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Howard Stutz

 

After restatement, Bally year-to-year loss surges

16 Mar 2007

By Howard Stutz

LAS VEGAS, Nevada -- Bally Technologies said Thursday it completed a 20-month review of the company's financial reporting for past few years and hoped to return to a normal schedule of releasing earnings.

The Las Vegas-based slot maker said its net loss for fiscal year 2006 more than doubled over 2005. But company executives said an upward trend in sales revenues show a return to profitability in 2007.

For the 12 months ended June 30, 2006, Bally Technologies said it had a net loss of $46.1 million, compared with a net loss of $22.6 million in 2005.

The company's 12-month revenue, though rose 11.7 percent to were $547.1 million from $483.1 million.

"Our core operations in the latter half of fiscal 2006 began to reflect the impact of our new products in the market and also reflect the strong results of our Systems products," Bally Technologies Chief Executive Officer Richard Haddrill said in a statement. "Total revenues in the third quarter and fourth quarter of fiscal 2006 increased by 28 percent and 33 percent, respectively, as compared with the corresponding period of the prior year."

Haddrill said Bally's total 2007 revenue should exceed $670 million.

The company blamed in 2006 net loss on impairment charges related to patents, an increase in depreciation expenses, and costs associated with legal and accounting matters.

Bally Technologies Chief Financial Officer, Robert Caller, said he still has to file various forms on the company's behalf with the Securities and Exchange Commission.

"The completion of these reports is a big step in our efforts to get back to a normal filing cycle and represents our fourth and fifth major filings in less than five months," Caller said.

Bally Technologies shares rose 98 cents, or 4.3 percent, Thursday to close at $23.78 on the New York Stock Exchange.

On Wednesday, Bally said it had signed a contract with the Chickasaw Nation to provide slot and casino management systems and technology in more than 8,000 gambling machines in 17 Indian casinos in southeastern Oklahoma. Financial terms of the deal weren't disclosed.

Deutsche Bank gaming analyst Bill Lerner said Bally executives have worked aggressively in recent weeks to communicate with Wall Street, seemingly putting the company's past financial reporting miscues behind them.

"Bally Technologies' product continues to gain traction across all product lines," Lerner said in a note to investors. "Further, it is clear to us that Bally Technologies is making headway in the ever-more-important category of video slot (machines), which is supported by conversations with casino operators and casino visits."

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