Mikohn spinning off sign division

By Liz Benston (contact)

Tuesday, Dec. 7, 2004 | 11:02 a.m.

In its latest restructuring move, Mikohn Gaming Corp. will sell off its casino sign division to the division's employees by March and will rename the company in a move to focus on its slot machine and systems business.

The spinoff will become private and will keep the Mikohn brand, while the remaining public entity will be renamed Progressive Gaming International Corp., which intends to hire several people to grow revenue, executives said.

The new hires will perform such functions such as R&D and engineering, marketing, tech support, service and sales.

About 100 sign employees will move to the private company, which will be located across the street from Mikohn's Las Vegas headquarters, executives said.

Progressive Gaming will begin trading under the new ticker symbol "PGIC" on the Nasdaq stock market, effective in January. The company will hold a minority stake in Mikohn after the sale of the sign business that has yet to be determined, though it will likely be less than 19 percent, executives said.

The Mikohn name is "synonymous with the sign business" and makes at least 80 percent of the lighted signs that hang inside casinos and advertise casino games, Mikohn President and Chief Executive Russ McMeekin said.

Progressive Gaming is the name of a company Mikohn bought several years ago and better reflects the direction of the company, he said.

Mikohn has previously indicated its intention to focus on casino systems and recurring revenue producers like table games and slot products, McMeekin said.

"We now have the people, processes and tools that give the confidence ... that this entity on a go-alone basis will be successful," he said.

Progressive Gaming will still maintain a "strong working relationship" with the sign company, he said.

James Cook, Mikohn's western regional vice president of sales, will become president of the Mikohn sign business. Robert Parente, executive vice president of sales and marketing, will serve on the board of directors of the private entity. Margerhita Arvanites, Mikohn's vice president of operations and manufacturing, is expected to become the entity's chief executive.

Over the past couple of years, Mikohn has attempted to achieve profitability by restructuring its business and eliminating staff. That included the sale of Mikohn's exterior sign business in 2002.

The company, which recently reported a profit of 7 cents per share in the third quarter, expects to earn about the same in the fourth quarter and hopes to maintain profit next year.