MATTHEWS, N.C., March 12, 2014 /PRNewswire/ -- PokerTek,
Inc. (NASDAQ: PTEK) today reported financial results for the fourth
quarter and full year ended December 31,
2013.
Full Year Operational Highlights:
- Total revenue increased 7%
- Recurring revenue increased 11%
- Gross profit margin exceeds 70%
- Net loss from continuing operations improved 25%
- Net cash used in operating activities improved 84%
- EBITDAS positive for third consecutive year
Fourth Quarter Operational Highlights:
- Total revenue increased 5%
- Recurring revenue decreased 11%
- Gross profit margin exceeds 60%
- Net loss from continuing operations improved 35%
"Financially, 2013 was a solid year posting recurring revenue
growth, strong gross margins and significant improvements in net
operating results and cash flow. Our operations and technical teams
deserve tremendous credit for the turnaround in our financial
performance in recent years," commented Mark Roberson, Chief Executive Officer.
"We also achieved several important marketing and product
development milestones during the year, entering new gaming markets
in Macau and South America, growing our cruise ship
penetration, achieving regulatory approvals for our ProCore product
line, and initiating our expansion into mobile gaming."
Financial Summary:
Revenue. Total revenue increased 7.1% to
$5.5 million for the year ended
December 31, 2013, with revenues from
license and service fees increasing 11.1% and revenue from sales of
systems and equipment decreasing 14.1%. For the quarterly periods,
total revenue increased 4.8% with revenue from license and service
fees decreasing 11.3% and revenue from sales of systems and
equipment increasing 324.3%.
Revenue from license and service fees increased 11.1% to
$4.9 million for the year ended
December 31, 2013 compared to
$4.4 million for the year ended
December 31, 2012. For the quarterly
periods, revenue from license and service fees decreased 11.3% to
$1.1 million from $1.3 million. License and service fees from
Canada, Mexico and cruise ships increased with new
placements generating revenue in the current year period. Increases
in those markets were offset, however, by reductions in revenue
from Ohio, Europe and other international markets.
Revenue from sales of systems and equipment decreased 14.1% to
$0.7 million for the year ended
December 31, 2013 compared to
$0.8 million for the year ended
December 31, 2012. Sales of systems
and equipment decreased on an annual basis due to lower equipment
sales in Europe and lower current
year contribution from the lease conversions, partially offset by
increased equipment sales in Asia.
On a quarterly basis, revenue from sales of systems and equipment
increased 324.3% to $273 thousand
from $64 thousand due primarily to
increased sales in Asia and
France.
Over the past several years, our revenue mix has become more
heavily weighted towards recurring license and service fees and
less towards sales of systems and equipment. In 2013, license and
service fees represented 87% of total revenue, compared to 84% in
2012.
Gross profit. Gross profit was $4.0 million for year ended December 31, 2013 compared to $3.8 million for the year ended December 31, 2012, an increase of 6.9%. Gross
profit as a percent of revenue was relatively unchanged at 72.5%
and 72.6% for the years ended December 31,
2013 and 2012, respectively. For the quarterly periods,
gross profit relatively unchanged at $0.9
million in both periods, however, as a percent of revenue
gross profit declined from 69.7% to 64.8% due primarily to higher
costs of revenue associated with sales activity in Asia.
Operating expenses. Operating expenses increased
by $0.1 million (2.8%) to
$4.6 million for the year ended
December 31, 2013 compared to
$4.5 million for the year ended
December 31, 2012. For the quarterly
periods, operating expenses decreased to $1.0 million from $1.1
million. The modest increase in operating expenses on an
annual basis was attributable to higher spending on regulatory
approvals and increased bad debt expense, partially offset by lower
employee compensation expense and professional fees.
Interest expense, net. Interest expense decreased
44.9% to $38,191 for the year ended
December 31, 2013 from $69,351 for the year ended December 31, 2012. On a quarterly basis, interest
expense decreased 17.9% to $8,974
from $10,934. The decrease is due to
lower long term debt outstanding and lower fees associated with our
credit facility.
Income tax provision. Income tax provision
decreased 51.3% to $42,310 for the
year ended December 31, 2013 from
$86,908 for the year ended
December 31, 2012. On a quarterly
basis, income tax provision was a benefit of $3,710 from an expense of $27,114. The change in income tax provision was
primarily attributable to lower withholdings in foreign
jurisdictions.
Net loss from continuing operations. Net loss from
continuing operations improved 25.1% to $0.6
million, $(0.07) per share,
for the year ended December 31, 2013
compared to $0.8 million,
$(0.11) per share, for the year ended
December 31, 2012. Net loss from
continuing operations improved 34.5% to $0.1
million, $(0.1) per share, for
the quarterly period ended December 31,
2013 from $0.2 million,
$(0.2) per share, for the quarterly
period ended December 31, 2012. The
improvements in net loss from continuing operations resulted
primarily from growth in revenue combined with reductions in
interest and income taxes.
Net income from discontinued operations. Net
income from discontinued operations for the year ended December 31, 2013 was $535 ($0.00 per
share) compared to $52,263
($0.01 per share) for the year ended
December 31, 2012. We completed the
disposition of these operations and do not expect to realize
additional income or loss from discontinued operations in future
periods.
Net loss. Net loss improved 20.3% to $0.6 million, $(0.07) per share, for the year ended
December 31, 2013 compared to
$0.8 million, $(0.11) per share, for the year ended
December 31, 2012. Net loss improved
33.8% to $0.1 million, $(0.1) per share for the quarterly period ended
December 31, 2013, from $0.2 million, $(0.2) per share for the quarterly period ended
December 31, 2012. The improvements
in net loss from continuing operations resulted primarily from
growth in revenue combined with reductions in interest and income
taxes.
EBITDAS, a non-GAAP financial measure (described below),
improved 38.4% to $585 thousand for
the year ended December 31, 2013 from
$423 thousand for the year ended
December 31, 2012. On a quarterly
basis, EBITDAS improved 16.4% to $155
thousand from $133 thousand.
2013 represents the Company's third consecutive year of positive
EBITDAS operating performance.
Balance Sheet and Cash Flow Information
Net cash used in operating activities from continuing operations
was $0.1 million for the year ended
December 31, 2013 compared to a use
of cash of $0.8 million for the year
ended December 31, 2012. The
improvement in cash used in operating activities was primarily due
to improved operating results and favorable working capital
comparisons, primarily gaming equipment and deferred revenue,
partially offset by reductions in accounts payable and accrued
liabilities.
Net cash used in investing activities was $10 thousand for the year ended December 31, 2013 compared to $1 thousand for the year ended December 31, 2012. Investing activities in both
periods are composed of minor capital expenditures for leasehold
improvements, office and manufacturing equipment
Net cash provided by financing activities was $0.3 million for the year ended December 31, 2013 and $0.4
million for the year ended December
31, 2012. Net cash provided by financing activities
primarily consist of proceeds from sales of common stock in both
periods. Principal payments on long-term debt totaled $60 thousand for the year ended December 31, 2013 and $0 for the year ended December 31, 2012.
As of December 31, 2013, the
Company's cash and cash equivalents totaled $0.4 million and total debt was $0.3 million. As of December 31, 2013 $0.5
million was available under our Credit Facility, based on
our accounts receivable and inventory levels, and there were no
amounts outstanding under the facility.
Gaming Positions Information
Gaming positions deployed worldwide totaled 2,272 gaming
positions, composed of 2,170 PokerPro and 102 ProCore positions. As
of December 31, 2012, gaming
positions consisted of 2,310 gaming positions, composed of 2,160
PokerPro and 150 ProCore positions.
Conference Call
A conference call and webcast will be held on March 12, 2014 at 11:00 am
EDT for management to discuss the Company's operating
results. Interested parties may listen to and participate in the
conference call by dialing (877) 703-6103 (U.S./Canada) or +1 (857) 244-7302 (Other) and
entering passcode 48599806. 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 58748311.
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) 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
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
Revenue
|
|
|
|
|
|
|
|
|
License
and service fees
|
|
$
1,135,106
|
|
$
1,279,148
|
|
$
4,850,375
|
|
$
4,367,132
|
Sales of
systems and equipment
|
|
273,364
|
|
64,433
|
|
696,320
|
|
810,147
|
Total
revenue
|
|
1,408,470
|
|
1,343,581
|
|
5,546,695
|
|
5,177,279
|
Cost of
revenue
|
|
495,133
|
|
407,180
|
|
1,527,740
|
|
1,419,351
|
Gross
profit
|
|
913,337
|
|
936,401
|
|
4,018,955
|
|
3,757,928
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Selling,
general and administrative
|
|
806,566
|
|
861,366
|
|
3,583,332
|
|
3,403,366
|
Research
and development
|
|
165,716
|
|
141,781
|
|
678,817
|
|
679,431
|
Share-based compensation expense
|
|
53,919
|
|
77,347
|
|
300,615
|
|
351,996
|
Depreciation
|
|
2,611
|
|
2,324
|
|
9,432
|
|
13,267
|
Total operating
expenses
|
|
1,028,812
|
|
1,082,818
|
|
4,572,196
|
|
4,448,060
|
Operating
loss
|
|
(115,475)
|
|
(146,417)
|
|
(553,241)
|
|
(690,132)
|
Interest
expense, net
|
|
8,974
|
|
10,934
|
|
38,191
|
|
69,351
|
Net loss from
continuing operations before income taxes
|
|
(124,449)
|
|
(157,351)
|
|
(591,432)
|
|
(759,483)
|
Income
tax provision
|
|
(3,710)
|
|
27,114
|
|
42,310
|
|
86,908
|
Net (loss) from
continuing operations
|
|
(120,739)
|
|
(184,465)
|
|
(633,742)
|
|
(846,391)
|
Income
from discontinued operations
|
|
-
|
|
2,150
|
|
535
|
|
52,263
|
Net
(loss)
|
|
$
(120,739)
|
|
$
(182,315)
|
|
$
(633,207)
|
|
$
(794,128)
|
|
|
|
|
|
|
|
|
|
Other
comprehensive loss:
|
|
|
|
|
|
|
|
|
Adjustments to net loss
|
|
-
|
|
-
|
|
-
|
|
-
|
Comprehensive loss
|
|
$
(120,739)
|
|
$
(182,315)
|
|
$
(633,207)
|
|
$
(794,128)
|
|
|
|
|
|
|
|
|
|
Net (loss) from
continuing operations per common share - basic and
diluted
|
|
$
(0.01)
|
|
$
(0.02)
|
|
$
(0.07)
|
|
$
(0.11)
|
Net income from
discontinued operations per common share - basic and
diluted
|
|
-
|
|
-
|
|
0.00
|
|
0.01
|
Net (loss) per common
share - basic and diluted
|
|
$
(0.01)
|
|
$
(0.02)
|
|
$
(0.07)
|
|
$
(0.10)
|
Weighted average
common shares outstanding - basic and diluted
|
|
9,333,559
|
|
8,627,770
|
|
9,113,965
|
|
7,973,609
|
POKERTEK,
INC.
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
December 31,
2013
|
|
December 31,
2012
|
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and
cash equivalents
|
|
$
415,533
|
|
$
235,757
|
|
Accounts
receivable, net
|
|
793,949
|
|
794,769
|
|
Inventory
|
|
869,631
|
|
1,177,127
|
|
Prepaid
expenses and other assets
|
|
90,314
|
|
66,988
|
|
Total current
assets
|
|
2,169,427
|
|
2,274,641
|
|
|
|
|
|
|
|
Long-term
assets:
|
|
|
|
|
|
Inventory
|
|
545,070
|
|
165,823
|
|
Gaming
systems, net
|
|
1,224,931
|
|
1,693,051
|
|
Property
and equipment, net
|
|
27,724
|
|
26,967
|
|
Other
assets
|
|
110,740
|
|
171,498
|
|
Total long-term
assets
|
|
1,908,465
|
|
2,057,339
|
|
Total
assets
|
|
$
4,077,892
|
|
$
4,331,980
|
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
|
$
243,960
|
|
$
274,609
|
|
Accrued
liabilities
|
|
310,126
|
|
569,404
|
|
Deferred
revenue
|
|
20,051
|
|
42,266
|
|
Long-term debt, current portion
|
|
70,822
|
|
59,571
|
|
Total current
liabilities
|
|
644,959
|
|
945,850
|
|
|
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
|
|
Long-term liability
|
|
167,523
|
|
219,494
|
|
Long-term debt
|
|
169,607
|
|
240,429
|
|
Total long-term
liabilities
|
|
337,130
|
|
459,923
|
|
Total
liabilities
|
|
982,089
|
|
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 9,363,434 and 8,625,498 shares
at
|
|
|
|
|
|
December 31, 2013 and
December 31, 2012, respectively
|
|
|
|
|
|
Additional paid-in capital
|
|
50,355,908
|
|
49,481,922
|
|
Accumulated deficit
|
|
(47,260,105)
|
|
(46,626,898)
|
|
Accumulated other comprehensive loss, net
|
|
-
|
|
-
|
|
Total
shareholders' equity
|
|
3,095,803
|
|
2,855,024
|
|
Total liabilities
and shareholders' equity
|
|
$
4,077,892
|
|
$
4,331,980
|
|
POKERTEK,
INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
Year Ended
December 31,
|
|
2013
|
|
2012
|
Cash flows from
operating activities:
|
|
|
|
Net loss
|
$
(633,207)
|
|
$
(794,128)
|
Net income from
discontinued operations
|
(535)
|
|
(52,263)
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
Depreciation and
amortization
|
771,724
|
|
751,832
|
Share-based
compensation expense
|
300,615
|
|
351,996
|
Provision for
doubtful accounts and other receivables
|
201,687
|
|
123,214
|
Changes in assets and
liabilities:
|
|
|
|
Accounts and other
receivables
|
(200,867)
|
|
(186,382)
|
Prepaid expenses and
other assets
|
37,433
|
|
88,111
|
Inventory
|
(71,750)
|
|
419,856
|
Gaming
systems
|
(294,172)
|
|
(1,327,283)
|
Accounts payable and
accrued expenses
|
(224,611)
|
|
20,994
|
Deferred
revenue
|
(22,215)
|
|
(238,817)
|
Net cash provided
by (used in) operating activities from continuing
operations
|
(135,898)
|
|
(842,870)
|
Net cash provided
by operating activities from discontinued operations
|
535
|
|
68,727
|
Net cash provided
by (used in) operating activities
|
(135,363)
|
|
(774,143)
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
Purchase of property
and equipment
|
(10,190)
|
|
(1,378)
|
Net cash used in
investing activities
|
(10,190)
|
|
(1,378)
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
Proceeds from
issuance of common stock, net of expenses
|
384,900
|
|
405,049
|
Repayments of
long-term debt
|
(59,571)
|
|
-
|
Net cash provided
by financing activities
|
325,329
|
|
405,049
|
Net increase in
cash and cash equivalents
|
179,776
|
|
7,967
|
Cash and cash
equivalents, beginning of year
|
235,757
|
|
606,229
|
Cash and cash
equivalents, end of period
|
$
415,533
|
|
$
614,196
|
|
|
|
|
Supplemental
Disclosure of Cash Flow Information
|
|
|
|
Cash paid
for:
|
|
|
|
Interest
|
$
35,450
|
|
$
66,587
|
Income taxes
|
46,412
|
|
49,645
|
|
|
|
|
Non-cash
transactions:
|
|
|
|
Amortization of commitment fee issued in common stock
|
$
-
|
|
$
44,223
|
Issuance of common
stock for debt cancellation
|
-
|
|
400,000
|
Shares of Common Stock issued in settlement of
litigation
|
117,288
|
|
-
|
POKERTEK,
INC.
|
RECONCILIATION TO
EBITDAS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Years Ended
December 31,
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
Net loss
from continuing operations
|
|
$
(120,739)
|
|
$
(184,466)
|
|
$
(633,742)
|
|
$
(846,391)
|
Interest
expense, net
|
|
8,974
|
|
10,934
|
|
38,191
|
|
69,351
|
Income
tax provision
|
|
(3,710)
|
|
27,114
|
|
42,310
|
|
86,908
|
Other
taxes
|
|
45,579
|
|
425
|
|
66,713
|
|
9,474
|
Depreciation and amortization
|
|
170,827
|
|
201,715
|
|
771,724
|
|
751,832
|
Stock-based compensation expense
|
|
53,919
|
|
77,347
|
|
300,615
|
|
351,996
|
EBITDAS
(1)
|
|
$
154,850
|
|
$
133,069
|
|
$
585,811
|
|
$
423,170
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.