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In a release dated June 9, the company stated:
- Revenue decreased by 8 percent to $45.3 million from the prior year period. Total lease and service revenue was a company record, up 7 percent year-over-year and totaled $20.5 million, or 45 percent of revenue.
- Net income increased 50 percent year-over-year to $4.6 million.
- Diluted earnings per share ("EPS") totaled $0.09 and included ($0.05) for severance charges related to the retirement of the company's former CEO and the departure of a senior executive, $0.02 related to the gain on debt extinguishment, and $0.02 for discrete tax events during the quarter.
- On April 15, the company purchased 99.9 percent of the remaining $30.3 million on its outstanding contingent convertible senior notes ("Notes"). On May 29, the company satisfied the remaining $8,000 on its Notes.
- Net debt (total debt, less cash and cash equivalents) totaled $100.7 million compared to $119.8 million as of October 31, 2008. The company's debt compliance calls for a maximum allowable leverage ratio of 4.25 times EBITDA; currently leverage stands at 1.96 times EBITDA.
"Shuffle Master had a decent second quarter given the magnitude of the economic climate. We remain focused on maintaining the discipline and rigor necessary to create long-term shareholder value, and we are taking aggressive steps to work with our customers to maximize their floor potential during this challenging time," said Tim Parrott, Chief Executive Officer.
- Gross margin decreased year-over-year from 60 percent to 57 percent.
- Adjusted EBITDA totaled $13.6 million, down 8 percent from $14.8 million in the comparable year-ago quarter. After approximately $2.1 million in add-backs related to cash compensation for severance charges, adjusted EBITDA was $15.7 million and increased as a percentage of total revenue.
- Operating expenses, adjusted for severance charges of $4.4 million related to the retirement of the company's former CEO and the departure of a senior executive, decreased year-over-year by 14 percent to $18.1 million.
- Selling, General and Administrative ("SG&A") expense, adjusted for severance charges, decreased by $2.7 million, and as a percentage of revenue, from the prior year period.
"We are very pleased by the progress we have made to date on our cost saving initiatives as well as our strong balance sheet and healthy liquidity," said Coreen Sawdon, CAO and Acting CFO. "With almost $15 million in cash, the complete elimination of the convertible notes on our balance sheet and the consistent reduction of debt every quarter, Shuffle Master is well-positioned to weather the recession. Furthermore, we will continue to take the steps necessary to scale our cost structure."
Shuffle Master is a gaming supply company specializing in providing its casino customers with value-add products in four distinct categories: Utility products which includes automatic card shuffler, roulette chip sorters and intelligent table system modules; Proprietary Table Games which include live table game tournaments; Electronic Table Systems which include various e-Table game platforms; and Electronic Gaming Machines which include traditional video slot machines for select markets and wireless gaming solutions.
((Comments on this story may be sent to newsdesk@closeupmedia.com))
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