WAUKEGAN, Ill., Aug 29, 2013 (BUSINESS WIRE) —
— Successful New Products Drive Quarterly Record Replacement Unit Shipments of 4,376 New Units in the U.S. and Canada, Total Global Shipments of 6,795 New Units and 6% Growth in Participation Revenues –
— Demand for Unique New Gamefield xD Gaming Machine Leads to Record Number of Wide-Area Progressive Games in Installed Base –
WMS Industries Inc.
/quotes/zigman/246735/quotes/nls/wms WMS
+0.08%
today reported revenue of $202.8 million
and net income of $13.5 million, or $0.24 per diluted share, for the
fiscal 2013 fourth quarter ended June 30, 2013. These results include a
$0.04 per diluted share impact for costs related to the pending
acquisition of WMS by Scientific Games Corporation
/quotes/zigman/85692/quotes/nls/sgms SGMS
+2.75%
in
selling and administrative expenses and $0.06 per diluted share for net
charges in interest income and other income and expense, net, primarily
related to foreign currency losses due to the devaluation of the
Argentina Peso to the U.S. dollar. This impact was partially offset by a
$0.03 per diluted share benefit from discrete tax items, principally due
to the conclusion of a prior year’s federal income tax audit. For the
fiscal 2012 fourth quarter, WMS reported revenue of $195.9 million and
net income of $22.1 million, or $0.40 per diluted share.
“Excellent customer and player demand for our innovative new Blade(TM)
and Gamefield xD(TM) gaming machines drove year-over-year increases
in new gaming machine sales and participation revenues, and these
improvements, combined with continued strength in interactive products
and services revenues, led to the growth in our quarterly revenues,”
said Brian R. Gamache, Chairman and Chief Executive Officer. “Our
investments in R&D during the last several years have supported the
development of great new products, games and innovative new gaming
experiences that deliver substantial value for our casino customers and
have set WMS on a path for renewed long-term growth. At next month’s G2E(R)
industry trade show, we’ll demonstrate our latest new products that
offer engaging gaming entertainment, including a full range of new
premium participation and for-sale games.”
Recent Highlights:
—
Total revenues grew 4% over the prior-year quarter to $202.8 million
and increased 14% on a quarterly sequential basis, while direct costs
attributable to revenues declined by $4.4 million, or 6%, from the
prior year due to improved productivity, strategic sourcing
initiatives and mix of business.
—
Gaming operations revenues increased $20.6 million, or 33%, year over
year to a quarterly record $83.4 million, primarily reflecting a
568-unit increase, or 6% gain, in the average installed participation
base plus interactive products and services revenue growing to $17.4
million.
—
WMS shipped approximately 2,450 new for-sale Blade cabinets in
the June 2013 quarter driving a quarterly record 4,376 new replacement
gaming machines shipped in the U.S. and Canada.
—
International unit shipments improved by 39% year over year to 2,055
gaming machines.
—
Cash flow from operating activities increased $11.3 million, or 23%,
in the June 2013 quarter over the prior year, while net cash used in
investing activities decreased by $20.0 million, or 25%, from the
comparable quarter a year ago.
—
Restarted sales and leasing of Video Gaming Terminals (VGTs) in
Illinois following modification and amendment of the State’s Video
Gaming Act on June 24, 2013 that will now permit WMS to continue as a
licensed manufacturer following the completion of the Company’s
pending acquisition by Scientific Games.
—
Launched the new, enhanced Play4Fun Network(TM) interactive
product that provides a B2B white-label, free-play iGaming and
marketing platform that seamlessly links players’ online gaming
experiences with a casino’s land-based entertainment offering, with
the first installation at the Snoqualmie Casino in Washington.
—
Extended the availability of the Jackpot Party(R) Social Casino
across mobile and tablet devices to include Android(TM) based
mobile devices.
—
Through the Williams Interactive subsidiary, extended the availability
of WMS slot games to several additional European real-money online
casino and bingo sites.
“Over the last two years, WMS prudently allocated capital to refresh our
installed participation base while investing in R&D initiatives to
develop innovative new premium games and platforms, such as the Gamefield
xD participation gaming machine that launched in the March 2013
quarter,” said Gamache. “As a result, today we have approximately 1,400 Gamefield
xD cabinets in our installed participation base; and by accelerating
the replacement and upgrading of our footprint, approximately 80% of our
installed gaming machines are Bluebird(R)2, Bluebird xD and Gamefield
xD cabinets. These investments have established a solid foundation
for consistent growth in our gaming operations, as new titles such as
the two initial THE WIZARD OF OZ(TM) game themes for the Gamefield
xD platform and the more recent launches of the MONOPOLY(TM)
Legends(TM), SPIDER-MAN(TM) and WILLY WONKA AND THE CHOCOLATE FACTORY(TM)
themes were drivers of our expanded footprint in the June quarter. With
ongoing expansion of these successful products, our installed base of
Wide-Area Progressive (WAP) gaming machines reached a new record level
in early August. And, with the new IRON MAN(TM) WAP game on the
Gamefield xD cabinet and THE LORD OF THE RINGS(TM) The Return of the
King(TM) standalone game scheduled for launch in the September quarter,
we expect to continue to generate further growth across our entire
participation footprint and deliver strong earnings performance for our
customers.
“The significant enhancement in graphics and player experience enabled
by the increased power of our next-generation CPU-NXT(R)3 operating
platform and Blade cabinet is driving superior in-casino
performance of our newest for-sale games such as Great Zeus(TM), Lantern
Festival(TM) and Montezuma(TM) themes. As a result of the
exceptional player appeal and customer performance, the Blade
cabinet represented about 36% of global new units shipped in the June
quarter, exceeding the previous record demand pace established by the
launch of the Bluebird2 cabinet in 2008. Recently, we doubled the
number of game themes available on the Blade platform and
continue to extend the range of entertaining themes and play experiences
available for the Blade cabinet to provide additional diversity
of engaging game play for players and customers.
“In addition, success throughout fiscal 2013 in leveraging our creative
development capabilities and legendary slot game library to create new
interactive products and services resulted in interactive revenues
reaching $57 million in annual revenues compared to just $4 million in
fiscal 2012. We are highly encouraged by the successful development
efforts and growth initiatives of our interactive products and services
during the past year and expect to achieve additional growth in fiscal
2014 as we further monetize key game launches and realize ongoing
benefits from the recent expanded availability of our Jackpot Party
Social Casino in tablet and mobile device channels. We are confident
that our interactive gaming initiatives and distribution opportunities
for our content and games in these growing channels is a source of
significant long-term growth potential for the Company,” concluded
Gamache.
Fiscal 2013 Fourth Quarter Financial Review
The following table summarizes key components related to revenue
generation for the three months ended June 30, 2013 and 2012 (dollars in
millions, except unit, per unit and per day data):
Three Months Ended
June 30, Increase/(Decrease)
----------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------
2013 2012 Amount %
---------------------------- ---------------------------- ------------------------------------------------- ---------------------------
Total Revenues $ 202.8 $ 195.9 $ 6.9 3.5
==================== ====== ==================== ====== ==================== ====== ====================
Product Sales Revenues:
New gaming machine sales revenues $ 105.0 $ 98.2 $ 6.8 6.9
Other product sales revenues 14.4 34.9 (20.5) (58.7)
-------------------- ------ -------------------- ------ -------------------- ------ --------------------
Total product sales revenues $ 119.4 $ 133.1 $ (13.7) (10.3)
==================== ====== ==================== ====== ==================== ====== ====================
Average sales price per new unit $ 15,443 $ 15,982 $ (539) (3.4)
New unit shipments to the U.S. and Canada 4,740 4,672 68 1.5
New unit shipments to International markets 2,055 1,474 581 39.4
-------------------- ------ -------------------- ------ -------------------- ------ --------------------
Total new units on which revenue was recognized 6,795 6,146 649 10.6
Used unit shipments 903 2,671 (1,768) (66.2)
-------------------- ------ -------------------- ------ -------------------- ------ --------------------
Total unit shipments 7,698 8,817 (1,119) (12.7)
==================== ====== ==================== ====== ==================== ====== ====================
Conversion kit unit sales 2,590 5,460 (2,870) (52.6)
Cost of product sales revenues $ 56.5 $ 60.4 $ (3.9) (6.5)
Gaming Operations Revenues:
Participation revenues $ 59.2 $ 56.1 $ 3.1 5.5
Interactive products and services revenues 17.4 1.2 16.2 nm
Other gaming operations revenues 6.8 5.5 1.3 23.6
-------------------- ------ -------------------- ------ -------------------- ------ --------------------
Total gaming operations revenues $ 83.4 $ 62.8 $ 20.6 32.8
==================== ====== ==================== ====== ==================== ====== ====================
Installed base of participation units at period end 9,910 9,561 349 3.7
Average installed participation units 9,818 9,250 568 6.1
Average daily revenue per participation unit $ 66.23 $ 66.50 $ (0.27) (0.4)
Cost of gaming operations revenues $ 13.7 $ 14.2 $ (0.5) (3.5)
Product Sales Revenues
Total product sales revenues for the June 2013 quarter were $119.4
million, as a $6.8 million increase in new gaming machine sales was
offset by a $20.5 million decline in sales of used gaming machines and
conversion kits. WMS shipped 4,740 new gaming machines to customers in
the U.S. and Canada, an increase of 68 units from the prior-year period
and a quarterly sequential increase of 31%, or 1,121 units. Replacement
units shipped to U.S. and Canadian customers, including 234 VLTs for
Canadian customers, increased 12% to a quarterly record 4,376 units
replacement units compared with 3,897 replacement units in the
prior-year period. New gaming machine shipments for new casino openings
and expansions in the U.S. and Canada totaled 364 units, a decrease from
775 units in the June 2012 quarter reflecting fewer new casino openings.
Shipments to international customers rose 39% year over year to 2,055
new units, or 30% of total global new unit shipments, compared to 1,474
new units, or 24% of global new unit shipments, in the year-ago period.
The Company’s average sales price in the June 2013 quarter was $15,443
compared to $15,982 in the year-ago period, reflecting higher revenue
deferrals of approximately $6.0 million related primarily to a new and
unique Blade cabinet content pricing plan and the sales mix
impact from lower-priced VLT units and Bluebird2 lite cabinets
for select international markets.
Other product sales revenues declined 59% to $14.4 million from the
record $34.9 million in the prior-year period, primarily reflecting
lower conversion kit sales revenues and lower used gaming machine
revenues as a result of a smaller number of used unit sales at lower
prices.
Gaming Operations Revenues
Gaming operations revenues rose $20.6 million, or 33%, to $83.4 million
in the June 2013 quarter from $62.8 million in the year-ago period. The
average installed participation base increased 568 units to 9,818 gaming
machines compared with 9,250 gaming machines in the prior-year quarter,
and increased 5%, or 499 units, on a quarterly sequential basis. The
quarter-end installed participation footprint rose 349 units year over
year and by 226 units on a quarterly sequential basis to 9,910 gaming
machines at June 30, 2013, representing the Company’s highest
quarter-end installed footprint in the last nine quarters. Average
revenue per day was essentially flat at $66.23 per unit for the June
2013 quarter compared with $66.50 in the prior-year period, primarily
reflecting the weakness in gaming industry revenues reported in most
regional gaming markets offset by the strong performance from WMS’
latest new participation products.
Revenues from interactive products and services, which are net of
platform fees, increased nearly fifteen-fold to $17.4 million from $1.2
million in the prior-year quarter. The increase reflects the significant
growth and monetization achieved during the last year with the Jackpot
Party Social Casino, organic growth in WMS’ UK-based online casino
and in the play of WMS slot games on multiple European real-money online
casinos. During the June quarter, growth initiatives were strategically
paused in the Company’s social gaming operations to enable the expansion
of an enhanced server and network infrastructure to facilitate further
future growth, particularly given the introduction of gaming products
for mobile platforms. Following the successful network upgrade and
expansion, daily active users (DAU) on Jackpot Party Social
Casino have increased over 35% thus far in the September quarter
compared to the June quarter across all platforms to new record levels
reflecting popularity of play on mobile devices, while maintaining high
rates of monetization that are believed to be comparable to the
industry’s leading social casino sites.
Other gaming operations revenues increased to $6.8 million compared to
$5.5 million in the year-ago quarter, primarily reflecting higher leased
gaming machine revenues and royalties from licensing WMS intellectual
property to third parties.
Costs and Expenses
The following table summarizes key components of costs and expenses for
the three months ended June 30, 2013 and 2012 ($ in millions):
Three Months Ended
June 30, Increase/(Decrease)
--------------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------
Costs and Expenses: 2013 2012 Amount %
-------------------- ----- -------------------- -------------------- ----- -------------------- ------------------------------- ----- --------------------
Cost of product sales $ 56.5 $ 60.4 $ (3.9) (6.5)
As a percentage of product sales revenues 47.3 % 45.4 % 190 bp 4.2
Cost of gaming operations 13.7 14.2 (0.5) (3.5)
As a percentage of gaming operations revenues 16.4 % 22.6 % (620)bp (27.4)
Research and development expense 30.3 24.3 6.0 24.7
As a percentage of total revenues 14.9 % 12.4 % 250 bp 20.2
Selling and administrative expense 49.9 40.0 9.9 24.8
As a percentage of total revenues 24.6 % 20.4 % 420 bp 20.6
Depreciation and amortization expense 32.5 25.3 7.2 28.5
As a percentage of total revenues 16.0 % 12.9 % 310 bp 24.0
-------------------- ----- -------------------- -------------------- ----- -------------------- -------------------------------
Total costs and expenses $ 182.9 $ 164.2 $ 18.7 11.4
==================== ===== ==================== ==================== ===== ==================== === ===== ====================
Operating income $ 19.9 $ 31.7 $ (11.8) (37.2)
==================== ===== ==================== ==================== ===== ==================== === ===== ====================
Operating margin 9.8 % 16.2 % (640)bp (39.5)
==================== ===== ==================== ==================== ===== ==================== ===============================
As a percent of product sales revenue in the June 2013 quarter, costs
declined 280 basis points on a quarterly sequential basis to 47.3% but
increased 190 basis points year over year reflecting the impact of
lower-priced VLT units and Bluebird2 lite cabinets for select
international markets, along with fewer high-margin conversion kit
sales, the higher cost of the Blade cabinet compared to the Bluebird2
cabinet and the impact of the competitive industry environment on
average selling price. As a result of successful supply chain management
and enhanced new product introduction processes, the initial yield at
the launch of the Blade cabinet was higher than the initial yield
at the launch of either the Bluebird2 or Bluebird xD cabinets.
Cost of gaming operations revenues declined $0.5 million year over year
and as a percent of gaming operations revenues declined 620 basis
points. The improvement primarily reflects the low direct costs
associated with higher interactive products and services revenues and
favorable jackpot expense on wide-area progressive games for the June
2013 quarter.
In aggregate, direct costs attributable to product sales and gaming
operations revenues decreased $4.4 million in the June 2013 quarter even
as revenues grew $6.9 million.
Research and development expenses increased $6.0 million year over year
and $0.4 million on a quarterly sequential basis to $30.3 million for
the June 2013 quarter. The year-over-year increase reflects higher
spending, including payroll-related and incentive costs, to support the
development of the Company’s innovative new casino gaming products, the
incremental expense from two interactive acquisitions completed in the
June 2012 quarter and higher development costs to support long-term
growth in interactive products and services revenues.
Selling and administrative expenses in the June 2013 quarter increased
$9.9 million year over year and rose $2.8 million on a quarterly
sequential basis to $49.9 million. The year-over-year increase reflects
$3.6 million of costs associated with the Company’s pending acquisition
by Scientific Games Corporation, the planned increase in online
marketing costs to expand the player base for interactive products and
services revenues, the impact of two acquisitions in the June 2012
quarter, higher payroll-related and incentive costs and the incremental
expenses related to the Company’s recent implementation of an upgraded
enterprise-wide ERP system.
Depreciation and amortization expense of $32.5 million in the June 2013
quarter increased by $7.2 million year over year and $0.8 million on a
quarterly sequential basis. The year-over-year increase reflects the
Company’s investment in its installed base of participation gaming
machines over the last 12 months, depreciation associated with the
completion of a major new facility, implementation of the upgraded
enterprise-wide ERP system and the amortization of finite-lived
intangible assets from the two acquisitions completed in the June 2012
quarter.
Cash Flow and Balance Sheet
Cash flow provided by operating activities for the twelve months ended
June 30, 2013 was $153.4 million compared to $156.8 million in the
year-ago period, but increased $11.3 million, or 23%, in the June
quarter over the prior year period to $61.5 million. Fiscal 2013 annual
results reflect lower net income, a greater impact of tax-related items
and a decrease in other non-cash items offset by higher depreciation and
amortization and a smaller change in operating assets and liabilities.
Total receivables, net increased slightly to $409.8 million at June 30,
2013 from $405.1 million at June 30, 2012, reflecting a $29.8 million
decrease in long-term notes receivable during the last fiscal year
offset by a $34.5 million increase in current accounts and notes
receivable. Inventory at $61.5 million was up $8.2 million from June 30,
2012, principally reflecting an increase in materials to support the
launch of the new Blade and Gamefield xD gaming machines.
Net cash used in investing activities for fiscal 2013 was $174.3
million, down $19.9 million from the $194.2 million used in fiscal 2012.
A $16.0 million decline in expenditures for property, plant and
equipment and a $16.4 million reduction in cash used to fund prior-year
acquisitions was partially offset by a $4.9 million increase in funds
used to acquire or license intangible and other non-current assets and a
$7.6 million increase in capital deployed for gaming operations,
primarily due to the strong customer demand for placements of the new,
high-performing Gamefield xD participation gaming machine. In the
June 2013 quarter, total capital expenditures in aggregate for gaming
operations equipment and property, plant and equipment were $50.8
million, or $7.6 million lower, than the $58.4 million of total capital
expenditures for property, plant and equipment and gaming operations
equipment in the June 2012 quarter.
Net cash provided by financing activities was $21.8 million in fiscal
2013 compared to $10.8 million in the prior year, primarily due to a
$45.4 million decline in stock repurchase activity, which was partially
offset by $35.0 million in lower net borrowings under the Company’s line
of credit.
Total cash, cash equivalents and restricted cash was $69.7 million at
June 30, 2013, and long-term debt was $85.0 million.
Adjusted EBITDA, a non-GAAP financial metric (see reconciliation to net
income at the end of this release), was $60.8 million in the June 2013
quarter, inclusive of the $3.6 million impact related to the pending
acquisition of WMS by Scientific Games and the $5.2 million impact from
net charges related to foreign currency losses and other items, compared
with $69.8 million in the prior-year period, while adjusted EBITDA
margin was 30.0% compared with 35.6% in the year-ago quarter.
About WMS
WMS Industries Inc. is a leading supplier of innovative gaming
entertainment products and services worldwide. The Company designs,
develops, manufactures, distributes and markets casino games and gaming
machines, video lottery terminals, video gaming terminals and
interactive gaming products and services. More information on WMS, and
its subsidiaries, WMS Gaming and Williams Interactive, can be found at www.wms.com
or www.williamsinteractive.com
or visit the Company on Facebook(R),
Twitter(R)
or YouTube(R).
G2E is a registered trademark of the American Gaming Association
and Reed Elsevier Inc. Used with permission.
IRON MAN and all related characters, TM & (C) 2008-2013 Marvel
Entertainment, Inc. and its subsidiaries. IRON MAN movies (C)
2008-2013 Paramount Pictures Inc. All rights reserved.
MONOPOLY is a trademark of Hasbro. Used with permission. (C)2013
Hasbro. All rights reserved.
THE LORD OF THE RINGS (C) 2013 New Line Productions, Inc. All
rights reserved. The Lord of the Rings: The Fellowship of the
Ring, The Lord of the Rings: The Two Towers, The Lord of the Rings: The
Return of the King and the names of the characters, items, events and
places therein are trademarks of The Saul Zaentz Company d/b/a
Middle-earth Enterprises under license to New Line Productions, Inc.
SPIDER-MAN and all related characters, TM & (C) 2002-2007 Marvel
Entertainment, Inc. and its subsidiaries. SPIDER-MAN movies (C)
2002-2007 Columbia Pictures Industries, Inc. All rights reserved.
THE WIZARD OF OZ and all related characters and elements are
trademarks of and (C) Turner Entertainment Co. (s13)
WILLY WONKA(TM) & (C) Warner Bros. Entertainment. (s13)
Cautionary Statement Regarding Forward-looking
Statements
This press release contains forward-looking statements concerning our
future business performance, strategy, outlook, plans, products and
liquidity. Forward-looking statements may be typically identified by
such words as “may,” “will,” “should,” “expect,” “anticipate,” “plan,”
“likely,” “believe,” “estimate,” “continue,” “project,” and “intend,”
among others. These forward-looking statements are subject to risks and
uncertainties that could cause our actual results to differ materially
from the expectations expressed in the forward-looking statements.
Although we believe that the expectations reflected in our
forward-looking statements are reasonable, any or all of our
forward-looking statements may prove to be incorrect. Consequently, no
forward-looking statements may be guaranteed. We undertake no obligation
to update such forward looking statements, all of which are made only as
of this date, August 29, 2013. Factors which could cause our actual
results to differ from those projected or contemplated in any such
forward-looking statements include, but are not limited to, the
following factors: (1) there is a risk that the acquisition of WMS (“the
acquisition”) pursuant to the previously announced merger agreement with
Scientific Games Corporation may not be consummated, on a timely basis
or otherwise; (2) our business has been and may in the future be
disrupted while the acquisition by Scientific Games Corporation is
pending or if the acquisition is not consummated as our ability to
transact business with customers, suppliers and other business partners
may be adversely affected; (3) it may be difficult for us to retain and
recruit employees in vital areas while the acquisition is pending or if
it fails; (4) in the event our recently announced acquisition by
Scientific Games Corporation is not consummated, the price of our stock
may be affected; (5) there could be unexpected costs, charges or
expenses or lost revenue opportunities resulting from the pending
acquisition; (6) in connection with the recent implementation of our
enterprise resource planning system, there is the risk of inaccurate
data or reporting and significant design errors that could have a
negative effect on our operating results and impact our ability to
manage our business which could constitute significant deficiencies; (7)
delay or refusal by regulators to approve our new gaming platforms,
cabinet designs, game themes and related hardware and software; (8)
changes in regulations or regulatory interpretations that may adversely
affect existing product placements or future placements; (9) an
inability to introduce in a timely manner new games and gaming machines
that achieve and maintain market acceptance; (10) a decrease in the
desire of casino customers to upgrade gaming machines or allot floor
space to leased or participation games, resulting in reduced demand for
our products; (11) a reduction in capital spending or interruption in
payments by casino customers associated with business weakness or
economic uncertainty that adversely affects our customers’ ability to
make purchases or pay; (12) a greater-than-expected demand for operating
leases by customers over outright product sales or sales financing
leases that shift revenue recognition from a single period to the term
of such operating leases; (13) a reduction in play levels of our
participation games by casino patrons, whether due to economic
conditions or increased placements of competitive product; (14)
inability of suppliers of key components to timely meet our requirements
to fulfill customer orders; (15) increased pricing or promotional
competitive activity that adversely affects our average selling price or
product revenues; (16) a failure to obtain and maintain our gaming
licenses and regulatory approvals; (17) failure of customers or players
to adapt to the new technologies that we introduce in new product
concepts; (18) a software anomaly or fraudulent manipulation of our
gaming machines and software; (19) a failure to obtain the right to use
or an inability to adapt to rapid development of new technologies; (20)
an infringement claim seeking to restrict our use of material
technologies; (21) risks of doing business in international markets,
including political and economic instability, terrorist activity,
changes in importation and repatriation regulations such as currently
experienced in Argentina, and foreign currency fluctuations; and (22)
the unfavorable outcome of any legal proceedings in which we may be
involved from time to time. These factors and other factors that could
cause actual results to differ from expectations are more fully
described under “Item 1. Business”, “Item 1A. Risk Factors” and “Legal
Proceedings” in our Annual Report on Form 10-K for the year ended June
30, 2012, and our more recent reports filed with the U.S. Securities and
Exchange Commission.
WMS INDUSTRIES INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in millions of U.S. dollars and millions of shares, except per
share amounts)
Three Months Ended June 30, Twelve Months Ended June 30,
--------------------------------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------------------------------
2013 2012 2013 2012
--------------------------------------------------------- --------------------------------------------------------- --------------------------------------------------------- -------------------------------------------------
REVENUES: (unaudited) (unaudited) (unaudited)
Product sales $ 119.4 $ 133.1 $ 390.4 $ 428.3
Gaming operations 83.4 62.8 306.9 261.4
-------------------- -------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------- -------------------- -------------------- ------ --------------------
Total revenues 202.8 195.9 697.3 689.7
COSTS AND EXPENSES:
Cost of product sales (1) 56.5 60.4 190.2 205.2
Cost of gaming operations (1) 13.7 14.2 57.4 55.5
Research and development 30.3 24.3 114.5 94.5
Selling and administrative 49.9 40.0 169.3 145.2
Depreciation and amortization (1) 32.5 25.3 121.2 92.2
Impairment and restructuring charges -- -- -- 9.7
-------------------- -------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------- -------------------- -------------------- ------ --------------------
Total costs and expenses 182.9 164.2 652.6 602.3
-------------------- -------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------- -------------------- -------------------- ------ --------------------
OPERATING INCOME 19.9 31.7 44.7 87.4
Interest expense (0.8) (0.4) (3.5) (1.6)
Interest income and other income and expense, net (2.0) 3.8 7.5 13.3
-------------------- -------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------- -------------------- -------------------- ------ --------------------
Income before income taxes 17.1 35.1 48.7 99.1
Provision for income taxes 3.6 13.0 14.1 35.0
-------------------- -------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------- -------------------- -------------------- ------ --------------------
NET INCOME $ 13.5 $ 22.1 $ 34.6 $ 64.1
==================== ============== ==================== ==================== ============== ==================== ==================== ============== ==================== ==================== ====== ====================
Earnings per share:
Basic $ 0.25 $ 0.40 $ 0.63 $ 1.15
==================== ============== ==================== ==================== ============== ==================== ==================== ============== ==================== ==================== ====== ====================
Diluted $ 0.24 $ 0.40 $ 0.63 $ 1.15
==================== ============== ==================== ==================== ============== ==================== ==================== ============== ==================== ==================== ====== ====================
Weighted-average common shares:
Basic common stock outstanding 54.8 54.9 54.6 55.5
==================== ============== ==================== ==================== ============== ==================== ==================== ============== ==================== ==================== ====== ====================
Diluted common stock and common stock equivalents 55.6 55.2 54.9 55.8
==================== ============== ==================== ==================== ============== ==================== ==================== ============== ==================== ==================== ====== ====================
1) Depreciation and amortization includes the following amounts
attributable to cost of product sales and cost of gaming
operations:
Cost of product sales $ 2.1 $ 2.1 $ 8.4 $ 6.4
Cost of gaming operations $ 19.7 $ 15.8 $ 75.0 $ 57.6
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions of U.S. dollars)
Three Months Ended June 30, Twelve Months Ended June 30,
------------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------
2013 2012 2013 2012
-------------------- ---- -------------------- -------------------- ---- -------------------- --------------------------- -------------------- ------ --------------------
(unaudited) (unaudited) (unaudited)
Net income $ 13.5 $ 22.1 $ 34.6 $ 64.1
Foreign currency translation adjustment, net of taxes (1.2) (5.8) 1.9 (9.9)
-------------------- ---- -------------------- -------------------- ---- -------------------- -------------------- ----- -------------------- ------ --------------------
Total comprehensive income $ 12.3 $ 16.3 $ 36.5 $ 54.2
==================== ==== ==================== ==================== ==== ==================== ==================== ===== ==================== ====== ====================
WMS INDUSTRIES INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions of U.S. dollars and millions of shares)
ASSETS June 30, 2013 June 30, 2012
------------------------------------------------------ ------------------------------------------------------
CURRENT ASSETS: (unaudited)
Cash and cash equivalents $ 59.9 $ 62.3
Restricted cash and cash equivalents 9.8 13.8
-------------------- -------------- -------------------- -------------------- -------------- --------------------
Total cash, cash equivalents and restricted cash 69.7 76.1
Accounts and notes receivable, net of allowances of $8.9 and $6.9, 317.3 282.8
respectively
Inventories 61.5 53.3
Other current assets 53.2 40.1
-------------------- -------------- -------------------- -------------------- -------------- --------------------
Total current assets 501.7 452.3
NON-CURRENT ASSETS:
Long-term notes receivable, net too low 92.5 122.3
140.5 115.7
Gaming operations equipment, net of accumulated depreciation and
amortization of $280.5 and $227.1, respectively
242.0 226.7
Property, plant and equipment, net of accumulated depreciation and
amortization of $178.3 and $142.0, respectively
Intangible assets, net 179.2 178.9
Deferred income tax assets 48.3 39.3
Other assets, net 20.4 18.9
-------------------- -------------- -------------------- -------------------- -------------- --------------------
Total non-current assets 722.9 701.8
-------------------- -------------- -------------------- -------------------- -------------- --------------------
TOTAL ASSETS $ 1,224.6 $ 1,154.1
==================== ============== ==================== ==================== ============== ====================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 75.5 $ 84.8
Accrued compensation and related benefits 19.3 9.5
Other accrued liabilities 70.7 76.5
-------------------- -------------- -------------------- -------------------- -------------- --------------------
Total current liabilities 165.5 170.8
NON-CURRENT LIABILITIES:
Long-term debt 85.0 60.0
24.9 22.7
Deferred income tax liabilities
Other non-current liabilities 20.2 23.3
-------------------- -------------- -------------------- -------------------- -------------- --------------------
Total non-current liabilities 130.1 106.0
Commitments, contingencies and indemnifications -- --
STOCKHOLDERS' EQUITY:
Preferred stock (5.0 shares authorized, none issued) -- --
Common stock (200.0 shares authorized and 59.7 shares issued) 29.8 29.8
Additional paid-in capital 451.8 443.5
Treasury stock, at cost (4.8 and 4.9 shares, respectively) (137.2) (144.1)
Retained earnings 589.5 554.9
Accumulated other comprehensive loss (4.9) (6.8)
-------------------- -------------- -------------------- -------------------- -------------- --------------------
Total stockholders' equity 929.0 877.3
-------------------- -------------- -------------------- -------------------- -------------- --------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,224.6 $ 1,154.1
==================== ============== ==================== ==================== ============== ====================
WMS INDUSTRIES INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions of U.S. dollars)
Twelve Months Ended
June 30,
---------------------------------------------------------------------------------------------------------------------------------------
2013 2012
-------------------- -------------- -------------------- -------------------- -------------- --------------------
CASH FLOWS FROM OPERATING ACTIVITIES (unaudited)
Net income $ 34.6 $ 64.1
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation 101.9 77.8
Amortization of intangible and other assets 35.5 29.0
Share-based compensation 15.9 15.8
Other non-cash items 6.0 12.3
Deferred income taxes (19.5) (1.0)
Tax benefit from exercise of stock options (1.8) (0.2)
Change in operating assets and liabilities (19.2) (41.0)
-------------------- -------------- -------------------- -------------------- -------------- --------------------
Net cash provided by operating activities 153.4 156.8
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to gaming operations equipment (90.6) (83.0)
Additions to property, plant and equipment (65.4) (81.4)
Payments to acquire or license intangible and other non-current (18.3) (13.4)
assets
Acquisition of businesses, net of cash acquired -- (16.4)
-------------------- -------------- -------------------- -------------------- -------------- --------------------
Net cash used in investing activities (174.3) (194.2)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings under revolving credit facility 83.0 60.0
Repayments of borrowings under revolving credit facility (58.0) --
Purchases of treasury stock (5.0) (50.4)
Cash received from exercise of stock options and employee stock 5.8 3.4
purchase plan
Additional consideration related to acquisitions (5.8) --
Debt issuance costs -- (2.4)
Tax benefit from exercise of stock options 1.8 0.2
-------------------- -------------- -------------------- -------------------- -------------- --------------------
Net cash provided by financing activities 21.8 10.8
Effect of exchange rates on cash and cash equivalents (3.3) (1.8)
-------------------- -------------- -------------------- -------------------- -------------- --------------------
DECREASE IN CASH AND CASH EQUIVALENTS (2.4) (28.4)
CASH AND CASH EQUIVALENTS, beginning of period 62.3 $ 90.7
-------------------- -------------- -------------------- -------------------- -------------- --------------------
CASH AND CASH EQUIVALENTS, end of period $ 59.9 $ 62.3
==================== ============== ==================== ==================== ============== ====================
WMS INDUSTRIES INC.
Supplemental Data - Earnings per Share
(in millions of U.S. dollars and millions of shares, except per
share amounts)
Three Months Ended Twelve Months Ended
June 30, June 30,
--------------------------------------------------------------------------- ------------------------------------------------------------------------------------------
2013 2012 2013 2012
--------------------------- --------------------------- --------------------------- ------------------------------------------
(unaudited) (unaudited) (unaudited)
Net income $ 13.5 $ 22.1 $ 34.6 $ 64.1
==================== ===== ==================== ===== ==================== ===== ==================== ====================
Basic weighted average common shares outstanding 54.8 54.9 54.6 55.5
Dilutive effect of stock options 0.6 0.2 0.2 0.2
Dilutive effect of restricted common stock 0.2 0.1 0.1 0.1
-------------------- ----- -------------------- ----- -------------------- ----- -------------------- --------------------
Diluted weighted average common stock and common stock 55.6 55.2 54.9 55.8
equivalents
==================== ===== ==================== ===== ==================== ===== ==================== ====================
Basic earnings per share of common stock $ 0.25 $ 0.40 $ 0.63 $ 1.15
==================== ===== ==================== ===== ==================== ===== ==================== ====================
Diluted earnings per share of common stock and common stock $ 0.24 $ 0.40 $ 0.63 $ 1.15
equivalents
==================== ===== ==================== ===== ==================== ===== ==================== ====================
Supplemental Data - Reconciliation of Net Income to Adjusted
EBITDA
(in millions of U.S. dollars)
(unaudited)
Three Months Ended Twelve Months Ended
June 30, June 30,
------------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------------------------
2013 2012 2013 2012
-------------------- ---- -------------------- -------------------- ---- -------------------- -------------------- ----- -------------------- -------------------- ------ --------------------
Net income $ 13.5 $ 22.1 $ 34.6 $ 64.1
==================== ==== ==================== ==================== ==== ==================== ==================== ===== ==================== ==================== ====== ====================
Net income $ 13.5 $ 22.1 $ 34.6 $ 64.1
Depreciation 28.2 21.0 101.9 77.8
Amortization of intangible and other assets 8.9 8.6 35.5 29.0
Provision for income taxes 3.6 13.0 14.1 35.0
Interest expense 0.8 0.4 3.5 1.6
Share-based compensation 3.8 4.3 15.9 15.8
Other non-cash items 2.0 0.4 6.0 12.3
-------------------- ---- -------------------- -------------------- ---- -------------------- -------------------- ----- -------------------- -------------------- ------ --------------------
Adjusted EBITDA $ 60.8 $ 69.8 $ 211.5 $ 235.6
==================== ==== ==================== ==================== ==== ==================== ==================== ===== ==================== ==================== ====== ====================
Adjusted EBITDA margin 30.0 % 35.6 % 30.3 % 34.2 %
==================== ==== ==================== ==================== ==== ==================== ==================== ===== ==================== ==================== ====== ====================
Adjusted EBITDA (earnings before interest, taxes, depreciation,
amortization, share-based compensation and other non-cash items) and
adjusted EBITDA margin are supplemental non-GAAP financial metrics used
by our management and commonly used by industry analysts to evaluate our
financial performance. Adjusted EBITDA and adjusted EBITDA margin
provide additional useful information to investors regarding our ability
to service debt and are commonly used financial analysis metrics for
measuring and comparing gaming companies in areas of liquidity,
operating performance, valuation and leverage. Adjusted EBITDA and
adjusted EBITDA margin should not be construed as an alternative to
operating income (as an indicator of our operating performance) or net
cash provided by operating activities (as a measure of liquidity) as
determined in accordance with U.S. generally accepted accounting
principles. All companies do not calculate adjusted EBITDA and adjusted
EBITDA margin in necessarily the same manner, and WMS’ presentation may
not be comparable to those presented by other companies.
SOURCE: WMS Industries Inc.
WMS Industries Inc.
William Pfund
Vice President, Investor Relations
847-785-3167
bpfund@wms.com
or
JCIR
Joseph Jaffoni or Richard Land
212-835-8500
wms@jcir.com
Copyright Business Wire 2013
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Source Article from http://www.marketwatch.com/story/wms-fiscal-fourth-quarter-revenue-grows-14-over-fiscal-third-quarter-to-203-million-2013-08-29?reflink=MW_news_stmp
