Mikohn Gaming’s profit increases

Thursday, March 13, 2003 | 10:53 a.m.

Slot machine manufacturer Mikohn Gaming Corp. today said it earned $79,000 in the fourth quarter, up from a loss of $10.2 million in the fourth quarter of 2001.

Earnings from continuing operations before income taxes for the fourth quarter were $200,000, or 2 cents per share, compared to a loss of $7.7 million, or 60 cents per share, a year earlier. The figures don't include one-time charges and other non-recurring items.

Revenue for the fourth quarter was $27.1 million, down from $27.9 million for the same period a year ago.

Revenue from product sales was $16.5 million in the fourth quarter, down from $16.8 million. Revenue from other gaming operations was $10.6 million compared to $11.2 million.

For the full year of 2002, the company reported a net loss of $37.9 million, or $2.95 per share, compared with a net loss of $9.7 million, or 83 cents per share, in 2001.

Included in the 2001 loss was a charge of $3.1 million for the early retirement of debt and $9.7 million of charges for asset write-offs, discontinued operations and other valuation and impairment charges. Included in the 2002 net loss were $28 million in charges related to corporate restructuring, discontinued operations losses, obsolete or slow-moving inventory, bad debt provisions and executive officer severance agreements.

"Our restructuring initiatives and cost reduction strategies implemented in the third quarter were the impetus for our improved fourth quarter results and will continue to benefit us in the future," Chief Financial Officer John Garner said. The company had about $16.3 million in cash as of Dec. 31 and expects to save about $2 million in additional costs this year, he said. It also anticipates benefits from a slot machine and table game service outsourcing agreement with Aristocrat Technologies in the second half of the year, he said.

After disappointing results last year, Mikohn was forced to lay off staff and close a small Las Vegas plant that was relocated to an existing hub in Utah. The firm had been dogged by game delays and slowed demand for slots leased by casinos.