WMS Industries Reports Fourth Quarter and Fiscal Year Results
Business Wire - August 24, 1998 17:03
CHICAGO--(BUSINESS WIRE)--August 24, 1998--WMS Industries Inc. (NYSE:WMS) announced today its results of operations for the fiscal fourth quarter and fiscal year ended June 30, 1998.
Revenues for the fiscal 1998 fourth quarter increased 44% to 35,047,000 from $24,349,000 in the prior year period. Loss from continuing operations decreased to $983,000, $.04 per share, from $2,197,000, $.09 per share, in the fiscal 1997 fourth quarter. WMS
Industries completed the distribution of its shares of Midway Games Inc. on April 6, 1998 to WMS Industries shareholders of record on March 31, 1998. The June 30, 1997 income from discontinued operations of $10,752,000 is the after tax income from Midway Games
Inc. for the three months. Net loss for the fourth quarter ended June 30, 1998 was $983,000, $.04 per share, compared to net income, which includes both continuing and discontinued operations, of $8,555,000, $.35 per share, for the prior year period. Gain on sale of marketable securities reduced the fourth quarter ended June 30, 1998 loss from continuing operations and net loss by $.02 per share. The number of shares used in calculating per share earnings increased by 14% to 7,944,000 for the 1998 fourth quarter from 24,449,000 for the prior year period.
The Company's gaming subsidiary, WMS Gaming Inc., which designs, manufactures and markets casino gaming devices and video lottery terminals reported a 105% increase in revenues to $22,035,000 in the fiscal 1998 fourth quarter from $10,722,000 in the prior year quarter. In the fourth quarter of fiscal 1998, the majority of WMS Gaming's revenues were derived from the sale of video gaming devices and recently introduced models of reel type slot machines, while the majority of revenues in the prior year quarter were from the sale of video lottery terminals. WMS Gaming's segment gross profit increased more than six-fold to $6,937,000 from $1,101,000 in the prior year period. Fiscal 1998 fourth quarter segment operating income was $363,000 compared to a segment operating loss of $4,202,000 in the fiscal 1997 fourth quarter.
The Company's pinball game segment experienced a decrease in revenues to $9,061,000 in the fiscal 1998 fourth quarter from $13,627,000 in the prior year quarter due to decreased industry- wide demand for the current generation of pinball games. In response to the continued weak demand the Company has embarked upon a major redesign of its pinball products in an effort to increase their attractiveness and popularity with players and customers. WMS has been designing and selling pinball games for over 50 years and has previously overcome substantial declines in demand for its pinball games. The Company has historically been successful in re-igniting demand for its products by introducing new generations of pinball games. The Company's next generation pinball family, Pinball 2000, is currently scheduled for introduction by the end of calendar 1998.
After the April 6, 1998 spin-off of Midway Games Inc., the Company continues to manufacture under a contract the coin- operated video
games designed and sold by Midway Games Inc. The June 30, 1998 quarter includes a new business segment, contract manufacturing, which generated revenues of $3,951,000, gross profit of $613,000 and segment operating profit of $347,000. Previously the Company recorded these operations as a cost allocation between a parent and consolidated subsidiary.
Revenues for the fiscal year ended June 30, 1998 increased 29% to $98,990,000 from $76,596,000 in the prior fiscal year. WMS
Gaming's revenues for the fiscal year ended June 30, 1998 increased 69% to $56,788,000 from $33,613,000 in the prior fiscal year. Loss
from continuing operations reflects an after tax charge of $39,917,000, $1.51 per share, from the previously announced adjustments to the
WMS outstanding common stock options, was $48,824,000, $1.85 per share, for the fiscal year ended June 30, 1998. Loss from
continuing operations for the fiscal year ended June 30, 1997 was $46,797,000, $1.92 per share, which includes the after tax loss of
$37,361,000, $1.54 per share, from the provisions related to WMS Gaming patent litigation. Net loss, which includes both continuing and
discontinued operations, was $22,078,000, $.84 per share, for the fiscal year ended June 30, 1998 compared to net income of
$40,695,000, $1.67 per share, for the prior fiscal year.
This press release contains forward looking statements that involve risks and uncertainties including statements relating to introduction of a
new generation of pinball games. The actual results could differ materially from those anticipated in these forward looking statements as a
result of certain risks including those described in the Company's 1997 annual report on Form 10-K and other documents filed with the
Securities and Exchange commission.
WMS Industries Inc. is engaged in the design, manufacture and sale of coin-operated pinball and novelty games, video lottery terminals and
gaming devices and contract manufacturing.
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