Elixir
Gaming Technologies 3Q Conference Call Reports
Fantini's
Gaming Report
November 15, 2007
TO: GIR, Full Service and Conference Call clients only
Laura
Briggs
Staff Writer
1-866-683-4357
Fax: 302-730-3743
Email: lbriggs@fantiniresearch.com
Third
Quarter Highlights:
Adjusted
earnings (loss) per share: ($4.67) vs. (16 cents) vs. (7 cents)
consensus
Revenue: $2.814 million vs. $2.353 million
Balance sheet cash and cash equivalents: $1.071 million vs.
$333,888 as of December 2006
Long-term debt: none
Weighted average shares outstanding: 45.781 million vs. 27.629
million
Year-To-Date:
Adjusted
earnings per share: ($5.88) vs. (44 cents)
Net revenue: $9.717 million
Executive
Director Joe Pisano led the company’s first call after
acquiring VendingData and becoming Elixir Gaming Technologies
(EGT).
Pisano
said EGT has surpassed all expectations during its first 60
days of management. It has contracts to place 4,000 units
in 20 venues.
EGT
is achieving 25.4 percent of net win of approximately $125
per unit per day average over a 12-month period.
Management
said these achievements put EGT a year ahead of expectations.
EGT
plans to sign contracts with 20 to 25 properties a year, which
would equal a potential roll out of 5,000 machines per year.
Business
model
EGT’s
primary focus is on Asian games in the Asian gaming market
– a market poised for significant growth, according
to Pisano. EGT mainly operates in the Philippines, Vietnam
and Cambodia, and it is looking into many other potential
markets.
Pisano
said EGT’s goal is to assist venues (minimum of three-star
venues) to design floor layouts, install gaming machines and
monitoring systems and maintain game performance.
EGT
buys its games from companies like IGT and Aristocrat, then
installs the games and maintains ownership of the monitoring
system.
Management noted that players seem to prefer IGT machines
to Stargames, and it is looking to replace its Stargames machines
with Aristocrat machines in the near future.
EGT
is looking forward to the roll out of its own machines in
first quarter of 2008. The games will be in a full server-based
venue for testing before rolling out to other properties.
EGT
signs contracts that are on average five years in length and
guarantee EGT 100 percent of the gaming floor and provide
it with a minimum 20 percent of net win.
Competition
Pisano
said what puts EGT above competitors is its knowledge of the
market and its processes, its amount of capital and its extensive
market contacts.
EGT
works closely with IGT and Aristocrat. Barriers to these
companies becoming competitors of EGT include foreign reporting
issues and the need for the operator of the foreign venues
to go through Nevada compliance.
-
Philippines
- Pisano said the Philippines has the most unrecognized
growth potential. EGT has nine contracts for 2,964
machines in highly populated tourist areas. There are
a total of 7,000 gaming units in this market today and
88 million people.
- Cambodia
- Cambodia has the second highest growth potential.
EGT has contracts at 7 venues for 930 machines.
Pasino said it is a grossly under-serviced area and there
is only 1 machine per 9,000 people.
- The
United States has 1 machine for every 400 people.
- Vietnam
- EGT has 2 contracts for 200 machines each. The
area’s annual growth rate is over 7 percent, and
Pisano noted the government is considering legalized casinos.
- Other
areas - Pisano also said Mongolia wants more legitimate
casino operations, and Nepal has become more active with
recent civil organization.
- Management
is also looking at Thailand, Taiwan, Japan, Saipan and
Rota.
Conference call replay available through December 14 on the
company website at www.elixirgaming.com.
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