IGT weighs domestic, offshore options

Even though International Game Technology may develop more manufacturing relationships offshore, the Reno-based company's heart stays close to home.

TJ Matthews, president and chief executive officer of the maker of slot machines, told securities analysts a few days ago that IGT views its manufacturing operation in Reno as critical to its success.

"Final assembly in the United States is a strategic advantage," he said.

IGT, which makes gaming devices at a plant in Reno's South Meadows, is the largest manufacturing company in Nevada.

Matthews told analysts, however, that IGT is likely to develop some manufacturing capability internationally as its business increasingly comes from foreign markets.

One sign of the company's direction is a $104.8 million investment recently made by IGT in China LotSynergy Holdings Limited, a company involved in the growing Chinese lottery market.

While IGT's investment initially is passive, Matthews said the two companies might share technology and manufacturing capacity in the future.

In other remarks with analysts, Matthews said:

* IGT expects to spend $1 billion during the next five years on product development.

* The company expects sales of slot machines in the United States to remain slow until 2009, when IGT plans to begin roll-out of systems in which floors of slot machines in casinos are controlled by centralized servers.

* While some products developed by competitors have drawn plaudits from the industry, IGT wants to beat all of its competitors all the time. "We aren't willing to cede anything to any of them," Matthews said.

For the quarter ended June 30, the company said its revenues from product sales totaled $364.6 million and its revenues from gaming operations its networks of linked machines paying progressive jackpots totaled nearly $342 million.

IGT earned $136.4 million in the quarter compared with net of $114.1 million in the same period a year earlier.