Multimedia Games, Inc., a subsidiary of Multimedia Games Holding Company, Inc. (Nasdaq: MGAM) (collectively, “Multimedia Games” or the “Company”), announced today that it has extended 1,709 unit placements, or 85% of 2,009 units currently installed on a revenue sharing basis at WinStar World Casino and Riverwind Casino operated by the Chickasaw Nation in Oklahoma, for an additional 3.5 years subsequent to the respective future end dates of the original unit placement agreements which occur in the second half of Fiscal 2013. The remaining 300 units will be removed over a two-year period beginning in the Company’s Fiscal 2014 third quarter (which begins April 2014).
Multimedia Games also extended 70 units, of a total of 115 units currently installed at the Chickasaw Nation’s Black Gold Casino, for an additional 3.5 years. In consideration of the long-term unit placement extensions, Multimedia Games will pay total unit placement fees of $13.2 million to the Chickasaw Nation in the current quarter. The Company also agreed to reduce its revenue share percentage on approximately 1,000 units at WinStar World Casino with two annual pricing adjustments on July 16, 2013 and August 1, 2014, bringing the revenue share percentage on these units in line with the Company’s other units deployed within the Nation’s gaming facilities.
In addition to the above noted unit placements, Multimedia Games has approximately 3,076 units currently installed pursuant to placement agreements at Chickasaw Nation facilities and approximately 300 additional units installed at these facilities. The following table details the current and expected future Chickasaw Nation facility unit placements (subject to existing performance clauses and requirements and other factors that may affect installed units) at fiscal year-end periods through Multimedia Games’ fiscal 2015:
|Current||at 9/30/2012||at 9/30/2013||at 9/30/2014||at 9/30/2015|
|Total units (approximate)||5,200||5,100||4,900||4,700||4,600|
|% of total current units (approximate)||100%||98%||94%||90%||88%|
Patrick Ramsey, President and Chief Executive Officer of Multimedia Games, commented, “With approximately 90% of our current units at Chickasaw Nation facilities expected to remain installed through at least September 2015, we believe we have significantly strengthened the Company’s long-term strategic alliance with our largest customer. These extensions are consistent with our plans to continue to grow revenues and reinvest in our proprietary games and technology development. We appreciate this relationship and the confidence the Chickasaw Nation has in Multimedia Games as a long-term supplier of high-performing gaming products at their facilities.”
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