OUR PLAN TO MOVE IGT FORWARD AND CREATE SHAREHOLDER VALUE
The Ader nominees have a forward-looking plan to refocus IGT on its core slot machine and systems business in order to increase shareholder value. As detailed in our presentation, we believe that our plan could create incremental annual EBITDA of $160-200 million with an associated upfront investment of $125-150 million.
Our nominees would seek to implement our plan as follows:
- Re-engage with IGT's customers to improve their confidence in the company;
- Refocus internal efforts on the company's core slot machine and systems business;
- Reevaluate policies which we believe have alienated IGT from its front-line employees in its core business; and
- Initiate a strategic review to improve the implementation of the company's social gaming effort.
Elements of our plan include:
- Revenue Enhancement Opportunities – $125-150 million of potential EBITDA Opportunity (with an associated capital spend of $60-75 million)
- Gaming Operations
- Leveraging opportunities to make yield improvements in Mega Jackpot Progressives
- Improving Gaming Operations Mix and Market Share by refocusing on the highly profitable wide-area progressive business
- Improving efforts in International Markets–Focus on higher-growth Asian and Latin American markets
- Expanding into fast-growing Asian-centric Electronic Table Games Segment
- Product Sales
- Positioning IGT for Domestic Replacement Cycle Uptick–Seek to improve anemic Ship Share
- Pursuing significant upside potential in Asian and Latin American product sales
- Gaming Operations
- Expense Initiatives – $35-50 million of potential EBITDA Opportunity (with an associated capital spend of $60-75 million)
- SG&A Opportunities – Economizing on Flight Operations (IGT recently purchased a Gulfstream V that we believe is unnecessary, as there are more cost-effective ways to conduct necessary private air travel) and recalibrating bloated corporate Legal and Internal Sales staffing.
- Adjusting R&D spending by focusing on core business and developing a new game platform to replace the costly AVP (advanced video platform)
- Improving COGS/Margin by rationalizing manufacturing overhead through process improvement