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

Reflecting the year-over-year revenue growth generated in the fiscal 2012 first quarter, Multimedia Games reported net income of $5.8 million, or $0.21 per diluted share, compared to a net loss of $1.4 million, or $0.05 per diluted share, in the fiscal 2011 first quarter. Fiscal 2012 first quarter net income and diluted EPS include a $1.0 million, or $0.04 per diluted share, income tax benefit related to a federal income tax refund and a gain on the sale of used equipment back to the original manufacturer totaling $0.9 million, or $0.03 per diluted share. Fiscal 2011 first quarter net income and diluted EPS included income tax expense of $0.1 million.

For the fiscal 2012 first quarter, net capital expenditures were $8.0 million compared to $9.1 million a year ago (definition of “net capital expenditures” is provided below).

Balance Sheet Continues to Strengthen

During the fiscal 2012 first quarter, the Company reduced total outstanding borrowings by approximately $0.9 million to $36.1 million and, as of December 31, 2011, total cash was $53.7 million. As a result, Multimedia Games was in a net cash position (total cash in excess of total debt) of $17.7 million as of December 31, 2011, compared with a net cash position of $9.7 million as of September 30, 2011, and a net debt position of $18.2 million as of December 31, 2010. The fiscal 2012 first quarter represents the twelfth consecutive quarter Multimedia Games has grown net cash or reduced net debt.

The Company generated free cash flow of $5.9 million in the fiscal 2012 first quarter compared to free cash flow of $3.6 million in the year-ago period. Total cash generation in the quarter was $6.9 million compared to $6.4 million a year ago. Free cash flow and cash generation are non-GAAP financial measures and there are no truly comparable GAAP financial measures. (Definitions of “free cash flow” and “cash generation” are provided below).

In the first quarter of fiscal 2012, the Company repurchased approximately 392,821 shares of its common stock for total consideration of approximately $1.9 million. The Company has purchased a total of 2.2 million shares at an average price of $5.36 per share since the inception of the share repurchase program in December 2010, and as of December 31, 2011, had approximately $3.1 million remaining under its $15.0 million common stock repurchase plan.

Adam Chibib, Chief Financial Officer, commented, “Multimedia Games continues to benefit from its dual focus on generating profitable revenue while exercising fiscal discipline. We grew quarterly free cash flow approximately 63% on a year-over-year basis and generated a nearly $36 million improvement in our net cash/net debt position. With our strengthened balance sheet, Multimedia Games has a strong financial foundation that allows us to prudently invest in the development of new products and refresh our existing installed base, while simultaneously allocating capital to secure long-term unit placement extensions with our largest customer and expand our addressable markets in order to drive sustainable long-term growth.”

Raises Fiscal 2012 EPS Outlook

Multimedia Games today raised its EPS expectations for fiscal 2012. While the Company maintains a conservative outlook regarding the economic environment and the pace of customer capital spending, reflecting the strength of the fiscal 2012 first quarter results, Multimedia Games now anticipates fiscal 2012 diluted EPS will be in a range of $0.42-$0.45, compared to its prior expectation of a range of $0.23-$0.26.

Multimedia Games cautions that market dynamics are constantly changing and as such, actual results could vary materially from the expectations noted above based on changes in the Company’s markets, operations, regulatory requirements, estimates and assumptions, risk factors and other factors as more fully described in the section below titled “Cautionary Language.”

Definitions of “cash generation,” “free cash flow,” “net cash position” and “net capital expenditures”

Multimedia Games’ management tracks cash generation (which is cash flow from operating activities plus cash flows from investing activities), free cash flow (cash flow from operating activities less net capital expenditures), net cash position and net capital expenditures as relevant measures of the Company’s performance. Cash generation, free cash flow, net cash position and net capital expenditures are not recognized financial measures under GAAP, but we believe that each is useful in measuring our operating performance. Cash generation helps assess the performance of operations, manufacturing investments and includes the amounts received and paid for our development agreements. We believe cash generation is a more comprehensive internal metric and more representative of our ability to pay down debt. Free cash flow helps measure the efficiency of our capital expenditures. Net cash position is defined as cash and cash equivalents less long-term debt. Net capital expenditures are defined as acquisitions of property and equipment and leased gaming equipment less transfer of leased gaming equipment to inventory.

2012 First Quarter Conference Call and Webcast

Multimedia Games is hosting a conference call and webcast today, February 1, 2012, beginning at 9:00 a.m. ET (8:00 a.m. CT). Both the call and the webcast are open to the general public. The conference call number is 720-545-0001 (domestic or international). Please call five minutes prior to the presentation to ensure that you are connected.

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