WMS Industries Fourth Quarter Earnings Per Share Rise 80% to $0.36 On 44% Revenue Gain

CHICAGO
Aug. 10, 2000

WMS Industries Inc.(NYSE:WMS) today reported diluted earnings per share increased by
80.0% to $0.36 for the June 2000 quarter compared to $0.20 in the June
1999 quarter.

    Revenues from continuing operations in the June 2000 quarter rose
by 44.3% to $67.7 million compared to $46.9 million in the 1999 fourth
quarter.

    The June 2000 quarter earnings per share of $0.36 represents the
one of the best quarterly results per share since the Company began
focusing on the gaming equipment industry. During the quarter the
Company recorded income of $0.05 per share related to an additional
recovery on the litigation settlement reached earlier in the fiscal
year which was fully offset by a $0.05 per share charge related to the
discontinuance of its contract manufacturing business segment.

    For the fiscal year ended June 30, 2000, excluding the impact of
discontinued operations and the recovery related to the litigation
settlement, the Company earned $1.11 per share on a diluted basis
compared to $0.30 in fiscal 1999. Revenues from continuing operations
grew 72.0% from $126.0 million in fiscal 1999 to $216.7 million in
fiscal 2000, primarily due to greater units sales, higher average
sales prices of gaming devices and the continuing increase in the
installed base of MONOPOLY(R) brand participation gaming devices.

    For the fourth quarter, the growth in revenues from continuing
operations was attributable to a 27.7% increase in the sale of gaming
devices to 5,721 units in the June 2000 quarter versus 4,481 units
sold in the June 1999 quarter. The current quarter sales included 904
Reel `em In(R), Cast For Cash(TM) units and the first shipments of
units to the recently opened California market. The average sales
price for gaming devices increased by 13.3% to $8,248 in the June 2000
quarter from $7,277 in the prior year quarter reflecting both a price
increase implemented early in fiscal 2000 and a shift in the game
sales mix to higher priced products.

    Revenue growth was also fueled by an increase in the installed
base of MONOPOLY brand participation games that provide the Company
with recurring revenues and cash flow. The average installed base of
MONOPOLY brand gaming devices increased to 3,734 units in the June
2000 quarter from 2,338 units in the June 1999 quarter. In July 2000,
the Company announced it had eclipsed 4,000 units in its installed
base of MONOPOLY games. Additionally, the current backlog of signed
MONOPOLY orders has increased to 550 units. The average revenue per
day for MONOPOLY gaming devices was $46.03 in the June 2000 quarter
versus $50.70 in the June 1999 quarter and $44.33 in the March 2000
quarter.

    "WMS achieved strong fourth quarter financial results as we
expanded our game offerings, increased the installed base of
participation games and marketed our games in new jurisdictions,"
stated Brian R. Gamache, President and Chief Operating Officer. "We
are energized by this financial performance and are excited about the
positive momentum heading into fiscal 2001. Our future prospects are
excellent based on the continued success of established games such as
Reel `em In, Cast for Cash and MONOPOLY-themed gaming devices, the
on-going development of new games such as the Puzzle Pays(TM) series
and our initiatives to begin establishing market share in
international gaming jurisdictions.

    "Our new Puzzle Pays series of participation games will now
include SCRABBLE(R), which we have licensed from Hasbro, Inc.
(NYSE:HAS), PICTIONARY(R), which we licensed from Pictionary
Incorporated, and JUMBLE(R), which we have licensed from Tribune Media
Services" added Gamache. "We intend to formally announce SCRABBLE and
PICTIONARY next week. With the proven skill of the WMS design and
development teams, players can expect the same high level of
entertainment they have come to experience with all WMS slot machines
while casinos realize an attractive profit. We look forward to
successful launch next month of JUMBLE, the first game in the Puzzle
Pays series.

    "Additionally we recently secured the licensing rights to several
more 'world class' brand names that we will be announcing over the
coming months," continued Gamache. WMS will continue to strive to
acquire the best brand names available to support our goal of
commercializing the most entertaining and profitable games in the
industry."

    "With today's announcement of the discontinuance of the contract
manufacturing business segment, the final separation of WMS and Midway
Games Inc. (NYSE:MWY) is nearly complete," added Gamache. "Now we can
focus all of our efforts on the continued success of our gaming
machine design, manufacturing and distribution business. Due to
increasing demand for our gaming products, we are currently
formulating plans to initiate selected production of gaming machines
in our Waukegan facility that was previously largely devoted to Midway
products.

    "We are very focused on the most important element of our business
- offering casinos creative new games that provide the highest
entertainment value to their customers. This has been, and will
continue to be what drives our success," concluded Gamache.

    Gross margin for the June 2000 quarter rose to 53.8% from 51.6% in
the June 1999 period. The increase in gross margin resulted from
higher average sales prices and a greater percentage of higher margin
recurring revenues to total revenues in the June 2000 quarter, the
impact of higher utilization of the Company's Chicago manufacturing
facility and lower material costs. Research and development expenses
increased during the June 2000 quarter to $3.5 million from $2.6
million in the prior year quarter as the Company continues to invest
in enhancing its product pipeline and product platform. Selling,
general and administrative expenses increased from $11.1 million in
the June 1999 quarter to $12.3 million in the June 2000 quarter as the
Company increased its cost structure to support revenue growth.

    Earnings before interest, taxes, depreciation and amortization
(EBITDA), excluding the impact of the recovery on the litigation
settlement, increased by 96.2% from $10.5 million in the June 1999
quarter to $20.6 million in the June 2000 quarter. This increase was a
result of higher revenues and margins partially offset by the
increases in research and development and selling, general and
administrative expenses. Operating income, excluding the impact of the
recovery on the litigation settlement, increased by 106.2% to $16.7
million in the June 2000 quarter from $8.1 million in the June 1999
quarter for the same reasons as the increase in EBITDA.

    MONOPOLY(R) and SCRABBLE(R) are registered trademarks of Hasbro,
Inc.(R)&(c) 2000, Hasbro Inc. All rights reserved.
    JUMBLE(R) is a registered trademark of Tribune Media
Services.(R)&(c) 2000 Tribune Media Services. All rights reserved.
    PICTIONARY(R) is a registered trademark of Pictionary
Incorporated.(R)&(c) 2000 Pictionary Incorporated. All rights
reserved.
    Reel `em In(R), Cast for Cash(TM) and Puzzle Pays(TM) are
trademarks of WMS Gaming Inc. All rights reserved.

    This press release contains certain forward-looking statements
concerning future business conditions and the outlook for the Company
based on currently available information that involve risks and
uncertainties. The Company's actual results could differ materially
from those anticipated in the forward looking statements as a result
of certain risks and uncertainties, including, without limitation, the
financial strength of the gaming industry, the expansion of legalized
gaming into new markets and legislative and regulatory changes in
existing gaming markets, the development, introduction and success of
new games and new technologies and the ability to maintain the
scheduling of such introductions, the ability of the Company to
qualify for and maintain gaming licenses and approvals, the outcome of
certain legal proceedings to which the Company is a party and other
risks more fully described under "--Factors Affecting Future
Performance" in the Company's Annual Report on Form 10-K.
    WMS Industries Inc. is engaged in the design, manufacture and sale
of gaming devices and video lottery terminals.
 
 

WMS INDUSTRIES INC.
             Scott D. Schweinfurth
             Chief Financial Officer
             773/961-111

             Joseph N. Jaffoni
             Jaffoni & Collins Incorporated
             212/835-8500
           wms@jcir.com
 
 

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