huffle Master, which makes table games, automated card shufflers and table game management systems, said its fourth-quarter profit was helped by strong growth of its lease business and higher revenue from its electronic dealerless table games.
For the fourth quarter that ended October 31, Shuffle Master posted net income of us$ 6.2 million, or 12 cents a share, compared with a net loss of us$ 15 million, or a loss of 28 cents a share, in the same quarter a year ago, which included a goodwill impairment charge of us$ 22.1 million.
Analysts polled by Thomson Reuters expected the company to earn 9 cents a share. Shuffle Master said revenue rose 2 % to us$ 54.6 million. Revenue at the company's electronic gaming machines segment, which makes the electronic table games, rose 25 %.
"Despite the adverse economic climate, we achieved year-over-year revenue growth in the quarter," Shuffle Master CEO Tim Parrott said. He added that the opening of CityCenter brought in about us$ 1.6 million in sales of gaming equipment for the company.
Shuffle Master is expected to benefit from recent legislation in Pennsylvania that allows casinos to add table games. However, Parrott said the company may lose some of its electronic table games if live gaming tables are added to the market. "We anticipate we will lose some seats, but like Nevada and elsewhere, we believe there will be a market for electronic table games and live table games," Parrott said on a conference call with analysts.
In addition, Parrott thought Shuffle Master would find new revenue sources in other markets seeking to add table games. Roth Capital Partners gaming analyst Todd Eilers said Shuffle Master has unique growth opportunities. "We believe the company will continue to keep an open eye toward alternatives that might become available from other distressed sellers or those looking to shake loose non-core assets," Eilers said.
Shuffle Master has been shifting its business model to generate more lease-based revenue while targeting cost reductions to help balance reduced sales during the recession.