GGRAsia – GPI’s first quarter profit plummets on R&D costs

GPI’s first quarter profit plummets on R&D costs

May 15, 2018 Newsdesk Industry Talk, Latest News, Top of the deck

Casino currency and table gaming equipment supplier Gaming Partners International Corp (GPI) posted net income of US$3,000 for the first three months of 2017, compared to a profit of US$932,000 a year earlier.

“The decrease in our net income was primarily due to an increase in our research and development expenses, [and] an increase in our costs due to the weakening of the U.S. dollar compared to the euro and the Mexico peso,” the Nasdaq-listed company said in a filing.

GPI reported revenue of approximately US$18.7 million for the three months ended March 31, down 1.2 percent from the prior-year period, it said. The firm said the decline in revenue was “mostly due to a decrease in playing card sales, table accessories and other products, and gaming furniture, partially offset by an increase in casino currency sales”.

Revenue from the sale of playing cards fell by 9.2 percent year-on-year, to nearly US$5.8 million in the first three months of 2018. Sales of casino currency rose by 14.6 percent year-on-year, to US$7.6 million, said the company.

“The first quarter of 2018 was disappointing for the playing cards product line, as lower revenues and higher fixed costs reduced margins and profitability,” the firm said in its latest filing. “While we continue to work to remedy these issues, we can no longer assure there will be uninterrupted progress in achieving acceptable levels of profitability,” it added.

GPI said it invested an aggregate of US$1.0 million in research and development in the January to March period, compared to US$310,000 in the first quarter 2017.

The firm’s first quarter net sales in the geographical areas of the Americas and Asia Pacific were approximately US$13.9 million and US$4.1 million respectively, down 2.8 percent and 1.4 percent. Net sales in the Europe and Africa segment surged by 42.5 percent year-on-year, to US$754,000.

GPI said additionally that it has a “strong backlog for the next 12 months”, with the company expecting to win “additional business, particularly in the Asia market due to a number of planned casino openings and expansions in the region”.

At March 31, 2018, GPI’s backlog of signed orders was US$20.1 million, including US$2.5 million for GPI Asia. Macau-based GPI Asia distributes GPI’s casino currencies, playing cards, and other table accessories in the Asia-Pacific region.

In its latest filing, GPI said it plans to launch a new “table management solution at the end of 2018 or early 2019,” to be developed jointly with BrainChip Holdings Ltd and Xuvi LLC.