Gaming supply company Shuffle Master, Inc. (SHFL) said Tuesday after the markets closed that its second quarter profit rose 50% from last year, helped by better cost control and a gain from the early extinguishment of debt. The company's quarterly earnings per share, excluding items, also came in above analysts' expectations, sending the company's shares up by more than 19% in after hours trading.
The Las Vegas, Nevada-based company reported net income for the second quarter of $4.58 million or $0.09 per share, compared to $3.05 million or $0.09 per share for the year-ago quarter.
The number of weighted average diluted shares outstanding during the second quarter was 53.19 million, compared to 34.77 million in the second quarter of last year.
The latest quarter results included $0.05 for severance charges related to the retirement of the company's former CEO and the departure of a senior executive, $0.02 related to the gain on debt extinguishment and $0.02 for discrete tax events.
Shuffle Master's former CEO Mark Yoseloff retired in March as planned. He was succeeded by Timothy Parrott.
On average, 7 analysts polled by Thomson Reuters expected the company to earn $0.04 per share for the second quarter. Analysts' estimates typically exclude special items.
Gross margin for the quarter decreased to 57% from 60% a year ago.
Operating income for the second quarter fell to $3.1 million from $8.0 million in the prior year quarter.
Operating expenses for the second quarter, adjusted for severance charges of $4.4 million, decreased year-over-year by 14% to $18.1 million.
Interest expenses for the quarter fell to $1.4 million from $2.3 million in the year-ago quarter.
Total revenue for the second quarter fell 8% to $45.30 million from $49.00 million in the same quarter last year. Six analysts had a consensus revenue estimate of $43.03 million for the second quarter.
However, lease and service revenue for the quarter rose 7% from last year to a record $20.5 million.
"Shuffle Master had a decent second quarter given the magnitude of the economic climate. We remain focused on maintaining the discipline and rigor necessary to create long-term shareholder value, and we are taking aggressive steps to work with our customers to maximize their floor potential during this challenging time," said Shuffle Master CEO Parrott.
On April 15, the company purchased 99.9% of the remaining $30.3 million on its outstanding contingent convertible senior notes and on May 29, the company satisfied the remaining $8,000 on its notes.
For the first six months of its fiscal year, the company reported net income of $3.6 million or $0.07 per share, compared to $1.2 million or $0.04 per share for the same period last year.
Total revenues for the first-half fell 8% to $79.79 million from $86.90 million in the prior year period.
Among others in the industry, International Game Technology (IGT) in April reported a 44% drop in its second quarter profit, reflecting the on-going effects of difficult global economic conditions that have impacted both gaming operators and casino patrons.
Shuffle Master shares, which have traded in a range of $1.97 to $8.38 over the past year, closed Tuesday's regular trading session at $4.61, up 12 cents or 2.67%. The stock is currently gaining 90 cents or 19.52% in after hours trading.
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