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

- financial tables follow -

Entertainment Gaming Asia Inc. Consolidated Statements of Operations (Unaudited)
					Old Basis						Old Basis
			Three Months Ended December 31,						Years Ended December 31,
(amounts in thousands, except per share data)			2011			2010			2011			2010
Revenues:
Gaming		$	4,299		$	3,830		$	17,396		$	14,312
Other products			3,385			2,308			9,733			7,893
Total revenues			7,684			6,138			27,129			22,205
Operating costs and expenses:
Cost of electronic gaming machine (EGM) participation:
EGM depreciation			1,249			2,150			4,890			8,020
Casino contract amortization			616			—			2,457			—
Other gaming related intangibles amortization			63			—			63			—
Other operating costs			360			155			1,169			759
Cost of other products			2,762			1,866			8,346			6,916
Selling, general and administrative expenses			2,020			1,603			5,880			5,880
Stock-based compensation expenses			215			220			1,452			887
Impairment of assets			1,351			3,216			1,351			3,460
Loss on disposition of assets			23			47			175			164
Product development expenses			85			90			386			610
Depreciation and amortization			27			207			113			885
Restructuring charges			—			—			—			310
Total operating costs and expenses			8,771			9,554			26,282			27,891
Income/(loss) from operations			(1,087)			(3,416)			847			(5,686)
Other income/(expense):
Interest expense and finance fees			(100)			(89)			(405)			(411)
Interest income			32			26			93			92
Foreign currency losses			(28)			(44)			(94)			(72)
Other			60			(15)			252			202
Total other income/(expense)			(36)			(122)			(154)			(189)
Income/(loss) before income tax			(1,123)			(3,538)			693			(5,875)
Income tax benefit/(expense)			118			800			(51)			665
Net income/(loss)		$	(1,005)		$	(2,738)		$	642		$	(5,210)
Basic and diluted earnings/(loss) per share		$	(0.01)		$	(0.02)		$	0.01		$	(0.05)
Weighted average common shares outstanding:
Basic			118,760			116,064			117,953			115,702
Diluted			119,955			119,033			118,902			117,816

As a result of the Quasi-Reorganization, the consolidated statements of operations for the three months and fiscal years ended December 31, 2011 and 2010 are not comparable. The consolidated statements of operations for the three months and fiscal year ended December 31, 2011 reflect depreciation and amortization of the assets using the basis from the Quasi-Reorganization, and the consolidated statements of operations for the three months and fiscal year ended December 31, 2010 are prepared on the Company’s historical basis of accounting. As such, operations for the periods ended December 31, 2010 are labeled as being under the “Old Basis,” which is defined as accounting policies and estimates prior to the adoption of the Quasi-Reorganization.

Entertainment Gaming Asia Inc. Consolidated Balance Sheets
			December 31, 2011			December 31, 2010
(amounts in thousands, except per share data)			(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents		$	12,759		$	10,217
Trade accounts receivable, net			2,691			2,854
Other receivables			114			101
Inventories			1,894			1,064
Assets held for sale			30			422
Prepaid expenses and other current assets			811			1,051
Total current assets			18,299			15,709
Electronic gaming machines and systems, net			8,889			12,360
Casino contracts			10,340			12,790
Property and equipment, net			2,558			1,941
Goodwill			357			—
Intangible assets, net			1,227			140
Contract amendment fees			450			558
Deferred tax assets			91			—
Prepaids, deposits and other assets			1,893			561
Total assets		$	44,104		$	44,059
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable		$	1,316		$	1,062
Amount due to a related party			14			14
Accrued expenses			2,228			2,225
Income tax payable			68			—
Notes payable to a related party, current portion			6,211			2,991
Capital lease obligations, current portion			322			164
Customer deposits and other current liabilities			357			251
Total current liabilities			10,516			6,707
Notes payable to a related party, net of current portion			—			6,211
Capital lease obligations, net of current portion			—			307
Other liabilities			869			441
Deferred tax liability			207			71
Total liabilities			11,592			13,737
Stockholders’ equity:
Common stock, $.001 par value, 300,000,000 shares authorized; 118,839,393 and 116,189,394 shares issued and outstanding			119			116
Additional paid-in-capital			31,191			29,638
Accumulated other comprehensive income			559			568
Retained earnings since January 1, 2011 ($386.1 million accumulated deficit eliminated)			642			—
Total EGT stockholders’ equity			32,511			30,322
Non-controlling interest			1			—
Total EGT stockholders’ equity			32,512			30,322
Total liabilities and stockholders’ equity		$	44,104		$	44,059

Entertainment Gaming Asia Inc. Adjusted EBITDA (Unaudited)
					Old Basis						Old Basis
			Three Months Ended December 31,					Years Ended December 31,
(amounts in thousands, except per share data)			2011			2010			2011			2010
Net profit/(loss) – GAAP		$	(1,005)		$	(2,738)		$	642		$	(5,210)
Interest expense and finance fees			100			89			405			411
Interest income			(32)			(26)			(93)			(92)
Income tax (benefit)/expense			(118)			(800)			51			(665)
Depreciation and amortization			2,016			2,491			7,754			9,395
Stock-based compensation expense			215			220			1,452			887
Impairment of all assets			1,351			3,216			1,351			3,460
Loss on dispositions of assets			23			47			175			164
EBITDA, as adjusted (1)		$	2,550			2,499		$	11,737			8,350

(1) Adjusted EBITDA for the year ended December 31, 2010 was restated to include loss on dispositions.

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