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Entertainment Gaming Asia Reports Fourth Quarter And 2011 Fiscal Year Results And Provides Market Update

Stocks in this article: EGT

Q4 and 2011 Fiscal Year Financial Review

Beginning in the fiscal year 2011, the Company reclassified its reporting segments to include: “gaming”, which consists of its gaming machine participation and future casino operations; and “other products,” which consolidates the previously reported segments of “table game products” and “non-gaming products” from the Company’s wholly-owned Dolphin subsidiary. The new manner of segment reporting has been applied retroactively to all periods presented.

Entertainment Gaming Asia’s fourth quarter of 2011 consolidated revenue was $7.7 million, an increase of 25% compared to $6.1 million in the fourth quarter of 2010. Consolidated revenue was $27.1 million for the 2011 fiscal year, an increase of 22% compared to $22.2 million in the 2010 fiscal year. The increases were due to significant improvements in both of the Company’s gaming and other products business segments.

Revenue from gaming operations was $4.3 million in the fourth quarter of 2011, an increase of 12% compared to $3.8 million in the fourth quarter of 2010. Revenue from gaming operations was $17.4 million for the 2011 fiscal year, an increase of 22% compared to $14.3 million in the 2010 fiscal year. The increases reflected strong performance from our operations at Nagaworld in Cambodia, where the Company achieved solid growth in average WUD driven primarily by targeted marketing to customers and machine mix improvements.

The Company’s Philippines operations also experienced strong improvement in average WUD for the fourth quarter and 2011 fiscal year compared to the prior-year periods. The Company attributes this to efforts to strategically manage its machine placements, marketing initiatives focused on the Company’s most promising venues in this market and the October 2011 agreement to increase the Company’s revenue sharing rights and marketing control in the attractive San Pedro VIP Club.

                       
WUD*
      Q4:11     Q4:10     Y/Y ∆     FY11     FY10     Y/Y ∆
Cambodia     $219     $197     11%     $232     $202     15%
Philippines     $64     $58    

10%

    $63     $57     10%
Consolidated     $136     $119     14%     $140     $117     20%
EGM Seats in Operation
                        12/31/11     12/31/10     Y/Y ∆
Cambodia                       719     680     6%
Philippines                       758     867     -13%
Consolidated                       1,477     1,547     -5%
 

* WUD figures exclude EGM seats operating under a new venue’s soft launch, if applicable. As a result, 60 EGM seats were excluded from the above fourth quarter and 2011 fiscal year WUD calculations. Had these seats been included in the fourth quarter and 2011 fiscal year WUD calculations, WUD for these periods would have been $202 for Cambodia, $65 for the Philippines, and $132 for the consolidated average and $214, $61, and $133, respectively. During the 2010 fiscal year, only one venue in Cambodia operated under a soft launch from September to December of that year with a total of 10 EGM seats. Consequently, there was no material difference to average WUD figures for the 2010 periods had these seats been included in the WUD calculations.

Revenue from other products was $3.4 million in the fourth quarter of 2011, an increase of 47% compared to $2.3 million in the fourth quarter of 2010. Revenue from other products was $9.7 million for the 2011 fiscal year, an increase of 23% compared to $7.9 million in the 2010 fiscal year. The increases were primarily the result of substantially higher sales of gaming chips and plaques, which reached $1.3 million for the fourth quarter of 2011 and $2.0 million for the 2011 fiscal year compared to $294,000 and $1.3 million, respectively in the prior-year periods. These gains were due to higher reorders from existing customers and the addition of new customers as the Company benefited from its ongoing efforts to enhance performance in this business segment.

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