Acres Gaming Releases First Quarter Results.Business Editors LAS VEGAS--(BUSINESS WIRE)--Oct. 31, 2001 Acres Gaming Incorporated (Nasdaq:AGAM AGAM Ambiente Gas Acqua Monza SpA (Italian) ), the leader in Bonusing(TM) technology for the gaming industry, today announced financial results for the quarter ended September September: see month. 30, 2001. Net revenue for the first quarter of fiscal 2002 increased 126% to $6.1 million from $2.7 million for the same quarter last year. Net income for the quarter totaled $417,000, or $.04 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to a net loss of $1.6 million, or ($.18) per diluted share for the first quarter of fiscal 2001. Gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. increased to 49% in the current quarter from 23% in the prior year quarter. The increase in gross profit margin was primarily attributable to the fact that software sales, which made up a greater percentage of the current quarter sales, carry a higher gross profit margin than the hardware sales recorded in the quarter ended September 30, 2000. The increase in gross profit margins was partially offset by an increase in fixed overhead expenses of approximately 29% related to an increase in staffing this quarter compared to the prior year quarter. Net operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. in the current year quarter were $425,000 greater than the prior year quarter due primarily to an increase in research and development staff. Net operating expenses as a percentage of revenue were 44% this quarter compared to 82% in the prior year quarter. At September 30, 2001, the Company had cash and equivalents of $8.8 million, compared to $12.0 million at June 30, 2001. The Company had no debt at either date. The decrease of $3.2 million is primarily attributed to the decrease in current liabilities Current Liabilities Usually appearing on a company's balance sheet, it represents the amount owed for interest, accounts payable, short-term loans, expenses incurred but unpaid, and other debts due within one year. of $3.7 million during the quarter. The Company's order backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. at September 30, 2001 was $18.5 million, compared to $13.7 million at September 30, 2000. Backlog, however, may not be a meaningful indicator of future revenues. The Company's revenues fluctuate significantly based on the timing of the delivery of any large order. "While we had a substantial earnings increase compared to year-ago, timing issues on our major contracts depressed revenue from recent quarterly run rates," Bud Glisson, Acres' CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , said. "Even with this level of revenue, we were still profitable due to margins at nearly 50%, compared to the 36% reported for all of last year, reflecting this quarter's higher mix of software installations. We are in the Bonusing phase of several of our contracts, where the margins are better than on the basic system installations." During the quarter the Company received a $3.3 million order from MGM MIRAGE MGM Mirage (NYSE: MGM) is a Las Vegas, Nevada-based business engaged in the development, ownership and operation of hotels and casinos throughout the world. The company began operations on May 31, 2000 after the completion of a merger of MGM Grand Inc. and Mirage Resorts, Inc. for an eleven-property player management system. Subsequent to quarter-end the Company received a deposit of $860,000 from an international customer on an order estimated to total $3.4 million. "New orders have been understandably slow in this uncertain business environment," Glisson continued. "Most of our prospective customers have continued to pursue their systems projects, but target dates for signed contracts have been delayed. If business conditions continue to stabilize stabilize See peg. , we would expect to add several new contracts to our already strong backlog, and barring unanticipated regulatory delays, we would expect earnings for the fiscal year ended June 30, 2002 to increase by 20% to 30% over the prior year." Acres Gaming will hold a conference call today, Wednesday, October 31, 2001, at 5:00 p.m. ET. The conference call will be broadcast live over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at www.acresgaming.com and the dial-in number is (800) 997-8642. A replay of the call will be available for 48 hours, beginning one hour after the call, by dialing 1-800-428-6051 and entering access code 214444. The webcast replay will be available on Acres Gaming's web site for 30 days. Acres Gaming provides products and services to casinos A list of casinos. Antigua and Barbuda
1 Card game played with a full deck by two to four players. Its origins are obscure though it probably traces back to the Italian game of Scopa. efficiency and profitability. Detailed descriptions of the promotions made available by Acres Bonusing(TM) as well as other products offered by Acres Gaming, are available at the Company's Web site, www.acresgaming.com. The Company has offices in Las Vegas Las Vegas (läs vā`gəs), city (1990 pop. 258,295), seat of Clark co., S Nev.; inc. 1911. It is the largest city in Nevada and the center of one of the fastest-growing urban areas in the United States. , Nevada, and Corvallis, Oregon Corvallis (IPA: [ˌkɔɹ ˈvæl ɪs]) is a city located in central western Oregon, USA. It is the county seat of Benton CountyGR6 . The discussion in this press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. (as defined in Section 27A of the Securities Act of 1933, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. ). Forward-looking statements involve risks and uncertainties and various factors could cause actual results to differ materially from those in the forward-looking statements. Forward-looking statements relate to expected revenue, order backlogs (which may not be a meaningful indicator of future revenues) and earnings projections. The following factors, among others, could cause actual results to differ from those indicated in the forward-looking statements: delays in the development or regulatory approval of products, delays or changes in installation schedules by the company or its customers, changes in laws or the administration of laws affecting gaming, the expense and unpredictability of patent and other litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. and other risks detailed from time to time in the company's SEC reports including the report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended June 30, 2001. Actual results may differ materially from the forward-looking statements.
ACRES GAMING INC.
STATEMENTS OF OPERATIONS
(in thousands except per share data)
Three months ended
September 30,
(unaudited)
2001 2000
NET REVENUES $ 6,092 $ 2,739
COST OF REVENUES 3,079 2,117
GROSS PROFIT 3,013 622
OPERATING EXPENSES:
Research and development 1,496 1,082
Selling, general and administrative 1,163 1,152
Total operating expenses 2,659 2,234
INCOME (LOSS) FROM OPERATIONS 354 (1,612)
OTHER INCOME (EXPENSE), NET 63 (4)
NET INCOME (LOSS) $ 417 $ (1,616)
NET INCOME (LOSS) PER SHARE - BASIC $ .05 $ (.18)
NET INCOME (LOSS) PER SHARE - DILUTED $ .04 $ (.18)
ACRES GAMING INC.
BALANCE SHEETS
(in thousands)
ASSETS
September 30, June 30,
2001 2001
(unaudited)
CURRENT ASSETS:
Cash and equivalents $ 8,826 $ 11,958
Receivables, net 2,610 3,266
Inventories 5,445 4,764
Prepaid expenses 256 167
Total current assets 17,137 20,155
PROPERTY AND EQUIPMENT, NET 1,167 1,301
OTHER ASSETS 689 773
$ 18,993 $ 22,229
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 1,869 $ 3,104
Accrued expenses 1,507 2,228
Customer deposits 5,555 6,663
Litigation settlement obligation 1,332 2,010
Total current liabilities 10,263 14,005
REDEEMABLE CONVERTIBLE PREFERRED STOCK 4,948 4,948
STOCKHOLDERS' EQUITY 3,782 3,276
$ 18,993 $ 22,229
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