Shuffle Master announced its results for the second quarter

"In my first two months as CEO, I have been impressed with the commitment of our employees to build upon our industry leadership, the depth and breadth of our strong intellectual property portfolio, and the many rich opportunities that I believe lie ahead for Shuffle Master," he added.

Second quarter 2011 financial highlights

- Total revenue increased year-over-year by 18% to us$ 59.9 million, a quarterly record, due to strong recurring revenue growth in Utility and Proprietary Table Games, and significant sales of Electronic Gaming Machines.

- Total lease, royalty and service revenue was up 12% year-over-year and approximately 3% sequentially, and totaled us$ 26.1 million, or 44% of total revenue.

- GAAP net income continued to be strong and remained consistent at us$ 7.9 million. Diluted earnings per share (EPS) was us$ 0.14, as compared to us$ 0.15 in the year-ago quarter.
 
- Selling, general and administrative ("SG&A") expenses increased us$ 1.4 million year-over-year from us$ 15.7 million to us$ 17.1 million for the quarter due primarily to a us$ 0.7 million increase in trademark, copyright and patent expenses, and an increase in depreciation expense of approximately us$ 0.3 million driven by improvements to the company's IT network infrastructure. As a percentage of total revenue, SG&A decreased by 240 bps to 29%.
 
- Adjusted EBITDA totaled us$ 19 million, up 5% from us$ 18 million in the year-ago quarter.

- Free Cash Flow, a non-GAAP financial measure, was us$ 15.4 million as compared to us$ 4.6 million in the prior year period.

-Net debt (total debt, less cash and cash equivalents) was us$ 56.8 million as compared to us$ 56.3 million as of October 31, 2010. The company paid approximately us$ 6 million on its us$ 200 million senior secured revolving credit facility during the second quarter.
 
- International revenue accounted for approximately 59% of total revenues in the second quarter; Australia represented 41%.

"We continued to strengthen our balance sheet in the second quarter as we further reduced debt by us$ 6 million," said Linster Fox, Chief Financial Officer of Shuffle Master. "We also continued to build our recurring revenues to a record us$ 26 million, fueled by strong shuffler, premium table game and progressive leases."

"We're very encouraged with our steadily improving ship share in Australia resulting from customer demand for our new Equinox cabinet," commented David Lopez, Chief Operating Officer of the company. "We attribute this success to our R&D efforts, continued investments in game content, and improved execution."