partnered with them to amend our credit agreement, which extended the covenant relief period under the revolving credit facility through the first quarter of 2022. The $100 million payment we made against the revolver in October also underscores our competence and our financial position.

Third, the breadth and resiliency of the Scientific Games portfolio continue to show its value and core strength. Despite the COVID impact on the gaming industry, all three of our other businesses; Lottery, Digital and SciPlay combined to post a 16% year-over-year revenue growth and 24% year-over-year adjusted EBITDA growth.

This is a true testament not only to the hard work of the teams within these business units, but also the value of meaningfully participating in a diversity of land-based and digital markets across real money and free-to-play gaming. Now let's talk about our quarterly results in a bit more detail.

Third quarter consolidated results showed a significant sequential improvement of 30% in revenue and 94% in adjusted EBITDA versus prior year however; revenue declined 18% to $698 million. These lower revenues drove a year-over-year adjusted EBITDA declined a 32%, down to $235 million.

Importantly that $235 million was up sequentially from $121 million in Q2. Given the reality of the global gaming market, which is seeming a lot more like a U-shape recovery than a V-shaped recovery, and the continued uncertainty of the global pandemic, we will continue to be somewhere between disciplined and cautious in our approach.

And we will continue to focus on cash flow and throttling standard investment in line with the current market outlook. This will include diligence on expense controls until revenues fully normalized. As a result of all of these measures, when revenue does return, we expect to have a higher flow through from revenue to cash flow.

Turning to our balance sheet and cash flows. We delivered $140 million in cash flow from operations, which is in line with prior year. The team continues to do an outstanding job managing the factors that are largely in our control and year-over-year delivered $44 million source of cash from working capital improvements in the quarter.

This resulted in free cash flow of $62 million and as mentioned earlier, this is an $11 million year-over-year improvement. As you will see in our press releases, we have also recast our free cash flow to exclude changes in restricted cash. After this change free cash flow would have been higher this quarter.

This revised presentation tends to more accurately aligned with what investors care about, which is the cash we generate that is available for debt reduction and strategic investment, excluding legally or contractually restricted cash. Our CapEx spend for the quarter was $50 million compared to $75 million last year.

For 2020 we now expect capital expenditures to be between $210 million and $225 million, which is just about $100 million below the guidance we set back in February of 2020. Finally, we ended the quarter with a net debt leverage ratio of 9.6. I'll quickly now turn to our Q3 business unit performance, starting with gaming.

In gaming, our results continued to be impacted by the pandemic with revenue and adjusted EBITDA down 49% and 66% year-over-year respectively. We did see strong sequential improvement, however, with revenue up 154% and adjusted EBITDA up 348% versus Q2. To add some color on the current environment over 90% of U.S. casinos are now open.

We are continuing to see strong year-over-year coin-in growth in our gaming operations segment with about three-fourth of our installed base currently being live. While we benefited from 40 openings this quarter, we won't have the same level of new casino openings in the fourth quarter.

Our lottery revenue and adjusted EBITDA both increased about 10% from the prior year, a strong results with a product that both continued rebound of domestic instant lottery sales and growth in the international product sells.

From a margin point of view, the growth in SGEP was offset by higher revenues and the lower margin equipment sales, which was $9 million above last year due primarily to increase sales into Turkey and Italy. Our digital revenue increased 15% to $75 million and adjusted EBITDA increased 47% to $25 million versus the prior year.

That $25 million number was helped by the completion of work delivered in the quarter. Just as a quick reminder, our current sports businesses primarily internationally based, with this being this – this business being more of a services and a time and a materials model.

That model tends to call some lumpiness in quarter-over-quarter revenues around when we deliver the end solutions and associated licensing's into the marketplace. Our $25 million adjusted EBITDA number this quarter was helped somewhat by that phenomenon in the business. That's opposed to our sports and our gaming business in the U.S.

which is smaller, part of our current revenue stream will grow kind of it tends to grow more smoothly and in line with the market. Finally on SciPlay, our business continued to perform better than the market with revenue up 30% and adjusted EBITDA up 54% over the prior year.

The business also showed strong productivity with adjusted EBITDA margin, increasing 500 basis points to 33%. In closing, Q3 with a solid result in an otherwise pretty difficult market. We made progress in several key areas that are worth mentioning again here, as we wrap up the call.

We transitioned to a new and independent board and a renewed shareholder base. We continue to strengthen our liquidity position, which is now at $1.2 billion, while also paying down $100 million on our revolver. We've added additional flexibility by extending our covenant relief period through Q1 of 2022.

We have three of our four businesses delivering very solid top hand and bottom line growth and dropping nice productivity to the bottom line. And importantly, we saw positive momentum in our gaming business from Q2 to Q3 while improving as long-term cost structure simultaneously.

In the middle of all of that, we stay focused on and continue to hire industry leading talent across all BUs and corporate functions. And we continue to invest in a high-performing and winning culture. Going forward we will continue to build upon this momentum focusing on at least four key finance priorities.

The first is predictability, which to us is developing a high say-do ratio in everything we do. The second is they set a balanced priorities, which is focusing on liquidity, growth and profitability.

The third is operational excellence and ensuring that its core to everything we do and delivering enhanced margins and an improved customer experience as we do it. And then fourth and finally, a renewed focus and determination on delivering the company. With that, we're happy to take your questions.

Operator, could you please open the line?.

[Operator Intrusions] The first question comes from Barry Jonas of Truist Securities. Please go ahead..

Hey guys. Good afternoon. My first question is, can you talk a little bit about how you're weighing the different paths and timeframes to deleverage? It seems like there are multiple options on the table on top of free cash flow generation, whether that's asset sales, equity raises or anything else? Thanks..

Thanks, Barry. This is Barry and I'll take that.

So, I think its most of you probably noted in our September 14th Investor Press Release and actually confirmed last week in our first board meeting, there is renewed interest to evaluate initiatives that we believe will drive shareholder value, but obviously it's early and we can't really speculate at this time.

As you guys know, it's something we have and will continue to consider with various structural avenues to deliver. Meanwhile, operationally and as demonstrated this quarter, we're also committed to de-levering by achieving greater cash flows from top and bottom line growth, cash and cost management and working capital management..

Great. Great. And then just one more for me; we've been hearing a lot about cashless gaming.

Maybe can you talk about Barry how you see the market opportunity and what differentiates your product from other offerings out there?.

Absolutely. So first of all I think like everyone has or seeing an increase interest in momentum, obviously due to the market conditions that have happened. We're actually excited about this because it's an area we've been working on for a while and we've developed some really good IP around it. In terms of our positioning and how we see it.

I mean, I think number one, we're extremely well positioned in the segment, given the leadership position we have in the systems category in which, as you know, we have about 525,000 slot machines connected and about 5,000 tables. So, it really helps us – we're already a part of that last mile, let's just call it between the wallet and the slot.

And so we've got a solution, as I mentioned before, we've been working on now for a while, combination of hardware software. We're in pre-production currently. We have two large corporate customers that we expect right now that we expect deployments beginning later this year.

And I think, for us, it's like I said it's we're seeing that – we're seeing both from a regulatory perspective, as well as from an operator perspective, increased interest in moving this stuff forward.

In terms of the revenue model, I think we also, the good thing about this is it's one that's going to be, won't dive into the detail, but it's a multiple stream revenue, which is a combination of some upfront hardware along with software licensing, maintenance, et cetera.

So, I think again good product, good mix and we're in a really nice position there given our current position in the marketplace, as well as the length of time and IP that we've developed in it..

That's great. If I could just sneak in one last one. We're certainly seeing some instances of second waves of COVID in certain States. One of your competitors talked about seeing in October some slight softness in some of their participation revenues.

Just wondering if you're seeing anything like that in any of your segments?.

I mean, right now, I’d say we remain cautiously optimistic. Obviously you see the progress that we made from Q3 over Q2. But we're aware as others are that things that are probably up in, particularly over in Europe and some of the countries there.

So right now I would just say that, we continue to see progress, but are monitoring the situation closely as these things are starting – hitting the market..

Yes. The only thing I'd add to that Barry, this is Mike. I mean, obviously first and foremost, the health and safety of our team members or customers or suppliers continue to be at the forefront of everything we do. We too are watching the same thing you're seeing as well. We hate to see it.

But obviously if it goes that direction, we've got a playbook now coming out of Q2 that we didn't want to run, but we needed to run to get the cost structure where it needed to be, to kind of play that thing out. Reluctantly, we'd just go back there, again if we had to but we're cautiously optimistic this thing will continue to move forward.

We liked the momentum. We saw Q2 to Q3. We think we'll see momentum Q3 to Q4, but like you and like everybody else we're watching the same things you all are. And it's anybody's guess right now how this thing's going to turn out..

Great. Really appreciate all the color. Thanks guys..

Next question comes from Chad Beynon of Macquarie. Please go ahead..

Good afternoon. Thanks for taking my question. Nice results. Really the only I guess confusing thing for us is on the game-ops. So I just wanted to revisit that a little bit. I believe you said that 25% of your installed base were inactive during the quarter and the active units were up double digits.

So I'm just a little confused on how that led to a 38% year-over-year decline, if you could confirm that. And then more importantly on these in actives, is that when it was blended during the quarter? And have you seen more of these units turned on, which could obviously help some momentum into the fourth quarter and beyond? Thanks..

Okay. This is next Barry. We report in our KPIs, to give you a total installed base. So that's what kind of a blended number, but they're – the KPI is actually a total number of reporting units in our KPI. It's about 70% to 80% of our units are currently turned on.

Can you guess the year-over-year upticks in terms of play levels? But yes, it couldn't kind of back into when year-over-year, but that's sort of their reporting process there..

Okay.

And are you – so have you seen more of these turned as you progress through the quarter? Is that how we should think about, absent any changes with the second way of kind of how that, that could potentially set in the fourth quarter?.

It's been relatively kind of 70% to 80% range. One thing I'd from a modeling perspective is New York is a really big market for us. And that opened kind of mid-September, so that was only in the quarter about one-month. But for the most part, it's kind of been 70% to 80% range shed..

Okay, great. I guess moving on to the social business that really held up very well. I think there were some fears that, that could come down. Could you talk about how the come to play.

Integration has gone so far and if there's any plans to roll out other titles, or if the thinking right now is monetization on the core games and then just further integration on solitaire paths and some of the come-to-play titles? Thanks..

Yes, absolutely. So I think first of all, the come-to-play integration to SciPlay has actually gone well. We've built a really nice playbook with showdown on the bingo front and just follow that same playbook. And it's really worked nicely plugging them into our – the analytics, the UA and the monetization schemes that we have there.

As you mentioned, there's one game that we were super excited about when we went into this acquisition, which was a solitaire game that we expect out, in beta in the first half of next year. I would say that's the first of, you think of this as a studio that specializes in this genre.

And so we'll focus initially on this solitaire game, but as grow then the way we tend to build game called Splinter Cell or Splinter Cell team-off of that and go after a related card game. So think of it as a center of excellence in that genre that we will – we'll begin to build from..

Thanks, Barry. Appreciate it..

The next question comes from John Decree of Union Gaming. Please go ahead..

Hi, everyone. Good afternoon. Barry, I wanted to ask a little bit about some of your comments in the prepared remarks and your focus on the installed base. You've hired some high caliber new talent to the R&D side of the business. And just wanted to see if you can help us understand what that means for R&D on the gaming segment going forward.

Should we expect to see a little bit more capital going to R&D or would it be a kind of reallocation of resources and what would the output kind of look like? Are you – you've mentioned higher performing games and more of them, but what does that take? Is it going to be more games in general or a focus on improving quality, I guess, how do we think about spend and output of the game studios with some of the changes that you're making there?.

It's a great question. I would – my top line would say, I think it's more of a focusing strategy as opposed to a quantity strategy. In fact, just the opposite, I think coming in the door, if you look at a year to two years ago, we were spread too thin going after too many markets and geographies.

The team that that's leading the gaming team has really done an amazing job of coming in, putting the plan together to really refocus the development resources towards the largest profit pools and within those profit pools, finding the gaps in the genres where we need to fill in.

And so the strategy is really about increasing the R&D after those large profit centers, and then offsetting that with not going after unprofitable efforts that are currently going on and finding efficiencies in other manners. And the model is really, the formula is very simple. We attract and get great R&D talent.

We've restructured the studios in accountable creative centers led by both the internal top talent that we have and some that we've brought in. we then target those after those profits centers, and then we've designed an incentive program for them to incent them toward it and drive forward on it. And so we're super excited.

We've already started to see that we showed the virtual G2E, some of the outcomes of this strategy, and I'm really excited about the product roadmap and games that we've got coming based on this..

And maybe John I'll just add one – I'll just add one thing real quick.

As Barry said, its fewer better games, right? And then putting our full weight and energy behind those games and then as you talk to Matt, Savan and Connie and the team, it's definitely going to be more money in R&D and going after prosecuting the product lineup, but we're going to self-fund it by taking cost out of other places and that's the plan the team has in place..

And higher top line obviously too..

Yes..

Got it. That's helpful. And Mike, perhaps a good segue into my second question, probably your area of expertise on working capital something you've talked about on prior calls, and now you've had a few months to roll up your sleeves.

I was wondering if you could kind of help unpack that a little bit and kind of maybe give us some examples of areas of improvement. And then to the extent that you'd be willing to kind of quantify the opportunity in terms of the impact on free cash flow.

Is it kind of nickels and dimes here and there? Or is the opportunity to increase cash flow through those initiatives a little bit larger than that?.

I'll probably stop short of giving guidance and what you'll probably hear me say is a bit of a no brainer, so I'll apologize, but it's just good old fashioned cash flow from operations and working capital, its PSI, DPO, and DSO, right.

When we look at those numbers, vis-à-vis the benchmarks in this industry and other industries, it would suggest we've got a lot of juice in that squeeze, if you will.

And we're just going to get really maniacally focused on our procure to pay processes or quote to collect processes, fine tuning our supply demand planning processes, making sure that we have the inventory required to deliver valuable top-line growth and all of those things just get rid of all the waste that's in them.

When we're done with that work, it will take some time to get through that in a meaningful way, and to put the automation, the tools, the technologies, the intelligence we need around it, but it's bigger than a bread box for sure, which is why we're going to focus on it..

Very good. Thanks guys. I'll hop back in the queue..

The next question comes from Ryan Sigdahl of Craig-Hallum Capital Group. Please go ahead..

Great. Thanks guys for taking my questions. So really a nice margin expansion in digital this quarter.

You noted a little some one-time stuff going on, but is Q3 a good run rate in the near-term? And then what does the longer term EBITDA margin look like in that business segment?.

I'll do the Q3 to Q4 run rate then I'll let Barry jump on the back of it. What I was trying to articulate there in the commentary is clearly we were helped by some one-time deliveries in Q3. So I don't think the Q3 run rate is indicative of Q4 run rate. And so we should just expect some of that one-time delivery, not to repeat itself in Q4.

That being said, we're still obviously very positive about the future of that business, the growth of that business, how we're winning in that business, a lot of really good things there, but we did have a nice little pop, one-time pop in Q3 that we wouldn't carry over into Q4..

That's really yeah. We recognized some license revenue in the third quarter in digital. There's a bit more detail on that in the SEC filings. So some comparability issue is kind of 3Q to 4Q filings, the business really go for all kinds of in between 2021 and 2022..

Then just any longer term targets or expectations on margins in that segment?.

No, we don't..

There's operating levers in the business as a scale it's obviously going to improve, but no kind of near-term targets there..

Moving on to then in the UK, some of the B2 operators there got a pretty large legal settlement up to a billion pounds from a tax refund.

Have you guys been able to claw back any of that given participation based machines there? Anything can you share there?.

Nothing we can really share right now, our taxing is definitely all over it, so that we're looking at, but probably pretty minimal that we can quantify at this time..

Great. That's it for me. Thanks guys. Good luck..

Thanks, Ryan..

Thanks, Ryan..

The next question comes from David Katz of Jefferies. Please go ahead..

Hi, afternoon everyone and thanks for taking my question. If you don't mind, I'm going to take a run at some of the initiatives comments that were made earlier.

And I am sort of wondering if those initiatives are more strategic in nature? Are they intended to – obviously they should include an outcome where they reduce leverage? Or can they be isolated to just strategic – strategic oriented allowing companies to grow differently and better and the like?.

Look, as I mentioned before, we can't speculate on specific actions. The goal here is, as we had mentioned before is to both drive shareholder value and delever the company. And we're looking at a – we're looking across the company at what strategic initiatives make sense in order to achieve maximization of shareholder value.

And that's really the only guidance that we can give at this time..

I see. And….

And then David, the only thing I would add is as I think it's all of the above. It's obviously we have an overarching objective to delever the company. We've tried to be pretty consistent to the offset.

With the new board, the leadership teams coming together, we're reviewing the strategy as we always do in terms of how to best maximize shareholder value.

In the meantime, we're just driving like crazy to get top-line growth, primarily in our gaming business pack and put the products in place we need to win in the marketplace and gain share and just focus on cash and operational excellence and cost is another big thing.

We think all of those things are going to go a long way towards delevering the company and we're just going to stay focused on that..

I understand not an easy one to ask or answer if I can just follow-up with respect specifically to the slot offerings within the company. Historically, we've seen companies in that business go through repositionings or retoolings or a variety of other characterizations.

And that can take some time because of the product development process inherent in it.

How would you sort of characterize where yours is? Is it some fine tuning of the process? Is it more of a retooling? How would you position that at this point?.

Look, I think, we're actually – if you remember, about three years ago, we started some initiatives to get to a single platform. So, we're completely platform agnostic. We began to do a reassessment of the product of the geographies and the target markets. Actually, Jamie and Toni joined us about a year and a half ago and started working that strategy.

And so, I would say, this is not a – okay, we're a complete rehaul and we're starting from scratch right now. I would say, actually, the first products we showed at G2E is – it has a – whatever you would call a fingerprint on what is an outcome of that.

So I think you're going to start to see the product roadmap coming out an outcome of the strategies that we've been putting in place. And I think it's only – given the timeline that you described, it's only going to get better over time as we continue to bring in more talent and the like.

And so I would say, our expectation is you are going to start seeing improvement immediately, but that gets our expectations, as they accelerate, even more as the team that's in place can make even greater impact as they will..

Yes, and I think the initial reaction to that, to your point, Barry on G2E was fantastic. Matt and the team were able to do a little bit of a virtual petting zoo and the feedback they got from the marketplace and the customers and every – I mean, we thought it was a great event. The customer feedback was awesome.

I think the 15 months into that retooling, as you mentioned, and we're pretty excited about what we're seeing so far. And I think the customers are reacting well to it..

Yes..

Thanks very much. I appreciate it..

The next question comes from Joe Stauff of Susquehanna. Please go ahead..

Thanks. Thank you very much. Good afternoon. I guess two questions. Look, I don't want to belabor the point because I know you are a little restricted in how you can answer it. But as we think about this strategic review process, right, the Board was just reconstituted as you referenced just had the first Board meeting.

Is this something that is likely to take, say six months or could that be sooner relative to how you think about the portfolio and whatever strategic decisions would be made? Is there any kind of just baseline guidance or timing that you could give us from that front?.

We're trying not to put timelines around it right now. I mean, obviously we're all coming together, we had a great first Board meeting with all the new members last week. We're working through it thoughtfully at an appropriate pace.

And when it's time to talk to the market about anything that might change, if something would have changed the move, we'll do that timely with all of you, of course..

Okay. And then maybe something, hopefully that's more explicit that you could answer is, strategically, how do you think about the benefits of having both gaming and lottery under one roof? That is, do you think one or the other businesses that you derive significance of synergies, maybe there are some marginal synergies from having them together..

Yes, look, I mean, I guess how I would describe it is, right now, operationally we're focused on being the global B2B provider of choice across the key forms of way training that's, gaming, sports betting and lottery, while supporting obviously our strategic stake in social. Strategically, I mean providing best-in-class platforms and content.

It means leading to digital transition and growth and then leveraging the broadest portfolio in deep partnerships in order to create differentiation. So to that end, the kind of key synergies that cut across our businesses today is we've got an amazing house of brands and franchises that we're able to leverage across all of our groups, right.

So whether that's Willy Wonka, Monopoly 88 Fortunes, all of our business units have access to that, which is nice. The other is there are some shared customers across some of the businesses units as well. There's, as an example, of Canadian lotteries where we'll supply various forms of gaming lottery and digital as well.

So we're obviously in early stages of that as we had mentioned before. But that's how you should think about our business as how we've been approaching it..

Okay. Thanks very much..

Thanks, Joe..

This concludes our question-and-answer session. I would like to turn the conference back over to Barry Cottle for any closing remarks..

Great. Thanks for joining us today, everyone. I know we've had a lot of new listeners on today's call, as well as our longtime supporters. We're truly excited about the talent and expertise we've added to our Board and the value creating opportunities that lay ahead with such a strong team and portfolio of assets.

I look forward to speaking to you next quarter and updating you on our progress to improve our balance sheet and deliver the best products to our partners in mobile and land-based gaming. Thank you all for your support..

The conference has now concluded. Thank you for attending to this presentation. You may now disconnect..