Mikohn turns quarterly profit

Wednesday, Nov. 3, 2004 | 11:02 a.m.

Mikohn Gaming Corp., a Las Vegas-based manufacturer of slot and table games, on Tuesday reported third-quarter earnings of $1.6 million, the best quarterly performance for the company in three years.

The company, which recently rolled out slot machines based on the Garfield cartoon character, said earnings of 7 cents a share were based on revenue of $25.7 million.

In the same quarter a year ago, the company reported a loss of $4.2 million, 32 cents a share, on revenue of $22.2 million.

The company's results beat Wall Street estimates. A survey of four analysts had projected earnings of 3 cents a share.

In a conference call this morning, Russel McMeekin, president and chief executive of Mikohn, said the company's transition from game developer to game licensor is responsible for the turnaround.

"It was another quarter of good progress and this is one with no brackets," McMeekin said, in reference to showing a profit instead of a loss.

McMeekin said he was encouraged by response the company received on its products at last month's Global Gaming Expo trade show, noting that in past years, response to product introductions have lagged.

"We had a number of people who told us at this show that they were interested in what we're doing with the company," he said.

McMeekin said Mikohn recently negotiated 11 new contracts for its TableLink tracking system, including four in North America, with a debut into the Atlantic City market at the Sands.

For Mikohn, it was the second straight quarter of double-digit revenue growth and the third straight quarter of exceeding analysts' expectations.

McMeekin said Mikohn's $4 million in cash flow for the quarter was the highest for any quarter since its inception as a public company.

In a related matter, the company announced today that it has acquired the licenses to a group of 15 patents in more than 12 countries relating to image based recognition of playing cards. The company also acquired the rights to patents to develop a card-recognition shoe.

Terms of the agreements were not disclosed.

The company also reported placing orders for microchips to support the global deployment of the company's TableLink product.

The chips will enable the tracking system to support additional blackjack table bets, including splits and double downs and to track play in roulette, baccarat, sic-bo and Caribbean Stud.