POKERTEK : Reports First Quarter 2011 Financial Results
05/04/2011| 09:40am US/Eastern
Recommend:
0
PokerTek, Inc. (NASDAQ: PTEK) today reported financial results for the
first quarter ended March 31, 2011.
Mark Roberson, Chief Executive Officer and Chief Financial Officer,
commented, "Revenue growth, margin expansion and controlled spending
levels combined to drive significantly improved operating results. We
were EBITDAS positive for the second consecutive quarter, generated
positive cash from operations, and our results from continuing
operations improved by 43%.
"We launched our new Blackjack Pro product during the first quarter with
initial installations going live in February and March. Player reaction
and product performance has been positive, and we are excited about the
opportunity to drive additional growth as we expand our electronic table
games offering."
Financial Summary
Total revenue for the first quarter of 2011 was $1.7 million compared to
$1.6 million for the first quarter of 2010. Revenues increased primarily
due to a higher number of revenue producing PokerPro tables in our
target markets, particularly in Mexico and Europe, partially offset by
reductions in revenue from Canada.
Gross profit increased 28.2% to $1.2 million for the first quarter of
2011 as compared to $0.9 million for the first quarter of 2010. Gross
profit margin increased to 72% compared to 60% for the prior-year
period. The increase in gross profit was primarily attributable to
increased revenues, improved asset utilization and reduced product costs.
Operating expenses were $1.6 million for the first quarter of 2011
compared to $1.7 million for the prior-year period. We continue to focus
on controlling spending and maintaining a lean operating structure as we
invest in new product development and increase our market penetration.
Net loss from continuing operations for the first quarter of 2011
improved 43% to $0.4 million ($0.07 per share) from $0.8 million ($0.14
per share) for comparable periods in 2011 and 2010. Including the
results of discontinued operations, quarterly net loss improved 46% to
$0.5 million ($0.07 per share) from $0.9 million ($0.15 per share).
EBITDAS from continuing operations, a non-GAAP financial measure,
improved to a profit of $119 thousand for the first quarter for 2011,
compared to a profit of $102 thousand in the prior-year period.
Balance Sheet and Cash Flow Information
Cash provided by operating activities improved 144% from a use of cash
of $82 thousand in the prior-year quarter to positive cash from
operations of $36 thousand for the current period. The improvement in
operating cash flow is directly attributable to our improved
profitability combined with working capital controls.
As of March 31, 2011, the Company's cash balance was $0.8 million.
Unit Count Information
Gaming positions deployed worldwide totaled 2,610 as of March 31, 2011,
composed of 259 PokerPro tables and 6 Blackjack Pro tables. As of March
31, 2010, 2,164 gaming positions were deployed, composed of 218 PokerPro
tables. As of December 31, 2010, gaming positions deployed worldwide
totaled 2,514, composed of 253 PokerPro tables.
Conference Call
A conference call and webcast will be held on Wednesday, May 4, 2011 at
2:30 p.m. EST for management to discuss the company's first-quarter 2011
performance. Interested parties may listen to and participate in the
conference call by dialing 866-203-3436 (U.S./Canada) or 617-213-8849
(Other) and entering passcode 34281370. A live webcast of the conference
call will be available through a link on our website, www.pokertek.com,
under the heading "Investors", as well as at www.earnings.com
and www.streetevents.com.
For those unable to participate in the live call, an archived replay
will be made available for one year on our website. A replay of the
conference call will also be available approximately two hours after the
conclusion of the call for approximately one week by dialing
888-286-8010 (U.S./Canada) or 617-801-6888 (Other) and entering passcode
31799044.
Use of Non-GAAP Measures
PokerTek, Inc. prepares its consolidated financial statements in
accordance with United States generally accepted accounting principles
("GAAP"). In addition to disclosing financial results prepared in
accordance with GAAP, the company discloses information regarding
EBITDAS, which differs from the term EBITDA as it is commonly used. In
addition to adjusting net income (loss) from continuing operations to
exclude taxes, interest, and depreciation and amortization, EBITDAS also
excludes noncash charges, certain non-recurring charges and share-based
compensation expense. EBITDA and EBITDAS are not measures of performance
defined in accordance with GAAP. However, EBITDAS is used internally in
planning and evaluating the company's operating performance.
Accordingly, management believes that disclosure of this metric offers
investors, bankers and other stakeholders an additional view of the
company's operations that, when coupled with the GAAP results, provides
a more complete understanding of the company's financial results.
EBITDAS should not be considered as an alternative to net loss or to net
cash used in operating activities as a measure of operating results or
of liquidity. It may not be comparable to similarly titled measures used
by other companies, and it excludes financial information that some may
consider important in evaluating the company's performance. A
reconciliation of GAAP net loss from continuing operations to EBITDAS is
included in the accompanying financial schedules.
About PokerTek, Inc.
PokerTek, Inc. (NASDAQ:PTEK) (www.pokertek.com)
is a licensed gaming company headquartered in Matthews, NC that develops
and distributes electronic table games solutions for the gaming
industry. The company's products are installed worldwide, and include
PokerPro and Blackjack Pro. For more information, visit: www.pokertek.com.
This press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, which
are made in accordance with the Private Securities Litigation Reform Act
of 1995. The forward-looking statements herein include, but are not
limited to, the expected adoption of our gaming systems by casinos and
other customers, and the expected acceptance of our gaming systems by
players. Our actual results may differ materially from those implied in
these forward-looking statements as a result of many factors, including,
but not limited to, the impact of global macroeconomic and credit
conditions on our business and the business of our suppliers and
customers, overall industry environment, customer acceptance of our
products, delay in the introduction of new products, further approvals
of regulatory authorities, adverse court rulings, production and/or
quality control problems, the denial, suspension or revocation of
permits or licenses by regulatory or governmental authorities,
termination or non-renewal of customer contracts, competitive pressures,
and our financial condition, including our ability to maintain
sufficient liquidity to operate our business. These and other risks and
uncertainties are described in more detail in our most recent annual
report on Form 10-K and other reports filed with the Securities and
Exchange Commission. Forward-looking statements speak only as of the
date they are made. We undertake no obligation to update or revise such
statements to reflect new circumstances or unanticipated events as they
occur, except as required by applicable laws, and you are urged to
review and consider disclosures that we make in the reports that we file
with the Securities and Exchange Commission that discuss other factors
germane to our business.
POKERTEK, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three-Months Ended
March 31,
2011
2010
Revenue
$
1,682,626
$
1,568,020
Cost of revenue
476,671
627,651
Gross profit
1,205,955
940,369
Operating expenses:
Selling, general and administrative
1,185,800
1,125,187
Research and development
264,760
285,180
Share-based compensation expense
157,951
221,579
Depreciation
20,281
39,332
Total operating expenses
1,628,792
1,671,278
Operating loss
(422,837
)
(730,909
)
Interest expense, net
26,650
32,555
Net loss from continuing operations before income taxes
(449,487
)
(763,464
)
Income tax provision
4,538
28,741
Net loss from continuing operations
(454,025
)
(792,205
)
Loss from discontinued operations
(9,974
)
(64,388
)
Net loss
$
(463,999
)
$
(856,593
)
Net loss from continuing operations per common share - basic and
diluted
$
(0.07
)
$
(0.14
)
Net loss from discontinued operations per common share - basic and
diluted
-
(0.01
)
Net loss per common share - basic and diluted
$
(0.07
)
$
(0.15
)
Weighted average common shares outstanding
6,210,883
5,628,059
POKERTEK, INC.
CONSOLIDATED BALANCE SHEETS
March 31, 2011 (Unaudited)
December 31, 2010
Assets
Current assets:
Cash and cash equivalents
$
814,125
$
666,179
Accounts receivable, net
1,209,414
1,057,511
Inventory
1,041,134
997,064
Prepaid expenses and other assets
194,964
213,495
Net assets of discontinued operations
334,420
379,441
Total current assets
3,594,057
3,313,690
Long-term assets:
Gaming systems, net
2,049,834
2,255,030
Property and equipment, net
62,508
80,755
Other assets
337,034
402,498
Total long-term assets
2,449,376
2,738,283
Total assets
$
6,043,433
$
6,051,973
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable
$
389,579
$
327,662
Accrued liabilities
707,797
648,604
Deferred revenue
1,030,590
817,789
Long-term liability - related party, current portion
44,905
21,402
Long-term debt, current portion
817,343
30,793
Current liabilities of discontinued operations
95,516
113,185
Total current liabilities
3,085,730
1,959,435
Long-term liabilities:
Deferred revenue
32,833
118,436
Long-term liability - related party
323,693
368,598
Long-term debt
-
800,000
Total long-term liabilities
356,526
1,287,034
Total liabilities
3,442,256
3,246,469
Commitments and contingencies
Shareholders' equity
Preferred stock, no par value per share;
-
-
authorized 5,000,000 none issued and
outstanding
Common stock, no par value per share; authorized 40,000,000
-
-
shares, issued and outstanding 6,284,117 and 6,187,853 shares at
March 31, 2011 and December 31, 2010, respectively
Additional paid-in capital
47,087,294
46,827,622
Accumulated deficit
(44,486,117
)
(44,022,118
)
Total shareholders' equity
2,601,177
2,805,504
Total liabilities and shareholders' equity
$
6,043,433
$
6,051,973
POKERTEK, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three-Months Ended
March 31,
2011
2010
Cash flows from operating activities:
Net loss
$
(463,999
)
$
(856,593
)
Net loss from discontinued operations
9,974
64,388
Adjustments to reconcile net loss to net cash used in operating
activities:
Depreciation and amortization
373,795
593,497
Share-based compensation expense
157,950
221,579
Provision for accounts and other receivables
15,580
14,682
Changes in assets and liabilities:
Accounts and other receivables
(149,812
)
237,684
Prepaid expenses and other assets
72,720
56,948
Inventory
(44,070
)
80,866
Gaming systems
(150,352
)
(463,363
)
Accounts payable and accrued expenses
87,708
(128,765
)
Deferred revenue
127,581
(32,804
)
Net cash provided by (used in) operating activities from
continuing operations
37,075
(211,881
)
Net cash provided by (used in) operating activities from
discontinued operations
(676
)
129,427
Net cash provided by (used in) operating activities
36,399
(82,454
)
Cash flows from investing activities:
Purchases of property and equipment
-
(4,265
)
Net cash used in investing activities
-
(4,265
)
Cash flows from financing activities:
Proceeds from issuance of common stock, net of expenses
124,997
-
Repayments of capital lease
(13,450
)
(6,332
)
Net cash provided by (used in) financing activities
111,547
(6,332
)
Net increase (decrease) in cash and cash equivalents
147,946
(93,051
)
Cash and cash equivalents, beginning of year
666,179
636,374
Cash and cash equivalents, end of period
$
814,125
$
543,323
Supplemental Disclosure of Cash Flow Information
Cash paid for:
Interest
$
14,425
$
18,607
Income taxes
4,031
26,821
Non-cash transactions:
Amortization of commitment fee issued in common stock
$
11,275
$
-
Gaming inventory purchase - related party
-
396,500
POKERTEK, INC.
RECONCILIATION TO EBITDAS
(Unaudited)
Three-Months Ended
March 31,
2011
2010
Net loss from continuing operations
$
(454,025
)
$
(792,205
)
Interest (income) expense, net
26,650
32,555
Income tax provision
4,538
28,741
Other taxes
9,714
17,355
Depreciation and amortization
373,795
593,497
Stock-based compensation expense
157,951
221,579
EBITDAS (1)
$
118,623
$
101,522
(1) EBITDAS is defined as net loss from continuing operations
before interest, taxes, depreciation, amortization, share-based
compensation, and non-cash charges. EBITDAS does not purport to
represent net earnings or net cash used in operating activities, as
those terms are defined under generally accepted accounting
principles, and should not be considered as an alternative to such
measurements or as indicators of the Company's performance. The
Company's definition of EBITDAS may not be comparable with similarly
titled measures used by other companies.
Recommend:
