Bally Technologies boosts operating margin in three months to 31st March despite bigger spend on R&D
Friday, 29 April 2011
LAS VEGAS, April 28, 2011 — Bally Technologies, Inc. (NYSE: BYI), a leader in slots, video machines, casino management systems, and server-based solutions for the global gaming industry, announced today diluted earnings per share (“Diluted EPS”) from continuing operations of US$0.43 and US$1.31 on revenue of US$191 million and US$544 million for the three months and nine months ended March 31, 2011, respectively.
“We are pleased with our operational and financial positioning for the future,” said Richard M. Haddrill, the Company‟s Chief Executive Officer. “While current industry conditions remain challenging, we have a number of opportunities, both domestic and international, that are attractive and exciting for the Company. Additionally, the early acceptance of our new Pro Series cabinets has been excellent, and we continue to be pleased with the strength of our gaming operations business.”
“Since the beginning of fiscal 2011, we purchased over two million of our shares for approximately US$76 million,” said Neil Davidson, the Company‟s Chief Financial Officer. “On April 6, 2011, the Board approved a share-repurchase program increase to US$550 million, less amounts tendered in the recently launched modified „Dutch auction‟ of up to US$400 million. We believe that our financial initiatives positively complement our business operations and further our commitment to creating long-term value for stockholders.”
Highlights of Certain Results for the Three Months Ended March 31, 2011
Selling, general and administrative expenses ("SG&A") increased to 30 percent of total revenues as compared with 28 percent last year, primarily due to increases in payroll, legal, and other expenses to support new markets.
Research and development expenses ("R&D") increased to 12 percent of total revenues as compared with 11 percent last year.
Operating margin increased to 20 percent as compared with 18 percent last year.
Adjusted EBITDA from continuing operations (earnings before interest, taxes, depreciation, and amortization, including asset impairment charges and share-based compensation), a non-GAAP financial measure, decreased to US$61 million as compared with US$67 million last year.
Diluted EPS from continuing operations increased to US$0.43 from US$0.36 last year. The prior year included an impairment charge of US$0.13 per diluted share related to Alabama charitable bingo assets.
ASP [Average Selling Price] of new gaming devices increased by 11 percent to US$15,556 per unit from US$13,979 last year, primarily as a result of product mix, including sales of Pro Series cabinets.
New gaming device sales decreased to 3,417 units as compared with 4,571 units last year due to fewer international units sold during the quarter and a continued sluggish North America replacement market.
New-unit sales to international customers were 29 percent of total new-unit shipments, as compared with 46 percent last year.
Gross margin decreased to 43 percent from 51 percent last year due to higher costs for the initial production runs of the Pro Series cabinets as well as write-downs related to older technology platforms.
Revenues increased 15 percent to an all-time record US$80 million as compared with US$70 million last year, driven by placements of new premium games throughout the quarter and the performance of our lottery systems installed base.
Gross margin increased to 74 percent from 72 percent in the same period last year primarily due to lower jackpot expenses.