One swallow doesn’t make a summer, but things may be looking up in the gaming equipment supply sector after WMS Industries broke several quarterly records in its fiscal 2009 third quarter results.
Only a few weeks ago, Stuart Gribble, WMS’s Sales Manager South-East Asia, was telling our sister publication Inside Asian Gaming that the company was actually putting on sales in Macau and elsewhere in the region. This was despite some reports of doom and gloom elsewhere in the gaming equipment world.
Now the proof of the pudding is in the company’s results. Diluted earnings per share rose a whopping 34 percent to USD0.43, beating estimates by USD0.06 per share. That was achieved off the back of multiple winning lines on the corporation’s balance sheet —to borrow some terminology from WMS’s award-winning slot machine product range.
Total revenues increased to a fiscal third quarter record USD180.8 million. Average installed participation footprint grew 10% to 9,785 gaming machines and the installed base increased 160 units to 9,901 gaming machines at March 31st, 2009 from 9,741 units at December 31st, 2008. Average daily revenue rose 10 percent to a quarterly record USD70.37 per participation unit. Product sales revenues totaled USD114.0 million, as average selling price improved 18% to a record USD14,854 on 6,431 new units shipped, with Bluebird2 units accounting for 47 percent of global unit shipments. Total gross profit grew 16 percent to a record USD117.3 million, as gross margin increased 620 basis points to an all-time quarterly record 64.9 percent, including a 520 basis point improvement in product sales gross margin to a record 53.2 percent. You get the picture.
As a bonus feature, operating margin rose to 21.1 percent, up 400 basis points from 17.1 percent, while operating income grew 29 percent to a quarterly record USD38.2 million. Asia played a part in that good performance.
“While economic challenges are evident in some regions, principally Western European markets, our opportunities are broadly based across the globe and we expect to realise year-over-year unit shipment growth in international markets for fiscal 2009. Customers in Eastern Europe, Latin Europe and in certain Asian markets continue to indicate strong demand for WMS products,” Orrin Edidin, WMS’s President told a conference call for analysts to discuss the results.
“We are directly focused on the macro-economic climate and our ability to deliver high-revenue generating products to our customers provides a clear competitive advantage in any economic environment,” added Brian R. Gamache, the company’s Chairman and Chief Executive Officer, explaining he was aiming for more of the same in 2010.
“Reflecting our continued innovation, product differentiation and clear operating momentum, WMS is targeting revenue growth in fiscal 2010 similar to fiscal 2009, which will lead to further earnings growth based on the significant leverage we are realising from improved operating margins,” stated Mr Gamache.
That’s quite an act for Bally Technologies to follow when it announces its third quarter fiscal results on May 7th.
