Third Quarter Included $2.2 Million of VGT Sales in Illinois  

Chicago, Illinois, November 9, 2012---- Wells-Gardner Electronics Corporation (NYSE MKT: WGA) announced net sales in the third quarter ending September 30, 2012 were $11.7 million, an increase of 20.2 percent over $9.8  million in the third quarter 2011.   The Company reported a net loss for the third quarter 2012 of $(235,000) or $(0.02) per share compared to a net loss of $(152,000) or $(0.01) per share for the same period in 2011.  The third quarter 2012 results included non-recurring charges of $106,000 for upgrading the Company's Oracle ERP system. The third quarter 2011 results included non-recurring charges of $214,000 made up of $89,000 relating to litigation and $125,000 of operating expenses related to the Illinois Video Gaming business.

For the nine months ending September 30, 2012, net sales were $36.9 million, an increase of 9.5 percent from $33.7 million in the same period in 2011. The Company reported a net loss of $(159,000) or $(0.01) per share compared to net earnings of $208,000 or $0.02 per share in the first nine months 2011. The nine months 2012 earnings included non-recurring charges of $758,000 made up of $447,000 for upgrading the Company's Oracle ERP system as well as $311,000 of operating expenses related to the Illinois Video Gaming business for the first two quarters, for which there was no revenue. The nine months 2011 results included $624,000 of non-recurring charges.

"We are pleased that the Illinois Video Gaming Terminal business went live on October 9, 2012 and that will result in an increasing rate of VGT sales activity," said Anthony Spier, Wells-Gardner's Chairman and Chief Executive Officer. "Gross margins for the third quarter 2012 declined to 17.5 percent compared to 18.0 percent in the same quarter in the prior year, primarily due to the VGT margin of 13.9%. Operating expenses in the quarter increased by $369,000 due to $106,000 of Oracle ERP expenses, which we fully expensed, and $263,000 of other items including additional VGT expenses and engineering expense, which are an investment in the future of the Company. The VGT business is accretive to the Company's earnings."

"The balance sheet continues to be a strategic strength as debt declined to $2.2 million at September 30, 2012 compared to $2.5 million at September 30, 2011 in spite of ending the third quarter 2012 with more than $2 million of VGT inventory. The Company has reduced the inventory levels in the rest of the business. We are continuing tight fiscal controls and the Company's debt equity ratio is 14 percent compared to 16 percent at the same date in 2011."

Outlook
We are projecting sales in the fourth quarter 2012 of between $15 and $17 million compared to $9.2 million in the same period in 2011 due primarily to VGT sales in Illinois. This means that the Company is projecting fiscal 2012 sales of between $52 million and $54 million compared to $42.9 million in fiscal 2011. The Company expects to be profitable in the fourth quarter 2012 resulting in an overall profit for fiscal 2012.

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 has most of its LCDs manufactured in Mainland China.  In addition, the Company's American Gaming & Electronics, Inc. subsidiary ("AGE"), a leading parts distributor to the gaming markets, sells parts and services to over 700 casinos in North America with offices in Nevada, New Jersey, Florida and Illinois. AGE is also a distributor of video gaming terminals in Illinois.

This press release contains forward-looking statements within the meaning of the federal securities laws.  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.  For additional investor information, please contact Jim Brace - Wells Gardner at (708) 290-2120 or Alan Woinski - Gaming USA Corporation at (201) 599-8484.