GPIC's second quarter results were down from last year, though a Reuters report noted that they beat the consensus estimates of $13.3 million in sales and a $.01 per share loss.
Gaming Partners International Reports Financial Results for the Second Quarter and First Half of 2007 and New Employment Agreement for CEO
Monday August 13, 6:46 pm ET
LAS VEGAS, Aug. 13 /PRNewswire-FirstCall/ -- Gaming Partners International Corporation (Nasdaq: GPIC - News), a leading worldwide provider of casino currency and table gaming equipment, today announced financial results for the second quarter and six months ended June 30, 2007. Additionally, the Company announced that agreement has been reached on a two-year employment contract that will extend the employment for Gerard Charlier, President and CEO, until September 2009.
For the second quarter of 2007, the Company reported revenues of $14.8 million, a decrease of 24% compared to revenues of $19.4 million for the second quarter of 2006. Gross profit for the quarter was $4.6 million, or 31% of revenues, compared to $7.2 million, or 37% of revenues, in the same period a year ago. The drop in revenues was due to fewer chip sales to casinos in Macau and a decrease in sales of high-margin products. The gross margin decrease is primarily driven by the significant decrease in production volume and a decrease in the sales of high-margin products.
Net income for the second quarter was $440,000, or $0.05 per both basic and diluted share, compared to $2.0 million or $0.25 per basic and diluted share in the three months ended June 30, 2006.
For the six months ended June 30, 2007, revenues were $23.7 million, a decrease of 37% compared to revenues of $37.7 million for the first six months of 2006. Gross profit for the period was $6.2 million, or 26% of revenues, compared to $14.4 million, or 38% of revenues, in the comparable period in 2006. The drop in revenues was due to fewer chip sales to casinos in Macau and a decrease in sales of high-margin products. The gross margin decrease is primarily driven by the significant decrease in production volume and a decrease in the sales of high-margin products.
Net loss for the six months ended was $1.0 million, or $0.13 per basic and diluted share, a decrease from the net income of $4.1 million, or $0.52 per basic and $0.51 per diluted share, for the six months ended June 30, 2006.
At June 30, 2007, the Company had cash and marketable securities of $9.2 million, compared to $10.6 million on December 31, 2006.
As of June 30, 2007, the backlog of unfilled orders, which are expected to be filled in 2007, is approximately $7.7 million at GPI USA and $9.9 million at GPI SAS. This compares to backlog of $4.3 million and $16.9 million for GPI USA and GPI SAS, respectively, at June 30, 2006.
Commenting on the results, Gerard Charlier, President and CEO of Gaming Partners International, said, "While the results for the second quarter were improved significantly from the first quarter in terms of revenue and a return to profitability, we are still disappointed in the numbers. Our international sales continue to be variable in the short term and highly dependent on activity in Macau. In the United States we continue to see strong interest in RFID technology and the information benefits it provides. While we have not yet seen the widespread adoption of the technology, we have high expectations for worldwide adoption of RFID in the long term.
"Despite our short-term results, we remain optimistic about the future based on our expectations for the continuing worldwide growth in the gaming industry and a leading position in the global casino currency market. We have a strong foothold in the emerging market for RFID gaming chips including our exclusive rights to manufacture and sell RFID gaming chips in the United States. In fact, my personal belief in the exciting potential for RFID technology in this industry was the key factor in my decision to renew my contract with GPI for two more years."
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GAMING PARTNERS INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands, except share amounts)
JUNE 30, DECEMBER 31,
2007 2006
ASSETS
Current Assets:
Cash and cash equivalents $ 6,453 $ 5,888
Marketable securities 2,789 4,710
Accounts receivables, less allowance for
doubtful accounts of $374 and $335 respectively 3,439 4,136
Inventories, net 12,070 9,251
Prepaid expenses 381 404
Deferred income tax asset - 355
Other current assets 2,667 1,497
Total current assets 27,799 26,241
Property and equipment, net 14,979 14,567
Goodwill 1,558 1,524
Other intangibles, net 1,113 1,245
Deferred income tax asset 2,555 2,093
Long-term investments 675 683
Other assets, net 507 616
Total Assets $ 49,186 $ 46,969
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term-debt $ 933 $ 1,047
Accounts payable 2,968 2,993
Accrued expenses 3,203 4,557
Customer deposits 6,268 1,187
Income taxes payable 189 870
Deferred income tax liability 629 623
Other current liabilities 352 177
Total current liabilities 14,542 11,454
Long-term debt, less current maturities 2,404 2,749
Long-term deferred income tax liability 249 182
Total liabilities 17,195 14,385
Commitments and contingencies (Note 11)
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, 8,103,401 and 8,090,901,
respectively, issued and outstanding 81 81
Additional paid-in capital 18,660 18,429
Treasury stock, at cost; 8,061 shares (196) (196)
Retained earnings 11,535 12,690
Accumulated other comprehensive income 1,911 1,580
Total stockholders' equity 31,991 32,584
Total Liabilities and Stockholders' Equity $ 49,186 $ 46,969
GAMING PARTNERS INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share amounts)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
2007 2006 2007 2006
Revenues $ 14,779 $ 19,436 $ 23,700 $ 37,733
Cost of revenues 10,164 12,255 17,514 23,358
Gross profit 4,615 7,181 6,186 14,375
Product development 94 117 140 173
Marketing and sales 1,045 986 2,139 2,073
General and administrative 3,187 3,117 5,993 5,770
Operating income (loss)
289 2,961 (2,086) 6,359
Loss on foreign currency transactions (51) (52) (79) (128)
Interest income 82 100 161 161
Interest expense (50) (38) (98) (77)
Other income, net 266 55 286 92
Income (loss) before income taxes
536 3,026 (1,816) 6,407
Income tax expense (benefit) 96 1,011 (766) 2,312
Net income (loss) $ 440 $ 2,015 $ (1,050) $ 4,095
Earnings per share:
Basic $ 0.05 $ 0.25 $ (0.13) $ 0.52
Diluted $ 0.05 $ 0.25 $ (0.13) $ 0.51
Weighted-average shares of common
stock outstanding:
Basic 8,103 7,934 8,099 7,922
Diluted 8,245 8,215 8,099 8,016
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Source: Gaming Partners International Corporation
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