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STUART ENTERTAINMENT FOURTH QUARTER SALES RISE 29 PERCENT TO SET NEW HIGHS; EARNINGS DECLINE DUE TO VLT AND MEXICO EXPENSES

 Strong Growth Trend Continues While Company Invests Heavily in
 Expansion of Facilities and new Product Lines.
 LITTLETON, Colo., March 30 /PRNewswire/ -- Stuart Entertainment Inc. (NASDAQ: STUA), today announced that sales rose more than 28 percent in both the fourth quarter and year ended Dec. 31, 1992, setting new records for the company. Earnings for both periods declined, however, as a result of significant expenses related to the opening and expansion of its Mexican manufacturing facility and the development of the company's new Video Lottery Terminal and other product lines.
 Leonard A. Stuart, chairman and chief executive officer, stated that, "despite the lower earnings, we are very pleased with the progress made during 1992. Sales rose at least 28 percent in each quarter of 1992, compared to the same quarters of the prior year -- an indication of the company's true strength and potential." Stuart added that, "with the completion of the Mexican facilities and the significant strides that have been made in bringing to market our new Video Lottery Terminal (VLT) and electronic Bingo product lines, the company is in a position to begin realizing the benefits from the sizable expenditures made in 1992."
 In the fourth quarter ended Dec. 31, 1992, Stuart Entertainment earned net income of $266,000, or $.08 per share, on record fourth quarter sales of $13,358,000. This compares with net income of $446,000, or $.13 per share, on sales of $10,354,000 during the same period in 1991.
 In the year ended Dec. 31, 1992, the company earned net income of $1,720,000, or $.49 per share, on record sales of $52,519,000. This compares with net income of $1,868,000, or $.55 per share, on sales of $40,886,000 during 1991. Average shares outstanding increased from 3,415,000 shares outstanding for the year ended Dec. 31, 1991, to 3,519,000 shares outstanding for the year ended Dec. 31, 1992.
 Operating Highlights
 Stuart noted that all major product lines experienced sales increases in excess of 19 percent during the year, and he added that the sales increases reflect the continuing growth of the Bingo industry as well as the company's success in achieving a larger market share.
 Stuart stated that a number of factors had contributed to the reduced earnings in 1992. In addition to the expenses associated with the opening of the Mexican facility and the development of a line of electronic gaming equipment, earnings were adversely affected by significant expenditures relating to the expansion and refurbishing of several U.S. manufacturing and administrative facilities and by the costs of an expanded research and development program designed to develop new and improved break-open tickets, electronic Bingo equipment and Bingo paper products. Finally, Stuart added that in order to meet temporary products shortages caused by delays experienced in opening the Mexico facility, the company purchased Bingo paper from Bingo Press & Specialty Ltd., dba Bazaar & Novelty, a Canadian company of which Stuart is the majority owner. The paper was acquired at a price below that available elsewhere in the market, but gross margins were adversely impacted as the price exceeded the company's cost of manufacturing the product.
 Stuart added that the expenses incurred in the development of its VLT and related electronic gaming products affected net income by more than $.10 in 1992.
 Entry Into British Market
 Stuart indicated that Stuart Entertainment and Bazaar & Novelty have executed an agreement with Mitre Printing Co. Ltd., a major manufacturer of Bingo paper, with its main plant in Nelson, England. This agreement will give the company its first entry into the sizable British Bingo market.
 The agreement provides that the company and Bazaar & Novelty will jointly provide special technology for new printing presses to be installed in May in England. Stuart Entertainment and Bazaar & Novelty will be responsible for the marketing of Bingo paper from these presses.
 Mitre Printing Co. Ltd., with more than 100 employees, is a subsidiary of Gala Leisure Ltd., which is the operator of more than 150 successful Bingo clubs in the United Kingdom.
 Stuart stated, "I am very enthusiastic about this agreement. The game of Bingo is extremely popular in England and the company feels there is a potential for significant Bingo paper sales in England. This agreement should open up the British and European markets to all Stuart Entertainment products."
 Stuart concluded by noting that "the European market has great potential and the company is now positioned to capitalize on opportunities available in England and Europe."
 Under existing agreements, Stuart Entertainment, and Bazaar & Novelty have agreed to jointly pursue Bingo-related international ventures.
 Electronic Gaming Equipment
 Stuart stated that, "there has been considerable interest in our new line of VLTs and related equipment. The company's wholly owned subsidiary, Video King Gaming Systems Inc., is continuing to make progress in the development of a line of state-of-the-art Electronic Bingo Systems and Video Lottery Terminals." Stuart added, "The sale of this electronic gaming equipment represents a significant opportunity for Stuart Entertainment. We believe that this new product line could become a major contributor to the future growth and profitability of the company."
 Stuart noted that the company had expensed virtually all costs incurred in the development of VLTs and electronic gaming products in 1992.
 The company previously reported that Video King Gaming Systems had received a substantial initial contract from the Manitoba Lottery Foundation for the delivery of Electronic Bingo Systems and related equipment. Delivery of this equipment is set for the second quarter of 1993.
 Overall, Stuart noted that he was "very encouraged by the company's initial marketing efforts in the VLT and electronic gaming market."
 Completion of Mexican Facility
 Stuart announced that planned expansion efforts related to the manufacturing facility recently established in Reynosa, Mexico were completed in December 1992. Stuart added that this facility, which is operated under the joint ownership of Stuart Entertainment and Bazaar & Novelty, "is providing additional capacity required to meet the growing demand for the company's Bingo paper products." Stuart noted that as a result of substantial organization, start-up and training costs, in addition to delays in the delivery and installation of equipment the benefits of operating the Mexican facility were not realized in 1992. Stuart indicated that the company has leased additional space in Reynosa and intends to further expand its manufacturing facilities in Mexico during 1993.
 Program To Improve Margins
 Stuart also announced that the company has made progress on a program initiated during the fourth quarter of 1992 that is designed to improve manufacturing efficiency, reduce production costs and cut Selling, General and Administrative (SG&A) expenses. This program, which is still being implemented, includes the consolidation of several U.S. facilities into the company's Council Bluffs, Iowa plant, the installation of manufacturing equipment designed to generate production efficiencies and cost savings, and a comprehensive review of SG&A expenses to identify specific areas for further cost reductions.
 STUART ENTERTAINMENT INC.
 Condensed Consolidated Balance Sheets
 Dec. 31, Dec. 31,
 1992 1991
 Assets:
 Current assets $17,271,000 $14,221,000
 Property, plant &
 equipment-net 11,607,000 10,190,000
 Other assets 4,886,000 3,590,000
 Total $33,764,000 $28,001,000
 Liabilities and
 Stockholders' Equity:
 Current liabilities $13,811,000 $10,274,000
 Long-term debt (less
 current portion) 4,748,000 4,433,000
 Other liabilities 1,037,000 1,088,000
 Stockholders' equity 14,168,000 12,206,000
 Total $33,764,000 $28,001,000
 Condensed Consolidated Summary of Income
 Three months ended
 Dec. 31,
 1992 1991
 Net sales $13,358,000 $10,354,000
 Net income $266,000 $446,000
 Earnings per share $.08 $.13
 Average shares outstanding 3,508,000 3,449,000
 12 months ended
 Dec. 31,
 1992 1991
 Net sales $52,519,000 $40,886,000
 Net income $1,720,000 $1,868,000
 Earnings per share $.49 $.55
 Average shares outstanding 3,519,000 3,415,000
 -0- 3/30/93
 /CONTACT: Richard H. Ellison of Stuart Entertainment, 303-794-9040/
 (STUA)


CO: Stuart Entertainment Inc. ST: Colorado IN: ENT SU: ERN

EH -- DV004 -- 1078 03/30/93 13:15 EST
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Date:Mar 30, 1993
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