Shuffle Master beats expectations

Wednesday, May 23, 2001 | 10:53 a.m.

A Las Vegas gaming supply company rode record revenues in its second quarter to earnings that exceeded analysts' expectations.

Shuffle Master Inc., which increased revenues for leases on card shufflers, table games and slot machines in the quarter ended April 30, reported net income of $3 million, 24 cents a share, on revenues of $12.3 million.

In the same quarter a year earlier, the company reported net income of $2.2 million, 20 cents a share, on revenues of $9.6 million.

A consensus of analysts polled by Thomson-First Call projected earnings per share of 22 cents for the quarter.

In a conference call Tuesday afternoon, the company also announced a three-for-two split of its common stock as well as plans to change the responsibilities of the company's senior executives.

The additional shares will be issued on June 18 for shareholders of record on June 8. The company had 11.5 million shares of stock outstanding as of April 30. The stock closed Tuesday at $31.84 a share.

The stock split was the second three-for-two split the company has had in six months, with the last split occurring Nov. 30.

Joe Lahti, chairman and chief executive officer of Shuffle Master, will relinquish the CEO role to Mark Yoseloff, effective June 15. Yoseloff will continue to hold the title of president. Lahti, who has split time between Las Vegas and the company's former headquarters in suburban Minneapolis, said he would spend more time in Minnesota in his role as chairman.

In another matter, a U.S. District Court judge in Minnesota last week denied International Game Technology's request for a temporary restraining order to stop Shuffle Master's field test of six "Double Platinum" three-reel slot machines at the Excalibur hotel-casino.

IGT filed suit against Shuffle Master earlier this month, saying the new machines, a retrofit of IGT three-reel slot machines, violates its Telnaes patent. Telnaes allows a three-reel machine to have millions of possible outcomes on one spin of the slot machine as opposed to the 8,000 physical outcomes that normally would be possible on a 20-stop, three-reel machine.

Shuffle Master says it continues to have an amicable relationship with IGT. The companies are partnering on the distribution of games themed with The Three Stooges, the Honeymooners and Let's Make a Deal. Lahti said IGT will begin manufacturing Let's Make a Deal slots at the end of the month.