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Richard N. Velotta

Bally Technologies rides acquisition of SHFL to record quarterly revenue

5 May 2014

LAS VEGAS -- Las Vegas-based gaming equipment manufacturer Bally Technologies, Inc. continued to ride its acquisition of SHFL entertainment to post record revenue in the third quarter of 2013.

Bally, which closed the deal for SHFL in November, on Thursday reported earnings of $66.1 million, 70 cents a share, on revenue of $338.4 million for the quarter that ended March 31.

That compares with earnings of $60.7 million, 93 cents a share, on revenue of $259.1 million for the same quarter a year earlier.

Once a Bally competitor, SHFL entertainment manufactured automatic shuffling machines on table games the company invented. Shuffling machines are a Bally product line that performs well internationally.

The company is on track to save $40 million in cost synergies as a result of the transaction. The company’s third quarter was SHFL’s first complete quarter under Bally ownership.

Bally President and CEO Ramesh Srinivasan said the acquisition has helped the company corner a larger share of the market, enabling it to offset losses brought upon by weak foreign currency exchanges in Argentina.

“The (shuffler business) is turning out to be everything we believed it would be,” Srinivasan said in a conference call Thursday with investors.

Bally’s diverse product line includes electronic gaming machines, gaming operations that include wide-area progressive slot machines and table game products.

“Our systems business continues to be a major factor as we gain a greater share of the industry’s increasing technology-related spend,” Srinivasan said.

Bally increased its electronic slot replacement sales by 19 percent to $102 million compared with $86 million a year ago with the delivery of 930 Equinox units. The company expects that line to be strong in Asian and Australian markets this year.

Bally rolled out its themed James Cameron’s “Titanic” slot machine line this week and will add the Magic of David Copperfield in the weeks ahead.

On the systems side, Srinivasa said eight of the nine casinos operating in the young Ohio market are operating machines manufactured by Bally. The company’s strength in the Midwest also was bolstered by the company’s strong sales in the Illinois market with 4,100 units sold there in the 2013 fiscal year.

Bally has paid down $102 million of its $1.9 billion debt with the repurchase of 150,000 shares.