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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) JUNE 26, 1998
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SHUFFLE MASTER, INC.
(Exact Name of Registrant as specified in its Charter)
MINNESOTA 41-1448495
(State or Other Jurisdiction of (IRS Employer Identification No.)
Incorporation or Organization)
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10901 Valley View Road
Eden Prairie, Minnesota 55344
(Address of Principal Executive Offices)
0-20820
(Commission File Number)
Registrant's Telephone Number, including area code: (612) 943-1951
Total number of sequentially numbered pages in this filing, including exhibits
thereto: 7
The Exhibit Index is located on page II-1.
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Thomas G. Barry, Jr.
10901 Valley View Road
Eden Prairie, Minnesota 55344
(Name and Address of Agent for Service)
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Copies to:
Michael W. Schley, Esq.
Larkin, Hoffman, Daly & Lindgren, Ltd.
1500 Norwest Financial Center
7900 Xerxes Avenue South
Bloomington, Minnesota 55431
(612) 835-3800
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ITEM 5. OTHER EVENTS.
On June 26, 1998, the Company issued a press release, a copy of which is
attached as Exhibit 99.1 to this Current Report on Form 8-K.
On June 29, 1998, the Company issued a press release, a copy of which is
attached as Exhibit 99.2 to this Current Report on Form 8-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
Exhibit No. Exhibit
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99.1 Press Release of the Company dated June 26, 1998.
99.2 Press Release of the Company dated June 29, 1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SHUFFLE MASTER, INC.
(Registrant)
Date: July 6, 1998. By: /s/ Joseph J. Lahti
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Joseph J. Lahti
Its: President and
Chief Executive Officer
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EXHIBIT INDEX
Exhibit No. Exhibit
99.1 Press Release of the Company dated June 26, 1998.
99.2 Press Release of the Company dated June 29, 1998.
EXHIBIT 99.1
NEWS RELEASE
FOR IMMEDIATE RELEASE
FOR INFORMATION CONTACT:
JOSEPH J. LAHTI, PRESIDENT AND CEO
BILL BARTKOWSKI GARY W. GRIFFIN, CFO
INVESTOR RELATIONS ADVISOR PH: 612.943.1951
PH: 888.642.1955 (TOLL FREE) OR 612.344.1012 FAX: 612.943.2090
FAX: 612.344.1001
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SHUFFLE MASTER TO RELOCATE MINNEAPOLIS OPERATIONS
TO LAS VEGAS
Successful Shuffler Test Accelerates Facilities Consolidation and Inventory
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Write Off, Company Expects $2.65 Million Charge in Third Quarter, With
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Expense Savings In Excess of $1.0 Million Annually
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BOARD ALSO APPROVES RIGHTS PLAN AND AUTHORIZES MANAGEMENT TO BUY BACK
UP TO 10% OF OUTSTANDING SHARES
MINNEAPOLIS . . . Friday, June 26, 1998 . . . Shuffle Master, Inc. (NASDAQ
National Market: SHFL) announced today that its board of directors has approved
a plan whereby the Company will consolidate its Minneapolis operations with
those of its Las Vegas office. The consolidation will be done in phases, with
shuffler production and certain administrative functions being transferred
within the next three months.
Company officials stated that the timing of the consolidation is being driven by
the successful test of its next generation single deck shuffler, the ACE(TM).
With an accelerated timetable for ACE production, and with a new continuous
shuffler well into the development pipeline, the Company has concluded that it
now has a window of time to move its assembly and other operations with the
least disruption to production capability.
The plan of consolidation will involve the Company recording a charge of
approximately $2.65 million in its third quarter ending July 31, 1998, with
additional relocation expenses of approximately $300,000 expected to be incurred
in the fourth quarter. Of the third quarter charges, an estimated $1.4 million
is related to severance costs, expenses and write-offs associated with the
Minneapolis facility and operations; $950,000 is related to a write-off of
inventory of the Company's current BG-3 single deck shuffler, which will be
replaced by the ACE; and $300,000 is for other asset charge-offs. The plan of
consolidation is expected to result in expense savings of $1.0 million in fiscal
year 1999, increasing to $1.2 million in fiscal year 2000.
Joseph J. Lahti, Chairman and Chief Executive Officer of the Company, stated,
"The consolidation of our operations has been under consideration for some time.
The success of the ACE(TM) test has put the marketing of this exciting new
product on the fast track, and it has required us to carefully consider when and
where we will set up manufacturing. Now is clearly the right time to consolidate
our manufacturing and other departments in a single facility, and we
<PAGE>
have the necessary space for expansion in Las Vegas."
Lahti continued, "In addition, acceleration of the ACE introduction changes the
need for inventory of our BG-3 single deck shufflers. While we will continue to
receive lease income from BG-3's, the need to place additional BG-3 units is
expected to decrease significantly. Consequently, we are recognizing the
decreased value of the BG-3 inventory in concert with finalizing our ACE
production plans."
Along with approving the plan of consolidation, the board also approved a
shareholder rights plan and increased management's authorization to repurchase
the Company's stock. The total authorization permits a repurchase of up to 10
percent of the Company's outstanding shares, or approximately 1 million shares.
The rights plan will provide for shareholders of record as of July 10, 1998, to
receive stock purchase rights that become exercisable if certain changes in the
company's stock ownership occur. Further details of the rights plan will be
provided in a separate release.
Lahti remarked, "We have stated on numerous occasions that it is our opinion
that consolidation is likely to occur on the supplier side of the gaming
industry. We have pursued and continue to pursue strategic alliances and
acquisitions as these opportunities unfold. However, with our stock at what we
believe to be undervalued levels, we run the risk of being acquired before we
realize the benefit of our internal and external growth plans. The stock buy
back and shareholder rights plans should provide the means for our shareholders
to receive fair value in either scenario."
Shuffle Master, Inc. is a Minneapolis-based company specializing in providing
innovative products and services to the casino industry.
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THIS RELEASE CONTAINS FORWARD LOOKING STATEMENTS THAT REFLECT RISKS AND
UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM
EXPECTATIONS. FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM
EXPECTATIONS INCLUDE, BUT ARE NOT LIMITED TO, THE FOLLOWING: CHANGES IN THE
LEVEL OF ACCEPTANCE OF THE COMPANY'S EXISTING PRODUCTS; COMPETITIVE ADVANCES;
ACCELERATION AND/OR DECELERATION OF VARIOUS PRODUCT DEVELOPMENT AND ROLL OUT
SCHEDULES; CONSUMER AND INDUSTRY ACCEPTANCE OF THE COMPANY'S PRODUCTS IN NEW
JURISDICTIONS AND NEW PRODUCTS AS INTRODUCED; HIGHER THAN EXPECTED PRODUCT
DEVELOPMENT AND/OR ROLL OUT COSTS; CURRENT AND/OR UNANTICIPATED FUTURE
LITIGATION; GENERAL ECONOMIC CONDITIONS; REGULATORY AND JURISDICTIONAL ISSUES
INVOLVING SHUFFLE MASTER SPECIFICALLY, AND FOR THE GAMING INDUSTRY IN GENERAL;
THE RELATIVE FINANCIAL HEALTH OF THE GAMING INDUSTRY BOTH NATIONALLY AND
INTERNATIONALLY; AND THE RISKS AND FACTORS DESCRIBED FROM TIME TO TIME IN THE
COMPANY'S REPORTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
EXHIBIT 99.2
NEWS RELEASE
FOR IMMEDIATE RELEASE
FOR FURTHER INFORMATION CONTACT:
JOSEPH J. LAHTI, PRESIDENT AND CEO
BILL BARTKOWSKI GARY W. GRIFFIN, CFO
INVESTOR RELATIONS ADVISOR PH: 612.943.1951
PH: 888.642.1955 (TOLL FREE) OR 612.344.1012 FAX: 612.943.2090
FAX: 612.344.1001
SHUFFLE MASTER, INC. ADOPTS SHAREHOLDER RIGHTS PLAN
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MINNEAPOLIS . . . Monday, June 29, 1998 . . . Shuffle Master, Inc. (NASDAQ
National Market: SHFL) announced that its Board of Directors has adopted a
Shareholder Rights Plan under which preferred stock purchase rights will be
distributed on July 10, 1998, at the rate of one Right for each outstanding
share of the Company's common stock, to shareholders of record on that date.
The plan is designed to deal with the serious problem of unilateral actions by
hostile acquirers which take advantage of temporary weakness in an issuer's
stock. These actions are calculated to deprive an issuer's Board and its
shareholders of their ability to realize the long-term value of an issuer's
significant strategic investments. The Shuffle Master shareholder rights plan is
intended to increase the likelihood that the Company's shareholders will realize
the long-term value of their investment.
Joseph J. Lahti, Chairman and CEO of Shuffle Master stated, "While the mechanics
of the plan are cumbersome, the underlying equation is simple. If any person or
group acquires 20% or more of Shuffle Master's common stock, all shareholders on
that date, other than the shareholder(s) with the 20% or greater position, will
have the right to purchase additional shares at a 50% discount to the
then-current market value. The number of shares that can be purchased will be
based on a formula that divides $18 by the then-current market value discounted
by 50%."
The Plan specifies that each Right will entitle holders of Shuffle Master common
stock to buy one-hundredth of a share of a new series of preferred stock at a
price of $18, subject to adjustment. The Rights will generally become
exercisable after a person or group acquires beneficial ownership of 20% or more
of the Company's common stock or announces a tender offer upon consummation of
which such person or group would own 20% or more of the Company's common stock.
If any person or group becomes the owner of 20% or more of the Company's common
stock, then, in lieu of the right to purchase preferred stock, each Right will
thereafter entitle its holder (other than an acquiring person or member of an
acquiring group) to purchase shares of the Company's common stock in an amount
equal to the exercise price ($18) of one one-hundredth share of the preferred
stock divided by 50% of the then-current market price of one share of common
stock.
<PAGE>
In addition, if the Company is acquired in a merger or other business
combination transaction, or sells 20% or more of its assets or earnings power
then, in lieu of the right to purchase preferred stock, each Right will
thereafter generally entitle its holder to purchase common shares of the
acquiring company using the same formula as for the Company's common stock.
The Rights will expire in ten years unless earlier redeemed or terminated. At
the option of the Board of Directors, the Company generally may amend the Rights
or redeem the Rights at $0.01 per Right at any time prior to the time a person
or group has acquired 20% of the Company's common stock.
The Board adopted the new Plan to protect against future abusive takeover
tactics such as partial tender offers and selective open market purchases. The
Plan is intended to assure that shareholders receive fair and equitable
treatment in the event of unsolicited attempts to acquire the Company. The Plan
is not intended to prevent an acquisition of the Company on terms that are
favorable and fair to all shareholders, and will not do so.
Additional detail regarding the Rights Plan will be outlined in a summary to be
mailed to all shareholders following the record date.
The Board is considering and may adopt additional measures to protect against
abusive takeover tactics.
Shuffle Master, Inc. is a Minneapolis-based company specializing in providing
innovative products and services to the casino industry.
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THIS RELEASE CONTAINS FORWARD LOOKING STATEMENTS THAT REFLECT RISKS AND
UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM
EXPECTATIONS. FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM
EXPECTATIONS INCLUDE, BUT ARE NOT LIMITED TO, THE FOLLOWING: CHANGES IN THE
LEVEL OF ACCEPTANCE OF THE COMPANY'S EXISTING PRODUCTS; COMPETITIVE ADVANCES;
ACCELERATION AND/OR DECELERATION OF VARIOUS PRODUCT DEVELOPMENT AND ROLL OUT
SCHEDULES; CONSUMER AND INDUSTRY ACCEPTANCE OF THE COMPANY'S PRODUCTS IN NEW
JURISDICTIONS AND NEW PRODUCTS AS INTRODUCED; HIGHER THAN EXPECTED PRODUCT
DEVELOPMENT AND/OR ROLL OUT COSTS; CURRENT AND/OR UNANTICIPATED FUTURE
LITIGATION; GENERAL ECONOMIC CONDITIONS; REGULATORY AND JURISDICTIONAL ISSUES
INVOLVING SHUFFLE MASTER SPECIFICALLY, AND FOR THE GAMING INDUSTRY IN GENERAL;
THE RELATIVE FINANCIAL HEALTH OF THE GAMING INDUSTRY BOTH NATIONALLY AND
INTERNATIONALLY; AND THE RISKS AND FACTORS DESCRIBED FROM TIME TO TIME IN THE
COMPANY'S REPORTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
