It recently came to my attention that Aimtron Electronics, the parent company of American Pinball, is in the process of conducting an Initial Public Offering on the National Stock Exchange of India (NSE). As soon as I heard that I immediately thought to myself…ooh there has to be a prospectus.
For those of you who aren’t familiar with the term, a prospectus is a legal document that companies must file when they register to issue stock. It outlines the business and its recent financial results. Unfortunately, besides listing it as a subsidiary, the Aimtron prospectus does not contain a lot of information about American Pinball. It does contain one interesting chart though (see below).
I am very familiar with U.S. balance sheets and prospectuses, not so much for the equivalent documents for the Indian market, so I'm kind of learning on the fly here. Apparently the unit of measure used in this chart is "₹ In Lakhs". According to good 'ole Google, lakh is "a hundred thousand units in the Indian place-value system. In numbers, it's written as 1,00,000."
Let's try to do some calculations to convert these numbers into something that we can understand. In order to do so I took the stated sales numbers in the chart below, multiplied them by 100,000 to get total sales in Indian Rupees and then converted that figure to U.S. Dollars by multiplying it by the current exchange rate of 0.012 USD per Rupee. According to this formula, American Pinball's sales were as follows:
I'm going to need someone to double check my logic and math here because these figures seem really low to me. It appears as though Aimtron Corporation USA's sales are growing at a nice clip year after year, but American Pinball's sales fell significantly when it launched Galactic Tank force in March of 2023.
The other column of data that the chart from the prospectus provides us with what is called "Balance...Receivables / Payables." My interpretation of this is accounts receivable minus accounts payable. If this number is positive, it means that you are owed more money than you owe and if it is negative it means that you owe more money than you are owed i.e. you are running in the red.
I'm not positive that I have these actual values correct, but at the very least these numbers can serve as an index to show us what happened to American Pinball's balance sheet after various games were launched. Galactic Tank Force's launch corresponds with the fourth fiscal period in the above chart. As you can see, American Pinball went from a large surplus of receivables to a owing more money than it was bringing in after GTF launched...and that was only for half of the year when in theory the game was selling at its best. This was likely a result of GTF's lackluster sales.
Below is a link to the prospectus. Feel free to play around with the numbers yourselves and let me know if I'm on the right track here.
Disclaimer: I am not an Indian financial analyst. I am looking at publicly available numbers and attempting to interpret them to see the results of one of Aimtron's divisions. This article is not intended to provide personal or professional financial advice.
We know Stern would love to go public and get that one-time infusion of outside cash to set the principals (and their descendants) up for life. They haven’t been secret about this. And I also know that American’s numbers aren’t Stern’s. But I DO see there a precipitous crash in sales in 2023 that I believe Stern and other manufacturers also felt to one degree or another. The bubble has burst. Seth Davis might still push them toward an IPO, but it will certainly be a few years too late. (And boy oh boy I can’t wait to learn the REAL margins on a modern day pin — they’re certainly higher than Stern would like to let on.)
Why would Aimtron seek to go public on the Indian stock exchange? Is this a typical path for smaller American companies?
It seems like the pinball division would be scrutinized pretty heavily by investors if Aimtron becomes public. It would be difficult to justify a money-losing part of the business if delivering the highest return for stockholders becomes paramount.
I'm not sure these numbers make any sense. $2.276M in sales (gross? net?) in 2022-2023 would amount to something like 380 pinball machines. Sales on the order of $274K in 2021-2022 would be like 40 pinball machines.
I know AP isn't Stern, but surely the scale of sales per year must in the 1000s of units to make this a viable business. Perhaps these numbers are off by a factor of 10.
Interesting!
Great scoop Jason! Here’s your TWIPY!!