Alliance Gaming profit increases

Thursday, Jan. 11, 2001 | 11:16 a.m.

Alliance Gaming Corp. reported a solidly profitable quarter Wednesday, as revenues improved across the company's main business lines.

The news cheered investors, who this morning bid up Alliance stock 88 cents to $11.38, an 8 percent increase and near the company's 52-week high.

The company reported record net income of $5.5 million, or 52 cents per share, for the quarter ending Dec. 31, 2000. That compares to a net loss of $7.2 million, or 70 cents per share, recorded in the year-ago quarter.

Alliance announced it expects to report net income of around $1.75 per share for the fiscal year ending Sept. 30, 2001.

Revenues reached $131.5 million, up 15 percent, while cash flow shot up 126 percent to $21.8 million.

The most substantial improvement was reported by Bally Gaming and Systems, Alliance's slot machine manufacturing division. Bally reported cash flow of $8.9 million, compared to negative cash flow of $200,000 in the year-ago quarter. Revenues increased 14 percent to $21.2 million.

Both installations and revenues received from each game increased during the quarter, Alliance reported, while cash flow margins were improved by reduced overhead costs aand the elimination of Bally's foreign sales offices. Though Bally Gaming's new game sales increased from 2,300 to 2,600 during the quarter, the strongest increase was a 63 percent jump in revenues from the sale of slot monitoring systems.

Also posting a strong gain was Bally Wulff, the company's German wall machines and amusement games subsidiary. Bally Wulff reported cash flow of $3.4 million, a 42 percent increase, while revenues rose 6 percent to $20.6 million. This was the result of a strong increase in the number of games both sold and leased, though Alliance said revenues were reduced by $4.1 million and cash flow by $600,000 due to the dollar's strength against the Deutschemark.

Alliance's casinos in Vicksburg, Miss., and Sparks, Nev., each saw improved results during the quarter, despite stronger competition and poor weather in Mississippi and poor hold in Nevada. Total revenues from the casino segment were $18.5 million, up 15 percent, while cash flow rose 17 percent to $6.1 million.

Alliance's slot route operations, located in Nevada and Louisiana, posted revenues of $53.9 million for the quarter, up 12 percent. But cash flow declined in the division, falling 3 percent to $6 million. The company blamed increased competition in Louisiana from truck stops as well as Harrah's New Orleans. Alliance plans to sell its Nevada slot route, United Coin Co., by June for $118 million.