WMS Reports Fiscal First Quarter Diluted EPS of $0.07, Inclusive of $0.17 Per Diluted Share of Charges, on Revenue of $156

  WMS Reports Fiscal First Quarter Diluted EPS of $0.07, Inclusive of $0.17
  Per Diluted Share of Charges, on Revenue of $156 Million

  Operating Cost Savings Achieved and Product Sales Gross Margin Improves to
51%, Reflecting Progress on Operating Execution Initiatives and Restructuring
                                   Actions

Product Approval Flow Improves with Recent Initial Jurisdiction Approvals for
        Five New Participation Games and More than 30 For-Sale Themes

Business Wire

WAUKEGAN, Ill. -- November 07, 2011

WMS Industries Inc. (NYSE:WMS) today reported revenue of $155.6 million and
net income of $3.8 million, or $0.07 per diluted share, for its fiscal 2012
first quarter ended September 30, 2011, which includes pre-tax impairment and
restructuring charges of $9.7 million, or $0.12 per diluted share, primarily
for separation-related costs and charges related to the decision to close two
facilities, as well as non-cash, pre-tax charges of $4.3 million, or $0.05 per
diluted share, to write down receivables following government enforcement
actions at certain casinos in Mexico. In the September 2010 quarter, revenue
was $187.5 million and net income was $19.5 million, or $0.33 per diluted
share, which included $3.8 million of pre-tax charges, or $0.04 per diluted
share, for costs associated with closing the Company’s main facility in the
Netherlands.

“We already are realizing tangible benefits from our recent restructuring and
realignment actions, which we expect will lead to a resumption of quarterly
sequential financial growth in the December 2011 quarter and through the
remainder of fiscal 2012,” said Brian R. Gamache, Chairman and Chief Executive
Officer. “First quarter results reflect initial cost savings from these
actions and we believe we are firmly on track to reduce annual operating costs
by an expected $20 million. In addition, product sales margins showed both
year-over-year and quarterly sequential improvement to 51%.

“Importantly, we’ve now received at least one jurisdictional approval for all
of the participation products that were originally expected to be
commercialized in fiscal 2011. During the next several months, we expect
additional approvals for these innovative products, and we expect a return to
a more consistent pace of approvals for other new products beginning in
calendar 2012. The new products we demonstrated at G2E® for launch during
fiscal 2012 included a record number of unique math models that offer players
a diverse range of unique gaming experiences. With our focus on capturing
near-term revenue opportunities and an expanding flow of new products being
commercialized, we anticipate building on the expected quarterly sequential
improvement in December 2011 quarter’s operating results with further
quarterly sequential revenue and margin improvement in the second half of this
fiscal year that will also reflect a resumption of year-over-year revenue and
margin growth in the March 2012 and June 2012 quarters,” noted Gamache.

Gamache added, “Customer response to our refocused product portfolio has been
very favorable following G2E, and our agreement with Caesar’s Entertainment as
a launch partner for our exciting new CLUE participation game in mid-calendar
2012, our selection to participate in Alberta’s VLT replacement initiative and
the extension of our distribution arrangement with eBet for Australia further
highlight the demand for our great gaming content and the long-term growth
opportunities for WMS.”

Recent Operational and Strategic Achievements:

  *Initial jurisdiction approvals received for five participation games: THE
    WIZARD OF OZ™ Journey to Oz™, BATTLESHIP™, Leprechaun’s Gold®, Pirate
    Battle® and MONOPOLY™ Party Train™ games.
  *Initial jurisdiction approvals received on more than 30 new for-sale games
    containing unique, new math models, including new G+® Deluxe and
    Innovation series of games – Colossal Reels™, Invaders!™ 5X4 and Reel
    Boost® themes.
  *First three Portal application themes – Jackpot Explosion®, Piggy Bankin®
    and Peng Wins® themes – now installed on a total of more than 480 gaming
    machines at 27 North American casino properties including trials, and a
    total of 700 gaming machines networked with WAGE-NET® Remote Configuration
    and Download functionality, along with two recently completed
    installations of the WAGE-NET system with Remote Configuration and
    Download functionality at two international casinos.
  *Extended the distribution agreement with our Australian distributor, eBet
    Limited, on a new five-year rolling basis and added the potential to
    expand into new territories including Queensland and Victoria, in addition
    to New South Wales.
  *Selected by Alberta Gaming and Liquor Commission to participate in their
    VLT replacement initiative for the province.
  *Partners with Caesar’s Entertainment for introduction of WMS’ innovative
    new CLUE™ participation game expected to launch in mid-calendar 2012.
  *Amended and expanded our revolving credit facility to $400 million, with a
    $100 million accordion feature, for a five-year term with lower spreads on
    interest rates and commitment fees and more flexible financial and
    non-financial covenants.

Fiscal 2012 First Quarter Financial Review

The following table summarizes key components related to revenue generation
for the three months ended September 30, 2011 and 2010 (dollars in millions,
except unit, per unit and per day data):

                                                   Three Months Ended
                                                     September 30,
Product Sales Revenues:                              2011         2010
                                                                    
New unit sales revenues                              $ 64.9         $ 88.1
Other product sales revenues                          22.2         23.1   
Total product sales revenues                         $ 87.1        $ 111.2  
                                                                    
New units shipped and recognized as product            3,918          5,338
sales revenue
Average sales price per new unit                     $ 16,574       $ 16,504
                                                                    
Gross profit on product sales revenues (1)           $ 44.3         $ 54.1
Gross margin on product sales revenues (1)             50.9   %       48.7   %
                                                                    
                                                     Three Months Ended
                                                     September 30,
Gaming Operations Revenues:                          2011           2010
                                                                    
Participation revenues                               $ 63.3         $ 72.9
Other gaming operations revenues                      5.2          3.4    
Total gaming operations revenues                     $ 68.5        $ 76.3   
Installed participation base at period end, with
lease payments based on:
Percentage of coin-in units                            3,616          3,817
Percentage of net win units                            2,952          3,347
Daily lease rate units (2)                            3,024        3,182  
                                                                             
Total installed participation units at quarter        9,592        10,346 
end
                                                                    
Average installed participation units                  9,602          10,379
Average revenue per day per participation unit       $ 71.70        $ 76.36
                                                                    
Gross profit on gaming operations revenues (1)       $ 54.2         $ 61.8
Gross margin on gaming operations revenues (1)         79.1   %       81.0   %
                                                                    
Total revenues                                       $ 155.6       $ 187.5  
Total gross profit (1)                               $ 98.5        $ 115.9  
Total gross margin (1)                                63.3   %      61.8   %

(1)  As used herein, gross profit and gross margin do not include
      depreciation, amortization and distribution expenses.
      Includes only participation game theme units. Does not include units
(2)   with product sales game themes placed under fixed-term, daily fee
      operating leases.
      

Product sales revenues of $87.1 million for the September 2011 quarter
declined from $111.2 million in the year-ago period, reflecting in part the
previously anticipated impact from customers’ delayed capital spend in the
September quarter pending their opportunity to see WMS’ newest products at the
G2E industry trade show, as the show’s timing changed from the middle of
November to early October this year. Global new unit shipments were 3,918
units in the September 2011 quarter including 2,530 new units shipped to U.S.
and Canada, of which approximately 1,600 units were replacement market
shipments compared to 2,900 unit replacement market shipments in the year-ago
period. The decline in replacement market shipments more than offset a
600-unit increase in units shipped for new casino openings and expansions. WMS
shipped 1,388 units to international customers, or 35% of total global unit
shipments, compared with 2,146 units, or 40% of total global unit shipments,
in the year-ago period. The average sales price for new units of $16,574 was
essentially flat compared with the prior-year quarter. Bluebird xD™ units
represented 32% of total global new unit shipments and mechanical reel
products were 16% of new unit sales in the September 2011 quarter.

Other product sales revenues declined to $22.2 million from $23.1 million in
the prior-year quarter, reflecting lower revenue of used gaming machines,
mostly offset by higher conversion kit revenues. Approximately 2,500 used
gaming machines were sold in the September 2011 quarter at lower average
prices, including a higher number of used competitor units, compared with
approximately 2,000 used units in the prior-year quarter; while we recorded
revenue on approximately 5,500 conversion kits in the September 2011 quarter
compared to approximately 1,900 conversion kits a year ago.

Gaming operations revenues were $68.5 million in the September 2011 quarter
compared to $76.3 million in the year-ago period. The average installed
participation base for the September 2011 declined to 9,602 units compared to
an average installed base of 10,379 units in the year-ago period. The ending
installed base of 9,592 gaming machines at September 30, 2011, compares with
9,870 units at June 30, 2011, and 10,346 units at September 30, 2010. Average
revenue per day of $71.70 was below the $76.36 achieved in the year-ago
period. The declines in the average and period-end installed base and average
revenue per day primarily reflect the previously discussed lack of new
participation products.

Near the end of the September 2011 quarter, WMS received initial approvals
from the first jurisdiction for four unique, new participation games –
BATTLESHIP, THE WIZARD OF OZ Journey to Oz, Leprechaun’s Gold and Pirate
Battle themes. Although the regulatory approval and commercial launch of these
games occurred too late in the quarter to provide meaningful benefit in the
installed footprint and revenue per day, the roll-out of these four high
profile game themes in jurisdictions where the games are approved, along with
the recent approval of the new MONOPOLY Party Train game theme early in the
December 2011 quarter, are expected to provide WMS with the opportunity to
refresh and stabilize the installed base by the end of the December 2011
quarter. With a refreshed installed base and expectations for the
commercialization of additional new participation games in the March 2012 and
June 2012 quarters, WMS expects to achieve growth in its participation
installed base and average revenue per day in the second half of fiscal 2012.

Other gaming operations revenues increased $1.8 million, or 53%, over the
year-ago period, primarily reflecting growth in the online gaming business in
the United Kingdom and incremental revenues from initial Portal applications.
WMS’ first three Portal applications – Jackpot Explosion, Piggy Bankin’ and
Peng-Wins themes - and the WAGE-NET networked gaming system with Remote
Configuration and Download functionality, on either a commercial or trial
basis, in aggregate have been installed on a total of just over 700 gaming
machines at 29 casino properties globally, as of October 31, 2011.

Total gross profit, excluding depreciation, amortization and distribution
expense as used herein, was $98.5 million for the September 2011 quarter
compared to $115.9 million in the year-ago period. Total gross margin was
63.3% compared to 61.8% in the year-ago period. Product sales gross margin was
50.9% in the September 2011 quarter compared with 48.7% in the September 2010
quarter. The product sales gross margin increase relates to progress with
continuous improvement efforts to reduce costs on the Bluebird®2 and Bluebird
xD cabinets and higher revenues from higher-margin conversion kit sales
partially offset by the impact from a lower volume of new unit sales and the
lower margin achieved on sales of used gaming machines. Gaming operations
gross margin was 79.1% in the September 2011 quarter compared with 81.0% in
the year-ago quarter primarily reflecting higher licensing royalty expense and
costs related to the start-up of our new operations launched in fiscal 2011.

The following table summarizes key components related to operating expenses
and operating income for the three months ended September 30, 2011 and 2010 ($
in millions):

                                                 Three Months Ended
                                                   September 30,
Operating Expenses                                 2011       2010
Research and development                           $ 24.4       $ 28.7
As a percentage of revenues                          15.7 %       15.3 %
Selling and administrative                           38.3         38.3
As a percentage of revenues                          24.6 %       20.5 %
Impairment and restructuring charges                 9.7          3.8
As a percentage of revenues                          6.2  %       2.0  %
Depreciation and amortization                        22.6         15.8
As a percentage of revenues                         14.5 %      8.4  %
Total operating expenses                           $ 95.0      $ 86.6 
Operating expenses as a percentage of revenues      61.0 %      46.2 %
Operating income                                   $ 3.5       $ 29.3 
Operating margin                                    2.2  %      15.6 %
                                                                       

September 2011 quarter operating expenses include pre-tax charges of $9.7
million for impairment and restructuring, primarily separation-related costs
and charges related to the decision to close two facilities, as well as $4.3
million in non-cash, pre-tax charges recorded in selling and administrative
expense for the write-down of receivables following recent government
enforcement actions at certain casinos in Mexico. The prior-year period
included pre-tax charges of $3.8 million (included in selling and
administrative expense a year ago) primarily for restructuring and asset
impairment charges related to closing WMS’ main facility in the Netherlands.
See accompanying table on page 13 for further information on the impairment
and restructuring charges and other charges.

Research and development expenses declined $4.3 million year over year to
$24.4 million, and were down $6.1 million from the June 2011 quarter, which
included $3.0 million in non-cash, pre-tax charges for the write-down of
intellectual property assets. The decrease reflects lower non-payroll-related
expenses due to cost containment measures coupled with savings being realized
from the workforce reductions announced in August 2011. Consistent with the
changes announced in August 2011, a priority has been placed on development
initiatives aimed at improving the ratable commercialization of new products
for core businesses, focusing on near-term revenue opportunities, as well as
continuing support for emergent opportunities such as online gaming, portal
applications for networked gaming and WMS’ award-winning Players Life® Web
Services.

Selling and administrative expenses in the September 2011 quarter were $38.3
million, flat with a year ago, primarily reflecting lower non-payroll-related
expenses due to cost containment measures and a decline in payroll-related
expenses from the lower level of staffing following the workforce reduction
announced in August 2011, offset by $4.9 million of bad debt expense, of which
$4.3 million relates to a small number of customers following recent
government enforcement actions at certain casinos in Mexico.

Depreciation and amortization expense increased to $22.6 million in the
September 2011 quarter compared with $15.8 million in the year-ago quarter,
primarily reflecting increased capital spending on gaming operations equipment
as the Company continues to transition its installed base of participation
units to Bluebird2 and Bluebird xD cabinets, and amortization related to the
Company’s investment in developing its WAGE-NET networked gaming system and
online gaming system following initial commercialization during the June 2011
quarter and December 2010 quarter, respectively.

Interest and other income and expense, net increased $1.2 million in the
September 2011 quarter over the year-ago period, reflecting higher interest
income earned on the greater amount of notes receivable.

The effective tax rate for the September 2011 quarter was 34% compared to 36%
for the September 2010 quarter, primarily reflecting the year-over-year
benefit from the reinstatement of the U.S. Federal Research & Development Tax
Credit legislation which more than offset an increase in the Illinois
corporate tax rate that became effective January 1, 2011, and the impact of
certain international subsidiary start-up operating losses that did not
benefit the effective global tax rate.

Cash flow provided by operating activities for the three months ended
September 30, 2011, was $13.1 million compared to $19.4 million in the prior
year. The decrease primarily reflects the impact of lower net income, lower
deferred income taxes and a decrease in share-based compensation, partially
offset by the year-over-year increase in depreciation and amortization, higher
other non-cash charges, along with a favorable improvement from changes in
operating assets and liabilities. Total receivables of $334.6 million at
September 30, 2011, were down $31.6 million from June 30, 2011 levels,
primarily due to lower revenues. Long-term notes receivable, net declined on a
quarterly sequential basis to $76.9 million at September 30, 2011, compared
with $81.6 million at June 30, 2011, while increasing year over year from
$66.7 million at September 30, 2010, largely reflecting higher sales during
the past twelve months into markets that historically have depended upon
extended financings, particularly certain Latin American countries. Inventory
was down $2.7 million on a quarterly sequential basis, and was flat with
September 30, 2010. Total current liabilities at September 30, 2011, were down
$50.0 million from June 30, 2011, compared to a decline of $19.7 million in
the comparable prior-year period, primarily due to higher payments for income
taxes and the timing on payments of accounts payable.

Net cash used in investing activities for the quarter ended September 30,
2011, increased by $2.8 million to $42.7 million from the year ago period due
to the $4.1 million increase in payments to acquire or license intangible and
other non-current assets, partially offset by modest decreases in capital
expenditures for property, plant and equipment and capital deployed for
additions to gaming operations equipment to continue the transition of the
installed base of participation units to Bluebird2 and Bluebird xD cabinets.
Net cash provided by financing activities was $8.2 million compared to $42.3
million used for financing activities in the prior year, primarily due to
$35.0 million in proceeds from borrowings in the September 2011 quarter under
the Company’s line of credit and lower stock repurchase activity, which
totaled $27.5 million in the September 2011 quarter compared to $46.4 million
in the September 2010 quarter.

Adjusted EBITDA, a non-GAAP financial metric (see reconciliation to net income
schedule near the end of this release), declined to $42.8 million in the
September 2011 quarter compared with $61.5 million in the prior-year period.
The adjusted EBITDA margin for the September 2011 quarter was 27.5% compared
with 32.8% in the year-ago period.

Total cash, cash equivalents and restricted cash was $82.4 million at
September 30, 2011, compared with $105.0 million at June 30, 2011, primarily
reflecting $27.5 million for common stock repurchases during the period and
higher payments for income taxes and the timing of payments on accounts
payable.

Share Repurchase Program Update

During the September 2011 quarter, WMS repurchased 1.3 million shares, or
approximately 2.3% of its outstanding common stock as of June 30, 2011, at an
average price of $20.67, for an aggregate $27.5 million. Reflecting $129.0
million for share repurchases over the last five quarters, approximately
$171.0 million remains available on WMS’ repurchase authorization. As of
September 30, 2011, WMS had 55.7 million shares outstanding and 4.0 million
shares held in the Company’s treasury.

Fiscal 2012 Outlook

Reflecting the recently received initial approvals on new participation and
for-sale products, and the favorable customer response to our new products
demonstrated at the recent G2E trade show, WMS expects to achieve a quarterly
sequential improvement in total revenues in the December 2011 quarter. With an
anticipated return to more ratable new product approvals in the second half of
the fiscal year and the cost savings expected to be achieved from
restructuring and realignment actions, WMS also expects to achieve further
quarterly sequential improvements in both revenues and operating margin during
the second half of our fiscal 2012 that is also expected to lead to a
resumption of year-over-year growth in the March 2012 and June 2012 quarters
compared to the comparable fiscal 2011 quarters. Notwithstanding the
expectation for second-half growth assumptions, primarily reflecting the
September 2011 quarterly results, WMS now expects fiscal 2012 annual revenue
to be modestly below the fiscal 2011 level, while operating margin is expected
to improve year over year. WMS continues to expect that growth in the
second-half of fiscal year will be driven by its improvement initiatives,
modest growth in WMS’ gaming operations business and the expected improvement
in new unit demand related to new casino openings and expansions in calendar
2012. The Company does not expect incremental revenue in fiscal 2012 from the
potential expansion of Illinois gaming, the opening of the Illinois or Ohio
VLT markets or from the VLT market in Italy. On a macro basis, WMS currently
assumes that the challenged economic and industry environment will continue
resulting in limited, if any, improvement in the industry replacement cycle in
calendar 2012. R&D spending in fiscal 2012 is targeted to approximate 13% of
total annual revenues. As previously announced, quarterly revenues and
operating margin are anticipated to be lowest in the September 2011 quarter
and increase in each subsequent quarter with the highest revenue levels and
operating margin in the June 2012 quarter.

WMS Industries Inc. is hosting a conference call and webcast at 4:30 PM EST
today, Monday, November 7, 2011. The conference call numbers are 212/231-2900
or 415/226-5357. To access the live call on the Internet, log on to
www.wms.com (select “Investor Relations”). Following its completion, a replay
of the call can be accessed for thirty days on the Internet via www.wms.com.

About WMS

WMS is engaged in serving the gaming industry worldwide by designing,
manufacturing and marketing games, video and mechanical reel-spinning gaming
machines, video lottery terminals and in gaming operations, which consists of
the placement of leased participation gaming machines in legal gaming venues.
WMS is proactively addressing the next stage of casino gaming floor evolution
with its WAGE-NET networked gaming solution, a suite of systems technologies
and applications designed to increase customers’ revenue generating
capabilities and operational efficiency. More information on WMS can be found
at www.wms.com or visit the Company on Facebook, Twitter or YouTube.

Product names mentioned in this release are trademarks of WMS, except for the
following:

G2E is a registered trademark of the American Gaming Association and Reed
Elsevier Inc. Used with permission.

BATTLESHIP, CLUE and MONOPOLY are trademarks of Hasbro. Used with permission.
©2011 Hasbro. All rights reserved.

THE WIZARD OF OZ and all related characters and elements are trademarks of and
© Turner Entertainment Co. (s11) Judy Garland as Dorothy from THE WIZARD OF
OZ. (s11)

This press release contains forward-looking statements concerning our future
business performance, strategy, outlook, plans, products and liquidity,
including, but not limited to, the statements set forth under the caption
“Fiscal 2012 Outlook.” Forward-looking statements may be typically identified
by such words as “may,” “will,” “should,” “expect,” “anticipate,” “plan,”
“likely,” “believe,” “estimate,” “project,” and “intend,” among others. These
forward-looking statements are subject to risks and uncertainties that could
cause our actual results to differ materially from the expectations expressed
in the forward-looking statements. Although we believe that the expectations
reflected in our forward-looking statements are reasonable, any or all of our
forward-looking statements may prove to be incorrect. Consequently, no
forward-looking statements may be guaranteed. Factors which could cause our
actual results to differ from expectations include (1) delay or refusal by
regulators to approve our new gaming platforms, cabinet designs, game themes
and related hardware and software; (2) an inability to introduce in a timely
manner new games and gaming machines that achieve and maintain market
acceptance; (3) a decrease in the desire of casino customers to upgrade gaming
machines or allot floor space to leased or participation games, resulting in
reduced demand for our products; (4) a reduction in capital spending or
interruption in payments by casino customers associated with business weakness
or economic uncertainty that adversely affects our customers' ability to make
purchases or pay; (5) a greater-than-expected demand for operating leases by
customers over outright product sales or sales financing leases that shift
revenue recognition from a single period to the term of such operating leases;
(6) future costs relating to our planned restructuring and other charges that
may be higher than currently estimated, including additional charges related
to actions at a later time not presently contemplated; (7) ability to realize
in full, or part, the anticipated savings and expense reductions from
restructuring and lower staffing; (8) adverse affects on product development,
innovation and the ability to retain and attract key personnel following the
restructuring and reorganization actions; (9) a reduction in play levels of
our participation games by casino patrons, whether due to economic conditions
or increased placements of competitive product; (10) inability of suppliers of
key components to timely meet our requirements to fulfill customer orders;
(11) a failure to obtain and maintain our gaming licenses and regulatory
approvals; (12) failure of customers or players to adapt to the new
technologies that we introduce in new product concepts; (13) a software
anomaly or fraudulent manipulation of our gaming machines and software; (14) a
failure to obtain the right to use or an inability to adapt to rapid
development of new technologies; (15) an infringement claim seeking to
restrict our use of material technologies; (16) risks of doing business in
international markets, including political and economic instability, terrorist
activity and foreign currency fluctuations; and (17) the unfavorable outcome
of any legal proceedings in which we may be involved from time to time. These
factors and other factors that could cause actual results to differ from
expectations are more fully described under “Item 1. Business”, “Item 1A. Risk
Factors” and “Legal Proceedings” in our Annual Report on Form 10-K for the
year ended June 30, 2011, and our more recent reports filed with the U.S.
Securities and Exchange Commission.

                         - financial tables follow -

WMS INDUSTRIES INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the Three Months Ended September 30, 2011 and 2010
(in millions of U.S. dollars and millions of shares, except per share amounts)
(unaudited)
                                 
                                       Three Months Ended
                                       September 30,
                                       2011                  2010
REVENUES:                              (unaudited)             (unaudited)
Product sales                          $   87.1                $   111.2
Gaming operations                         68.5                  76.3    
Total revenues                             155.6                   187.5
COSTS AND EXPENSES:
Cost of product sales                      42.8                    57.1
(1)
Cost of gaming                             14.3                    14.5
operations (1)
Research and development                   24.4                    28.7
Selling and                                38.3                    38.3
administrative
Impairment and                             9.7                     3.8
restructuring charges
Depreciation and                          22.6                  15.8    
amortization (1)
Total costs and expenses                  152.1                 158.2   
OPERATING INCOME                           3.5                     29.3
Interest expense                           (0.4    )               (0.4    )
Interest income and
other income and                          2.7                   1.5     
expense, net
Income before income                       5.8                     30.4
taxes
Provision for income                      2.0                   10.9    
taxes
NET INCOME                             $   3.8                $   19.5    
Earnings per share:
Basic                                  $   0.07               $   0.33    
Diluted                                $   0.07               $   0.33    
Weighted-average common
shares:
Basic common stock                        56.2                  58.2    
outstanding
Diluted common stock and                  56.6                  59.6    
common stock equivalents
                                                               
                                                               
(1) Cost of product sales and cost of gaming operations exclude the following
amounts of depreciation and amortization, which are included in the
depreciation and amortization line item:
                                                               
Cost of product sales                  $   1.4                 $   1.2
Cost of gaming                         $   14.1                $   9.5
operations
                                                                           
                                                                           

WMS INDUSTRIES INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30 and June 30, 2011
(in millions of U.S. dollars and millions of shares)
                                                             
                                                 September 30,     June 30,
ASSETS                                           2011              2011
CURRENT ASSETS:                                  (unaudited)
Cash and cash equivalents                        $  68.3           $ 90.7
Restricted cash and cash equivalents               14.1           14.3    
Total cash, cash equivalents and                    82.4             105.0
restricted cash
Accounts and notes receivable, net of               257.7            284.6
allowances of $6.7 and $5.5, respectively
Inventories                                         64.4             67.1
Other current assets                               42.9           40.8    
Total current assets                                447.4            497.5
                                                                   
NON-CURRENT ASSETS:
Long-term notes receivable, net                     76.9             81.6
Gaming operations equipment, net of
accumulated depreciation and amortization           94.2             86.8
of $201.6 and $270.5, respectively
Property, plant and equipment, net of
accumulated depreciation and amortization           177.6            171.5
of
$120.7 and $115.7, respectively
Intangible assets, net                              151.4            153.9
Deferred income tax assets                          44.7             43.1
Other assets, net                                  15.6           11.9    
Total non-current assets                           560.4          548.8   
TOTAL ASSETS                                     $  1,007.8       $ 1,046.3 
                                                                   
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable                                 $  41.9           $ 66.2
Accrued compensation and related benefits           13.6             12.3
Other accrued liabilities                          46.9           73.9    
Total current liabilities                           102.4            152.4
                                                                   
NON-CURRENT LIABILITIES:
Long-term debt                                      35.0             —
Deferred income tax liabilities                     24.8             23.9
Other non-current liabilities                      14.2           14.1    
Total non-current liabilities                       74.0             38.0
Commitments, contingencies and                      —                —
indemnifications
                                                                   
STOCKHOLDERS’ EQUITY:
Preferred stock (5.0 shares authorized,             —                —
none issued)
Common stock (200.0 shares authorized and           29.8             29.8
59.7 shares issued)
Additional paid-in capital                          432.9            437.9
Treasury stock, at cost (4.0 and 2.9                (125.9   )       (104.9  )
shares, respectively)
Retained earnings                                   494.6            490.0
Accumulated other comprehensive income             —              3.1     
Total stockholders’ equity                         831.4          855.9   
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY       $  1,007.8       $ 1,046.3 
                                                                             
                                                                             

WMS INDUSTRIES INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended September 30, 2011 and 2010
(in millions of U.S. dollars)
(unaudited)
                                                               
                                                       Three Months Ended
                                                       September 30,
CASH FLOWS FROM OPERATING ACTIVITIES                   2011          2010
Net income                                             $ 3.8         $ 19.5
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation                                             19.3          15.8
Amortization of intangible and other non-current         6.6           5.3
assets
Share-based compensation                                 2.6           5.1
Other non-cash items                                     8.1           4.5
Deferred income taxes                                    (0.9  )       3.0
Tax benefit from exercise of stock options               —             (1.2  )
Change in operating assets and liabilities              (26.4 )      (32.6 )
Net cash provided by operating activities                13.1          19.4
                                                                     
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to gaming operations equipment                 (22.1 )       (22.9 )
Purchase of property, plant and equipment                (15.9 )       (16.4 )
Payments to acquire or license intangible and           (4.7  )      (0.6  )
other non-current assets
Net cash used in investing activities                    (42.7 )       (39.9 )
                                                                     
CASH FLOWS FROM FINANCING ACTIVITIES
Purchase of treasury stock                               (27.5 )       (46.4 )
Proceeds from borrowings under revolving credit          35.0          —
facility
Cash received from exercise of stock options             0.7           2.9
Tax benefit from exercise of stock options              —           1.2   
Net cash provided by (used in) financing                 8.2           (42.3 )
activities
Effect of Exchange Rates on Cash and Cash               (1.0  )      0.6   
Equivalents
                                                                     
DECREASE IN CASH AND CASH EQUIVALENTS                    (22.4 )       (62.2 )
CASH AND CASH EQUIVALENTS, beginning of period          90.7        166.7 
CASH AND CASH EQUIVALENTS, end of period               $ 68.3       $ 104.5 
                                                                             
                                                                             

WMS INDUSTRIES INC.
Supplemental Data – Earnings per Share
(in millions of U.S. dollars and millions of shares, except per share amounts)
(unaudited)
                                                      
                                                         Three Months Ended
                                                         September 30,
                                                         2011       2010
                                                                      
Net income                                               $ 3.8       $ 19.5 
                                                                      
Basic weighted average common shares outstanding           56.2         58.2
Dilutive effect of stock options                           0.3          1.0
Dilutive effect of restricted common stock and            0.1        0.4  
warrants
Diluted weighted average common stock and common
stock                                                     56.6       59.6 
equivalents
                                                                      
Basic earnings per share of common stock                 $ 0.07      $ 0.33 
Diluted earnings per share of common stock and
common stock                                             $ 0.07      $ 0.33 
equivalents
                                                         
Supplemental Data – Reconciliation of Net Income to Adjusted EBITDA
(in millions of U.S. dollars)
(unaudited)
                                                         
                                                         Three Months Ended
                                                         September 30,
                                                         2011         2010
                                                                      
Net income                                               $ 3.8       $ 19.5 
                                                                      
Net income                                               $ 3.8        $ 19.5
Depreciation                                               19.3         15.8
Amortization of intangible and other non-current           6.6          5.3
assets
Provision for income taxes                                 2.0          10.9
Interest expense                                           0.4          0.4
Share-based compensation                                   2.6          5.1
Other non-cash items                                      8.1        4.5  
Adjusted EBITDA                                          $ 42.8      $ 61.5 
Adjusted EBITDA margin                                    27.5 %      32.8 %
                                                                             

Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization,
share-based compensation and other non-cash items, including non-cash
impairment and restructuring charges) and adjusted EBITDA margin are
supplemental non-GAAP financial metrics used by our management and commonly
used by industry analysts to evaluate our financial performance. Adjusted
EBITDA and adjusted EBITDA margin provide additional useful information to
investors regarding our ability to service debt and are commonly used
financial analysis metrics for measuring and comparing gaming companies in
areas of liquidity, operating performance, valuation and leverage. Adjusted
EBITDA and adjusted EBITDA margin should not be construed as an alternative to
operating income (as an indicator of our operating performance) or net cash
from operations (as a measure of liquidity) as determined in accordance with
U.S. generally accepted accounting principles. All companies do not calculate
adjusted EBITDA and adjusted EBITDA margin in necessarily the same manner, and
WMS’ presentation may not be comparable to those presented by other companies.

WMS INDUSTRIES INC.
Supplemental Data – Items Impacting Comparability: Charges
For the Three Months Ended September 30, 2011 and 2010
(in millions of U.S. dollars, except per share amounts)
(unaudited)
                                                               
                                   Three Months Ended       Three Months Ended
                                   September 30, 2011       September 30, 2010
                                              Per                      Per
                                   Pre-tax    diluted       Pre-tax    diluted
DESCRIPTION OF CHARGES             amounts    share         amounts    share
IMPAIRMENT AND RESTRUCTURING
CHARGES
Non-cash Charges
Impairment of property, plant      $   0.6    $  0.01       $   2.4    $  0.03
and equipment
                                                                       
Cash Charges
Restructuring charges                 9.1      0.11          1.4      0.01
                                                                       
Total Impairment and                   9.7       0.12           3.8       0.04
Restructuring Charges
                                                                       
OTHER CHARGES
Non-cash charges to write-down
Mexican customer                                                          
receivables (recorded in            4.3      0.05          —      
selling and administrative                                                —
expenses)
                                                                       
                                                                       
TOTAL IMPAIRMENT,
RESTRUCTURING AND                  $   14.0   $  0.17       $   3.8    $  0.04

OTHER CHARGES
                                                                          

The three month period ended September 30, 2011, includes $14.0 million of
pre-tax charges, or $0.17 per diluted share, which includes $9.7 million
pre-tax, or $0.12 per diluted share, of impairment and restructuring charges,
including $5.9 million pre-tax of separation-related costs and $3.8 million
pre-tax of costs related to the decision to close two facilities; and $4.3
million pre-tax, or $0.05 per diluted share, of non-cash charges to write-down
receivables following government enforcement actions at certain casinos in
Mexico.

The three month period ended September 30, 2010, includes $3.8 million of
pre-tax impairment and restructuring charges, or $0.04 per diluted share, that
previously had been included in selling and administrative expense, which
includes $1.4 million pre-tax, or $0.01 per diluted share, of
separation-related restructuring charges and $2.4 million pre-tax, or $0.03
per diluted share, of asset impairment charges related to closing WMS’ main
facility in the Netherlands.

Contact:

WMS Industries Inc.
William Pfund
Vice President, Investor Relations
847-785-3167 or bpfund@wms.com
or
Jaffoni & Collins Incorporated
Joseph Jaffoni or Richard Land
212-835-8500 or wms@jcir.com
 
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