week, Progressive Gaming
International Corp. notified
Wall Street that it
was updating its
third-quarter estimates to
reflect a loss of 9 cents
per share rather than
earnings of 9 cents. Online
casino players understand
that this in basically a
difference of 18 cents per
share.
This
revelation, announced in a
filing with the SEC, sent
shares of the equipment
provider tumbling downward
almost 30 percent on the
Nasdaq National Market over
two days of trading.
Progressive Gaming said its
estimated results for the
quarter ended Sept. 30 would
be revenue of $17.8 million,
down from the previous
prediction of $23.8 million,
and cash flow of $1 million,
down from the previously
predicted $5.5 million.
Cash
flow is generally defined as
earnings before interest,
taxes, depreciation and
amortization.
The
company plans to announces
its official third-quarter
results in less than 2
weeks.
Progressive Gaming Chairman
Russ McMeekin said the
company's growing dependence
on fees from licensing
products and intellectual
property has changed its
accounting procedures and
practices.
Nearly 60% of
the Progressive's overall
revenue comes from
licensing. The other 40%
comes from sales.
,
about 450,000 shares of
Progressive Gaming are
traded. Today, more than
6.67 million shares changed
hands.
The
SEC filing by the company,
which manufactures gaming
management systems and slot
machines, surprised some
Wall Street analysts.
The
18-cent earnings per share
variance was based on the
company not being able to
recognize approximately $6
million in revenue and $1.5
million in costs related to
two software licensing
transactions that came near
the end of the quarter.
Company auditors caught the
accounting error.
The
company called the deals
"complex" in the brief SEC
filing and tried to explain
them further on the
conference call.
