SOURCE: Association of Gaming Equipment Manufacturers

Association of Gaming Equipment Manufacturers

December 09, 2009 14:15 ET

Association of Gaming Equipment Manufacturers Releases November 2009 Index

LAS VEGAS, NV--(Marketwire - December 9, 2009) - Reported earnings for the third quarter wrapped up during the month of November with the Dow Jones Industrial Average continuing its surge above 10,000 points and leaving some bears with global gaming suppliers. While movement in gaming supplier stock prices was modest during the past month, year-over-year comparisons demonstrated strength. The AGEM Index dropped 1.16 points or 1.1 percent during November, closing the month at 104.73. The index remains in better health than earlier in the year as it has rebounded 46.8 percent over the last 12 months. Additionally, the majority of the index members reported positive gains during the month, but a few declines from the larger market-capitalized members pressured aggregate valuations by month-end.

Selected positive contributors to the index during the month include: (1) International Game Technology (IGT) with the only full-point contribution, adding 1.77 points to the index based on a 5.89-percent increase in its stock price; (2) Bally Technologies (BYI) contributing 0.66 points with a 5.43-percent increase in its stock performance; and (3) Global Cash Access (GCA) posting a 17.54-percent increase in its stock price, adding 0.49 points to the overall index.

Selected negative contributors to the index include: (1) Konami (KNM) with its stock price dropping 10.95 percent, contributing -1.30 points to the index; (2) Aristocrat Technologies (ATI) posting -1.11 points to the index with a 10.84-percent decline in its stock valuation; and (3) Lottomatica (LTO) contributing -1.09 points to the index as its stock performance declined 8.13 percent.

As year-end approaches and the economy outside of Wall Street begins healing, investors may remain cautious on gaming suppliers as a sustained upswing in consumer spending will be required before material capital improvements emerge.

AGEM
                    Exchange:    Stock Price        Percent Change   Index
                     Symbol      At Month End       Prior    Prior  Contri-
                   (Currency) Nov-09 Oct-09 Nov-08  Period   Year   bution

Ainsworth Game  ASX: AGI (AU$)  0.19   0.17   0.08   15.15   137.50   0.04
 Technology
Aristocrat      ASX: ALL (AU$)  4.03   4.52   3.93  (10.84)    2.54  (1.11)
 Technologies
Astro Corp.      Taiwan: 3064  73.20  68.10  37.00    7.49    97.84   0.07
                   (NT$)
Bally
 Technologies  NYSE: BYI (US$) 41.53  39.39  18.47    5.43   124.85   0.66
Elixir Gaming  AMEX: EGT (US$)  0.28   0.28   0.05       -   460.00      -
 Technologies
GameTech        Nasdaq: GMTC
 International     (US$)        1.46   1.33   1.12    9.77    30.36   0.01
Gaming Partners  Nasdaq: GPIC
 International     (US$)        5.30   4.51   5.34   17.52    (0.75)  0.04
Global Cash    NYSE: GCA (US$)  7.44   6.33   3.09   17.54   140.78   0.49
 Access
IGT            NYSE: IGT (US$) 18.89  17.84  10.15    5.89    86.11   1.77
INTRALOT S.A.   ATHEX: INLOT    3.68   4.37   3.66  (15.79)    0.55  (0.68)
                   (EUR)
Konami        NYSE: KNM (US$)  16.51  18.54  22.83  (10.95)  (27.68) (1.30)
Lottomatica    MILAN: LTO.MI
 (GTECH)          (EUR)        13.34  14.52  18.60   (8.13)  (28.28) (1.09)
Multimedia     Nasdaq: MGAM     5.49   4.91   2.30   11.81   138.70   0.09
 Games            (US$)
Shuffle        Nasdaq: SHFL     8.17   7.81   4.28    4.61    90.89   0.11
 Master            (US$)
Transact       Nasdaq: TACT     6.21   5.67   5.34    9.52    16.29   0.03
 Technologies      (US$)
Wells-Gardner    AMEX: WGA      2.41   1.92   0.69   25.52   249.28   0.03
 Electronics       (US$)
WMS Industries   NYSE: WMS     38.88  39.98  24.65   (2.75)   57.73  (0.34)
                   (US$)
Change in
 Index Value                                                         (1.16)

AGEM: October
 2009                                                               105.88

AGEM:
 November
 2009                                                               104.73

ANALYSIS PROVIDED BY UNION GAMING GROUP

Broader indices continued to push higher in November despite mixed economic consumption data. Consensus trades continue to work such as gold, crude oil, and betting against a weak dollar. Against that backdrop, the AGEM Index was relatively flat during the month largely mirroring news flow and sentiment throughout the gaming and related sectors. Importantly the Global Gaming Expo (G2E) -- the suppliers' major gaming show every year -- took place during the month with better than anticipated delegate turnout. While products across the show floor were compelling, technological advances were largely understood by gaming investors going into the show, so sentiment about the publicly traded gaming suppliers was unchanged following the event. There was also no incremental evidence that casinos' capital expenditure budgets were loosening enough to foster the beginning of an important replacement cycle -- despite evident advancements in Server Based Gaming (SBG).

On the positive event front, Ohio finally passed casino gaming in its four largest cities via voter referendum, raising questions about the ultimate outcome of a delayed referendum in the state for slots at racetracks. We suspect, however, that Kentucky has never had greater propensity than now to expand gaming in some format given the geographically contiguous nature of the two states. Major gaming markets such as Macau and Las Vegas experienced relatively positive events during the month, helping investor sentiment on the overall gaming sector. For Macau, material revenue growth continued, while Las Vegas reported lagging September data finally underscoring visitation growth, and declines in unemployment, while our own analysis showed Las Vegas locals market stabilization during the period. Other highlights included Harrah's Entertainment positioning to acquire Planet Hollywood in Las Vegas, signaling an important trough in cash flow and valuation for some investors in the sector, while the federal government delayed the enforcement of online gaming rules in the U.S., perhaps foreshadowing the ultimate passage of favorable internet gaming regulation. Positive sentiment was offset to a large degree by Dubai World's potential default as investors tried to connect the dots to MGM MIRAGE's CityCenter risk during the period, which we are less concerned about.

The AGEM Index

The Association of Gaming Equipment Manufacturers (AGEM) produces the monthly AGEM Index that comprises 17 global gaming suppliers throughout the world. A total of 12 suppliers are based in the United States and are listed on the NYSE, Nasdaq or AMEX, while two trade on the Australian exchange, one supplier trades on the Athens exchange, one trade on the Milan exchange, and another trades on the Taiwan OTC exchange. The index is computed based on the month-end stock price (adjusted for dividends and splits) of each company and weighted based on approximation of market capitalization. Market capitalizations for manufacturers trading on foreign exchanges have been converted to US dollar equivalents as of month-end for comparability purposes. The AGEM Index is based on a 100-point value as of January 2005.

About AGEM

AGEM is an international trade association representing manufacturers and suppliers of electronic gaming devices, systems, table games, key components and support products and services for the gaming industry. The Association works to further the interests of gaming equipment suppliers throughout the world. Through political action, tradeshow partnerships, information dissemination and good corporate citizenship, the members of AGEM work together to create benefits for every company within the organization. Together, AGEM has assisted regulatory commissions and participated in the legislative process to solve problems and create a positive business environment.

AGEM Membership Roster

The current AGEM membership roster, 81 strong, is a who's who of the supplier segment of the global gaming industry: AGEM Gold Members: Aristocrat Technologies, Aruze Gaming America, Austrian Gaming Industries, Bally Technologies, GTECH/Atronic/Spielo, International Game Technology (IGT), INTRALOT S.A., Konami Gaming and WMS Gaming. AGEM Silver Members: AC Coin & Slot, Action Gaming, Casino Technology, Interblock USA, JCM Global, MEI, Multimedia Games, Octavian International, Shuffle Master, Suzo-Happ Group, TCSJohnHuxley and Wells-Gardner Electronics. AGEM Bronze Members: Ainsworth Game Technology, Astro Corp., Cadillac Jack, Cammegh Limited, CashCode / Crane Payment Solutions, Diamond Game, Digital Display Group, Euro Games Technology (EGT), GameTech International, Gaming Support, Incredible Technologies, Jumbo Technology, KGM Gaming, MCA Processing, Modern Gaming, Rocket Gaming Systems and Summit Gaming. AGEM Associate Members: CMYK Creative, Cole Industries, Cybertec Gaming Systems, DynaGraphic Printing, Elite Casino Products, Esterline Advanced Input Systems, FutureLogic, Gaming Partners International, Gary Platt Manufacturing, Global Cash Access, Global Gaming Group (G3), Grand Products, Greenberg Traurig LLP, Howard & Howard, IdeaWork Studios, IDX, Intel, IPS, James Industries, Kreller Group, KSK, Lewis & Roca, Masterpiece Advertising, MC2, Mikohn Signs and Graphics, Money Controls, Nanoptix, Paokai Electronic Enterprise Co., Proforma GPS, Regulatory Management Counselors, Sanmina-SCI, Strategy9, Talent Associates, Tgraphics/Outpost Productions, The Bright Group, 3M Touch Systems, Tournament One, TMX, Trade Show Fabrications, TransAct Technologies, Veridocs, Wrex Products and Young Electric Sign Company (YESCO).

AGEM Index and Overview

The AGEM index and overview is prepared by Applied Analysis (AA). AA is a Nevada-based advisory services firm providing a wide range of consultation services for public and private entities. The company utilizes extensive experience in economics, information technology and finance to provide a wide range of services, including urban economic consulting, financial advisory services, market analysis, public policy analysis, hospitality industry and gaming consulting and information system and technology consulting.

Industry Analysis

Industry Analysis is prepared by Union Gaming Group (UGG). UGG is an independent research firm, government and industry advisor, focusing on the global gaming business. UGG provides research, access and advisory services and offers varying levels of research products and services, which capitalize on UGG's relationships with corporate managements, governments, and other parties relevant to the global gaming business.

Contact Information

  • Contact:
    Marcus Prater
    AGEM Executive Director
    (702) 812-6932
    Email Contact