GPI’s 3Q revenue, profit down as sales in Asia decline
Casino currency and table gaming equipment supplier Gaming Partners International Corp (GPI) posted net income of US$1.5 million for the three months ended September 30, compared to a profit of US$2.2 million a year earlier.
GPI reported revenue of approximately US$22.9 million for the third quarter of 2018, down by 7.1 percent from the prior-year period, impacted by a decline in sales in the Asia-Pacific region.
“The decrease in revenues was primarily attributable to decreases in casino currency sales and gaming furniture sales partially offset by increases in all other product lines,” the Nasdaq-listed company said in a filing on Friday.
GPI’s third quarter net sales in the geographical area of Asia Pacific were approximately US$7.3 million, compared to almost US$11.6 million in the prior-year period.
GPI said additionally that it had a backlog of signed orders through September 30, 2019 of US$20.0 million, including US$8.1 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.
“We anticipate winning additional business, particularly in the Asia market due to the number of planned casino openings and expansions in the region,” GPI stated in its Friday filing. “However, there is always uncertainty surrounding the timing of casino openings and the number of tables to be allotted to each new casino, which will impact both the amount of revenue we recognise and the timing of revenue recognition.”
GPI said research and development expenses for the three months ended September 30 increased by US$0.6 million, or 176.9 percent compared to the same period in 2017. “The increase is mainly due to payments made to BrainChip Holdings Ltd and Xuvi LLC for achieving certain milestones in our global licensing and development agreements,” the firm stated.
In late January, 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”.
GPI’s initial commitment to BrainChip and Xuvi totalled US$1.3 million. “Due to very positive customer response, we committed an additional US$0.8 million in the second half of 2018 to develop product enhancements and speed up product development,” GPI said in its Friday filing.
In its latest filing, the firm also commented on the performance of its playing card segment: revenue stood at approximately US$6.1 million for the third quarter, up by 3.6 percent in year-on-year terms.
The firm said performance at its playing cards manufacturing facility in Missouri, in the United States, continued “to lag with lower revenue and higher fixed costs reducing margins and profitability.”
GPI added: “We continue to work to remedy the issues at the facility. However, it will be several quarters before we return to acceptable levels of performance and profitability.”
GPI announced in August that Gregory Gronau had resigned from his position as company chief executive. The firm said at the time the resignation was “for personal reasons, and not a result of any disagreement with the company or its management”.
The firm’s chief financial officer and chairman Alain Thieffry in currently accumulating the positions of interim CEO, president, secretary and treasurer, “until a successor is appointed”, GPI stated in its latest filing.
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