WMS Industries Inc. (NYSE:WMS) today reported revenue of $195.9 million and net income of $22.1 million, or $0.40 per diluted share, for the quarter ended June 30, 2012, compared to revenue of $203.2 million and net income of $10.3 million, or $0.18 per diluted share, in the June 2011 quarter. The June 2012 quarter results reflect the third consecutive quarter of sequential revenue growth as revenues rose $19.9 million, or 11% from the March 2012 quarter. Earnings per share in the June 2012 quarter were impacted by $0.02 per diluted share for charges related to legal settlements and include a $0.01 per diluted share benefit for a reduction in bad debt expense related to customer receivables in Mexico. In addition, the June 2012 quarter earnings also reflect acquisition-related expenses. The June 2011 quarter results included $0.26 per diluted share of net charges for impairment and restructuring costs, asset write-downs and other charges.
- The commercialization of new game themes contributed to 6,146 global new units shipped in the June 2012 quarter, including a 16% increase from the prior year in the U.S. and Canada to 4,672 new gaming machines driven by a near-quarterly record 3,900 replacement units.
- Game conversion revenues rose year over year reflecting the sale of approximately 5,500 kits in the June 2012 quarter compared to 2,100 kits in the prior-year period, bringing total shipments in fiscal 2012 to 19,900 kits compared to 8,200 kits in fiscal 2011. Annual unit sales of conversion kits rose to nearly 95% of annual new gaming machine unit sales in fiscal 2012 compared with 34% in fiscal 2011, and represented approximately 27% of the nearly 75,000 cumulative Bluebird®2 and Bluebird xD ™ gaming machines sold life-to-date globally.
- Launched the first two slot games powered by WMS’ next-generation CPU-NXT ® 3 platform – the Aladdin & the Magic Quest® game featuring unique synchronized motion of the chair with the game play and the Super Team® game featuring player-customizable superheroes made possible by WMS’ award-winning Player’s Life® Web Services. These new games, along with several other new participation themes, drove a 172 unit quarterly sequential increase in the quarter-end participation installed base at June 30, 2012 and a 135 unit quarterly sequential increase in the average installed footprint.
- Entered into agreement to launch My Poker® video poker games by 2012 calendar year-end at Station Casinos’ properties in Las Vegas.
- At June 30, 2012 WMS’ networked gaming products were installed at 98 casino properties in 16 countries around the world, on more than 1,900 gaming machines.
- Sharpened focus on WMS’ online, social, casual and mobile gaming products and services, to leverage the Company’s gaming content and resources to actively participate in the significant growth potential from the convergence of land-based casino gaming with interactive gaming distribution channels. In addition:
- Completed the acquisitions of Jadestone Group and Phantom EFX to accelerate interactive initiatives; and,
- Entered into a strategic alliance with 888 Holdings to pursue online poker initiatives in the U.S., including play-for-fun and real money applications when legally permitted, as well as other online casino applications and future opportunities.
“Quarterly sequential improvements in new unit shipments, and in particular new replacement units in the U.S. and Canada, along with higher game conversion revenues and growth in our installed participation base, demonstrate the ongoing progress WMS is achieving in the commercialization of new innovative game content and products,” said Brian R. Gamache, Chairman and Chief Executive Officer. “We have returned to a normalized rate of new product introductions; and our newest for-sale and participation products are providing customers with the strong performance historically associated with WMS products. As we continue to introduce creative and differentiated new products, we expect to grow our product sales ship share, as well as our installed participation base.
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