Gambling equipment provider Shuffle Master grew its profit by 50 percent in the second quarter despite the souring economy and payouts of $4.4 million to its retired chief executive and another senior manager.
Shuffle Master reported net income of $4.57 million in the quarter that ended April 30, compared to net income of nearly $3.05 million a year ago. Both figures translated into earnings per share of 9 cents.
Revenues, however, were $45.3 million, an 8 percent decline compared with $49 million a year ago.
“Shuffle Master had a decent second quarter given the magnitude of the economic climate,” Shuffle Master CEO Tim Parrott said in a statement.
Parrott become CEO earlier this when long-time chief executive Mark Yoseloff retired. The severance paid to Yoseloff and another departed Shuffle Master executive cost the company about 5 cents per share, which accounted for earnings per share to be equal to the prior quarter.
Parrott has spent the first part of his tenure assessing the company’s business and products, including automated card shufflers and table game management systems as well as several table games the company leases to casinos, including Let It Ride, Three Card Poker and Caribbean Stud Poker.
The economy hurt the company’s revenues. Casinos have slowed their purchasing of new gaming equipment because gaming revenues have declined in many gaming jurisdictions.
Sales revenue for automated shufflers fell 9 percent but lease and service revenues grew by 9 percent.
Meanwhile, revenues for the table games division fell 10 percent.
As with many gaming companies, Shuffle Master has cut costs to improve liquidity to help the equipment provider operate during in light of the sour economy.
Shares of Shuffle Master closed at $4.61 on the Nasdaq National Market, up 12 cents or 2.67 percent.
Contact reporter Howard Stutz at firstname.lastname@example.org or 702-477-3871.