In preparation for WMS's F1Q 2013 earnings release Thursday, we’ve put together the recent pertinent forward looking company commentary.
YOUTUBE FROM FQ4 2012 CONFERENCE CALL (8/6)
- "We expect economic conditions and the gaming industry sentiment to remain challenging....We believe it will take several quarters of meaningful improvements in general economic conditions before we see operator confidence build to the point where they're notably increasing annual capital budgets, and right now we're not expecting such a rebound."
- "We expect to see little, if anything, in meaningful improvement in the replacement market in fiscal 2013 compared to fiscal 2012. In addition, we continue to expect an overall reduction in demand for shipments to new casino openings and expansions over the next 12 months."
- "For our first quarter, we expect revenues to approach the levels of revenues in the September 2011 quarter with stronger revenue growth in the back half of the fiscal year."
- "We expect R&D in fiscal 2013 to increase to a range of 15% to 16% of revenues and that SG&A depreciation will also increase as a percentage of revenues."
- "We expect to continue to maintain particular emphasis on increasing the mix of Wide Area Progressive units and our proprietary Adaptive Gaming technology units."
- "Given the current marketplace environment coupled with the expected range of VLT pricing and ongoing market pressures, average selling price in fiscal 2013 is likely to see greater variability on a quarterly sequential basis depending on the product mix in the given quarter. On a quarterly basis, we expect fiscal 2013 will follow the path over the last several years with September being the quarter with the lowest revenues and operating margin followed by sequential growth expected in each of the subsequent fiscal quarters."
- "Our floor share of new casinos continues to average in the high teens."
- "We believe our success with conversion kit sales reflects the improvements in game content and, most importantly, results in the ongoing upgrade of our game content across existing casino floors, a key goal in addressing our customers' focus on earnings performance."
- "With a healthy number of open orders for participation units, we expect growth in the installed participation footprint in fiscal 2013. We do expect aggregate capital spend on gaming operations equipment and property, plant and equipment to decline in fiscal 2013 by 20%. The participation footprint expansion, coupled with placements of VLTs in Illinois, of gaming machines on operating leases and the completion of two large PP&E projects in early fiscal 2013 will continue to drive higher depreciation in fiscal 2013."
- "We expect the increased spending on operating expenses will largely offset the increased gross profit contributions from higher revenues in fiscal 2013."
- "During the June quarter as well as throughout fiscal 2012, we used our financial flexibility to support our customers in their purchase of new gaming machines to refresh their casino floors. In light of their constrained capital budgets, we believe this to be a prudent and practical use of our financial strength and we expect this to continue throughout fiscal 2013. We have continued to experience bad debt expense at 1% or less of revenues and our percentage of age notes over 90 days remain below our competitors, so we will continue to use prudence and discipline in the granting of credit."
- "Our social gaming pursuits were bolstered by the Phantom EFX acquisition and we recently directly published a suite of slot-based games with our Jackpot Party Casino on Facebook. I'm pleased to note that the initial beta results are far exceeding our expectations."
- "The competitive pressures from a [participation] product standpoint have never been this aggressive.... the for-sale product business is very competitive as well."
- "In Q4 we saw a $700 increase quarter over quarter, which we expected. I don't think you'll see any major upticks or downticks in the pricing going forward. I think when we have our new cabinets coming out next fiscal year, there will be an opportunity for us to look at price again and hopefully the market conditions will be more improved there."
- [Flattish EPS FOR 2013?] "We didn't give that guidance, but if you are interpreting that literally, it's probably pretty close."
- "So I think ASP, the upside is limited for fiscal 2013 on ASP. But I do believe that in the second half of the year when we launch our new products and cabinets and form factors, we'll have an ability to see an uptick in our pricing. But I'm not sure, given the first half, if it will offset it enough."