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WMS Fiscal Fourth Quarter Revenue Grows 14% Over Fiscal Third Quarter to $203 Million

WAUKEGAN, Ill.--(BUSINESS WIRE)--Aug. 29, 2013-- WMS Industries Inc. (NYSE:WMS) today reported revenue of $202.8 million and net income of $13.5 million, or $0.24 per diluted share, for the fiscal 2013 fourth quarter ended June 30, 2013. These results include a$0.04 per diluted share impact for costs related to the pending acquisition of WMS by Scientific Games Corporation (NASDAQ:SGMS) in selling and administrative expenses and $0.06 per diluted share for net charges in interest income and other income and expense, net, primarily related to foreign currency losses due to the devaluation of the Argentina Peso to the U.S. dollar. This impact was partially offset by a $0.03 per diluted share benefit from discrete tax items, principally due to the conclusion of a prior year’s federal income tax audit. For the fiscal 2012 fourth quarter, WMS reported revenue of $195.9 million and net income of $22.1 million, or $0.40per diluted share.

“Excellent customer and player demand for our innovative new Blade™ and Gamefield xD™ gaming machines drove year-over-year increases in new gaming machine sales and participation revenues, and these improvements, combined with continued strength in interactive products and services revenues, led to the growth in our quarterly revenues,” said Brian R. Gamache, Chairman and Chief Executive Officer. “Our investments in R&D during the last several years have supported the development of great new products, games and innovative new gaming experiences that deliver substantial value for our casino customers and have set WMS on a path for renewed long-term growth. At next month’s G2E® industry trade show, we’ll demonstrate our latest new products that offer engaging gaming entertainment, including a full range of new premium participation and for-sale games.”

Recent Highlights:

Total revenues grew 4% over the prior-year quarter to $202.8 million and increased 14% on a quarterly sequential basis, while direct costs attributable to revenues declined by $4.4 million, or 6%, from the prior year due to improved productivity, strategic sourcing initiatives and mix of business.
Gaming operations revenues increased $20.6 million, or 33%, year over year to a quarterly record $83.4 million, primarily reflecting a 568-unit increase, or 6% gain, in the average installed participation base plus interactive products and services revenue growing to $17.4 million.
WMS shipped approximately 2,450 new for-sale Blade cabinets in the June 2013 quarter driving a quarterly record 4,376 new replacement gaming machines shipped in the U.S. and Canada.
International unit shipments improved by 39% year over year to 2,055 gaming machines.
Cash flow from operating activities increased $11.3 million, or 23%, in the June 2013 quarter over the prior year, while net cash used in investing activities decreased by $20.0 million, or 25%, from the comparable quarter a year ago.
Restarted sales and leasing of Video Gaming Terminals (VGTs) in Illinois following modification and amendment of the State’s Video Gaming Act on June 24, 2013 that will now permit WMS to continue as a licensed manufacturer following the completion of the Company’s pending acquisition by Scientific Games.
Launched the new, enhanced Play4Fun Network™ interactive product that provides a B2B white-label, free-play iGaming and marketing platform that seamlessly links players’ online gaming experiences with a casino’s land-based entertainment offering, with the first installation at the Snoqualmie Casino in Washington.
Extended the availability of the Jackpot Party® Social Casino across mobile and tablet devices to include Android™ based mobile devices.
Through the Williams Interactive subsidiary, extended the availability of WMS slot games to several additional European real-money online casino and bingo sites.

“Over the last two years, WMS prudently allocated capital to refresh our installed participation base while investing in R&D initiatives to develop innovative new premium games and platforms, such as the Gamefield xD participation gaming machine that launched in theMarch 2013 quarter,” said Gamache. “As a result, today we have approximately 1,400 Gamefield xD cabinets in our installed participation base; and by accelerating the replacement and upgrading of our footprint, approximately 80% of our installed gaming machines are Bluebird®2, Bluebird xD and Gamefield xD cabinets. These investments have established a solid foundation for consistent growth in our gaming operations, as new titles such as the two initial THE WIZARD OF OZ™ game themes for theGamefield xD platform and the more recent launches of the MONOPOLY™ Legends™, SPIDER-MAN™ and WILLY WONKA AND THE CHOCOLATE FACTORY™ themes were drivers of our expanded footprint in the June quarter. With ongoing expansion of these successful products, our installed base of Wide-Area Progressive (WAP) gaming machines reached a new record level in early August. And, with the new IRON MAN™ WAP game on the Gamefield xD cabinet and THE LORD OF THE RINGS™ The Return of the King™ standalone game scheduled for launch in the September quarter, we expect to continue to generate further growth across our entire participation footprint and deliver strong earnings performance for our customers.

“The significant enhancement in graphics and player experience enabled by the increased power of our next-generation CPU-NXT®3operating platform and Blade cabinet is driving superior in-casino performance of our newest for-sale games such as Great Zeus™, Lantern Festival™ and Montezuma™ themes. As a result of the exceptional player appeal and customer performance, the Bladecabinet represented about 36% of global new units shipped in the June quarter, exceeding the previous record demand pace established by the launch of the Bluebird2 cabinet in 2008. Recently, we doubled the number of game themes available on the Bladeplatform and continue to extend the range of entertaining themes and play experiences available for the Blade cabinet to provide additional diversity of engaging game play for players and customers.

“In addition, success throughout fiscal 2013 in leveraging our creative development capabilities and legendary slot game library to create new interactive products and services resulted in interactive revenues reaching $57 million in annual revenues compared to just$4 million in fiscal 2012. We are highly encouraged by the successful development efforts and growth initiatives of our interactive products and services during the past year and expect to achieve additional growth in fiscal 2014 as we further monetize key game launches and realize ongoing benefits from the recent expanded availability of our Jackpot Party Social Casino in tablet and mobile device channels. We are confident that our interactive gaming initiatives and distribution opportunities for our content and games in these growing channels is a source of significant long-term growth potential for the Company,” concluded Gamache.

www.wms.com