WMS reports fiscal 2013 third quarter results

The results also reflect a us$ 0.02 per diluted share impact related to estimated lost revenue for more than 200 new Illinois Video Gaming Terminals (VGTs) due to the inability to serve the market long-term given existing Illinois law prohibiting the supplier of the state monitoring system (currently Scientific Games) from also selling VGTs, which will be the case upon the closing of the acquisition. 

Results also reflect higher marketing costs to support the significant growth in interactive products and services and the successful launch of the Blade and Gamefield xD gaming cabinets in the March 2013 quarter. Results benefited by us$ 0.05 per diluted share from discrete tax items, including the retroactive reinstatement of the U.S. Federal Research and Development Tax Credit. In the comparable year-ago period, WMS reported revenue of us$ 176 million and net income of us$ 22.1 million. 

"The 13% quarterly sequential increase in revenues reflects the encouraging initial contributions from our innovative new Blade and Gamefield xD gaming machines, solid customer demand and higher earnings performance for other recently introduced participation games such as Monopoly Legends theme and The Lord of the Rings 3-reel mechanical theme and for-sale games such as Triton's Gold, Zodiac Sisters and Great Owl themes on the Bluebird2e platform and Lantern Festival and Great Zeus themes on the new Blade platform, as well as continued strong revenue growth for our interactive products and services," said Brian R. Gamache, Chairman and CEO. 

"Strong player and customer interest in recently launched gaming machines and the growing availability and rising popularity of our interactive products and services are establishing a platform for long-term success that we are supporting through stepped-up investments in new product development and in marketing efforts aimed at expanding the distribution and availability of our interactive products, services and game content." 

"Our successful operating execution in the March 2013 quarter is highlighted by the introduction and strong roll-out of the new Blade and Gamefield xD gaming machines that were launched on time and within our targeted cost structure range," said Gamache. "The high level of customer demand for our Blade cabinet is evident as nearly 1,000 units shipped in the quarter, which represents a 55% increase over the number of new units shipped in the December 2008 quarter, the first quarter of the successful launch of the Bluebird2 cabinet. We continue to ramp up our manufacturing capacity for the Blade cabinet, as based upon current open orders we expect to ship a significant number of these new cabinets in the June quarter.”

"The strong player popularity and initial earnings performance of the Gamefield xD participation gaming machines confirms the enthusiasm for this product when it was unveiled at the G2E trade show in October 2012 and reflects the extensive player testing and customer feedback that went into its design and development," Gamache added. "The benefit of the capital investments we've made to refresh our installed participation base and to develop exciting new games that support our customers with high-profile, player-appealing products is clearly reflected in the recent increases in our installed base and average revenue per day, as well as in the continued strong backlog for new games that collectively generate high earnings performance for customers and high returns for the company. 

"Following the success of the two initial The Wizard of Oz game themes, we recently launched the third new game for the Gamefield xD cabinet: the Monopoly Prime Reel Estate game. We are very encouraged by the early performance of our new gaming cabinets and the level of engagement they are garnering with players and expect them to continue to fuel growth in unit shipments, our installed base and our average revenue per day in the current quarter and beyond," he concluded.