Association of Gaming Equipment Manufacturers (AGEM) Releases January 2018 Index

During the latest period, six of the 12 global gaming equipment manufacturers reported month-to-month increases in stock price. Six manufacturers reported decreases in stock price during the month, with three manufacturers posting double-digit increases or declines.

The three broader stock market indexes produced positive results in January. The S&P 500 reported a month-to-month increase of 5.62 percent to 2,823.81. The Dow Jones Industrial Average increased 5.79 percent to 26,149.39, while the NASDAQ increased 7.36 percent during the period to 7,411.48. 

Selected positive contributors to the January 2018 AGEM Index included the following:

• Crane Co. (CR) contributed 9.78 points due to a 12.02 percent increase in stock price to $99.94.
   


• International Game Technology (IGT) contributed 7.80 points due to a 9.66 percent increase in stock price to $29.07.
   


• Aristocrat Leisure Limited (ASX:ALL) reported a 0.84 percent increase in stock price to AU$23.90 and contributed 6.78 points.

Selected negative contributors included the following:

• With its stock price falling 9.06 percent to $46.65, Scientific Games Corporation (SGMS) contributed negative 5.20 points.
   


• Gaming Partners International (GPIC) reported a 9.52 percent decrease in stock price to $10.17, contributing negative 0.11 points.

Infographics accompanying this release are available at

http://www.globenewswire.com/NewsRoom/AttachmentNg/69bea84d-3062-47a1-9534-4bd2335c0ba2

http://www.globenewswire.com/NewsRoom/AttachmentNg/a5be05a3-1ca8-4e1f-a4ae-9fd22584894a

During the last month, Agilysys (NASDAQ:AGYS) released its quarterly financial results for the fiscal year 2018 third quarter, which ended December 31, 2017. During the third quarter, Agilysys saw gross profit margin grow on a year-over-year basis from 48.6 percent in the third quarter of fiscal year 2017 to 49.9 percent for the third quarter of fiscal year 2018. Operating losses increased over this period primarily due to increases in operating expenses. On a year-over-year basis, operating losses increased from $1.63 million in the third quarter of fiscal year 2017 to $3.61 million in the third quarter of fiscal year 2018 (122 percent increase). Operating expenses during this period grew 66.2 percent to $6.11 million from $3.68 million the prior year.

Aristocrat Leisure Limited (ASX:ALL) also recently released results for its fiscal year ending in September 2017. Revenues increased 15.3 percent in fiscal year 2017, growing from AU$2.13 billion in fiscal year 2016 to AU$2.45 billion. Earnings before interest, taxes, depreciation and amortization (EBITDA) also grew from AU$806 million in the prior year to AU$1.0 billion in fiscal year 2017. Consequently, EBITDA margins increased by 2.9 percent to 40.8 percent in fiscal year 2017. The EBITDA growth has reduced Aristocrat’s net debt-to-EBITDA ratio for fiscal year 2017 to 0.6, half of its 1.2 ratio the prior year. Aristocrat paid off AU$88.4 million of debt during fiscal year 2017, reducing gross debt to AU$1.20 billion from AU$1.29 billion the prior year.
During January 2018, AGS, an AGEM member and manufacturer of Class II and Class III slot machines, completed its initial public offering and began trading at the end of the month on the New York Stock Exchange. In mid-January AGS announced the beginning of the IPO, offering an initial 10.25 million shares of its common stock with an initial price estimated to be between $16.00 and $18.00 per share. AGS ultimately priced the IPO at $16.00 per share. In addition to the initial common stock offering, the underwriters of the IPO (Credit Suisse, Deutsche Bank, Jefferies and Macquarie Capital) were granted a 30-day option to purchase an additional 1.54 million shares of common stock.

Just before trading, AGS expected to receive gross proceeds of either $164 million or $188.6 million, if the underwriters exercised their additional purchase options. The funds were to be used to pay off all payment-in-kind (PIK) notes on AGS’s balance sheet, as well as any fees relating to the IPO. Since trading started on January 26, 2018, AGS’s market capitalization increased to $294 million, and its stock price has grown by $2.50 to nearly $20.00 per share. The current market capitalization is 79.2 percent higher than the initial funds expected to be raised, and the current stock price is over 20 percent higher than the initial asking price.