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» PokerTek CEO Discusses Q2 2011 Results - Earnings Call Transcript
Sales cycles tend to be long in our industry with new installations occurring only after regulatory diligence, contractual and project planning hurdles are cleared. June was one of the busiest months we have ever experienced, resulting in 262 net new gaining positions at 13 distinct locations for the quarter. Those installations will begin to contribute more visibly to our financial results starting in the third quarter.In addition, our visibility into the second half has improved with over 225 new gaming positions already booked and scheduled for Q3, plus additional installations working their way through the planning process. The expected growth in these gaming positions will further enhance our market position, driving recurring revenue growth and financial performance for the second half and into 2013. Over the past three years we have demonstrated a continuing trend of improvement in margins, expenses and bottom line results. We achieved our first quarter of EBITDA profitability in 2010, our first full year EBITDA’s profitability in 2011. In the first quarterly period with positive EPS our first quarterly period with positive EPS on a GAAP basis. Based on the current pipeline, we expect growth and recurrent revenue to accelerate in Q3 and Q4. Our goal is to grow recurring revenue while lowering operating expenses, resulting in sustainable EPS profitability on a recurring basis by the end of this year. James will now provide an update on the recent installations, product performance and key market initiatives that we expect to drive revenue growth. James Crawford Thanks Mark. As Mark mentioned, Q2 was one of the busiest quarters in the history of the company with 262 net gain positions added. We also have good visibility into the second half with a large number of installations already planned and scheduled. These projects which we expect to install over the next several months will include an expansion of both PokerPro and ProCore.
The growth in gaming positions for Q2 including the following key markets. First, we added 70 gaming positions in the U.S including 50 additional positions in Harrah's Cherokee's New Poker Room, bringing the total at Cherokee to 150 gaming positions. This is [inaudible] noteworthy as it comes just after the proudly received approval off of manually dealt games for the first time. Both the operator and players have come to appreciate the advantages of PokerPro and prefer electronic poker over manually dealt games. The decision to make PokerPro the heart of their new expanded game environment speaks volumes.We also continued to expand in Ontario where we added 60 PokerPro gaming positions at two additional sites and added six ProCore positions. This brings the total number of PokerPro player positions installed in Ontario at the end of the Q to 90 positions at 30 sites. As we continue to roll out PokerPro to additional sites in Ontario, early indications show phenomenal player adoptions from both casual and experienced poker players making these some of the highest performing PokerPro tables ever installed. The ProCore blackjack installation marks the beginning of field trials for that product in Ontario. We expect to complete field trial in Q3 with additional installations expected to begin in the second half of 2012. We also installed games at locations in the Caribbean, France, on cruise ships and other parts of Europe. Looking ahead to the second half of 2012, we have a robust pipeline of product installations planned and expect the installations currently scheduled, especially those in Canada and the United States, to drive recurring revenue growth. In addition, we are also planning new installations in South America and expect to expand our presence in France. ProCore blackjack will complete field trials in both Ontario and France during the second half and we expect installations to begin immediately upon approvals in those markets. France has good market potential but it comes with long sales approval cycles. Read the rest of this transcript for free on seekingalpha.com