Writedowns on acquisition generate loss for GameTech
Writedowns totaling $18.4 million in the value of a 2007 acquisition played a major role in dragging GameTech International of Reno into a loss in its most recent fiscal year.
The publicly held maker of electronic bingo gear reported last week that it lost $10.5 million on revenues of $47.8 million in the fiscal year ended Nov. 1. A year earlier, the company lost $11.16 million on revenues of $55.4 million.
In a filing with the Securities and Exchange Commission, GameTech said that it wrote down the value of Summit Amusement & Distributing Ltd., a Montana company it acquired in early 2007 for $40.9 million in cash.
Summit makes video lottery systems sold mostly in Montana, South Dakota and Louisiana casinos.
The writedowns included $15.7 million in goodwill associated with the transaction and $2.7 million in the value of obsolete gaming libraries owned by Summit.
GameTech said sales of bingo and video lottery systems slumped during 2009 because of the economic downturn and fierce regional competition.
The company, headquartered in a 100,000-square-foot building in South Meadows, employs about 190 people nationwide.
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