Shuffle Master, Inc. Reports Record Second Quarter Results
biz.yahoo.com
Thursday June 9, 4:03 pm ET
LAS VEGAS--(BUSINESS WIRE)--June 9, 2005--Shuffle Master, Inc. (NASDAQ National Market: SHFL) today announced its operating results for the second quarter and six months ended April 30, 2005.
Second Quarter Financial Highlights
Diluted earnings per share from continuing operations increased 36% to $0.19
Revenue increased 35% to $27.1 million
Income from operations increased 18% to $10.4 million
Net cash provided by operating activities increased 268% to $13.7 million
EBITDA from continuing operations increased 42% to $13.3 million
Year-to-date Financial Highlights
Diluted earnings per share from continuing operations increased 40% to $0.35
Revenue increased 47% to $52.5 million
Income from operations increased 30% to $20.1 million
Net cash provided by operating activities increased 222% to $19.2 million
EBITDA from continuing operations increased 51% to $25.7 million
Recent announcements included:
On May 3, 2005, the Board of Directors authorized management to repurchase up to $30.0 million of Shuffle Master common stock in the open market under a new share repurchase program. Remaining repurchases under all previous authorizations totaled $2.2 million.
On May 4, 2005, the Company announced the first orders for the Easy Chipper® roulette chip sorting machine. This marked the first release of a new product developed by CARD since the acquisition in May 2004. The first Easy Chipper was purchased by the Casino Munkebjerg Vejle in Vejle, Denmark, followed by a significant multi-unit order from Burswood International Resort Casino in Perth, Australia.
On June 6, 2005, the Company announced that its wholly-owned subsidiary, Shuffle Up Productions, Inc., successfully launched its Three Card Poker National Championship, with the first regional tournament held on June 6-7, 2005, at the Mohegan Sun Casino in Connecticut. The Three Card Poker National Championship will give players the opportunity to compete for over $2.0 million in cash prizes, with the finals being held at the Rio All-Suite Hotel and Casino® in Las Vegas from November 27, 2005 through December 2, 2005.
Shuffle Up Productions also announced that it has contracted
with LMNO Productions to develop and produce a multi-segment
television program, which we anticipate airing in early
calendar 2006, based on the 2005 Three Card Poker National
Championship tournaments.
Mark L. Yoseloff, Chairman and Chief Executive Officer commented, "We are extremely pleased with our second quarter financial results, as momentum in our core business remained solid. Our performance benefited from a significant revenue increase in our Utility Products segment, as well as a solid contribution from our Entertainment Products segment." Yoseloff concluded, "Looking to the remainder of fiscal 2005, our market-leading shufflers and table game content, in addition to our increasingly diverse product portfolio, will position Shuffle Master for continued growth. This is highlighted, in part, by continued progress in the roll out of our Table Master(TM) product, the recent shipment of our first Easy Chipper roulette chip sorting machines and the successful launch of our Three Card Poker National Championship."
Utility Products
Revenue from Utility Products totaled $17.4 million in the second quarter, an increase of 69% from $10.3 million in the comparable prior year quarter due to continued strength in the shuffler business. Utility Products lease revenue increased 24% due to a greater number of shuffler units on lease, primarily the Deck Mate®, MD2(TM) and one2six(TM) shufflers, as well as a slight increase in the overall average shuffler monthly lease rate. Utility Products sales and service revenue increased 108% as a result of continued strong demand for the one2six shuffler acquired from CARD, increased sales of Deck Mate and MD2 shufflers, as well as an overall increase in average shuffler selling prices.
Entertainment Products
For the quarter, revenue from Entertainment Products decreased slightly to $9.7 million versus $9.8 million in the same prior year period. Entertainment Products lease and royalty revenue remained relatively flat compared to last year due primarily to a higher average monthly royalty rate for Three Card Poker®, the table games acquired from BET Technology, Inc. ("BTI") in late February 2004, and an increase in the installed base of Four Card Poker(TM). These increases were offset by the conversion of Let It Ride® and Three Card Poker royalty units to lifetime license sales, which both yield higher average monthly royalty rates than the acquired BTI table games, as well as the Company's more recent game introductions. Entertainment Products sales and service revenue was comparable to last year, resulting from flat lifetime license sales of Let It Ride and Three Card Poker.
Operating Expenses
Operating expenses for the quarter totaled $10.0 million compared to $7.5 million in the prior year quarter. The increase in operating expenses was primarily due to higher fees associated with the Company's legal proceedings, the establishment of the Company's European headquarters and related headcount resulting from the CARD acquisition, project costs associated with Sarbanes-Oxley 404 compliance and increased investment in research and development activities. As a percentage of revenue, operating expenses for the second quarter were 37%, which is flat compared to the same quarter last year.
Balance Sheet, Cash Flows & Capital Deployment
Cash, cash equivalents, and investments totaled $42.8 million at April 30, 2005, a decrease from $47.0 million at October 31, 2004. Net cash provided by operating activities totaled $13.7 million during the quarter compared to $3.7 million in the prior year quarter. During the second quarter, the Company received a Federal and State income tax refund of approximately $6.6 million for fiscal years ended 2001, 2000 and 1999.
Capital deployment initiatives during the second quarter totaled approximately $2.5 million in capital expenditures. The Company also repurchased 407,500 common shares during the quarter for approximately $10.9 million at an average price of $26.76 per share.
Current Outlook
Management is targeting diluted earnings per share of $0.21 - $0.22 for the third quarter of fiscal 2005 and $0.77 - $0.79 for full year fiscal 2005. |
