UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ending DECEMBER 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to_____
Commission File Number 001-10684
INTERNATIONAL GAME TECHNOLOGY
(Exact name of registrant as specified in charter)
Nevada 88-0173041
(State of Incorporation) (IRS Employer Identification No.)
5270 Neil Road, Reno, Nevada 89502
(Address of principal executive offices)
(702) 686-1200
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at February 6, 1996
Common Stock 125,519,122
par value $.000625 per share
<PAGE>
Part I - Financial Information
Item 1. Financial Statements
The accompanying consolidated financial statements have been prepared
by the Company, without audit, and reflect all adjustments which are, in
the opinion of management, necessary for a fair statement of the results
for the interim periods. The statements have been prepared in accordance
with the regulations of the Securities and Exchange Commission (the "SEC"),
but omit certain information and footnote disclosures necessary to present
the statements in accordance with generally accepted accounting principles.
These financial statements should be read in conjunction with the
financial statements, accounting policies and notes included in the
Company's Annual Report on Form 10-K for the fiscal year ended September
30, 1995. Management believes that the disclosures are adequate to make
the information presented herein not misleading.
Organization
International Game Technology (the "Company") was incorporated in
December 1980 to acquire the gaming licensee and operating entity, IGT, and
facilitate the Company's initial public offering. In addition to its 100%
ownership of IGT, each of the following corporations is a direct or
indirect wholly-owned subsidiary of the Company: I.G.T.-Australia, Pty.
Ltd. ("IGT-Australia"); IGT-Europe b.v. ("IGT-Europe"); IGT-Iceland Ltd.
("IGT-Iceland"); IGT-Japan k.k. ("IGT-Japan"); I.G.T.-Argentina S.A. ("IGT-
Argentina"); IGT-do Brazil Ltda. ("IGT-Brazil"); and International Game
Technology-Africa (Pty) Ltd. ("IGT-Africa").
IGT is the largest manufacturer of computerized casino gaming products
and proprietary gaming systems in the world. The Company believes it
manufactures the broadest range of microprocessor-based gaming machines
available. The Company also develops and manufactures "SMART" systems
which monitor slot machine play and track player activity, as well as wide
area progressive systems. In addition to gaming product sales and leases,
the Company has developed and sells computerized linked proprietary systems
to monitor lottery video gaming terminals and has developed specialized
lottery video gaming terminals for lotteries and other applications. The
Company derives revenues related to the operations of these systems as well
as collects license and franchise fees for the use of the systems.
IGT-Australia, located in Sydney, Australia, manufactures
microprocessor-based gaming products and proprietary systems, and performs
engineering, manufacturing, sales and marketing and distribution operations
for the Australian markets as well as other gaming jurisdictions in the
Southern Hemisphere and Pacific Rim.
IGT-Europe was established in The Netherlands in February 1992 to
distribute and market gaming products in Eastern and Western Europe and
Northern Africa. Prior to providing direct sales, the Company sold its
products in these markets through a distributor.
IGT-Iceland was established in September 1993 to provide system
software, machines, equipment and technical assistance to support Iceland's
video lottery operations.
<PAGE>
Item 1. Financial Statements, (continued)
IGT-Japan was established in July 1990, and in November 1992 opened an
office in Tokyo, Japan. On April 16, 1993, IGT-Japan was approved to
supply Pachisuro gaming machines to the Japanese market.
IGT-Argentina was established in December 1993 and opened an office in
Buenos Aires, Argentina to distribute and market gaming products in
Argentina and Peru.
IGT-Brazil opened an office in Sao Paulo, Brazil in October 1994 and
subsequently was incorporated in March 1995 to distribute and market gaming
products in Brazil.
IGT-Africa opened an office in September 1994 in Johannesburg South
Africa and subsequently was incorporated in October 1995 to distribute and
market gaming products in Southern Africa.
Unless the context indicates otherwise, references to "International
Game Technology," "IGT" or the "Company" include International Game
Technology and its wholly-owned subsidiaries and their subsidiaries. The
principal executive offices of the Company are located at 5270 Neil Road,
Reno, Nevada 89502; its telephone number is (702) 686-1200.
The consolidated financial statements include the accounts of the
Company and all its majority-owned subsidiaries. All material intercompany
accounts and transactions have been eliminated.
<PAGE>
Consolidated Statements of Income
[CAPTION]
<TABLE>
Three Months Ended
December 31,
1995 1994
<S> <C> <C>
(Amounts in thousands, except
per share amounts)
Revenues
Product sales $99,080 $114,144
Gaming operations 57,143 45,036
Total revenues 156,223 159,180
Costs And Expenses
Cost of product sales 54,930 66,252
Gaming operations 30,277 19,016
Selling, general and administrative 25,509 22,352
Depreciation and amortization 6,866 6,259
Research and development 6,303 7,079
Provision for bad debts 1,664 1,486
Total costs and expenses 125,549 122,444
Income From Operations 30,674 36,736
Other Income (Expense)
Interest income 9,730 8,991
Interest expense (5,219) (5,113)
Loss on sale of assets (14) (695)
Other 8,042 121
Other income, net 12,539 3,304
Income Before Income Taxes 43,213 40,040
Provision For Income Taxes 15,550 14,414
Net Income $27,663 $25,626
Primary Earnings Per Share $0.21 $0.19
Fully Diluted Earnings Per Share $0.21 $0.19
Weighted Average Common And Common
Equivalent Shares Outstanding 128,879 133,667
Weighted Average Common Shares
Outstanding Assuming Full Dilution 128,879 133,667
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
[CAPTION]
Consolidated Balance Sheets
<TABLE>
December 31, September 30,
1995 1995
<S> <C> <C>
(Dollars in thousands)
Assets
Current Assets
Cash and cash equivalents $235,602 $241,613
Investment securities,
at market value 48,167 47,813
Accounts receivable, net of
allowances for doubtful
accounts of $5,681 and $5,182 106,909 113,196
Current maturities of long-term
notes and contracts receivable,
net of allowances 60,966 80,271
Inventories, net of allowances for
obsolescence of $17,241
and $14,902:
Raw materials 46,534 39,526
Work-in-process 6,485 4,836
Finished goods 33,593 29,463
Total inventories 86,612 73,825
Deferred income taxes 32,069 25,336
Investments to fund liabilities
to jackpot winners 21,184 19,465
Prepaid expenses and other 4,459 5,117
Total current assets 595,968 606,636
Long-Term Notes and Contracts
Receivable, net of allowances
and current maturities 54,927 43,511
Property, Plant and Equipment, at Cost:
Land 13,856 13,910
Buildings 14,125 14,270
Gaming operations equipment 64,456 68,096
Manufacturing machinery and
equipment 65,221 62,454
Leasehold improvements 12,485 12,362
Construction in progress 41,482 23,999
Total 211,625 195,091
Less accumulated depreciation and
amortization (74,871) (75,793)
Property, plant and equipment,
net 136,754 119,298
Investments to Fund Liabilities
to Jackpot Winners 184,154 167,398
Deferred Income Taxes 40,029 27,735
Other Assets 8,957 7,120
Total Assets $1,020,789 $971,698
</TABLE>
<PAGE>
[CAPTION]
Consolidated Balance Sheets
<TABLE>
December 31, September 30,
1995 1995
<S> <C> <C>
(Dollars in thousands)
Liabilities and Stockholders' Equity
Current Liabilities:
Current maturities of long-term
notes payable and capital
lease obligations $ 6,870 $ 7,385
Accounts payable 29,275 28,862
Jackpot liabilities 27,915 25,072
Accrued employee benefit
plan liabilities 4,782 11,302
Accrued dividends payable 3,796 3,866
Accrued vacation liability 5,868 5,664
Other accrued liabilities 46,610 15,568
Total current liabilities 125,116 97,719
Long-Term Notes Payable and
Capital Lease Obligations,
net of current maturities 107,360 107,543
Long-Term Jackpot Liabilities 232,660 212,341
Deferred Income Taxes 1,156 -
Other Liabilities 4,559 5
Total liabilities 470,851 417,608
Commitments and Contingencies
Stockholders' Equity:
Common stock, $.000625 par value;
320,000,000 shares authorized;
150,156,238 and 150,118,534
shares issued 94 94
Additional paid-in capital 231,486 231,338
Retained earnings 486,896 463,039
Treasury stock; 23,612,546 and
21,268,046 shares at cost (170,706) (143,281)
Net unrealized gain on
investment securities 2,168 2,900
Total stockholders' equity 549,938 554,090
Total liabilities and
stockholders' equity $1,020,789 $971,698
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
[CAPTION]
Consolidated Statements of Cash Flows
<TABLE>
Three Months Ended
December 31,
1995 1994
<S> <C> <C>
(Dollars in thousands)
Cash Flows from Operating Activities:
Net Income $27,663 $25,626
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 6,866 6,259
Provision for bad debts 1,664 1,486
Provision for inventory
obsolescence 3,303 1,495
Loss on sale of assets 14 695
(Increase) decrease in assets:
Receivables 13,036 (11,672)
Inventories (22,491) 16,960
Prepaid expenses and other (781) 4,851
Other assets (5,307) (2,815)
Increase (decrease) in liabilities:
Accounts payable and accrued
liabilities 669 (8,040)
Accrued and deferred income
taxes payable, net of tax benefit
of stock option and purchase plans 15,003 9,105
Other 257 29
Total adjustments 12,233 18,353
Net cash provided by operating
activities 39,896 43,979
</TABLE>
<PAGE>
[CAPTION]
Consolidated Statements of Cash Flows
<TABLE>
Three Months Ended
December 31,
1995 1994
<S> <C> <C>
(Dollars in thousands)
Cash Flows from Investing Activities:
Investment in property, plant and
equipment (25,404) (8,294)
Proceeds from sale of property,
plant and equipment 7,282 1,152
Purchase of investment securities (7,686) (6,365)
Proceeds from sale of investment
securities 6,751 23,687
Proceeds from investments to fund
liabilities to jackpot winners 6,029 4,295
Purchase of investments to fund
liabilities to jackpot winners (24,504) (14,467)
Net cash provided by (used in)
investing activities (37,532) 8
Cash Flows from Financing Activities:
Principal payments on debt (1,978) (99)
Payments on liabilities to
jackpot winners (6,029) (4,295)
Collections from systems to fund
liabilities to jackpot winners 29,191 17,530
Proceeds from stock options
exercised 62 232
Payments of cash dividends (3,866) (3,971)
Proceeds of long-term debt 1,501 -
Payments to purchase treasury stock (27,425) -
Net cash (used in) provided by
financing activities (8,544) 9,397
Effect of Exchange Rate Changes on Cash 169 1,178
Net Increase (Decrease) in Cash and
Cash Equivalents (6,011) 54,562
Cash and Cash Equivalents at
Beginning of Period 241,613 142,730
Cash and Cash Equivalents at
End of Period $235,602 $197,292
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
Notes to Consolidated Financial Statements
1. Notes and Contracts Receivable
[CAPTION]
The following allowances for doubtful notes and contracts were netted
against current and long-term maturities:
<TABLE>
December 31, September 30,
1995 1995
<S> <C> <C>
(Dollars in thousands)
Current $ 1,611 $ 3,465
Long-term 12,490 10,149
$14,101 $13,614
</TABLE>
2. Construction of New Corporate Headquarters and Manufacturing Facility
In May 1994, the Company purchased a 78-acre site in Reno, Nevada for
approximately $6.0 million for the construction of an approximately 915,000
square foot office, manufacturing and warehousing facility. The
manufacturing and warehousing facility was completed in early calendar
1996. The Company anticipates that the office facility will be completed
in late calendar 1996 absent unexpected delays. The estimated total cost
of all facilities including the site is $82.4 million.
3. Income Taxes
The provision for income taxes is computed on pre-tax income reported
in the financial statements. The provision differs from income taxes
currently payable because certain items of income and expense are
recognized in different periods for financial statement and tax return
purposes.
4. Concentrations of Credit Risk
The financial instruments that potentially subject the Company to
concentrations of credit risk consist principally of cash and cash
equivalents and accounts, contracts, and notes receivable. The Company
maintains cash and cash equivalents with various financial institutions in
amounts, which at times, may be in excess of the FDIC insurance limits.
Product sales and the resulting receivables are concentrated in
specific legalized gaming regions. The Company also distributes a portion
of its products through third party distributors resulting in significant
distributor receivables. At December 31, 1995 accounts, contracts, and
notes receivable by region as a percentage of total receivables are as
follows:
[CAPTION]
<TABLE>
<S> <C>
Nevada 34.1%
Riverboats (greater Mississippi River area) 17.6%
Colorado 8.5%
Native American Casinos (distributor) 8.1%
Louisiana (distributor) 1.9%
New Jersey (distributor) 1.8%
Other Regions (individually less than 5%) 28.0%
Total 100.0%
</TABLE>
<PAGE>
Notes to Consolidated Financial Statements
Effective September 30, 1993, the Company sold its equity ownership
interest in CMS-International ("CMS") to Summit Casinos-Nevada, Inc.
("Summit"), whose owners include senior management of CMS. The Company
remains as guarantor on certain indebtedness of CMS, which, at December 31,
1995, had an aggregate balance of $16.1 million. The notes that have been
guaranteed are also collateralized by the respective casino properties.
Summit has agreed to indemnify and hold the Company harmless against any
liability arising under these guarantees. Management believes it is
unlikely that the Company will incur losses relating to these guarantees.
5. Supplemental Statement of Cash Flows Information
Certain noncash investing and financing activities are not reflected
in the consolidated statements of cash flows.
The Company manufactures gaming machines which are leased to customers
under capital leases. Accordingly, transfers from inventory to property,
plant and equipment totaling $6,435,000 and $2,571,000 were made in the
quarters ended December 31, 1995 and 1994, respectively.
The tax benefit of stock options totaled $86,000 and $168,000 for the
three months ended December 31, 1995 and 1994, respectively.
During the quarter ended December 31, 1995, unrealized losses on
investments, net of taxes totaling $732,000 were recorded within "Net
unrealized gain on investment securities" in stockholder's equity.
On December 1, 1995, the Board of Directors declared a quarterly cash
dividend of $.03 per share, payable on March 1, 1996 to shareholders of
record at the close of business on February 1, 1996. At December 31, 1995,
the Company had accrued $3,897,000 for the payment of this dividend.
Payments of interest for the three months ended December 31, 1995 and
1994 were $6,774,000 and $4,723,000, respectively. Payments for income
taxes for the first three months of fiscal 1996 and 1995 were $2,000,000
and $1,500,000, respectively.
6. Contingencies
The Company has been named in and has brought lawsuits in the normal
course of business. Management does not expect the outcome of these suits,
including the lawsuit described below, to have a material adverse effect on
the Company's financial position or results of future operations.
The Company is a defendant in three class action lawsuits, one filed
in the United States District Court of Nevada, Southern Division, entitled
Larry Schreier v. Caesar's World, Inc., et al., and two filed in the United
States District Court of Florida, Orlando Division, entitled Poulos v.
Caesar's World, Inc., et al. and Ahern v. Caesar's World, Inc., et al.,
which have been consolidated in a single action. Also named as defendants
in these actions are many, if not most, of the largest gaming companies in
the United States, and certain other gaming equipment manufacturers. Each
complaint is identical in its material allegations. The actions allege that
the defendants have engaged in fraudulent and misleading conduct by
inducing people to play video poker machines and electronic slot machines,
based on false beliefs concerning how the machines operate and the
Notes to Consolidated Financial Statements
extent to which there is actually an opportunity to win on a given play.
The complaints allege that the defendants' acts constitute violations of
the Racketeer Influenced and Corrupt Organizations Act ("RICO"), and also
give rise to claims for common law fraud and unjust enrichment, and it
seeks compensatory, special consequential, incidental and punitive damages
of several billion dollars.
In response to the complaints, all of the defendants, including the
Company, filed motions attacking the pleadings for failure to state a
claim, seeking to dismiss the complaints for lack of personal jurisdiction
and venue, and seeking to transfer venue of the actions to Las Vegas. The
Court has granted the defendants' motion to transfer venue of the action to
Las Vegas. Plaintiffs have responded to all motions, and have also
propounded discovery with respect to each defendant on jurisdiction, venue,
and class issues. The Company expects that there will be further briefing
on the motions, and the Court has not indicated when it will rule on these
motions. Plaintiffs have also filed their motion to certify the class. A
representative group of the defendants took the deposition of each
plaintiff, and also obtained documents from the plaintiffs. It is not known
when the Court will rule on the class certification motions.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
THREE MONTHS ENDED DECEMBER 31, 1995 COMPARED TO THE
THREE MONTHS ENDED DECEMBER 31, 1994
Revenues for the first quarter of fiscal 1996 totaled $156.2 million
as compared to $159.2 million in the first quarter of fiscal 1995. Net
income for the quarter was $27.7 million or $.21 per fully diluted share
versus $25.6 million or $.19 per share in the prior year.
Revenues and Gross Profit Margins
Total revenues decreased 2% as a result of a 13% reduction in product
sales revenue partially offset by a 27% gain in gaming operations revenue.
Product sales revenue of $99.1 million for the first quarter of fiscal
1996 decreased $15.1 million from the comparable prior year period. The
Company sold 17,100 and 20,300 machines during the first quarter of fiscal
1996 and 1995, respectively. The decrease in sales is due to fewer sales
to Native American, Nevada and riverboat markets. During the first quarter
of fiscal 1995, significant sales were made in the riverboat markets in
connection with the openings of several new casinos. Although machine
sales have decreased in domestic markets, the Company remains a dominant
supplier to gaming operators in North America and internationally. In the
international markets, the Company sold 4,800 machines in the current
quarter compared to 2,700 in the first quarter of fiscal 1995.
Revenues from gaming operations in the first quarter grew to $57.1
million in comparison to $45.0 million for the same period last year. This
27% increase is primarily attributable to the expansion of the Company's
linked progressive systems in the Native American and Nevada markets.
Progressive system revenue growth in the Native American market resulted
from an increase in the installed base of machines from 100 games in the
first quarter of fiscal 1995 to 800 in the current quarter. Nevada wide-
area progressive system revenues are up primarily due to increased play on
the Company's Megabucks system and the introduction of the new Quarters and
Dollars Deluxe systems which began last year.
Gross profit on total revenues for the first quarter of fiscal 1996
was $71.0 million compared to $73.9 million for the first quarter of fiscal
1995. The gross margin on product sales increased from 42% in the first
quarter of fiscal 1995 to 45% in the current quarter due to improved
production efficiencies which resulted from having fewer direct labor
employees in the current period compared to the first quarter of fiscal
1995. International sales, which had higher than average margins, also
contributed to the increased margin on product sales. The gross margin on
gaming operations was 47% and 58% for the first quarter of fiscal 1996 and
1995, respectively. This decrease in gross profit margin relates to the
increase in the cost of interest sensitive annuities the Company purchases
to fund jackpot payments.
Expenses
Selling, general and administrative expenses increased $3.2 million or
14% for the first quarter in comparison to the same prior year period.
This increase is primarily the result of costs associated with relocation
to the Company's new manufacturing facility. Research and development
expenses totaled $6.3
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations, (continued)
million for the quarter compared to $7.1 million for the first quarter of
fiscal 1995. This decrease is due to two factors. Research and
development expenses decreased due to allocating a larger portion of
engineering efforts toward custom engineering in the current period. The
expenses incurred for custom engineering are charged to customers and,
therefore, included in cost of sales. Additionally, research and
development expenses in Australia declined $275,000 due to the completion
of design and development of the Game King product which is now in
production.
Depreciation and amortization expenses were $6.9 million and $6.3
million for the quarters ended December 31, 1995 and 1994, respectively.
The increase over the prior year period is primarily due to depreciation of
the larger number of units installed on the Company's linked progressive
systems. The provision for bad debts in the first quarter increased
$178,000 in comparison to the prior first quarter. This increase is due
primarily to sales in emerging markets.
Other Income and Expense
The increase in interest income from $9.0 million in the prior year
first quarter to $9.7 million in the current quarter is primarily
attributable to the increase in systems play, resulting in increased income-
producing investments to fund future jackpot payments. Correspondingly,
interest expense which totaled $5.2 million and $5.1 million for the first
quarter of fiscal 1996 and 1995, respectively, has increased in response to
this overall growth in jackpot liabilities. The increase in interest
expense related to the jackpot liability was offset by a decrease in
interest expense due to capitalization of interest associated with
construction of the Company's manufacturing facility (see Note 2).
The loss on the sale of assets during the first quarter of fiscal 1996
decreased $681,000 from the comparable prior year period due to unrealized
losses recorded in the prior year quarter for the Company's investment in
the common stock of Radica Games Limited.
Other income increased $7.9 million over the first quarter of fiscal
1995 due primarily to a $7.6 million settlement which was received by IGT-
Australia from the State of Victoria, Australia.
LIQUIDITY AND CAPITAL RESOURCES
Working Capital
Working capital decreased $38.1 million to $470.9 million during the
three months ended December 31, 1995. The primary factors for this
decrease are as follows. Working capital decreased due to decreases in
current maturities of long-term notes and contracts receivable of $19.3
million which was attributable, in part, to substantial payments of current
balances. Working capital also decreased due to an increase in accrued
income taxes payable which is due to the timing of estimated tax payments.
This decrease in working capital was offset by the $12.8 million increase
in inventories. To insulate the Company's customers from the impact of the
relocation and the resulting production down time, additional inventory was
acquired and produced in advance of the relocation (see Note 2).
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations, (continued)
Cash Flow
During the three month period ended December 31, 1995, the Company
generated cash from operating activities of $39.9 million. Decreases in
receivables and increases in accrued and deferred income taxes provided
cash from operating activities while increases in inventories used
operating cash.
This increase in operating cash was offset by cash used in investing
activities of $37.5 million and cash used in financing activities of $8.5
million, respectively. The cash used in investing activities relates
primarily to construction of the new manufacturing facility (see note 2) as
well as purchases of investments to fund jackpot liabilities. The cash
used in financing activities is due to purchases of the Company's common
stock in accordance with the stock repurchase program offset by collections
from the progressive systems to fund the related liabilities.
Lines of Credit
As of December 31, 1995, the Company had a $50.0 million unsecured
bank line of credit with various interest rate options available to the
Company. The line of credit is used for the purpose of funding operations
and to facilitate standby letters of credit. The Company is charged a
nominal fee on amounts used against the line as security for letters of
credit. Funds available under this line are reduced by any amounts used as
security for letters of credit. At December 31, 1995, $48.1 million was
available under this line of credit.
IGT-Australia had a $4,440,000 (Australian) bank line of credit
available as of December 31, 1995. Interest is paid at the lender's
reference rate plus 1%. This line is secured by equitable mortgages, and
has a provision for review and renewal annually in January. At December
31, 1995, no funds were drawn under this line.
The Company is required to comply, and is in compliance, with certain
covenants contained in these line of credit agreements which, among other
things, limit financial commitments the Company may make without written
consent of the lender and require the maintenance of certain financial
ratios, minimum working capital and net worth of the Company.
Stock Repurchase Plan
A stock repurchase program was originally authorized by the Board of
Directors in October 1990. This repurchase program currently allows for
the purchase of up to 24.0 million shares. During the first quarter of
fiscal 1996, the Company purchased 2,344,500 shares of its own outstanding
common stock for a total of $27,425,000 in cash. During January 1996, the
Company purchased 1,065,000 shares of its own outstanding stock for a total
of $11,980,000 in cash. As of January 31, 1996, the Company has purchased
a total of 21,657,018 million shares (adjusted for stock splits) under this
repurchase program.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations, (continued)
RECENTLY ISSUED ACCOUNTING STANDARDS
The Financial Accounting Standards Board ("FASB") issued SFAS No. 121
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of" in March 1995. This statement, effective for the
Company's fiscal year ended September 30, 1997, requires that long-lived
assets and certain identifiable intangibles to be held and used by an
entity be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. Management believes that if SFAS No. 121 had been adopted at
December 31, 1995, it would not have had a significant effect on the
financial position or results of operations of the Company.
The FASB issued SFAS No. 123 "Accounting for Awards of Stock-Based
Compensation to Employees" in October, 1995. This statement, effective for
the Company's fiscal year ended September 30, 1997, requires certain
disclosures about the impact on results of operations of the fair value of
stock-based employee compensation arrangements. Management believes that
if SFAS No. 123 had been adopted at December 31, 1995, it would not have
had a significant effect on the financial position or results of operations
of the Company.
<PAGE>
Part II - Other Information
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None.
(b) Reports on Form 8-K
None.
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
Date: February 13, 1996
INTERNATIONAL GAME TECHNOLOGY
By:/s/Scott Shackelton
Scott Shackelton
Vice President
Corporate Controller
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000353944
<NAME> INTERNATIONAL GAME TECHNOLOGY
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-96
<PERIOD-START> OCT-01-95
<PERIOD-END> DEC-31-95
<CASH> 235,602
<SECURITIES> 48,167
<RECEIVABLES> 175,167
<ALLOWANCES> 7,292
<INVENTORY> 86,612
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0
0
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</TABLE>
