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Entertainment Gaming Asia Inc. (NYSE Amex: EGT) (“Entertainment Gaming Asia” or “the Company”), a leading provider of electronic gaming machines (EGMs) on a participation basis to the Pan-Asian gaming industry, today reported operating results for the fourth quarter and fiscal year ended December 31, 2010 and reviewed recent corporate progress.
Consolidated adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, and non-cash charges) was $2.5 million for the fourth quarter of 2010 compared to $808,000 for the fourth quarter of 2009. Consolidated adjusted EBITDA was $8.2 million for the 2010 fiscal year compared to $33,000 for the 2009 fiscal year.
Total net revenue from EGMs on participation for the fourth quarter of 2010 was $3.8 million, an increase of 55% from the fourth quarter of 2009. Total net revenue from EGMs on participation for the 2010 fiscal year was $14.3 million, more than double the 2009 fiscal year level.
Average consolidated win per unit per day (WUD) for the fourth quarter of 2010 was $119, an increase of 13% from the fourth quarter of 2009. Average consolidated WUD for the 2010 fiscal year was $117, up 31% from the 2009 fiscal year.
As of February 28, 2011, total installed EGM seats in operation were 1,608 in eight venues, comprised of six venues in the Philippines with a total of 878 seats and two venues in Cambodia with a total of 730 seats.
Cash selling, general and administrative (SG&A) expense was $1.6 million for the fourth quarter of 2010, down 4% from the fourth quarter of 2009. Cash SG&A expense was $5.9 million for the 2010 fiscal year, down 23% from the 2009 fiscal year.
As part of its annual impairment review, the Company recorded a $3.1 million non-cash impairment charge in the fourth quarter of 2010 associated with the write-down of certain Dolphin intangible and fixed assets as the current carrying value of the assets was higher than the expected value of the projected future cash flows.
Cash balance of $10.2 million as of December 31, 2010, more than doubling from $4.2 million as of December 31, 2009.
Effective December 31, 2010, the Company effected an elective accounting quasi-reorganization to eliminate the deficit in retained earnings against additional paid-in capital, which serves to further streamline its balance sheet and better reflect the Company’s progress in refocusing its business operations.
In March 2011, the Company announced a joint venture agreement in Cambodia under which the Company will develop and operate a new casino strategically located in the Southern Cambodia province of Kampot near the Vietnam border.
The Company is actively building a solid pipeline of potential casino and slot venue projects in the Indo-China region to achieve its growth objectives.
Clarence Chung, Chairman and Chief Executive Officer of Entertainment Gaming Asia, commented, “The 2010 fiscal year was a very positive year for the company in which we demonstrated strong financial growth as well as continued progress in our corporate model. This transformation was a result of our efforts over the last two years to reposition the Company via refocusing our business model and improving our operating efficiency in order to drive cash flow. These efforts are clearly reflected in the strong year-over-year improvements in our financial performance. We generated over $8 million in adjusted EBITDA in the 2010 fiscal year and have improved our cash position to over $10 million as of December 31, 2010 and to approximately $12 million as of February 28, 2011. Going forward, we believe we have established a solid base from which to not only maximize returns from our core participation business but also to expand our business model as we execute on our casino development plans. We enter 2011 a transformed company poised to capitalize on the opportunities within emerging gaming markets in Asia.”