WMS Isn't Playing Games: Fool by Numbers

On Oct. 30, WMS Industries (NYSE: WMS  ) released third-quarter earnings for the period ended Sept. 30.

• Revenues grew 5.9% to $111 million, reflecting growth in gaming operations revenues and the benefit from the acquisition of Orion Financement Company.
• The installed base of WAP and LAP machines grew significantly over last year, while stand-alone games fell.
• Free cash flows improved to $5 million as cash provided by operations increased 106% over the prior year, reflecting higher net income and better utilization of working capital.
• The stock has a four-star rating in Motley Fool CAPS.

(Figures in millions, except per-share data)

Income Statement Highlights

	Avg. Est.	Q3 2006	Q3 2005	Change
Sales	$114	$111	$104	5.9%
Net Profit	--	$7.1	$6.1	16.4%
EPS	$0.21	$0.20	$0.18	11.1%
Diluted Shares	--	38	38	1.1%

Get back to basics with a look at the income statement.

Margin Checkup

	Q3 2006	Q3 2005	Change*
Gross Margin	56.60%	52.11%	4.49
Operating Margin	10.22%	9.58%	0.64
Net Margin	6.42%	5.84%	0.58

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets	Q3 2006	Q3 2005	Change
Cash + ST Invest*	$21	$37	(43.2%)
Accounts Rec.	$83	$94	(11.5%)
Inventory	$90	$95	(5.3%)

*Does not include restricted cash.

Liabilities	Q3 2006	Q3 2005	Change
Accounts Payable	$38	$26	48.4%
Long-Term Debt	$115	$115	0.0%

Learn the ways of the balance sheet.

Cash Flow Highlights

	Q3 2006	Q3 2005	Change
Cash From Ops.	$26	$12	105.6%
Capital Expenditures	$21	$17	20.8%
Free Cash Flow	$5	($5)	N/A

Find out why Fools always follow the money.

Related Companies:

• International Game Technology (NYSE: IGT  )
• Bally Technologies (NYSE: BYI  )
• FEI (Nasdaq: FEIC  )
• Harrah's Entertainment (NYSE: HET  )

Related Foolishness:

• International Game On and On and On
• From Poker to Investing: Contrarianism
• The Booming Business of Gaming

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Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so checkFool.com for more of our in-depth discussion of what the numbers mean. This data has been provided by Netscribes. To provide feedback on this article, please click on the "feedback" button below.