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Association of Gaming Equipment Manufacturers (AGEM) releases May 2013 index

5 June 2013

LAS VEGAS -- (PRESS RELEASE) -- In May 2013, the Association of Gaming Equipment Manufacturers (AGEM) Index reported a composite score of 167.49, up 8.04 points (+5.0 percent) when compared to April 2013. The latest performance reflects the third consecutive month-to-month increase, and the index has only witnessed one monthly decline since the beginning of the year (the index fell 0.7 percent in February 2013). Compared to a year ago, the AGEM Index is up by 49.12 points, or 41.5 percent. In May, 10 of the global gaming equipment manufacturers reported increases in stock price when compared to the prior month, with all but two up by more than 5.0 percent. Of the seven companies that witnessed declines, just three were down by more than 5.0 percent.

The AGEM Index outperformed the broader stock markets in May. The Dow Jones Industrial Average ended the month at 15,115.57, representing a 1.9-percent increase when compared to the prior month. The S&P 500 reported a slightly better performance, increasing 2.1 percent month-to-month to 1,630.74. Meanwhile, NASDAQ witnessed the greatest increase of the three, rising 3.8 percent to 3,455.91.

Selected positive contributors to the May 2013 AGEM Index included the following:

•Lottomatica (LTO) reported a stock price of EUR 20.79, up 7.4 percent, and contributed 1.91 points.

•Konami (KNM) contributed 1.82 points due to a 7.8-percent increase in stock price to $24.47.

•With a stock price of $17.88 (up 5.5 percent) International Game Technology (IGT) contributed 1.69 points to the overall index.

Selected negative contributors included the following:

•Ainsworth Game Technology (AGI) reported a stock price of AU$3.70, down 2.9 percent, and diluted the index by 0.74 points.

•Global Cash Access (GCA) contributed negative 0.22 points, due to a 7.4-percent decline in stock price to $6.60 per share.

A number of the gaming equipment manufacturers reported top-line revenue growth in the three months ending March 31, 2013, suggesting continued expansion in the sector. Results for selected companies are noted below.

Bally Technologies (BYI) reported net revenues of $259.1 million during the company's fiscal third quarter of 2013, up 13.3 percent from the prior year period. Each of the major sources of revenue reported year-over-year increases. Gaming equipment revenues increased 8.2 percent to $85.8 million, due to an increase in domestic replacement sales. The average selling price of new gaming devices declined 6.0 percent to $16,051 during the quarter, but new-unit sales increased 18.7 percent to 4,923. Gaming operations revenues increased 10.3 percent year-over-year while systems revenues reported the greatest year-over-year increase, rising 25.5 percent to $71.3 million.

Net revenues for International Game Technology (IGT) were $600.0 million during the company's fiscal second quarter of 2013, up 10.9 percent compared to the second quarter of 2012. Although gaming operations revenues reported a year-over-year decline during the period (-4.4 percent), strong increases in product sales and interactive revenues drove overall growth. Product sales revenues increased 15.9 percent to $279.0 million as a result of a 24.8-percent increase in revenues in North America. Units shipped increased 36.2 percent to 14,300, largely attributable to a 58.8-percent increase in North American new units and a 68.0-percent increase in North American replacement units. Average machine selling price declined 10.8 percent to $14,100, primarily due to increased promotional activity. Social gaming revenues increased 31.0 percent quarter-to-quarter to $54.3 million.

Multimedia Games (MGAM) reported net revenues of $46.6 million during its fiscal second quarter of 2013, up 17.8 percent from a year ago. Gaming operations revenues increased 15.0 percent to $33.4 million, while gaming equipment and system sales revenue increased 26.4 percent to $12.8 million. The latest performance is partially attributable to the sale of 580 new units during the period, up 22.9 percent from a year ago. In addition, the company deployed over 1,000 new revenue units for the third consecutive quarter. The domestic participation installed base increased 18.4 percent year-over-year to 11,712.

Net revenues for Wells-Gardner Electronics (WGA) increased 46.1 percent during the company's fiscal first quarter of 2013 to $18.0 million. The latest performance is attributable to an increase in VGT sales in Illinois, which resulted in a 55-percent increase in sales to the gaming industry.

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