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Multimedia Games’ Third Quarter Revenue Rises 19% To Quarterly Record $48.1 Million And EBITDA Increases 30% To $25.0 Million; Reports Diluted EPS Of $0.28

Multimedia Games Holding Company, Inc. (Nasdaq: MGAM) (“Multimedia Games” or the “Company”) today reported operating results for its fiscal 2013 third quarter ended June 30, 2013, as summarized below:


Summary of 2013 Q3 Results

(In millions, except per share and unit data)
Three Months Ended June 30,
2013     2012
Revenue $ 48.1 $ 40.5
EBITDA (1) $ 25.0 $ 19.2
Operating income (2) $ 14.0 $ 7.7
Net income (2) $ 8.4 $ 7.2
Diluted earnings per share (2) $ 0.28 $ 0.25
Pro-forma diluted earnings per share (3) $ 0.28 $ 0.19
New units sold 647 543
Domestic participation installed units:
Average 11,946 9,981
Quarter-end 12,163 10,149


EBITDA is defined as net income before net interest expense, income taxes, depreciation, amortization and accretion of contract rights. A reconciliation of EBITDA to net income, the most comparable Generally Accepted Accounting Principles (“GAAP”) financial measure, can be found attached to this release.


Operating income, net income and diluted earnings per share (“EPS”) for the three month period ended June 30, 2013, reflects a change in the depreciable lives for the Company’s gaming operations equipment as described later in this release.


Pro-forma diluted earnings per share for the three month period ended June 30, 2012, reflects the following adjustments: (i) a tax expense rate of 38.7%, representing the effective tax rate for the fiscal 2013 third quarter, which results in a $0.09 per diluted share reduction from the reported results; and, (ii) an estimated $0.03 benefit to fully diluted EPS related to the change in depreciable lives of gaming operations equipment (which is described in more detail below).
Three Months Ended June 30,
2013     2012
Diluted EPS as reported (2) $ 0.28 $ 0.25
Pro-forma at 38.7% tax rate (0.09 )
Normalize depreciation, net of tax     0.03  
Pro-forma diluted EPS (3) $ 0.28 $ 0.19  

Patrick Ramsey, President and Chief Executive Officer of Multimedia Games, commented, “Our record quarterly revenue and overall strong financial performance reflects our ongoing success in creating great games that resonate with customers. We continue to expand the Company’s total addressable market while simultaneously achieving growth in existing markets. We delivered quarterly revenue of over $48 million as we deployed over 1,000 new revenue units for the fourth consecutive quarter, with products placed in 21 states, and generated operating margins that continue to be at the high end of our industry peer group, coming in at 29.1% of revenues. Combined, these factors enabled us to generate $14 million in free cash flow (definition provided below). Further, the operating leverage in our business was evident in the quarter as EBITDA growth of 30% outpaced the approximately 19% increase in revenue.

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