GTECH Announces Fiscal Year 2006 First Quarter Results WEST
GREENWICH, R.I., June 22 /PRNewswire-FirstCall/ -- GTECH Holdings
Corporation (NYSE:GTK) today announced first quarter earnings for
fiscal year 2006, which ended May 28, 2005. "GTECH delivered
another strong financial performance in the first quarter," said
GTECH President and CEO W. Bruce Turner. "We also scored several
key wins and made significant strategic progress. We are pleased to
report that we also saw progress in Brazil in the first quarter,
where it appears we are one step closer to a resolution of what has
been a difficult situation for GTECH." "We are pleased with the
underlying strength of the business," said GTECH Senior Vice
President and CFO Jaymin B. Patel. "Our continued financial,
operational, and strategic successes provide further confidence in
our ability to drive profitable growth for our shareholders in both
the near term and over the next several years." Operating Results
Revenues for the first quarter of fiscal 2006 were $326.4 million,
up 16.5% over revenues of $280.2 million in the first quarter of
fiscal 2005. Net income was $54.8 million, or $0.43 per diluted
share, compared to net income of $53.6 million, or $0.40 per
diluted share for the same period last year. Net income in the
first quarter of the prior year includes a one-time, after-tax gain
of $6.9 million, or approximately $0.05 per diluted share,
associated with the sale of the Company's 50% interest in Gaming
Entertainment (Delaware) L.L.C. Prior year earnings and dividends
per share reflect the 2-for-1 common stock split declared in June
2004. Cash Flow and Investments During the first quarter of fiscal
2006, the Company generated $121.6 million of cash from operations.
This cash was principally used to fund $40.6 million of systems,
equipment, and other assets relating to contracts; to repurchase
$32.1 million, or 1.3 million shares of the Company's common stock;
and to pay cash dividends of $9.8 million. At May 28, 2005, the
Company had $125.6 million of cash and cash equivalents and $209.5
million of short-term investment securities on hand. At the end of
the first quarter of fiscal 2006, the Company had no borrowings
under its $500 million senior revolving credit facility. Financial
Outlook The Company provided guidance for the full year and second
quarter of fiscal 2006. For the fiscal year ending February 25,
2006, the Company expects service revenue growth in the range of
11% to 13%, reflecting the net effect of a new contract in Brazil
and the return of a portion of fiscal year 2005 Brazil revenues
previously held in escrow. It expects product sales in the range of
$180 million to $210 million. The Company expects that service
margins will be in the range of 40% to 42%, and product sale
margins to be in the range of 38% to 40%. Based upon this outlook,
it now expects earnings per share for fiscal 2006 to be in the
range of $1.64 to $1.70 on a fully-diluted basis. For the second
quarter of fiscal 2006, ending August 27, 2005, the Company expects
service revenue growth in the range of 10% to 12% and product sales
in the range of $30 million to $35 million. The Company expects
service and product sale margins in the range of 38% to 40%.
Accordingly, the Company expects earnings per share to be in the
range of $0.37 to $0.40 per share for the quarter. First Quarter
Highlights In the first quarter of fiscal 2006, GTECH continued to
successfully execute against the Company's strategic objectives of
maintaining and expanding the core lottery business, and winning
new customers. Domestically, GTECH was selected by the Pennsylvania
Department of Revenue for a gaming central control system. The
system will monitor and control up to 61,000 gaming devices at
approximately 14 venues throughout the state. In addition, GTECH
was named the preferred vendor to provide a video gaming monitoring
system and site controllers for the Louisiana Department of Public
Safety & Corrections video gaming program. Both of these awards
follow highly competitive procurements. Also in the quarter, GTECH
received an order for 2,400 Instant Ticket Vending Machines (ITVMs)
to be provided to the Pennsylvania Lottery. The Hoosier Lottery in
Indiana also selected GTECH to negotiate a contract for 680 ITVMs.
Internationally, GTECH received a one-year contract from the
Company's customer in Brazil, Caixa Economica Federal, through May
14, 2006. In Denmark, GTECH signed a two-year contract extension
with Dansk Tipstjeneste, the operator of the Danish National
Lottery. The Company was also granted an 18-year agreement to
operate The Barbados Lottery, which was recently consolidated from
three lotteries into one. GTECH further strengthened its management
team with the appointments of Dr. Joseph Nadan as Senior Vice
President and Chief Technology Officer, and Bruce Rowe as Vice
President of Business Strategy for Gaming Solutions, and General
Manager of Nevada Operations. Also in the first quarter, GTECH
announced that it formed a strategic alliance with Harrah's
Operating Company, Inc., a subsidiary of Harrah's Entertainment,
Inc., whereby GTECH will supply Harrah's properties with gaming
machines, and the two companies will work together to develop new
game content. Over the next two years, GTECH will place 200 leased
video gaming machines in Harrah's properties around the country.
The companies will also explore opportunities to expand the
relationship with additional slot products in future years,
depending upon the performance of the machines installed during the
initial period. "Our long-term strategy remains the same. We will
work to drive new growth through acquisition and partnerships, and
we will continue to focus on M&A transactions that enhance our
offerings in the online and instant channels, monitor games, gaming
machines, and the full range of interactive channels," continued
Mr. Turner. "All of these activities will bring us closer to
achieving our ultimate goal: to become a fully-diversified, world-
class gaming company. This will ensure that we have a wealth of
opportunities to fuel our continued growth." Certain statements
contained in this press release are forward looking statements
within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. The Company
identifies forward looking statements by words such as "may,"
"will," "should," "could," "expect," "plan," "anticipate,"
"intend," "believe," "estimate," "continue," or similar words that
refer to the future. Such statements include, without limitation,
statements relating to the prospects and financial outlook for the
Company, which reflect management assumptions regarding: (i) the
future prospects for and stability of the lottery industry and
other businesses in which the Company is engaged or expects to be
engaged, (ii) the future operating and financial performance of the
Company (including, without limitation, expected future growth in
revenues, profit margins and earnings per share), and (iii) the
ability of the Company to retain existing business and to obtain
and retain new business. Such forward looking statements reflect
management's assessment based on information currently available,
but are not guarantees and are subject to risks and uncertainties
that could cause actual results to differ materially from those
contemplated in the forward looking statements. These risks and
uncertainties include, but are not limited to, those set forth
above, in the Company's subsequent press releases and on reports by
the Company on Forms 10-K, 10-Q and 8-K, and other reports and
filings with the Securities and Exchange Commission, as well as
risks and uncertainties respecting: (i) the potential impact of
extensive and evolving government regulations upon the Company's
business; (ii) the ability of the Company to continue to retain and
extend its existing contracts and win new contracts; (iii) the
possibility of slower than expected growth or declines in sales of
lottery and gaming goods and services by the Company or the
Company's customers; (iv) exposure to foreign currency
fluctuations; (v) risks and uncertainties inherent in doing
business in foreign jurisdictions; (vi) the relatively large
percentage of the Company's revenues attributable to a relatively
small number of the Company's customers; (vii) the possibility of
significant fluctuation of quarterly operating results; (viii) the
intensity of competition in the lottery and gaming industries; (ix)
the possibility of substantial penalties under and/or termination
of the Company's contracts; (x) the ability of the Company to
respond to technological change and to satisfy the future
technological demands of its customers; (xi) opposition to
expansion of lottery and gaming; (xii) the Company's ability to
attract and retain key employees; and (xiii) the possibility of
adverse determinations in pending legal proceedings. GTECH is a
leading gaming technology and services company. With more than $1.2
billion in annual revenues and 5,300 people in over 50 countries,
GTECH provides integrated technology, creative content, and
business services to effectively manage and grow today's evolving
gaming markets. In targeted emerging economies, GTECH also
leverages its operational presence and infrastructure to supply
commercial transaction processing services. For more information
about the Company, please visit GTECH's website at
http://www.gtech.com/. Contact: Robert K. Vincent Public Affairs
GTECH Corporation 401-392-7452 GTECH HOLDINGS CORPORATION AND
SUBSIDIARIES CONSOLIDATED INCOME STATEMENTS (Unaudited) Three
Months Ended May 28, May 29, 2005 2004 (Dollars in thousands,
except per share amounts) Revenues: Services $291,364 $253,326
Sales of products 35,035 26,879 326,399 280,205 Costs and expenses:
Costs of services 168,917 147,293 Costs of sales 21,604 15,917
190,521 163,210 Gross profit 135,878 116,995 Selling, general and
administrative 32,019 27,635 Research and development 12,938 13,087
Operating expenses 44,957 40,722 Operating income 90,921 76,273
Other income (expense): Interest income 2,045 1,335 Equity in
earnings of unconsolidated affiliates 1,787 1,306 Other income
(expense) (1,794) 10,525 Interest expense (7,265) (4,336) (5,227)
8,830 Income before income taxes 85,694 85,103 Income taxes 30,850
31,488 Net income $54,844 $53,615 Basic earnings per share $0.48
$0.45 Diluted earnings per share $0.43 $0.40 Weighted average
shares outstanding - basic 114,646 118,624 Weighted average shares
outstanding - diluted 129,707 134,977 Cash dividends declared per
common share $0.085 $0.085 GTECH HOLDINGS CORPORATION AND
SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) May 28,
February 26, 2005 2005 ASSETS (Dollars in thousands) CURRENT
ASSETS: Cash and cash equivalents $125,634 $94,446 Investment
securities available-for- sale 209,500 196,825 Trade accounts
receivable, net 148,509 168,706 Sales-type lease receivables 3,271
3,461 Refundable performance deposit 8,000 8,000 Inventories 47,638
61,135 Deferred income taxes 24,538 31,435 Other current assets
31,286 26,646 TOTAL CURRENT ASSETS 598,376 590,654 SYSTEMS,
EQUIPMENT AND OTHER ASSETS RELATING TO CONTRACTS, net 714,085
720,438 GOODWILL, net 330,726 331,022 PROPERTY, PLANT AND
EQUIPMENT, net 77,595 74,558 INTANGIBLE ASSETS, net 68,190 70,839
REFUNDABLE PERFORMANCE DEPOSIT 12,000 12,000 SALES-TYPE LEASE
RECEIVABLES 3,942 4,756 OTHER ASSETS 49,975 50,874 TOTAL ASSETS
$1,854,889 $1,855,141 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT
LIABILITIES: Accounts payable $62,424 $99,234 Accrued expenses
57,852 54,227 Employee compensation 26,240 21,862 Advance payments
from customers 42,673 42,865 Deferred revenue and advance billings
24,604 29,705 Income taxes payable 28,057 16,499 Taxes other than
income taxes 17,012 16,572 Short term borrowings 20 334 Current
portion of long-term debt 3,567 2,476 TOTAL CURRENT LIABILITIES
262,449 283,774 LONG-TERM DEBT, less current portion 721,425
726,329 OTHER LIABILITIES 89,696 83,260 DEFERRED INCOME TAXES
103,485 106,010 COMMITMENTS AND CONTINGENCIES -- -- SHAREHOLDERS'
EQUITY: Preferred Stock, par value $.01 per share - 20,000,000
shares authorized, none issued -- -- Common Stock, par value $.01
per share - 200,000,000 shares authorized, 116,551,144 shares
issued; 114,491,856 and 115,006,751 shares outstanding at May 28,
2005 and February 26, 2005, respectively 1,166 1,166 Additional
paid-in capital 281,248 278,204 Accumulated other comprehensive
loss (47,435) (43,227) Retained earnings 492,438 455,537 727,417
691,680 Less cost of 2,059,288 and 1,544,393 shares in treasury at
May 28, 2005 and February 26, 2005, respectively (49,583) (35,912)
677,834 655,768 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$1,854,889 $1,855,141 GTECH HOLDINGS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three Months
Ended May 28, May 29, 2005 2004 (Dollars in thousands) OPERATING
ACTIVITIES Net income $54,844 $53,615 Adjustments to reconcile net
income to net cash provided by operating activities: Depreciation
42,023 33,379 Intangibles amortization 2,641 1,633 Deferred income
taxes 4,372 7,237 Tax benefit related to stock award plans 3,044
5,250 Minority interest 1,309 353 Equity in earnings of
unconsolidated affiliates, net of dividends received (1,787) (494)
Gain on sale of investment -- (10,924) Other 7,706 3,123 Changes in
operating assets and liabilities: Trade accounts receivable 16,924
(6,417) Inventories 13,486 (10,340) Accounts payable (32,448)
(7,020) Employee compensation 3,188 (13,802) Advance payments from
customers (192) 22,610 Deferred revenue and advance billings
(5,101) 16,169 Income taxes payable 11,558 9,899 Other assets and
liabilities 9 (7,823) NET CASH PROVIDED BY OPERATING ACTIVITIES
121,576 96,448 INVESTING ACTIVITIES Acquisitions (net of cash
acquired) 296 (193,018) Purchases of systems, equipment and other
assets relating to contracts (40,562) (53,932) Purchases of
available-for-sale investment securities (85,000) (49,895)
Maturities and sales of available- for-sale investment securities
72,325 259,600 Purchases of property, plant and equipment (2,394)
(1,973) Decrease in restricted cash 5,080 -- Proceeds from sale of
investment -- 11,773 Investments in and advances to unconsolidated
subsidiaries -- (775) NET CASH USED FOR INVESTING ACTIVITIES
(50,255) (28,220) FINANCING ACTIVITIES Principal payments on
long-term debt (1,317) (91,239) Purchases of treasury stock
(32,051) (28,275) Dividends paid (9,770) (10,103) Premiums and fees
paid in connection with the early retirement of debt -- (10,610)
Proceeds from stock options 3,322 3,508 Other 863 769 NET CASH USED
FOR FINANCING ACTIVITIES (38,953) (135,950) Effect of exchange rate
changes on cash (1,180) (1,376) INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 31,188 (69,098) Cash and cash equivalents at
beginning of period 94,446 129,339 CASH AND CASH EQUIVALENTS AT END
OF PERIOD $125,634 $60,241 DATASOURCE: GTECH Holdings Corporation
CONTACT: Robert K. Vincent, Public Affairs of GTECH Corporation,
+1-401- 392-7452 Web site: http://www.gtech.com/
Copyright
Gtech (NYSE:GTK)
Historical Stock Chart
From Jun 2024 to Jul 2024
Gtech (NYSE:GTK)
Historical Stock Chart
From Jul 2023 to Jul 2024