United States-listed supplier of casino currency and equipment Gaming Partners International Corp (GPI) says the company’s merger with Japanese firm Angel Holdings GK, a specialist in the manufacture of casino playing cards, should take place before year-end.
“Although all requisite conditions to consummating the merger are not in our direct control, we anticipate the merger will be effectuated before December 1,” GPI stated in its 2018 annual report, filed on Tuesday.
The stockholders of GPI formally approved earlier this month the merger with Angel Holdings. GPI had announced in November that Angel Holdings would buy all of GPI’s stock for a cash consideration of nearly US$110.7-million.
Angel Holdings makes and supplies playing cards and card games for gaming and for the retail market. The company’s headquarters is in Kyoto, with branch offices in Macau, the U.S., Australia and the Philippines.
GPI stated in its annual report it posted net income of US$3.7 million for full calendar year 2018, compared to a profit of US$3.6 million a year earlier. The company reported a net loss of US$0.3 million for the fourth quarter of last year, compared to net income of US$0.4 million in the last three months of 2017.
GPI reported revenue of approximately US$87.0 million for the 12 months ended December 31, up by 7.9 percent from the prior-year period, partially helped by an increase in sales in the Asia-Pacific region.
“The increase in revenues is primarily due to an increase in casino currency sales which was generated by casino openings, partially offset by a decrease in playing cards sales,” the Nasdaq-listed company said in its filing.
GPI’s full 2018 net sales in the geographical area of Asia Pacific were approximately US$26.1 million, compared to US$23.2 million a year before.
GPI said additionally that it had a backlog of signed orders to be delivered during 2019 of US$32.9 million, including US$17.5 million for GPI Asia Ltd. Macau-based GPI Asia distributes GPI’s casino currencies, playing cards, and other table accessories in the Asia-Pacific region.
“Due to scheduled casino openings in Asia, we have an exceptionally high backlog for 2019,” GPI stated. But the company cautioned: “The inherent uncertainties associated with construction delays and regulatory decisions regarding table allotments will impact both the amount of revenue we recognise and the timing of revenue recognition.”
GPI said research and development expenses for 2018 increased by US$2.5 million, or 166.7 percent compared to 2017. “This is primarily due to payments made to BrainChip Holdings Limited and Xuvi, LLC for achieving certain milestones in our global licensing and development agreements,” the firm stated.
In January 2018, GPI announced global licensing and development agreements with BrainChip and Xuvi regarding joint development of products “to provide a table management solution that would combine visioning technology and immersive data analytics with our RFID technology”.
In its Tuesday filing, GPI said that the product being developed with BrainChip and Xuvi was currently being tested in an undisclosed casino. The firm added it aimed to start commercialising it in 2020.
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Vitaly Umansky, Eunice Lee and Kelsey Zhu
Sanford Bernstein analysts