PokerTek, Inc. (NASDAQ: PTEK) today reported financial results for
the second quarter ended June 30, 2013.
Financial Highlights
- Revenue increased 54%
- Gross Profit margin increased to 77%
- Net loss from continuing operations improved 87%
- EPS nearing breakeven at $(0.01)
- EBITDAS and cash flow positive
"Our financial results for the second quarter were strong, with
increased market penetration in Canada, Mexico and the United
States driving 54% revenue growth and an 87% improvement in net
operating results," commented Mark Roberson, Chief Executive
Officer.
"With a strong base of high margin recurring revenue in place,
we expect to accelerate second half product placements to drive
growth. Areas of focus for the second half include expanding our
installed base in several markets, specifically including cruise
ships, South America and US markets. In addition, our ProCore
platform is nearing regulatory approvals that will allow us to
begin marketing BlackJack and Baccarat in regulated markets around
the world."
Financial Summary
Total revenue increased by $0.6 million, or 54.0%, to $1.6
million for the quarter and by $0.3 million, or 10.1%, to $3.0
million for the first half of 2013. The increase in total revenue
was primarily due to increased license and service fees from Canada
and Mexico, increased sales of systems and equipment in the United
States, partially offset by lower revenues from Europe.
Revenue from license and service fees increased by $0.3 million,
or 35.1% to $1.2 million for the quarter and by $0.6 million, or
29.9%, to $2.6 million for the first half of 2013. The increase in
recurring license and service fees from the prior year resulted
from growth in leased games in Canada and Mexico, partially offset
by lower license and service fees from Europe.
Revenue from systems and equipment sales increased $0.2 million,
or 181.4%, to $0.4 million for the quarter and decreased by $0.3
million, or 43.9%, for the first half of 2013. The changes in sales
of systems and equipment for the quarter were primarily due to
increased product sales in the United States. For the first half,
product sales decreased due to a large product sale occurring in
the first quarter of 2012, combined with lower product sale
activity in Europe during the current year.
Gross profit increased by $0.5 million, or 67.3%, to $1.2
million for the quarter and by $0.2 million, or 12.0%, to $2.3
million for the first half. Gross profit margins increased to 77.2%
for the quarter and 76.0% for the first half of 2013.
Operating expenses increased $0.2 million or 13.8%, to $1.3
million for the quarter and by $0.1 million or 5.9%, to $2.5
million for the first half. Operating expenses increased primarily
due to higher spending on testing and other fees incurred to obtain
regulatory approval of new products.
Net loss from continuing operations improved 87.0% to $51
thousand for the quarter and by 26.5% to $247 thousand for the
first half. The improvement was primarily due to growth in
recurring license and service fees and sales of systems and
equipment, partially offset by higher product approval costs and
foreign income taxes incurred in the current year.
Net loss from continuing operations per common share improved by
80.0% to $0.01 per common share (basic and diluted) for the quarter
and by 25.0% to $0.03 per common share (basic and diluted) for the
first half.
EBITDAS, a non-GAAP financial measure (described below),
improved to positive $248 thousand for the quarter from a loss of
$112 thousand in the prior year. For the first half, EBITDAS
improved to $370 thousand from $283 thousand in 2012.
Balance Sheet and Cash Flow
Information
Cash provided by operating activities from continuing operations
was $0.4 million for the six months ended June 30, 2013 compared to
a use of cash of $0.1 million for the six months ended June 30,
2012. The improvement in cash provided by operating activities was
primarily due to improved operating results and favorable working
capital, primarily from increased deferred revenue and reduced use
of cash for gaming systems when compared with the prior period.
Cash provided by financing activities was $0.4 million for the
six months ended June 30, 2013, compared to $0.2 million for the
comparable period in 2012. Cash provided by financing activities
primarily consists of proceeds from sales of common stock in both
periods, partially offset by principal payments on long term debt
in the current year period.
As of June 30, 2013, the Company's cash and cash equivalents
totaled $1.0 million and total debt was $0.3 million.
Gaming Positions Information
Gaming positions deployed worldwide totaled 2,456 at June 30,
2013 comprised of 2,300 PokerPro and 156 ProCore gaming positions.
As of June 30, 2012, our install base consisted of 2,294 gaming
positions deployed worldwide comprised of 2,174 PokerPro gaming
positions, and 120 ProCore gaming positions.
Conference Call
A conference call and webcast will be held on Wednesday, August
7, 2013 at 11:00 am EDT for management to discuss the company's
second-quarter 2013 performance. Interested parties may listen to
and participate in the conference call by dialing 877-703-6104
(U.S./Canada) or +1-857-244-7303 (Other) and entering passcode
13918332. A live webcast of the conference call will be available
through a link on our website, www.pokertek.com, under the heading
"Investors". For those unable to participate in the live call, an
archived replay will be made available 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 +1-617-801-6888 (Other) and
entering passcode 79665455.
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 Six Months Ended June
June 30, 30,
---------------------- ----------------------
2013 2012 2013 2012
---------- ---------- ---------- ----------
Revenue
License and service fees $1,225,353 $ 906,929 $2,586,022 $1,990,343
Sales of systems and
equipment 378,870 134,654 409,321 729,177
---------- ---------- ---------- ----------
Total revenue 1,604,223 1,041,583 2,995,343 2,719,520
Cost of revenue 365,909 301,376 719,459 687,355
---------- ---------- ---------- ----------
Gross profit 1,238,314 740,207 2,275,884 2,032,165
---------- ---------- ---------- ----------
Operating expenses:
Selling, general and
administrative 1,020,216 847,945 1,966,995 1,740,679
Research and development 169,922 174,112 338,349 373,896
Share-based compensation
expense 75,880 88,457 146,659 196,706
Depreciation 2,310 4,232 4,633 8,464
---------- ---------- ---------- ----------
Total operating expenses 1,268,328 1,114,746 2,456,636 2,319,745
---------- ---------- ---------- ----------
Operating loss (30,014) (374,539) (180,752) (287,580)
---------- ---------- ---------- ----------
Interest expense, net 9,470 19,810 20,013 40,665
---------- ---------- ---------- ----------
Net loss from continuing
operations before income
taxes (39,484) (394,349) (200,765) (328,245)
---------- ---------- ---------- ----------
Income tax provision 11,939 714 46,020 7,441
Net (loss) from continuing
operations (51,423) (395,063) (246,785) (335,686)
---------- ---------- ---------- ----------
Income from discontinued
operations - 44,345 535 54,867
---------- ---------- ---------- ----------
Net (loss) $ (51,423) $ (350,718) $ (246,250) $ (280,819)
========== ========== ========== ==========
Net (loss) from continuing
operations per common share
- basic and diluted $ (0.01) $ (0.05) $ (0.03) $ (0.04)
Net income from discontinued
operations per common share
- basic and diluted - 0.01 0.00 0.01
---------- ---------- ---------- ----------
Net (loss) per common share
- basic and diluted $ (0.01) $ (0.05) $ (0.03) $ (0.04)
========== ========== ========== ==========
Weighted average common
shares outstanding - basic
and diluted 9,227,808 7,563,120 9,004,560 7,563,612
POKERTEK, INC.
CONSOLIDATED BALANCE SHEETS
June 30, 2013 December 31,
(Unaudited) 2012
---------------- ----------------
Assets
Current assets:
Cash and cash equivalents $ 1,017,232 $ 235,757
Accounts receivable, net 723,705 794,769
Inventory 1,246,272 1,342,950
Prepaid expenses and other assets 104,673 66,988
---------------- ----------------
Total current assets 3,091,882 2,440,464
---------------- ----------------
Long-term assets:
Gaming systems, net 1,621,272 1,693,051
Property and equipment, net 28,204 26,967
Other assets 155,708 171,498
---------------- ----------------
Total long-term assets 1,805,184 1,891,516
---------------- ----------------
Total assets $ 4,897,066 $ 4,331,980
================ ================
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 393,330 $ 274,609
Accrued liabilities 457,068 569,404
Deferred revenue 219,528 42,266
Long-term debt, current portion 66,712 59,571
---------------- ----------------
Total current liabilities 1,136,638 945,850
---------------- ----------------
Long-term liabilities:
Long-term liability 187,763 219,494
Long-term debt 206,816 240,429
---------------- ----------------
Total long-term liabilities 394,579 459,923
---------------- ----------------
Total liabilities 1,531,217 1,405,773
Commitments and contingencies
Common stock subject to rescission - 71,183
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 9,316,164 and
8,625,498 shares at June 30, 2013 and
December 31, 2012, respectively - -
Additional paid-in capital 50,238,995 49,481,922
Accumulated deficit (46,873,146) (46,626,898)
---------------- ----------------
Total shareholders' equity 3,365,849 2,855,024
---------------- ----------------
Total liabilities and shareholders'
equity $ 4,897,066 $ 4,331,980
================ ================
POKERTEK, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended June 30,
----------------------------
2013 2012
------------- -------------
Cash flows from operating activities:
Net loss $ (246,250) $ (280,819)
Net income from discontinued operations (535) (54,867)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 400,258 366,386
Share-based compensation expense 146,659 196,706
Provision for doubtful accounts and other
receivables 104,217 2,956
Changes in assets and liabilities:
Accounts and other receivables (74,180) 111,825
Prepaid expenses and other assets 19,132 36,537
Inventory 96,678 68,691
Gaming systems (323,846) (618,501)
Accounts payable and accrued expenses 91,943 86,445
Deferred revenue 177,263 (46,686)
------------- -------------
Net cash provided by (used in) operating
activities from continuing operations 391,338 (131,327)
Net cash provided by operating activities from
discontinued operations 535 70,502
------------- -------------
Net cash provided by (used in) operating
activities 391,873 (60,825)
------------- -------------
Sale of investments
Purchase of investments
------------- -------------
Net cash used in investing activities (5,870) -
------------- -------------
Repayments of long-term debt (26,472) -
Proceeds from capital lease
Repayments of capital lease - -
------------- -------------
Net cash provided by financing activities 395,472 174,869
------------- -------------
Net increase in cash and cash equivalents 781,475 114,044
Cash and cash equivalents, beginning of year 235,757 606,229
------------- -------------
Cash and cash equivalents, end of period $ 1,017,232 $ 720,273
============= =============
Supplemental Disclosure of Cash Flow
Information
Cash paid for:
Interest $ 23,756 $ 37,911
Income taxes 43,995 8,790
Non-cash transactions:
Amortization of commitment fee issued in
common stock $ - $ 22,550
Shares of common stock issued in settlement
of litigation 117,288 -
Notes receivable, net 41,028
POKERTEK, INC.
RECONCILIATION TO EBITDAS
(UNAUDITED)
Three Months Ended June Six Months Ended June
30, 30,
2013 2012 2013 2012
----------- ----------- ----------- -----------
Net income (loss) from
continuing operations $ (51,423) $ (395,063) $ (246,785) $ (335,686)
Interest expense, net 9,470 19,810 20,013 $ 40,665
Income tax provision 11,939 714 46,020 $ 7,441
Other taxes 1,249 4,267 3,340 $ 7,072
Depreciation and
amortization 200,840 170,200 400,258 $ 366,386
Stock-based compensation
expense 75,880 88,457 146,659 $ 196,706
----------- ----------- ----------- -----------
EBITDAS (1) $ 247,955 $ (111,615) $ 369,505 $ 282,584
=========== =========== =========== ===========
(1) EBITDAS is defined as net income (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.
Contact Mark Roberson CEO and CFO PokerTek, Inc.
704.849.0860, x101 investorrelations@pokertek.com
(MM) (NASDAQ:PTEK)
Historical Stock Chart
From Mar 2024 to Apr 2024
(MM) (NASDAQ:PTEK)
Historical Stock Chart
From Apr 2023 to Apr 2024
