Multimedia Games’ First Quarter Revenue Rises 21.6% to $34.8 Million; Reports Diluted EPS of $0.21 Inclusive of $0.07 Per Diluted Share Benefit from Non-Recurring Items

Patrick Ramsey, President and Chief Executive Officer of Multimedia Games, commented, “Our first quarter results reflect a continuation of the momentum the Company built throughout fiscal 2011 and represent a very strong start to fiscal 2012. By successfully executing against key strategic initiatives including growing our unit sales and installed base, refreshing our installed base at our largest customer’s facilities with proprietary Class II games, expanding the number of markets we can serve, and maintaining a focus on operating discipline, Multimedia Games continues to strengthen our competitive position and prospects for long-term growth. Our progress with these initiatives is evidenced by the year-over-year increase in unit sales, the fifth consecutive quarter of growth in our domestic installed base and our ninth consecutive quarter of operating income improvement, all of which helped drive fiscal 2012 first quarter diluted earnings per share of $0.21, inclusive of a $0.07 benefit from non-recurring items.”

Ramsey continued, “With growing acceptance of our products in a variety of domestic gaming jurisdictions, Multimedia Games’ total revenues for the fiscal 2012 first quarter increased 21.6%. We more than doubled the number of units sold compared with the first quarter last year and recorded double digit year-over-year revenue growth in our gaming operations segment, as our quarter-end domestic installed base increased by 961 units, or approximately 11%, from the prior-year period.

“Our new products continue to gain traction in a number of markets – including Oklahoma, California, Washington, Mississippi and Louisiana – as we deployed an aggregate 662 new revenue units in the quarter, including the sale of 408 new units in ten jurisdictions and the net addition of 254 units to our installed base. Our strengthened product portfolio was also a key factor in the Company’s ability to further solidify our long-term strategic alliance with the Chickasaw Nation, as we recently extended several long-term unit placement agreements which positions the Company to retain approximately 90% of our current footprint at their facilities through the end of our fiscal 2015. Revenues from our operation of the New York Lottery’s central determinant system also continue to rise reflecting the recent opening of Resorts World New York as well as solid year-over-year increases at existing facilities.

“The deployment of an increasing number of new revenue units, the renewal of several long-term agreements with the Chickasaw Nation, and our ongoing new market licensing efforts, coupled with consistent cash flow generation have established a strong platform for future growth. Reflecting the strong fiscal 2012 first quarter performance, we are raising our full year diluted EPS outlook to a range of $0.42-$0.45 from a range of $0.23-$0.26.”

Summary of Fiscal 2012 First Quarter Operating Results

Multimedia Games’ fiscal 2012 first quarter revenue rose 21.6%, or $6.2 million, to $34.8 million, compared to revenue of $28.6 million in the fiscal 2011 first quarter. Fiscal 2012 first quarter revenue included approximately $24.9 million from gaming operations and approximately $9.6 million from gaming equipment and system sales, compared with $22.0 million in revenue from gaming operations and $6.1 million from gaming equipment and system sales in the year-ago period.

Gaming operations revenue in the fiscal 2012 first quarter grew 13.2% to $24.9 million reflecting year-over-year improvements in all of the domestic markets where the Company has installed machines, which more than overcame the $1.0 million year-over-year decline in revenues from Mexico operations. The year-over-year revenue increase primarily reflects a 1,064 unit increase in the Company’s average installed base for the fiscal 2012 first quarter compared to the fiscal 2011 first quarter. The domestic installed base rose 254 units, or 2.7%, on a quarterly sequential basis, with unit growth coming from all of the Company’s domestic markets. The strong growth also includes a 60.4%, or $1.2 million, year-over-year rise in revenues related to the Company’s operation of the central determinant system for the New York Lottery.

Gaming equipment and system sales in the fiscal 2012 first quarter increased 57.6% to $9.6 million, from $6.1 million in the prior-year period. During the quarter, the Company recorded revenue of $7.5 million related to the sale of 408 new units and $1.5 million in revenue related to parts and equipment sales. Multimedia Games sold units into ten markets in the fiscal 2012 first quarter, including Arkansas for the first time. Washington and California remained key markets with a total of 216 units sold and unit sales also continued to increase in markets such as Mississippi and Iowa. Gaming equipment and system sales in the 2011 first quarter included $3.4 million in revenue related to the sale of 201 new proprietary units and $1.1 million related to parts and equipment sales. There was $0.6 million and $1.6 million of deferred revenues for the sale of player stations in a prior-year period recognized in the fiscal 2012 and fiscal 2011 first quarter periods, respectively.

Other revenue, primarily comprised of service revenue, was approximately $0.3 million in the fiscal 2012 first quarter compared to $0.5 million in the fiscal 2011 first quarter.

Total operating expenses for the fiscal 2012 first quarter rose $1.3 million, or 4.2%, to $31.0 million. Selling, general and administrative (“SG&A”) expenses were essentially flat at $11.5 million and $11.4 million in the fiscal 2012 and fiscal 2011 first quarter periods, respectively, while total cost of goods sold increased by $1.0 million. SG&A for the fiscal 2012 and fiscal 2011 first quarter periods include non-cash stock compensation costs of approximately $0.6 million and $0.5 million, respectively. Depreciation and amortization was down slightly to $9.7 million from $10.0 million in the prior-year period while research and development of $3.6 million in the December 2011 quarter compares to $3.2 million recorded in the prior-year period.

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