IGT’s quarterly report bodes
well for another big year
in 2004

Jan 27, 2004 4:20 AM

Buoyed by a 55% increase in worldwide machine sales, International Game Technology (IGT) reported huge increases in revenues, income from continuing operations and cash flows for the first quarter of fiscal 2004 that ended on Dec. 31, 2003.

Revenues increased 24% to $608.1 million; income from continuing operations increased 38% to $116.7 million or $0.33 per diluted share, and cash flow totaled $130 million.

In addition to the jump in international sales, the company reported domestic machine sales of 22,600 units, that was 17% higher than the prior year. Moving up 48% was domestic sales of replacement units that totaled 16,400.

As for its installed base of recurring revenue games, the company said that it was up 1,900 units to 34,400. Also, margins for the proprietary games reached 56% compared to last year’s 53%.

Addressing the most recent quarter, T.J. Matthews, company CEO said, "Our ongoing commitment to be the leading provider of gaming machines, platforms and systems has enabled us not only to grow our top line revenues, but also to increase the efficiency of our earnings and related profitability within our product sales and proprietary gaming business units."

It was noted that the most recent quarterly results included approximately two months of operations from the recent acquisition of Acres Gaming.

Wall Street estimates for the company’s earnings during the current fiscal year has averaged $1.28 a share, and Maureen Mullarkey, IGT chief financial officer, said she was comfortable with that figure.

In another news announcement, Coast Casinos Inc. said it had signed an agreement with IGT to purchase 100% of its gaming machines for its new Southcoast Resort from the company.

The new Southcoast, scheduled to open in late 2005, will have 2,500 gaming machines. All the machines will have the ticket-in/ticket-out feature.

Alliance Gaming Inc.

After reporting a strong fiscal quarter, Alliance Gaming Inc. (AGI) management advised Wall Street that it expects earnings to grow about 35% during the 2005 fiscal year.

As for the quarter that ended Dec. 31, marking the second quarter in the current fiscal year, the company reported earnings of $0.37 a share on net income of $18.7 million. Last year, the company had net income of $11.9 million or $0.24 a share.

For the full year that ends in June, the company said it expects earnings from continuing operations to be at least $1.04 a share, down from the previously forecast of $1.10 a share which was the same as Wall Street estimates.

EBITDA (earnings before interest, taxes, depreciation and amortization) from continuing operations was $34 million, up 30% from the $26.1 million in the comparable quarter of 2002.

As of Dec. 31, 2003, the company’s cash position was $72.3 million and its capital expenditures for the quarter totaled $13.2 million.

Station Casinos Inc.

Although Station Casinos Inc. (STN) won’t report its fiscal fourth quarter earnings for another two weeks, the company took the time last week to reiterate its existing financial guidance and make other announcements.

As previously noted, the company said it expects adjusted earnings per share to be between $0.38 and $0.41, excluding development costs and nonrecurring items. EBITDA is expected to be between $81 million and $84 million. For the full year the earnings per share will be between $1.21 and $1.24 while in 2005 it is expected to be approximately $1.68 to $1.78.

Development costs over the next year will be around $292 million while the cost in 2005 is expected to be somewhere near $350 million.

As for Red Rock Station at the intersection of I-215 and West Charleston Boulevard, the company said the initial phase is expected to include 60 table games and 2,700 slot machines. The property will include 400 hotel rooms, 45,000 square feet of meeting space, 16 movie theaters, a 20,000 square foot spa and several restaurants.

Once completed, the company expects the new property to add between $0.06 and $0.11 to the company’s earnings.

President Casinos Inc.

Losses continued for President Casinos Inc. (PREZ), the gaming company that operates riverboat casinos in downtown St. Louis, Mo., and in Biloxi, Miss.

For the third quarter that ended on Nov. 30, 2003, the company reported a net loss of $2.6 million or $0.52 a share, compared to a net loss of $1.6 million or $0.31 a share in the third quarter of 2002.

Revenues for the three-month period were $27.5 million compared to revenues of $29 million a year earlier.

For the ninth period revenues reached $90.8 million compared to the previous year’s $94.4 million.