UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
- --------------------------------------------------------------------------------
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended April 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission file number: 0-20820
SHUFFLE MASTER, INC.
(Exact name of registrant as specified in its charter)
Minnesota 41-1448495
(State or Other Jurisdiction (IRS Employer Identification No.)
of Incorporation or Organization)
10901 Valley View Road, Eden Prairie MN 55344
(Address of Principal Executive Offices) (State) (Zip Code)
Registrant's Telephone Number, Including Area Code: (612) 943-1951
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes __X__ No ____
As of June 9, 1998, there were 10,007,486 shares of the Company's $.01 par value
common stock outstanding.
<PAGE>
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SHUFFLE MASTER, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(IN THOUSANDS) APRIL 30, OCTOBER 31,
----------- -----------
ASSETS 1998 1997
----------- -----------
(unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 2,390 $ 1,053
Investments 17,610 15,253
Accounts receivable, net 5,470 5,354
Note receivable from related party 332 697
Inventories 1,935 2,317
Other current assets 2,129 818
----------- -----------
Total current assets 29,866 25,492
SYSTEMS AND EQUIPMENT LEASED UNDER OPERATING
LEASES, NET, AND HELD FOR LEASE 6,117 7,497
PROPERTY AND EQUIPMENT, NET 3,417 3,744
INTANGIBLE ASSETS, NET 3,519 3,840
OTHER ASSETS 375 153
----------- -----------
$ 43,294 $ 40,726
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 785 $ 600
Accrued liabilities:
Compensation 936 1,232
Expenses 228 251
Customer deposits and unearned revenue 1,821 1,946
Tournament playoff liability -- 198
Current portion of long-term obligation to related party 529 529
----------- -----------
Total current liabilities 4,299 4,756
DEFERRED INCOME TAXES 141 141
LONG-TERM OBLIGATION 1,470 1,718
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common stock, $.01 par value, 30,000 shares
authorized, 10,001 and 9,968 shares
issued and outstanding, respectively 100 100
Additional paid-in capital 27,172 26,905
Retained earnings 10,112 7,106
----------- -----------
Total shareholders' equity 37,384 34,111
----------- -----------
$ 43,294 $ 40,726
=========== ===========
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE>
SHUFFLE MASTER, INC.
CONSOLIDATED INCOME STATEMENTS
(unaudited)
<TABLE>
<CAPTION>
(IN THOUSANDS, EXCEPT PER THREE MONTHS ENDED SIX MONTHS ENDED
SHARE AMOUNTS) APRIL 30, APRIL 30,
-------------------------- --------------------------
1998 1997 1998 1997
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
REVENUE:
Shuffler lease $ 2,376 $ 2,877 $ 4,710 $ 5,584
Shuffler sales 1,235 2,293 4,050 3,999
Let It Ride(R)table game 1,866 1,977 3,590 3,875
Video 1,290 112 1,447 160
Other 365 193 626 321
---------- ---------- ---------- ----------
7,132 7,452 14,423 13,939
COSTS AND EXPENSES:
Cost of products 2,026 2,620 4,570 5,013
Selling, general and administrative 2,226 2,522 4,521 4,950
Research and development 611 381 1,164 718
---------- ---------- ---------- ----------
4,863 5,523 10,255 10,681
---------- ---------- ---------- ----------
INCOME FROM OPERATIONS 2,269 1,929 4,168 3,258
Interest income, net 233 289 443 637
---------- ---------- ---------- ----------
Income before income taxes 2,502 2,218 4,611 3,895
Provision for income taxes 875 800 1,605 1,400
---------- ---------- ---------- ----------
NET INCOME $ 1,627 $ 1,418 $ 3,006 $ 2,495
========== ========== ========== ==========
EARNINGS PER COMMON SHARE $ .16 $ .13 $ .30 $ .23
========== ========== ========== ==========
EARNINGS PER COMMON SHARE
-- ASSUMING DILUTION $ .16 $ .13 $ .30 $ .23
========== ========== ========== ==========
WEIGHTED AVERAGE COMMON SHARES 10,073 10,938 10,067 11,027
========== ========== ========== ==========
WEIGHTED AVERAGE COMMON SHARES
--ASSUMING DILUTION 10,190 10,978 10,136 11,089
========== ========== ========== ==========
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE>
SHUFFLE MASTER, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
APRIL 30,
---------------------------
(IN THOUSANDS) 1998 1997
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 3,006 $ 2,495
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 1,869 1,781
Provision for inventory obsolescence 231 323
Provision for bad debts 91 --
Changes in operating assets and liabilities:
Accounts receivable (207) (650)
Inventories 151 (657)
Other current assets (1,311) (123)
Accounts payable and accrued liabilities (134) (34)
Customer deposits and unearned revenue (125) 431
Tournament playoff liability (198) (1,033)
----------- -----------
Net cash provided by operating activities 3,373 2,533
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of investments (11,464) (38,658)
Proceeds from the sales and maturity of investments 9,107 43,242
Proceeds received on note receivable 378 --
Payments for systems and equipment leased and (236) (2,958)
held for lease
Purchases of property and equipment (150) (1,028)
Other 310 (366)
----------- -----------
Net cash (used) provided by investing activities (2,055) 232
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on long-term obligation to related party (154) --
Repurchase of common stock -- (5,000)
Proceeds from issuance of common stock 173 47
----------- -----------
Net cash provided (used) by financing activities 19 (4,953)
----------- -----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,337 (2,188)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 1,053 3,440
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 2,390 $ 1,252
=========== ===========
CASH PAID FOR:
Income taxes $ 1,355 $ 1,420
=========== ===========
Interest $ 49 $ --
=========== ===========
NON-CASH TRANSACTIONS:
Payment of debt with common stock $ 94 $ --
=========== ===========
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE>
SHUFFLE MASTER, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Interim Financial Statements:
The financial statements as of April 30, 1998, and for the three and six
month periods ended April 30, 1998 and 1997, are unaudited, but in the
opinion of management include all adjustments (consisting only of normal,
recurring adjustments) necessary for a fair presentation of the financial
results for the interim periods. The results of operations for the three
and six month periods ended April 30, 1998, are not necessarily indicative
of the results to be expected for the year ending October 31, 1998. These
interim statements should be read in conjunction with the Company's October
31, 1997, financial statements and notes thereto included in its Form 10-K.
2. Inventories:
DESCRIPTION APRIL 30, 1998 OCTOBER 31, 1997
--------------------------- -------------- ----------------
(In thousands)
Raw materials $ 1,631 $ 1,580
Work-in-process 667 635
Finished goods 62 337
------------ ------------
2,360 2,552
Less: Valuation allowance (425) (235)
------------ ------------
$ 1,935 $ 2,317
============ ============
3. Systems and Equipment Leased and Held for Lease:
Systems and equipment leased and held for lease includes the various models
of shufflers, Let It Ride(R) table equipment and video machines.
DESCRIPTION APRIL 30, 1998 OCTOBER 31, 1997
-------------------------------------- -------------- ----------------
(In thousands)
SYSTEMS AND EQUIPMENT LEASED:
Shuffler systems $ 5,021 $ 4,790
Table and video equipment 1,922 2,194
---------- ----------
6,943 6,984
Less: Accumulated depreciation (4,375) (3,680)
---------- ----------
2,568 3,304
SYSTEMS AND EQUIPMENT HELD FOR LEASE:
Shuffler systems 1,922 2,273
Table and video equipment 1,627 1,920
---------- ----------
$ 6,117 $ 7,497
========== ==========
4. License Agreement:
In April 1998, the Company entered into an agreement with Bally Gaming,
Inc. for the development, manufacture and marketing of a casino video slot
game version of Let's Make A Deal. The Company granted Bally Gaming, Inc.
an exclusive license for the use of Let's Make a Deal intellectual property
in gaming machines in certain jurisdictions, and received license fee
income of $1,000,000. This license fee income is included with video
revenue in the Consolidated Income Statement. Future revenue and expenses
related to the development and distribution of the game will be shared
equally by the Company and Bally Gaming, Inc.
<PAGE>
SHUFFLE MASTER, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
5. Common Stock:
During the first six months of 1997, the Company repurchased 569,000 shares
of its common stock at a total cost of $5,000,000. In April 1997, the Board
of Directors authorized the repurchase of an additional $5,000,000 of the
Company's common shares. No shares have been repurchased under this
authorization during fiscal 1998. The amount remaining for share repurchase
under this second authorization was $3,104,000 at April 30, 1998.
6. Earnings per Share:
Effective December 15, 1997, the Company adopted Statement of Financial
Accounting Standards No. 128, "Earnings per Share" (SFAS 128). Earnings per
share amounts for the second quarter and six months of fiscal 1997 have
been presented to conform with the requirements of SFAS 128. There was no
change in earnings per share from previously reported amounts.
THREE MONTHS ENDED
APRIL 30,
--------------------
SHARE RECONCILIATION 1998 1997
--------------------------------------------------- --------- --------
(In thousands)
EARNINGS PER SHARE:
Weighted average shares outstanding 9,992 10,830
Shares to be issued under asset purchase 81 108
-------- --------
Weighted average common shares 10,073 10,938
======== ========
EARNINGS PER SHARE - ASSUMING DILUTION:
Weighted average shares outstanding 9,992 10,830
Shares to be issued under asset purchase 81 108
Dilutive impact of options and warrants
outstanding 117 40
-------- --------
Weighted average common shares and potential
dilutive shares outstanding 10,190 10,978
======== ========
7. Contingency:
The Company is involved in litigation with Progressive Games, Inc., a
Florida corporation. The Company has a declaratory judgment action pending
in United States District Court in Nevada, Mississippi and Connecticut
requesting a determination that certain patents owned by Progressive Games,
Inc. are either invalid or not infringed by the Company. Progressive Games,
Inc. is suing the Company in United States District Court in Nevada,
Mississippi and Connecticut alleging the Company's Let It Ride The
Tournament(TM) and Let It Ride Bonus(TM) table games and apparatus infringe
certain of Progressive Games, Inc.'s patents. Progressive Games, Inc. is
asking for injunctive relief and damages. Pursuant to the order of the
Judicial Panel on Multidistrict Litigation the actions pending in Nevada
and Connecticut have been transferred to the Southern District of
Mississippi for coordinated or consolidated pretrial proceedings with the
actions already pending in that District.
In addition to the above consolidated actions, Progressive Games, Inc. has
sued Boardwalk Regency Corporation, dba Caesars Atlantic City in United
States District Court in New Jersey, alleging that its use of the Company's
Let It Ride Bonus(TM) game infringes one of Progressive Game, Inc.'s
patents. Progressive Games, Inc. is requesting injunctive relief and
damages.
<PAGE>
SHUFFLE MASTER, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
7. Contingency (continued):
The Company has agreed to defend and indemnify, and is defending and
indemnifying Boardwalk Regency Corporation as well as all of its other Let
It Ride The Tournament(TM) and Let It Ride Bonus(TM) casino licensees who
were sued by Progressive Games, Inc. due to their use of the Let It Ride
The Tournament(TM) and Let It Ride Bonus(TM) table games and apparatus. If
Progressive Games, Inc. should prevail in its suit, management does not
believe it would materially affect the Company's financial condition.
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The following table sets forth selected financial information derived from the
Company's Consolidated Income Statements:
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
----------------------------------- ---------------------------------
PERIOD ENDED APRIL 30, 1998 1997 1998 1997
- ------------------------------------ ---------------- --------------- --------------- --------------
<S> <C> <C> <C> <C>
Revenue 100.0% 100.0% 100.0% 100.0%
Cost of products 28.4 35.2 31.7 36.0
---------------- --------------- --------------- --------------
Gross margin 71.6 64.8 68.3 64.0
---------------- --------------- --------------- --------------
Selling, general and administrative 31.2 33.8 31.3 35.5
Research and development 8.6 5.1 8.1 5.2
---------------- --------------- --------------- --------------
Income from operations 31.8 25.9 28.9 23.3
Interest income, net 3.3 3.9 3.1 4.6
---------------- --------------- --------------- --------------
Income before income taxes 35.1 29.8 32.0 27.9
Provision for income taxes 12.3 10.8 11.1 10.0
---------------- --------------- --------------- --------------
Net income 22.8% 19.0% 20.9% 17.9%
================ =============== =============== ==============
</TABLE>
REVENUE
Revenue for the three months ended April 30, 1998, was $7,132,000, a decrease of
$320,000 or 4.3% compared to the same period last year. Current period revenue
included $1,000,000 of license fee revenue received from the assignment of
certain licensing rights to Bally Gaming, Inc. (see further discussion regarding
this license agreement in Note 4 to the Consolidated Financial Statements). This
amount was included with video revenue in the Consolidated Income Statement.
Other video revenue included amounts from Let It Ride(R) Bonus video and Five
Deck Frenzy(TM). As of April 30, 1998, there were 171 Five Deck Frenzy video
placements under the joint marketing agreement with IGT.
During fiscal 1997, the Company placed strong emphasis on solidifying customer
commitment to its shuffler products by emphasizing sales of shufflers, including
a significant number of leased units converted to sales. As a result of this
sales emphasis, the shuffler lease base declined during fiscal 1997. Having made
significant progress in total placements of shufflers, and with new generations
of shuffler products expected to be available in late fiscal 1998 and in fiscal
1999, the Company began to reemphasize leasing in fiscal 1998. With the
emphasis on shuffler sales, including lease conversions during fiscal 1997,
shuffler lease revenue decreased by $501,000 from the second quarter of last
year. There were 1,670 shufflers on lease at April 30, 1998, up from 1,600 at
October 31, 1997, but down from 1,904 on lease at April 30, 1997. Shuffler sales
decreased to $1,235,000 in the current quarter compared to $2,293,000 in the
prior year second quarter as the Company began to focus its placement efforts on
leasing. Current quarter unit sales were 191 compared to 290 in the second
quarter of fiscal 1997, with 123 and 208 conversion sales in the current and
prior year second quarters, respectively.
Revenue from the Let It Ride(R) table game was $1,866,000 in the current year
second quarter compared to $1,977,000 in the prior year. Current year revenue
includes fixed fee amounts from Let It Ride Bonus(TM) and Let It Ride(R)Basic
tables, and revenue from Let It Ride(R) equipment sales. Prior year Let It Ride
revenue was generated from the Company's percentage of the $1 side bet option on
Let It Ride(R) The Tournament(TM) tables. The installed base of Bonus tables was
290 at April 30, 1998 compared to 187 Tournament tables installed at April 30,
1997, and 220 installed Bonus tables at October 31, 1997. In addition, there
were 287 Let It Ride(R) Basic tables in casinos at April 30, 1998 compared to
338 at April 30, 1997. The decrease in Basic tables principally resulted from
casinos converting to the Bonus game.
Revenue for the six months ended April 30, 1998, was $14,423,000, an increase of
$484,000 or 3.5% over the six month period ended April 30, 1997. Video revenue
increased by $1,287,000 as noted above.
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Shuffler lease revenue decreased by $874,000 to $4,710,000 in the current year
compared to $5,584,000 in the prior year period, while shuffler sales were
approximately $4,000,000 for both periods. Shuffler sales were approximately
$1,000,000 greater in the current year first quarter compared to the prior year
first quarter, while current year second quarter shuffler sales were
approximately $1,000,000 less than the second quarter last year. Let It Ride(R)
table game revenue decreased by $285,000 compared to last year's six month
period because of the lower revenue generated on a per table basis by the Bonus
game compared to the Tournament version. Other revenue increased by $305,000
from the prior year, principally due to revenue from extended service contracts
on sold shufflers.
COSTS AND EXPENSES
Gross margin was 71.6% and 68.3% for the current quarter and six months,
compared to 64.8% and 64.0% in the prior year. The margin increase resulted
primarily from the recording of the license fee revenue under the Bally Gaming,
Inc. agreement. Excluding the license fee revenue from gross margin for purposes
of comparison, gross margin would have been 67.0% and 66.0% for the current
quarter and six months. The gross margin improved due to lower direct and
support costs for the Let It Ride(R) table game compared to Let It Ride The
Tournament(TM) . In addition, the Company provided $118,000 and $231,000 to
inventory valuation reserves in the current quarter and six months,
respectively, for valuation adjustments on early version finished shufflers and
component parts, and certain Let It Ride(R) equipment related to The Tournament.
The obsolescence provision was $173,000 and $323,000 for the comparable periods
in the prior year.
Selling, general and administrative expenses decreased by $296,000 to $2,226,000
in the current year second quarter, and by $429,000 to $4,521,000 in the six
month period ended April 30, 1998. Legal fees were approximately $150,000 and
$350,000 for the current quarter and six months, respectively, and were less
than half of the legal expenses from the comparable periods in the prior year.
Overall legal activities for the ongoing litigation decreased in the current
year (see Note 7 to the Consolidated Financial Statements). Sales and marketing
expenses decreased by $80,000 and $132,000 from the prior year quarter and six
months due to the third quarter fiscal 1997 elimination of the training
department. The current year first quarter expenses include a bad debt provision
of $91,000 compared to no provision in the prior year, due to the bankruptcy
filings of two of the Company's customers. Research and development expenses
increased to $611,000 from $381,000 in the prior year second quarter, and to
$1,164,000 compared to $718,000 for the six month period. The increased expenses
were incurred for the development of new video games and shuffler systems.
Market testing of several video games developed through a joint venture with IGT
are expected to begin field test in the Company's third quarter of fiscal 1998.
The Company recently announced the beginning of a field test for its newly
developed single deck shuffler, called the ACE(TM).
INTEREST INCOME, NET
Interest income was $233,000 in the current second quarter and $443,000 for the
current six month period, compared to $289,000 and $637,000, respectively, in
the prior year. Current year invested cash balances are less than those in the
prior year due to the use of $10,396,000 for fiscal 1997 common stock share
repurchases.
INCOME TAXES
The Company recorded income tax expense at an effective annual rate of 35.0% for
the quarter and 34.8% year-to-date, compared to 36.1% and 35.9% in the prior
year comparable periods. The current year effective tax rate is lower than the
prior year and reflects the expected tax benefit from the Company's foreign
sales corporation.
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
EARNINGS PER COMMON SHARE
Earnings per common share was $.16 for the current year second quarter, and $.30
for the current six month period, compared to $.13 and $.23 for the prior year
periods. Weighted average common shares - assuming dilution, decreased to
10,190,000 in the current quarter, and 10,136,000 for the current six month
period compared to 10,978,000 and 11,089,000 in prior year comparable periods
due to the repurchase of 1,241,000 shares of common stock during fiscal 1997.
LIQUIDITY AND CAPITAL RESOURCES
As of April 30, 1998, the Company had cash and investments totaling $20,000,000,
compared to $16,306,000 at October 31, 1997. The current ratio increased to 6.9
to 1 from 5.4 to 1 at October 31, 1997, while working capital increased to
$25,567,000 at April 30, 1998, from $20,736,000 at October 31, 1997.
Cash flows from operating activities totaled $3,373,000 in the current six
months compared to cash flows from operating activities of $2,533,000 in the
same period last year. Significant items under cash flows from operating
activities include net income of $3,006,000, and non-cash charges for
depreciation and amortization, bad debt and inventory allowance provisions of
$2,191,000. A significant use of cash was an increase of $1,311,000 in other
current assets, principally due to the recording of the amount due from Bally
Gaming, Inc. under the license agreement discussed in Note 4 to the Consolidated
Financial Statements.
Under investing activities, the investment balance increased by $2,357,000 as
the Company invested the cash generated by operations for the purchase of longer
term securities with maturities of up to one year from purchase date. In fiscal
1997, payments for systems and equipment leased and held for lease included over
$1,300,000 for the purchase of video slot machines and related equipment for the
Let It Ride Bonus(TM) video. Property and equipment purchases were $1,028,000 in
fiscal 1997 and included approximately $725,000 for leasehold improvements and
furnishings for the facility under lease in Las Vegas, Nevada.
The Company believes its current cash and investments, and cash provided by
operations will be sufficient to finance its current operations and new product
development for the foreseeable future.
FORWARD LOOKING STATEMENTS
This report 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 product 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;
and the relative financial health of the gaming industry both nationally and
internationally; and other risks and factors described from time to time in the
Company's reports filed with the Securities and Exchange Commission.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In 1995, the Company filed a declaratory judgment action against D&D Gaming,
Inc., and D&D Gaming filed suit against the Company for willful patent
infringement. Both actions involved the Company's Let It Ride The Tournament(TM)
game. D&D Gaming assigned all of its rights, title and interest in the patents
that were the subject matter of this proceeding to Progressive Games, Inc. The
Company and its casino licensees have been sued in District Court in Nevada,
Mississippi, Connecticut and New Jersey by Progressive Games, Inc. alleging that
their use of Let It Ride Tournament(TM) and Let It Ride Bonus(TM) games infringe
certain of Progressive Games, Inc.'s patents. See additional discussion
regarding this legal proceeding under Note 7 to the Consolidated Financial
Statements.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
Certain matters were submitted to the shareholders for their approval as set
forth in the Company's Proxy Statement dated February 10, 1998, previously filed
with the Securities and Exchange Commission:
(a) The Annual Meeting of Shareholders was held March 19, 1998.
(b) Matters voted upon:
(1) Directors elected at the meeting:
Votes Cast For Votes Withheld
-------------- --------------
Patrick J. Cruzen 8,777,959 126,926
Joseph J. Lahti 8,721,179 183,706
David W. Rogers 8,711,589 193,296
Thomas A. Sutton 8,769,778 135,107
Mark L. Yoseloff 8,714,529 190,356
(2) The proposal to decrease the number of directors to five was
approved. 8,216,300 shares were voted in favor thereof,
433,677 shares voted against, and 254,908 shares abstained.
(3) An amendment to the 1993 Stock Option Plan was approved.
7,849,055 shares voted in favor thereof, 734,908 shares
voted against and 320,922 shares abstained.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: Exhibit 27, Financial Data Schedules
(b) Reports on Form 8-K: None
<PAGE>
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 thereunto duly authorized.
SHUFFLE MASTER, INC.
(Registrant)
Date: June 11, 1998
/s/ Gary W. Griffin
- --------------------------------
Gary W. Griffin
Chief Financial Officer
/s/ John A. Rahja
- --------------------------------
John A. Rahja
Vice President and Controller
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-START> NOV-01-1997
<PERIOD-END> APR-30-1998
<CASH> 2,390
<SECURITIES> 17,610
<RECEIVABLES> 5,670
<ALLOWANCES> 200
<INVENTORY> 1,935
<CURRENT-ASSETS> 29,866
<PP&E> 5,402
<DEPRECIATION> 1,985
<TOTAL-ASSETS> 43,294
<CURRENT-LIABILITIES> 4,299
<BONDS> 1,595
0
0
<COMMON> 100
<OTHER-SE> 37,284
<TOTAL-LIABILITY-AND-EQUITY> 43,294
<SALES> 4,050
<TOTAL-REVENUES> 14,423
<CGS> 1,461
<TOTAL-COSTS> 4,570
<OTHER-EXPENSES> 1,164
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 4,611
<INCOME-TAX> 1,605
<INCOME-CONTINUING> 3,006
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,006
<EPS-PRIMARY> .16
<EPS-DILUTED> .16
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-START> NOV-01-1997
<PERIOD-END> JAN-31-1998
<CASH> 1,577
<SECURITIES> 15,929
<RECEIVABLES> 7,060
<ALLOWANCES> 200
<INVENTORY> 2,163
<CURRENT-ASSETS> 27,550
<PP&E> 5,283
<DEPRECIATION> 1,743
<TOTAL-ASSETS> 41,789
<CURRENT-LIABILITIES> 4,514
<BONDS> 1,595
0
0
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