Progressive Gaming replaces boss, gives warning

Technology provider Progressive Gaming International on Thursday replaced its CEO and told investors the company’s financial results for 2008 would fall below previous projections.

The news, announced before the stock markets opened, sent Progressive’s shares tumbling on the Nasdaq National Market to their lowest levels ever.

Shares fell 25 percent initially on the news and ended the day down $1.22, or 43.88 percent, to close at $1.56.

Las Vegas-based Progressive Gaming said CEO Russel McMeekin was stepping down and would be replaced on an interim basis by Terrance Oliver, a member of the company’s board since 1988.

McMeekin, who had been CEO of Progressive since August 2002, oversaw the transition of the company last year from a slot machine and table games provider to a pure technology company that offered casino and slot machine management systems.

Oliver, who was chairman of Progressive’s board from 1988 to 1993, served in various executive capacities at nine casinos from 1973 to 1996. He retired as chief operating officer of Fitzgeralds Gaming Corp. in 1996. He is on the board of Peninsula Gaming Partners, which operates the Diamond Jo Casino in Dubuque, Iowa, and the Evangeline Downs Racino in Opelousas, La.

In his first act, Oliver told investors the company would fall short of previously projected 2008 financial guidance for revenues and other balance sheet items.

In a statement, Oliver said the country’s economic issues had affected Progressive. Casinos have lowered their capital expenditures during the past year and are not purchasing new management systems, such the products offered by Progressive.

Oliver said the company will undergo some cost-cutting measures in order to improve its financial performance.

“We expect to begin implementing these measures before the end of the third-quarter period,” Oliver said. “Our goal is to reduce expenses by an amount sufficient to permit us to generate cash-flows in the near-term.”

In August, Progressive Gaming told investors it expected that its 2008 revenues would be $80 million to $90 million. The company did not give out any new projections Thursday.

Deutsche Bank gaming analyst Bill Lerner said Progressive Gaming has been caught in the same economic cycle as other companies in the manufacturing sector; casinos are not purchasing new equipment.

“I think Progressive Gaming has some important technology for slot floors globally,” Lerner said. “But the timing is unfortunate. Fast forward to a year-and-a-half from now and Progressive will benefit just like the other gaming technology companies from an accelerated replacement cycle.”

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871.