WAUKEGAN, Ill., Feb 06, 2013 (BUSINESS WIRE) —
WMS Industries Inc.
/quotes/zigman/246735/quotes/nls/wms WMS
+1.11%
today reported revenue of $157.5 million
and net income of $4.3 million, or $0.08 per diluted share, for the
quarter ended December 31, 2012, inclusive of a $2.0 million after-tax
impact, or $0.04 per diluted share, for a discrete non-U.S. tax item and
$2.5 million of pre-tax expense, or $0.03 per diluted share, for costs
incurred in the process leading to the recently announced definitive
merger agreement with Scientific Games Corporation
/quotes/zigman/85692/quotes/nls/sgms SGMS
+5.88%
. These
results compare to revenue of $162.2 million and net income of $16.1
million, or $0.29 per diluted share, in the December 2011 quarter, which
included a benefit of $2.1 million pre-tax, or $0.02 per diluted share,
related to the settlement of litigation.
Net income and diluted earnings per share in the December 2012 quarter
reflect a year-over-year increase in research and development and online
marketing expenses to support growth in the Company’s interactive
products and services initiatives, as well as the impact of the two
interactive acquisitions completed in the June 2012 quarter. In
addition, December results reflect the ongoing development and
commercialization of a greater number of new participation and for-sale
games and cabinets, including the new Blade(TM) and Gamefield xD(TM)
cabinets with WMS’ CPU-NXT(R)3 operating system, both of which are
on schedule to launch in the March 2013 quarter.
Recent Highlights:
—
Gaming operations revenues increased $8.0 million on a year-over-year
basis and $1.6 million on a quarterly sequential basis to $72.7
million, primarily reflecting continued interactive products and
services revenue growth, as well as growth in the installed
participation base, which was 342 gaming machines higher at December
31, 2012 than at December 31, 2011.
—
Cash flow provided by operating activities for the six months ended
December 31, 2012, was $71.2 million, a year-over-year increase of
$5.5 million or 8%.
—
During the quarter, Jackpot Party(R) Social Casino, the fourth
most-popular casino game on Facebook(R) as measured by number of
daily active users, generated continued revenue growth, averaging more
than $100,000 a day in revenues after the Facebook payment
processing fee, primarily due to higher monetization rates and higher
average daily payments by paying players.
—
Jackpot Party Social Casino was launched on the Apple(R)
iOS on the iPhone(R) during December. As a native application on
iOS available in the Apple iTunes Store(R), the app quickly
became among the top ten largest grossing casino game apps on the iPhone
from Apple.
—
WMS was selected by the Western Canada Lotteries Corporation to
replace existing VLT units throughout the province of Saskatchewan,
adding to its previous selection by the Alberta Liquor and Gaming
Commission and Manitoba Lotteries Corporation to participate in their
VLT replacement initiatives.
—
In the December quarter, WMS agreed to make its library of classic
slot gaming content available to the British Columbia Lottery
Corporation for its online casino.
—
In the December 2012 quarter, WMS’ innovative new My Poker(R) video
poker dedicated gaming machines were introduced at casinos in several
regional locations.
“WMS’ progress with the commercialization of new innovative game content
and products is evident in the sequential quarterly growth of domestic
replacement units shipped and solid demand for our Canadian and Illinois
VLT units,” said Brian R. Gamache, Chairman and Chief Executive Officer.
“Importantly, in the current quarter we have installed our new unique Gamefield
xD participation gaming machines at casinos in New Jersey and expect
initial installations in more jurisdictions throughout the quarter.
Further, following the December 2012 launch of our My Poker(R)
video poker platform in select regional locations, we have now launched
the product at Station Casinos’ properties in the Las Vegas area and
continue to roll it out in additional casinos in various jurisdictions.
We also recently shipped our first units of the sleek, new Blade
cabinet to a casino in Detroit. Customer demand for the Blade
cabinet is running at record levels for a WMS product launch and in the
March and June quarters we expect to ship more than twice the units we
shipped in the first two quarters after launching our Bluebird2
cabinet almost five years ago. We also have very high customer demand
for the Gamefield xD product. In its first four weeks of being
orderable, we have booked more than 500 unit placements. The early
performance of our new video poker product is also very encouraging and
we have more than 750 My Poker gaming machines shipped to-date or
on order. Reflecting the commercialization of these multiple new cabinet
launches, in the current quarter WMS will go from having the oldest set
of gaming machines amongst our competitive set to offering the freshest
group of new cabinets.
“In addition, with the revenue growth achieved to date for interactive
products and services, our investment in this attractive new product
distribution channel is proving to be very prudent,” continued Gamache.
“The early success of Jackpot Party Social Casino contributed to
the $12 million in year-over-year revenue growth from interactive
products and services.”
Fiscal 2013 Second Quarter Financial Review
The following table summarizes key components related to revenue
generation for the three months ended December 31, 2012, and 2011
(dollars in millions, except unit, per unit and per day data):
Three Months Ended Increase/(Decrease)
December 31,
------------------ -------------------------------------
2012 2011 Amount %
----------- ----------- ----------------------- -------------------
Total Revenues $ 157.5 $ 162.2 $ (4.7) (2.9)
=== ====== === ====== === ============== ===
Product Sales Revenues:
New gaming machine sales revenues $ 75.6 $ 79.1 $ (3.5) (4.4)
Other product sales revenues 9.2 18.4 (9.2) (50.0)
------ ------ -------------- ---
Total product sales revenues $ 84.8 $ 97.5 $ (12.7) (13.0)
=== ====== === ====== === ============== ===
Average sales price per new unit $ 15,558 $ 16,325 $ (767) (4.7)
New unit shipments to the U.S. and Canada 2,778 2,759 19 0.7
New unit shipments to International markets 2,080 2,087 (7) (0.3)
------ ------ -------------- ---
Total new units on which revenue was recognized 4,858 4,846 12 0.2
Used unit shipments 924 1,575 (651) (41.3)
------ ------ -------------- ---
Total unit shipments 5,782 6,421 (639) (10.0)
====== ====== ============== ===
Conversion kit unit sales 1,390 5,000 (3,610) (72.2)
Cost of product sales $ 43.2 $ 48.7 $ (5.5) (11.3)
Gaming Operations Revenues:
Participation revenues $ 54.6 $ 58.4 $ (3.8) (6.5)
Interactive products and services revenues 13.0 1.2 11.8 nm
Other gaming operations revenues 5.1 5.1 -- --
------ ------ --------------
Total gaming operations revenues $ 72.7 $ 64.7 $ 8.0 12.4
=== ====== === ====== === ==============
Installed base of participation units at period end 9,624 9,282 342 3.7
Average installed participation units 9,281 9,376 (95) (1.0)
Average daily revenue per participation unit $ 63.89 $ 67.62 $ (3.73) (5.5)
Cost of gaming operations $ 13.7 $ 14.4 $ (0.7) (4.9)
Product Sales Revenues
Total product sales revenues for the December 2012 quarter were $84.8
million compared to $97.5 million in the prior-year period. WMS shipped
2,778 new gaming machines to customers in the U.S. and Canada, inclusive
of 1,060 VLTs for Canada and 204 VLTs for the new Illinois VLT market.
Total global shipments increased 1,067 units on a quarterly sequential
basis, and were flat on a year-over-year basis. Lower demand in the
December quarter for our current gaming cabinets reflects heightened
interest by customers in purchasing the new Blade cabinet after
seeing it at G2E(R), which resulted in some customers deferring
purchases of Bluebird2 gaming machines. This purchase behavior is
not unusual for the launch of a new gaming product. Although these
deferrals impacted our total shipments, we sold 3,245 Bluebird2-style
cabinets and 1,412 Bluebird xD cabinets in the December quarter.
Replacement units shipped to U.S. and Canadian customers were 2,434
units, inclusive of the Canadian VLT units, compared with 2,200 gaming
machines in the prior-year period, while new gaming machine sales for
new casino openings and expansions totaled 344 units compared with
approximately 600 units in the December 2011 quarter. WMS shipped 2,080
new units, or 43% of total global new unit shipments, to international
customers in the December 2012 quarter, compared to 2,087 new units, or
43% of global sales in the year-ago period. The Company’s average sales
price of $15,558 declined on a quarterly sequential and year-over-year
basis primarily reflecting the mix impact and lower average selling
prices associated with VLTs and the new Bluebird(R)2-lite cabinet
for select international markets, as well as the impact of the
competitive marketplace and challenges from having a five-year old
cabinet just ahead of launching the Blade cabinet.
Other product sales revenues declined by 50% to $9.2 million, reflecting
lower conversion kit sales revenue compared to the record level in the
year-ago period, and lower used gaming machine revenues as a result of a
smaller number of trade-in units accepted which, translated into a
smaller number of unit sales at slightly lower prices than the year-ago
period.
Gaming Operations Revenues
Gaming operations revenues increased $8.0 million to $72.7 million in
the December 2012 quarter from $64.7 million in the year-ago period,
marking the second consecutive quarter of year-over-year growth in
gaming operations revenues. The installed participation base at December
31, 2012 increased by 342 units over the prior year and was essentially
flat with the installed base of 9,632 units at September 30, 2012. The
average installed participation base for the December 2012 quarter
declined by 95 units year over year to 9,281 units primarily reflecting
the impact of units that were offline during the quarter as a result of
superstorm Sandy affecting Eastern U.S. casinos, coupled with one
customer removing units at the beginning of the quarter. Average revenue
per day in the quarter of $63.89 per unit compares to average revenue
per day of $65.23 in the September 2012 quarter and $67.62 in the
December 2011 quarter.
Revenues from interactive products and services increased $3.5 million,
or 37% on a quarterly sequential basis to $13.0 million and were up from
$1.2 million in the prior-year period, primarily reflecting the growing
success of the Company’s July 2012 launch of the Jackpot Party Social
Casino on Facebook.
The Jackpot Party Social Casino is now the fourth most popular
social casino on Facebook based on the number of daily active
users. Revenue growth for interactive products and services also
reflects organic growth in WMS’ UK-based B2C online website and the
addition of Phantom EFX retail sales and Jadestone game server
integration revenues.
Other gaming operations revenues were flat on a year-over-year basis at
$5.1 million.
Costs and Expenses
The following table summarizes key components of costs and expenses for
the three months ended December 31, 2012, and 2011 ($ in millions):
Three Months Ended Increase/(Decrease)
December 31,
------------------ -------------------
Costs and Expenses: 2012 2011 Amount %
------------ ------------ -------------- ----------
Cost of product sales $ 43.2 $ 48.7 $ (5.5) (11.3)
As a percentage of product sales revenues 50.9 % 49.9 % 100 bp 2.0
Cost of gaming operations 13.7 14.4 (0.7) (4.9)
As a percentage of gaming operations revenues 18.8 % 22.3 % (350)bp (15.7)
Research and development expense 26.7 23.7 3.0 12.7
As a percentage of total revenues 17.0 % 14.6 % 240 bp 16.4
Selling and administrative expense 37.9 33.2 4.7 14.2
As a percentage of total revenues 24.1 % 20.5 % 360 bp 17.6
Depreciation and amortization expense 29.0 21.2 7.8 36.8
As a percentage of total revenues 18.4 % 13.1 % 530 bp 40.5
----- -- ----- -- --------------
Total costs and expenses $ 150.5 $ 141.2 $ 9.3 6.6
== ===== == ===== === =====
Operating income $ 7.0 $ 21.0 $ (14.0) (66.7)
== ===== == ===== === ===== ===
Operating margin 4.4 % 12.9 % (850)bp (65.9)
Cost of product sales declined $5.5 million to $43.2 million in the
December 2012 quarter primarily reflecting the lower unit cost of VLTs,
lower gaming machine unit costs due to the Company’s strategic sourcing,
supply chain and other continuous improvement initiatives, and lower
sales of used gaming machines and conversion kit units. As a percent of
product sales revenues, cost of product sales increased to 50.9% from
49.9% primarily reflecting the lower average sales price associated with
VLTs.
Cost of gaming operations declined $0.7 million primarily reflecting the
low costs associated with the revenues from interactive products and
services and a more favorable jackpot expense experience on wide-area
progressive games. As a result, cost of gaming operations as a percent
of gaming operations revenues improved 350 basis points.
Research and development expenses in the December 2012 quarter increased
$3.0 million year over year to $26.7 million. The expected increase
reflects the incremental expense from two interactive acquisitions in
the June 2012 quarter and higher development costs, including an
increase in staffing required for porting WMS’ library of slot gaming
content for distribution as interactive products and services, coupled
with a modest increase in spending to support the development of the
Company’s innovative new casino gaming products.
Selling and administrative expenses in the December 2012 quarter
increased $4.7 million year over year and $3.5 million on a quarterly
sequential basis to $37.9 million. The increase reflects $2.5 million of
costs incurred in the process leading up to the recently announced
definitive merger agreement with Scientific Games Corporation, the
impact of the two acquisitions in the June 2012 quarter, the previously
planned increase in online marketing costs to expand the player base for
interactive products, a modest increase to support the overall growth of
interactive products and services, and the incremental expenses related
to the Company’s implementation of an upgraded enterprise-wide ERP
system partially offset by ongoing cost savings initiatives.
Depreciation and amortization expense of $29.0 million in the December
2012 quarter increased $7.8 million on a year over year basis and $1.0
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 an 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 six months ended
December 31, 2012, increased $5.5 million to $71.2 million, reflecting
higher depreciation and amortization, share-based compensation, a lower
negative impact from the change in operating assets and liabilities and
tax impacts, partially offset by lower net income and other non-cash
items. Total receivables, net declined to $362.4 million at December 31,
2012, from $387.8 million at September 30, 2012, and compare with $405.1
million at June 30, 2012, and reflect a $44.0 million, or 36%, decrease
in long-term notes receivable during the last six months. Inventory was
$55.7 million, or $13.4 million lower than at December 31, 2011,
primarily reflecting operational improvements and lower finished goods
inventory, and was up slightly from the $53.3 million in inventory at
June 30, 2012. Total current liabilities at December 31, 2012, declined
$55.2 million from June 30, 2012, due to lower accounts payables and
lower accrued liabilities reflecting the timing of income tax payments.
Net cash used in investing activities increased in the December 2012
six-month period to $78.0 million compared with $73.5 million for the
six months ended December 2011, reflecting a $3.0 million increase in
capital deployed for gaming operations equipment and $1.8 million higher
expenditures for property, plant and equipment partially offset by a
$0.3 million decrease in capital deployed to acquire or license
intangible and other non-current assets. For the December 2012 quarter,
capital expenditures for gaming operations equipment and property, plant
and equipment declined by $3.1 million year over year and $20.3 million
sequentially from the September 2012 quarter.
Net cash provided by financing activities was $18.5 million compared to
the use of $2.3 million of cash in the prior-year six-month period
primarily due to a $32.1 million decline in stock repurchase activity,
partially offset by $10.0 million of lower net borrowings under the
Company’s line of credit.
Total cash, cash equivalents and restricted cash was $87.8 million at
December 31, 2012, and long-term debt was $85.0 million.
Adjusted EBITDA, a non-GAAP financial metric (see reconciliation to net
income schedule at the end of this release), decreased to $48.5 million
in the December 2012 quarter compared with $57.7 million in the
prior-year period. The adjusted EBITDA margin for the December 2012
quarter was 30.8% compared with 35.6% in the year-ago period.
About WMS
WMS serves the gaming industry worldwide by designing, manufacturing and
marketing games, video and mechanical reel-spinning gaming machines,
video lottery terminals and in gaming operations, which consists of the
placement of leased participation gaming machines in legal gaming
venues. The Company also develops and markets digital gaming content,
products, services and end-to-end solutions that address global online
wagering and play-for-fun social, casual and mobile gaming
opportunities. WMS also addresses customers’ gaming floor evolution with
its WAGE-NET(R) networked gaming solution, a suite of systems
technologies and applications designed to increase customers’ revenue
generating capabilities and operational efficiency. More information on
WMS can be found at
www.wms.com
or visit the Company on Facebook(R),
Twitter(R)
or YouTube(R).
MONOPOLY is a trademark of Hasbro. Used with permission. (C)2013
Hasbro. All rights reserved.
THE WIZARD OF OZ and all related characters and elements are
trademarks of and (C) Turner Entertainment Co. (s13)
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, February 6, 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 recently announced merger agreement with
Scientific Games may not be consummated, on a timely basis or otherwise;
(2) our business may be disrupted while the acquisition by Scientific
Games 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 is not consummated, the price of our
stock may be affected; (5) there could be unexpected costs, charges or
expenses 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)
(unaudited)
Three Months Ended Six Months Ended
December 31, December 31,
---------------------------------------- -------------------------------
REVENUES: 2012 2011 2012 2011
----------------------- ----------------------- ----------------------- --------------
Product sales $ 84.8 $ 97.5 $ 172.8 $ 184.6
Gaming operations 72.7 64.7 143.8 133.2
-------------- -------------- -------------- -----
Total revenues 157.5 162.2 316.6 317.8
COSTS AND EXPENSES:
Cost of product sales (1) 43.2 48.7 84.5 91.5
Cost of gaming operations (1) 13.7 14.4 28.9 28.7
Research and development 26.7 23.7 54.3 48.1
Selling and administrative 37.9 33.2 72.3 71.5
Depreciation and amortization (1) 29.0 21.2 57.0 43.8
Impairment and restructuring charges -- -- -- 9.7
-------------- -------------- -------------- -----
Total costs and expenses 150.5 141.2 297.0 293.3
-------------- -------------- -------------- -----
OPERATING INCOME 7.0 21.0 19.6 24.5
Interest expense (1.0) (0.4) (1.7) (0.8)
Interest income and other income and expense, net 3.9 4.2 6.3 6.9
-------------- -------------- -------------- -----
Income before income taxes 9.9 24.8 24.2 30.6
Provision for income taxes 5.6 8.7 10.6 10.7
-------------- -------------- -------------- -----
NET INCOME $ 4.3 $ 16.1 $ 13.6 $ 19.9
=== ============== === ============== === ============== === =====
Earnings per share:
Basic $ 0.08 $ 0.29 $ 0.25 $ 0.36
=== ============== === ============== === ============== === =====
Diluted $ 0.08 $ 0.29 $ 0.25 $ 0.35
=== ============== === ============== === ============== === =====
Weighted-average common shares:
Basic common stock outstanding 54.5 55.6 54.5 55.9
============== ============== ============== =====
Diluted common stock and common stock equivalents 54.6 55.8 54.6 56.2
============== ============== ============== =====
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 $ 1.4 $ 4.1 $ 2.8
Cost of gaming operations $ 17.8 $ 13.1 $ 35.4 $ 27.2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions of U.S. dollars)
(unaudited)
Three Months Ended Six Months Ended
December 31, December 31,
---------------- -----------------
2012 2011 2012 2011
-------- ------------- --------- -------------
Net income $ 4.3 $ 16.1 $ 13.6 $ 19.9
Foreign currency translation adjustment, net of taxes 1.2 (2.3) 4.1 (5.4)
--- ---- --- ---- ---- ---
Total comprehensive income $ 5.5 $ 13.8 $ 17.7 $ 14.5
=== === === ==== === ==== === ====
WMS INDUSTRIES INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions of U.S. dollars and millions of shares)
ASSETS December 31, June 30,
2012 2012
-------------------- --------------------
CURRENT ASSETS: (unaudited) (audited)
Cash and cash equivalents $ 72.8 $ 62.3
15.0 13.8
Restricted cash and cash equivalents
-------------- --------------
Total cash, cash equivalents and restricted cash 87.8 76.1
Accounts and notes receivable, net of allowances of $8.2 and $6.9, 284.1 282.8
respectively
Inventories 55.7 53.3
Other current assets 46.4 40.1
-------------- --------------
Total current assets 474.0 452.3
NON-CURRENT ASSETS:
Long-term notes receivable, net 78.3 122.3
122.1 115.7
Gaming operations equipment, net of accumulated depreciation and
amortization of $250.6 and $227.1, respectively
236.6 226.7
Property, plant and equipment, net of accumulated depreciation and
amortization of $159.1 and $142.0, respectively
Intangible assets, net 175.4 178.9
Deferred income tax assets 40.6 39.3
Other assets, net 19.7 18.9
-------------- --------------
Total non-current assets 672.7 701.8
-------------- --------------
TOTAL ASSETS $ 1,146.7 $ 1,154.1
===== ============== ===== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 59.3 $ 84.8
Accrued compensation and related benefits 7.9 9.5
Other accrued liabilities 48.4 76.5
-------------- --------------
Total current liabilities 115.6 170.8
NON-CURRENT LIABILITIES:
Long-term debt 85.0 60.0
22.7 22.7
Deferred income tax liabilities
Other non-current liabilities 25.1 23.3
-------------- --------------
Total non-current liabilities 132.8 106.0
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 446.9 443.5
Treasury stock, at cost (5.1 and 4.9 shares, respectively) (144.2) (144.1)
Retained earnings 568.5 554.9
Accumulated other comprehensive loss (2.7) (6.8)
-------------- - -------------- -
Total stockholders' equity 898.3 877.3
-------------- --------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,146.7 $ 1,154.1
===== ============== ===== ==============
WMS INDUSTRIES INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions of U.S. dollars)
(unaudited)
Six Months Ended
December 31,
----------------------------------------
2012 2011
----------------------- -----------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 13.6 $ 19.9
Adjustments to reconcile net income to net cash provided by (used
in) operating activities:
Depreciation 47.2 37.1
Amortization of intangible and other assets 17.9 14.2
Share-based compensation 8.0 7.6
Other non-cash items 2.4 10.2
Deferred income taxes (1.3) (2.0)
Tax benefit from exercise of stock options -- (0.2)
Change in operating assets and liabilities (16.6) (21.1)
-------------- - -------------- -
Net cash provided by operating activities 71.2 65.7
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to gaming operations equipment (38.6) (35.6)
Additions to property, plant and equipment (32.9) (31.1)
Payments to acquire or license intangible and other non-current (6.5) (6.8)
assets
-------------- - -------------- -
Net cash used in investing activities (78.0) (73.5)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings under revolving credit facility 63.0 35.0
Repayments of borrowings under revolving credit facility (38.0) --
Purchases of treasury stock (5.0) (37.1)
Additional consideration related to acquisitions (2.6) --
Cash received from exercise of stock options and employee stock 1.1 2.1
purchase plan
Debt issuance costs -- (2.5)
Tax benefit from exercise of stock options -- 0.2
-------------- --------------
Net cash provided (used) by financing activities 18.5 (2.3)
Effect of exchange rates on cash and cash equivalents (1.2) (1.3)
-------------- - -------------- -
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 10.5 (11.4)
CASH AND CASH EQUIVALENTS, beginning of period 62.3 90.7
-------------- --------------
CASH AND CASH EQUIVALENTS, end of period $ 72.8 $ 79.3
===== ============== ===== ==============
WMS INDUSTRIES INC.
Supplemental Data - Earnings per Share
(in millions of U.S. dollars and millions of shares, except per
share amounts)
(unaudited)
Three Months Ended December 31, Six Months Ended December 31,
-------------------------------- ------------------------------
2012 2011 2012 2011
-------------- ----------------- ------------ -----------------
Net income $ 4.3 $ 16.1 $ 13.6 $ 19.9
====== ====== ====== ========= ===== ===== ===== ==========
Basic weighted average common shares outstanding 54.5 55.6 54.5 55.9
Dilutive effect of stock options 0.0 0.1 0.0 0.2
Dilutive effect of restricted common stock and warrants 0.1 0.1 0.1 0.1
------ --------- ----- ----------
Diluted weighted average common stock and common stock equivalents 54.6 55.8 54.6 56.2
====== ====== ====== ========= ===== ===== ===== ==========
Basic earnings per share of common stock $ 0.08 $ 0.29 $ 0.25 $ 0.36
====== ====== ====== ========= ===== ===== ===== ==========
Diluted earnings per share of common stock and common stock $ 0.08 $ 0.29 $ 0.25 $ 0.35
equivalents
====== ====== ====== ========= ===== ===== ===== ==========
Supplemental Data - Reconciliation of Net Income to Adjusted
EBITDA
(in millions of U.S. dollars)
(unaudited)
Three Months Ended December 31, Six Months Ended December 31,
------------------------------- ---------------------------------
2012 2011 2012 2011
--------------- --------------- ---------------- ----------------
Net income $ 4.3 $ 16.1 $ 13.6 $ 19.9
==== ==== ==== ==== ==== ===== ==== =====
Net income $ 4.3 $ 16.1 $ 13.6 $ 19.9
Depreciation 24.2 17.8 47.2 37.1
Amortization of intangible and other assets 8.9 7.6 17.9 14.2
Provision for income taxes 5.6 8.7 10.6 10.7
Interest expense 1.0 0.4 1.7 0.8
Share-based compensation 3.6 5.0 8.0 7.6
Other non-cash items 0.9 2.1 2.4 10.2
---- ---- ----- -----
Adjusted EBITDA $ 48.5 $ 57.7 $ 101.4 $ 100.5
==== ==== ==== ==== ==== ===== ==== =====
Adjusted EBITDA margin 30.8 % 35.6 % 32.0 % 31.6 %
==== ==== ==== ==== ===== ==== ===== ====
Adjusted EBITDA (earnings before interest, taxes, depreciation,
amortization, share-based compensation and other non-cash items,
including non-cash impairment and restructuring charges) 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.
http://cts.businesswire.com/ct/CT?id=bwnews&sty=20130206006530r1&sid=cmtx4&distro=nx
SOURCE: WMS Industries Inc.
WMS Industries Inc.
William Pfund, 847-785-3167
Vice President, Investor Relations
bpfund@wms.com
or
JCIR
Joseph Jaffoni or Richard Land, 212-835-8500
wms@jcir.com
Copyright Business Wire 2013
Source Article from http://www.marketwatch.com/story/wms-reports-fiscal-2013-second-quarter-results-2013-02-06
