Vegas slot firm beats analysts’ expectations

Thursday, July 25, 2002 | 11:13 a.m.

Alliance Gaming Corp., a big Las Vegas-based slot machine maker and slot route operator, Wednesday reported earnings for its fourth quarter ending June 30 of $14.8 million or 30 cents per share before special items, up from $8.4 million or 19 cents in the year-ago quarter.

Alliance beat the estimates of analysts surveyed by Thomson First Call of 29 cents per share. But investors weren't overly impressed as the company's stock slipped 5 cents to $12.33 this morning.

Including non-recurring items, the company earned $27.7 million, or 56 cents per share compared to a loss of $1.2 million, or 3 cents in the prior-year quarter.

Results for the June 2002 quarter include:

Record revenue of $159 million, an increase of 13 percent.

EBITDA (cash flow), before non-recurring items, of $29.3 million, up 22 percent.

The one-time items include:

A tax benefit from the reduction of previously recorded valuation reserves against net deferred tax assets, primarily net operating loss carry forwards generated in the 1990s totaling $37 million. The company has about $80 million of operating loss carry forwards that can be used to offset pre-tax income in the future.

A non-cash charge against goodwill and other long-lived assets for Alliance's Bally Wulff unit in Germany of $24.1 million.

The company posted $16.7 million in cash flow from its Bally slot-making unit, up from $11.8 million in the year-ago quarter. Route operations generated $6.8 million, up from $6.7 million, casino operations fell from $6.7 million to $5.6 million and the German unit generated $3 million, up from $1.2 million.

For fiscal 2003, the company updated its earnings per share guidance to at least 84 cents on a fully-taxed basis, on revenue of approximately $675 million and generating EBITDA of approximately $130 million. The fiscal 2003 earnings guidance reflects a 20 percent increase in earnings per share compared to 70 cents on a fully taxed basis in fiscal 2002 excluding non-recurring items.

In the June quarter, Alliance said it sold 4,400 gaming machines, up from 3,100 in the year-ago quarter.

Game monitoring sales fell from 10,000 units to 9,300 units.