Other products revenue was $2.1 million in the third quarter of 2011, a decrease of 16% compared to $2.5 million in the third quarter of 2010. The decrease was the result of reduced sales of gaming chips and plaques as non-gaming product sales were essentially flat with the prior year period.
Cash-based SG&A expense was $1.5 million in the third quarter of 2011, an increase of 12% compared to $1.3 million in the third quarter of 2010. The increase was primarily the result of higher legal fees related to the Company’s casino projects and salaries and wage expenses.
Entertainment Gaming Asia reported adjusted EBITDA of $2.8 million for the third quarter of 2011 compared to $3.2 million for the third quarter of 2010. This decrease was primarily driven by a slight increase in cash-based SG&A expense and lower gross profit from the Company’s other products division due to reduced production efficiencies on lower sales volumes.
Entertainment Gaming Asia reported net income of $647,000, or $0.01 per share, on a weighted average diluted share count of approximately 119.9 million shares for the third quarter of 2011. This compared to a net profit of $725,000, or a $0.01 per share, on a weighted average diluted share count of approximately 117.8 million shares for the third quarter of 2010. The third quarter of 2010 included a one-time tax benefit of $320,000 related to the implementation of a new tax structure for its Cambodia operations.Focus on Core Participation Operations The Company continues to focus on initiatives to improve its strategic positioning and overall returns for its core gaming participation operations. In October, the Company announced an agreement related to the San Pedro VIP Club, one of its best performing venues in its Philippine gaming participation operations. This agreement enables the Company to work directly with the government operator Philippine Amusement and Gaming Corporation (PAGCOR) and serves to increase the Company’s revenue sharing rights to 35% from 17% of net win and its control over marketing strategies in this venue.
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