CSDS Earnings:
Casino Data Systems Reports Profitable Quarter
Casino Data Systems (Nasdaq: CSDS)
today announced profits for a fifth consecutive quarter.
Performance Overview
The Company reported total revenue of $15.7M for the quarter ended
March 31, 1999, an increase of $2.0M and $3.0M over the previous quarter and
the same quarter in the prior year, respectively.
Income from operations for the quarter ended March 31, 1999 was $183K,
compared to a loss from operations of $645K in the preceding quarter and
income from operations of $109K in the same quarter in the prior year.
"Consistent with the objectives we stated last quarter, we increased both
revenues and income from operations," stated Lee Lemas, Chief Operating and
Financial Officer. "Also consistent with the objectives we stated in the
prior quarter, we will continue to seek greater profit through increased
revenue while we maintain our focus on cost controls and increasing production
efficiencies throughout 1999."
Net income for the quarter ended March 31, 1999 was $192K compared to
$1.8M in the preceding quarter and $320K in the same quarter in the prior
year. Basic earnings per share were $.01 for this quarter as compared to
$.10 for the preceding quarter and $.02 for the same quarter in the preceding
year.
The balance sheet remained strong as of March 31, 1999 with unrestricted
and restricted cash and investments of $29.6M combined with zero long term
debt.
Revenues
Revenues from Systems and Services sales were $6.9M for the quarter ended
March 31, 1999, an increase of $907K and $1.5M over the preceding quarter and
the same quarter in the prior year, respectively. The increase in revenues is
primarily due to sales of the Company's Windows* based product which became
available for sale late in the fourth quarter of 1998.
Revenues from recurring revenue products were $2.2M for the quarter ended
March 31, 1999, a decrease of $52K and $611K for the preceding quarter and the
same quarter in the prior year, respectively. These decreases are due to
decreases in the number of operating units and lower levels of play on the
Company's Cool Millions(TM) products.
Revenues from game sales were $4.7M for the quarter ended March 31, 1999,
an increase of $358K and $2.1M over the preceding quarter and the same quarter
in the prior year, respectively. These increases are primarily due to the
increased portfolio of games available for sale. The most notable new
addition and contributor to the increased sales is the Bandit(TM) Bingo game
which was approved March 25 by the Nevada Gaming Commission. As previously
announced, this is the first of the Company's high-end multimedia games on its
Bandit platform.
Revenues from signs and meter sales were $1.2M for the quarter ended
March 31, 1999, an increase of $428K over the preceding quarter, and a
decrease of $131K over the same quarter in the prior year.
Revenues from TurboPower Software were $740K for the quarter ended
March 31, 1999, an increase of $339K and $186K for the preceding quarter and
the same quarter in the prior year, respectively. These increases are
primarily attributable to a new product released in the first quarter of 1999.
"We are extremely pleased with the revenue growth generated by our games
and systems lines of business. Our Bandit Bingo game and Oasis Windows system
have generated tremendous excitement with our casino customers" stated Steve
Weiss, CDS Chairman and Chief Executive Officer. "We plan to build on the
momentum generated by these products with future releases of several other
exciting games in the Bandit series combined with increased penetration of our
Oasis Windows system."
Gross Margin Percentage
Consolidated gross margin decreased to 44% for the quarter ended
March 31, 1999, from 46% and 47% for the preceding quarter and the same
quarter in the prior year, respectively. This decrease is primarily
attributable to a sales mix which was more weighted toward game sales, which
generally have a lower gross margin than the Company's other products.
Expenses
Selling, general and administrative expenses for the quarter ended
March 31, 1999, decreased $251K or 5% over the preceding quarter versus an
increase of $61K or 1% over the same quarter in the prior year. The decrease
in selling, general and administrative expenses from the preceding quarter to
the current quarter is primarily attributable to a decrease in legal costs.
The increase in selling, general and administrative expenses for the quarter
ended March 31, 1999 compared to the same quarter in the prior year is
primarily attributable to higher commissions and travel and related expenses
as a result of the higher revenues for the quarter ended March 31, 1999.
Research and development expenses for the quarter ended March 31, 1999
increased over the preceding quarter by $116K or 10% and by $512K or 64% over
the same quarter in the prior year. The increase in research and development
for the quarter ended March 31, 1999 over the preceding quarter is primarily
attributable to an increase in lab and prototype expense. The increase in the
quarter ended March 31, 1999 to the same quarter in the prior year is due
primarily to an increase in headcount.
Depreciation and amortization expense of $1.1M decreased $43K or 4% over
the preceding quarter and increased $397K or 61% for the same quarter in the
prior year. The decrease compared to the preceding quarter is primarily
attributable to a decrease in the number of linked games. The increase in
depreciation and amortization for the quarter ended March 31, 1999 as compared
to the same quarter in the prior year is due to an increased number of units
on the Xtreme(TM) link.
Safe Harbor
The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements contained in this release (as well as
information included in oral statements or other written statements made or to
be made by the Company) may contain comments that are forward-looking. Such
forward-looking information involves important risks and uncertainties that
could significantly affect anticipated results in the future and, accordingly,
such results may differ from those expressed in any forward-looking statements
made by or on behalf of the Company. In addition to factors discussed above,
other factors that could cause actual results to differ materially are the
following: business and economic conditions, and growth in the gaming industry
in various geographic regions; competitive factors, such as improvements in
rival systems functionality or game acceptance; pricing pressures; changes in
player preferences; timing of software systems product introductions and
upgrades; timely development, implementation, production and customer
acceptance of new games in a cost-effective manner; execution of the
manufacturing ramp; the ability to successfully enter new market segments and
manage the growth of such businesses; unanticipated costs or adverse effects
of changes in the gaming industry; final resolution of pending shareholder
litigation and other litigation; and other risk factors listed from time to
time in the Company's SEC reports.
Founded in 1990 with headquarters in Las Vegas, Nevada, Casino Data
Systems is a leading designer, manufacturer and distributor of innovative,
technology-driven products for the gaming industry. The Company's diversified
product line reaches into virtually all facets of the casino floor; including
complete casino management systems, games and meters, multiple site
progressive systems and casino signage.
* Windows is a registered trademark of Microsoft Corporation.
For more information on the Company, visit our website at:
csds.com
Casino Data Systems
Balance Sheets
For the periods Ended December 31, 1998 and March 31, 1999
Dollars in Thousands
BALANCE SHEET 03/31/99 12/31/98
ASSETS:
Current Assets:
Cash - Unrestricted $4,497 $5,141
Cash - Restricted 7,754 8,111
Investments 3,142 2,650
Accounts receivable, net 18,131 16,347
Inventory, net 20,914 19,147
Other current assets 2,311 2,342
Total Current Assets 56,749 53,738
Property and equipment, net 19,546 19,828
Investments 14,196 14,623
Note receivable 1,119 1,137
Intangible assets, net 4,264 4,649
Software development, net 3,426 3,804
Deposits 408 391
Deferred tax asset 840 840
Total Noncurrent Assets 43,799 45,272
Total Assets $100,548 $99,010
LIABILITIES AND SHAREHOLDER'S EQUITY:
Current Liabilities:
Current portion of long-term debt $78 $211
Accounts payable 3,499 3,687
Accrued expenses 9,140 8,026
Accrued slot liability 2,080 2,107
Total Current Liabilities 14,797 14,031
Noncurrent Liabilities:
Accrued slot liability 19,419 18,839
Total Noncurrent Liabilities 19,419 18,839
Shareholder's Equity:
Common Stock 83,790 83,790
Retained Deficit (17,458) (17,650)
Total Shareholder's Equity 66,332 66,140
Total Liabilities and Shareholder's Equity $100,548 $99,010
Casino Data Systems
Selected Financial Results
Three Months Ended March 31, 1999 and 1998
Dollars in Thousands Except Per Share Data
STATEMENT OF OPERATIONS
Three Months Ended
03/31/99 03/31/98
Systems & Services $6,896 $5,373
Games 4,694 2,621
Recurring Revenue 2,200 2,811
Signs 1,207 1,338
TurboPower 740 554
Total Sales 15,737 12,697
Costs of Goods Sold 8,768 6,772
Gross Margin 6,969 5,925
Cost and Expenses:
Selling General Administrative 4,419 4,358
Research and Development 1,316 804
Depreciation and Amortization 1,051 654
Total Costs and Expenses 6,786 5,816
Income From Operations 183 109
Other Income 112 376
Income Before Tax 295 485
Income Tax Expense 103 165
Net Income $192 $320
Basic Net Income Per Common Share $0.01 $0.02
Basic Weighted Average Shares Outstanding 18,066 18,066
SOURCE Casino Data Systems |
