Mikohn earnings rise 69 percent

Tuesday, July 27, 1999 | 10:59 a.m.

Mikohn Gaming Corp. of Las Vegas said participation-game revenue helped fuel a 69 percent jump in second-quarter net income to $1.2 million, or 11 cents a share, from $698,000, or 7 cents a share, in the 1998 period.

Revenue rose to $29 million from $25.6 million and cash flow soared 74 percent, to $6.1 million from $3.5 million in the year-ago quarter, the Las Vegas gaming equipment maker said today.

For the first half, net income climbed to $2.1 million, or 20 cents a share, from $138,000, or 1 cent a share, in the 1998 period. Revenue rose to a record $54.2 million from $47.4 million, Mikohn said.

Mikohn Chairman David Thompson said gaming-operation results continue to grow.

"Recurring revenue products, including progressive table games, MoneyTime slots and other products on lease and participation, posted unit growth of 6 percent in just the past three months to 1,774 games," Thompson said.

"Recurring revenues accounted for approximately 24 percent of total revenues in the second quarter, compared with 10 percent in the 1998 period last year before acquisition of Progressive Games Inc.

"Our strategy will continue to emphasize expansion of recurring revenues through high value-added products in order to further strengthen margins and reduce earnings volatility," he said.

Thompson said Mikohn's sign business posted results similar to those in the 1998 second quarter. Gaming Products grew sequentially from the first quarter, reflecting increased shipments of the CasinoLink gaming management system, but decreased on a year-over-year basis, he said.

Sales from Mikohn's international subsidiaries rose 47 percent from the 1998 quarter.

"Mikohn is maintaining a high level of spending for research, development and product management to support the roll-out of the most extensive array of new products in company history," Thompson said.

"We will shortly begin to realize the initial returns from these substantial investments, which are principally targeted at driving recurring revenue growth.

"We remain optimistic about prospects for further gains in sales and earnings."

Mikohn stock was quoted at $4.625 a share, up 37.5 cents, in midday trading today.