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US – Shuffle Master enjoys 15th quarter of growth

By - 11 September 2012

With 15 quarters of consecutive growth, record recurring revenues of US$30m and zero debt for the first time in eight years, it’s safe to assume Shuffle Master’s experience of the economic downturn has been offset by a period of extraordinary growth for the company.

Total revenue in its third quarter to July 31 increased year-over-year by nine per cent to $63.4m driven by demand for proprietary table games and utility products.

Gavin Isaacs, Chief Executive Officer, said: “We’re pleased to have produced another solid quarter of operating results, with year-over-year growth in all key categories, including revenue, earnings per share, net income, EBITDA and recurring revenue. We are well-positioned to deliver strong results and are excited by the upcoming launches of our innovative products at G2E, including a new card shuffler, revamped e-Tables, and a suite of new live and online games.  I’m also incredibly encouraged by the customer enthusiasm surrounding our new slots highlighted at the Australian Gaming Expo including 88 Fortunes, Samurai Spirit and the Flintstones stand-alone progressive.  I am confident that we will finish 2012 with a deeper product portfolio and a stronger organization as we continue to execute on a clear, deliberate game plan to position Shuffle Master for sustainable growth and value creation for the long term.”

Utility revenue grew eight per cent to $24.4m, driven by strong recurring revenue in addition to an increase in shuffler units sold, primarily due to the sale of MD3 units to a casino customer in Macau.

The leased installed base of shufflers at the end of the quarter was 8,245, and represented a seven per cent increase year-over-year. The total MD3 installed base grew to 1,381 units; 53 per cent of which are on lease.

Recurring revenue for table games increased 17 per cent year-over-year to $12.4m, primarily due to increased placements across premium branded table games Ultimate Texas Hold’em andMississippi Stud, progressive units Fortune Pai Gow Poker Progressive and Three Card Poker Progressive, and side bets Fortune Pai Gow Poker, Dragon Bonus and Fire Bet. The progressive installed base totalled 1,139 units, up 356 units from the year-ago quarter. Strong placements were fuelled by installs of Fortune Pai Gow Poker Progressive, Three Card Poker Progressive, and Ultimate Texas Hold’em Progressive, and to a lesser extent, new inter-casino progressive upgrades. In terms of slots, revenue grew 11 per cent year-over-year to approximately $20m, driven by an increase in units due to a large sale to a customer in the Philippines, as well as sales of the new Super Top Box for Equinox. Shuffle Master placed 1,050 EGMs in the third quarter up by 20 per cent from the prior year period driven by Equinox placements into Australia, 150 units placed in the Philippines, and increased leased placements in Mexico and Latin America.

Summing up the extraordinary growth of the company, Lin Fox, Chief Financial Officer, added: “Recurring revenue grew for the 15th consecutive quarter and was approximately $30m, a company record. For the first time in over eight years, we now have zero net debt, demonstrating the success of our prudent pay-down strategy.  Our priorities remain investing in our products and our people, and expanding our businesses into new markets.  We believe we are in an ideal position to take advantage of strategic growth opportunities that arise from having such a strong balance sheet.”

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