Shuffle Master Reports Record Second Quarter as Shares Pop

Global gaming supplier Shuffle Master SHFL reported second quarter earnings that beat analyst estimates. The quarter was the company's best on record in terms of revenue as sales growth was strong and the company made positive comments on future operations.

Quarterly Breakdown

For the second quarter of fiscal 2013 ended April 30, the company reported earnings per share of $0.21, outpacing Wall Street forecasts of $0.20 by 5 percent. Earnings per share were also 5 percent higher than in the same comparable period a year ago.

Revenue in the quarter also beat estimates as the company reported record quarterly revenue of $77.4 million vs. $71.57 million forecast. Revenue grew 17 percent over the same period a year ago as all but one of four business segments saw double digit gains in revenue in the quarter.

Management Comments

"Our record second quarter results reflect a continuation of the strong worldwide demand for our innovative products, particularly in Australia and Asia," said Gavin Isaacs, SHFL's Chief Executive Officer. "What's more, we achieved 17% year-over-year growth against a strong comparable quarter last year that included over $2 million in sales from new openings. The MD3 card shuffler helped fuel this quarter's growth with record placements of 520 units, its strongest performance to date."

"Our slot machine, shuffler, and specialty table games businesses continued to gain momentum, with each segment reporting record revenue in the quarter. Given the 22% increase in net profit that we announced today, we strongly believe that consistent execution against our strategic initiatives is the right blueprint for building long-term, sustainable value for our shareholders."

"Our diverse businesses continue to deliver solid financial results," said Linster Fox, SHFL's Chief Financial Officer. "We are confident that keeping our IP-rich businesses well-capitalized has been, and will continue to be, our most important use of cash."

"However, given our balance sheet's current strong position, we will continue to look at the best way to manage a balance between investing in our business and capital allocation for potential M&A, stock repurchases, and dividends."

Market Impact

Shares rose nearly 6 percent in after-market trade to $18.50 after closing down 0.57 percent during Tuesday trading. Shares broke to a new 52-week high following the earnings release.