WMS Industries Third Quarter Income From Continuing Operations Rises 70% to a Record $0.40 Per Share Before Relocation Costs.Business Editors WAUKEGAN, Ill.--(BUSINESS WIRE)--April 26, 2001 Represents 12th Consecutive Period of Quarterly Growth in Income from Continuing Operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the Prior to Unusual Items 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 Industries Inc. (NYSE NYSE See: New York Stock Exchange :WMS) announced today that, prior to corporate relocation RELOCATION, Scotch law, contracts. To let again to renew a lease, is called a relocation. 2. When a tenant holds over after the expiration of his lease, with the consent of his landlord, this will amount to a relocation. costs, income from continuing operations for the third fiscal quarter ended March 31, 2001 increased 70% to $12.9 million, or $0.40 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 $7.5 million, or $0.24 per diluted share, in the comparable prior year quarter. Revenues from continuing operations increased 44% to $70.7 million for the March 31, 2001 quarter compared with $49.1 million in the prior year period. Earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
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. , prior to the corporate relocation costs, was $19.3 million in the March 2001 quarter, up 71% compared to $11.3 million in the prior year quarter. The increase in operating income resulted from continued growth in EBITDA despite higher non-cash depreciation and amortization charges related to the 49% increase in the installed base of participation games from the March 31, 2000 level. Prior to relocation expenses, the EBITDA margin grew to 34% and operating income margin grew to 27%. Net income for the quarter ended March 31, 2001 was $12.7 million, or $0.39 per diluted share, reflecting $301,000 of pre-tax charges related to the previously announced consolidation of the Company's manufacturing, distribution, warehousing and corporate offices in Waukegan, Illinois Waukegan (IPA: /wɔˈkiːgən/) is a city in Lake County, Illinois. As of the 2000 census, the city had a total population of 87,901. Estimated population in 2006: 93,389 . . Total relocation charges for the nine months ended March 31, 2001 amounted to $0.07 per diluted share, which is consistent with previous guidance of $0.07 to $0.09 per share for the full fiscal year. For the quarter ended March 31, 2000, net income was $7.7 million, or $0.25 per diluted share, which includes earnings of $0.01 per share from discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: contract manufacturing operations Manufacturing operations concern the operation of a facility, as opposed to maintenance, supply and distribution, health, and safety, emergency response, human resources, security, information technology and other infrastructural support organizations. . The fiscal 2001 third quarter revenue growth was attributable to a 44% increase in the sales of gaming devices to 5,294 units in the March 2001 quarter versus 3,684 units sold in the March 2000 quarter. The average selling price The average sales price of goods or commodities. Especially used in the retail sector and technology distribution. of games sold grew 2% to $8,322 in the March 2001 quarter. Revenue growth was also fueled by an increase in the installed base of MONOPOLY(R) and JUMBLE(R) brand participation games that provide the Company with recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. revenues and cash flow. Revenue from participation and leases increased 36% to $22.9 million in the March 2001 quarter compared to $16.8 million in the prior year quarter. The average installed base of participation gaming devices increased by 45% to 5,181 units in the March 2001 quarter from 3,575 units in the March 2000 quarter due to increased placements of MONOPOLY and JUMBLE brand games. At March 31, 2001, the Company had a total of 5,394 participation gaming devices installed, a 49% gain over the March 31, 2000 installed base, and the Company also achieved sequential growth in placements over the December 31, 2000 level. The average daily revenue per participation device was $42.99 in the March 2001 quarter compared to $44.17 in the March 2000 quarter and $42.98 in the December 2000 quarter. The average daily revenue was 3% lower in the March 2001 quarter than in the same quarter a year ago, primarily due to the larger installed base and the higher mix of games in lower net win jurisdictions in the current year quarter. The average daily revenue was consistent with the December 2000 quarter due to the highly successful introduction of the latest MONOPOLY game, Money Grab(TM), in Nevada in February 2001 coupled with a full quarter of JUMBLE games installed in jurisdictions outside of Nevada, offset by a decrease in net win per day in Nevada of non-Money Grab MONOPOLY games and JUMBLE games. WMS currently has a 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. of customer requests for over 500 additional MONOPOLY and JUMBLE participation gaming machines See video game console. . Total gross profit dollars increased 46% to $41.6 million for the March 2001 quarter, up from $28.4 million in the March 2000 quarter. The 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. on sales of gaming machines increased to 46% from 44% in the prior year quarter and was up sequentially from 42% in the December 2000 quarter, primarily due to the increase in average sales price and the mix of products, including higher game conversion revenues, coupled with realizing benefits from consolidating manufacturing, warehousing and distribution operations in Waukegan, Illinois in the December 2000 quarter. Gross profit margin on participation and lease revenues was consistent from the March 2000 quarter to the March 2001 quarter. "In the March 2001 quarter, WMS' overall financial performance reached the highest level since we entered the gaming device business," stated Brian R. Gamache, President and Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. . "Both our game sales business and our participation business showed continued upward momentum and growth. Our base game sales improved as a result of higher 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. due to our initial success 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). market and the international markets, combined with an increase in the average sales price. Participation revenues grew 36% over the March 2000 quarter and 5% sequentially over the December 2000 quarter providing $19.5 million of gross margin. Money Grab, our latest MONOPOLY game and the first new MONOPOLY product release in ten months, is delivering great success in Nevada, which portends well for ongoing contributions from this game in other markets. We recently received approvals for the game in markets outside of Nevada and are currently installing games in these jurisdictions. "This past quarter demonstrates the importance of our recurring revenue business," continued Mr. Gamache. "Total participation revenues benefited from the introduction of Money Grab into Nevada and a full quarter of JUMBLE games installed in jurisdictions outside of Nevada which generate higher net win per day than games in Nevada. The Money Grab game a theft committed by grabbing or snatching a purse or other piece of property. See also: Grab has been an instant success with games showing an average daily net win rate at about the same level as the first MONOPOLY games in Nevada in fiscal 1999. "In the current quarter, the Company expects to launch a second theme for its JUMBLE game, Bee Bucks Bucks: see Buckinghamshire. (TM), along with its SCRABBLE Scrabble Game in which two to four players compete in forming words with lettered wooden tiles on a 225-square board. Words spelled out by letters on the tiles interlock like words in a crossword puzzle. Words are scored by adding up the point values of their letters. (R) participation game, the second game in our Puzzle “Puzzle solving” redirects here. For the concept in Thomas Kuhn's philosophy of science, see normal science. A puzzle is a problem or enigma that challenges ingenuity. Pays(TM) series," stated Gamache. "These games will help fuel further growth both in the installed base of games and net win, as we continue to drive the profitability of our participation business. With WMS' new partnership arrangement with Harrah's Entertainment Harrah's Entertainment, Inc. (NYSE: HET) is a gaming corporation that owns and operates casinos, hotels, and six golf courses under several brands. The company, based in Las Vegas, Nevada, is the largest gaming company in the world, with yearly revenues around $7.11 billion. (NYSE:HET) for the roll-out of our HOLLYWOOD SQUARES For the musical group of the same name, see . The Hollywood Squares is an American television comedy and game show in which two contestants play tic-tac-toe to win money and prizes. (R) game in fiscal 2002, as well as similar arrangements we are actively pursuing with other leading 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. operators for our PAC-MAN(TM) game, we will secure a significant initial installed base of these games coupled with substantial marketing investment by our partners to launch the games in various jurisdictions. Plus, with our new agreement with IGT IGT impaired glucose tolerance. (NYSE:IGT) to provide wide area progressive games based on a popular entertainment brand, WMS is entering an important new, and highly profitable, segment of the participation market. We are clearly focused on expanding our installed base of participation games and intend to introduce eight new participation games in fiscal 2002, twice as many as we did in fiscal 2001. In addition to the planned wide area progressive game, WMS expects to soon have five series of participation games: MONOPOLY, Puzzle Pays, HOLLYWOOD SQUARES, PAC-MAN, and a new, soon-to-be-announced TV Game Show series. We estimate that the total installed base of participation games in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. has eclipsed 30,000 units and continues to grow, and we firmly intend to increase our marketshare and emerge as a dominant supplier in this segment of the casino floor. "In California, we continue to see market demand from our customers and, as reported last week, we have taken an order representing our 5,000th game for shipment during fiscal 2001, exceeding our initial fiscal 2001 forecast of 4,000 units shipped to California tribal gaming properties by over 25%. Orders for future delivery remain brisk Brisk as a proper name may refer to:
"The Company is actively demonstrating that it now has the proper foundation in place to support future growth. In addition, the management team continues to fulfill ful·fill also ful·fil tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils 1. To bring into actuality; effect: fulfilled their promises. 2. its promises to deliver improved financial performance while implementing long-term strategic initiatives to position WMS as a leader in several key areas and markets. We are clearly within reach of achieving the consensus fiscal 2001 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. projections of $1.42 per share, prior to unusual items, and we'll end the fiscal year with a balance sheet capable of financing a myriad Myriad is a classical Greek name for the number 104 = 10 000. In modern English the word refers to an unspecified large quantity. The term myriad is a progression in the commonly used system of describing numbers using tens and hundreds. of growth opportunities both internally and externally. "In conclusion, WMS has the right products, creative talent, financial resources, marketshare opportunities, infrastructure, plus the management drive to increase shareholder value." WMS Industries Inc. is hosting a conference call and webcast at 4:30 p.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 today, Thursday, April 26, 2001. The conference call number is 212/676-5387 or 415/908-4734. To access the live call on the Internet, log on to http://wmsgaming.com (select "Co. Info," then "Investor Relations Investor relations The process by which the corporation communicates with its investors. "). Following its completion, a replay of the call can be accessed for sixty days on the Internet via http://wmsgaming.com. MONOPOLY(R)and SCRABBLE(R)are trademarks of Hasbro, Inc.(c)2001 Hasbro, Inc. All rights reserved. Used with permission. JUMBLE(R)is a trademark of Tribune Media Services Tribune Media Services ("TMS") is a syndication company owned by the Tribune Company. The company is divided into two divisions, "News and Features" and "Entertainment Products". .(c)2001 Tribune Media Services. All rights reserved. Used with permission PAC-MAN(TM)is a trademark of Namco Ltd.(c)1980 Namco Ltd. All rights reserved. HOLLYWOOD SQUARES(R) is a trademark of King World Productions, Inc. Money Grab(TM), Bee Bucks(TM)and Puzzle Pays(TM)are trademarks of WMS Gaming WMS Gaming, Inc. is a subsidiary of WMS Industries, Inc, which manufactures casino slot machines. The company is credited with the introduction of 5 reel video slot machines to the world-wide market, and WMS Gaming is also well known for their manufacture of pinball machines. Inc.(c)2001 WMS Gaming Inc. All rights reserved. This press release contains certain 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. concerning future business conditions and the outlook for the Company based on currently available information that involve risks and uncertainties. The Company's actual results could differ materially from those anticipated in the forward looking statements as a result of certain risks and uncertainties, including, without limitation, the financial strength of the gaming industry, the expansion of legalized gaming into new markets and legislative and regulatory changes in existing gaming markets, the development, introduction and success of new games and new technologies and the ability to maintain the scheduling of such introductions, the ability of the Company to qualify for and maintain gaming licenses and approvals, and other risks more fully described under "Part I - Item 1. Business - Risk Factors" in the Company's Annual 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. . WMS Industries Inc. is engaged in the design, manufacture and sale and lease of gaming machines and 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 .
WMS INDUSTRIES INC.
Consolidated Income Statement
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Nine Months Ended
March 31, March 31,
-------- --------
2001 2000 2001 2000
---- ---- ---- ----
Revenues:
Machine Sales $ 47,889 $ 32,308 $133,761 $ 99,427
Participation and Lease 22,859 16,831 64,237 49,562
-------- -------- -------- --------
Total Revenues 70,748 49,139 197,998 148,989
-------- -------- -------- --------
Costs and Expenses:
Cost of Sales 25,845 18,089 74,855 58,290
Cost of Participation
and Lease 3,322 2,634 9,153 6,020
Research and Development 4,830 3,094 12,454 8,140
Selling and Administrative 12,767 10,549 37,817 30,411
Depreciation and Amortization 4,645 3,455 13,087 10,476
Reversal of Excess
Accrual Related to
Litigation Settlement - - - (13,160)
Corporate Relocation 301 - 3,374 -
-------- -------- -------- --------
Total Costs and Expenses 51,710 37,821 150,740 100,177
-------- -------- -------- --------
Operating Income 19,038 11,318 47,258 48,812
Interest and Other Income 1,399 854 3,630 2,414
-------- -------- -------- --------
Income from Continuing
Operations Before Income Taxes 20,437 12,172 50,888 51,226
Provision for Income Taxes 7,766 4,625 19,337 19,466
-------- -------- -------- --------
Income from Continuing
Operations 12,671 7,547 31,551 31,760
Discontinued Operations,
Net of Income Taxes
Pinball and Cabinets:
Loss from Discontinued
Operations - - - (469)
Income (Loss) Related to
Discontinuance - - 1,616 (13,200)
Contract Manufacturing
Income from Discontinued
Operations - 162 - 456
-------- -------- -------- --------
Net Income $ 12,671 $ 7,709 $ 33,167 $ 18,547
======== ======== ======== ========
Basic Per Share of Common Stock:
Income from Continuing
Operations $0.40 $0.24 $1.00 $1.04
Income (Loss) from
Discontinued Operations - 0.01 0.05 (0.43)
-------- -------- -------- --------
Net Income $0.40 $0.25 $1.05 $0.61
======== ======== ======== ========
Diluted Per Share of Common Stock:
Income from Continuing
Operations $0.39 $0.24 $0.98 $1.02
Income (Loss) from
Discontinued Operations - 0.01 0.05 (0.43)
-------- -------- -------- --------
Net Income $0.39 $0.25 $1.03 $0.59
======== ======== ======== ========
Average Number of Shares
Outstanding
Basic 31,646 30,726 31,443 30,562
======== ======== ======== ========
Diluted 32,275 31,361 32,050 31,236
======== ======== ======== ========
WMS Industries Inc.
Condensed Consolidated Balance Sheets
(in thousands)
March 31, 2001 June 30, 2000
-------------- -------------
Assets (unaudited)
------
Cash and Short-Term Investments $ 89,613 $ 80,669
Receivables, net 66,518 54,266
Inventories 43,398 32,918
Deferred Income Taxes 5,459 9,279
Assets of Discontinued Operations - 5,246
Other Current Assets 3,675 1,198
-------- --------
Total Current Assets 208,663 183,576
-------- --------
Gaming Machines on Participation or Lease, net 21,640 16,809
Property, Plant and Equipment, net 29,725 30,465
Other Assets 14,503 8,180
-------- --------
Total Assets $274,531 $239,030
======== ========
Liabilities and Stockholders' Equity
------------------------------------
Accounts Payable $ 9,554 $ 8,352
Liabilities of Discontinued Operations - 8,242
Accrued Liabilities 18,782 17,016
-------- --------
Total Current Liabilities 28,336 33,610
-------- --------
Stockholders' Equity:
Common Stock 15,870 15,460
Additional Paid-in Capital 191,476 184,278
Retained Earnings 39,231 6,064
Treasury Stock (382) (382)
-------- --------
Total Stockholders' Equity 246,195 205,420
-------- --------
Total Liabilities and Stockholders' Equity $274,531 $239,030
======== ========
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