Mikohn Gaming to repurchase stock

Wednesday, Aug. 14, 2002 | 11:11 a.m.

Financially troubled gaming manufacturer Mikohn Gaming Corp. of Las Vegas said Tuesday it intends to purchase up to $2 million of the company's common stock over an undisclosed period.

Mikohn last month reported a loss of $5.8 million, fueled by delays of new game launches and slowing demand for machines leased by casino customers. The company's new president, Russ McMeekin, this month announced a workforce reduction of about 15 percent as part of a sweeping restructuring plan to return to profitability.

The company's stock has hovered between about $1 and $2 for the month, down from a high of around $7 a year ago.

Also Tuesday, Mikohn named John Garner as the company's new executive vice president and chief financial officer. Garner, a former financial officer with Paul-Son Gaming Corp. and Alliance Gaming Corp., replaces Don Stevens, who has held the position since 1996 and is retiring this month.

Separately, the company said it has received more favorable lending terms from Foothill Capital Corp., a subsidiary of Wells Fargo & Co.

Under the revised agreement with Foothill Capital, Mikohn has a borrowing capacity of $12.5 million beginning July 1 that will supplement the company's existing cash balance of about $13 million.

Starting with the quarter ending June 30, 2003, the company will be required to maintain a minimum cash flow of about $17 million. The requirement will return to the original amount of $20 million beginning Sept. 30, 2003.

The line of credit will increase to $17.5 million once Mikohn maintains cash flow of $20 million as calculated at the end of three consecutive calendar quarters.