PokerTek reports first quarter 2011 financial 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 US$ 1.7 million compared to US$ 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 US$ 1.2 million for the first quarter of 2011 as compared to US$ 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 US$ 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 US$ 0.4 million (US$ 0.07 per share) from US$ 0.8 million ($0.14 per share) for comparable periods in 2011 and 2010. Including the results of discontinued operations, quarterly net loss improved 46% to US$ 0.5 million (US$ 0.07 per share) from US$ 0.9 million (US$ 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 US$ 82 thousand in the prior-year quarter to positive cash from operations of US$ 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 US$ 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.