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Gaming Partners International Corporation Reports Financial Results For the Second Quarter and First Six Months of 2012

August 9, 2012

LAS VEGAS, Aug. 9, 2012 /PRNewswire/ — Gaming Partners International Corporation (NASDAQ: GPIC), a leading worldwide provider of casino currency and table gaming equipment, announced today financial results for the second quarter and six months ended June 30, 2012.

(Logo: http://photos.prnewswire.com/prnh/20110512/LA99804LOGO)

For the second quarter and six months ended June 30, 2012, the Company earned $0.22 and $0.38 per basic and diluted share, respectively.

During the second quarter of 2012, the Company posted revenues of $13.0 million and net income of $1.8 million. These results compare to revenues of $14.8 million and net income of $0.9 million, or $0.11 per basic share and diluted share, for the second quarter of 2011. Gross profit for the second quarter of 2012 was $4.7 million, or 36% of revenues, compared to $4.8 million, or 32% of revenues, for the prior year quarter.

The decrease in revenue for the second quarter of 2012, compared to the same prior year period, was due to a $1.9 million decrease in sales of European-style casino chips for Asian casinos related to significant sales in the second quarter of 2011 to the Galaxy (TM) and Sociedade de Jogos de Macau casinos in Macau, a $0.8 million decrease in sales of RFID solutions to casinos in Asia primarily related to the May 2011 Galaxy Macau opening, offset by a $0.6 million increase in sales of American-style chips in the United States, particularly by sales of Paulson chips to casinos opening in New Jersey and Ohio. The increase in net income for the second quarter of 2012, compared to the same prior year period, is primarily driven by a reduction in general and administrative expenses due to the settlement of certain litigation and a reduction in income taxes from the utilization of foreign tax credits, offset, in part, by slightly lower gross profit.

During the first six months of 2012, the Company posted revenues of $28.5 million and net income of $3.1 million. These results compare to revenues of $32.6 million and net income of $2.6 million, or $0.32 per basic and diluted share, for the first six months of 2011. Gross profit for the first six months of 2012 was $10.0 million, or 35% of revenues, compared to $11.1 million, or 34% of revenues, for the first six months of 2011.

The decrease in revenue for the first six months of 2012, compared to the same prior year period, was due primarily to a $7.8 million decrease in sales of European-style casino chips for Asian casinos related to significant chip and RFID solutions sales in the first six months of 2011 to Macau casinos, offset by a $2.2 million increase in sales of American-style chips in the United States, primarily driven by sales of Paulson chips to casinos opening in New Jersey, Ohio, and Maine, and a $1.4 million increase in sales of furniture, accessories, table layouts, and cards to new and expanding casinos in the United States. The increase in net income for the first six months of 2012, compared to the same prior year period, is primarily driven by a reduction in general and administrative expenses due to the settlement of certain litigation and a reduction in income taxes from the utilization of foreign tax credits offset, in part, by lower gross profit.

The Company ended the quarter with $25.7 million in cash, cash equivalents and marketable securities and no debt.

“As stated above, our net income for the second quarter and first six months of 2012 were higher, compared to 2011, with diluted earnings of $0.22 and $0.38, respectively,” commented Greg Gronau, GPIC President and Chief Executive Officer. “While our worldwide sales were down to $28.5 million for the first six months of the year, with our existing backlog of signed replacement and expansion orders and other potential sales, particularly in Asia, we believe that we will have stronger revenue performance in the second half of the year.”

About Gaming Partners International Corporation (GPIC)

GPIC manufactures and supplies casino table games and equipment to licensed casinos worldwide. Under the brand names of Paulson®, Bourgogne et Grasset® and Bud Jones®, GPI provides casino currency such as chips, plaques and jetons; gaming furniture and accessories; table layouts; playing cards; dice; and roulette wheels. GPIC pioneered the use of security features such as RFID technology in casino chips and provides radio frequency identification device (RFID) solutions including chips, readers and displays. Headquartered in Las Vegas, Nevada, GPIC also has offices in Beaune, France; San Luis Rio Colorado, Mexico; Atlantic City, New Jersey, Gulfport, Mississippi and Macau S.A.R., China. For additional information, please visit http://www.gpigaming.com.

Safe Harbor Statement
This release contains “forward-looking statements” based on current expectations involving known and unknown risks and uncertainties, such as statements relating to anticipated future sales or the timing thereof; fulfillment of product orders; the long-term growth and prospects of our business or any jurisdiction; and the long term potential of the RFID casino currency solutions market and the ability of GPIC to capitalize on any such growth opportunities. Actual results or achievements may be materially different from those expressed or implied. GPIC’s plans and objectives are based on assumptions involving judgments with respect to future economic, competitive and market conditions, the timing and its ability to consummate acquisitions, and future business decisions and other risks and uncertainties identified in Part I-Item 1A, “Risk Factors” of the Company’s Annual Report on Form 10-K for the period ended December 31, 2011, all of which are difficult or impossible to predict accurately and many of which are beyond its control. Therefore, there can be no assurance that any forward-looking statement will prove to be accurate.

For more information please contact:

Gerald W. Koslow, Chief Financial Officer
+1.702.384.2425
jkoslow@gpigaming.com

                                            GAMING PARTNERS INTERNATIONAL CORPORATION
                                              CONDENSED CONSOLIDATED BALANCE SHEETS
                                                           (unaudited)
                                               (in thousands, except share amounts)

                                                                    June 30,                          December 31,
                                                                              2012                                     2011
                                                                              ----                                     ----
    ASSETS
    Current Assets:
                      Cash and cash
                      equivalents                                          $12,688                                   $9,282
                      Marketable
                      securities                                            13,060                                   14,867
                      Accounts
                      receivable, net                                        4,285                                    5,976
                     Inventories                                             7,845                                    7,749
                     Prepaid expenses                                          766                                    1,015
                      Deferred income
                      tax asset                                                617                                      893
                      Other current
                      assets                                                 2,321                                    1,564
                       Total current assets                                 41,582                                   41,346
    Property and equipment, net                                             11,373                                   11,836
    Intangibles, net                                                           592                                      646
    Deferred income tax asset                                                2,047                                    1,740
    Inventories, non-current                                                   383                                      160
    Other assets, net                                                          255                                      314
                            Total assets                                   $56,232                                  $56,042
                     ============

    LIABILITIES AND STOCKHOLDERS' EQUITY
    Current Liabilities:
                     Short-term debt                          $                  -                                      $17
                     Accounts payable                                        2,660                                    2,376
                      Accrued
                      liabilities                                            4,020                                    5,876
                      Customer deposits
                      and deferred
                      revenue                                                3,979                                    4,585
                      Income taxes
                      payable                                                  369                                        -
                       Total current liabilities                            11,028                                   12,854
    Long-term debt                                                               -                                       15
    Deferred income tax liability                                              661                                      689
                           Total liabilities                                11,689                                   13,558
                     --------
    Commitments and contingencies - see Note 8
    Stockholders' Equity:
       Preferred stock, authorized 10,000,000 shares, $.01
        par value,                                                               -                                        -
                       none issued or
                        outstanding
       Common stock, authorized 30,000,000 shares, $.01 par
        value,
                      8,207,077 and
                      8,108,304 issued
                      and outstanding,
                      respectively,
                      as of June 30,
                      2012, and
                      8,207,077 and
                      8,187,764 issued
                      and outstanding,
                      respectively, as
                      of December 31,
                      2011                                                      82                                       82
       Additional paid-in capital                                           19,493                                   19,401
       Treasury stock, at cost: 98,773 and 19,313 shares                      (807)                                    (267)
       Retained earnings                                                    25,524                                   22,442
       Accumulated other comprehensive income                                  251                                      826
                     Total stockholders' equity                             44,543                                   42,484
                      Total liabilities and stockholders'
                      equity                                               $56,232                                  $56,042
                                                                           =======                                  =======

                                      GAMING PARTNERS INTERNATIONAL CORPORATION
                                   CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                                     (unaudited)
                                       (in thousands, except per share amounts)

                                                          Three Months Ended            Six Months Ended
                                                               June 30,                     June 30,
                                                               --------                     --------
                                                              2012                 2011           2012        2011
                                                              ----                 ----           ----        ----
    Revenues                                               $13,030              $14,791        $28,455     $32,612
    Cost of revenues                                         8,291                9,993         18,494      21,485
                         Gross profit                        4,739                4,798          9,961      11,127

    Marketing and sales                                      1,215                1,292          2,623       2,569
    General and
     administrative                                          1,759                2,401          4,028   -   4,951
                         Operating income                    1,765                1,105          3,310       3,607
    Other income and
     (expense)                                                  17                  121            127         231
                         Income before income taxes          1,782                1,226          3,437       3,838
    Income tax (benefit) /
     provision                                                 (28)                 318            355       1,201
                         Net income                         $1,810                 $908         $3,082      $2,637
                         ==========

    Earnings per share:
                         Basic                               $0.22                $0.11          $0.38       $0.32
                         =====
                         Diluted                             $0.22                $0.11          $0.38       $0.32
                         =======
    Weighted-average
     shares of common
     stock outstanding:
                         Basic                               8,122                8,199          8,146       8,199
                                                             =====
                         Diluted                             8,134                8,225          8,162       8,223
                                                             =====

SOURCE Gaming Partners International Corporation


Source: PR Newswire