The notes to consolidated financial statements
are an integral part of these consolidated statements.
The notes to consolidated financial statements
are an integral part of these consolidated statements.
The notes to consolidated financial statements
are an integral part of these consolidated statements.
Notes to Consolidated Financial Statements
Note 1.
Description
of Business and Significant Accounting Policies
The business activities of the Company
entail the owning and leasing of electronic gaming machines (EGMs) placed in premier hotels and other venues in Cambodia and the
Philippines, the development and operation of casinos and gaming establishments under the Dreamworld brand in select emerging markets
in the Indo-China region and the design, manufacture and distribution of gaming chips and plaques under the Dolphin brand to major
casinos primarily in Southeast Asia and Australia. Previously, the Company was engaged in the design, manufacture and distribution
of other, non-gaming plastic products, primarily for the automotive industry. These operations were sold on March 28, 2013 and
related historical revenues and expenses were reclassified as discontinued operations. The accounting policies of these segments
are consistent with the Company’s policies for the accompanying consolidated financial statements.
Basis of Presentation
These consolidated financial statements
are prepared pursuant to generally accepted accounting principles in the United States for interim financial information and with
the instructions to Form 10-Q and Rule 8-03 of Regulation S-X promulgated by the Securities and Exchange Commission (“SEC”)
and reflect all adjustments, consisting of normal recurring adjustments and other adjustments, which management believes are necessary
to fairly present the financial position, results of operations and cash flows of the Company, for the respective periods presented.
The results of operations for an interim period are not necessarily indicative of the results that may be expected for any other
interim period or the year as a whole. The accompanying unaudited consolidated financial statements should be read in conjunction
with the consolidated financial statements and notes thereto in the Company’s Annual Report on Form 10-K for the year
ended December 31, 2013, filed with the SEC on March 31, 2014. Certain previously reported amounts have been reclassified
to conform to the current period presentation.
Principles of Consolidation
These consolidated financial statements
include the accounts of Entertainment Gaming Asia Inc. and all its subsidiaries. All intercompany balances and transactions have
been eliminated in consolidation.
Use of Estimates
The Company is required to make estimates,
judgments and assumptions that it believes are reasonable based on its historical experience, contract terms, observance of known
trends in the Company and the industry as a whole, and information available from other outside sources. These estimates affect
the reported amounts of assets, liabilities, revenues and expenses and related disclosures of contingent assets and liabilities.
On a regular basis, the Company evaluates its estimates, including those related to revenue recognition, product returns, long-lived
assets, inventory obsolescence, stock-based compensation, income taxes, bad debts, warranty obligations, long-term contracts, contingencies
and litigation. Actual results may differ from those estimates.
Discontinued Operations
A discontinued operation is a component
of an entity that either has been disposed of, or that is classified as held for sale, and (i) represents a separate major line
of business or geographical area of operations; and (ii) is a part of a single coordinated plan to dispose of a separate major
line of business or geographical area of operations; or (iii) is a subsidiary acquired exclusively with a view to resale.
Non-current assets held for discontinued
operations are carried at the lower of carrying amount or fair value less costs to sell. Any gain or loss from disposal of a business,
together with the results of these operations until the date of disposal, is reported separately as discontinued operations. The
financial information of discontinued operations is excluded from the respective captions in the Company's consolidated statements
of comprehensive income and related notes for all periods presented.
Cash and Cash Equivalents
All highly-liquid instruments with original
maturities of three months or less are considered cash equivalents. The Company places its cash and temporary investments with
financial institutions. As of March 31, 2014, the Company had deposits with financial institutions in excess of Federal Deposit
Insurance Corporation (FDIC) insured limits by approximately $4.1 million.
Accounts Receivable and Allowance
for Doubtful Accounts
Accounts receivable are stated at face
value less any allowances for doubtful accounts. Allowances for doubtful accounts are maintained at levels determined by Company
management to adequately provide for uncollectible amounts. In determining the estimated uncollectable amounts, the Company evaluates
a combination of factors, including, but not limited to, activity in the related market, financial condition of customers, specific
customer collection experience and history of write-offs and collections. Interest income is imposed on overdue accounts receivable
after the Company evaluates a combination of factors, including but not limited to, customer collection experiences, customer relationship
and contract terms. Accounts receivable balances are written off after all collection efforts have been exhausted.
Inventories
Inventories are stated at the lower of
cost, determined using the first-in, first-out method, or market. Cost elements included in work-in-process and finished goods
include raw materials, direct labor and manufacturing overheads.
Long-Lived Assets
The Company accounts for impairment of
long-lived assets in accordance with Financial Accounting Standards Board (FASB) ASC 360,
Property, Plant and Equipment
.
Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. In such instances, the Company estimates the undiscounted future cash flows that result from the
use of the asset and its ultimate disposition. If the sum of the undiscounted cash flows is less than the carrying value, the Company
recognizes an impairment loss, measured as the amount by which the carrying value exceeds the fair value of the asset, determined
principally using discounted cash flows. There were no impairment charges for long-lived assets for the three-month periods ended
March 31, 2014 and 2013.
Prepaids, Deposits and Other Assets
Prepaids, deposits and other assets consist
primarily of prepaid leases, prepaid value-added taxes in foreign countries, prepayments to suppliers, rental and utilities and
other deposits.
Gaming Equipment
Gaming equipment consists primarily of
EGMs and systems. Gaming equipment is stated at cost. The Company depreciates new EGMs and systems over a five-year useful life
and depreciates refurbished EGMs and systems over a three-year useful life once placed in service. Depreciation of gaming equipment
of approximately $782,000 and $1.1 million was included in cost of gaming operations in the consolidated statements of comprehensive
income for the three-month periods ended March 31, 2014 and 2013, respectively.
Property and Equipment
Property and equipment are stated at cost.
Depreciation is computed using the straight-line method over the useful lives of the assets currently estimated to be three to
twenty years, which in the case of leasehold improvements, is limited to the life of the lease and throughout the renewal period
as long as renewal is reasonably assured.
Depreciation of property and equipment
of approximately $157,000 and $89,000 was included in the cost of gaming operations in the consolidated statements of comprehensive
income for the three-month periods ended March 31, 2014 and 2013, respectively.
Depreciation of property and equipment
of approximately $136,000 and $41,000 was included in cost of gaming products in the consolidated statements of comprehensive income
for the three-month periods ended March 31, 2014 and 2013, respectively.
Goodwill and Intangible Assets, Including
Casino Contracts
Intangible assets consist of patents, trademarks,
technical know-how, gaming operation agreement, casino contracts and goodwill. Intangible assets other than goodwill are amortized
on the straight-line basis over the period of time the asset is expected to contribute directly or indirectly to future cash flows,
which ranges from four to ten years. The straight-line amortization method is utilized because the Company believes there is no
more reliably determinable method of reflecting the pattern for which the economic benefits of the intangible assets are consumed
or otherwise used.
Amortization expenses related to casino
contracts were approximately $610,000 and $620,000 for the three-month periods ended March 31, 2014 and 2013, respectively.
Amortization expenses related to other gaming related intangibles were approximately $63,000 for the three-month periods ended
March 31, 2014 and 2013. The amounts were accounted for as cost of gaming operations in the consolidated statements of comprehensive
income. Amortization expenses related to technical know-how were approximately $7,000 and $6,000 for the three-month periods ended
March 31, 2014 and 2013, respectively. The amounts were accounted for as cost of gaming products in the consolidated statements
of comprehensive income. Amortization expenses related to patents and trademarks were approximately $6,000 for the three-month
periods ended March 31, 2014 and 2013. The amounts were accounted for as selling, general and administrative expenses in the
consolidated statements of comprehensive income.
The Company measures and tests finite-lived
intangibles for impairment when there are indicators of impairment in accordance with ASC 360-10-05,
Property, Plant and Equipment
.
The Company measures and tests Goodwill
for impairment, at least annually in accordance with ASC 350-10-05,
Intangibles — Goodwill and Other
.
Impairment testing for goodwill and other
intangibles requires judgment, including the identification of reporting units, allocation of related goodwill, assignment of corporate
shared assets and liabilities to reporting units, estimated future cash flows and determinations of fair values. While the Company
believes its estimates of future revenues and future cash flows are reasonable, different assumptions could materially affect the
assessment of useful lives, recoverability and fair values. No impairment charges relating to intangible assets were recorded for
the three-month periods ended March 31, 2014 and 2013, respectively.
Litigation and Other Contingencies
In the performance of its ordinary course
of business operations, the Company is subject to risks of various legal matters, litigation and claims of various types. The Company
has regular litigation reviews, including updates from corporate and outside counsel, to assess the need for accounting recognition
or disclosure of these contingencies. See Note 16.
ASC 450,
Contingencies,
requires
that liabilities for contingencies be recorded when it is probable that a liability has been incurred and that the amount can be
reasonably estimated. Significant management judgment is required related to contingent liabilities and the outcome of litigation
because both are difficult to predict. For a contingency for which an unfavorable outcome is reasonably possible and which is significant,
the Company discloses the nature of the contingency and, when feasible, an estimate of the possible loss.
Revenue Recognition
The Company recognizes revenue when all of the following have
been satisfied:
|
|
·
|
Persuasive evidence of an arrangement exists;
|
|
|
·
|
The price to the customer is fixed and determinable;
|
|
|
·
|
Delivery has occurred and any acceptance terms have been fulfilled;
|
|
|
·
|
No significant contractual obligations remain; and
|
|
|
·
|
Collection is reasonably assured.
|
Gaming Revenue and Promotional Allowances
The Company earns recurring gaming revenue from its slot and
casino operations.
For slot operations, the Company
earns recurring gaming revenue by providing customers with EGMs and casino management systems which track game performance
and provide statistics on installed EGMs owned by the Company and leased to venue owners. Revenues are recognized on the
contractual terms of the slot agreements between the Company and the venue owners and are based on the Company’s share
of net winnings and reimbursement of expenses, net of customer incentives and commitment fees.
Revenues are recognized as earned unless
collection is not reasonably assured, in which case revenues are recognized when the payment for net winnings is received. All
slot operations revenues were recognized as earned during the three-month periods ended March 31, 2014 and 2013, respectively.
Commitment fees paid to the venue operators
relating to contract amendments which are not recoverable from daily net win are capitalized as assets and amortized as a reduction
of revenue over the term of the amended contracts. The Company had commitment fee balances related to contract amendments of approximately
$207,000 and $234,000 as of March 31, 2014 and December 31, 2013, respectively.
For casino operations, the Company’s
revenues are measured by the aggregate net difference between gaming wins and losses, with liabilities recognized for funds deposited
by customers before gaming play occurs and for chips in the customers’ possession, if any. Cash discounts, other cash incentives
related to casino play and commissions rebated through junkets or tour guides, if any, to customers are recorded as a reduction
to casino revenue. Consequently, the Company’s casino revenues are reduced by discounts and commissions.
The Company does not accrue a jackpot liability
for its slot machine base and progressive jackpots because the Company can avoid payment of such amounts, as regulations do not
prohibit removal of gaming machines from the gaming floor without payment of the jackpots.
Promotional allowances represent goods
and services, which would be accounted for as revenue if sold, that a casino gives to customers as an inducement to gamble at that
establishment. Such goods and services include food and beverages. The Company includes the retail value of promotional allowances
in gross revenues and deducts it from gross revenues to reach net revenues on the face of the consolidated statements of comprehensive
income.
During the three-month period
ended March 31, 2014, the Company also earned recurring gaming revenue through leasing table game equipment and providing
casino management services to gaming operators within their casino properties.
Revenues from gaming table leasing arrangements
are recognized as earned over the contractual terms of the arrangement between the Company and the gaming promoters.
Gaming Products Sales
The Company recognizes revenue from the
sale of its gaming products to end users upon shipment against customer contracts or purchase orders.
Stock-Based Compensation
Under the fair value recognition provisions
of ASC 718,
Compensation-Stock Compensation
, the Company recognizes stock-based compensation expenses for all service-based
awards to employees and non-employee directors with graded vesting schedules on the straight-line basis over the requisite service
period for the entire award. Estimates are revised if subsequent information indicates that forfeitures will differ from previous
estimates, and the cumulative effect on compensation cost of a change in the estimated forfeitures is recognized in the period
of the change. For non-employee awards, the Company remeasures compensation cost each period until the service condition is complete
and recognizes compensation cost on the straight-line basis over the requisite service period. Option valuation models require
the input of highly subjective assumptions, and changes in the assumptions used can materially affect the fair value estimates.
Judgment is required in estimating stock price volatility, forfeiture rates, expected dividends, and expected terms that options
remain outstanding. For restricted stock awards with performance conditions, the Company evaluates if performance conditions are
probable in each reporting period. The compensation expense of restricted awards is recognized ratably over the implicit service
period if achieving performance conditions is probable. Cumulative catch-up adjustments are required in the event of changes in
assessment of probability. See Note 12 for additional information relating to stock-based compensation assumptions. Stock-based
compensation expense totaled approximately $71,000 and $247,000 for the three-month periods ended March 31, 2014 and 2013,
respectively.
Product Development
Product development expenses are expensed
as incurred. Employee related costs associated with product development are included in product development expenses. Product development
expenses were approximately $54,000 and $120,000 for the three-month periods ended March 31, 2014 and 2013, respectively.
Leases
Leases are classified at the inception
date as either a capital lease or an operating lease. A lease is a capital lease if any of the following conditions exists:
|
|
·
|
Ownership is transferred to the lessee by the end of the lease term;
|
|
|
·
|
There is a bargain purchase option;
|
|
|
·
|
The lease term is at least 75% of the property’s estimated remaining
economic life; or
|
|
|
·
|
The present value of the minimum lease payments at the beginning of
the lease term is 90% or more of the fair value of the leased property to the lessor at the inception date.
|
A capital lease is accounted for as if
there was an acquisition of an asset and an incurrence of an obligation at the inception of the lease. All other leases are accounted
for as operating leases wherein rental payments are expensed as incurred. The Company had no capital leases as of March 31, 2014
and December 31, 2013.
Income Taxes
The Company is subject to income taxes
in the United States (including federal and state) and several foreign jurisdictions in which it operates. Deferred income tax
balances reflect the effects of temporary differences between the carrying amounts of assets and liabilities and their tax basis
and are stated at enacted tax rates expected to be in effect when taxes are actually paid or recovered. ASC 740,
Income Taxes,
requires that deferred tax assets be evaluated for future realization and reduced by a valuation allowance to the extent the Company
believes a portion will not be realized. The Company considers many factors when assessing the likelihood of future realization
of its deferred tax assets, including its recent cumulative earnings experience and expectations of future taxable income by taxing
jurisdiction, the carry-forward periods available to the Company for tax reporting purposes, and other relevant factors.
The Company accounts for uncertain tax
positions in accordance with ASC 740, which contains a two-step approach to recognizing and measuring uncertain tax positions.
The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it
is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes,
if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely to be realized upon ultimate
settlement. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require
periodic adjustments and which may not accurately anticipate actual outcomes. The Company recognizes interest and penalties, if
any, related to unrecognized tax benefits in the provision for income taxes in the statements of comprehensive income.
On December 31, 2010, the Company
effected a Quasi-Reorganization. As of that date, the Company’s deferred taxes were reported in conformity with applicable
income tax accounting standards described above, net of applicable valuation allowances. Deferred tax assets and liabilities were
recognized for differences between the assigned values and the tax basis of the recognized assets and liabilities with corresponding
valuation allowances as appropriate. In accordance with the Quasi-Reorganization requirements, pre-existing tax benefits realized
subsequent to the Quasi-Reorganization are recorded directly in equity.
(Loss)/Earnings per Share
Basic (loss)/earnings per share are computed
by dividing the reported net (loss)/earnings by the weighted average number of shares of common stock outstanding during the period.
Diluted earnings per share is computed by dividing the net income by the weighted average number of shares of common stock and
shares issuable from stock options and restricted shares during the period. The computation of diluted earnings per share excludes
the impact of stock options and restricted shares that are anti-dilutive. There is no difference in diluted loss per share from
basic loss per share as the assumed exercise of common stock equivalents would have an anti-dilutive effect due to losses.
Foreign Currency Translations and Transactions
The functional currency of the Company’s
international subsidiaries, except for its operations in Cambodia whose functional currency is also U.S. dollars ("US$"),
is generally the local currency. For these subsidiaries, the Company translates the assets and liabilities at exchange rates in
effect at the balance sheet date and income and expense accounts at average exchange rates during the year. Resulting currency
translation adjustments are recorded directly to accumulated other comprehensive income within stockholders’ equity. Gains
and losses resulting from transactions in non-functional currencies are recorded in the statements of comprehensive income.
Below is a summary of closing exchange
rates as of March 31, 2014 and December 31, 2013, and average exchange rates for the three-month periods ended March 31, 2014 and
2013, respectively.
|
(US$1 to foreign currency)
|
|
March 31, 2014
|
|
|
December 31, 2013
|
|
|
Australian dollar
|
|
|
1.08
|
|
|
|
1.13
|
|
|
Hong Kong dollar
|
|
|
7.76
|
|
|
|
7.75
|
|
|
Philippine peso
|
|
|
44.88
|
|
|
|
44.45
|
|
|
Thai baht
|
|
|
32.57
|
|
|
|
32.92
|
|
|
|
|
Three-Month Periods Ended March 31,
|
|
|
(US$1 to foreign currency)
|
|
2014
|
|
|
2013
|
|
|
Australian dollar
|
|
|
1.12
|
|
|
|
0.96
|
|
|
Hong Kong dollar
|
|
|
7.76
|
|
|
|
7.76
|
|
|
Philippine peso
|
|
|
44.94
|
|
|
|
40.83
|
|
|
Thai baht
|
|
|
32.72
|
|
|
|
29.92
|
|
Fair Value Measurements
Fair value is defined under ASC 820,
Fair
Value Measurements and Disclosures
, as the exchange price that would be received for an asset or paid to transfer a liability
(an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market
participants on the measurement date. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable
inputs and minimize the use of unobservable inputs. The standard establishes a fair value hierarchy based on three levels of input,
of which the first two are considered observable and the last unobservable.
|
|
·
|
Level 1 — Quoted prices in active markets for identical assets
or liabilities. These are typically obtained from real-time quotes for transactions in active exchange markets involving identical
assets.
|
|
|
·
|
Level 2 — Input, other than quoted prices included within Level
1, which are observable for the asset or liability, either directly or indirectly. These are typically obtained from readily-available
pricing sources for comparable instruments.
|
|
|
·
|
Level 3 — Unobservable input, where there is little or no market
activity for the asset or liability. This input reflects the reporting entity’s own assumptions of the data that participants
would use in pricing the asset or liability, based on the best information available under the circumstances.
|
As of March 31, 2014, the fair values
of cash and cash equivalents, restricted cash, accounts receivable and accounts payable approximate carrying values due to the
short maturity of these items.
Guarantees
The Company recognizes a guarantee at its
inception which is the greater of (i) the fair value of the guarantee and (ii) the contingent liability amount. The fair value
of a guarantee is determined by using expected present value measurement techniques. The initial liability recognized is amortized
over the guarantee period. The Company does not accrue any guarantee liabilities as of the balance sheet dates.
The Company currently conducts business
in two operating segments: (i) gaming operations, which include EGM participation and casino operations; and (ii) gaming
products, which consist of the design, manufacture and distribution of gaming chips and plaques. Previously, the Company was also
engaged in the design, manufacture and distribution of other non-gaming plastic products, primarily for the automotive industry.
These operations were sold on March 28, 2013 and the related historical revenues and expenses were reclassified as discontinued
operations. The accounting policies of these segments are consistent with the Company’s policies for the accompanying consolidated
financial statements.
|
|
|
Three-Month Periods Ended March 31,
|
|
|
(amounts in thousands)
|
|
2014
|
|
|
2013
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Gaming operations
|
|
$
|
4,099
|
|
|
$
|
5,492
|
|
|
Gaming products
|
|
|
811
|
|
|
|
1,427
|
|
|
Total revenues
|
|
$
|
4,910
|
|
|
$
|
6,919
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss
|
|
|
|
|
|
|
|
|
|
Gaming operations gross margin
|
|
$
|
1,407
|
|
|
$
|
1,689
|
|
|
Gaming products gross margin
|
|
|
(677
|
)
|
|
|
(69
|
)
|
|
Corporate and other operating costs and expenses
|
|
|
(1,745
|
)
|
|
|
(2,014
|
)
|
|
Total operating loss
|
|
$
|
(1,015
|
)
|
|
$
|
(394
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization:
|
|
|
|
|
|
|
|
|
|
Gaming operations
|
|
$
|
1,627
|
|
|
$
|
1,844
|
|
|
Gaming products
|
|
|
167
|
|
|
|
55
|
|
|
Corporate
|
|
|
11
|
|
|
|
3
|
|
|
Total depreciation and amortization
|
|
$
|
1,805
|
|
|
$
|
1,902
|
|
Geographic segment revenues for the three-month periods ended
March 31, 2014 and 2013 consisted of the following:
|
|
|
Three-Month Periods Ended March 31,
|
|
|
(amounts in thousands)
|
|
2014
|
|
|
2013
|
|
|
Cambodia
|
|
$
|
3,359
|
|
|
$
|
4,540
|
|
|
Macau
|
|
|
359
|
|
|
|
667
|
|
|
Philippines
|
|
|
934
|
|
|
|
1,376
|
|
|
Australia
|
|
|
192
|
|
|
|
163
|
|
|
Other
|
|
|
66
|
|
|
|
173
|
|
|
|
|
$
|
4,910
|
|
|
$
|
6,919
|
|
For the three-month periods ended March 31,
2014 and 2013, in the gaming operations segment, the largest customer represented 64% and 60%, respectively, of total gaming operations
revenue. For the three-month periods ended March 31, 2014 and 2013, in the gaming products segment, the largest customer represented
24% and 41%, respectively, of total gaming products sales.
Inventories consisted of the following:
|
(amounts in thousands)
|
|
March 31, 2014
|
|
|
December 31, 2013
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
Raw materials
|
|
$
|
1,315
|
|
|
$
|
809
|
|
|
Work-in-process
|
|
|
359
|
|
|
|
342
|
|
|
Finished goods
|
|
|
81
|
|
|
|
367
|
|
|
Spare parts
|
|
|
185
|
|
|
|
119
|
|
|
Casino inventories
|
|
|
22
|
|
|
|
26
|
|
|
|
|
$
|
1,962
|
|
|
$
|
1,663
|
|
|
|
Note 4.
|
Prepaid Expenses and Other Current Assets
|
Prepaid expenses and other current assets consisted of the following:
|
(amounts in thousands)
|
|
March 31, 2014
|
|
|
December 31, 2013
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
Prepayments to suppliers
|
|
$
|
439
|
|
|
$
|
400
|
|
|
Prepaid leases
|
|
|
19
|
|
|
|
43
|
|
|
|
|
$
|
458
|
|
|
$
|
443
|
|
Accounts and other receivables consisted of the following:
|
(amounts in thousands)
|
|
March 31, 2014
|
|
|
December 31, 2013
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
Trade accounts
|
|
$
|
735
|
|
|
$
|
922
|
|
|
Other
|
|
|
428
|
|
|
|
453
|
|
|
|
|
|
1,163
|
|
|
|
1,375
|
|
|
Less: allowance for doubtful accounts
|
|
|
—
|
|
|
|
—
|
|
|
Net
|
|
$
|
1,163
|
|
|
$
|
1,375
|
|
Gaming equipment is stated at cost. The
major categories of gaming equipment and accumulated depreciation consisted of the following:
|
|
|
Useful Life
|
|
|
|
|
|
|
|
(amounts in thousands)
|
|
(years)
|
|
March 31, 2014
|
|
|
December 31, 2013
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
EGMs
|
|
3-5
|
|
$
|
17,731
|
|
|
$
|
17,587
|
|
|
Systems
|
|
5
|
|
|
1,418
|
|
|
|
1,417
|
|
|
Other gaming equipment
|
|
3-5
|
|
|
42
|
|
|
|
42
|
|
|
|
|
|
|
|
19,191
|
|
|
|
19,046
|
|
|
Less: accumulated depreciation
|
|
|
|
|
(11,597
|
)
|
|
|
(10,875
|
)
|
|
|
|
|
|
$
|
7,594
|
|
|
$
|
8,171
|
|
Depreciation expense of approximately $782,000
and $1.1 million was included in cost of gaming operations in the consolidated statements of comprehensive income for the three-month
periods ended March 31, 2014 and 2013, respectively.
|
|
Note 7.
|
Property and Equipment
|
Property and equipment are stated at cost.
Property and equipment consisted of the following:
|
|
|
Useful Life
|
|
|
|
|
|
|
|
(amounts in thousands)
|
|
(years)
|
|
March 31, 2014
|
|
|
December 31, 2013
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
Equipment, vehicles, furniture and fixtures
|
|
3-10
|
|
$
|
4,833
|
|
|
$
|
4,109
|
|
|
Land and building
|
|
5-20
|
|
|
2,949
|
|
|
|
2,949
|
|
|
Leasehold improvements
|
|
1-5
|
|
|
1,126
|
|
|
|
1,029
|
|
|
Construction in progress
|
|
N/A
|
|
|
987
|
|
|
|
1,112
|
|
|
|
|
|
|
|
9,895
|
|
|
|
9,199
|
|
|
Less: accumulated depreciation
|
|
|
|
|
(1,678
|
)
|
|
|
(1,342
|
)
|
|
|
|
|
|
$
|
8,217
|
|
|
$
|
7,857
|
|
Depreciation expense of property and equipment
of approximately $157,000 and $89,000 was included in cost of gaming operations in the consolidated statements of comprehensive
income for the three-month periods ended March 31, 2014 and 2013, respectively.
Depreciation expense of property and equipment
of approximately $136,000 and $41,000 was included in cost of gaming products in the consolidated statement of comprehensive income
for the three-month periods ended March 31, 2014 and 2013, respectively.
|
|
Note 8.
|
Goodwill and Intangible Assets, including Casino Contracts
|
Intangible assets, if any, are stated at
cost. The Company’s intangible assets consisted of the following:
|
|
|
Useful Life
|
|
|
|
|
|
|
|
(amounts in thousands)
|
|
(years)
|
|
March 31, 2014
|
|
|
December 31, 2013
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
Gaming operation agreement
|
|
4-5
|
|
$
|
1,171
|
|
|
$
|
1,178
|
|
|
Less: accumulated amortization
|
|
|
|
|
(630
|
)
|
|
|
(567
|
)
|
|
|
|
|
|
|
541
|
|
|
|
611
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill
|
|
N/A
|
|
|
348
|
|
|
|
353
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Patents
|
|
5-6
|
|
|
114
|
|
|
|
114
|
|
|
Less: accumulated amortization
|
|
|
|
|
(67
|
)
|
|
|
(62
|
)
|
|
|
|
|
|
|
47
|
|
|
|
52
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trademarks
|
|
5-9
|
|
|
26
|
|
|
|
26
|
|
|
Less: accumulated amortization
|
|
|
|
|
(10
|
)
|
|
|
(10
|
)
|
|
|
|
|
|
|
16
|
|
|
|
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Technical know-how
|
|
10
|
|
|
261
|
|
|
|
261
|
|
|
Less: accumulated amortization
|
|
|
|
|
(48
|
)
|
|
|
(41
|
)
|
|
|
|
|
|
|
213
|
|
|
|
220
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Casino contracts
|
|
5-6
|
|
|
12,735
|
|
|
|
12,764
|
|
|
Less: accumulated amortization
|
|
|
|
|
(7,929
|
)
|
|
|
(7,335
|
)
|
|
|
|
|
|
|
4,806
|
|
|
|
5,429
|
|
|
|
|
|
|
$
|
5,971
|
|
|
$
|
6,681
|
|
Amortization expense for finite-lived intangible
assets was approximately $686,000 and $695,000 for the three-month periods ended March 31, 2014 and 2013, respectively.
Goodwill movements during the periods consisted of the following:
|
(amounts in thousands)
|
|
2014
|
|
|
2013
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
Balance as of January 1
|
|
$
|
353
|
|
|
$
|
380
|
|
|
Foreign currency translation adjustment
|
|
|
(5
|
)
|
|
|
(27
|
)
|
|
Balance as of March 31/December 31
|
|
$
|
348
|
|
|
$
|
353
|
|
|
|
Note 9.
|
Prepaids, Deposits and Other Assets
|
Prepaids, deposits and other assets consisted of the following:
|
(amounts in thousands)
|
|
March 31, 2014
|
|
|
December 31, 2013
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
Prepaid taxes
|
|
$
|
952
|
|
|
$
|
927
|
|
|
Prepaid leases
|
|
|
219
|
|
|
|
222
|
|
|
Prepayments to suppliers
|
|
|
769
|
|
|
|
279
|
|
|
Deposits on EGM orders
|
|
|
56
|
|
|
|
16
|
|
|
Rentals, utilities and other deposits
|
|
|
395
|
|
|
|
353
|
|
|
|
|
$
|
2,391
|
|
|
$
|
1,797
|
|
As of March 31, 2014, prepaid leases
consisted of land lease prepayments of approximately $219,000 for the Company’s gaming development project located in the
Kampot province of Cambodia.
|
|
Note 10.
|
Accrued Expenses
|
Accrued expenses consisted of the following:
|
(amounts in thousands)
|
|
March 31, 2014
|
|
|
December 31, 2013
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
Payroll and related costs
|
|
$
|
522
|
|
|
$
|
601
|
|
|
Professional fees
|
|
|
461
|
|
|
|
312
|
|
|
Withholding tax expenses
|
|
|
552
|
|
|
|
551
|
|
|
Other tax expenses
|
|
|
482
|
|
|
|
482
|
|
|
Others
|
|
|
483
|
|
|
|
420
|
|
|
|
|
$
|
2,500
|
|
|
$
|
2,366
|
|
Other tax expense represented an accrued
tax liability related to the Philippines operations.
|
|
Note 11.
|
Other Liabilities
|
Other liabilities consisted of the following:
|
(amounts in thousands)
|
|
March 31, 2014
|
|
|
December 31, 2013
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
Tax liabilities
|
|
$
|
674
|
|
|
$
|
659
|
|
|
Others
|
|
|
89
|
|
|
|
83
|
|
|
|
|
$
|
763
|
|
|
$
|
742
|
|
|
|
Note 12.
|
Stock-Based Compensation
|
Options
The Company effected a 1-for-4 reverse
stock split of its common shares as of June 12, 2012. All historical share amounts and share price information presented in this
Note 12 have been proportionally adjusted to reflect the impact of this reverse stock split.
At the annual shareholders meeting held
on September 8, 2008, a new stock option plan, the “2008 Stock Incentive Plan” (the “2008 Plan”), was voted
on and became effective on January 1, 2009, which replaced two previous plans, the Amended and Restated 1999 Stock Option Plan
and the Amended and Restated 1999 Directors’ Stock Option Plan (the “Stock Option Plans”), thereby terminating
both of the Stock Option Plans on December 31, 2008.
The 2008 Plan allows for incentive awards
to eligible recipients consisting of:
|
|
·
|
Options to purchase shares of common stock that qualify as incentive
stock options within the meaning of the Internal Revenue Code;
|
|
|
·
|
Non-statutory stock options that do not qualify as incentive options;
|
|
|
·
|
Restricted stock awards; and
|
|
|
·
|
Performance stock awards which are subject to future achievement of
performance criteria or free of any performance or vesting.
|
The maximum number of shares reserved for
issuance under the 2008 Plan was originally 1,250,000 shares, and in July 2010 the Company’s shareholders approved an increase
in the number of shares reserved for issuance to 2,500,000 shares. At the annual shareholders meeting held on July 13, 2012, the
Company’s shareholders approved a further increase in the number of shares reserved for issuance to 3,750,000 shares. The
exercise price shall not be less than 100% of the fair market value of one share of common stock on the date of grant, unless the
participant owns more than 10% of the total combined voting power of all classes of stock of the Company or any parent or subsidiary
corporation of the Company, in which case the exercise price shall then be 110% of the fair market value. The outstanding stock
options generally vest from six-months and one-day to over three years and have ten-year contractual terms.
During the three-month period ended March
31, 2014, stock options for the purchase of 225,000 shares of common stock were granted with a weighted average exercise price
of $1.21 and weighted average fair value of $0.67 (2013: $1.18) per share and will vest from six-month and one day to three-year
periods. During the three-month period ended March 31, 2014, 95,000 shares of restricted stock awards with a weighted average fair
value of $1.21 per share were issued. The shares of restricted stock shall vest, subject to and upon the recipient’s achievement
of key operational and financial performance milestones or according to the vesting period. For restricted stock awards with performance
conditions, the Company evaluates if performance conditions are probable in each reporting period. The compensation expense of
restricted awards is recognized ratably over the implicit service period if achieving performance conditions is probable. Cumulative
catch-up adjustments are required in the event of any changes in the assessment of probabilities.
During the three-month period ended March
31, 2014, there were no exercises of outstanding stock options.
Prior to January 1, 2009, the Company had
two stock options plans, the Amended and Restated 1999 Stock Option Plan and the Amended and Restated 1999 Directors’ Stock
Option Plan (the “Previous Stock Option Plans”), through which 3,750,000 shares and 75,000 shares were authorized,
respectively. Both Previous Stock Option Plans expired on December 31, 2008; however, options granted under the Previous Stock
Option Plans that were outstanding as of the date of termination remain outstanding and subject to termination according to their
terms.
As of March 31, 2014, stock options for
the purchase of 936,864 and 20,000 shares of common stock, respectively, were outstanding in relation to the Amended and Restated
1999 Stock Option Plan and the Amended and Restated 1999 Director’s Stock Option Plan.
As of March 31, 2014, there were no
outstanding non-plan options to purchase common stock. All previously granted non-plan options had expired by December 31,
2012. The non-plan options were issued to certain employees and non-employees of EGT Entertainment Holding Limited as
approved by the Company’s stockholders in September 2007 pursuant to the initial closing of the transactions under the
Securities Purchase and Product Participation Agreement dated June 12, 2007 between the Company and EGT Entertainment
Holding Limited.
As of March 31, 2014, stock options for
the purchase of 2,497,374 shares of common stock were outstanding under the 2008 Plan.
As of March 31, 2014, 3,024,237 stock options
were exercisable with a weighted average exercise price of $2.12, a weighted average fair value of $0.91 and an aggregate intrinsic
value of approximately $258,000. The total fair value of shares vested during the three-month period ended March 31, 2014 was approximately
$313,000. The total compensation cost related to unvested shares as of March 31, 2014 was approximately $271,000. The amount was
expected to be recognized over 1.72 years.
A summary of all current and expired plans
as of March 31, 2014 and changes during the period then ended are presented in the following table:
Options
|
|
|
Number of
Options
|
|
|
Weighted Average
Exercise Price
|
|
|
Weighted Average
Remaining Contractual
Life
(in years)
|
|
|
Aggregate
Intrinsic Value
(in thousands)
|
|
|
Outstanding as of December 31, 2013
|
|
|
3,291,738
|
|
|
$
|
2.11
|
|
|
|
6.13
|
|
|
$
|
738
|
|
|
Granted
|
|
|
225,000
|
|
|
|
1.21
|
|
|
|
—
|
|
|
|
—
|
|
|
Exercised
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Forfeited or expired
|
|
|
(62,500
|
)
|
|
|
2.25
|
|
|
|
—
|
|
|
|
—
|
|
|
Outstanding as of March 31, 2014
|
|
|
3,454,238
|
|
|
|
2.05
|
|
|
|
5.99
|
|
|
|
258
|
|
|
Exercisable as of March 31, 2014
|
|
|
3,024,237
|
|
|
$
|
2.12
|
|
|
|
5.53
|
|
|
$
|
258
|
|
Restricted Stock
|
|
|
Number of shares
|
|
|
Weighted Average
Fair Value at
Grant Date
|
|
|
Weighted Average
Remaining
Contractual Life
(in years)
|
|
|
Unvested balance as of December 31, 2013
|
|
|
—
|
|
|
$
|
—
|
|
|
|
—
|
|
|
Granted
|
|
|
95,000
|
|
|
|
1.21
|
|
|
|
1.46
|
|
|
Vested (1)
|
|
|
(12,500
|
)
|
|
|
1.21
|
|
|
|
0.75
|
|
|
Unvested balance as of March 31, 2014
|
|
|
82,500
|
|
|
$
|
1.21
|
|
|
|
1.46
|
|
|
|
(1)
|
Vested shares included 12,500 shares of restricted common stock issued in 2014 for which final vesting is subject to the approval
of Company’s compensation committee.
|
Recognition and Measurement
The fair value of each
stock-based award to employees and non-employee directors is estimated on the measurement date which generally is the grant
date while awards to non-employees and restricted common stock with performance criteria are measured at the earlier of the
performance commitment date or the service completion date using the Black-Scholes-Merton option-pricing model. Option
valuation models require the input of highly subjective assumptions, and changes in assumptions used can materially affect
the fair value estimates. The Company estimates the expected life of the award by taking into consideration the vesting
period, contractual term, historical exercise data, expected volatility, blackout periods and other relevant factors.
Volatility is estimated by evaluating the Company’s historical volatility data. The risk-free interest rate on the
measurement date is based on U.S. Treasury constant maturity rates for a period approximating the expected life of the award.
The Company historically has not paid dividends, nor does it expect to pay dividends in the foreseeable future and,
therefore, the expected dividend rate is zero.
The following table summarizes the range
of assumptions utilized in the Black-Scholes-Merton option-pricing model for the valuation of stock options granted during the
three-month periods ended March 31, 2014 and 2013.
|
|
|
Three-Month Periods Ended March 31,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
Range of values:
|
|
Low
|
|
|
High
|
|
|
Low
|
|
|
High
|
|
|
Expected volatility
|
|
|
73.03
|
%
|
|
|
74.03
|
%
|
|
|
75.02
|
%
|
|
|
76.49
|
%
|
|
Expected dividends
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Expected term (in years)
|
|
|
3.73
|
|
|
|
9.11
|
|
|
|
3.73
|
|
|
|
9.47
|
%
|
|
Risk free rate
|
|
|
1.16
|
%
|
|
|
2.52
|
%
|
|
|
0.55
|
%
|
|
|
1.91
|
%
|
For stock-based compensation accrued to
employees and non-employee directors, the Company recognizes stock-based compensation expense for all service-based awards with
graded vesting schedules on the straight-line basis over the requisite service period for the entire award. Initial accruals of
compensation expense are based on the estimated number of shares for which requisite service is expected to be rendered. Estimates
are revised if subsequent information indicates that forfeitures will differ from previous estimates, and the cumulative effect
on compensation cost of a change in the estimated forfeitures is recognized in the period of the change.
For non-employee awards, the Company remeasures
compensation cost each period until the service condition is complete and recognizes compensation cost on the straight-line basis
over the requisite service period.
The Company estimates forfeitures and recognizes
compensation cost only for those awards expected to vest assuming all awards would vest and reverse recognized compensation cost
for forfeited awards when the awards are actually forfeited.
For awards with service conditions and
graded vesting that were granted prior to the adoption of ASC 718, the Company estimates the requisite service period and the number
of shares expected to vest, and recognizes compensation expense for each tranche on the straight-line basis over the estimated
requisite service period.
|
|
Note 13.
|
Related Party Transactions
|
Effective January 1, 2010,
the Company began sub-leasing office space from Melco Services Limited, a wholly-owned subsidiary of Melco
International Development Limited, which is also the parent of the Company’s principal shareholder, EGT Entertainment
Holding Limited. This sub-lease expired at the end of March 2013 and the Company moved its principal executive office to the
premises of the new Hong Kong Dolphin facilities in April 2013. The relocation of the Company’s principal executive
office serves to minimize costs and improve oversight of its Dolphin operations.
Significant revenues, purchases and expenses arising from transactions
with related parties consisted of the following:
|
|
|
Three-Month Periods Ended March 31,
|
|
|
(amounts in thousands)
|
|
2014
|
|
|
2013
|
|
|
Melco Crown (Macau) Ltd
|
|
|
|
|
|
|
|
|
|
Sales of gaming products
|
|
$
|
135
|
|
|
$
|
630
|
|
|
|
|
|
|
|
|
|
|
|
|
Melco Services Limited
|
|
|
|
|
|
|
|
|
|
Technical services
|
|
$
|
1
|
|
|
$
|
8
|
|
|
Office rental
|
|
$
|
1
|
|
|
$
|
40
|
|
|
|
|
|
|
|
|
|
|
|
|
Golden Future (Management Services) Limited
|
|
|
|
|
|
|
|
|
|
Management services
|
|
$
|
59
|
|
|
$
|
—
|
|
Melco Services Limited is a wholly-owned
subsidiary of Melco International Development Limited, which owns 38.1% of Entertainment Gaming Asia Inc.
Melco International Development Limited
owns 33.6% of Melco Crown Entertainment Limited, which owns 90% of Melco Crown (Macau) Limited.
Golden Future (Management Services) Limited is a wholly-owned
subsidiary of Melco Crown (Macau) Limited.
The Company recorded income
tax expenses of $15,000 and $41,000 for the three-month periods ended March 31, 2014 and 2013, respectively.
The Company’s effective income tax rates were (1.5)% and (14.2)% for the three-month periods ended March 31, 2014
and 2013, respectively. EGT Cambodia entity and Dreamworld Casino (Pailin) are income tax exempt and only pay a fixed monthly
tax rather than a tax on income. The change in effective tax rate was mainly due to an increase in the consolidated
pre-tax loss.
The fixed obligation tax arrangement is
subject to annual renewal and negotiation. The Company has renewed the fixed obligation tax arrangement for both EGT Cambodia and
Dreamworld Casino (Pailin) for 2014.
The Company has been subjected to income
tax examinations by tax authorities in jurisdictions in which it operates. During the years ended December 31, 2011 and 2012, the
United States Internal Revenue Service (the “IRS”) conducted an audit of the Company’s 2008 and 2009 tax returns
in the United States. On January 23, 2013, the IRS formally notified the Company that it had completed the review of the examination
of the above-mentioned years with no changes to the Company’s tax position.
The
Company's 2009 to 2013 Australian income tax returns remain open to examination by the Australian Taxation Office. The Company's
2010 to 2013 Cambodian income tax returns remain open to examination by the General Department of Taxation. The Company's 2010
to 2013 Philippines income tax returns remain open to examination by the Philippines Bureau of Internal Revenue. The Company's
2007 to 2013 Hong Kong income tax returns remain open to examination by the Hong Kong Inland Revenue Department
.
|
|
Note 15.
|
Discontinued Operations
|
From July 2006 until March 2013, the Company’s
operations included the development, manufacture and sale of gaming chips and plaques from its subsidiary, Dolphin Australia. It
also conducted the development, manufacture and sale of non-gaming plastic products for a number of industries, including the automotive
industry, from the Melbourne facility.
On February 22, 2013, the Company entered
into a Share Sale Agreement with the then general manager of the Dolphin Australia operations, pursuant to which it agreed to sell
him the portion of its business dedicated to the non-gaming plastic products, mainly automotive parts. The sale was completed on
March 28, 2013. In connection with the sale of non-gaming operations, the Company relocated its gaming products operations, which
included gaming chips and plaques, from Melbourne, Australia to Hong Kong. Commercial production in the new facility commenced
in May 2013.
Prior to the completion of the sale, the
Company transferred out of Dolphin Australia to Dolphin Hong Kong, both of which are subsidiaries wholly-owned by the Company,
all inventory on hand and all assets and operations relating to the Company’s gaming chips and plaques operations, including
all trademarks, patent rights and other intellectual property.
The purchase price received pursuant to
the Share Sale Agreement was 350,000 Australian dollars (AUD). The Company also agreed to assume Dolphin Australia’s liabilities
for (i) severance under Australian labor laws for those employees to be terminated by Dolphin Australia as part of the transactions,
approximately $750,000, (ii) the lease for the Melbourne facility through the end of its present term expiring in January 2014,
net of sub-lease income, approximately $350,000, and (iii) all Dolphin Australia payables, net of receivables, relating to both
gaming and non-gaming operations up to March 28, 2013.
The buyer owed the Company $1.1 million
for the settlement of working capital related to the sale of the non-gaming Dolphin assets. As of December 31, 2013, the outstanding
balance had been fully settled.
As part of the sale transaction, the Company
also agreed to grant Dolphin Australia a non-transferable, substantially royalty-free license to utilize certain trademarks and
patent rights in connection with Dolphin Australia’s manufacture and sale of plastic products for the non-gaming industries.
The following table details selected financial
information for the discontinued operations in the consolidated statements of comprehensive income.
|
|
|
Three-Month Periods Ended March 31,
|
|
|
(amounts in thousands)
|
|
2014
|
|
|
2013
|
|
|
Income from operations
|
|
$
|
—
|
|
|
$
|
236
|
|
|
Loss on disposal
|
|
|
—
|
|
|
|
(2,442
|
)
|
|
Income tax benefit (1)
|
|
|
—
|
|
|
|
28
|
|
|
Loss from discontinued operations, net of tax
|
|
$
|
—
|
|
|
$
|
(2,178
|
)
|
|
|
(1)
|
Income tax benefit represented a reversal of previously recognized uncertain tax benefits.
|
|
|
Note 16.
|
Commitments and Contingencies
|
Legal Matters
Prime Mover/Strata Litigation
On March 26, 2010, a complaint (as
subsequently amended on May 28, 2010 and December 20, 2011) (the “Complaint”) was filed by certain of the Company's
shareholders including Prime Mover Capital Partners L.P., Strata Fund L.P., Strata Fund Q.P. L.P., and Strata Offshore Fund, Ltd
(collectively, the “Plaintiffs”) in the United States District Court for the Southern District of New York against
certain defendants including the Company and certain other of current and former directors and officers. The case number is 12-4393.
On December 18, 2013, the Second Circuit
affirmed by Summary Order the District Court’s September 28, 2012 judgment granting the dismissal of the Plaintiffs’
Complaint. Since the Plaintiffs did not request a rehearing of the Summary Order in the permitted time, the civil action was concluded
with all claims dismissed against all parties.
|
|
Note 17.
|
(Loss)/Earnings Per Share
|
Computation of the basic and diluted loss per share from continuing
operations consisted of the following:
|
|
|
Three-Month Periods Ended March 31,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
(amounts in thousands,
except per share data)
|
|
Loss
|
|
|
Number of
Shares
|
|
|
Per Share
Amount
|
|
|
Loss
|
|
|
Number of
Shares
|
|
|
Per Share
Amount
|
|
|
Basic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss attributable to equity shareholders
|
|
$
|
(1,030
|
)
|
|
|
30,019
|
|
|
$
|
(0.03
|
)
|
|
$
|
(329
|
)
|
|
|
29,975
|
|
|
$
|
(0.01
|
)
|
|
Effect
of dilutive securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dilutive stock options/restricted
shares (1)
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss attributable to equity shareholders plus assumed conversion
|
|
$
|
(1,030
|
)
|
|
|
30,019
|
|
|
$
|
(0.03
|
)
|
|
$
|
(329
|
)
|
|
|
29,975
|
|
|
$
|
(0.01
|
)
|
|
|
(1)
|
There was no difference in diluted loss per share from basic loss per share as the assumed exercise
of common stock equivalents would have an anti-dilutive effect due to losses for the three-month periods ended March 31, 2014 and
2013.
|
For the three-month period ended March 31,
2014, outstanding stock options of 2,185,487 shares of common stock were excluded from the calculation of diluted earnings per
share as their effect would be anti-dilutive. For the three-month period ended March 31, 2013, outstanding stock options of
2,166,738 shares of common stock were excluded from the calculation of diluted earnings per share as their effect would be anti-dilutive.
|
|
Note 18.
|
Accumulated Other Comprehensive Income
|
The accumulated balances in respect of
other comprehensive income consisted of the following:
|
(amounts in thousands)
|
|
Unrealized
Actuarial
Income
|
|
|
Foreign
Currency
Translation
|
|
|
Accumulated
Other
Comprehensive
Income
|
|
|
Balances, January 1, 2013
|
|
$
|
62
|
|
|
$
|
867
|
|
|
$
|
929
|
|
|
Current period other comprehensive income/(loss)
|
|
|
37
|
|
|
|
(224
|
)
|
|
|
(187
|
)
|
|
Balances, December 31, 2013
|
|
|
99
|
|
|
|
643
|
|
|
|
742
|
|
|
Current period other comprehensive loss
|
|
|
—
|
|
|
|
(41
|
)
|
|
|
(41
|
)
|
|
Balances, March 31, 2014
|
|
$
|
99
|
|
|
$
|
602
|
|
|
$
|
701
|
|