Bally Technologies Inc. (BYI) had great expectations when it announced the acquisition of SHFL Entertainment, the former Shuffle Master, and a brief merger of the two companies’ financial experience during the second fiscal quarter showed the merger’s impact.
The company said it had record quarterly revenue of $285 million and adjusted earnings per share of $1.06 for the period that ended on Dec. 31, 2013. Diluted earnings, the company said, amounted to $0.54 per share.
The quarterly results included 37 days of operations from the acquired SHFL.
Officials called the quarter “transformative.” Investors were less impressed. A selling wave began that continued into Monday after analysts at Janney Capital cut their rating of the shares to neutral from buy.
Where in recent months, the shares had hit a 52-week high of $82.67 per share, by Monday the share value had fallen as low as $66.65.
In a statement issued for the quarterly report, Ramesh Srinivasan, president and CEO remarked, “Our second quarter fiscal 2014 was transformative in many respects. We successfully closed the acquisition of SHFL ahead of schedule and the ongoing integration process is moving forward smoothly.
“We have integrated our sales, services and product development teams while simultaneously continuing to execute well on our core business as evidenced in our second quarter,” he said.
Revenues that are considered recurring in nature set a quarterly record and accounted for approximately 51 percent of the total revenue, explained CFO Neil Davidson.
Under the category of electronic gaming machines, the company reported a revenue increase of 7 percent to $88 million, driven by the shipment of 1,025 units into the Illinois Video Gaming Terminal market; 587 Equinox units and 90 ETS seats partially offset by the absence of 568 Canadian VLT units sold in the prior year period.
As for the future, the company said it expected to reach earnings per share of between $4.30 and $4.50. This was moved up from the previous $3.80 to $4.10 per share.
Also, the company announced it had signed an exclusive enterprise-wide systems agreement with Australian Leisure and Hospitality Group.
Affected by weather issues and general regional weakness, Penn National Gaming Inc. (PENN) reported quarterly revenue for the period that ended on Dec. 31, 2013, was down 13.3 percent.
Also, because of the creation and spinoff of Gambling and Leisure Properties, a publicly-traded company under the symbol GLPI, the company reported a net loss of $888.7 million. The loss was primarily related to the $1 billion non-cash impairment charge caused by the spinoff.
Through the spinoff, PENN operates 19 casinos but the real estate involved is owned by the REIT spinoff company.
On a per share basis, the PENN quarterly loss was $11.40. Last year, the company reported a profit of $20.2 million or $0.19 per share.
The creation of a REIT by the gaming company was a first for the industry. Company officials said by separating the company into two parts it would generate more value for the shareholder. Since the creation of Gaming and Leisure Properties, the REIT has acquired another property, the Casino Queen in East St. Louis, Illinois.
Ray Poirier is the longtime executive editor at GamingToday.
Contact Ray at [email protected].