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Matthew Crowley

Shuffle Master Earnings Up

9 December 2005

LAS VEGAS -- Shuffle Master, a Las Vegas-based manufacturer of automatic card shufflers and other gambling devices, on Thursday said its fourth-quarter earnings rose 30.8 percent from a year earlier.

In a statement, the company said it had net income of $8.5 million, or 24 cents per share, for the three months ended Oct. 31, up from net income of $6.5 million, or 18 cents per diluted share, a year earlier.

The company said new-product development, business alliances and improved global distribution helped improve its quarterly earnings. The results were in line with Reuters Estimates' 24-cents-per-share forecast.

Quarterly revenue rose 30.5 percent to $33.8 million from $25.9 million.

For the 12 months ended Oct. 31, Shuffle Master earned $29.5 million, or 81 cents per diluted share, up from $24.1 million, or 64 cents per diluted share, a year earlier.

Twelve-month revenue rose 34 percent, to $113.6 million from $84.8 million. The company said it was the first time annual revenue had ever topped $100 million.

The company's total installed base of shufflers, its core product, increased 22 percent to approximately 18,600.

Keeping with previous guidance, Shuffle Master said it expects earnings per share to increase by about 25 percent in fiscal 2006 to $1 to $1.05 per share, excluding employee stock option expenses and any contribution from the company's expected acquisition of Australia's Stargames Ltd.

Shuffle Master said Nov. 14 that it would buy Stargames, a maker of table games and slot machines, for about $108 million. Under the deal, Shuffle Master will buy all of Stargames' stock, paying $1.14 per share. The companies have said they expected the deal to close in the first quarter of 2006.

Shuffle Master earnings fell 53 cents, or 1.91 percent, Thursday to close at $27.27 on the Nasdaq National Market.