Cash flow up for Alliance

Thursday, Aug. 16, 2001 | 10:44 a.m.

One-time charges caused Alliance Gaming Corp. to report a loss for the quarter ending June 30, though revenues, net income and cash flow from operations all showed marked improvements.

The company reported a loss of $1.2 million, or 11 cents per share, compared to net income of $800,000, or 8 cents per share, in the year-ago quarter. This was the result of a $6.5 million charge taken from Alliance's termination of the sale of its Nevada slot route, and $3.2 million in non-cash refinancing charges.

When these charges are removed, Alliance reported net income of $8.4 million, or 75 cents per share, a record for the company.

Alliance's operating results showed significant improvements over the year-ago quarter as well. Revenues rose 10 percent to $140.2 million, and cash flow before one-time charges increased 51 percent to $24 million. One-time charges reduced actual cash flow to $17.5 million, an increase of 10 percent.

The star of the quarter was Bally Gaming & Systems, Alliance's slot machine manufacturing and operating unit. Bally reported cash flow of $11.8 million, up 136 percent from the year-ago period.

Gaming operations -- which includes "participation" slots that are leased to casinos, rather than sold -- reported $8.5 million in revenues, up 47 percent. Slot sales rose 17 percent to $24.5 million, while systems sales were up 18 percent to $14.3 million.

Results were more muted in other areas of Alliance's business, though all but one business unit showed gains for the quarter. Alliance's slot route operations reported cash flow of $6.7 million, up 8 percent. This gain came from Nevada's United Coin Co., where cash flow increased 17 percent to $6.1 million; this gain was offset by a 40 percent in cash flow from Alliance's Louisiana slot route. Win per slot rose in Nevada 2 percent, but fell 22 percent in Louisiana due to more competition in the New Orleans area.

Alliance's casino results were also mixed, though the group reported cash flow of $6.7 million, up 1.5 percent. Cash flow from the Rail City Casino in Sparks rose 40 percent to $1.4 million, but cash flow was off 5 percent to $5.3 million at Rainbow Casino in Vicksburg, Miss. Decreased table game play, higher marketing costs and higher utility costs all contributed to Rainbow's decline, Alliance said.

Alliance's final business unit, its Bally Wulff unit in Germany, reported $1.2 million in cash flow, down 37 percent from the year-ago period. Both sales and leases increased for the quarter, but were offset by a decline in the selling price of machines and weakness in the German Deutschemark.