Q2 2012 Financial ReviewThe Company effected a 1:4 reverse stock split of its common shares on June 12, 2012. All historical share amounts and share information presented have been proportionally adjusted to reflect the impact of this reverse stock split, including basic and diluted weighted-average shares and shares issued and outstanding. Entertainment Gaming Asia’s second quarter of 2012 consolidated revenue was $7.6 million, an increase of 13% compared to $6.7 million in the second quarter of 2011. The increase was due to solid improvements in the Company’s gaming operations and sales of gaming chips and plaques. Revenue from gaming operations was $5.2 million in the second quarter of 2012, an increase of 14% compared to $4.6 million in the second quarter of 2011. The increase reflected gains from the Company’s slot operations (formerly referred to as the participation business) in both Cambodia and the Philippines and approximately $213,000 of incremental revenue from Dreamworld Pailin, which opened in May 2012. The Company achieved record performance of $5.0 million in revenue for its slot operations during the quarter driven by strong growth in both its Cambodia and Philippines operations. In Cambodia, the Company’s performance was driven by strong average WUD from its operations in NagaWorld, which reached $258 for the quarter. Cambodia slot revenue also included incremental revenue from its operations at Thansur Bokor, which officially opened in May 2012; however, this operation created a drag on average Cambodia WUD as it is still ramping up. In the Philippines, the Company’s operations continued to benefit from strategic management of its slot machine placements and marketing initiatives focused on its most promising venues in this market. Despite a reduced machine base primarily due to a venue closure during the quarter, both revenue and WUD for the Philippines operations improved during the quarter.
|EGM Seats in Operation|
|(1)||Represents WUD for the Company’s slot machine operations. It excludes EGM seats in operation during venue soft launch opening periods, if applicable, and includes cash payments for venues for which revenue is recognized on a cash basis. Had such applicable seats been included and revenue recognized on an accrual basis for the second quarter of 2012, WUD would have been $208 for Cambodia, $74 for Philippines and $148 for the consolidated average. Had such applicable seats been included and revenue recognized on an accrual basis for the second quarter of 2011, WUD would have been $230 for Cambodia, $60 for Philippines and $139 for the consolidated average.|