PokerTek, Inc. (
Q2 2011 Earnings Call
August 9, 2011 11:00 am ET
Tracy Egan – Vice President, Marketing
Mark Roberson – Chief Executive Officer, Chief Financial Officer and Treasurer
James Crawford – President
Previous Statements by PTEK
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» PokerTek, Inc. Q2 2010 Earnings Call Transcript
Good day, ladies and gentlemen and welcome to the Second Quarter 2011 PokerTek Incorporated, Earnings Conference Call. My name is Ann, and I will be your coordinator today. As a reminder this conference is being for replay purposes. At this time, all participants are in listen-only mode. (Operator instructions) We will be facilitating a question-and-answer session following the presentation.
I would now like to turn the presentation over to Tracy Egan, Vice President of Marketing. Please proceed.
Thank you and good morning. Welcome to PokerTek's investor conference call for the second quarter ended June 30, 2011. The purpose of today's call is to provide our investors and other interested parties with information about the Company’s operating results and to communicate other business developments.
Joining us today are Mark Roberson, Chief Executive Officer and Chief Financial Officer, and James Crawford, President. Today’s conference call is being simultaneously webcast and will be also be archived for replay purposes.
Before we get started, I would like to remind you that certain comments about future expectations, plans and prospects for the Company constitute forward-looking statements for purposes of the Safe Harbor provision and the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from these expectations and we undertake no obligation to update those expectations.
We will also be discussing certain financial measures such as earnings before interest, taxes, depreciation, amortization and share-based compensation which represent a non-GAAP financial measure. A reconciliation to the most recently comparable GAAP measures can be found in today’s press release.
Now, I’ll turn the call over to Mark.
Thanks, Tracy. Welcome everyone to our second quarter conference call. I hope we’re going to set an opportunity to review the information that was released this morning. The company had a strong quarter and achieved several notable milestones. Financially, this is the third quarter in a row with EBITDA positive operating results. We were positive 133,000 this quarter. One year ago, we were at negative 222,000 and two years ago, we were at negative 900,000. For Q2 all financial measures strengthen with revenues up and margins exceeding 70%.
There is a clear pattern when you step back and view the results over two year period rebuilding you’re recurring revenue business with higher margins and lower operating expenses and those actions are continuing to drive tangible financial results.
From a product standpoint we saw our investments in the ProCore platform began to bear fruit. We installed our first Blackjack games on the new platform earlier this year and based on the performance and feedback from those initial installs, we rolled out the remaining inventory during June.
Those tables which are in play both on cruise ships and in land based casinos are performing well and generating a very positive player response. I emphasis this point because it validates our plan to expand our game offerings and become a more diversified player in the electronic table games business.
PokerPro has a dominant position in the industry and is generating solid financial performance. The ProCore platform allows us to build on our core Poker business expanding the attainable share of our customer’s floor and our ability to drive increased market penetration in growth.
From a balance sheet perspective, our cash position increased to $1.2 million at the end of the quarter and our officers and directors participated in a private placement transaction in May that strengthened the company’s balance sheet and provide additional capital just forth the ProCore rollout.
Overall, a good quarter and we’re continuing to execute on the strategic objectives communicated earlier this year. James will provide a brief update on the state of the Poker business and the performance of our Blackjack tables.
Thanks Mark. As Mark said, one of our primary areas of focus has been to carefully manage our current customer base and to maximize our revenues, while beginning to establish and expand our Blackjack business. With regards to PokerPro, we’ve been busy with our existing customers. Cruise ship installs increased bringing the total number of PokerPro tables installed on ships to 62, which is the highest number in our company history.
We extended and signed a new multi year contract with one of our best customers in Europe and we expect to have additional rooms opened with this customer before the end of the year. We also reentered the Bulgarian market with the new customer installing four tables at the end of the quarter.
In Tanzania, after the success of their initial two table install, our customer added two additional tables to accommodate their expanding Poker business. We’ve upgraded many of our customers with PokerPro’s newest new Tournaments Plus software version 3.0 one of these site with Harrah's Cherokee Casino here in North Carolina where we temporarily install ten additional PokerPro tables for a total of 20. And this allows Harrah's Cherokee to host the states first world series of Poker tournament in May. It was a great week of Poker action with over 1000 players competing in 14 tournaments and a variety of cash games over the span of 10 day.
Culminating with the final tournament where 269 players competed for a WSOP main event. With regards to our distributor relationship TCS’s John Huxley have start up strong with inflations in Africa being planned for the third quarter. Matsui our Asian distributor is also planning their first installations before the end of the year.