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Multimedia Games’ First Quarter Revenue Rises 21.6% To $34.8 Million; Reports Diluted EPS Of $0.21 Inclusive Of $0.07 Per Diluted Share Benefit From Non-Recurring Items

Total operating expenses for the fiscal 2012 first quarter rose $1.3 million, or 4.2%, to $31.0 million. Selling, general and administrative (“SG&A”) expenses were essentially flat at $11.5 million and $11.4 million in the fiscal 2012 and fiscal 2011 first quarter periods, respectively, while total cost of goods sold increased by $1.0 million. SG&A for the fiscal 2012 and fiscal 2011 first quarter periods include non-cash stock compensation costs of approximately $0.6 million and $0.5 million, respectively. Depreciation and amortization was down slightly to $9.7 million from $10.0 million in the prior-year period while research and development of $3.6 million in the December 2011 quarter compares to $3.2 million recorded in the prior-year period.

Reflecting the year-over-year revenue growth generated in the fiscal 2012 first quarter, Multimedia Games reported net income of $5.8 million, or $0.21 per diluted share, compared to a net loss of $1.4 million, or $0.05 per diluted share, in the fiscal 2011 first quarter. Fiscal 2012 first quarter net income and diluted EPS include a $1.0 million, or $0.04 per diluted share, income tax benefit related to a federal income tax refund and a gain on the sale of used equipment back to the original manufacturer totaling $0.9 million, or $0.03 per diluted share. Fiscal 2011 first quarter net income and diluted EPS included income tax expense of $0.1 million.

For the fiscal 2012 first quarter, net capital expenditures were $8.0 million compared to $9.1 million a year ago (definition of “net capital expenditures” is provided below).

Balance Sheet Continues to Strengthen

During the fiscal 2012 first quarter, the Company reduced total outstanding borrowings by approximately $0.9 million to $36.1 million and, as of December 31, 2011, total cash was $53.7 million. As a result, Multimedia Games was in a net cash position (total cash in excess of total debt) of $17.7 million as of December 31, 2011, compared with a net cash position of $9.7 million as of September 30, 2011, and a net debt position of $18.2 million as of December 31, 2010. The fiscal 2012 first quarter represents the twelfth consecutive quarter Multimedia Games has grown net cash or reduced net debt.

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