GTECH reports 36% rise in net income

Apr 18, 2006 4:54 AM

GTECH Holdings Corporation (GTK), one of the world’s largest suppliers of lottery provisions that is in the process of being acquired by the Italian firm Lottomatica S.p.A., reported an increase of 36% in net income for the fourth fiscal quarter that ended on Feb. 25.

Earnings increased to $59.4 million or $0.45 per share compared to $43.8 million or $0.34 per share in the comparable quarter of 2005.

Excluding a $6.1 million charge associated with the company’s pending acquisition, the GTECH, based in West Greenwich, R.I., posted earnings of $65.5 million or $0.50 per share, topping the average forecast of gaming analysts of $0.47 per share.

For the full fiscal year, the company posted net income of $211 million or $1.63 per share. A year earlier, the company’s net income was $196.3 million or $1.50 per share.

Late last year, the company agreed to sell itself to Lottomatica for $4.8 billion in cash, or $35 a share. Agreeing to the merger was GTECH CEO Bruce Turner who is expected to continue with his duties after the acquisition is consummated in the middle of the calendar year.

Turner, in announcing the company’s results, remarked, "GTECH delivered solid financial results in both the quarter and the full fiscal year, meeting or exceeding our previous outlook."

"All told," he said, "GTECH secured new contracts and extensions with 22 customers, representing approximately $1 billion in revenues to the company over the life of the contracts."

Turning to the European continent, Turner said, "EuroMillions has become a solid contributor for GTECH. It continues to grow with 10 jurisdictions now participating in the game, three of which GTECH facilities manage for its customers. In fact, EuroMillions now has the largest player base of any multi-jurisdictional game in the world, with more than 200 million players.
Following the release of the company’s financials, GTECH announced that it has been notified by the Idaho Lottery Commission of that group’s intent to negotiate a contract for equipment and services from another vendor. The Idaho Lottery has been a GTECH customer since 1989 and contributes about $3 million to $4 million to GTECH’s annual revenues.