PokerTek reports third quarter 2011 financial results

Roberson added: "Looking ahead, we expect Mexico to remain closed to electronic table games for at least several months which will negatively impact results. However, we expect to grow our higher margin business in Europe, Canada, and the United States and cruise ships in the first half of 2012. In addition, we expect to begin the regulatory approval process for the SAS/TITO version of our ProCore platform in 2012 which will significantly increase our longer-term growth opportunities."

Financial Summary
Total revenue for the third quarter of 2011 increased 13% to us$ 1.6 million compared to us$ 1.4 million during the third quarter of 2010. On a year-to-date basis, revenue increased 14% from us$ 4.3 million to us$ 4.9 million. Approximately 14% of revenue for the quarterly period and 17% for the year-to-date period was derived from Mexico where the Company does not expect to earn revenue during the fourth quarter of 2011. Revenues increased primarily due to improved results in Europe, Africa, North America, and the cruise markets, partially offset by lower revenues in Mexico.

Gross profit increased 8% to us$ 1.1 million for the third quarter of 2011 as compared to us$ 1 million during the third quarter of 2010. On a year-to-date basis, gross profit increased 25% from us$ 2.8 million to us$ 3.5 million. 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 third quarter of 2011 compared to us$ 1.7 million during the prior-year period. On a year-to-date basis, operating expenses were us$ 4.7 million compared to us$ 5 million during the prior year period. The company continues to maintain a lean operating structure, even as it invests in the development of the new ProCore platform and expands its penetration of PokerPro in international markets.

Net loss from continuing operations for the third quarter of 2011 improved 24% to us$ 0.5 million from us$ 0.7 million for comparable period of 2010. On a year-to-date basis, net loss from continuing operations improved 42% to us$ 1.4 million from us$ 2.4 million for the comparable period of 2010.

Including discontinued operations, net loss for the third quarter of 2011 improved 20% to us$ 0.5 million from us$ 0.6 million for comparable period of 2010. On a year-to-date basis, net loss improved 61% to us$ 1.4 million from us$ 3.5 million for the comparable period of 2010.

EBITDAS, a non-GAAP financial measure, improved to a profit of us$ 156 thousand for the third quarter for 2011, compared to a loss of us$ 82 thousand in the prior-year period. On a year-to-date basis, EBITDAS improved from a loss of us$ 203 thousand to a profit of us$ 409 thousand.

Balance sheet and cash flow information
The company used us$ 659 thousand of cash for continuing operations for the first nine months of 2011, compared to us$ 167 thousand during the comparable prior year period. Cash used in operating activities increased as increased working capital, primarily accounts receivable, inventory and deferred revenue, offset improvements in the company's results of operations. As of September 30, 2011, the company's cash balance was us$ 0.8 million and total debt was us$ 0.7 million.

Unit count information
Gaming positions deployed worldwide totaled 1,958 as of September 30, 2011 comprised of 189 PokerPro tables and 14 Blackjack Pro tables. As of September 30, 2010, 2,334 gaming positions were deployed comprised of 235 PokerPro tables.

On a comparable basis, excluding Mexico, gaming positions increased 14% to 1,958 as of September 30, 2011 from 1,714 as of September 30, 2010 due to increased placements on cruise ships and international markets, primarily in Europe and Africa.