EGT – Research / DD & Charts - Portfolio 2011 -- Presented By Matt24D About EGT – Entertainment Gaming Asia Inc., Hong Kong - Map Phone: 852 3151 3800 Fax: 852 2147 3230 Website: http://www.elixirgaming.com
Shares outstanding per their last 10Q 116 million shares.
Dreamworld Casino and Resort will be built in phases. Plans for phase one include 150 gaming machines and 20 tables games housed on approximately 54,000 square feet (5,000 square meters) of casino floor space and 50 hotel rooms. Phase one is expected to be completed in the first quarter of 2011.
Asia is the most promising market for the expansion of the global casino gaming industry and, according to a 2010 survey from the American Gaming Association, could produce more revenue than the U.S. market in three to five years.
Business Summary Entertainment Gaming Asia Inc. operates as a provider of gaming technology solutions. The company leases electronic gaming machines and systems to gaming venue operators and owners in the Asia Pacific region with a focus on the Philippines and Cambodia markets. It secures long-term contracts to provide solutions to 3, 4, and 5 star hotels and other well-located venues throughout Asia that seek to offer casino gaming products. The company also engages in the design, manufacture, and distribution of table game products, which include high-frequency RFID casino chips that allow casinos to identify counterfeit casino chips and track table play; traditional casino chips for various table games, including a range of American-style gaming chips; and high-frequency RFID casino plaques. Its table game products also consist of Deck Checker, an automated playing card scanner; RandomPlus Card Shuffler, a shuffling device; ShufflePro Shuffler, a playing card-shuffler; and ChipWasher, an automated gaming chip cleaner that washes and sanitizes gaming chips. In addition, Entertainment Gaming Asia involves in the design, manufacture, and sale of component parts for the automotive industry, which comprise inner remote door handles, fuel filler hinge assemblies, module brackets, steering wheel spoke covers, speaker grills, fasteners, safety products, and vehicle cosmetic components. It also holds a casino license in Cambodia. The company was formerly known as Elixir Gaming Technologies, Inc. and changed its name to Entertainment Gaming Asia Inc. on July 26, 2010. Entertainment Gaming Asia Inc. was founded in 1995 and is based in Central, Hong Kong.
"Entertainment Gaming Asia Inc., formerly known as Elixir Gaming Technologies, Inc., is a leading provider of electronic gaming machines on a revenue sharing (participation) basis to the rapidly growing and emerging gaming markets in Pan Asia, with a current focus on the Cambodia and Philippines markets. We secure long-term contracts to provide electronic gaming machines and related systems to premier hotels and other well-located gaming venues in Pan Asia. We retain ownership of the gaming machines and systems and receive recurring daily fees based on an agreed upon percentage of the net gaming win per machine and provide on-site maintenance.
We also hold a casino license in Cambodia and intend to build and operate Dreamworld Casino and Resort, a casino hotel in the Takeo Province strategically located near the Vietnam border. Phase one of Dreamworld Casino and Resort, which will include approximately 150 gaming machines, 20 table games, and 50 hotel rooms, is expected to be completed in the fourth quarter of 2011.
In addition, through our wholly-owned subsidiary Dolphin Products Pty Ltd., we manufacture and sell casino gaming chips and plaques primarily in the markets of Macau and Australia as well as non-gaming products such as automotive parts. More information on our Dolphin Products Pty Ltd. subsidiary.
Shares outstanding per their last 10Q 116 million shares.
EGT is up and for sure a company showing major growth. Their major project that they just finished was Nagaworld in the Cambodia. This casino in the only casino within 200 KM of the capital city of Phnom Penh. The have 669 gaming machines on prime floor space.
In April 2010, they entered into a machine participation agreement with a new partner to place approximately 60 gaming machine seats on a participation basis at its new casino in the Kampong Cham province of Cambodia (north east of Phnom Penh) near the Vietnam border. Start this year they should be breaking ground on their dream world casino resort that they will own and operate.
With regard to their non-gaming operations, Dolphin auto component sales volumes continue to modestly strengthen driven by the improvement in the automotive parts industry in Australia for the first nine months of 2010 compared to the same period in 2009. As a designated tier 1 and tier 2 supplier to several major manufacturers, we believe Dolphin is better positioned to gain market share and increase sales orders in the future as the Australian automotive parts industry continues to improve. In addition, we are pursuing opportunities to leverage our existing operations to also serve the military and mining industries with a goal to further strengthen and diversify this business in the future.
Based on the solid revenue performance, particularly from our operations at NagaWorld, and our continued strict cost control efforts, we have achieved positive GAAP earnings for the three months ended September 30, 2010, the first profitable quarter since effecting our new business model in September 2007, and have significantly improved our ability to generate and grow positive cash flow. We achieved positive Adjusted EBITDA (as defined below) of approximately $3.0 million for the three months ended September 30, 2010 up from approximately $1.4 million for the three months ended June 30, 2010. Cash flow provided from operations amounted to approximately $7.8 million for the nine months ended September 30, 2010 compared with cash used in operations of approximately $7.9 million in the same period in the prior year.
Revenues are growing very nice as well
Revenue from our gaming machine participation operations was approximately $4.1 million for the three months ended September 30, 2010, more than doubling from $1.8 million in the same period in the prior year. Gross margin for the gaming participation business improved to 45% in the three months ended September 30, 2010 compared to negative gross margin of 64% in the same period in the prior year. Excluding non-cash items such as machine depreciation and asset write-downs, gross margin for the gaming participation business improved to 96% from 80%, respectively.
10Q notes on Dream world "As a border casino, Dreamworld Casino will cater to players residing in the nearby major southern Vietnamese cities as well as the growing number of expatriates and tourists in the greater Phnom Penh area. We intend to leverage our marketing expertise and the Dreamworld brand from our existing operations to eventually make Dreamworld Casino a destination location for players in the area.
We continue to actively pursue casino development projects with a focus on the Indo-China region. We are currently in final stages of discussions on another significant new project. While there is no guarantee we will successfully conclude these negotiations, given our constrained capital resources, we are re-evaluating the project timeline for the Takeo Project in order to divert certain capital to this potential new project, which we believe offers greater short- and medium-term return potential. Should an adjustment to the Takeo Project development timeline be required, it would not place our gaming license or any rights to own and "
THIS IS VERY GOOD FROM THE 10Q
We presently expect that our capital expenditures for the Takeo Project and purchase of gaming machines for 2011 will be approximately $11 to $13 million. Given our current and projected future cash flow generation capability from our operations at NagaWorld, our ability to source previously-owned gaming machines at attractive prices relative to new gaming machines, and our strong relationships with gaming equipment manufacturers, we anticipate funding our capital expenditures for the Takeo Project and purchase of gaming machines for 2011 from cash on hand and expected net cash flow from operations.
You can see that earnings this year are really starting to grow big time. The Win per seat is growing their cash on hand is growing as well.
* Consolidated adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, and non-cash charges) was $1.3 million for the first quarter of 2010, up 64% sequentially from the prior quarter. This compared to negative adjusted EBITDA of $2.6 million for the same period last year.
* Total net revenue from gaming machines on participation for the first quarter of 2010 was a record $2.8 million, an increase of 15% on a quarterly sequential basis, reflecting solid performance and the increasing gaming machine installed base at the Company’s operations at NagaWorld.
* Average consolidated win per unit per day (WUD) for the first quarter of 2010 was $107, an increase of 2% on a quarterly sequential basis on an increasing gaming machine installed base. * As of May 1, 2010, total installed gaming machine seats in operation were 1,487 in seven venues, comprised of six venues in the Philippines with a total of 897 seats and one venue in Cambodia with a total of 590 seats.
* Cash SG&A expense was $1.4 million for the first quarter of 2010, which was below the guidance range of $1.5 to $1.8 million and down 45% from the same period last year.
* Cash was $5.1 million as of March 31, 2010, after a payment of $2.7 million to NagaWorld in January 2010 under the previously-announced additional machine placement and contract consolidation arrangement and the recovery of $3.5 million in commitment fees from NagaWorld.
* In April, the Company entered into a machine participation agreement with Grand Golden Co. Ltd. to place approximately 60 gaming machine seats in November 2010 at its new Grand Golden casino in Kampong Cham Province, Cambodia near the Vietnam border.
* Consolidated adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, and non-cash charges) was $1.4 million for the second quarter of 2010, up from $1.3 million in the prior quarter.
* Total net revenue from gaming machines on participation for the second quarter of 2010 was a record $3.5 million, an increase of 24% on a quarterly sequential basis, reflecting both a higher average win per unit per day (WUD) and gaming machine installed base at the Company’s operations in Cambodia and the Philippines. * Average consolidated WUD for the second quarter of 2010 was $115, an increase of 7% on a quarterly sequential basis on an increasing gaming machine installed base. * As of August 1, 2010, total installed gaming machine seats in operation were 1,544 in seven venues, comprised of six venues in the Philippines with a total of 888 seats and one venue in Cambodia with a total of 656 seats. * Cash selling, general and administrative (SG&A) expense was $1.5 million for the second quarter of 2010, which was at the low end of the guidance range of $1.5 to $1.8 million and down 24% from the same period last year. * Cash was $6.4 million as of June 30, 2010, up from $4.2 million as of December 31, 2009. * In May 2010, the Company amended the terms of its unsecured promissory note due to EGT Entertainment Holding Limited, formerly called Elixir Group Limited, effective as of July 1, 2010 to defer the repayment of principal on the outstanding principal balance on the note of $9.2 million until July 1, 2011. * In May 2010, the Company unveiled its plans to expand its gaming operations to include the ownership and operation of its own casinos. In May 2010, the Company was granted a casino license by the Cambodian government and in June 2010, it acquired the title to over seven acres of land in the Takeo Province near the Vietnam border where it intends to build and operate its own casino hotel, Dreamworld Casino and Resort (“Dreamworld Casino”).
* In July 2010, the Company changed its name to Entertainment Gaming Asia Inc. to reflect the material transformation of its operations and more suitably reflect its expanded gaming business model.
* Net income was $725,000 or $0.01 per share for the third quarter of 2010 compared to a net loss of $0.01 per share in the second quarter of 2010 and a net loss of $0.03 per share in the third quarter of 2009. * Consolidated adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, and non-cash charges) was $3.0 million for the third quarter of 2010, up from $1.4 million in the second quarter of 2010 and $338,000 in the third quarter of 2009. * Total net revenue from gaming machines on participation for the third quarter of 2010 was a record $4.1 million, an increase of 16% from the second quarter of 2010 and 123% from the third quarter of 2009, reflecting both a higher average win per unit per day (WUD) and gaming machine installed base. * Average consolidated WUD for the third quarter of 2010 was $125, an increase of 9% from the second quarter of 2010 and 45% from the third quarter of 2009. * As of September 30, 2010, total installed gaming machine seats in operation were 1,525 in eight venues, comprised of six venues in the Philippines with a total of 846 seats and two venues in Cambodia with a total of 679 seats. * Cash selling, general and administrative (SG&A) expense was $1.3 million for the third quarter of 2010, which was below the guidance range of $1.5 to $1.8 million and down 10% from the second quarter of 2010 and 11% from the third quarter of 2009. * Cash balances of $8.8 million, including $1.0 million held in an escrow account for a potential new casino project in the Indo-China market, as of September 30, 2010, up from $6.4 million as of June 30, 2010 and $4.2 million as of December 31, 2009.
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