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Bringing More to the TableTM
During this presentation and the Q&A session, we may be making forward-looking statements that reflect certain risks and uncertainties associated with Shuffle Master’s business.
The forward-looking statement paragraph that appears in our most recently filed 8-K, 10-K and 10-Q filings with the Securities and Exchange Commission more specifically describe those risks and uncertainties and we urge you to read those filings carefully.
This presentation reflects reclassifications for discontinued operations and segment realignment.
Forward Looking Statement
♠ Company Overview
♠ Product Overview
♠ Financial Highlights
♠ Investment Considerations
♠ Question & Answer
Today’s Presentation
Company Overview
Table MasterProprietary
TableGames
Utility Products Category
Table Game Pit
Entertainment Products Category
ShufflersIntelligent
TableSystems
RouletteChip
Sorters
Company Overview
Domestic* Foreign TotalEstimated Total Table Games:
Blackjack 10,400 8,500 18,900Proprietary Games(1) 6,000 1,400 7,400Pai Gow Poker 500 500 1,000Baccarat 900 4,000 4,900Live Poker Tables 3,200 2,000 5,200Other 500 100 600
Total Card Based Games 21,500 16,500 38,000Roulette Games 1,600 7,200 8,800
Total Table Games 23,100 23,700 46,800* North America, South America, Caribbean and cruise ships
(1) Includes Blackjack, Pai Gow Poker and other side-bet games
Source: Company estimates, various gaming industry analyst reports and other industry resources
Worldwide Table Market
Entertainment Products Overview
Live Games
Entertainment Products Category
Electronic Games
Merchandising Opportunities
Game Tournaments
Table Master
“For Fun”Devices
Live Tournaments
Rapid Roulette
Current Entertainment Products
♠ Proprietary table games are patent-protected, newly-developed games
♠ Segment is growing in popularity ♦ Number of games has quadrupled
in the past 10 years♦ Games appeal to casinos because
of their increased revenue potential♦ Entice players with their exciting,
fast paced content
♠ Currently offer 3 of the top 5 titles
♠ Generate revenue by collecting royalties from intellectual property
Proprietary Table Games
Diverse Selection
Popular Side Bets
1,0011,270 1,527 1,732
3,233
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2000 2001 2002 2003 2004 10/31/2005
3,681Games
Installed
Installed Proprietary Games
Parallel Game and Shuffler Growth
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
1992 1994 1996 1998 2000 2002 2004
Specialty Shufflers Specialty Games
BG Series Introduced
Let It Ride Created
Ace Shuffler Released & Three
Card Poker AcquiredLive Stakes Poker Craze
Begins
♠ An electronic, five-player platform targeting lower stakes live games
♠ Broaden distribution channel for our entertainment content
♠ Currently features our popular proprietary titles like Three Card Poker® and Let It Ride Bonus™
♠ Current installed base of 102 units
♠ Expand penetration into areas where live games are not allowed:♦ Racinos♦ Arcades♦ Video Lottery Terminals
Table Master™
Live Games
Entertainment Products Category
Electronic Games
Internet Gaming
Merchandising Opportunities
WirelessGaming
Game Tournaments
Table Master
“For Fun”Game Sites
“For Fun”Devices
In-Casino Wireless
Live Tournaments
Rapid Roulette
“For Real”Game Sites
Board and PC Game Versions
Mobile Telephones
Televised Tournaments
New, More Intricate Content
BrandedGame
Merchandise
Internet Game
Tournaments
New Device
Development
Existing Offerings Products Driving Future Growth
Future Growth Opportunities
Utility Products Overview
Intelligent Table System
Intelligent Shoes
Automatic Shufflers
Utility ProductsCategory
Other Utility Products
Roulette Chip Sorters
Optical Card Recognition
MD2 Workstation
Easy Chipper & Chip Tree
Multi-Shift Drop Box
Current Utility Products
Automatic Card Shufflers
♠ First shufflers began being used in 1992
♠ Shuffle Master instrumental in introducing technology to the pit
♠ Shufflers enhance game speed, productivity and security
♠ Have driven the expansion of the specialty table game market
♠ Ample room for increased market penetration
Shuffler Replacement Cycle
♠ Mechanical replication of hand shuffling
♠ Hybrid between hand shuffle replication & computer generated shuffle
♠ Computer controlled♠ Features data gathering
& communication
6,6638,193
9,47511,090
15,289
02,0004,0006,0008,000
10,00012,00014,00016,00018,00020,000
2000 2001 2002 2003 2004 10/31/2005
18,589Shufflers
Placed
Installed Shufflers
♠ Easy Chipper®
♦ Next-generation device featuring patented color reading system; maximizes roulette game play and reduces labor costs
♦ First product released by CARD since May 2004 acquisition
♦ New product category: worldwide roulette market exceeds 8,000 tables
♦ Faster and more efficient than similar products
♦ Features Intelligent Chip Tree that tracks chip volume and value
Roulette Chip Sorters
♠ Two Intelligent Shoe versions
♠ Both use optical card recognition to read the rank and suit of each card dealt
♠ Work with any type of playing cards
♠ IS-B: Premium model that includes automated card delivery and interfaces with attractive display to post baccarat game results
♠ IS-T: Lower price-point model that mimics a traditional shoe
Intelligent Shoes
♠ Recently announced a worldwide product integration with IGT and Progressive Gaming
♠ Partnership will create a comprehensive, automated table game management solution using complementary capabilities, technologies and resources♦ SHFL will provide shufflers, card reading
shoes and bet-present sensing technology♦ IGT will provide back-end table
management systems♦ PGIC will provide RFID bet and payoff
recognition and chip tracking
♠ Agreed to sell IGT an equal ownership interest in bet recognition patents for an initial payment of $10.5 million, with a $4.9 million future payment due in 2007
Intelligent Table System™
Intelligent Table System
Intelligent Shoes
AutomatedBloodhound
Additional ITS Product
Developments
Automatic Shufflers
Utility ProductsCategory
Other Utility Products
Roulette Chip Sorters
Optical Card Recognition
MD2 Workstation
Easy Chipper & Chip Tree
Next Generation Shufflers
Multi-Shift Drop Box
Next Generation
Chip Sorters
New Product
Development
Existing Offerings Products Driving Future Growth
Future Growth Opportunities
Worldwide Distribution
Canada5%
Other1%
Other N.America 2%
Australasia8%
Europe7%
United States77%
FY 2005 Revenue = $114 million
Diversified Business
Financial Highlights
Fiscal ‘05 Fiscal ‘04 Variance
Total Revenue $ 113,588
Income fromOperations $ 45,784 $ 36,242 26%
$84,7835 34%
EBITDA $ 56,950 $ 41,972 36%
Net Income $ 29,537 $ 24,144 22%
EPS – Fully Diluted $ 0.81 $ 0.60 34%
(All amounts shown in thousands, except per share amounts)
Fiscal 2005 vs. Fiscal 2004(From continuing operations)
10/31/05 10/31/04
Total Cash & Investments $ 34,088
Total Debt $ 162,659 $157,980
Total Equity $ 13,757 $ 14,729
$ 47,038
Working Capital $ 57,991 $ 65,671
(All amounts shown in thousands)
Balance Sheet Statistics
65%
35%
65%
35%
59%
41%
57%
43%
60%
40%
0
20
40
60
80
100
120
($ M
illio
ns)
2001 2002 2003 2004 2005
Utility Products Entertainment Products
$43.2$48.7
$58.4
$113.6
5-year CAGR = 24%(2001 – 2005)
$84.8
Total Revenue (From continuing operations)
0.30 0.360.45
0.60
0.81
1.00 - 1.05
$0.00
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
2001 2002 2003 2004 2005 2006Guidance
Earnings per Diluted Share(From continuing operations)
5-year CAGR = 24%(2001 – 2005)
♠ Share Repurchases♦ Fiscal 2005: Repurchased 1.5 million shares for
approximately $38.6 million
♦ Remaining authorization totaled $8.8 million
♦ Total authorizations of $110 million over the past three years
Recent Share Repurchases
♠ Ameranth Wireless, Inc.: Worldwide strategic alliance to promote and distribute Ameranth’s poker-room management products including Deck Mate interface
♠ Casino Solutions, S.A.C.: Distribution agreement to enhance product penetration and service throughout South America
♠ Machines Games Automatics, S.A. (MGA): Exclusive Spanish distribution agreement for Table Master♦ Agreement covers modified arcade market platform♦ Product will be debuted at Madrid trade show in September♦ Anticipated first year revenue: $5 million
Recent Strategic Partnerships
Investment Considerations
♠ Table game trends remain favorable
♠ Leading market share within our core businesses
♠ Strength of our intellectual property portfolio and related high margin products
♠ Continued investment in R&D
♠ Strong balance sheet and cash flow generation
♠ Consistency in the growth of our earnings
♠ Seasoned management team
Investment Considerations
Why invest in Shuffle Master?
The 20th Century Casino
The 21st Century Casino
Question & Answer