AG&E HOLDINGS INC 
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Chicago, Illinois - May 8, 2014 --- Wells-Gardner Electronics Corporation (NYSE MKT: WGA) announced financial results today for the first quarter of 2014, ended March 31, 2014.
Highlights for the first quarter of 2014 included:
Revenue for the quarter totaled $12.5 million with EPS of $0.01 per fully diluted share compared to revenue of $18.0 million and EPS of $0.05 per fully diluted share in the first quarter of 2013.
Parts sales increased by 20 percent and parts margin increased by 28 percent in the first quarter of 2014 compared to the prior year quarter.
Video Lottery Terminal (VLT) sales in the first quarter were $5.3 million compared to $5.9 million in the first quarter of 2013.
Engineering, Sales and Administrative expenses decreased 18% to $2.0 million versus $2.4 million in last year's first quarter.
Long-term debt totaled $100,000, with cash on hand of $330,000, essentially making the Company net debt-free at March 31, 2014.
Cash flow from operations for the quarter was $1.4 million.
Anthony Spier, chairman and chief executive officer of Wells-Gardner, said, "As anticipated, general market conditions during the first quarter of 2014 continued to be challenging. While LCD sales were down 49 percent from an extremely strong prior year quarter, they increased over two percent from the fourth quarter 2013, showing that the Company is holding its own in the soft gaming industry market. In addition, results for the quarter were impacted by timing issues related to the fact that one of our major customers switched to a Vendor Managed Inventory program that delayed sales recognition. This timing impact concluded this quarter and we expect this will not impact future results. On the plus side, LCD sales to amusement customers increased by approximately $500,000 in the quarter."
Mr. Spier continued, "Pretax earnings came in near expectations in this quarter. We continue to run the company conservatively with a focus on managing expenses, prudently managing bank debt, and operating our business from internally generated cash flow."
Strategic Review
On December 4, 2013 the Board of Directors of Wells-Gardner Electronics Corporation authorized management to explore strategic alternatives. The Company has retained El Segundo, California-based Innovation Capital as its financial advisor to conduct a thorough review of the Company's business and assets and to provide recommendations for consideration by the Wells-Gardner Board of Directors. There can be no assurance that this evaluation process will result in any transaction. Management will report the results of the strategic review at the conclusion of the process.
Outlook
Based on its best estimates and information available at this time, management believes full year 2014 net sales will be in a range between $48 million and $52 million, compared to $57.9 million in full year 2013, with the first quarter of 2014 expected to be the most challenging quarter of the year. This sales guidance is based on the assumption that the City of Chicago does not opt in to the VLT program in 2014. The Company expects to be profitable in 2014.
Conference Call
The Company will host a conference call and webcast at 11:00 AM Eastern Time on Thursday, May 8, 2014. Both the call and webcast are open to the general public.
The conference call domestic dial-in number is 877-261-8990 and the pass code is 37236125. Questions will be taken only from participants on the conference call. The teleconference will be webcast by Thomson/CCBN on the Company's website at www.wellsgardner.com under the investor relations section. The conference call will be available via replay for 30 days beginning late May 8, 2014. The replay call in number is 888-843-7419 and the pass code is 37236125#.
About Wells-Gardner Electronics Corporation
Founded in 1925, Wells-Gardner Electronics Corporation is a distributor and manufacturer of color video monitors and other related distribution products for a variety of markets including, but not limited to, gaming machine manufacturers, casinos, coin-operated video game manufacturers and other display integrators. The Company's American Gaming & Electronics, Inc. subsidiary ("AGE"), a leading parts distributor to the gaming markets, sells parts and services to more than 700 casinos in North America with offices in Nevada, New Jersey, Florida and Illinois. AGE is also a licensed distributor of video gaming terminals in Illinois. For additional investor information, please contact Jim Brace - Wells-Gardner at (708) 290-2120 or Joseph Diaz, Managing Partner, Lytham Partners, LLC, (602) 889-9660.
Private Securities Litigation Reform Act of 1995
This press release contains forward-looking statements within the meaning of the federal securities laws. The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for such forward-looking statements. The words, "believe," "project," "expect," "anticipate," "estimate," "will" and other similar statements of expectation identify forward-looking statements. Those statements include statements regarding the intent, belief or expectations of the Company and its management. Readers are cautioned that the forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties, and that actual results could differ materially from those expressed in any forward-looking statement. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include, but are not limited to, development of competing technologies, availability of adequate credit, interruption or loss of supply from key suppliers, increased competition, the regulatory process and regulatory and legislative changes affecting the gaming industry. Wells-Gardner assumes no obligation to update the information contained in this release to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.
| WELLS-GARDNER ELECTRONICS CORPORATION | ||||
| Condensed Consolidated Statements of Earnings (unaudited) | ||||
| Three Months Ended March 31, 2014 and 2013 | ||||
| Three Months Ended March 31, | ||||
| 2014 | 2013 | |||
| Net sales | $ | 12,460,000 | $ | 18,031,000 |
| Cost of sales | 10,394,000 | 15,071,000 | ||
| Gross margin | 2,066,000 | 2,960,000 | ||
| Engineering, selling & administrative expenses | 1,947,000 | 2,373,000 | ||
| Operating Earnings | 119,000 | 587,000 | ||
| Interest expense | 15,000 | 37,000 | ||
| Other expense, net | (5,000) | - | ||
| Income Tax expense | 38,000 | 1,000 | ||
| Net Earnings | $ | 71,000 | $ | 549,000 |
| Earnings per share: | ||||
| Basic earnings per share | $ | 0.01 | $ | 0.05 |
| Diluted earnings per share | $ | 0.01 | $ | 0.05 |
| Basic average common shares outstanding | 11,731,842 | 11,692,480 | ||
| Diluted average common shares outstanding | 11,731,842 | 11,694,886 | ||
HUG#1783707
Management to Host Conference Call and Webcast at 11:00AM Eastern Time on Thursday, May 8, 2014
Chicago, Illinois, May 2, 2014 - Wells-Gardner Electronics Corporation (NYSE MKT: WGA) announced today that it will release its first quarter 2014 financial results on Thursday, May 8, 2014 just before the market opens and will host a conference call and webcast at 11:00 AM Eastern Time on Thursday, May 8, 2014. Both the call and webcast are open to the general public.
The conference call domestic dial in number is 877-261-8990 and the pass code is 37236125. Questions will be taken only from participants on the conference call. The teleconference will be webcast by Thomson/CCBN on the Company's website at www.wellsgardner.com under the investor relations section. The conference call will be available via replay for 30 days beginning late Thursday, May 8, 2014. The replay call in number is 888-843-7419 and the pass code is 37236125#.
Founded in 1925, Wells-Gardner Electronics Corporation is a distributor and manufacturer of color video monitors and other related distribution products for a variety of markets including, but not limited to, gaming machine manufacturers, casinos, coin-operated video game manufacturers and other display integrators. The Company's American Gaming & Electronics, Inc. subsidiary ("AGE"), a leading parts distributor to the gaming markets, sells parts and services to more than 700 casinos in North America with offices in Nevada, New Jersey, Florida and Illinois. AGE is also a licensed distributor of video gaming terminals in Illinois. For additional investor information, please contact Jim Brace-Wells Gardner at (708) 290-2120 or Joseph Diaz, Managing Partner, Lytham Partners, LLC, 602-889-9660.
HUG#1782343
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