Shuffle Master hits 19 straight winners!

Aug 27, 2002 9:32 AM

Posting record revenue and income, Shuffle Master racked up its 19th consecutive quarter of recurring revenue growth in the third quarter ending July 31.

The Las Vegas-based game maker reported revenue of $15.1 million, a 20.3 percent increase over last year’s third quarter result. Operating income increased 27.1 percent during the quarter to $5.8 million, compared with $4.6 million a year ago. Net income increased 21.9 percent to $3.9 million, or 22 cents per diluted share compared with $3.2 million, or 17 cents per diluted share.

Looking ahead, Chairman Mark Yoseloff said earnings-per-share could rise to 23-25 cents this quarter. Among the developments fueling the firm’s optimism:

”¡ Total shuffler installations now exceed 9,000 units, with more than 550 new installs in the quarter, including Great Britain.

”¡ Total table game units increased 20.5 percent from the third quarter last year, and now stand at 1,476 units.

”¡ Recurring revenue increased to $10.8 million, up 30.4 percent over the third quarter of fiscal 2001.

”¡ Gross margin was 74.1 percent — among the highest in the industry. Operating margin was 38.6 percent, and net income was 25.9 percent of revenue.

”¡ Cash and short-term investments stand at $19.4 million as of July 31.

”¡ A host of new products are in the pipeline. First shipments of Hollywood and Spider-Man slot machines were made late in the quarter. Two table games ”” Crazy For Poker and Single Deck 21 ”” are now hitting the market. And test trials have been conducted on the Deck Mate shuffler, with full production expected early next year.

Joint ventures with IGT and WMS are continuing, and Yoseloff called prospects for future expansion "pretty rosy." He said Shuffle Master will introduce a new game with IGT at the Global Gaming Expo next month.

Despite another record quarter, Shuffle Master’s share prices still languish around $18 ”” far off the $24 achieved last April. To capitalize on this, Shuffle Master repurchased $11.4 million of its common stock during the quarter. The company authorized another purchase in coming months.