WMS reports its results for its fiscal 3Q

The Company also reiterated its fiscal 2012 outlook for 3%-to-7% revenue growth, resulting in a range of US$ 810-to-US$ 850 million in total revenues, with an expected operating margin of 21%-to-22%.

Total revenues were US$ 192.7 million for the March 2011 quarter compared with US$ 197.5 million in the prior-year period. The year-over-year decline was principally due to a 3%, or US$ 3.7 million, reduction in product sales revenues to US$ 120.2 million. Gaming operations revenues of US$ 72.5 million declined slightly from the prior-year quarter, and were essentially flat on a quarterly sequential basis reflecting a sequential increase in average daily revenue and a slightly lower average installed base of participation gaming machine units.

Operating margin at 18.1% was essentially flat on a quarterly sequential basis, reflecting lower total gross profit offset by the benefits of disciplined cost containment. Net income was US$ 24.2 million, or US$ 0.41 per diluted share, compared with US$ 33.0 million, or US$ 0.55 per diluted share, in the prior-year quarter, which included a US$ 0.06 per diluted share net benefit from discrete tax items.

"WMS' fiscal third quarter results reflect lower-than-expected global new unit demand, unit shipments expected to be fulfilled in the March quarter not shipping until early April, and delays in the commercialization of certain new products," said Brian R. Gamache, Chairman and CEO.

"We've already begun to implement the appropriate solutions to address the root causes for the fulfillment issues and we are revising our processes for regulatory submissions to try to shorten the time frames from-concept-to-launch for our advanced technology-based new products. Given our track record for identifying and overcoming prior challenges, we expect to make quick progress in improving our sales and operating execution. Importantly, our commitment to fiscal discipline and efforts toward improving our operating execution is expected to enhance our operating margin."

Gamache noted, "Despite the continued impact of customers' constrained capital budgets, our strategic direction remains laser focused. We made progress on several fronts in the third quarter including further increases in sales of new units into international markets, a year-over-year increase in average selling prices and progress towards lowering the cost structure and improving the profit margin for our popular Bluebird xD(TM) units.”

“We also successfully introduced several new games for our participation business that are improving the average revenue per day performance of our installed base. In addition, our disciplined operating expense management resulted in the operating margin in the March 2011 quarter being comparable to the December 2010 quarter despite lower revenues generating lower total gross profit; and cash flow from operating activities for the nine months year-to-date improved US$ 22 million, or 27%, over the comparable year-ago period."

"WMS' broad portfolio of innovative, player-appealing content and our strengthening schedule of new participation games support our outlook for extending our track record of annual revenue growth, which distinguishes WMS from our competitive set," Gamache added. "Our success in developing new games and content-enhancing technologies and products that amplify player entertainment continues to be acknowledged by customers and industry participants.”

“WMS had four new products recognized in Casino Journal's Top 20 Most Innovative Gaming Technology Products Awards for 2010 and our Player's Life Web Services platform placed first in Casino Enterprise Management's recent Slot Floor Technology Awards, marking the second consecutive year a WMS product has been rated the top product. With the recent approval from GLI for the commercial version of our core WAGE-NET Networked Gaming system, our Ultra Hit Progressive Portal application family and our first Portal theme, the launch of our online gaming site in the U.K. and a robust pipeline of great new games, we are well positioned to remain a leader in gaming content and innovation that drives higher returns for our customers and increased revenue for WMS."