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Progressive Gaming might sell off assets

29 December 2008

LAS VEGAS, Nevada -- Troubled slot machine company Progressive Gaming International Corp. could be cashing out unless it can come up with enough coin to stave off a proposed asset sale.

On Wednesday the Las Vegas-based company in a Securities and Exchange Commission filing disclosed plans "to conduct a sale of substantially all of the company's assets ... "

The filing said Progressive Gaming was cooperating with lender Private Equity Management Group Financial Corp. to conduct a sale on Jan. 15, unless management can meet $17 million in obligations some other way in the meantime.

Progressive Chief Financial Officer Heather Rollo, whose signature dated Tuesday appeared on the filing, did not return calls for comment.

Gambling industry analyst Bill Lerner of Deutsche Bank said the filing represents another step toward the abyss for a company that never really recovered from a terrible 2007, despite shuffling management jobs and trying to change from a slots and table games provider to a gaming technology firm.

"I think what it means is they are essentially liquidating the company," Lerner said. "Whoever has priority in their capital structure ... can take out as much capital as possible before shutting the thing down."

The news was troubling in as much as Progressive, in years past, was a successful Nevada company with high name recognition on the business side of gambling. But its troubles have been widely known and the latest action isn't a surprise.

The company, formed in 1986 as the Mikohn Gaming Corp., suffered a brutal 2007. That year the stock price fell by about 75 percent, wiping out more than $200 million in market capitalization. The company sold off both its slot machine and table games divisions and settled a lingering federal antitrust lawsuit but couldn't reverse the slide.

In an April interview, Rollo said the company employed about 300 people and managed more than 75,000 slot machines worldwide and had visions of becoming, "a leader in the sports and poker management system segment in the next 24 months."

She described Progressive's core products as software systems, patents and intellectual property for radio frequency identification, or RFID, devices.

In addition to an office on Pilot Road in Las Vegas, it has offices in Reno, Colorado, Florida, Mississippi, Missouri, New Jersey, Wisconsin and international offices in Macau, Australia, the United Kingdom, Estonia and the Netherlands.

There is also a Progressive manufacturing center in Hurricane, Utah.

Progressive's Web site says it employs 280 people globally.

Shares of the company, which trade under the symbol PGIC on the Nasdaq National Market, fell 6 cents, or 35.47 percent, Wednesday to close at 11 cents.