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US – AGEM Index up slightly in August

By - 12 September 2017

The AGEM Index experienced a slight increase on mixed stock performance in August 2017.

The composite index stood at 431.66 points at the close of the month, which represents an increase of 7.74 points, or 1.82 percent, when compared to July 2017. The AGEM Index reported a year-over-year increase for the 23rd consecutive month and has climbed 145.26 points, or 50.7 percent, since August 2016.

During the latest period, eight of the 13 global gaming equipment manufacturers reported month-to-month increases in stock price, with three up by more than 10 percent. Five manufacturers reported decreases in stock price during the month, with all posting single-digit declines.

The three broader stock market indexes produced relatively flat to modestly positive results in August. The S&P 500 reported a month-to-month increase of 0.05 percent to 2,471.65. Similarly, the Dow Jones Industrial Average increased 0.26 percent to 21,948.10, while the NASDAQ increased 1.27 per cent during the period to 6,428.66.

Aristocrat Leisure Limited (ASX:ALL) contributed 4.87 points due to a 4.65 percent increase in stock price to AU$21.17.

International Game Technology (IGT) reported a 6.99 percent increase in stock price to $20.37 and contributed 3.90 points.

Ainsworth Game Technology (ASX:AGI) contributed 0.85 points due to a 2.66 percent increase in stock price to AU$2.66.

With its stock price falling 4.99 percent to $35.20, Scientific Games Corporation (SGMS) contributed negative 2.13 points.

Crane Company reported a 1.68 per cent decrease in stock price to $74.23, contributing negative 1.01 points.

In recent months, several slot machine manufacturing companies have released quarterly earnings reports. Below are selected highlights and results.

Galaxy Gaming Inc (GLXZ) reported second quarter revenue totaling $3.7m, a 19.4 per cent increase from the $3.1 million in the previous year. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) reported a 14.6 per cent decrease from the prior year’s $1.3m to $1.1m. Increased investment in personnel and research have enlarged sales, general, and administrative costs.

Crane Company (CR) announced second quarter sales of $703m, which down a modest one per cent from the prior year. Despite the dip in top-line sales, operating profit rose six per cent to $109m during the quarter. Net income during the period reached $69.2m, a 1.5 per cent increase over the $68.2m reported in the previous year. Comprehensive income rose 94.8 percent from $55.3m to $107.7m during the same period, mostly due to favorable currency translation adjustments. Also during the quarter, Crane Company completed two acquisitions: (1) Westlock Controls; and (2) Microtronic AG.

Everi Holdings, Inc. (EVRI) posted a 13.2 percent increase in second quarter revenue, totaling $242.2 million. This increase was primarily attributable to higher revenues in Everi’s payments segment, which provides solutions for cash access related services to gaming establishments. The company’s adjusted EBITDA jumped to $54.1 million from $51.2 million in the prior year.

Gaming Partners International Corporation (GPIC) second quarter revenues fell 20.0 percent to $16.3 million. This decrease was attributable to a dip in casino currency sales in the Americas, Europe and Africa, as well as a reduction in both sales and profitability on the playing card segment.

Ainsworth Game Technology (ASX:AGI) announced revenues of AU$282.1 million for the year ending June 30, 2017. This is a decrease of 1.2 percent from AU$285.5 million in the previous year. Profits of AU$37.9 million represent a decrease of 32.0 percent from the previous year. This decline in profits was partially due to unfavorable foreign currency translation.

Aristocrat Leisure entered into an agreement to acquire 100 per cent of Plarium Global Limited, a social gaming company, for US$500m and earn-out arrangements based on 10 times the last twelve months’ EBITDA. The acquisition should significantly increase revenue in Aristocrat’s digital social casino segment, said Chief Executive and Managing Director Trevor Croker.

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