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AGEM releases August 2015 index

4 September 2015

(PRESS RELEASE) -- The AGEM Index fell to 190.45 in August 2015, representing a decline of 11.45 points (-5.7%) from July 2015. While the decline is largely attributable to broader market trends in late August, the latest period represents the fourth monthly decline in the AGEM Index since the start of 2015. Compared to a year ago, the composite index was relatively flat, falling a modest 0.13 points (-0.1%) from 190.58. Effective August 24, 2015, Global Cash Access changed its name to Everi Holdings Inc. and began trading as EVRI on the New York Stock Exchange.

In August, eight of the 13 global gaming equipment manufacturers reported a decline in stock price compared to July 2015. Additionally, five manufacturers reported a stock price decline of more than 10%, with three down by more than 20%. Of the five manufacturers that reported gains in stock price during the month, all but one were up by less than 3%.

The broader stock markets reported declines in August largely due to international economic concerns, with each of the three major indices falling by more than 6.0%. NASDAQ ended the month at 4,776.51, which represents a decline of 6.9% from the prior month. The Dow Jones Industrial Average fell 6.6% to 16,528.03, while the S&P 500 fell 6.3% to 1,972.18.

Selected positive contributors to the August 2015 AGEM Index included the following:
—Konami Corp. (TYO: 9766) contributed 2.69 points, due to a 2.9-percent increase in stock price to ¥2,664.
—Everi Holdings Inc. (EVRI) reported a stock price of $5.17 (+2.4 percent) and contributed 0.10 point to the index.

Selected negative contributors included the following:
—Due to a 14.2% decline in stock price to $16.98, International Game Technology PLC (IGT) contributed negative 6.00 points.
—Scientific Games Corporation (SGMS) contributed negative 3.20 points, due to a 27.0% decline in stock price to $11.02.
—With a stock price of AU$8.44 (-1.5%), Aristocrat Technologies (ALL) contributed negative 2.65 points.

The data table can be found here.

In August 2015, many of the gaming equipment manufacturers released their financial results for the period ending June 30, 2015. Selected performances are noted below.

Ainsworth Game Technology (AGI) reported net revenue of AU$240.6 million in fiscal year 2015, which represents a decline of 1.4% from AU$244.1 million in fiscal year 2014. The company's domestic revenue fell 35.1% to AU$93.0 million as unit volume fell 41.1% to 3,535. The company noted the decline in domestic revenue was partially attributable to less business activity with large corporate customers and changes in customer purchasing patterns. However, Ainsworth released the A600 at the Australasian Gaming Exhibition in August, which is expected to positively impact future sales.

International revenue, which accounts for 61.3% of total revenue, was AU$147.6 million in fiscal year 2015, representing an increase of 46.4% from the prior year. Revenue in North America increased 41.4% to AU$82.7 million as unit volume increased 30.2% to 3,100. In Latin America, Ainsworth reported net revenue of AU$50.3 million, up 57.7% from a year ago. Unit volume increased 39.3% to 2,219 during the period. Other international revenue, which includes Asia, New Zealand and Europe increased 40.4% year-over-year to AU$14.6 million, primarily attributable to sales growth in Asia.

Konami Corporation (9766) reported net revenue of ¥51,202 million for the three months ending June 2015, which represents a 5.3% increase from ¥48,606 million one year ago. Revenue for the gaming and systems segment was ¥6,829 million during the period, representing a modest increase of 0.2% from a year ago. Meanwhile, the Pachislot and Pachinko machines segment reported an 11.9% decline in revenue to ¥3,061 million. During the period, Konami expanded its Podium series video slot machines and launched a pachislot machine themed after the animated series Gun X Sword.

GTECH S.p.A. and International Game Technology completed their merger on April 7, 2015. The following results for the combined company are on a pro forma, constant currency basis.

International Game Technology PLC (IGT) reported revenue of $1.3 billion in the second quarter of 2015, up 1.2% from a year ago. During the period, the North America Lottery segment reported a 14.6% gain in revenue, rising to $270 million. International revenue also positively impacted total revenue growth, rising 17.1 percent year-over-year to $247 million, primarily due to strong product sales for lottery terminals and gaming machines. These gains were offset by a 6.8% decline in North America Gaming & Interactive revenue, which fell to $353 million, and a 3.7% decline in revenue in Italy, which fell to $432 million. During the quarter, IGT sold 10,147 gaming machines worldwide, up 7.9% from the prior year. A 15.2% increase in replacement units to 7,960 was offset by a 12.3% decline in new or expansion units to 2,187.

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