In preparation for WMS's Q2 earnings release tomorrow, we’ve put together the pertinent forward looking commentary from WMS’s Q1 earnings call and subsequent conferences/releases.
- “The $8 million of orders were not canceled but they shipped in early April rather than by March 31st. Our production and distribution teams were simply unable to fulfill these orders in time as they were received after our normal cut-off dates which created challenges and stresses related to logistics of an already compressed order fulfillment period.”
- This implies 450-500 units at WMS’s average ASP that were pushed into 4Q
- “As we look forward over the next 12 to 24-months, WMS is planning new product introductions that we believe could be game changers and thus we would begin to monetize the potential value we’ve created through investments, intellectual property and R&D initiatives during the past several years. These include the expected launch of our portal applications and other network solutions, the introduction of our first participation games to be powered by our third generation operating systems CPU-NXT 3, and new category creating form factors yet to be announced”
- “We expect that the further roll-out of these products and the approval of additional new products in the June quarter will help us improve gaming operations momentum”
- “Today we reiterated our revenue guidance of $210 million to $220 million for the June 2011 quarter. And with expectations for an improvement in product sales margin further strengthening of growth in gaming operations and our focus on cost containment, we expect operating margins will improve on a quarterly sequential basis to a range of 22% to 23.5%.”
- “Initial outlook for fiscal 2012 to be consistent with the growth level achieved in fiscal years 2009, 2010 and 2011. We are still in the midst of our budgeting process, but we expect annual growth of 3% to 7% to be driven by continued market share penetration, especially in international markets, stronger new casino openings and expansion opportunities domestically and internationally, growing revenues from new networked gaming and online gaming products and services and increased participation revenues. Our operating margin guidance range of 21% to 22% anticipates improvements in product sales margin and operating expense growth at a rate less than our revenue growth”
- “We now have received GLI approval on our core WAGENET system including remote configuration and download functionality and Jackpot Explosion. This now allows us to begin the commercial launch into Native American casinos, in California initially, and then expand to other travel casinos as well as certain riverboat and other commercial casino jurisdictions as secondary approvals for those jurisdictions are received.”
- “In our for-sale business, we’re also beginning to break through the regulatory logjam. During the last 90 days, we’ve launched multiple new game themes in our G+ deluxe series and launched our first themes in a new line of Real Boost games, which is part of our innovation series of products. While still early in their rollout, these games are amongst the best performing games we have ever commercialized.”
- Q: “What kind of ship share assumptions do you have for the fiscal 4Q and for fiscal 2012?
- A: “I would say in a high 20s to the 30% range”
- “We have modeled our guidance today on flat demand for fiscal ‘12, replacement demand.”
- “I don’t think pricing really entered into our issues in Q3. Pricing comes up every now and again. It didn’t use to come up hardly at all. It comes up a little bit more frequently now but we still believe that we have pricing leverage and if our content continues to perform at the levels of the G+ Deluxe and the Real Boost product, we’re not going to continue to see pricing as an issue.”
- 2012 guidance: “No, we’re not counting on any new markets. I believe there might be a little bit of Italy in there but I think that for the most part we’re not assuming any new market openings. It’s really flat demand and us continuing to drive penetration internationally and domestically as well as our gaming operations business and margin improvement. That’s where you’re going to see the up ticks.”
- “Battle Stations, we got the Pirate Battle and we have Leprechaun’s Gold that have essentially moved from Q2 and Q3 in our original fiscal ‘11 planning into Q4, Q1 and Q2. So, you’re going to see the games that we launched in Q3 are going to help suffice through Q4 and the games we’re launching in Q4 are going to help build our footprints slightly and our average win per day should see a nice up tick over the next couple of quarters. So, you are going to see some accretion in the footprint and the rate over the next call it two quarters.”
- 2012 growth will come from:
- Greater market penetration [internationally] …margin improvement, ASP and Network gaming,… online revenues”
