International edition
September 27, 2021

It also reported total revenues of us$ 16.7 million for the fourth quarter 2006

Progressive Gaming wants to sell table game business

(US).- Casino equipment provider Progressive Gaming International said Monday it will try to sell its table game business to free up cash flow and pay down some notes that are coming due next year. The Las Vegas-based company has asked Roth Capital Partners to assist in the sale.

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rogressive Gaming owns the rights to more than a dozen specialty table games, such as Caribbean Stud and World Series of Poker Texas Hold ’Em Bonus Poker. The games are leased to casinos worldwide. No time frame or a predicted price was given on the potential sale.

In a statement, Progressive Gaming said it expected to retain certain rights to the games, such as wireless applications. Jefferies & Co. gaming analyst Aimee Marcel-Remey said she thought a sale would fetch between us$ 40 million and us$ 50 million, which is based on 10 times the cash flow Progressive Gaming generates from the table games division. She said Shuffle Master paid 10 times cash flow when it acquired an Australian slot maker a year ago.

"That seemed to be a pretty good model for us to base a sales price," Marcel-Remey said in advising investors on how to look at Monday’s announcement. "We backed out what Progressive earns from table games as about us$ 4 million to us$ 5 million in cash flow."

Marcel-Remey said Progressive Gaming would be better off selling its table games division and concentrating on its other businesses, such as providing casino’s with jackpot systems, table game identification systems, the company’s Rapid Bet Live sports wagering system and mobile and wireless gaming.

"The operating structure for the company’s hardware-based division is expensive," Marcel-Remey said. "Divesting of this division would create a more efficient operating structure and would allow management to focus on its current systems business."

Progressive Gaming said it would use some of the proceeds from a sale to pay down all or part of its 11.875 percent notes, in which the company pays about us$ 7 million annually in interest. Proceeds would also go toward working capital and to fund other growth initiatives.

Meanwhile, Progressive Gaming reported fourth quarter earnings late Monday, saying it lost 29 cents per share for the period that ended December 31, compared with a loss of 22 cents per share a year ago. In the quarter, the company’s total revenues were us$ 16.7 million, compared with us$ 19.2 million in the fourth quarter of 2005.

Its President Russel McMeekin said a sale of the table games business would allow the company to be a true systems provider, focusing on technology. He also said the company has completed several transactions since 2004. "We believe these games are positioned for growth and believe the timing is appropriate to maximize the value of these assets."

The firm, which was hit with a us$ 39 million judgment in a federal antitrust lawsuit in February, settled another case with a rival gaming manufacturer last week. The firm had a little more than us$ 7 million in cash on the company’s balance sheet as of the end of December. Shares of Progressive closed at us$ 7.21, or 4.88 percent, in trading on the Nasdaq National Market.

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