LAS VEGAS, June 20 /PRNewswire-FirstCall/ -- Bally Technologies, Inc.
(NYSE: BYI) announced today the filing of its quarterly reports on Form 10-Q
for the three-month periods ended Sept. 30, 2006 and Dec. 31, 2006. The
following table summarizes the Company's operating results for the six-month
periods ended Dec. 31, 2006 (the "fiscal 2007 period") and 2005 (the "fiscal
2006 period"):
Six Months Ended
Dec. 31,
2006 2005
(dollars in millions, except ASP and per-share amounts)
Revenues $305.6 $232.9
Gross margin 153.1 109.5
Operating income (loss) 14.3 (11.3)
Net loss $(2.7) $(17.3)
Basic and diluted loss per share $(0.05) $(0.33)
Weighted average shares outstanding:
Basic and diluted 52,985 52,138
Operating Statistics:
New gaming devices sold 8,099 6,463
OEM units sold 1,605 326
New Unit Average Selling Price
(ASP) $12,363 $10,802
Revenues for the fiscal 2007 period increased 31 percent, to $305.6
million from $232.9 million in the fiscal 2006 period ended Dec. 31, 2005.
Further, current deferred revenue increased by $16.4 million to $63.5
million at Dec. 31, 2006 compared with $47.1 million at June 30, 2006. The
Company reported operating income of $14.3 million for the fiscal 2007
period compared with an operating loss of $11.3 million in the fiscal 2006
period. The Company reported a net loss of $2.7 million ($0.05 per share)
for the fiscal 2007 period compared with a net loss in the fiscal 2006
period of $17.3 million ($0.33 per share). In the fiscal 2007 and 2006
periods, the Company recorded stock-based compensation of $5.3 million, net
of tax benefit ($0.10 per share) and $3.8 million, net of tax benefit
($0.07 per share), respectively.
The Company's Gaming Equipment and Systems revenues increased 35
percent to $282.6 million for the fiscal 2007 period compared with $208.8
million in the fiscal 2006 period.
Gaming Equipment revenue increased 49 percent, to $136.6 million for
the fiscal 2007 period compared with $91.4 million in the fiscal 2006
period, with unit sales of gaming devices increasing 43 percent to 9,704
units in the fiscal 2007 period compared with 6,789 units in the fiscal
2006 period.
The average selling price ("ASP") of new gaming devices (excluding OEM
sales) increased 14 percent to $12,363 per unit for the fiscal 2007 period
compared with $10,802 per unit in the fiscal 2006 period. The Company
recorded inventory obsolescence charges of $6.2 million in the fiscal 2007
period compared with $8.0 million in the fiscal 2006 period. Gross margin
on the Company's gaming equipment increased to 35 percent in the fiscal
2007 period from 27 percent in the fiscal 2006 period. The increase in
margin was primarily due to lower sales discounts and lower production
costs in the fiscal 2007 period compared with the fiscal 2006 period. In
addition, in the fiscal 2006 period, the Company recorded higher inventory
obsolescence charges in connection with the Company's introduction of ALPHA
OS(TM) products.
Gaming Operations revenue increased 8 percent to $77.8 million from
$71.8 million in the fiscal 2006 period. Revenue from the Company's rental
and daily fee, lottery and centrally determined games improved 24 percent
to $63.0 million in the fiscal 2007 period compared with $50.9 million in
the fiscal 2006 period as a result of a 32 percent increase in the
installed base of games at Dec. 31, 2006 to 43,044 compared with 33,127 at
Dec. 31, 2005. The increase in games was driven by new placements of the
Company's premium participation games, including Hot Shot Progressive(TM),
as well as the placement of approximately 2,600 lottery games in New York
state late in the period. The increase in Gaming Operations revenue was
partially offset by a decrease in revenues from wide-area products to $13.2
million in the fiscal 2007 period from $19.4 million in the fiscal 2006
period resulting from a decrease in the number of wide-area progressive
games deployed. Gross margin on Gaming Operations increased to 58 percent
in the fiscal 2007 period compared with 45 percent in the fiscal 2006
period as a result of increased revenues from the Company's premium
participation games and a decrease in depreciation expense. In the fiscal
2006 period, the lives of certain participation games were shortened
resulting in an acceleration of depreciation over the remainder of their
useful lives. Many of these games became fully depreciated in the
three-month period ended Sept. 30, 2006.
The following table summarizes the installed base of the Company's Gaming
Operations:
Dec. 31, June 30,
2006 2006
End of period installed base:
Wide-area progressive 935 1,053
Near-area progressive 544 569
Total linked progressive systems 1,479 1,622
Rental and daily-fee games 4,636 3,422
Lottery systems 7,164 4,300
Centrally determined systems 31,244 27,437
Systems revenue increased 50 percent to $68.2 million in the fiscal
2007 period compared with $45.6 million in the fiscal 2006 period. Revenues
were impacted by an increase in deferred revenues during the fiscal 2007
period. Gross margins on System sales decreased to 68 percent in the fiscal
2007 period from 82 percent in the fiscal 2006 period due to the increase
in the proportion of sales of lower margin hardware products versus
software.
The Company's selling general and administrative expenses increased 17
percent to $101.7 million in the fiscal 2007 period compared with $87.0
million in the fiscal 2006 period. This increase was partially attributable
to an increase in payroll and related costs to support the current and
planned growth in the Company's business. Professional and legal fees also
increased as a result of the October 2006 restatement of the Company's
fiscal 2005, 2004 and 2003 financial statements as well as ongoing
intellectual property litigation.
The Company's net interest expense increased to $16.8 million in the
fiscal 2007 period compared with $11.7 million in the 2006 fiscal period as
a result of higher interest rates as compared with the fiscal 2006 period
as well as approximately $2.1 million in fees paid to amend the Company's
bank agreement as a result of the delayed filing of the Company's 2006 Form
10-K.
Research and development costs increased 23 percent to $25.9 million in
the fiscal 2007 period compared with $21.0 million in the fiscal 2006
period. This increase in research and development reflects the Company's
focus on a continued high level of product innovation and quality for
growth.
Robert C. Caller, Chief Financial Officer, said, "These two filings
represent another important accomplishment as we move closer to our goal of
becoming a timely filer. These are our sixth and seventh major filings in
the last eight months. We are anxious to complete the filing of our fiscal
2007 Form 10-K on a timely basis."
Fiscal 2007 Business Outlook
"Our financial results for the six months ended Dec. 31, 2006 began to
show the fruits of our efforts in consolidating the Company's various
businesses and re-tooling the product lines," said Richard M. Haddrill,
Chief Executive Officer. "All of our principle product lines showed
increases, with revenues from Gaming Equipment and from Systems increasing
49 percent and 50 percent, respectively. As we continue to execute our
strategy, we expect that our operating results in the second half of fiscal
2007 and fiscal 2008 will show additional improvement over our results for
the first half of the fiscal year."
The Company expects it will record revenue for the six months ended
June 30, 2007 in the range of $365 to $385 million, bringing total revenues
for the year to an expected range of $670 to $690 million. Total gross
margin is expected to increase in the second half of fiscal 2007. Excluding
sales of OEM units, the Company expects to sell in excess of 13,000 gaming
devices in the second half of fiscal 2007. The Company expects accelerating
growth in Gaming Operations revenues in the second half of fiscal 2007 and
expects to have placed in excess of 2,000 of its premium Hot Shot
Progressive game by June 30, 2007. Revenue from Systems will continue to
fluctuate as the Company applies complicated software revenue recognition
accounting standards.
The Company expects its selling, general and administrative expenses in
the second of half of fiscal 2007 will be between $107 and $112 million.
Research and development costs are expected to range between $25 and $28
million.
Filing Status
The Company currently intends to file its 2007 Annual Report on Form
10-K in a timely manner. The Company will file its Form 10-Q for the
three-month period ended March 31, 2007 simultaneously with the filing of
the Form 10-K, but may provide additional business updates prior to that
time.
With a history dating back to 1932, Las Vegas-based Bally Technologies
designs, manufactures, operates and distributes advanced gaming devices,
systems and technology solutions worldwide. Bally's product line includes
reel-spinning slot machines, video slots, wide-area progressives and Class
II, lottery and central determination games and platforms. As the world's
No. 1 gaming systems company, Bally also offers an array of casino
management, slot accounting, bonusing, cashless and table management
solutions. The Company also owns and operates Rainbow Casino in Vicksburg,
Miss. Additional Company information, including the Company's investor
presentations, can be found at http://www.BallyTech.com.
This news release may contain "forward-looking" statements within the
meaning of the Securities Act of 1933, as amended, and is subject to the
safe harbor created thereby. Such information involves important risks and
uncertainties that could significantly affect the results in the future
and, accordingly, such results may differ from those expressed in any
forward-looking statements. Future operating results may be adversely
affected as a result of a number of risks that are detailed from time to
time in the Company's filings with the Securities and Exchange Commission.
The Company undertakes no obligation to update the information in this
press release and represents that the information is only valid as of
today's date.
Investor Contact: Robert Caller Media Contact: Marcus Prater
(702) 584-7982 (702) 584-7828
rcaller@ballytech.com mprater@ballytech.com
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SOURCE Bally Technologies, Inc.
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Related links:
http://www.BallyTech.com
CONTACT:
investor contact, Robert Caller,
+1-702-584-7982, rcaller@ballytech.com, or media contact, Marcus
Prater, +1-702-584-7828, mprater@ballytech.com, both of Bally
Technologies, Inc.
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