Mikohn Gaming reports strong gain in revenue

Wednesday, July 25, 2001 | 10:28 a.m.

Mikohn Gaming Corp., a Las Vegas-based supplier to the casino industry, on Tuesday reported a second-quarter profit of $1.67 million or 15 cents per share, about even with the prior-year quarter's $1.63 million or 15 cents.

The prior-year results included a one-time gain of $2.6 million.

Revenue increased from $25.9 million to $27 million. Excluding the one-time gain, revenue increased 16 percent year-over-year.

Mikohn pointed out its second-quarter profit was up dramatically from its first quarter profit of $446,000 or 4 cents per share.

Investors today showed no reaction to the report. Mikohn stock, which rose 8 cents Tuesday, was down 1 cent at $7.10 in trading this morning.

Second quarter recurring revenues contributed by Mikohn's gaming operations -- mainly leased slot and table games -- grew 41 percent to $11.1 million from $7.9 million.

Product sales revenues, primarily from the sale of interior and exterior casino signage and electronics products, increased 2.7 percent to $15.9 million.

"We are reaping the rewards of the re-engineering of our gaming operations business segment that we began several years ago and accelerated in late 2000," said Chairman and Chief Executive David Thompson. "For the first time, recurring revenues from gaming operations contributed more than 40 percent of quarterly revenues, validating our strategic shift. We are pleased with what we have been able to accomplish in such a short period.

"Our product sales business segment recorded modestly improved second-quarter sales and gross profit, and in the important interior casino signage product line, margins recovered nine basis points from the first quarter, reflecting better project pricing.

"Slot operations continue to be our primary growth driver as second quarter revenues from our leased slot games grew 100 percent to $6.9 million, with gross profit contribution rising even more sharply at 156 percent to $5.5 million."

Thompson said the company added 400 leased slots to operations and relocated slots from underperforming locations during the first half of the year.

He said the company has a backlog in slot operations of more than 850 branded games and "continues to anticipate adding 1,200 to 1,500 leased slot games to our installed base in the current year, with most of the placements coming in the fourth quarter when Mississippi approval is anticipated."

Thompson added: "We are pleased with a successful second quarter and are optimistic about the outlook for continued progress in the third and fourth quarters. We remain comfortable with our previous guidance, which anticipates earnings per share in the range of 40 to 60 cents for fiscal 2001."