WMS YOUTUBE

In preparation for WMS's FQ1 2012 earnings release Monday afternoon, we’ve put together the recent pertinent forward looking company commentary.

WMS Receives Approval from Nevada Gaming Commission for the Initial Commercial Release of WAGE-NET® Networked Gaming System

  • Nevada Gaming Commission approves WMS’s initial commercial version of WAGE-NET
  • WMS will launch the Jackpot Explosion® application, the first themed application in WMS’ Ultra Hit Progressive® (“UHP”) Portal application family in Nevada casinos. 

YOUTUBE from FQ4 2011 CONFERENCE CALL

  • “$11 million to $14 million or $0.12 to $0.15 per diluted share of charges in the September 2011 quarter, mostly related to the reduction in force we are now implementing. In aggregate, we will reduce our global workforce by about 10%, which we expect should generate meaningful cost savings in future quarters.”
  • “Since the beginning of the fiscal year, we improved the gross margin on the Bluebird xD cabinet by over 20% through our continuous improvement initiatives, and we expect further improvement in fiscal 2012.”
  • “Guidance for fiscal 2012 revenue growth of 3% to 5% is slightly higher than the result achieved for our fiscal 2011 and reflects recent operating trends and a general industry environment in which we expect customers’ capital spending plans around the globe to remain flat during the remainder of calendar 2011 and into calendar 2012.”
  • “We do expect revenues from new unit sales to increase slightly, with new unit shipment growth coming primarily in the second half of the fiscal year, driven by the increase in demand from a greater number of new casino openings and expansions.  We expect ASPs to generally remain flat, with any changes generally reflecting the mix between Bluebird2 and Bluebird xD cabinets. This guidance does not include any incremental revenues from the potential expansion of Illinois gaming or the opening of Illinois or Ohio VLT markets.”
  • ”Given our industry-high daily revenue of $76.13 and only modest expectations for improvement in the lackluster consumer environment, we believe that average daily revenue will remain flat.”
  • “Additionally, we anticipate that quarterly revenues in the September 2011 quarter will be slightly below the relative percentage of annual revenue achieved in fiscal 2010 and fiscal 2009. This reflects expected year-over-year lower new unit demand, as the timing of G2E was moved from the third week of November to the first week of October, and we anticipate some customers may wait until the show before placing orders. And a slightly higher percentage of revenues in the June 2012 quarter, due to an anticipated increase in new casino opening activity.”
  • “Even with re-prioritizing our R&D efforts, we expect that our annual R&D expenses in fiscal 2012 will approximate 13% of total revenues.”
  • “We expect our product sale margin to improve in fiscal 2012, as we have initiatives targeted to lower costs in both the Bluebird2 and Bluebird xD cabinets. Overall, we expect better product sales margin in the second half of the fiscal year than the first half. Gaming operations margin is expected to be generally stable within a range similar to that experienced during fiscal 2011. Including the impact of the charges I mentioned we will be recording in the September 2011 quarter, we expect to improve our operating margin, especially with the anticipated reduction in our cost structure resulting from the workforce reduction.”
  • “We expect depreciation to increase on a quarterly sequential basis over the $20.6 million expensed in the June 2011 quarter, primarily as a result of the continued transition of our participation base to Bluebird2 and Bluebird xD cabinets and an increase in operating lease units.”
  • “We expect it’ll still be another quarter or two until we return to a more normal flow of [participation] products.”
  • “We made some difficult decisions on both products and staffing, and as a result we narrowed our focus to prioritize core categories and postponed or deselected certain longer-term projects. These actions are aimed squarely at capturing near-term revenue opportunities and improving our predictability. We’re now moving forward once again, and after a brief transition period, we expect to be back to full speed ahead in the second half of fiscal ‘12.”
  • [Portal apps] “We’ve got 300 units in 14 casinos today. We would expect that number will double by the end of this calendar year. And by the end of June next year, we’ll have 100 casinos with our servers and racks in there and a wider assortment of our portal families and applications.”
  • [Product sales margins]  “Our short-term goal is to get back to the mid-50%’s, which is probably a Q3, Q4 event, and ultimately get to that 60% margin over time. We’re working through some of these used-game issues and some of these supply chain issues. But we want to build up to that mid-50%’s rage in the last half of this year. It’ll be a ramp up from Q1 and Q2.”
  • “We would now look for Italy to be a fiscal ‘13 event.”