Friday, Sept. 3, 2004 | 10:37 a.m.
Gaming equipment supply company Shuffle Master Inc., riding a surge in popularity of table games, on Thursday reported year-over-year increases in several financial categories for the third quarter and beat Wall Street earnings estimates.
The Las Vegas-based company reported net income of $6.2 million, or 27 cents a share, on record revenue of $23.1 million for the quarter ended July 31. In the same quarter a year ago, the company reported net income of $4.6 million, or 19 cents a share, on revenue of $15.4 million.
Nine analysts surveyed by Thomson First Call had forecast earnings per share of 24 cents.
Mark Yoseloff, chairman and chief executive officer of the company, said that because of the company's financial momentum, executives are increasing their 2004 earnings outlook, forecasting diluted earnings per share in the range of 88 cents to 90 cents per share for fiscal 2004 compared with the previous guidance of 86 cents to 89 cents.
The company cited several reasons for its financial growth, including a resurgence in the popularity of table games. Shuffle Master's leading products are its automatic shuffling machines used by dealers of blackjack, poker and Let It Ride, a game the company invented.
Yoseloff said the takeoff in the popularity of poker has generated increased interest in the three-card and four-card poker table games.
"Shuffle Master continues to be a driving force behind the resurgence of table game play," he said in a statement."Not only are we delivering a majority of the exciting new content through our Entertainment Products group but we also offer the Ace shuffler, which provides the security and productivity necessary for the success of single-deck specialty games."
Yoseloff said the quarter was the first to include results from the company's acquistion of BET Technology Inc., and Vienna, Austria-based CARD. The company acquired the patents to several games in the BET deal, adding 1,090 installed table games including Fortune Pai Gow, Casino War and Royal Match 21.
CARD develops, manufactures and supplies shufflers and chip-sorting devices. The acquisition of CARD also jump-started Shuffle Master's emergence as an international company, with operations in Europe, Australia and Macau.
The company is hoping to parlay the expansion of gaming in Macau, particularly in baccarat play, to increased sales.
Shuffle Master has gone to court to protect several of the patents it holds on the equipment it provides.
Yoseloff bristled during an earnings conference call Thursday afternoon over a news release issued by rival manufacturer VendingData Corp., Las Vegas, regarding a pending court case first filed in March 2002.
Minutes after Shuffle Master had issued its news release announcing earnings, VendingData sent out its own release explaining how it had filed a motion in U.S. District Court in Las Vegas to invalidate Shuffle Master's patents on a system that randomly ejects playing cards from a group of vertically stacked unshuffled cards.
Yoseloff was critical of the timing of the release, right on the heels of his company's favorable earnings report.
"I'm disappointed in the timing," Yoseloff said in response to an analyst's question. "It (the release) came out five minutes after ours and it was about motions they had filed in court, not that they had prevailed. These are the same motions that have been heard and denied by the court.
"I'm holding back on the comments I'd like to make, but it's the same old stuff from the same old gang," he said. "Consider the source and take it for what it's worth."
Mike Jahnke, chief operating officer of VendingData, said the timing of the release was in connection with capital funding the company had received and the purpose of the release was to provide the industry and investors access to specific court filings.
Jahnke also said the motion isn't an old filing that had been ruled on, but a motion for a summary judgment in response to a suit filed earlier against the company by Shuffle Master.
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