WMS turns profit in Q4;
offers improvement for coming year

Aug 10, 2004 6:49 AM

WMS Industries (WMS) Monday reported a slight profit for the fiscal fourth quarter of 2004 that ended on June 30 but still showed a deficit for the fiscal year.

Net income for the fourth quarter was $896, 000 on revenues of $68.1 million or $0.03 per share compared to last year’s revenues of $50.9 million and a net loss of $5.1 million or $0.17 per share.

For the fiscal year, the company reported revenues of $230 million but a net loss of $883,000 or $0.03 a share. For fiscal 2003, the company had revenues of $178.7 million and a net loss of $8.2 million or $0.27 per share.

The fourth quarter’s increase in total revenues resulted in $13.6 million in higher gaming machines sales and a $5.3 million increase for parts, used games and conversion sets.

The company reiterated if first quarter 2005 guidance of anticipated revenues at between $75 million and $80 million and full year revenue guidance of $340 million to $360 million.

Pinnacle Entertainment

With legal costs behind the company, Pinnacle Entertainment Inc. (PNK) returned to profitably during the second quarter that ended on June 30. Revenues rose 5% to $139 million while profit jumped to $15.7 million or $0.43 a share compare to a loss last year in the comparable quarter of $0.09 a share.

Company executives said gaming revenues rose 4% with strong growth noted at the Belterra Casino in Indiana, as well as properties in Bossier City, La., and Biloxi, Miss.

For the fiscal year, the company raised its forecast for earnings with expectations to be between $8.7 million and $11.5 million or on a per share basis. This breaks down to between $0.24 per share to $0.33 per share.

During the conference call, Dan Lee, company chairman and CEO, said the company had several major projects in various planning stages. These include a $365 million casino in Lake Charles, La., said to be only a short drive from the Houston, Texas, market, and two gaming properties in the St. Louis, Mo., area.

Magna Entertainment

Revenues for the second quarter and first six months of 2004 increased by 5.4% and 7.0%, respectively, for Magna Entertainment Corp. (MECA), the largest operator of pari-mutuel racetracks in North America.

However, because of increased costs "in a number of strategically important areas," the company said, net income decreased to a net loss of $25.5 million in the second quarter, compared to net income of $0.8 million last year.

The loss was attributed to the non-cash write down, pre-operating and start-up costs incurred at Magna Racino and RaceOnTV and our other European business developments, the company reported.

Mikohn Gaming

For the second consecutive quarter, Mikohn Gaming Corporation (MIKN) reduced its net loss and again beat analysts’ consensus. Net loss for the three months that ended on June 30 fell to $.9 million or $0.04 a share compared to a net loss of $2.4 million or $0.18 per share in the same period of 2003.

The analysts’ consensus for the period was a net loss of $0.06 a share.

The company noted that this was the best quarterly performance by the company in the past 18 months.

Revenues for the second quarter declined from last year’s $25.2 million to $23.3 million, primarily due to lower license fees from slot and table games. However, these were partially offset by higher systems and product sales, the company said.

For the third quarter, the company said it expects earnings to be between break-even and $.5 million.

Argosy Gaming

The second quarter proved to be a major earnings period for riverboat casino operator Argosy Gaming Co. (AGY) that posted a two-fold increase during the period.

Net profit was $18.6 million or $0.63 per share. Last year, during the quarter that ended on June 30, the company had a profit of $6.9 million or $0.24 per share.

Revenues during the second quarter were $254.6 million, up from last year’s $248.3 million. Boosting revenues were its properties in Lawrenceburg, Ind., and Riverside, Mo., while a decline was caused by the actions to mitigate the high tax rates in Illinois.

"The second quarter results were on track with our expectations of improved year-over-year results," said Richard Glasier, president and CEO. "Operationally, Argosy is well situation to grow from a strong base."

Scientific Games

Second quarter revenues at Scientific Games Corporation (SGMS), distributor of lottery and pari-mutuel services, rose 38.% to $178.1 million from last year’s $128.8 million. Net income, before preferred stock dividend, increased 55% to $19.5 million or $0.21 a share. Last year, net income was $12.6 million or $0.14 a share.

The company noted that the lottery systems business was a significant contributor to the second quarter results that included the addition of the IGT OnLine Entertainment Systems business as well as the sale of equipment of Pennsylvania and a system to Italy.

Also, the company said it experience strong sales of instant lottery tickets in England and France.

As for guidance, the company is it was prepared to confirm its previous guidance of revenues between $690 million and $720 million and earnings of between $0.78 per share to $0.83 per share.