The solid top-line growth combined with higher expenses primarily related to start-up and general operating costs associated with its new casino operations resulted in adjusted EBITDA of $2.8 million for the second quarter of 2012 compared to $3.3 million for the second quarter of 2011.
Entertainment Gaming Asia reported net income of $484,000, or $0.02 per share, on a weighted average diluted share count of approximately 31.3 million shares for the second quarter of 2012. This compared to net income of $307,000, or $0.01 per share, on a weighted average diluted share count of approximately 30.1 million shares for the second quarter of 2011.
Focus on Improving Slot Returns
The Company continues its efforts to improve returns on its slot operations by focusing on its higher potential venues. These efforts include the closure of under-performing venues and the strategic movement of machines to focus on those higher performing venues. During the second quarter and through August 1, 2012, the Company added one slot operation location, Thansur Bokor, and terminated three slot contracts, of which two were in the Philippines and one was in Cambodia. The three terminated contracts comprised approximately 232 seats of which 84 have been redeployed so far to other higher potential locations.Strengthening Gaming Chips and Plaques Operations The Company continued to focus on improving the financial performance of its other products division, which includes the manufacture and sale of gaming chips and plaques. Through its expanded product offerings, which include new styles of chips and more innovative, state of the art security features, and its targeted marketing programs, the Company has further strengthened its existing customer relationships in its core markets of Australia and Macau and is working to broaden its customer base in existing and new geographies. As a result, the Company recorded strong revenue growth for this business during the quarter driven by customer reorders and secured a $2 million order from an existing customer to be delivered in the third quarter of 2012. Further, the Company has begun its expansion and improvement plans for the manufacturing plant, which are expected to increase operating efficiencies and automation.