Shuffle Master - a company that makes utility products such as automatic card shufflers and chip sorters; proprietary table games; and electronic gaming machines and table systems – yesterday reported results for its second quarter ended 30 April 2008. Revenue increased by 10% to US$49 million from the same period in 2007 and by 29% from the first quarter.

“I’m pleased to announce that Shuffle Master had an outstanding second quarter,” said Mark L. Yoseloff, Ph.D., Chairman and Chief Executive Officer. “Despite the fact that the Company continues to rely less and less on product sales as it builds its lease and service revenue base, revenues were a record for our fiscal second quarter compared to any second quarter in our history.” He added, Continuing our positive trend, lease and service revenue was at record levels in all product segments, excluding Electronic Gaming Machines which are generally sold.”

International revenue accounted for 57% of the quarter’s revenue but a foreign currency loss of US$1.2 million related to fluctuations of the U.S. dollar, the Euro and the Australian dollar. Shuffle Master’s Electronic Gaming Machines (EGM) division represents the slot machine business which was part of the Stargames acquisition. Total revenue contribution from Stargames products was US$14.3 million, a sequential quarter increase of US$5.1 million from US$9.2 million, and an increase of US$0.4 million from the prior year period.

For the second quarter 2008, EGM revenue was US$10.7 million, an increase of 89% from US$5.6 million in the prior sequential quarter, and up 8% from US$9.9 million in the prior year period. The significant revenue growth is mainly attributable to the success of recent titles including “Drifting Sands 3” and “Ninja 3”, as well as the “Pink Panther” linked progressive.

Coreen Sawdon, CAO and Acting CFO stated, “Our strong top line growth reflected gains in all of our product categories as compared to the prior sequential quarter, and serves to validate our lease revenue model. At the same time, the Company's cost savings initiatives and commitment to debt reduction aided the bottom line and strengthened the balance sheet. We saw improved gross profit and operating margin this quarter compared to the prior sequential quarter.”

Mark Yoseloff commented, “After a challenging first quarter, we are now on target for another strong year of financial performance for Shuffle Master,” continued Yoseloff. “As we continue to grow revenue, we are methodically working to reduce costs. We remain focused on leveraging growth and productivity into better top and bottom-line performance for our Company.”
(E-06.10.08)

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