AGEM releases July 2015 index

10 August 2015

(PRESS RELEASE) -- After reporting month-to-month declines for two consecutive months, the AGEM Index posted a respectable gain in July 2015. The composite index ended the month at 201.90, which represents an increase of 9.62 points (+5.0%) from June 2015. The index reported even more substantial gains when compared to a year ago, rising 18.29 points, or 10.0%. The latest period represents the fifth consecutive month of year-over-year gains.

In July 2015, six of the 13 global gaming equipment manufacturers reported month-to-month increases in stock price, with each reporting gains of more than 10%. Of the six manufacturers that reported declines in stock price, three were down by more than five percent, with one (Global Cash Access) falling nearly 35 percent. Intralot S.A. (INLOT) reported no change in stock price from June to July 2015.

The broader stock markets also reported positive trends in July 2015. The Dow Jones Industrial Average ended the month at 17,689.86, representing a slight increase of 0.4% when compared to June 2015. Meanwhile, the S&P 500 reported a gain of 2.0 percent, rising to 2,103.84, and the NASDAQ increased 2.8% to 5,128.28.

Selected positive contributors to the July 2015 AGEM Index included the following:
—International Game Technology PLC (IGT) reported an 11.5% gain in stock price to $19.80 and contributed 5.01 points.
—Due to a stock price of AU$8.57 (+12.0%), Aristocrat Technologies (ALL) contributed 4.88 points.
—Konami Corp. (TYO: 9766) contributed 3.60 points, due to a 13.7% gain in stock price to ¥2,588.

Selected negative contributors included the following:
—Crane Co. (CR) contributed negative 3.23 points, due to a 9.4% decline in stock price to $53.20.
—With a stock price of $5.05 (-34.8%), Global Cash Access (GCA) contributed negative 1.28 points.
—Due to a stock price of $15.10 (-2.8%), Scientific Games Corporation (SGMS) contributed negative 0.41 points.

AGEM Exchange: Symbol Stock Price At Month End Percent Change Index
(Currency) May-15 Apr-15 May-14 Prior Period Prior Year Contribution
Ainsworth Game
Technology ASX: AGI (AU$) 3.10 2.80 3.94 10.71 (21.32) 0.78
Technologies ASX: ALL (AU$) 7.80 8.32 5.31 (6.25) 46.89 (3.55)
Astro Corp. Taiwan: 3064 (NT$) 30.75 26.95 40.20 14.10 (23.51) 0.12
Crane Co. NYSE: CR (US$) 60.53 61.11 74.11 (0.95) (18.32) (0.39)
Daktronics, Inc.Nasdaq: DAKT (US$) 10.78 10.73 12.41 0.47 (13.13) 0.03
Galaxy Gaming
Inc. OTCMKTS: GLXZ (US$) 0.25 0.28 0.48 (10.71) (47.92) 0.00
Gaming Partners
International Nasdaq: GPIC (US$) 10.39 11.08 8.35 (6.23) 24.43 (0.06)
Global Cash
Access NYSE: GCA (US$) 7.73 7.40 8.90 4.46 (13.15) 0.27
International Game
Technology NYSE: IGT (US$) 18.09 20.35 12.55 (11.11) 44.14 (4.67)
INTRALOT S.A. ATHEX: INLOT ((() 1.66 1.63 2.09 1.84 (20.57) 0.10
Konami Corp TYO: 9766 (¥) 2,325.00 2,209.00 2,303.00 5.25 0.96 0.45
Scientific Games
Corporation Nasdaq: SGMS (US$) 15.22 12.67 8.95 20.13 70.06 3.08
Technologies Nasdaq: TACT (US$) 6.51 5.12 10.28 27.15 (36.67) 0.16

Change in Index Value (3.70)
AGEM Index Value: April 2015 200.68
AGEM Index Value: May 2015 196.98

During July 2015, a few gaming equipment manufacturers released their financial results for the three months ending June 2015. Additional reports in August 2015 will shed more light on the sector's performance through the first half of the year. Selected highlights are noted below.

Global Cash Access (GCA) completed its $1.2-billion acquisition of Multimedia Games Holding Company, Inc. in December 2014. The following reflects the combined company results for the second quarter of 2015 and pro forma results for the prior year. Global Cash Access reported net revenues of $206.4 million in the second quarter, which represents an increase of 5.7% from a year ago. The latest gain is attributable to a 9.1% increase in Games segment revenues to $54.9 million. Meanwhile, net revenues for the Payments segment increased 4.6% to $151.5 million.

The company noted that it would be implementing a number of initiatives to achieve sustainable long-term growth. These initiatives include an expansion of its game development studios from its existing eight to a total of 16, which is expected to expand the number of games offered on an annual basis. Two studios are reportedly opening before the end of 2015 and will be located in Reno, Nevada and Chicago, Illinois.

In addition, Global Cash Access plans to rebrand itself and will reportedly reveal its new name, logo and New York Stock Exchange ticker symbol at the Global Gaming Expo in Las Vegas, Nevada, which will be held from September 29 through October 1. The company's rebrand will reflect its role as a full-service supplier of casino gaming equipment and payment solutions.

In November 2014, Scientific Games Corporation (SGMS) completed its merger with Bally Technologies. In the second quarter of 2015, the company reported net revenues of $691.5 million, which represented a decline of 9.9% from its pro forma estimate of $767.3 million one year ago. During the period, services revenues increased 5.5% year-over-year to $337.9 million. However, this gain was offset by a 30.0% decline in product sales revenues to $218.1 million. Instant games revenue remained flat at $135.5 million.

By July 31, 2015, the combined company implemented approximately $184 million in annualized cost savings related to the merger integration. Scientific Games noted these savings were reflective of the elimination of duplicate positions and overhead costs. The company originally estimated it would achieve costs savings of $188 million by the end of 2015. That estimate has now been revised upwards to $200 million. As part of its integration efforts, Scientific Games Corporation initiated the closure of the WMS Waukegan, Illinois facility during the second quarter of 2015.

Related Links
Aristocrat Technologies, Inc. Gaming Vendor Information
Crane Composites Gaming Vendor Information
Everi Holdings, Inc. Gaming Vendor Information
IGT - International Game Technology Gaming Vendor Information
Intralot S.A. Gaming Vendor Information
Konami Gaming, Inc. Gaming Vendor Information
Everi Software Details
Intralot Ownership Details
Konami Gaming Software Details
Light & Wonder Software Details
Association of Gaming Equipment Manufacturers (AGEM) Association Information

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