PDS on the block?

Aug 20, 2002 8:16 AM

PDS Gaming says, let’s make a deal.

Posting a small loss during the past quarter, the Las Vegas firm said it has engaged an investment banking firm to explore a merger, sale or privatization of the company.

"We’ve made some very hard cuts in an effort to right-size this company,’’ CEO Johann Finley said. "Now we’re looking at our alternatives.’’

A diversified company that finances, leases and sells gaming equipment, PDS has been hammered this year. For the six months ended June 30, it reported a loss from continuing operations of $510,000, or 13 cents per diluted share, compared with income of $1.9 million, or 47 cents per diluted share, in the first half of 2001.

But Finley and president Peter Cleary noted that the balance sheet brightened in the second quarter, when PDS completed $20.4 million in new business originations vs. $14.9 million a year ago.

"Looking forward, we continue to see attractive opportunities to add finance and lease transactions to our portfolio,’’ Cleary said.

It’s doubtful, however, that PDS will be boosting its stake in gaming. The Nasdaq-traded company has failed in bids to take over the Four Queens and the Resort at Summerlin. And its Rocky’s Sports Pub and Grill in Reno has been a serious drag on the bottom line.

More likely, Finley says, is a merger with a financial firm such as GMAC, Textron or even Foothill Capital, or, possibly, another gaming-related company