MATTHEWS, N.C., Nov. 7, 2013 /PRNewswire/ -- PokerTek, Inc.
(NASDAQ: PTEK) today reported financial results for the third
quarter ended September 30, 2013.
Year-to-Date Financial Highlights
- Revenue increased 8%
- Gross Profit margin improved to 75%
- Net loss from continuing operations improved 23%
- EBITDAS and cash flow positive
"Our financial results for the first nine months were solid,"
commented Mark Roberson, Chief
Financial Officer. "Our recurring revenue base is strong and
stable, generating high gross margins and improved bottom line
operating results.
"With new installations in Macau, Colombia and cruise ships taking place in the
fourth quarter, we anticipate a strong finish to the year."
Financial Summary
Revenue increased by 2.6%, to $1.1
million for the third quarter and by 7.9% to $4.1 million for the first nine months of
2013.
Revenue from license and service fees increased 2.9% for the
quarter and by 20.3% for the first nine months. License and service
fees from Canada, Mexico and cruise ships increased with several
new installations generating revenue in the current year period
following installation in early 2013 and late 2012. These increases
were offset, however, by reductions in revenue from the United States and from other international
markets, particularly as a US customer elected to purchase their
leased equipment in the first half of 2013 which reduced license
fees in the third quarter.
Revenue from systems and equipment sales decreased 17.5% and
43.3%. For the quarter periods, both 2013 and 2012 reflect nominal
equipment sales activity as compared with previous quarters due
primarily to timing. The lower than normal level of systems and
equipment sales revenue in the quarterly periods was the result of
timing of the sales cycle with various customers. On a year-to-date
basis, customers in the United
States purchased gaming equipment under lease in both
periods, and sales in Europe
declined due to the weaker economic conditions and reduced
availability of capital for equipment purchases in France and Eastern
Europe
Gross profit increased by 5.1%, to $0.8
million for the three months ended September 30, 2013 and by 10.1% to $3.1 million for the first nine months of 2013.
Gross profit margins increased to 73% for the quarter and 75% for
the first nine months of 2013.
Operating expenses increased 3.9%, to $1.1 million for the quarter and by 5.3% to
$3.5 million for the first nine
months of 2013. Operating expenses increased due to higher spending
on regulatory approval of new products and increased bad debt
expense, which was partially offset by lower employee compensation
and professional fees.
Net loss from continuing operations for the quarter improved
18.4% to a loss of $266 thousand and
improved by 22.5% to $513 thousand.
The improvement was primarily due to reductions in interest expense
from lower long term debt and lower income tax expenses from
foreign jurisdictions
Net loss from continuing operations per common share improved by
25% to $0.03 per common share (basic
and diluted) for the quarter and by 33% to $0.06 per common share (basic and diluted) for
the first nine months.
EBITDAS, a non-GAAP financial measure (described below),
improved to positive $61 thousand for
the quarter from $8 thousand in the
prior year. For the first nine months, EBITDAS improved to
$431 thousand from $290 thousand in 2012.
Balance Sheet and Cash Flow Information
Cash provided by operating activities from continuing operations
was $0.2 million for the nine months
ended September 30, 2013 compared to
a use of cash of $0.5 million for the
nine months ended September 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 equipment when compared with the prior
period.
Cash provided by financing activities was $0.4 million for both the nine months ended
September 30, 2013 and 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 September 30, 2013, the
Company's cash and cash equivalents totaled $0.8 million and total debt was $0.3 million.
Gaming Positions Information
Gaming positions deployed worldwide totaled 2,180 gaming
positions worldwide, comprised of 2,060 PokerPro and 120 ProCore
gaming positions. As of September 30,
2012, our install base consisted of 2,442 gaming positions
deployed worldwide comprised of 2,304 PokerPro gaming positions,
and 138 ProCore gaming positions.
Conference Call
A conference call and webcast will be held on Thursday, November 7, 2013 at 11:00 am EST for management to discuss the
company's third-quarter 2013 performance. Interested parties may
listen to and participate in the conference call by dialing
866-202-0886 (U.S./Canada) or
+1-617-213-8841 (Other) and entering passcode 60758967. 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 97357139.
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.
Contact
Mark
Roberson
CEO and CFO
PokerTek, Inc.
704.849.0860, x101
investorrelations@pokertek.com
POKERTEK,
INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
AND OTHER
COMPREHENSIVE LOSS
|
(Unaudited)
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
Revenue
|
|
|
|
|
|
|
|
|
License
and service fees
|
|
$
1,129,246
|
|
$
1,097,641
|
|
$
3,715,269
|
|
$
3,087,984
|
Sales of
systems and equipment
|
|
13,635
|
|
16,537
|
|
422,956
|
|
745,714
|
Total
revenue
|
|
1,142,881
|
|
1,114,178
|
|
4,138,225
|
|
3,833,698
|
Cost of
revenue
|
|
313,149
|
|
324,816
|
|
1,032,607
|
|
1,012,172
|
Gross
profit
|
|
829,732
|
|
789,362
|
|
3,105,618
|
|
2,821,526
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Selling,
general and administrative
|
|
809,770
|
|
801,320
|
|
2,776,766
|
|
2,541,998
|
Research
and development
|
|
174,752
|
|
163,754
|
|
513,101
|
|
537,650
|
Share-based compensation expense
|
|
100,038
|
|
77,943
|
|
246,696
|
|
274,649
|
Depreciation
|
|
2,188
|
|
2,480
|
|
6,821
|
|
10,943
|
Total operating
expenses
|
|
1,086,748
|
|
1,045,497
|
|
3,543,384
|
|
3,365,240
|
Operating
loss
|
|
(257,016)
|
|
(256,135)
|
|
(437,766)
|
|
(543,714)
|
Interest
expense, net
|
|
9,204
|
|
17,752
|
|
29,217
|
|
58,417
|
Net loss from
continuing operations before income taxes
|
|
(266,220)
|
|
(273,887)
|
|
(466,983)
|
|
(602,131)
|
Income
tax provision
|
|
-
|
|
52,353
|
|
46,020
|
|
59,794
|
Net loss from
continuing operations
|
|
(266,220)
|
|
(326,240)
|
|
(513,003)
|
|
(661,925)
|
Income
(loss) from discontinued operations
|
|
-
|
|
(4,754)
|
|
535
|
|
50,113
|
Net
loss
|
|
$
(266,220)
|
|
$
(330,994)
|
|
$
(512,468)
|
|
$
(611,812)
|
|
|
|
|
|
|
|
|
|
Other
comprehensive loss:
|
|
|
|
|
|
|
|
|
Adjustments to net loss
|
|
-
|
|
-
|
|
-
|
|
-
|
Comprehensive loss
|
|
$
(266,220)
|
|
$
(330,994)
|
|
$
(512,468)
|
|
$
(611,812)
|
|
|
|
|
|
|
|
|
|
Net loss from
continuing operations per common share - basic and
diluted
|
|
$
(0.03)
|
|
$
(0.04)
|
|
$
(0.06)
|
|
$
(0.09)
|
Net income (loss)
from discontinued operations per common share - basic and
diluted
|
|
-
|
|
(0.00)
|
|
0.00
|
|
0.01
|
Net loss per common
share - basic and diluted
|
|
$
(0.03)
|
|
$
(0.04)
|
|
$
(0.06)
|
|
$
(0.08)
|
Weighted average
common shares outstanding - basic and diluted
|
|
9,306,222
|
|
8,130,413
|
|
9,102,346
|
|
7,753,925
|
POKERTEK,
INC.
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
September 30,
2013
(Unaudited)
|
|
December 31,
2012
|
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and
cash equivalents
|
|
$
777,794
|
|
$
235,757
|
|
Accounts
receivable, net
|
|
600,193
|
|
794,769
|
|
Inventory
|
|
1,326,179
|
|
1,342,950
|
|
Prepaid
expenses and other assets
|
|
63,284
|
|
66,988
|
|
Total current
assets
|
|
2,767,450
|
|
2,440,464
|
|
|
|
|
|
|
|
Long-term
assets:
|
|
|
|
|
|
Gaming
systems, net
|
|
1,561,057
|
|
1,693,051
|
|
Property
and equipment, net
|
|
26,026
|
|
26,967
|
|
Other
assets
|
|
128,988
|
|
171,498
|
|
Total long-term
assets
|
|
1,716,071
|
|
1,891,516
|
|
Total
assets
|
|
$
4,483,521
|
|
$
4,331,980
|
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
|
$
398,291
|
|
$
274,609
|
|
Accrued
liabilities
|
|
320,481
|
|
569,404
|
|
Deferred
revenue
|
|
138,866
|
|
42,266
|
|
Long-term debt, current portion
|
|
69,252
|
|
59,571
|
|
Total current
liabilities
|
|
926,890
|
|
945,850
|
|
|
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
|
|
Long-term liability
|
|
169,052
|
|
219,494
|
|
Long-term debt
|
|
187,912
|
|
240,429
|
|
Total long-term
liabilities
|
|
356,964
|
|
459,923
|
|
Total
liabilities
|
|
1,283,854
|
|
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 9,313,179 and 8,625,498 shares at
|
|
|
|
|
|
September 30, 2013 and December 31, 2012, respectively
|
|
|
|
|
|
Additional paid-in capital
|
|
50,339,033
|
|
49,481,922
|
|
Accumulated deficit
|
|
(47,139,366)
|
|
(46,626,898)
|
|
Total
shareholders' equity
|
|
3,199,667
|
|
2,855,024
|
|
Total liabilities
and shareholders' equity
|
|
$
4,483,521
|
|
$
4,331,980
|
|
|
|
|
|
|
|
POKERTEK,
INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
2013
|
|
2012
|
Cash flows from
operating activities:
|
|
|
|
Net loss
|
$
(512,468)
|
|
$
(611,812)
|
Net income from
discontinued operations
|
(535)
|
|
(50,113)
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
Depreciation and
amortization
|
600,897
|
|
550,117
|
Share-based
compensation expense
|
246,696
|
|
274,649
|
Provision for
doubtful accounts and other receivables
|
200,015
|
|
37,333
|
Changes in assets and
liabilities:
|
|
|
|
Accounts and other
receivables
|
(5,439)
|
|
57,494
|
Prepaid expenses and
other assets
|
46,214
|
|
79,757
|
Inventory
|
16,771
|
|
206,588
|
Gaming
systems
|
(462,082)
|
|
(925,449)
|
Accounts payable and
accrued expenses
|
(58,395)
|
|
(46,538)
|
Deferred
revenue
|
96,600
|
|
(44,127)
|
Net cash provided
by (used in) operating activities from continuing
operations
|
168,274
|
|
(472,101)
|
Net cash provided
by operating activities from discontinued operations
|
535
|
|
66,577
|
Net cash provided
by (used in) operating activities
|
168,809
|
|
(405,524)
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
Purchase of property
and equipment
|
(5,880)
|
|
(1,378)
|
Net cash used in
investing activities
|
(5,880)
|
|
(1,378)
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
Repayments of
long-term debt
|
(42,836)
|
|
-
|
Proceeds from
issuance of common stock, net of expenses
|
421,944
|
|
414,869
|
Net cash provided
by financing activities
|
379,108
|
|
414,869
|
Net increase in
cash and cash equivalents
|
542,037
|
|
7,967
|
Cash and cash
equivalents, beginning of year
|
235,757
|
|
606,229
|
Cash and cash
equivalents, end of period
|
$
777,794
|
|
$
614,196
|
|
|
|
|
Supplemental
Disclosure of Cash Flow Information
|
|
|
|
Cash paid
for:
|
|
|
|
Interest
|
$
29,789
|
|
$
58,179
|
Income taxes
|
43,995
|
|
22,272
|
|
|
|
|
Non-cash
transactions:
|
|
|
|
Amortization of commitment fee issued in common stock
|
$
-
|
|
$
33,825
|
Shares of common
stock issued in settlement of litigation
|
117,288
|
|
-
|
Issuance of common
stock for debt cancellation
|
-
|
|
400,000
|
|
|
|
|
POKERTEK,
INC.
|
RECONCILIATION TO
EBITDAS
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
Net loss
from continuing operations
|
|
$
(266,220)
|
|
$
(326,240)
|
|
$
(513,003)
|
|
$
(661,925)
|
Interest
expense, net
|
|
9,204
|
|
17,752
|
|
29,217
|
|
$
58,417
|
Income
tax provision
|
|
0
|
|
52,353
|
|
46,020
|
|
$
59,794
|
Other
taxes
|
|
17,797
|
|
1,977
|
|
21,134
|
|
$
9,049
|
Depreciation and amortization
|
|
200,638
|
|
183,732
|
|
600,897
|
|
$
550,117
|
Stock-based compensation expense
|
|
100,038
|
|
77,943
|
|
246,696
|
|
$
274,649
|
EBITDAS
(1)
|
|
$
61,457
|
|
$
7,517
|
|
$
430,961
|
|
$
290,101
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.
|
SOURCE PokerTek, Inc.