Write-downs result in loss | nnbw.com

Write-downs result in loss

NNBW Staff

GameTech International Inc. of Reno has taken a $10.8 million write-down on the value of a Montana company it purchased in 2007.

The write-down led to a loss of $11.1 million on revenues of $55.4 million for publicly held GameTech during its fiscal year that ended Nov. 2.

A year earlier, the company reported profits of $4.7 million on revenues of $58.8 million.

GameTech makes electronic systems used in bingo halls in 40 states and five nations outside of the United States.

The write-down that depressed GameTech’s net income came after auditors took a fresh look at the earnings prospects for Summit Amusement and Distributing Ltd., which GameTech purchased for $40.9 million. The Billings, Mont., company develops video poker machines.

In the most recent year, GameTech said in filing with the Securities and Exchange Commission, revenues at the Montana company fell by 1.8 percent because of regulatory delays on the approval of new products as well as slowing sales in Louisiana.

Revenue from the bingo products that are manufactured at GameTech’s Reno headquarters fell by 6.7 percent during the fiscal year.

The company said the soft economy and increased competitive pressures contributed to falling sales.

GameTech is moving into a 102,918-square-foot building it purchased at 8850 Double Diamond Parkway in Reno. The company said it’s investing $2.7 million to add office space and get the building ready for manufacturing.

The company is financing the building project with part of the proceeds of a $40 million loan from U.S. Bank and Bank of the West.