Multimedia Games Reports Fiscal 2006 Third Quarter Results.AUSTIN Austin. 1 City (1990 pop. 21,907), seat of Mower co., SE Minn., on the Cedar River, near the Iowa line; inc. 1868. The commercial and industrial center of a rich farm region, it is noted as home to the Hormel meatpacking company, whose Spam Town museum , Texas -- Multimedia Games, 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 : MGAM MGAM Multimedia Games ): --Results Primarily Impacted by Lower than Anticipated Oklahoma Oklahoma (ōkləhō`mə), state in SW United States. It is bordered by Missouri and Arkansas (E); Texas, partially across the Red R. (S, W); New Mexico, across the narrow edge of the Oklahoma Panhandle (W); and Colorado and Kansas (N). Hold per Day and Net Player Terminal Removals in that Market --Retains Bear, Stearns as Exclusive Financial Advisor --Establishes Fiscal 2006 Fourth Quarter EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. Guidance of $0.00 - $0.02 Multimedia Games, Inc. (NASDAQ: MGAM) today reported operating results for its fiscal third quarter, ended June June: see month. 30, 2006, as summarized in the table below:
Summary of Q3 Results
(In millions, except per-share and player terminal data)
For the Three Months
June 30,
2006 2005
----------- ----------
Revenue $ 32.2 $ 37.1
EBITDA(1)(2) $ 15.1 $ 23.0
Net income (loss)(2) $ (0.6) $ 4.6
Diluted earnings (loss) per share(2) $ (0.02) $ 0.16
Average installed player terminals:
Class II
(Legacy and Reel Time Bingo(R) games) 8,402 10,492
Oklahoma compact games 1,484 531
Other gaming units(3) 2,886 2,518
-----------------------------------------------
(1) EBITDA is defined as earnings before interest, taxes,
amortization, depreciation, and accretion of contract rights. In
the period ending September 30, 2005, accretion of contract rights
was added to the calculation of EBITDA. Prior periods have been
adjusted to reflect this change. A reconciliation of EBITDA to net
income, the most comparable Generally Accepted Accounting
Principles ("GAAP") financial measure, can be found attached to
this release.
(2) For the three months ended June 30, 2006, EBITDA, net income
(loss) and EPS as reported above include a negative after-tax
impact of approximately $552,000, or $0.02 per share,
respectively, related to the Company's adoption, on October 1,
2005, of Statement of Financial Accounting Standards, or SFAS, No.
123(R), "Share-Based Payment."
(3) Other gaming units include Charity, Iowa Lottery, and Mexico.
Clifton Clifton, industrial city (1990 pop. 71,742), Passaic co., NE N.J., on the Passaic River; settled 1685, set off from Passaic and inc. 1917. It has steel, textile equipment, chemical, plastics, clothing, and electronics industries. Lind, Multimedia Games' ("Multimedia's") President and Chief Executive Officer, commented, "A greater-than-anticipated quarterly sequential One after the other in some consecutive order such as by name or number. decline in hold per day in Oklahoma, and a reduction of our installed base of Class II player terminals in that market impacted our third-quarter 2006 operating results. In Q3 FY '06, average hold per day for the Company's Oklahoma Class II and compact games declined approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 18%, exceeding the 12.4% decline assumed in the guidance. The average hold per day for our installed base in other markets also fell below the Company's projections, although the decline was less than that experienced in Oklahoma. The Company's Oklahoma operations were also impacted by the removal--net of 403 games that were converted to compact games--of 313 Class II units in the market, while our guidance assumed that the installed base of Class II games (net of conversions to Class III games) would remain approximately the same throughout the fiscal third quarter. The lower than expected hold per day and the player terminal removals in Oklahoma were attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the replacement of our linked Class II units with stand-alone (jargon) stand-alone - Capable of operating without other programs, libraries, computers, hardware, networks, etc. Exactly what is absent is presumed to be obvious from context. "We only run Windows on stand-alone PCs because it's too dangerous to run it on networked ones." gaming devices and other non-standard-sequence bingo bingo Game of chance played with cards having a grid of numbered squares corresponding to numbered balls drawn at random. When a number on the card is drawn, the players cover that number (should they have it); the game is won by covering a certain number of squares in a row games and higher play of these devices. The impact of a dramatically lower Oklahoma hold per day in June combined with the decline in the player terminal installed base caused the company to miss its guidance. "Over the last few months, there have been increased placements of and interest in a large number of stand-alone gaming units in Oklahoma, which for many players has affected the attractiveness of our older, linked, standard-sequence bingo games and titles. The lower-than-anticipated hold per day, and the reality that our linked network games are more expensive to support than stand-alone units, underscore The underscore character (_) is often used to make file, field and variable names more readable when blank spaces are not allowed. For example, NOVEL_1A.DOC, FIRST_NAME and Start_Routine. (character) underscore - _, ASCII 95. the need for Multimedia to redouble re·dou·ble v. re·dou·bled, re·dou·bling, re·dou·bles v.tr. 1. To double. 2. To repeat. 3. Games To double the doubling bid of (an opponent) in bridge. v. its efforts to be as innovative as possible in rapidly evolving gaming markets. We believe that progress in addressing this latest market change is being made, as indicated by both the increased appeal of games on our new Reel Time Bingo 1.2 ("RTB RTB Return(ed) to Base RTB Reasons to Believe (website) RTB Reasons to Believe (Pasadena, CA) RTB Right to Buy (UK home buying) 1.2") platform, and Multimedia's expanded supply agreement with a third party for non-linked instant bingo gaming devices. These two offerings have already led to a quarterly sequential improvement in fourth-quarter hold per day to date relative to third-quarter levels. "Multimedia is now offering five distinct products for the Oklahoma Class II and Class III markets: Class II Legacy games About Legacy Games Legacy Games is the name of a try-before-you-buy game website run by Legacy Interactive. It's a casual games portal, where users can download and try games for free before buying them. , Class II high-speed high-speed adj. 1. Operated or designed for operation at high speed: a high-speed food processor. 2. Taking place at high speed: a high-speed chase. 3. Reel Time Bingo games, Class III skill games, Class III video and mechanical reel games, and non-linked instant bingo games. These offerings will enable us to more quickly and effectively address changing customer needs and player preferences, and along with our ongoing development of innovative new games, are the best avenues for reinvigorating our hold per day, driving new unit placements, and strengthening our competitive position in Oklahoma. "Among the most promising of these offerings is our updated, high-speed RTB 1.2 Class II product, specifically designed to appeal to players in local markets. In installations to date, this offering has outperformed the average hold per day of the prior game platform. We plan to convert the majority of our Class II installed base to this platform, but given the complexity of the required hardware and software upgrades, the conversion process only allows us to upgrade approximately 600 to 700 units per quarter. Nevertheless, we expect that the improved performance of our RTB 1.2 platform and new Class III platform will be drivers of additional unit placements in current customers' facilities as well as in facilities where we are currently not represented. "As indicated at the time we reported second quarter results in May, we expected to place approximately 550 units in the Mexico Mexico, city, Mexico Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. market during Q3 FY '06, and we slightly exceeded that estimate as of June 30 with installations at four facilities. While our customer has reported that they are pleased with initial performance, the hold per day to date in this market has been below our earlier projections, and we expect that it will begin to show ongoing improvements as players in the market become more aware of this offering. We are prepared to meet our customer's needs for additional units in conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with the opening of six new facilities and their planned expansion of three existing facilities, which they expect to complete by May 2007. As anticipated, these operations are not yet cash-flow positive, since Q3 FY '06 revenue generated from the initial Mexico placements was more than offset by costs associated with developing our presence in that market and ensuring the successful openings of the first four sites during the quarter. "In the Alabama Alabama, indigenous people of North America Alabama (ăləbăm`ə), indigenous people of North America whose language belongs to the Muskogean branch of the Hokan-Siouan linguistic stock (see Native American languages). charity market, we had net player terminal additions in Q3 FY '06, though they did not offset an overall decline in the market. As in Oklahoma, we are introducing new games in this market, and based on initial positive player response, we expect our position in this market to improve during Q4 FY '06. In addition, we recently went live with our MegaBingo(R) product in the Minnesota Minnesota, state, United States Minnesota (mĭn'ĭsō`tə), upper midwestern state of the United States. It is bordered by Lake Superior and Wisconsin (E), Iowa (S), South Dakota and North Dakota (W), and the Canadian provinces charity bingo market, with a similarly favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. early response from players. "In the New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Lottery lottery, scheme for distributing prizes by lot or other method of chance selection to persons who have paid for the opportunity to win. The term is not applicable when lots are drawn without payment by the interested parties to determine some matter, e.g. market, where Multimedia provides the central determinant determinant, a polynomial expression that is inherent in the entries of a square matrix. The size n of the square matrix, as determined from the number of entries in any row or column, is called the order of the determinant. system for video lottery terminals A Video Lottery Terminal or VLT is a gaming machine that allows gamblers to bet on the outcome of a video game. A VLT is similar to a slot machine, except that it is connected to a centralized computer system that determines the outcome of each wager using a random ("VLTs") at racetracks in the state, there are now approximately 6,200 VLTs currently installed, and the hold per day continues to grow at each of the six facilities that are operating. An additional 3,000 units are expected to be added at New York facilities by the end of calendar 2006, including 1,900 units at a new facility in the New York metropolitan area New York–Northern New Jersey–Long Island is the most populous metropolitan area in the United States and the third most populous in the world, after Tokyo and Mexico City. . "Reflecting ongoing success in identifying new revenue sources, Multimedia was recently notified by a state lottery A game of chance operated by a state government. Generally a lottery offers a person the chance to win a prize in exchange for something of lesser value. Most lotteries offer a large cash prize, and the chance to win the cash prize is typically available for one dollar. that the Company has qualified as a video lottery terminal provider, and we expect to begin a test of up to fifty units in this market early in Q2 FY '07. We have also recently deployed a new slot platform in the California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). Class III Native American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of market. These are important milestones, since they mark our entry into the stand-alone, non-networked gaming market. Mr. Lind concluded, "Our immediate focus is to drive increased hold per day and new placements through the ongoing roll-out of new platforms and content in all of our markets. We are meeting with initial success in these efforts, manifested by improvements in our average hold per day relative to Q3 FY '06 levels. Accordingly, we expect that Multimedia will return to profitability in Q4 FY '06. In addition, Mexico continues to represent a tremendous growth opportunity for Multimedia, and one that is expected to contribute to our earnings, beginning in Q1 FY '07. In the New York Lottery market, with the growth in hold per day for existing units and the planned new and expanded facilities, we hope to eliminate its negative impact on our operating results in Q1 FY '07, and we forecast a benefit to earnings in the second quarter of fiscal 2007. "We are squarely square·ly adv. 1. Mathematics At right angles: sawed the beam squarely. 2. In a square shape. 3. addressing competitive pressures in Oklahoma, and are focusing on driving revenue in all markets through the introduction of new game platforms and content, while also advancing revenue diversification Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. opportunities. We are optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about achieving near-term near-term adj. Of, for, or involving a short period of time in the near future. performance improvements in presently served markets, based on revenue gains in the quarter to date resulting from growth in hold per day and an expanded installed base. In addition, our business development efforts in new domestic and international markets are at an all time high." Exclusive Financial Advisor: Multimedia also announced that in late July July: see month. it retained the investment banking firm Bear, Stearns & Co. Inc. as exclusive financial advisor to the Company. Bear, Stearns has been engaged to assist Multimedia Games and its Board of Directors in identifying and evaluating prospective opportunities to enhance shareholder value. Multimedia indicated that there can be no assurance that any direct action will be taken as a result of Bear, Stearns' engagement or the Company's efforts to enhance shareholder value. Fiscal 2006 Third-Quarter Review: Compared to the prior-year period, total revenue for the fiscal 2006 third quarter decreased 14%, or $5.0 million, to $32.2 million. The decline is primarily due to a lower average hold per day and a 5% lower average installed base of player terminals in the 2006 third fiscal quarter compared to the prior year period. The Q3 2006 net loss was $585,000, compared with net income of $4.6 million for Q3 2005, and EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become declined to $15.1 million, from $23.0 million in the prior-year period. These decreases were primarily due to the decline in revenue noted above and a $3.3 million increase in selling, general and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. in the current year period. Q3 2006 EBITDA, net income and EPS were impacted by a pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern charge of approximately $695,000, a result of the Company's adoption of SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 123(R), "Share- Based Payment," on October October: see month. 1, 2005. Multimedia's total installed base of player terminals declined by 4%, or 494 units, to 12,787 units at June 30, 2006, compared with 13,281 units at June 30, 2005. On a quarterly sequential basis, Multimedia's total installed base of player terminals declined by 66 units, or approximately 1%, from the 12,853 units reported as of March 31, 2006. Removals of units during the June 2006 quarter include 296 units from facilities in the Oklahoma market and 383 Iowa TouchPlay units, but were partially offset by the installation of 600 units in Mexico. The table below sets forth Multimedia's end-of-period installed player terminal base by product line or market for each of the five most recent fiscal quarters. "Total Other Gaming Units" includes unit placements in the charity bingo, Iowa and Mexico markets. Excluded from the table below are the approximately 1,318 video card readers installed in Alabama.
Total Oklahoma
Quarter Reel Time Class II Compact Total Other
Ended Bingo Legacy Units Games(1) Gaming Units(2)
----------- ----------- -------- ---------- ---------- ---------------
6/30/2006 7,635 376 8,011 1,593 3,183
3/31/2006 8,439 392 8,831 1,173 2,849
12/31/2005 8,915 390 9,305 1,229 2,589
9/30/2005 9,189 461 9,650 1,076 2,565
6/30/2005 9,157 558 9,715 938 2,628
(1) "Oklahoma Compact Games" represents installations of games
pursuant to the approved gaming compact between Native American
tribes, racetracks and the State of Oklahoma.
(2) Total Other Gaming Units at March 31, 2006 includes 383 units
installed in Iowa which were removed in early May 2006 due to
legislation in that state.
Selling, general and administrative expense increased 24%, to $17.4 million for the three months ended June 30, 2006, from $14.1 million for the three months ended June 30, 2005. The increase is attributable to stock-based compensation expense of $695,000 in the June 2006 quarter, a year-over-year increase in legal fees of approximately $616,000 related to 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 our entry into new markets, reserve for bad debts reserve for bad debts See allowance for doubtful accounts. , and a capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. software write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. , as well an increase in salaries, wages and related employee benefits and taxes. Fiscal third-quarter selling, general and administrative expenses declined slightly on a quarterly sequential basis. Multimedia adopted SFAS No. 123(R) for share-based payments, effective October 1, 2005, using the modified mod·i·fy v. mod·i·fied, mod·i·fy·ing, mod·i·fies v.tr. 1. To change in form or character; alter. 2. prospective method. The following table presents a comparison of the actual three and nine months ended June 30, 2006, reported net income (loss), net income (loss) per share, and compensation cost of stock options granted to employees, to the pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma amounts that would have been reported if compensation expense had been determined using the fair value method required by SFAS No. 123(R) for the three and nine months ended June 30, 2005.
For the Three Months For the Nine Months
Ended June 30, Ended June 30,
2006 2005 2006 2005
--------- --------- -------- ---------
(in thousands, (in thousands,
except per-share except per-share
amounts) amounts)
Reported net income (loss): $ (585) $ 4,550 $ 3,420 $ 14,785
Additional after-tax pro
forma share-based
compensation -- (718) -- (2,337)
--------- --------- -------- ---------
Comparative net income
(loss) (prior year pro
forma) $ (585) $ 3,832 $ 3,420 $ 12,448
========= ========= ======== =========
Basic earnings (loss) per
common share:
As reported $ (0.02) $ 0.17 $ 0.13 $ 0.53
========= ========= ======== =========
Pro forma $ (0.02) $ 0.14 $ 0.13 $ 0.45
========= ========= ======== =========
Diluted earnings (loss) per
common share
As reported $ (0.02) $ 0.16 $ 0.12 $ 0.50
========= ========= ======== =========
Pro forma $ (0.02) $ 0.13 $ 0.12 $ 0.42
========= ========= ======== =========
Research and development expense in the June 30, 2006 quarter increased by $0.2 million, or 4%, to $4.6 million, from $4.4 million for the June 30, 2005 quarter. During the quarter ended June 30, 2006, Multimedia capitalized $1.1 million in costs related to the internal development of its gaming products and systems, compared to $1.2 million during the quarter ended March 31, 2006. Approximately $730,000 of the capitalized costs in the June 2006 quarter were related to the development of new content, and approximately $350,000 was for systems. For the three months ended June 30, 2006, capital expenditures were $11.6 million, of which $9.6 million was for gaming equipment purchases and $2.0 million was for all other capital expense. Included in the gaming equipment purchases was $4.4 million of gaming equipment and licenses purchased under the WMS WMS Warehouse Management System WMS Web Map Service (open geospatial consortium specification) WMS West Middle School (Rochester Hills, MI) WMS Workforce Management Software WMS Wechsler Memory Scale agreement entered into during the current quarter. The remaining equipment purchases relate primarily to the hardware upgrade of the rental RENTAL. A roll or list of the rents of an estate containing the description of the lands let, the names of the tenants, and other particulars connected with such estate. This is the same as rent roll, from which it is said to be corrupted. pool and systems. Financial Guidance For its fiscal 2006 fourth quarter, ending June 30, 2006, Multimedia is establishing diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of guidance of $0.00-$0.02, inclusive of inclusive of prep. Taking into consideration or account; including. an impact of $0.02 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 for share-based payments pursuant to the Company's adoption of SFAS No. 123(R) beginning October 1, 2005. The fiscal 2006 fourth quarter diluted earnings per share guidance assumes the following: --The installed base in Oklahoma is projected to grow from June 30, 2006 levels; --Average hold per day, network wide is projected to grow slightly over the Q3 FY '06 level; --Revenue from Multimedia's average installed base in Mexico is not yet expected to be sufficient to offset the total costs the Company will incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. during the quarter for installing player terminals and gaming systems in the market; --Revenue from Multimedia's operation of the central determinant system for VLTs at racetracks in New York is not yet expected to be sufficient to offset the total costs the Company will incur during the quarter; --SG&A expense will be relatively flat; --Driven by recent installations, depreciation and amortization expense is expected to increase slightly over Q3 FY '06 levels; and, --Maintenance capital expenditures ("Cap Ex") and Cap Ex to support expansions will be approximately $11.0 million to $13.0 million. Conference Call Multimedia Games, Inc. is hosting a conference call and webcast today, August 8, beginning at 9:00 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT (8:00 a.m. CDT CDT abbr. Central Daylight Time CDT Central Daylight Time CDT n abbr (US) (= Central Daylight Time) → hora de verano del centro; (BRIT ). Both the call and the webcast are open to the general public. The conference call number is 913-981-4900 (domestic or international). Please call five minutes prior to the presentation to ensure that you are connected. Interested parties may also access the conference call live on 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.shareholder.com/mgam/medialist.cfm. Two hours after the call has concluded, an archived version of the webcast will be available for replay at the same location or at www.multimediagames.com/Investors/Index.htm. A digital replay of the teleconference will also be available beginning at 1:00 p.m. EDT the day of the call, continuing through midnight EDT on Tuesday Tuesday: see week. , August 15, 2006. To access this rebroadcast, dial 888-203-1112 (U.S. and Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of ) or 719-457-0820 (international), and then the pass code 2513494. About the Company Multimedia Games is a leading developer and supplier of comprehensive systems, content, electronic games Electronic Games was the first video game magazine published in the United States and ran from 1981 to 1985. Co-founded by Arnie Katz, Joyce Worley and Bill Kunkel, it is unrelated to the subsequent Electronic Gaming Monthly. and player terminals for the Native American gaming market, as well as the racino A racino is a combined race track and casino. In some cases, the gambling is limited to slot machines, but many locations are beginning to include table games such as blackjack, poker, and roulette. , charity and international bingo, video lottery, and sweepstakes sweepstakes, contest or race, usually a horse race, on which a lottery is run. Prizes are awarded to the holders of winning tickets. In the case of a horse race, the draw is made from the names of all the horses entered in the race and vast numbers of blanks. markets. The Company's ongoing development and marketing efforts focus on gaming systems and products for use by Native American tribes throughout the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , the commercial casino casino or cassino (both: kəsē`nō). 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. market, video lottery systems and other products for domestic and international lotteries United Kingdom
Coupons are usually attached to a document, such as a promissory note, bond, share of stock, or a bearer gaming opportunities. Additional information may be found at www.multimediagames.com. Cautionary Language 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. based on Multimedia's current expectations. The words "will," "would," "could," "expect," "plan," "believe," "anticipate," "intend" and similar words and phrases Words and Phrases® A multivolume set of law books published by West Group containing thousands of judicial definitions of words and phrases, arranged alphabetically, from 1658 to the present. as they relate to Multimedia are intended to identify such forward-looking statements. These forward-looking statements reflect the current views and assumptions of Multimedia and are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. These risks and uncertainties include, but are not limited to: (i) the risk that operating results projected in Multimedia's guidance, and as a result, Multimedia's financial condition, may be adversely affected by regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. developments (such as regulatory action related to our development agreements with our tribal customers), ongoing competitive pressures, the failure of new customers to place Multimedia's games and terminals into operation, removal of Multimedia's terminals and systems from facilities of existing customers, or the failure of one or more of our projected new revenue sources or significant development opportunities to generate anticipated revenues, each to an extent or with effects greater than anticipated in making projections; (ii) the risk that the charity, sweepstakes or lottery markets do not grow as anticipated, or that Multimedia's business may not develop as anticipated therein; (iii) the risks resulting from the difficulty of continually con·tin·u·al adj. 1. Recurring regularly or frequently: the continual need to pay the mortgage. 2. evolving in existing markets, and successfully and cost-effectively entering new markets, particularly international markets in which Multimedia has not previously operated; (iv) the risk associated with the difficulty of continually developing and introducing to new and existing markets new and enhanced game content and systems that will be widely accepted both by customers and end users; (v) the risk of continuing legal and state and regulatory activities, and future enforcement actions related thereto there·to adv. 1. To that, this, or it. 2. Archaic In addition to that; furthermore. thereto Adverb Formal 1. to that or it 2. ; (vi) the risks that Multimedia continues to sustain a decline in units placed in operation in Oklahoma or a continued decline in the hold per day of such units; (vii) the risks of continued competitive pressure on Multimedia's business model and pricing, and on its ability to introduce and maintain games in existing and new markets; (viii) the risks associated with the difficulty of installing and maintaining an increasing number of terminals and systems at an existing or new facility; and (ix) the risks associated with growth generally and the resultant This article is about the resultant of polynomials. For the result of adding two or more vectors, see Parallelogram rule. For the technique in organ building, see Resultant (organ). In mathematics, the resultant of two monic polynomials pressures organizationally. Other important risks and uncertainties that may affect the Company's business are detailed from time to time in the "Certain Risks" and "Risk Factors" sections and elsewhere in Multimedia's filings with the Securities and Exchange Commission. Multimedia disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
CONSOLIDATED BALANCE SHEETS
As of June 30, 2006 and September 30, 2005
(In thousands, except shares and per-share amounts)
(Unaudited)
June 30, September 30,
ASSETS 2006 2005(1)
-------------- ---------------
CURRENT ASSETS:
Cash and cash equivalents $ 6,764 $ 118
Accounts receivable, net of allowance
for doubtful accounts of $617 and
$229, respectively 13,601 18,807
Inventory -- 414
Contract costs in excess of billing -- 789
Prepaid expenses and other 1,876 3,177
Notes receivable, net 8,811 9,362
Deferred income taxes 1,960 2,075
-------------- ---------------
Total current assets 33,012 34,742
Restricted cash and long-term
investments 986 1,068
Leased gaming equipment, net 26,374 37,391
Property and equipment, net 94,404 93,894
Notes receivable - noncurrent 56,527 40,545
Intangible assets, net 42,130 45,093
Other assets 737 1,959
Deferred income taxes - noncurrent 3,774 --
-------------- ---------------
Total assets $ 257,944 $ 254,692
============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of revolving lines of
credit $ 11,238 $ --
Current portion of long-term debts and
capital leases 7,149 13,401
Accounts payable and accrued expenses 26,179 35,349
Federal and state income tax payable 441 3,312
Deferred revenue 1,477 2,081
-------------- ---------------
Total current liabilities 46,484 54,143
Revolving lines of credit 40,037 27,770
Long-term debts and capital leases,
less current portion 1,454 6,498
Other long-term liabilities 2,738 3,049
Deferred revenue - noncurrent 212 1,057
Deferred income taxes -- 3,258
-------------- ---------------
Total liabilities 90,925 95,775
-------------- ---------------
Commitments and contingencies
Stockholders' equity:
Preferred stock:
Series A, $0.01 par value,
1,800,000 shares authorized, no
shares issued and outstanding -- --
Series B, $0.01 par value, 200,000
shares authorized, no shares
issued and outstanding -- --
Common stock, $0.01 par value,
75,000,000 shares authorized,
31,383,621 and 30,802,524 shares
issued, and 27,472,236 and
27,050,285 shares outstanding,
respectively 314 308
Additional paid-in capital 73,329 67,184
Treasury stock, 3,911,385 and
3,752,239 shares at cost,
respectively (24,741) (23,285)
Accumulated other comprehensive loss (13) --
Retained earnings 118,130 114,710
-------------- ---------------
Total stockholders' equity 167,019 158,917
-------------- ---------------
Total liabilities and
stockholders' equity $ 257,944 $ 254,692
============== ===============
(1) Certain amounts have been reclassified to conform to the current-
year presentation.
CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)
For the Three Months Ended June 30, 2006 and 2005
(In thousands, except per-share amounts)
(Unaudited)
2006 2005
--------------- --------------
REVENUES:
Gaming revenue:
Class II $ 20,363 $ 28,191
Charity 4,243 4,622
All other(1) 4,523 2,814
Gaming equipment, system sale and
lease revenue 1,765 957
Other 1,274 565
--------------- --------------
Total revenues 32,168 37,149
--------------- --------------
OPERATING COSTS AND EXPENSES:
Cost of gaming equipment and systems
sold and royalty fees paid 624 787
Selling, general and administrative
expenses 17,424 14,104
Amortization and depreciation 14,384 14,576
--------------- --------------
Total operating costs and
expenses 32,432 29,467
--------------- --------------
Operating income (264) 7,682
OTHER INCOME (EXPENSE):
Interest income 577 608
Interest expense (1,123) (675)
--------------- --------------
Income (loss) before income taxes (810) 7,615
Income tax expense (benefit) (225) 3,065
--------------- --------------
Net income (loss) $ (585) $ 4,550
=============== ==============
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation
adjustment (13) --
--------------- --------------
Comprehensive income (loss) $ (598) $ 4,550
=============== ==============
Basic earnings (loss) per share $ (0.02) $ 0.17
=============== ==============
Diluted earnings (loss) per share $ (0.02) $ 0.16
=============== ==============
(1) Gaming revenue: All other includes recurring revenue from games
operated under the Oklahoma compact, Class III Washington State,
lottery, and Mexico markets.
CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)
For the Nine Months Ended June 30, 2006 and 2005
(In thousands, except per-share amounts)
(Unaudited)
2006 2005(2)
----------- -----------
REVENUES:
Gaming revenue:
Class II $ 69,515 $ 87,082
Charity 14,055 14,676
All other(1) 12,537 10,235
Gaming equipment, system sale and lease
revenue 13,459 2,762
Other 3,096 1,607
----------- -----------
Total revenues 112,662 116,362
----------- -----------
OPERATING COSTS AND EXPENSES:
Cost of gaming equipment and systems sold and
royalty fees paid 11,346 2,588
Selling, general and administrative expenses 50,964 46,535
Amortization and depreciation 42,856 42,620
----------- -----------
Total operating costs and expenses 105,166 91,743
----------- -----------
Operating income 7,496 24,619
OTHER INCOME (EXPENSE):
Interest income 1,669 1,390
Interest expense (3,143) (1,892)
----------- -----------
Income before income taxes 6,022 24,117
Income tax expense 2,602 9,332
----------- -----------
Net income $ 3,420 $ 14,785
=========== ===========
OTHER COMPREHENSIVE INCOME
Foreign currency translation adjustment (13) --
----------- -----------
Comprehensive income $ 3,407 $ 14,785
=========== ===========
Basic earnings per share $ 0.13 $ 0.53
=========== ===========
Diluted earnings per share $ 0.12 $ 0.50
=========== ===========
(1) Gaming revenue: All other includes recurring revenue from games
operated under the Oklahoma compact, Class III Washington State,
lottery, C-TILG and Mexico markets.
(2) Certain amounts have been reclassified to conform to the
current-year presentation.
Reconciliation of U.S. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). Net income to EBITDA: EBITDA is defined as earnings before earnings before interest, taxes, amortization, depreciation, and accretion The act of adding portions of soil to the soil already in possession of the owner by gradual deposition through the operation of natural causes. The growth of the value of a particular item given to a person as a specific bequest under the provisions of a will between the of contract rights. Although EBITDA is not a measure of performance calculated in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting ("GAAP"), Multimedia believes the use of the non-GAAP financial measure EBITDA enhances an overall understanding of Multimedia's past financial performance, and provides useful information to the investor because of its historical use by Multimedia as a performance measure, and the use of EBITDA by other companies in the gaming equipment sector as a measure of performance. However, investors should not consider this measure in isolation or as a substitute for net income, 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. , or any other measure for determining Multimedia's operating performance that is calculated in accordance with GAAP. In addition, because EBITDA is not calculated in accordance with GAAP, it may not necessarily be comparable to similarly titled measures employed by other companies. A reconciliation of EBITDA to the most comparable GAAP financial measure, net income, follows:
Reconciliation of U.S. GAAP Net income to EBITDA:
For the Three Months For the Nine Months
Ended June 30, Ended June 30,
2006 2005 2006 2005
---------- --------- --------- ----------
(in thousands) (in thousands)
Net income $ (585) $ 4,550 $ 3,420 $ 14,785
Add back:
Amortization and
depreciation 14,384 14,576 42,856 42,620
Accretion of contract
rights(1) 947 740 2,996 1,541
Interest expense, net 546 67 1,474 502
Income tax expense (benefit) (225) 3,065 2,602 9,332
---------- --------- --------- ----------
EBITDA $ 15,067 $ 22,998 $ 53,348 $ 68,780
---------------------------- ========== ========= ========= ==========
(1) Accretion of contract rights relates to the amortization of
intangible assets for the development projects. These amounts are
recorded net of revenues in the Consolidated Statements of
Operations and Comprehensive Income (Loss). In the period ending
September 30, 2005, accretion of contract rights was added to the
calculation of EBITDA. Prior periods have been adjusted to reflect
this change
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion