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Entertainment Gaming Asia Inc. Reports Second Quarter 2013 Results And Provides Market Update

- financial tables follow -

 

Entertainment Gaming Asia Inc.

Consolidated Statements of Comprehensive Income

(Unaudited)

     

Three-Month Periods Ended June 30,

Six-Month Periods Ended June 30,

(amounts in thousands, except per share data)

2013   2012 2013 2012
Revenues:  
Gaming operations, gross $ 5,685 $ 5,198 $ 10,959 $ 10,154
Less: promotional allowances

Gaming operations, net

5,685 5,198 10,959 10,154
Gaming products 162 978 1,589 1,509
Total revenues 5,847 6,176 12,548 11,663
 
Operating costs and expenses:
Cost of gaming operations
Gaming equipment depreciation 1,262 1,180 2,404 2,289
Casino contract amortization 617 615 1,238 1,230
Other gaming related intangibles amortization 63 63 126 126
Other operating costs 1,730 950 3,491 1,474
Cost of gaming products 546 810 2,041 1,230
Selling, general and administrative expenses 1,440 1,637 3,057 3,222
Stock-based compensation expenses 198 287 445 552
Gain on dispositions of assets (17) (29)
Impairment of assets 71 71
Product development expenses 35 86 155 186
Depreciation and amortization 47 59 77 90
Total operating costs and expenses 5,938 5,741 13,034 10,441
(Loss)/income from operations (91) 435 (486) 1,222
 
Other (expense)/income:
Interest expense and finance fees (1) (36) (5) (89)
Interest income 14 4 26
Foreign currency (losses)/gains (292) 25 (188) 214
Other income 7 26 10 26
Total other (expense)/income (286) 29 (179) 177
 
(Loss)/income from continuing operations before income tax expense (377) 464 (665) 1,399
 
Income tax expense (8) (35) (49) (89)
 
Net (loss)/income from continuing operations (385) 429 (714) 1,310
Net income/(loss) from discontinued operations, net of tax 99 55 (2,080) 146
 
Net (loss)/income $ (286) $ 484 $ (2,794) $ 1,456
 
Basic and diluted earnings per share:
(Loss)/earnings from continuing operations $ (0.01) $ 0.02 $ (0.02) $ 0.05
(Loss)/earnings from discontinued operations, net of tax

$

$

$

(0.07) $
(Loss)/earnings $ (0.01) $ 0.02 $ (0.09) $ 0.05
 
Weighted average common shares outstanding
Basic 30,025 29,918 30,024 29,909
Diluted 30,025 31,329 30,024 30,717
 

Entertainment Gaming Asia Inc.

Consolidated Balance Sheets

  June 30,

2013

   

December 31, 2012

(amounts in thousands, except per share data) (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 4,789 $ 10,365
Accounts receivable, net 404 1,841
Other receivables 692 112
Inventories 1,108 2,047
Prepaid expenses and other current assets 526 387
Total current assets 7,519 14,752
 
Gaming equipment, net 9,874 9,724
Casino contracts 6,682 7,982
Property and equipment, net 8,751 6,170
Goodwill 362 380
Intangible assets, net 1,065 1,253
Contract amendment fees 288 342
Deferred tax assets 201
Prepaids, deposits and other assets 2,558 2,914
Total assets $ 37,099 $ 43,718
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 844 $ 3,636
Amount due a related party 21
Accrued expenses 1,625 2,619
Customer deposits and other current liabilities 564 656
Total current liabilities 3,054 6,911
 
Other liabilities 738 1,078
Deferred tax liability 137 137
Total liabilities 3,929 8,126
 
Stockholders’ equity:
Common stock, $.001 par value, 75,000,000 shares authorized; 30,024,662 and 29,974,662 shares issued and outstanding, respectively 30 30
Additional paid-in-capital 32,813 32,224
Accumulated other comprehensive income 712 929
(Accumulated losses)/retained earnings since January 1, 2011 ($386.1 million accumulated deficit eliminated upon quasi-reorganization) (386) 2,408
Total EGT stockholders’ equity 33,169 35,591
Non-controlling interest 1 1
Total stockholders’ equity 33,170 35,592
Total liabilities and stockholders’ equity $ 37,099 $ 43,718
               

Entertainment Gaming Asia Inc.

Adjusted EBITDA from Continuing Operations

(Unaudited)

 

Three-Month Periods Ended June 30,

Six-Month Periods Ended June 30,

(amounts in thousands) 2013   2012   2013   2012
Net (loss)/income from continuing operations – GAAP $ (385) $ 429   $ (714) $ 1,310
Interest expense and finance fees 1 36 5 89
Interest income (14) (4) (26)
Income tax expense 8 35 49 89
Depreciation and amortization 2,064 1,936 3,966 3,770
Stock-based compensation expenses 198 287 445 552
Impairment of assets 71 71
Gain on dispositions of assets (17)   (29)
EBITDA from continuing operations, as adjusted

$

1,886

$

2,763

 

$

3,747

$

5,826

 

Adjusted EBITDA is earnings before interest, taxes, depreciation, amortization, stock-based compensation, and other non-cash operating income and expenses. Adjusted EBITDA is presented exclusively as a supplemental disclosure because management believes that it is widely used to measure the performance, and as a basis for valuation, of gaming companies. Management uses Adjusted EBITDA as a measure of the operating performance of its segments and to compare the operating performance of its operations with those of its competitors. The Company also presents Adjusted EBITDA because it is used by some investors as a way to measure a company’s ability to incur and service debt, make capital expenditures and meet working capital requirements. Gaming companies have historically reported EBITDA as a supplement to financial measures in accordance with generally accepted accounting principles in the United States (“GAAP”). Adjusted EBITDA should not be considered as an alternative to operating income as an indicator of the Company’s performance, as an alternative to cash flows from operating activities as a measure of liquidity, or as an alternative to any other measure determined in accordance with GAAP. Unlike net income/(loss), Adjusted EBITDA does not include depreciation or interest expense and, therefore, does not reflect current or future capital expenditures or the cost of capital. The Company compensates for these limitations by using Adjusted EBITDA as only one of several comparative tools, together with GAAP measurements, to assist in the evaluation of operating performance. Such GAAP measurements include operating income, net income/(loss), cash flows from operations and cash flow data. The Company has significant uses of cash flows, including capital expenditures, interest payments, debt principal repayments, taxes and other non-recurring charges, which are not reflected in Adjusted EBITDA. Entertainment Gaming Asia’s calculation of Adjusted EBITDA may be different from the calculation methods used by other companies and, therefore, comparability may be limited.

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