SHFL acclaims “record” quarter

SHFL Entertainment, which was known as Shuffle Master until an early-October rebranding, revealed that the quarter saw revenues from its utility and proprietary table games segments contribute to this increase while the overall figure represented an improvement of nine percent year-on-year when higher settlements and licensing fees from the comparable period were subtracted.

The Las Vegas-based firm stated that recurring revenues for the three-month period grew by 12% year-on-year to us$ 31.3 million due to us$ 1.4 million in additional recurring proprietary table games revenues and higher earnings from its electronic table systems and utility segments.

Adjusted earnings before interest, tax, depreciation and amortisation decreased by two percent year-on-year to us$ 17.9 million although this figure represented a boost of ten percent ‘adjusted for online settlements and licensing fees in both the current period and prior year period’.

Net income fell by 8% when compared with the same period in 2012 to us$ 7.1 million ‘due to higher operating expenses related to global growth initiatives across all product categories’ although adjustments saw this figure represent a rise of eleven percent year-on-year.

“Proprietary table games continued to grow twelve percent year-on-year and, more impressively, the majority of revenues were recurring. With 29 percent year-on-year revenue growth, our utility segment achieved standout results with over 470 MD3 shuffler placements, many of which were replacements. “The collective strength of our product categories delivered an overall solid quarter and we intend to continue capitalising on our unique business model to drive profitable long-term growth for our shareholders,” added Isaacs.

SHFL Entertainment stated that its gross margin for the three-month period increased by 50 basis points year-on-year to 64 percent primarily due to an improvement in gross margins from its utility segment owing to a rise in sales of its shuffler units. In addition, its operating margin descended 350 basis points to 16.3 percent due to a rise in operating expenses over the same period last year that, on an adjusted basis, was flat to leave it with free cash flow for the quarter of us$ 9.6 million, which represented a swell of 22 % year-on-year.

“The diversity of our product segments among our widespread geographies enabled us to report year-on-year revenue growth despite seasonality in our electronic gaming machines business in the first quarter, [which is] typically our softest of the year,” said Linster Fox, CFO for SHFL Entertainment. “We remain committed to investing internally in our team and in our products, expanding our business both internationally and online and looking for accretive merger and acquisition opportunities that are a strategic fit. Our solid balance sheet and consistently strong cash flows affords us the flexibility to pursue these growth initiatives.”