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TheStreet Open House

PokerTek's CEO Discusses Q2 2012 Results - Earnings Call Transcript

Stocks in this article: PTEK

Sales cycles tend to be long in our industry with new installations occurring only after regulatory diligence, contractual and project planning hurdles are cleared. June was one of the busiest months we have ever experienced, resulting in 262 net new gaining positions at 13 distinct locations for the quarter. Those installations will begin to contribute more visibly to our financial results starting in the third quarter.

In addition, our visibility into the second half has improved with over 225 new gaming positions already booked and scheduled for Q3, plus additional installations working their way through the planning process. The expected growth in these gaming positions will further enhance our market position, driving recurring revenue growth and financial performance for the second half and into 2013.

Over the past three years we have demonstrated a continuing trend of improvement in margins, expenses and bottom line results. We achieved our first quarter of EBITDA profitability in 2010, our first full year EBITDA’s profitability in 2011.

In the first quarterly period with positive EPS our first quarterly period with positive EPS on a GAAP basis.

Based on the current pipeline, we expect growth and recurrent revenue to accelerate in Q3 and Q4. Our goal is to grow recurring revenue while lowering operating expenses, resulting in sustainable EPS profitability on a recurring basis by the end of this year.

James will now provide an update on the recent installations, product performance and key market initiatives that we expect to drive revenue growth.

James Crawford

Thanks Mark. As Mark mentioned, Q2 was one of the busiest quarters in the history of the company with 262 net gain positions added. We also have good visibility into the second half with a large number of installations already planned and scheduled. These projects which we expect to install over the next several months will include an expansion of both PokerPro and ProCore.

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