WMS Industries Inc. (NYSE:WMS) today reported revenue of $157.5
million and net income of $4.3 million, or $0.08 per diluted share,
for the quarter ended December 31, 2012, inclusive of a $2.0
million after-tax impact, or $0.04 per diluted share, for a
discrete non-U.S. tax item and $2.5 million of pre-tax expense, or
$0.03 per diluted share, for costs incurred in the process leading
to the recently announced definitive merger agreement with
Scientific Games Corporation (NASDAQ:SGMS). These results compare
to revenue of $162.2 million and net income of $16.1 million, or
$0.29 per diluted share, in the December 2011 quarter, which
included a benefit of $2.1 million pre-tax, or $0.02 per diluted
share, related to the settlement of litigation.
Net income and diluted earnings per share in the December 2012
quarter reflect a year-over-year increase in research and
development and online marketing expenses to support growth in the
Company’s interactive products and services initiatives, as well as
the impact of the two interactive acquisitions completed in the
June 2012 quarter. In addition, December results reflect the
ongoing development and commercialization of a greater number of
new participation and for-sale games and cabinets, including the
new Blade™ and Gamefield xD™ cabinets with WMS’ CPU-NXT®3 operating
system, both of which are on schedule to launch in the March 2013
quarter.
Recent Highlights:
- Gaming operations revenues increased
$8.0 million on a year-over-year basis and $1.6 million on a
quarterly sequential basis to $72.7 million, primarily reflecting
continued interactive products and services revenue growth, as well
as growth in the installed participation base, which was 342 gaming
machines higher at December 31, 2012 than at December 31,
2011.
- Cash flow provided by operating
activities for the six months ended December 31, 2012, was $71.2
million, a year-over-year increase of $5.5 million or 8%.
- During the quarter, Jackpot Party®
Social Casino, the fourth most-popular casino game on Facebook® as
measured by number of daily active users, generated continued
revenue growth, averaging more than $100,000 a day in revenues
after the Facebook payment processing fee, primarily due to higher
monetization rates and higher average daily payments by paying
players.
- Jackpot Party Social Casino was
launched on the Apple® iOS on the iPhone® during December. As a
native application on iOS available in the Apple iTunes Store®, the
app quickly became among the top ten largest grossing casino game
apps on the iPhone from Apple.
- WMS was selected by the Western Canada
Lotteries Corporation to replace existing VLT units throughout the
province of Saskatchewan, adding to its previous selection by the
Alberta Liquor and Gaming Commission and Manitoba Lotteries
Corporation to participate in their VLT replacement
initiatives.
- In the December quarter, WMS agreed to
make its library of classic slot gaming content available to the
British Columbia Lottery Corporation for its online casino.
- In the December 2012 quarter, WMS’
innovative new My Poker® video poker dedicated gaming machines were
introduced at casinos in several regional locations.
“WMS’ progress with the commercialization of new innovative game
content and products is evident in the sequential quarterly growth
of domestic replacement units shipped and solid demand for our
Canadian and Illinois VLT units,” said Brian R. Gamache, Chairman
and Chief Executive Officer. “Importantly, in the current quarter
we have installed our new unique Gamefield xD participation gaming
machines at casinos in New Jersey and expect initial installations
in more jurisdictions throughout the quarter. Further, following
the December 2012 launch of our My Poker® video poker platform in
select regional locations, we have now launched the product at
Station Casinos’ properties in the Las Vegas area and continue to
roll it out in additional casinos in various jurisdictions. We also
recently shipped our first units of the sleek, new Blade cabinet to
a casino in Detroit. Customer demand for the Blade cabinet is
running at record levels for a WMS product launch and in the March
and June quarters we expect to ship more than twice the units we
shipped in the first two quarters after launching our Bluebird2
cabinet almost five years ago. We also have very high customer
demand for the Gamefield xD product. In its first four weeks of
being orderable, we have booked more than 500 unit placements. The
early performance of our new video poker product is also very
encouraging and we have more than 750 My Poker gaming machines
shipped to-date or on order. Reflecting the commercialization of
these multiple new cabinet launches, in the current quarter WMS
will go from having the oldest set of gaming machines amongst our
competitive set to offering the freshest group of new cabinets.
“In addition, with the revenue growth achieved to date for
interactive products and services, our investment in this
attractive new product distribution channel is proving to be very
prudent,” continued Gamache. “The early success of Jackpot Party
Social Casino contributed to the $12 million in year-over-year
revenue growth from interactive products and services.”
Fiscal 2013 Second Quarter Financial Review
The following table summarizes key components related to revenue
generation for the three months ended December 31, 2012, and 2011
(dollars in millions, except unit, per unit and per day data):
Three Months Ended
December 31,
Increase/(Decrease)
2012 2011 Amount %
Total Revenues $ 157.5 $ 162.2
$ (4.7 ) (2.9 ) Product Sales
Revenues: New gaming machine sales revenues $ 75.6 $ 79.1 $
(3.5 ) (4.4 ) Other product sales revenues 9.2 18.4
(9.2 ) (50.0 )
Total product sales revenues $
84.8 $ 97.5 $ (12.7 )
(13.0 ) Average sales price per new unit $
15,558 $ 16,325 $ (767 ) (4.7 ) New unit shipments to the U.S. and
Canada 2,778 2,759 19 0.7 New unit shipments to International
markets 2,080 2,087 (7 ) (0.3 ) Total new
units on which revenue was recognized 4,858 4,846 12 0.2 Used unit
shipments 924 1,575 (651 ) (41.3 )
Total
unit shipments 5,782 6,421
(639 ) (10.0 ) Conversion kit
unit sales 1,390 5,000 (3,610 ) (72.2 ) Cost of product sales $
43.2 $ 48.7 $ (5.5 ) (11.3 )
Gaming Operations Revenues: Participation revenues $ 54.6 $
58.4 $ (3.8 ) (6.5 ) Interactive products and services revenues
13.0 1.2 11.8 nm Other gaming operations revenues 5.1
5.1 — —
Total gaming operations revenues
$ 72.7 $ 64.7 $ 8.0
12.4 Installed base of participation units at
period end 9,624 9,282 342 3.7 Average installed participation
units 9,281 9,376 (95 ) (1.0 ) Average daily revenue per
participation unit $ 63.89 $ 67.62 $ (3.73 ) (5.5 ) Cost of gaming
operations $ 13.7 $ 14.4 $ (0.7 ) (4.9 )
Product Sales Revenues
Total product sales revenues for the December 2012 quarter were
$84.8 million compared to $97.5 million in the prior-year period.
WMS shipped 2,778 new gaming machines to customers in the U.S. and
Canada, inclusive of 1,060 VLTs for Canada and 204 VLTs for the new
Illinois VLT market. Total global shipments increased 1,067 units
on a quarterly sequential basis, and were flat on a year-over-year
basis. Lower demand in the December quarter for our current gaming
cabinets reflects heightened interest by customers in purchasing
the new Blade cabinet after seeing it at G2E®, which resulted in
some customers deferring purchases of Bluebird2 gaming machines.
This purchase behavior is not unusual for the launch of a new
gaming product. Although these deferrals impacted our total
shipments, we sold 3,245 Bluebird2-style cabinets and 1,412
Bluebird xD cabinets in the December quarter. Replacement units
shipped to U.S. and Canadian customers were 2,434 units, inclusive
of the Canadian VLT units, compared with 2,200 gaming machines in
the prior-year period, while new gaming machine sales for new
casino openings and expansions totaled 344 units compared with
approximately 600 units in the December 2011 quarter. WMS shipped
2,080 new units, or 43% of total global new unit shipments, to
international customers in the December 2012 quarter, compared to
2,087 new units, or 43% of global sales in the year-ago period. The
Company’s average sales price of $15,558 declined on a quarterly
sequential and year-over-year basis primarily reflecting the mix
impact and lower average selling prices associated with VLTs and
the new Bluebird®2-lite cabinet for select international markets,
as well as the impact of the competitive marketplace and challenges
from having a five-year old cabinet just ahead of launching the
Blade cabinet.
Other product sales revenues declined by 50% to $9.2 million,
reflecting lower conversion kit sales revenue compared to the
record level in the year-ago period, and lower used gaming machine
revenues as a result of a smaller number of trade-in units accepted
which, translated into a smaller number of unit sales at slightly
lower prices than the year-ago period.
Gaming Operations Revenues
Gaming operations revenues increased $8.0 million to $72.7
million in the December 2012 quarter from $64.7 million in the
year-ago period, marking the second consecutive quarter of
year-over-year growth in gaming operations revenues. The installed
participation base at December 31, 2012 increased by 342 units over
the prior year and was essentially flat with the installed base of
9,632 units at September 30, 2012. The average installed
participation base for the December 2012 quarter declined by 95
units year over year to 9,281 units primarily reflecting the impact
of units that were offline during the quarter as a result of
superstorm Sandy affecting Eastern U.S. casinos, coupled with one
customer removing units at the beginning of the quarter. Average
revenue per day in the quarter of $63.89 per unit compares to
average revenue per day of $65.23 in the September 2012 quarter and
$67.62 in the December 2011 quarter.
Revenues from interactive products and services increased $3.5
million, or 37% on a quarterly sequential basis to $13.0 million
and were up from $1.2 million in the prior-year period, primarily
reflecting the growing success of the Company’s July 2012 launch of
the Jackpot Party Social Casino on Facebook.
The Jackpot Party Social Casino is now the fourth most popular
social casino on Facebook based on the number of daily active
users. Revenue growth for interactive products and services also
reflects organic growth in WMS’ UK-based B2C online website and the
addition of Phantom EFX retail sales and Jadestone game server
integration revenues.
Other gaming operations revenues were flat on a year-over-year
basis at $5.1 million.
Costs and Expenses
The following table summarizes key components of costs and
expenses for the three months ended December 31, 2012, and 2011 ($
in millions):
Three Months Ended
December 31,
Increase/(Decrease)
Costs and Expenses: 2012 2011
Amount % Cost of product sales $ 43.2 $ 48.7 $
(5.5 ) (11.3 ) As a percentage of product sales revenues 50.9 %
49.9 % 100 bp 2.0 Cost of gaming operations 13.7 14.4 (0.7 ) (4.9 )
As a percentage of gaming operations revenues 18.8 % 22.3 % (350)bp
(15.7 ) Research and development expense 26.7 23.7 3.0 12.7 As a
percentage of total revenues 17.0 % 14.6 % 240 bp 16.4 Selling and
administrative expense 37.9 33.2 4.7 14.2 As a percentage of total
revenues 24.1 % 20.5 % 360 bp 17.6 Depreciation and amortization
expense 29.0 21.2 7.8 36.8 As a percentage of total revenues
18.4 % 13.1 % 530 bp 40.5
Total costs and expenses
$ 150.5 $ 141.2 $
9.3 6.6 Operating income $
7.0 $ 21.0 $ (14.0
) (66.7 ) Operating margin 4.4
% 12.9 % (850)bp (65.9 )
Cost of product sales declined $5.5 million to $43.2 million in
the December 2012 quarter primarily reflecting the lower unit cost
of VLTs, lower gaming machine unit costs due to the Company’s
strategic sourcing, supply chain and other continuous improvement
initiatives, and lower sales of used gaming machines and conversion
kit units. As a percent of product sales revenues, cost of product
sales increased to 50.9% from 49.9% primarily reflecting the lower
average sales price associated with VLTs.
Cost of gaming operations declined $0.7 million primarily
reflecting the low costs associated with the revenues from
interactive products and services and a more favorable jackpot
expense experience on wide-area progressive games. As a result,
cost of gaming operations as a percent of gaming operations
revenues improved 350 basis points.
Research and development expenses in the December 2012 quarter
increased $3.0 million year over year to $26.7 million. The
expected increase reflects the incremental expense from two
interactive acquisitions in the June 2012 quarter and higher
development costs, including an increase in staffing required for
porting WMS’ library of slot gaming content for distribution as
interactive products and services, coupled with a modest increase
in spending to support the development of the Company’s innovative
new casino gaming products.
Selling and administrative expenses in the December 2012 quarter
increased $4.7 million year over year and $3.5 million on a
quarterly sequential basis to $37.9 million. The increase reflects
$2.5 million of costs incurred in the process leading up to the
recently announced definitive merger agreement with Scientific
Games Corporation, the impact of the two acquisitions in the June
2012 quarter, the previously planned increase in online marketing
costs to expand the player base for interactive products, a modest
increase to support the overall growth of interactive products and
services, and the incremental expenses related to the Company’s
implementation of an upgraded enterprise-wide ERP system partially
offset by ongoing cost savings initiatives.
Depreciation and amortization expense of $29.0 million in the
December 2012 quarter increased $7.8 million on a year over year
basis and $1.0 million on a quarterly sequential basis. The
year-over-year increase reflects the Company’s investment in its
installed base of participation gaming machines over the last 12
months, depreciation associated with the completion of a major new
facility, implementation of an upgraded enterprise-wide ERP system
and the amortization of finite-lived intangible assets from the two
acquisitions completed in the June 2012 quarter.
Cash Flow and Balance Sheet
Cash flow provided by operating activities for the six months
ended December 31, 2012, increased $5.5 million to $71.2 million,
reflecting higher depreciation and amortization, share-based
compensation, a lower negative impact from the change in operating
assets and liabilities and tax impacts, partially offset by lower
net income and other non-cash items. Total receivables, net
declined to $362.4 million at December 31, 2012, from $387.8
million at September 30, 2012, and compare with $405.1 million at
June 30, 2012, and reflect a $44.0 million, or 36%, decrease in
long-term notes receivable during the last six months. Inventory
was $55.7 million, or $13.4 million lower than at December 31,
2011, primarily reflecting operational improvements and lower
finished goods inventory, and was up slightly from the $53.3
million in inventory at June 30, 2012. Total current liabilities at
December 31, 2012, declined $55.2 million from June 30, 2012, due
to lower accounts payables and lower accrued liabilities reflecting
the timing of income tax payments.
Net cash used in investing activities increased in the December
2012 six-month period to $78.0 million compared with $73.5 million
for the six months ended December 2011, reflecting a $3.0 million
increase in capital deployed for gaming operations equipment and
$1.8 million higher expenditures for property, plant and equipment
partially offset by a $0.3 million decrease in capital deployed to
acquire or license intangible and other non-current assets. For the
December 2012 quarter, capital expenditures for gaming operations
equipment and property, plant and equipment declined by $3.1
million year over year and $20.3 million sequentially from the
September 2012 quarter.
Net cash provided by financing activities was $18.5 million
compared to the use of $2.3 million of cash in the prior-year
six-month period primarily due to a $32.1 million decline in stock
repurchase activity, partially offset by $10.0 million of lower net
borrowings under the Company’s line of credit.
Total cash, cash equivalents and restricted cash was $87.8
million at December 31, 2012, and long-term debt was $85.0
million.
Adjusted EBITDA, a non-GAAP financial metric (see reconciliation
to net income schedule at the end of this release), decreased to
$48.5 million in the December 2012 quarter compared with $57.7
million in the prior-year period. The adjusted EBITDA margin for
the December 2012 quarter was 30.8% compared with 35.6% in the
year-ago period.
About WMS
WMS serves the gaming industry worldwide by designing,
manufacturing and marketing games, video and mechanical
reel-spinning gaming machines, video lottery terminals and in
gaming operations, which consists of the placement of leased
participation gaming machines in legal gaming venues. The Company
also develops and markets digital gaming content, products,
services and end-to-end solutions that address global online
wagering and play-for-fun social, casual and mobile gaming
opportunities. WMS also addresses customers’ gaming floor evolution
with its WAGE-NET® networked gaming solution, a suite of systems
technologies and applications designed to increase customers’
revenue generating capabilities and operational efficiency. More
information on WMS can be found at www.wms.com or visit the Company
on Facebook®, Twitter® or YouTube®.
MONOPOLY is a trademark of Hasbro. Used with permission. ©2013
Hasbro. All rights reserved.
THE WIZARD OF OZ and all related characters and elements are
trademarks of and © Turner Entertainment Co. (s13)
This press release contains forward-looking statements
concerning our future business performance, strategy, outlook,
plans, products and liquidity. Forward-looking statements may be
typically identified by such words as “may,” “will,” “should,”
“expect,” “anticipate,” “plan,” “likely,” “believe,” “estimate,”
“continue,” “project,” and “intend,” among others. These
forward-looking statements are subject to risks and uncertainties
that could cause our actual results to differ materially from the
expectations expressed in the forward-looking statements. Although
we believe that the expectations reflected in our forward-looking
statements are reasonable, any or all of our forward-looking
statements may prove to be incorrect. Consequently, no
forward-looking statements may be guaranteed. We undertake no
obligation to update such forward looking statements, all of which
are made only as of this date, February 6, 2013. Factors which
could cause our actual results to differ from those projected or
contemplated in any such forward-looking statements include, but
are not limited to, the following factors: (1) there is a risk that
the acquisition of WMS (“the acquisition”) pursuant to the recently
announced merger agreement with Scientific Games may not be
consummated, on a timely basis or otherwise; (2) our business may
be disrupted while the acquisition by Scientific Games is pending
or if the acquisition is not consummated as our ability to transact
business with customers, suppliers and other business partners may
be adversely affected; (3) it may be difficult for us to retain and
recruit employees in vital areas while the acquisition is pending
or if it fails; (4) in the event our recently announced acquisition
by Scientific Games is not consummated, the price of our stock may
be affected; (5) there could be unexpected costs, charges or
expenses resulting from the pending acquisition; (6) in connection
with the recent implementation of our enterprise resource planning
system, there is the risk of inaccurate data or reporting and
significant design errors that could have a negative effect on our
operating results and impact our ability to manage our business
which could constitute significant deficiencies; (7) delay or
refusal by regulators to approve our new gaming platforms, cabinet
designs, game themes and related hardware and software; (8) changes
in regulations or regulatory interpretations that may adversely
affect existing product placements or future placements; (9) an
inability to introduce in a timely manner new games and gaming
machines that achieve and maintain market acceptance; (10) a
decrease in the desire of casino customers to upgrade gaming
machines or allot floor space to leased or participation games,
resulting in reduced demand for our products; (11) a reduction in
capital spending or interruption in payments by casino customers
associated with business weakness or economic uncertainty that
adversely affects our customers' ability to make purchases or pay;
(12) a greater-than-expected demand for operating leases by
customers over outright product sales or sales financing leases
that shift revenue recognition from a single period to the term of
such operating leases; (13) a reduction in play levels of our
participation games by casino patrons, whether due to economic
conditions or increased placements of competitive product; (14)
inability of suppliers of key components to timely meet our
requirements to fulfill customer orders; (15) increased pricing or
promotional competitive activity that adversely affects our average
selling price or product revenues; (16) a failure to obtain and
maintain our gaming licenses and regulatory approvals; (17) failure
of customers or players to adapt to the new technologies that we
introduce in new product concepts; (18) a software anomaly or
fraudulent manipulation of our gaming machines and software; (19) a
failure to obtain the right to use or an inability to adapt to
rapid development of new technologies; (20) an infringement claim
seeking to restrict our use of material technologies; (21) risks of
doing business in international markets, including political and
economic instability, terrorist activity, changes in importation
and repatriation regulations such as currently experienced in
Argentina, and foreign currency fluctuations; and (22) the
unfavorable outcome of any legal proceedings in which we may be
involved from time to time. These factors and other factors that
could cause actual results to differ from expectations are more
fully described under “Item 1. Business”, “Item 1A. Risk Factors”
and “Legal Proceedings” in our Annual Report on Form 10-K for the
year ended June 30, 2012, and our more recent reports filed with
the U.S. Securities and Exchange Commission.
WMS INDUSTRIES INC.
CONDENSED CONSOLIDATED STATEMENTS OF
INCOME
(in millions of U.S. dollars and
millions of shares, except per share amounts)
(unaudited)
Three Months EndedDecember
31,
Six Months EndedDecember
31,
REVENUES: 2012 2011 2012
2011 Product sales $ 84.8 $ 97.5 $ 172.8 $ 184.6
Gaming operations 72.7 64.7
143.8 133.2
Total revenues 157.5
162.2 316.6 317.8 COSTS AND
EXPENSES: Cost of product sales (1) 43.2 48.7 84.5 91.5 Cost of
gaming operations (1) 13.7 14.4 28.9 28.7 Research and development
26.7 23.7 54.3 48.1 Selling and administrative 37.9 33.2 72.3 71.5
Depreciation and amortization (1) 29.0 21.2 57.0 43.8 Impairment
and restructuring charges — — —
9.7
Total costs and expenses
150.5 141.2 297.0
293.3 OPERATING INCOME
7.0 21.0 19.6 24.5 Interest expense
(1.0 ) (0.4 ) (1.7 ) (0.8 ) Interest income and other income and
expense, net 3.9 4.2 6.3
6.9 Income before income taxes 9.9 24.8 24.2 30.6
Provision for income taxes 5.6 8.7
10.6 10.7
NET INCOME $
4.3 $ 16.1 $ 13.6
$ 19.9
Earnings per share:
Basic
$ 0.08 $ 0.29
$ 0.25 $ 0.36 Diluted
$ 0.08 $ 0.29 $
0.25 $ 0.35 Weighted-average
common shares: Basic common stock outstanding
54.5 55.6 54.5
55.9 Diluted common stock and common
stock equivalents
54.6 55.8
54.6 56.2
1) Depreciation and amortization includes
the following amounts attributable to cost of product sales and
cost of gaming operations:
Cost of product sales $ 2.1 $ 1.4 $ 4.1 $ 2.8 Cost of gaming
operations $ 17.8 $ 13.1 $ 35.4 $ 27.2
CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME
(in millions of U.S. dollars)
(unaudited)
Three Months EndedDecember
31,
Six Months EndedDecember
31,
2012 2011 2012
2011 Net income $ 4.3 $ 16.1 $ 13.6 $ 19.9 Foreign
currency translation adjustment, net of taxes 1.2
(2.3 ) 4.1 (5.4 )
Total comprehensive income
$ 5.5 $ 13.8 $
17.7 $ 14.5
WMS INDUSTRIES INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in millions of U.S. dollars and
millions of shares)
ASSETS
December 31,2012
June 30,2012
CURRENT ASSETS: (unaudited) (audited) Cash and cash
equivalents $ 72.8 $ 62.3
Restricted cash and cash equivalents
15.0 13.8
Total cash, cash
equivalents and restricted cash 87.8 76.1
Accounts and notes receivable, net of allowances of $8.2 and $6.9,
respectively 284.1 282.8 Inventories 55.7 53.3 Other current assets
46.4 40.1
Total current assets
474.0 452.3 NON-CURRENT ASSETS:
Long-term notes receivable, net 78.3 122.3
Gaming operations equipment, net of
accumulated depreciation and amortization of $250.6 and $227.1,
respectively
122.1 115.7
Property, plant and equipment, net of
accumulated depreciation and amortization of $159.1 and $142.0,
respectively
236.6 226.7 Intangible assets, net 175.4 178.9 Deferred income tax
assets 40.6 39.3 Other assets, net 19.7 18.9
Total non-current assets 672.7
701.8 TOTAL ASSETS $
1,146.7 $ 1,154.1
LIABILITIES AND STOCKHOLDERS’
EQUITY
CURRENT LIABILITIES: Accounts payable $ 59.3 $ 84.8
Accrued compensation and related benefits 7.9 9.5 Other accrued
liabilities 48.4 76.5
Total current
liabilities 115.6 170.8 NON-CURRENT
LIABILITIES: Long-term debt 85.0 60.0
Deferred income tax liabilities
22.7 22.7 Other non-current liabilities 25.1
23.3
Total non-current liabilities 132.8
106.0 Commitments, contingencies and indemnifications — —
STOCKHOLDERS’ EQUITY: Preferred stock (5.0 shares
authorized, none issued) — — Common stock (200.0 shares authorized
and 59.7 shares issued) 29.8 29.8 Additional paid-in capital 446.9
443.5 Treasury stock, at cost (5.1 and 4.9 shares, respectively)
(144.2 ) (144.1 ) Retained earnings 568.5 554.9 Accumulated other
comprehensive loss (2.7 ) (6.8 )
Total
stockholders’ equity 898.3
877.3 TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY $ 1,146.7 $ 1,154.1
WMS INDUSTRIES INC.
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(in millions of U.S. dollars)
(unaudited)
Six Months EndedDecember
31,
2012 2011 CASH FLOWS FROM OPERATING
ACTIVITIES Net income $ 13.6 $ 19.9
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation 47.2 37.1 Amortization of intangible and other assets
17.9 14.2 Share-based compensation 8.0 7.6 Other non-cash items 2.4
10.2 Deferred income taxes (1.3 ) (2.0 ) Tax benefit from exercise
of stock options — (0.2 ) Change in operating assets and
liabilities (16.6 ) (21.1 )
Net cash provided by
operating activities 71.2 65.7
CASH FLOWS FROM
INVESTING ACTIVITIES Additions to gaming operations equipment
(38.6 ) (35.6 ) Additions to property, plant and equipment (32.9 )
(31.1 ) Payments to acquire or license intangible and other
non-current assets (6.5 ) (6.8 )
Net cash used in
investing activities (78.0 ) (73.5 )
CASH FLOWS FROM
FINANCING ACTIVITIES Borrowings under revolving credit facility
63.0 35.0 Repayments of borrowings under revolving credit facility
(38.0 ) — Purchases of treasury stock (5.0 ) (37.1 ) Additional
consideration related to acquisitions (2.6 ) — Cash received from
exercise of stock options and employee stock purchase plan 1.1 2.1
Debt issuance costs — (2.5 ) Tax benefit from exercise of stock
options — 0.2
Net cash provided
(used) by financing activities 18.5 (2.3 )
Effect of
exchange rates on cash and cash equivalents (1.2 )
(1.3 )
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 10.5 (11.4 )
CASH AND CASH EQUIVALENTS,
beginning of period 62.3 90.7
CASH
AND CASH EQUIVALENTS, end of period $ 72.8 $ 79.3
WMS INDUSTRIES INC.
Supplemental Data – Earnings per
Share
(in millions of U.S. dollars and
millions of shares, except per share amounts)
(unaudited)
Three Months Ended December 31, Six Months
Ended December 31, 2012 2011
2012 2011 Net income $ 4.3 $
16.1 $ 13.6 $ 19.9 Basic weighted average common shares
outstanding 54.5 55.6 54.5 55.9 Dilutive effect of stock options
0.0 0.1 0.0 0.2
Dilutive effect of restricted common stock
and warrants
0.1 0.1 0.1 0.1
Diluted weighted average common stock and
common stock equivalents
54.6 55.8 54.6 56.2 Basic earnings per
share of common stock $ 0.08 $ 0.29 $ 0.25 $ 0.36 Diluted earnings
per share of common stock and common stock equivalents $ 0.08 $
0.29 $ 0.25 $ 0.35
Supplemental Data – Reconciliation of
Net Income to Adjusted EBITDA
(in millions of U.S. dollars)
(unaudited)
Three Months Ended December 31, Six Months
Ended December 31, 2012 2011
2012 2011 Net income $
4.3 $ 16.1 $ 13.6 $ 19.9 Net
income $ 4.3 $ 16.1 $ 13.6 $ 19.9 Depreciation 24.2 17.8 47.2 37.1
Amortization of intangible and other assets 8.9 7.6 17.9 14.2
Provision for income taxes 5.6 8.7 10.6 10.7 Interest expense 1.0
0.4 1.7 0.8 Share-based compensation 3.6 5.0 8.0 7.6 Other non-cash
items 0.9 2.1 2.4
10.2
Adjusted EBITDA $ 48.5 $ 57.7 $
101.4 $ 100.5
Adjusted EBITDA margin
30.8 % 35.6 % 32.0 % 31.6 %
Adjusted EBITDA (earnings before interest, taxes, depreciation,
amortization, share-based compensation and other non-cash items,
including non-cash impairment and restructuring charges) and
adjusted EBITDA margin are supplemental non-GAAP financial metrics
used by our management and commonly used by industry analysts to
evaluate our financial performance. Adjusted EBITDA and adjusted
EBITDA margin provide additional useful information to investors
regarding our ability to service debt and are commonly used
financial analysis metrics for measuring and comparing gaming
companies in areas of liquidity, operating performance, valuation
and leverage. Adjusted EBITDA and adjusted EBITDA margin should not
be construed as an alternative to operating income (as an indicator
of our operating performance) or net cash provided by operating
activities (as a measure of liquidity) as determined in accordance
with U.S. generally accepted accounting principles. All companies
do not calculate adjusted EBITDA and adjusted EBITDA margin in
necessarily the same manner, and WMS’ presentation may not be
comparable to those presented by other companies.
Advanced Drainage Systems (NYSE:WMS)
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Advanced Drainage Systems (NYSE:WMS)
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