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» PokerTek's CEO Discusses Q1 2011 Results - Earnings Call Transcript
Now, I’ll turn the call over to Mark.Mark Roberson Thanks Tracy. Good morning and thank you for joining us today. Obviously we are pleased to start the New Year with strong EBITDA and cash flow performance of as well as posting our first quarter of positive earnings-per-share on GAAP basis. On our year end conference call we discussed several steps we had taken to refocus our sales efforts and further reduce overhead. For Q1 our gross margins improved to 77% and our operating expenses declined by 26% from the first-quarter of 2011. As a result PokerTek increased its cash position and strengthened its balance sheet better positioning the company for growth. Entering 2012 we are focused on ramping up market penetration for both local PokerPro and ProCore. We have clear lead with PokerPro which is the dominant product in its category and we have opportunities tied up to drive market penetration more aggressively over the next several quarters. The ProCore platform which expand our reach into the market for house bank blackjack and other specialty games continues to perform well and it's creating new opportunities for diversification and growth. Achieving a profitable quarter is an important milestone and worthy of a few moments of celebration however our focus not on the quarterly ups and downs but instead on growing more meaningfully over the next several years. In this industry the sales and regulatory cycle can be arduous and opportunities take time. We have worked hard over the past several years to solidify PokerPro's market position, to develop the ProCore platform, to streamline their operations and to focus our sales and marketing efforts. I'm excited about the progress and expect to see increased growth in our gaining positions as we proceed through 2012. James will now provide some highlights regarding our current marketing initiatives and opportunities.
James CrawfordThanks Mark. Q1 was a busy one as we began planning several new PokerPro projects which we expect to install over the next several months and we continue to roll out the ProCore platform. We installed 54 additional ProCore positions in the quarter if which 48 were added as kind of a crew shifts. This brings the total number of ProCore player positions on Carnival to 132 positions on eight ships. As we continue to roll out ProCore to additional ships player adoption from both casual and experienced blackjack players continues to be excellent. We are working closely with Carnival to enhance the product, add promotional features and deepen our integration with their slot systems to enhance the player experience and further integrate our products with Carnival's goals and strategies. We also installed in our first ProCore table in France at the casino in Toulouse and expect to expand the roll out to more land based properties. PokerPro was already installed at the property in Toulouse and the players have quickly embraced the ProCore blackjack. We also added 10 more PokerPro positions at another property in France in the quarter. We changed our distribution strategy in France at the beginning of Q1 signing up a new independent representative to help drive sales in the market. Based on the feedback we expect the second half of the year to be busy as new capital budgets are approved for the operators there. We previously announced that PokerPro field trial was successfully completed and the product approved in Ontario. The field trial was at OLG's Western Fair Property where we originally installed 20 positions, then added 10 more on the exceptional results. We expect to build on the success of this initial installation and are currently planning projects to install PokerPro at four additional sites.
We expect the contract to be completed and tables added over the next few months. Additionally we recently submitted ProCore blackjack for approval in Ontario. We look forward to beginning field travel with that product soon as well.Read the rest of this transcript for free on seekingalpha.com