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LAS VEGAS -- For the second straight quarter the cost of acquiring an Australian slot maker sent gaming equipment provider Shuffle Master to a quarterly loss, even though the Las Vegas-based company's revenues grew almost 50 percent.
"We posted solid operating results and we've made tremendous progress in creating a formidable global gaming equipment supplier," Shuffle Master Chairman Mark Yoseloff said Thursday during the company's conference call to announce third-quarter earnings for the period that ended July 31.
Shuffle Master, which supplies casinos with table games and table game-related equipment, said its third-quarter earnings were $7.2 million or 20 cents per share, down from $8.1 million or 22 cents per share for the same quarter a year ago. Analysts polled by Thomson First Call thought the company would earn 24 cents per share.
The integration process stemming from the company's acquisition of Stargames in February, drove down earnings. Stargames, which distributes Rapid Roulette, an electronic version of the table game, is Australia's third-largest slot maker.
Costs associated with the acquisition, which increased Shuffle Master's operating expenses by $5.6 million, affected results. Yoseloff said the company is working toward integrating Stargames within Shuffle Master's corporate structure.
Meanwhile, Shuffle Master's overall revenues grew to $40.7 million in the quarter, a 49 percent increase compared with $27.3 million a year ago. Cash flow, defined as earnings before interest, taxes, depreciation and amortization, was $19.2 million, a 26 percent increase compared with $15.2 million for the same quarter of 2005.
Yoseloff said the loss per share would be short-lived as the company continues with its integration process.
"We are confident that fiscal 2007 will see Shuffle Master's market presence expand dramatically," Yoseloff said. "This includes a leading position in the fastest growing gaming region in the world, the Pacific Rim, and enormous opportunity in North America."
Shuffle Master Chief Financial Officer Richard Baldwin said the company's international revenues will grow faster than domestic revenues during the coming quarter.
Nevertheless, gaming expansion in the United States helped Shuffle Master.
In July, the company announced it was awarded a contract by the Delaware Lottery in which 44 Table Master games, an electronic automated table game that seats up to five players, will be installed in the state's three lottery locations. The initial installations should begin by the end of the year.
The company announced earnings after trading on the Nasdaq National Market closed Thursday.
Shares in the company closed at $26.93, off 85 cents or 3.06 percent. In after-hours trading, shares in Shuffle Master fell to $25.60, down $1.33 or 4.94 percent.
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