Huge earnings jump in QI reported by Shuffle Master Inc.

Mar 2, 2004 5:04 AM

With increases across the financial board, Shuffle Master Inc. (SHFL) reported earnings per diluted share for the quarter that ended on Jan. 31, of $0.34 compared to the $0.19 per share the company reported in the corresponding period of 2003.

Earnings came from revenue of $15.6 million, a 31% jump from the $11.9 million of a year ago. Net income of $5.9 million compared to last year’s $3.3 million.

Company chairman and CEO Mark Yoseloff called the reporting "another outstanding quarter for Shuffle Master. Our Utility Products segment, which includes shuffler sales and leases, experienced a 26% increase while our Entertainment Products segment, which includes table game royalties and sale, showed 36% top line growth."

He added that over the next quarter the company plans to broaden each of these categories with new products and through the integration of recent acquisitions. Among the new products planned is the "third generation shuffler."

In a recent announcement, the company said it had purchased certain assets of BET Technology Inc. that included some proprietary table games such as Fortune Pai Gow, Casino War and Royal Match.

Also, the company said it plans to purchase Casinos Austria Research and Development, a company, based in Vienna, Austria, that develops, manufactures and supplies innovative casino products, including the One2Six shuffler.

Shortly after the release of its fiscal quarter, the company’s board of directors announced that the company had extended Yoseloff’s employment contract through 2007. No terms of the contract were disclosed.

Garry W. Saunders, chairman of the company’s Compensation Committee, commented, "Mark’s leadership and vision have enabled Shuffle Master to dramatically expand its core business and his future guidance will be an integral part of our future success in our utility and entertainment products market. With Dr. Yoseloff at the helm, our board of directors is confident that Shuffle Master will be in excellent hands in the coming years."

Dr. Yoseloff joined the company in 1997 as executive vice president and assumed the post of CEO in 2001. He previously had spent two decades as a senior executive for Coleco Industries. He received his doctorate in finite mathematics from Princeton University where he also taught mathematics and computer science.

Magna Entertainment

Despite increased revenues in the fourth quarter that ended on Dec. 31, 2003, Magna Entertainment Corp. (MECA) saw its net loss rise from the previous year’s $32.809 to $148, 153. This amounted to a loss of $0.96 a share compared to the $0.23 loss of a year earlier.

The fourth quarter’s results were reflected in the company’s year end loss of $0.98 a share compared to the 2002 loss of $0.14 a share.

However, the company officials were pleased that the company had achieved some of its goals. Said Jim McAlpine, president and CEO, "Despite encountering numerous challenges during 2003, MECA made significant strides toward our goal of creating a global entertainment company built around horse racing, including the achievement of revenue growth of 29%”¦As announced on October 30, we have developed a multi-part action plan aimed at improving our future financial results." The plan includes a major reduction in operating expenses.

Looking toward the coming year, McAlpine noted the possibility that some of the company’s track would receive approval to add gaming machines to their horse racing operations.

The possibility of Class II gaming devices, similar to slot machines, seems likely since both legislative bodies in Oklahoma have approved the plan. Progress also has been reported in both Maryland and Pennsylvania where the company has horse racing operations.