Shuffle Master bullish on both ’05 and ’06

Sep 13, 2005 4:45 AM

Investors turned bullish on the shares of Shuffle Master Inc. (SHFL) following a promising report for both fiscal third quarter that ended on July 31 and for guidance for both the final quarter of 2005 and full year 2006.

Share price for SHFL jumped 15% to $27.95 immediately following the announcement on Wednesday and inched upward from there to $28.98 by the close of trading on Friday.

For the third quarter, the company said revenues increased to $27.3 million, an 18% jump while diluted earnings increased 29% to $0.22 per share. In the comparable period of 2004, the company had revenues of $23 million and earnings per share of $0.17.

As for 2006 guidance, the company said it estimated earnings to be between $1.00 and $1.05 per share. The consensus of analysts had placed earnings estimates in the $0.98 share range.

Particularly notable, said analysts following the announcement, were sales of the company’s Easy Chipper chip-sorting device and Table Master electronic table games. Also seen as a positive were the company’s acquisition of VIP Gaming Solutions of Sydney, Australia, and a strategic alliance with Ameranth Wireless, Inc. of San Diego, Cal.

Commenting on the quarterly report, Dr. Mark Yoseloff, chairman and CEO, said, "For the quarter and year thus far, we experienced significant progress in out utility and entertainment products categories and were effective in translating that growth into solid year-over-year profitability."

Yoseloff added that "we remain very excited about the future for Shuffle Master and believe the pieces are in place to offer new technologies and content to our global customer base, while generating substantial profits for our shareholders."

The company commands a 90% share of the market for automatic card shufflers, a product that casinos use to deal more hands per hour, prevent players from counting cards and dealers from cheating.