Progressive Gaming says annual report will be tardy

21 March 2007

By Howard Stutz

LAS VEGAS, Nevada – (PRESS RELEASE) -- Casino equipment provider Progressive Gaming International Corp., besieged in the past month by a multimillion-dollar lawsuit judgment and a sagging stock price, said it would delay filing its annual report for 2006.

The Las Vegas-based company, which announced fourth-quarter earnings March 5, said in a filing Monday with the Securities and Exchange Commission that it expected a significant change in what had been reported for the fiscal year that ended Dec. 31.

Previously, Progressive Gaming said it lost 29 cents per share in the fourth quarter and $1.05 per share for the year. Revenue in 2006 was $69.5 million, down 11.1 percent from $78.2 million in 2005.

"The company anticipates that the earnings statement to be reported ... for the year ended Dec. 31 will reflect an operating loss and an increase in net loss as compared to the fiscal years ended Dec. 31, 2005," Progressive Gaming said in its filing with the SEC, adding that it had not determined if there were accounting implications.

Company Chief Financial Officer Heather Rollo was unavailable for further comment.

The news followed other recent Progressive Gaming issues. In February the company was hit with a $39 million judgment in a federal antitrust lawsuit, but it is challenging the jury's verdict.

Meanwhile, Progressive Gaming said this month it would seek a buyer for its table game business to pay down debt.

In addition, shares of Progressive Gaming have taken a hit in the past month on the Nasdaq National Market. Since Feb. 20, the company's stock value has fallen more than 45 percent. Shares closed Tuesday at $5.05, down 5 cents, or 0.98 percent. On Monday, Progressive Gaming shares hit a 52-week intraday low of $4.95.

Jefferies & Co. gaming analyst Aimee Marcel Remey said longtime Progressive Gaming investors are starting to grow concerned about the company's recovery. She said a sale of the table games division could fetch enough to pay down the debt, roughly $45 million.

"People are starting to worry about where the revenues are going to come from," Marcel Remey said. "Progressive has had some pretty loyal shareholders who have been there a while, but some are wondering what is happening with the company."

Marcel Remey said the annual report issue could be due to the company changing chief financial officers six months ago. She also said company management is trying to boost the stock price.

This month, Chairman Russel McMeekin made two separate purchases of Progressive Gaming shares; 2,000 shares at $5.97 per share on March 13 and 10,000 shares at prices per share ranging between $6.76 to $6.89 on March 8.

Progressive Gaming announced last week it hired former Palms sports book director Rich Baccellieri to oversee a rollout of the company's Rapid Bet Live sports wagering system in the Bahamas.

Progressive Gaming recently sent analysts an update of how casino chips with radio frequency identification (tags are being used more frequently. The company owns the chips' patents.

"The company is trying to send investors a clue that it's not dying," Marcel Remey said.