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» Entertainment Gaming Asia Inc. Q2 2010 Earnings Call Transcript
Now, the agenda for today’s call will be as follows: First, Clarence will discuss the highlights of our second quarter of 2011 financial performance and corporate developments. Following that, Andy will review in more detail our financial results for the quarter. Clarence will then conclude our prepared remarks and then update on our growth plans for our gaming operations. We would then be pleased to take your questions.With that, please let me turn the call over to Clarence Chung. Clarence. Clarence Chung Thank you Traci and good morning everyone. I’m please to report that Entertainment Gaming Asia has reported another solid quarter of operating results and record gaming participation performance, while we remain focused on the growth strategies to develop and operate the regional casinos in the emerging and growing markets of Indo-China. Before we discuss the details of our growth plans, I would like to take this opportunity to highlight some of our key financial results during the second quarter of 2011 and recent corporate development. Total gaming participation revenues for the second quarter of 2011 was $4.6 million, a new record for the company. This represents 29% from the same period last year. This strong growth was driven by record high, consolidated average net win of $147 per seat, driven primarily by our operations at NagaWorld, which achieved average net win of $21.50 per seat for the quarter, as a result of targeted marketing to customers, as well as machine mix improvements. Cash SG&A was $1.2 million for the quarter, down 20% from the same period last year, reflecting our strict cost control efforts. Adjusted EBITDA was $3.3 million for the second quarter, which was well more than double the $1.4 million achieved in the same period last year and represents a solid annualized EBITDA run rate for the company.
We achieved positive GAAP earnings with net income of $307,000, which notably includes approximately $520,000 of one-time non-cash expenses for Director and key employee performance during the period.We have significantly improved our cash flow from operations, which has enabled us to continue to build our cash position with cash and cash equivalents reaching $14 million as of June 30, 2011 compared to $10.2 million as of December 31, 2010. Our healthy cash position and improved cash flows from operations enable us to repay our outstanding notes payable, thereby strengthening (inaudible) through the redemption in debt, while maintaining the ability to execute our existing growth trends. As you can see, we continue to post improvement in our financial performance and have accomplished this while processing on our casino development trend, which we believe will drive near term returns and long term growth for the company. We will discuss our casino development trends in a moment, but first, I would like to turn the call over to Andy, to review the financial results in more detail. Andy. Andy (Kin Ming) Tsui Thank you Clarence and good morning everyone. Before we discuss the details of the second quarter of 2011 financial results, I would like to remind investors that effective at the beginning of 2011 we reclassified our reported operating segments into two divisions; gaming operations, which include our gaming participation business and future casino development operations and other products, which consist of the total operating divisions, formerly called table games and non-gaming products. These changes do not reflect any change in focus of the company and all new reporting segment information has been applied retroactively to other periods discussed. Total revenue for the second quarter of 2011 was $6.7 million up 33% compared to $5.1 million in the second quarter of 2010. Revenue growth was primary driven by our gaming participation operation, as well as improvement in our other product operations. Read the rest of this transcript for free on seekingalpha.com