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Howard Stutz

Progressive looks ahead despite $13.7 million loss

20 February 2008

LAS VEGAS, Nevada -- Progressive Gaming International Corp. turned the page on 2007 on Tuesday. Company officials were more interested in discussing the future during their quarterly earnings release instead of dwelling on the past.

The Las Vegas-based company, which spent the last year transforming itself from a slot machine and gaming table provider to a pure technology company focused on casino management systems, said it was taking steps to become profitable.

Progressive Gaming said it had a net loss of $13.7 million, or 26 cents a share, for the quarter that ended Dec. 31. A year ago, the company had a net loss of $10.1 million and loss of 29 cents a share.

During 2007, Progressive Gaming sold its table games division to Shuffle Master. The company said the loss per share, when adjusted to account for continuing operations, was 6 cents.

Still, Progressive Gaming executives pointed toward some positive signs of recovery. Revenues climbed 32 percent to $19.1 million in the quarter and 30 percent to $70.9 million for all of 2007. Meanwhile, adjusted cash flow, described as earnings before interest, taxes, depreciation and amortization, was $897,000 in the quarter and $1.7 million for the year, reversing losses when comparing both reporting periods to a year ago.

"In 2007, we successfully repositioned the company for sustainable high-margin revenue growth," Progressive Gaming Chief Executive Officer Russel McMeekin said in a statement.

During a conference call with analysts and investors, McMeekin said Progressive was expecting revenues to be in the $80 million to $90 million range in 2008, 13 percent to 27 percent above 2007.

He said the company expects to significantly increase sales revenues from both its slot machine management system and its table game management system. More than 76,000 slot machines worldwide are now controlled by Progressive Gaming systems, 29 percent higher than in 2006. McMeekin told analysts and investors the figure could climb to above 100,000 slot machines when 2008 is complete.

"Our revenue guidance highlights our belief in the strong level of worldwide customer interest in our systems installations," McMeekin said.

McMeekin said the company expects to increase the number of table games operating under its management system from 5,740 at the end of 2007 to 8,900 by the end of 2008.

Shares of Progressive Gaming rose 20 cents, or 8.26 percent, Tuesday to close at $2.62 on the Nasdaq National Market.