Bally Gaming reports fourth quarter and fiscal year end results; Ontario Gaming Commission grants license.LAS VEGAS--(BUSINESS WIRE)--Feb. 14, 1996--Bally Gaming International Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :BGII BGII Baldur's Gate II: Shadows of Amn (computer game) ) today reported lower fourth-quarter and 1995 year-end results due to unusual charges primarily related to merger transaction costs Transaction Costs Costs incurred when buying or selling securities. These include brokers' commissions and spreads (the difference between the price the dealer paid for a security and the price they can sell it). and a decline in gaming machine See video game console. unit sales unit sales Sales measured in terms of physical units rather than dollars. Unit sales data are often used by financial analysts when evaluating the health of a company. . Bally bally Adjective, adv Brit old-fashioned, slang extreme or extremely: a bally nuisance, he's too bally charming for his own good Adj. 1. Gaming also announced a further expansion of the jurisdictions in which it is fully licensed to do business with the approval Feb. 8, 1996, of its application for gaming registration in the province of Ontario, Canada. The Ontario Gaming Control Commission granted the approval following a thorough review of the company's entire record of operations, particularly its support of the U.S. Government's crackdown crack·down n. An act or example of forceful regulation, repression, or restraint: a crackdown on crime. Noun 1. on illegal gaming in Louisiana. For the fourth quarter of 1995, the company reported a net loss of $3.5 million, or 33 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , compared with net income of $2.2 million, or 21 cents per share for the 1994 quarter. The net loss in the quarter included in the unfavorable impact of $1.7 million for transaction costs and 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. expenses primarily related to a definitive merger agreement with Alliance Gaming Alliance Gaming NYSE: AGI is a Las Vegas, Nevada based manufacturer of slot machines and casino management software. History On June 18, 1996 merged with Bally Gaming International. Corp. (NASDAQ:ALLY). In addition, the company recorded a $1.8 million charge ($1.3 million net of tax) for the writedown of a facility in Germany and for an increase in German VAT taxes. For the year ended Dec. 31, 1995 the company reported a net loss of $3.4 million or 31 cents per share, compared to net income of $3.8 million, or 35 cents per share, for calendar year 1994. "While our Bally Systems unit had a very strong fourth quarter capping off an outstanding year, our Gaming and German business units continued to be adversely impacted by fewer new casino openings and a decline in demand for new machines," said Richard Gillman, chairman and chief executive officer. "Excluding the impact of unusual charges we would have earned 18 cents per share net income for the year ended December 31, 1995." Consolidated fourth-quarter revenues were $60.3 million, compared to $66.3 million in the prior year period. For the year ended Dec. 31, 1995, revenues increased by 6% to $249.3 million, compared to $236.2 million for calendar year 1994. Gaming Unit Continues Market Penetration Noun 1. market penetration - the extent to which a product is recognized and bought by customers in a particular market penetration - the act of entering into or through something; "the penetration of upper management by women" of Multi-Game Product The Gaming business unit reported revenues of $23.4 million for the fourth quarter, a 25% decrease from the prior year quarter. This decrease was primarily a result of industry-wide lower unit sales due to a reduced number of new casino openings compared to the prior year period. The company's multi-game, touch screen machine, Game Maker(R), which was introduced in the third quarter of 1994, continued to further penetrate the market. Game Maker(R) unit sales accounted for 37% of total unit sales for the fourth quarter of 1995 compared to 32% for the third quarter of 1995. Sales of used equipment continue to increase rapidly with revenues for the year up to more than 100% compared to 1994. New unit sales for the quarter decreased to approximately 4,000 machines, compared to 5,400 in the 1994 period, reflecting an industry-wide trend of fewer new casino openings. These sales included 2,100 units to customers in Nevada and Atlantic City Atlantic City, city (1990 pop. 37,986), Atlantic co., SE N.J., an Atlantic resort and convention center; settled c.1790, inc. 1854. Situated on Absecon Island, a barrier island 10 mi (16. , 1,500 units to international markets and 400 units to riverboat riv·er·boat n. A boat suitable for use on a river. , Native American and other domestic casinos. For the year, new unit sales totaled 18,100 compared to 21,600 in 1994. Before the impact of unusual charges, the Gaming unit had an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $1.3 million for the fourth quarter compared to operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $.6 million in the prior year quarter. Gross margins as a percentage of revenues for the quarter were 25%, compared to 29% in the 1994 quarter. This decrease resulted from the impact of decreased demand for new machines, the changing mix of sales and increased provisions for inventory valuation reserves. For the years ended Dec. 31, 1995 and 1994, gross margin was 28% and 26%, respectively. The increase in gross margin is due primarily to lower costs of materials offset in part by the impact of lower production volume. As part of the Gaming unit's provision for doubtful receivables during the 1995 quarter, reserves were increased by $.3 million with respect to certain accounts, including the two riverboats at the River City Complex in New Orleans New Orleans (ôr`lēənz –lənz, ôrlēnz`), city (2006 pop. 187,525), coextensive with Orleans parish, SE La., between the Mississippi River and Lake Pontchartrain, 107 mi (172 km) by water from the river mouth; founded . The 1995 quarter results included an allocation of $.8 million of the merger transaction costs. "Despite the fact that the Gaming unit sold 3,500 fewer new units in 1995, Gaming's gross margin dollars were about the same in 1995 as in 1994, reflecting the success of our product cost reduction program and greater emphasis on higher margin products," said Hans Kloss
The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. . "With the anticipated increase in casino openings in 1996, including the mega-resorts 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. , the riverboats in Indiana and growth in select international locations, we are poised for a stronger year ahead." German Operating Results Include Unusual Charges Wulff reported revenues of $32.2 million, a 6% decrease, compared to $34.2 million in the 1994 quarter. Revenues for the quarter were impacted by lower demand for new wall machines partially offset by increased distribution of slot and video gaming video gaming n. 1. Gambling by means of interactive games of chance played on a video screen. 2. The playing of video games. machines and higher demand for used equipment and amusement machines. Excluding the impact of unusual charges, Wulff had operating income of $.7 million for the fourth quarter, compared to operating income of $4.6 million in the prior year quarter. The decrease in operating income results from lower gross margins and higher selling, general and administrative expenses, partially offset by a reduction in the provision for doubtful receivables due to lower sales. Gross margin was 28% for the 1995 fourth quarter compared to 42% in the 1994 quarter. This decrease in margin resulted from a change in product sale mix to lower margin used equipment and the impact of lower production volume due to decreased demand for new wall machines. For the year gross margin was 33% compared to 35% in 1994. Included in the fourth quarter results for 1995 were unusual charges of $.8 million to adjust the carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of a building which will be sold, $1.0 million primarily to increase its VAT tax reserves and an allocation of the merger transaction costs of $.9 million. Revenues in the 1995 quarter benefited from the decline of the dollar against the deutschemark. Revenues were positively affected by approximately $2.5 million with an insignificant impact on operating results. Systems Revenues Increase Dramatically. Systems, the Reno, Nevada-based unit which designs and sells computerized computerized adapted for analysis, storage and retrieval on a computer. computerized axial tomography see computed tomography. , on-line monitoring systems, reported revenues of $8.0 million for the quarter, a 142% increase over the prior year quarter. At Dec. 31, 1995, Systems product was installed in 50 locations with over 50,000 units on-line. Gross margin for the quarter decreased due to higher discounts to customers, a change in product mix and a provision for product upgrades. Operating income increased to $2.6 million in the fourth quarter, compared to $.3 million in the prior year quarter. For the year ended Dec. 31, 1995, operating income totaled $5.2 million, a 100% increase over the $2.6 million in operating income in the comparable 1994 period. Merger Agreement As previously announced, the company signed a definitive merger agreement with Alliance Gaming Corp. on Oct. 17, 1995 which was amended as of Jan. 23, 1996. The agreement is subject to BGII's shareholders' approval, Alliance obtaining $150 million in permanent financing Permanent financing Long-term financing using either debt or equity. permanent financing The long-term financing that supports a long-term asset. , and certain regulatory approvals. Bally Gaming International Inc., through its subsidiaries, is a world leader in the manufacture of gaming and computer-tracking devices for casinos. The company designs, manufactures and distributes its gaming and computer monitoring Recording a user's activity on the computer. Computer monitoring programs are used to determine how much time an employee spends on various tasks as well as possible illicit activities. systems through its Gaming and Systems business units of Bally Gaming Inc. in Las Vegas and Reno, and its Wulff subsidiaries in Berlin and Hannover, Germany. -0-
Bally Gaming International Inc.
Summary of Consolidated Operating Results
($ in 000, except per share data)
Three Months Ended Dec. 31,
1995 1994
Revenues $ 60,305 $ 66,330
Costs and expenses:
Cost of sales 40,543 40,511
Selling, general and
administrative 15,741 16,625
Provision for doubtful
accounts 2,135 3,679
Unusual charges 3,526 --
61,945 60,815
Operating income (loss) (1,640) 5,515
Interest expense 1,670 1,845
Income (loss) before income
taxes (3,310) 3,670
Income tax provision 230 1,447
Net income (loss) (3,540) 2,223
Net income(loss) per share
of common stock (.33) .21
Weighted average number of
common shares and
common share equivalents
outstandings 10,812,587 10,732,653
Year Ended Dec. 31,
1995 1994
Revenues $249,312 $236,192
Costs and expenses:
Cost of sales 163,131 157,059
Selling, general and
administrative 65,289 59,989
Provision for doubtful
accounts 6,712 5,763
Unusual charges 5,816 --
240,948 222,811
Operating income 8,364 13,381
Interest expense 6,853 6,768
Income before income
taxes 1,511 6,613
Income tax provision 4,904 2,820
Net income (loss) (3,393) 3,793
Net income (loss) per
common share (.31) .35
Weighted average number of
common shares and common
share equivalents
outstanding 10,775,699 10,726,556
CONTACT: Bally Gaming International Inc. Scott Schweinfurth, 702/896-7859 or Sard Verbinnin & Co. George Sard/Dan Connolly, 212/687-8080 |
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