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</TD></TR><TR><TD vAlign=top><TABLE width="100%" valign="top"><TBODY><TR><TD>Shareholders Embrace Upbeat Report By IGT Chairman
Mar 09, 2006
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Driven largely by foreign business, International Game Technology Chairman TJ Matthews presented an upbeat forecast for the world's largest maker of gambling machines at the company's annual meeting.
And despite the impact of hurricanes and a lackluster domestic market that hurt earnings for fiscal 2005 and the first quarter of 2006 that ended Dec. 31, only four shareholders had questions at Tuesday's meeting - all of them minor inquiries.
"We are the very best manufacturers in our industry," Matthews, the company's chairman and CEO told some 150 shareholders - about one-third of them IGT employees - at the meeting marking the company's 25th year in business.
Hurricanes in the Gulf Coast gambling region cost the company $14.9 million and is expected to result in a loss of 50,000 machine days each quarter of fiscal 2006. Matthews said the casinos eventually would be rebuilt and would represent a new market. Matthews said IGT released 172 new game themes such as Fort Knox and Party Time! in North America last fiscal year, a 38 percent increase over the previous year, and spent $138 million on research and development, or 6 percent of its total revenue. The company is projecting expenses of $172 million this year.
"We will spend more money than our next three competitors combined," he said. IGT owns 70 percent of the international market.
While IGT pioneered the use of so-called cashless machines, which pay out in bar-coded tickets and accept either the tickets or bills, demand for replacement machines has eased since most casinos have converted to the newer technology.
"We have our work cut out for us to figure out what's going to make our games resell," he said.
Chief Financial Officer Maureen Mullarkey said the popularity of low denomination games - specifically penny slots - and machines with mystery bonuses had proved popular in recent years.
While domestic sales have leveled off, Matthews said international business has improved, driven largely by Japan, Latin America and Australia. The company has established offices in Mexico, Macau and Russia.
"Five years or so ago, we about broke even in this business," he said.
Last year's operating income topped $115 million and Matthews forecast international annual operating income would double within the next four years.
"IGT is interested in all sorts of gaming expansion. We look forward to the next 25 years," he said.
IGT shares, which have ranged between $24.20 and $37.18 the past year, gained 23 cents to close at $35.44 Tuesday on the New York Stock Exchange.
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<CENTER><TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR><TD>Game Developers </TD></TR></TBODY></TABLE></CENTER>
</TD></TR><TR><TD vAlign=top><TABLE width="100%" valign="top"><TBODY><TR><TD>Shareholders Embrace Upbeat Report By IGT Chairman
Mar 09, 2006
</TD></TR><TR><TD>
And despite the impact of hurricanes and a lackluster domestic market that hurt earnings for fiscal 2005 and the first quarter of 2006 that ended Dec. 31, only four shareholders had questions at Tuesday's meeting - all of them minor inquiries.
"We are the very best manufacturers in our industry," Matthews, the company's chairman and CEO told some 150 shareholders - about one-third of them IGT employees - at the meeting marking the company's 25th year in business.
Hurricanes in the Gulf Coast gambling region cost the company $14.9 million and is expected to result in a loss of 50,000 machine days each quarter of fiscal 2006. Matthews said the casinos eventually would be rebuilt and would represent a new market. Matthews said IGT released 172 new game themes such as Fort Knox and Party Time! in North America last fiscal year, a 38 percent increase over the previous year, and spent $138 million on research and development, or 6 percent of its total revenue. The company is projecting expenses of $172 million this year.
"We will spend more money than our next three competitors combined," he said. IGT owns 70 percent of the international market.
While IGT pioneered the use of so-called cashless machines, which pay out in bar-coded tickets and accept either the tickets or bills, demand for replacement machines has eased since most casinos have converted to the newer technology.
"We have our work cut out for us to figure out what's going to make our games resell," he said.
Chief Financial Officer Maureen Mullarkey said the popularity of low denomination games - specifically penny slots - and machines with mystery bonuses had proved popular in recent years.
While domestic sales have leveled off, Matthews said international business has improved, driven largely by Japan, Latin America and Australia. The company has established offices in Mexico, Macau and Russia.
"Five years or so ago, we about broke even in this business," he said.
Last year's operating income topped $115 million and Matthews forecast international annual operating income would double within the next four years.
"IGT is interested in all sorts of gaming expansion. We look forward to the next 25 years," he said.
IGT shares, which have ranged between $24.20 and $37.18 the past year, gained 23 cents to close at $35.44 Tuesday on the New York Stock Exchange.
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