On a fully diluted basis, GPIC's third quarter came in at $.12 per share. According to Reuters, one analyst was looking for $.20 per share.
Gaming Partners International Reports Financial Results for the Third Quarter and First Nine Months of 2006
Monday November 13, 5:45 am ET
Third Quarter Revenues of $20.1 Million, a 50% Increase over 2005
Net Income Increases 314% Year-over-Year to $1.0 Million
Company Declares Cash Dividend of $0.125 Per Share
LAS VEGAS, Nov. 13 /PRNewswire-FirstCall/ -- Gaming Partners International Corporation (Nasdaq: GPIC - News), the leading worldwide provider of casino currency and table gaming equipment, today announced financial results for the third quarter and nine months ended September 30, 2006.
For the third quarter of 2006, the Company reported revenues of $20.1 million, an increase of 50% over revenues of $13.4 million for the third quarter of 2005. Gross profit for the quarter was $6.1 million, or 30.1% of revenues, compared to $4.9 million or 36.3% of revenues in the same period a year ago. The decline in gross profit margin was primarily related to difficulty in initial manufacturing of gaming chips using Magellan/PGIC RFID high-frequency technology in very large volume. The Company is working to improve yields and expects to see such improvement as it gains experience and identifies ways in which to maximize efficiency in this area of manufacturing.
Net income for the third quarter increased 314%, to $1.0 million, or $0.13 per basic and $0.12 per diluted share, from $246,000 or $0.03 per basic and diluted share in the three months ended September 30, 2005. Weighted average shares outstanding were 8.0 million basic and 8.2 million diluted for third quarter of 2006, and 7.8 million basic and 8.2 million diluted for the three months ended September 30, 2005.
For the nine month period ended September 30, 2006, revenues were $57.9 million, an increase of 41.6% compared to revenues of $40.9 million in the first nine months of 2005. Gross profit for the period was $21.4 million, or 36.9% of revenues, compared to $16.5 million or 40.3% of revenues in the comparable period in 2005. Decline in gross profit margin for the period was due to initial start up costs, as well as the above mentioned difficulty in the manufacture of high frequency RFID gaming chips.
Net income for the period was $5.0 million, or $0.63 per basic and $0.62 per diluted share, an increase of 125% over net income of $2.2 million or $0.29 per basic and $0.27 per diluted share for the nine months ended September 30, 2005. Weighted average shares outstanding were 7.9 million basic and 8.1 million diluted for first nine months of 2006, and 7.8 million basic and 8.1 million diluted for the comparable period in 2005.
As of September 30, 2006, the Company had cash and marketable securities of $10.8 million, compared to $13.6 million on December 31, 2005.
The Company also announced a one-time cash dividend of $0.125 per share, payable on December 15, 2006 to shareholders of record at the close of business on November 27, 2006. This marks the second cash dividend paid to the shareholders of Gaming Partners and reflects the continued improvement in the Company's profitability and operational performance.
Backlog of production orders, which are expected to be filled in 2006, at the end of the third quarter was approximately $4.2 million at GPI-USA and $7.4 million at GPI-SAS. This compares to backlog of $3.9 million and $8.0 million for GPI-USA and GPI-SAS respectively on September 30, 2005.
Commenting on the results, Gerard Charlier, President and CEO said, "In the third quarter we saw a continuation of strong year-over-year revenue growth, fueled by the strength of our GPI-SAS subsidiary, which saw revenue double compared to the third quarter last year. Our U.S. business remained strong as well, achieving sales growth of approximately 4% over last year through re-racking orders from our casino partners throughout the United States."
Mr. Charlier added, "Looking ahead, we remain encouraged by the opportunities in the RFID space, as demand for our next generation casino currency solutions is continuing to build. As mentioned last quarter, we expect full-year sales of our RFID gaming chips to be approximately $16 million, more than three-fold growth over 2005. RFID technology is still in its infancy particularly in the U.S. and expected to be a significant growth driver for GPI going forward. Additionally, broader trends in the gaming market bode well for our full range of casino currency products as we believe the market will be driven by new casino openings in the U.S. and abroad, customer re-orders necessitated by re-branding or technological obsolescence and overall growth in the popularity of table gaming.
"As the recognized leader in the global market for casino currency and table gaming supplies, we are excited about what the future holds for the industry, and more importantly, for GPI and our shareholders."
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GAMING PARTNERS INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2006 and DECEMBER 31, 2005
(unaudited)
(dollars in thousands, except share amounts)
SEPTEMBER 30, DECEMBER 31,
2006 2005
ASSETS
Current Assets:
Cash and cash equivalents $4,474 $4,573
Marketable securities 6,367 9,075
Accounts receivables, less allowance
for doubtful accounts of $314 and $398,
respectively 7,670 4,734
Inventories 10,038 9,895
Prepaid expenses 581 623
Deferred income tax asset 58 200
Other current assets 1,560 1,288
Total current assets 30,748 30,388
Property and equipment, net 13,900 11,212
Goodwill, net 1,469 1,386
Other intangibles, net 1,338 1,529
Deferred income tax asset 3,077 2,407
Long-term investments 636 1,645
Other assets, net 365 149
Total Assets $51,533 $48,716
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term-debt $750 $716
Accounts payable 3,009 3,483
Accrued expenses 4,819 3,587
Customer deposits 4,509 10,506
Income taxes payable 1,310 1,136
Deferred income tax liability 1,382 1,061
Other current liabilities 366 336
Total current liabilities 16,145 20,825
Long-term debt, less current maturities 2,499 1,892
Total liabilities 18,644 22,717
Commitments and contingencies (note 6)
Stockholders' Equity:
Preferred stock, authorized 10,000,000
shares, $.01 par value, none issued
and outstanding - -
Common stock, authorized 30,000,000 shares,
$.01 par value, 8,003,777 and 7,898,766,
respectively, issued and outstanding 80 79
Additional paid-in capital 18,186 16,904
Treasury stock, at cost; 8,061 shares (196) (196)
Retained earnings 13,780 8,766
Accumulated other comprehensive income 1,039 446
Total stockholders' equity 32,889 25,999
Total Liabilities and Stockholders' Equity $51,533 $48,716
GAMING PARTNERS INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2006 and 2005
(unaudited)
(dollars in thousands, except per share amounts)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2006 2005 2006 2005
Revenues $20,135 $13,415 $57,868 $40,893
Cost of revenues 14,066 8,551 36,433 24,402
Gross profit 6,069 4,864 21,435 16,491
Product development 199 107 372 241
Marketing and sales 993 1,172 3,066 3,228
Depreciation and amortization 254 326 967 931
General and administrative 2,900 2,804 9,048 7,734
Total operating expenses 4,346 4,409 13,453 12,134
Income from operations 1,723 455 7,982 4,357
Other income, net 84 28 209 235
Interest expense (47) (48) (124) (155)
Income before income taxes 1,760 435 8,067 4,437
Income tax expense (741) (189) (3,053) (2,207)
Net income $1,019 $246 $5,014 $2,230
Net income per share:
Basic $0.13 $0.03 $0.63 $0.29
Diluted $0.12 $0.03 $0.62 $0.27
Weighted average shares outstanding:
Basic 7,984 7,847 7,943 7,813
Diluted 8,221 8,155 8,070 8,113
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Source: Gaming Partners International Corporation
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