AGI Alamos Gold Inc New

Alliance Gaming Reports Third Quarter Revenues Increase 8% to $125.4 Million Adjusted for Certain Charges, Reports Earnings of $0.07 Per Share, or a Loss of $(0.13) Per Share After Charges LAS VEGAS, April 28 /PRNewswire-FirstCall/ -- Alliance Gaming Corporation (NYSE:AGI) today announced its results for its third fiscal quarter ending March 31, 2005. Third quarter net loss from continuing operations totaled $(6.4) million, or $(0.13) per share, including certain charges described below totaling $(0.20) per share. Excluding these charges resulted in third quarter income from continuing operations of $3.6 million, or $0.07 per share. For the comparable prior year quarter ended March 31, 2004, the Company reported income from continuing operations of $12.2 million or $0.24 per diluted share on revenues of $116.2 million. Consolidated results for the March 31, 2005 quarter include: * Revenues of $125.4 million, an increase of 10% on a sequential basis compared to the quarter ended December 31, 2004, and an increase of 8% from $116.2 million in the prior year quarter. * Operating loss from continuing operations of $(2.2) million compared to an operating loss of $(7.7) million for the quarter ended December 31, 2004, compared to operating income of $22.2 million in the prior year quarter. * EBITDA excluding certain charges, of $24.7 million, compared to $16.0 million for the quarter ended December 31, 2004, and $30.3 million in the prior year quarter. * Pre-tax charges totaling $13.7 million including inventory obsolescence, impairment charges, restructuring charges, and a tax charge of $1.4 million (in aggregate $(0.20) per share). Earnings before interest, taxes, depreciation, amortization, refinancing charges, restructuring charges, stock-based compensation and inventory and asset write-downs (EBITDA) is not a Generally Accepted Accounting Principles (GAAP) measurement. EBITDA may not be comparable to similarly titled measures reported by other companies. A reconciliation of EBITDA to GAAP net income (loss) from continuing operations is attached to this press release. Earnings excluding certain charges and EPS excluding certain charges are not GAAP measurements, and the reconciliation to the appropriate GAAP measurements is attached to this press release. "I am pleased with our progress during the quarter on our key business initiatives, including our Alpha video product roll out. We tracked against our plans during the quarter, and our earnings per share, excluding charges, is encouraging," said Richard Haddrill, President and CEO. Third Quarter Charges: A summary of the charges incurred in March 31, 2005 quarter include: * Inventory obsolescence charges totaling $7.9 million, or ($0.10) EPS net of tax, which is included in cost of goods sold, and includes further write-downs for slow moving legacy products. * Impairment charges totaling $3.6 million, or ($0.04) EPS net of tax, to reflect the write-down of certain intellectual property assets, gaming devices, and other assets. * Restructuring charges totaling $2.2 million, or ($0.03) EPS net of tax, resulting from the additional reductions in force completed during the quarter. * Tax charge of $1.4 million, or ($0.03) EPS for the estimated potential tax liability for the relocation of the Company's German distribution operations. Liquidity and Capital Expenditures: * Cash flows from operations, as defined under GAAP, totaled $22.8 million for the quarter ended March 31, 2005, and $15.1 million for the nine months ended March 31, 2005. * As of March 31, 2005, cash and cash equivalents totaled $31.4 million, which included approximately $2.0 million held for operational purposes in vaults, cages and change banks and $13.3 million held in jackpot reserve accounts. * For the quarter ended March 31, 2005, consolidated capital expenditures, including costs to produce proprietary games, totaled $15.5 million, compared to $16.2 million for the prior year quarter. The current period capital expenditures were driven by the continued deployment of wide-area progressive and daily-fee games. Interest expense for continuing operations for the current quarter totaled $5.1 million compared to $4.6 million in the prior year period due to higher interest rates on lower borrowings. The Company will hold its conference call on Thursday, April 28, 2005 at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time). Participants may access the call by dialing (913) 981-4913 and using participant passcode 4321756. The Company will also broadcast the conference call over the Internet. Interested parties are asked to log on to the call at http://www.alliancegaming.com/, using the Investor Relations tab, 10 minutes prior to the start of the call. Supplemental Business Unit Detail The following chart summarizes the financial information for the Bally Gaming and Systems business unit (dollars in millions): Three Months Ended Nine Months Ended March 31, March 31, 2005 2004 2005 2004 Revenues: Game sales $53.1 $49.2 $150.6 $141.5 Gaming operations 31.6 21.7 95.5 53.5 System sales 27.0 31.1 70.6 91.8 Total $111.7 $102.0 $316.7 $286.8 Gross margin 54.2 60.6 155.1 173.4 Selling, general & administrative 29.2 24.3 97.8 62.9 Research and development 10.6 9.1 32.7 24.5 Restructuring charges 2.2 -- 3.1 -- Impairment charges 3.6 -- 3.6 -- Depreciation & amortization 11.2 7.1 31.8 17.3 Operating income (loss) $(2.6) $20.1 $(13.9) $68.7 Summary operating statistics: Gross Margin % Games 20% 45% 18% 46% Gaming operations 71% 73% 75% 73% Systems 78% 73% 79% 76% New gaming devices sold 3,966 3,893 9,829 10,990 OEM units sold -- 256 1,954 2,950 New unit ASP (excluding OEM) $10,136 $9,816 $10,381 $8,724 Systems revenue detail: Hardware and software sales $15.7 $22.6 $35.8 $65.3 Maintenance and service revenues 11.3 8.5 34.8 26.5 Total Systems revenues $27.0 $31.1 $70.6 $91.8 GMU installed base 282,000 265,000 Casino management systems base 225 213 System managed TITO games 136,000 64,000 Installed base of recurring revenue games: As of March 31st 2005 2004 WAP games 1,660 1,670 Daily-fee games 8,620 5,780 Total 10,280 7,450 Centrally determined link count 18,720 15,170 Revenues from games and related parts sales totaled $53.1 million, an increase of $7.0 million on a sequential basis compared to the December 31, 2004 quarter, and an increase of $3.9 million over the prior year quarter. The average new-unit selling price was $10,136 and we also increased the sale of used games, parts, and game kits. Game sales gross margin decreased to 20% from 45% in the prior year quarter resulting from discounting of slower moving products and a $7.9 million inventory charge, or $(0.10) per share net of tax, for certain discontinued and obsolete products. The gross margin for the current quarter excluding the obsolescence charge was 35%, compared to 32% in the December 31, 2004 quarter, both of which reflect a low margin contractual agreement that was completed during the current quarter. Gaming Operations revenues totaled $31.6 million, an increase of $1.0 million on a sequential basis. The gross placements for all WAP and daily-fee games totaled 1,250 units and returns totaled 1,484 units, resulting in a net decrease of 234 units in the installed base of games on a sequential basis compared to December 31, 2004. This sequential decrease was primarily due to the previously disclosed return of 550 TILG games. The casino-owned central determination link count increased 995 net units on a sequential basis primarily due to unit placements in Oklahoma and Washington. Gaming operations gross margin decreased to 71% from 73% in the prior year quarter. Bally Systems revenues totaled $27.0 million, an increase of $2.8 million on a sequential basis. The recurring hardware and software maintenance revenues continued to increase due to the larger installed base of game monitoring units and eTicket sites, which currently stands at 282,000 in 225 casinos world-wide managing 136,000 TITO games. Bally Systems gross margin increased to 78% compared to 73% in the prior year period reflecting the higher proportion of high margin maintenance and services revenues. Bally Gaming's selling, general and administrative costs, excluding restructuring charges, totaled $29.2 million, compared to $24.3 million in the prior year quarter. This increase reflects the inclusion of SG&A costs for Class II and centrally determined gaming operations which were acquired on March 3, 2004. Selling, general and administrative costs decreased $4.0 million on a sequential basis compared to the quarter ended December 31, 2004. Certain recurring expenses have been reduced in the areas of consulting, legal, regulatory, provisions for bad debts, and payroll partially as a result of additional staff reductions, which occurred in January and February 2005. These staff reductions resulted in a pre-tax restructuring charge totaling $2.2 million, or ($0.03) per share, net of tax, for severance benefits. The restructuring plan includes the consolidation of our European distribution operations resulting in a $1.4 million tax charge ($0.03 per share) which is included in income tax expense in the statement of operations. Research and development expenses totaled $10.6 million, an increase of $0.2 million on a sequential basis. These R&D expenses incurred relate to investments in new and existing products, including the Alpha video platform and related game content development. Depreciation and amortization totaled $11.2 million, an increase of $0.3 million on a sequential basis. This increase reflects the higher base of WAP and daily-fee games and the amortization of the purchased intangible assets. As a result of its ongoing review of long-lived assets, the Company determined that certain intellectual property assets were no longer recoverable, resulting in an impairment charge of $1.3 million. The Company also reduced the estimated useful lives of certain participation games from three years to two years based on current market trends, resulting in an impairment charge of $0.8 million. The Company also recorded an impairment charge for a development loan totaling $1.5 million. The combined after tax impact of these items totaled $(0.04) per share. Casino Operations The following chart summarizes the financial information for the Rainbow Casino in Vicksburg, Mississippi (Dollars in millions): Three Months Ended Nine Months Ended March 31, March 31, 2005 2004 2005 2004 Rainbow Casino Revenues $13.7 $14.2 $39.3 $39.3 Operating Income $4.8 $5.2 $12.7 $13.0 Average No. of Gaming Devices 916 930 929 930 Average No. of Table Games 12 12 12 12 Rainbow Casino reported a decrease in revenues and operating income of 4% and 8%, respectively, compared to the prior year quarter. EBITDA decreased 4% to $5.6 million. For the period, slot revenue grew 2.5% and slot win per day grew 1% to $161 per day. A reconciliation of operating income reported by the Rainbow Casino business segment to its EBITDA is attached to this press release. FORWARD LOOKING STATEMENTS The disclosures herein include statements that are "forward looking" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as amended, and are subject to the safe harbor created thereby. Such forward looking information involves important risks and uncertainties that could significantly affect results in the future and, accordingly, such results may differ from those expressed in any forward looking statements made by or on behalf of the Company. Future operating results may be adversely affected as a result of a number of factors including the impact of competition, uncertainties concerning such matters as the Company's ability to service debt, product development, customer financing, sales to non-traditional gaming markets, foreign operations, dependence on key personnel, strict regulation by gaming authorities, the outcome of pending litigation matters including the pending securities class actions, gaming taxes and value added taxes, and other factors described in the Company's filings with the Securities and Exchange Commission, including but not limited to the Company's most recent reports on Form 10-K and 10-Q. Alliance Gaming Corporation is a diversified gaming company headquartered in Las Vegas, Nevada. The Company is engaged in the design, manufacture, operation and distribution of advanced gaming devices and systems worldwide and operates the Rainbow Casino in Vicksburg, Mississippi. Additional information about the Company can be found on the Alliance Gaming web site at: http://www.alliancegaming.com/. ALLIANCE GAMING CORPORATION UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In 000's, except per share amounts) Three Months Ended Nine Months Ended March 31, March 31, 2005 2004 2005 2004 Revenues Gaming equipment and systems $111,678 $101,977 $316,688 $286,764 Casino operations 13,734 14,262 39,339 39,329 125,412 116,239 356,027 326,093 Costs and expenses: Cost of gaming equipment and systems 57,453 41,378 161,626 113,395 Cost of casino operations 4,857 5,324 14,248 15,211 Selling, general and administrative 36,510 30,198 121,216 80,812 Research and development costs 10,589 9,059 32,719 24,462 Restructuring charges 2,219 -- 3,654 -- Impairment charges 3,599 -- 3,599 -- Depreciation and amortization 12,373 8,128 35,234 20,595 127,600 94,087 372,296 254,475 Operating income (loss) (2,188) 22,152 (16,269) 71,618 Other income (expense) Interest income 215 1,817 1,013 1,943 Interest expense (5,073) (4,590) (12,785) (14,188) Minority interest (907) (722) (2,551) (1,749) Refinancing / bank amendment charges -- -- (564) (12,293) Other, net 24 (182) 552 (1,081) Income (loss) from continuing operations before income taxes (7,929) 18,475 (30,604) 44,250 Income tax expense (benefit) (1,480) 6,234 (10,210) 15,944 Income (loss) from continuing operations (6,449) 12,241 (20,394) 28,306 Income (loss) from discontinued operations, net (395) 1,593 (4,771) 10,299 Net income (loss) $(6,884) $13,834 $(25,165) $38,605 Basic earnings (loss) per share Continuing operations $(0.13) $0.25 $(0.41) $0.57 Discontinued operations (0.01) 0.03 (0.09) 0.21 Total $(0.14) $0.28 $(0.50) $0.78 Diluted earnings (loss) per share Continuing operations $(0.13) $0.24 $(0.41) $0.56 Discontinued operations (0.01) 0.03 (0.09) 0.20 Total $(0.14) $0.27 $(0.50) $0.76 Weighted average diluted common and common share equivalents outstanding 51,057 51,449 50,485 50,522 ALLIANCE GAMING CORPORATION UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (In 000's) As of March 31, June 30, ASSETS 2005 2004 Current assets: Cash and cash equivalents $31,414 $172,726 Accounts and notes receivable, net of allowances for doubtful accounts of $13,381 and $9,722 105,781 129,779 Inventories, net 58,319 61,135 Deferred tax assets, net 19,982 20,054 Other current assets 16,952 12,420 232,448 396,114 Long-term investments (restricted) 9,622 2,528 Long-term receivables and lease receivables, net 16,037 18,132 Leased gaming equipment, net of accumulated depreciation of $46,138 and $31,105 46,205 46,634 Property, plant and equipment, net of accumulated depreciation of $31,616 and $23,127 74,986 75,838 Goodwill, net 175,077 136,989 Intangible assets, net of accumulated amortization of $17,152 and $12,489 57,185 63,623 Assets of discontinued operations held for sale -- 4,442 Deferred tax assets, net 14,895 -- Other assets, net 14,935 6,354 $641,390 $750,654 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $24,856 $37,515 Income taxes payable 6,353 7,233 Accrued liabilities 61,301 51,469 Jackpot liabilities 12,576 12,075 Current maturities of long-term debt 4,768 5,866 Liabilities of discontinued operations held for sale -- 4,337 109,854 118,495 Long-term debt, net of current maturities 345,442 423,089 Deferred tax liabilities, minority interest and other liabilities 8,339 8,267 Total liabilities 463,635 549,851 Stockholders' equity 177,755 200,803 $641,390 $750,654 ALLIANCE GAMING CORPORATION UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In 000's) Nine Months Ended March 31, 2005 2004 Continuing Operations Net income (loss) $(25,165) $38,605 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: (Income) loss from discontinued operations 4,771 (10,299) Depreciation and amortization 35,234 20,595 Stock-based compensation 1,356 -- Refinancing / bank amendment charges 564 12,293 Deferred income taxes (3,996) (6,257) Provision for losses on receivables 5,700 755 Inventory and other discontinued asset write-downs 25,565 -- Other (1,207) (1,354) Change in operating assets and liabilities, net of effects of business acquired: Purchase of appeal bond (7,600) -- Accounts and notes receivable 18,458 (8,725) Inventories (8,347) (3,080) Other current assets (4,955) (627) Accounts payable (12,814) 9,893 Accrued liabilities and jackpot liabilities (12,449) 16,255 Net cash provided by operating activities of continuing operations 15,115 68,054 Cash flows from investing activities of continuing operations: Advances of notes receivable due from Sierra Design Group -- (72,820) Additions to property, plant and equipment (9,124) (9,556) Additions to leased gaming equipment (30,076) (26,372) Additions to other long-term assets (2,177) (12,825) Acquisitions, net of cash acquired (12,000) (50,675) Proceeds from sale of net assets of discontinued operations 1,911 16,500 Net cash used in investing activities of continuing operations (51,466) (155,748) Cash flows from financing activities of continuing operations: Capitalized debt issuance costs (1,053) (6954) Premium paid on early redemption of debt -- (5,399) Proceeds from the issuance of long-term debt -- (350,000) Net change in revolving credit facility -- (70,000) Payoff of debt due to sale of net assets of discontinued operations (101,618) (337,625) Reduction of long-term debt (5,283) (2,986) Re-purchase of treasury shares (164) -- Proceeds from exercise of stock options and warrants 1,068 6,623 Net cash (used in) provided by financing activities of continuing operations (107,050) 73,659 Effect of exchange rate changes on cash 385 100 Discontinued operations: Cash provided by discontinued operations 1,704 7,557 Cash and cash equivalents: Decrease for the period (141,312) (6,378) Balance, beginning of period 172,726 38,884 Balance, end of period $31,414 $32,506 ALLIANCE GAMING CORPORATION Other Supplemental Information Reconciliation of EBITDA to net income (loss) from continuing operations: The following table reconciles earnings before interest, taxes, depreciation, amortization, refinancing charges, severance charges, stock-based compensation and inventory write-down charge (EBITDA) to the Company's net income (loss) from continuing operations (in 000's): Three Months Ended Nine Months Ended March 31, March 31, 2005 2004 2005 2004 Net income (loss) from continuing operations $(6,449) $12,241 $(20,394) $28,306 Income taxes (1,480) 6,234 (10,210) 15,944 Other expense, net 883 904 1,999 2,830 Interest expense, net 4,858 2,773 11,772 12,245 Stock-based compensation 813 -- 1,356 -- Inventory and other asset write-downs 11,477 -- 25,565 -- Refinancing charge -- -- 564 12,293 Restructuring charges 2,219 -- 3,654 -- Depreciation and amortization 12,373 8,128 35,234 20,595 EBITDA from continuing operations $24,694 $30,280 $49,540 $92,213 EBITDA is not a Generally Accepted Accounting Principles (GAAP) measurement. EBITDA may not be comparable to similarly titled measures reported by other companies. We believe that the analysis of EBITDA, which is not a GAAP-based financial measurement, is a useful adjunct to operating income, net income, cash flows and other GAAP-based measures. EBITDA is a common measure of performance in the gaming industry but may not be comparable to similarly titled measures reported by other companies. We disclose EBITDA primarily because it is a performance measure used by management in evaluating the performance of our business units. Additionally, EBITDA is utilized as a performance measure in covenants for our bank credit agreement. Although inventory and asset write-downs are normal and customary, they are not included in the EBITDA definition in our bank credit agreement. This non-GAAP information should not be considered as an alternative to any measure of performance as promulgated under accounting principles generally accepted in the United States, such as operating income, net income or net cash provided by operating activities. The following tables reconcile operating income (loss) by business segment to EBITDA: For the quarter ended March 31, 2005 from continuing operations (in 000's): Operating Depreciation Restructuring & Inventory Income and Stock-based and Asset (loss) Amortization Compensation Write-downs EBITDA Bally Gaming & Systems $(2,575) $11,200 $2,186 $11,477 $22,288 Rainbow Casino 4,812 828 -- -- 5,640 Corporate Expenses (4,425) 345 846 -- (3,234) $(2,188) $12,373 $3,032 $11,477 $24,694 For the quarter ended March 31, 2004 from continuing operations (in 000's): Operating Depreciation Restructuring & Inventory Income and Stock-based and Asset (loss) Amortization Compensation Write-downs EBITDA Bally Gaming & Systems $20,096 $7,115 $-- $-- $27,211 Rainbow Casino 5,157 690 -- -- 5,847 Corporate Expenses (3,101) 323 -- -- (2,778) $22,152 $8,128 $-- $-- $30,280 For the nine months ended March 31, 2005 from continuing operations (in 000's): Operating Depreciation Restructuring & Inventory Income and Stock-based and Asset (loss) Amortization Compensation Write-downs EBITDA Bally Gaming & Systems $(13,902) $31,821 $3,075 $25,565 $46,559 Rainbow Casino 12,690 2,415 -- -- 15,105 Corporate Expenses (15,057) 998 1,935 -- (12,124) $(16,269) $35,234 $5,010 $25,565 $49,540 For the nine months ended March 31, 2004 from continuing operations (in 000's): Operating Depreciation Restructuring & Inventory Income and Stock-based and Asset (loss) Amortization Compensation Write-downs EBITDA Bally Gaming & Systems $68,670 $17,332 $-- $-- $86,002 Rainbow Casino 12,985 2,061 -- -- 15,046 Corporate Expenses (10,037) 1,202 -- -- (8,835) $71,618 $20,595 $-- $-- $92,213 Reconciliation of GAAP Earnings to Adjusted Earnings: Three Months Ended March 31, 2005 2004 Income (loss) from continuing operations $(6,449) $12,241 Restructuring charges, net of tax 1,398 -- Impairment charges, net of tax 2,267 -- Inventory charges, net of tax 4,963 -- Tax charge 1,447 -- Adjusted Earnings $3,626 $12,241 Reconciliation of GAAP EPS to Adjusted EPS: Three Months Ended March 31, 2005 2004 Income (loss) from continuing operations $(0.13) $0.24 Restructuring charges, net of tax 0.03 -- Impairment charges, net of tax 0.04 -- Inventory charges, net of tax 0.10 -- Tax charge 0.03 -- Adjusted EPS $0.07 $0.24 Adjusted EPS excludes certain charges, including restructuring, impairment charges, inventory write-downs and a tax charge resulting from the consolidation of the Company's European distribution operations. Adjusted EPS is presented solely as a supplemental disclosure because the Company believes that it is a measure of operating performance used in the gaming industry, and is considered by the Company to be a better measure of the Company's operating results both in comparison to historical results as well as future results. The above tables reconcile the Adjusted Earnings and Adjusted EPS to GAAP-based measurements. DATASOURCE: Alliance Gaming Corporation CONTACT: Investors and Media, Steve Des Champs of Alliance Gaming, +1-702-270-7600 Web site: http://www.alliancegaming.com/

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