Wells-Gardner reports first quarter earnings

The first quarter 2012 results included non-recurring charges of us$ 139,000 of operating expenses related to the Illinois Video Gaming business, which is not expected to generate revenue before the third quarter 2012. The first quarter 2011 results included non-recurring charges of us$ 342,000 made up of us$ 200,000 for two litigation cases and us$ 142,000 of operating expenses related to the Illinois Video Gaming business.

“We are optimistic that revenue improvement throughout the gaming sector reflects an improvement in the global gaming environment,” said Anthony Spier, Wells-Gardner’s Chairman and Chief Executive Officer. “Gross margins were flat at 17.7 percent while operating expenses declined by us$ 178,000 due primarily to a reduction in litigation expenses.”

“The balance sheet continues to be a strategic strength with a decline of over us$ 800,000 in debt to us$ 540,000 at March 31, 2012 compared to us$ 1.4 million at March 31, 2011. We are continuing tight fiscal controls and the Company’s debt equity ratio is now 3 percent.”

The firm is projecting sales in fiscal 2012 of between us$ 60 million and us$ 70 million based on its prediction that the Illinois Video Gaming business will begin in the third quarter 2012. This compares to sales of us$ 42.9 million in fiscal 2011.

The Illinois Gaming Board and the central server provider Scientific Games Corporation have jointly announced that they expect the first installations in early August 2012.  In addition, the company is developing several new proprietary products that it expects will contribute to improved sales and margins in 2012. The company will continue to aggressively control costs and inventory levels.