Shuffle Master Gambles Away Its Earnings: Fool by Numbers

On April 23, Shuffle Master (Nasdaq: SHFL  ) released first-quarter earnings for the period ended Jan. 31.

•  Earnings folded over 71%, while management struggles to generate returns from the recent acquisition of Stargames.

•  Shuffle Master was delinquent in its earnings release for the first quarter when it overstated inventory purchased from a subsidiary.

•  The Motley Fool CAPS community bets two stars on Shuffle Master, while Gaming Partners International Corporation (Nasdaq: GPIC  ) raises them a star. Be the first to gamble on Vendingdata Corp (AMEX: VNX  ) .

(Figures in thousands, except per-share data.)

Income Statement Highlights

	Q1 2007	Q1 2006	Change
Sales	$37,341.0	$33,318.0	12.1%
Net Profit	$2,025.0	$7,353.0	(72.5%)
EPS	$0.06	$0.21	(71.4%)
Diluted Shares	35,594.0	35,692.0	(0.3%)

Get back to basics with the income statement.

Margin Checkup

	Q1 2007	Q1 2006	Change*
	71.9%	78.7%	(6.8)
	12.6%	34.3%	(21.7)
	5.4%	22.1%	(16.7)

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets	Q1 2007	Q1 2006	Change
Cash + ST Invest.	$3,064.0	$40,972.0	(92.5%)
Accounts Rec.	$29,252.0	$19,261.0	51.9%
Inventory	$28,627.0	$8,293.0	245.2%

Liabilities	Q1 2007	Q1 2006	Change
Accounts Payable	$6,441.0	$5,074.0	26.9%
Long-Term Debt	$222,608.0	$153,103.0	45.4%

The balance sheet reflects the company's health.

Cash Flow Highlights

	Q1 2007	Q1 2006	Change
Cash From Ops.	$3,919.0	$9,748.0	(59.8%)
Capital Expenditures	$3,166.0	$2,271.0	39.4%
Free Cash Flow	$753.0	$7,477.0	(89.9%)

Free cash flow is a Fool's best friend.

Related Foolishness:

•  Gaming Roundup: Macau Continues to Roll

•  Shuffling Out of Shuffle Master?

•  IGT's Solid Where It Counts

Shuffle Master is a Motley Fool Stock Advisor recommendation. You can find out why with a 30-day free trial to the Gardner brothers' market-beating service.

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 check Fool.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.