x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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NEVADA
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88-0310433
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(State or other jurisdiction
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(I.R.S. Employer Identification No.)
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of incorporation or organization)
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||
1700 Industrial Road,
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89102
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Las Vegas, Nevada
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(Zip Code)
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(Address of principal executive offices)
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Large accelerated filer ¨
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Accelerated filer ¨
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Non-accelerated filer ¨
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Smaller reporting company x
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(Do not check if a smaller reporting company)
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PART I. FINANCIAL INFORMATION
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1
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ITEM 1.
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FINANCIAL STATEMENTS
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1
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Condensed Consolidated Balance Sheets (unaudited)
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1
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Condensed Consolidated Statements of Operations (unaudited)
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2
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Condensed Consolidated Statements of Stockholders’ Equity and Other Comprehensive Income (unaudited)
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3
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Condensed Consolidated Statements of Cash Flows (unaudited)
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4
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Condensed Consolidated Notes to Financial Statements (unaudited)
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5
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ITEM 2.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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12
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ITEM 3.
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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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20
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ITEM 4.
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CONTROLS AND PROCEDURES
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20
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PART II. OTHER INFORMATION
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21
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ITEM 1.
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LEGAL PROCEEDINGS
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21
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ITEM 1A.
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RISK FACTORS
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21
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ITEM 2.
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UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
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21
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ITEM 3.
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DEFAULTS UPON SENIOR SECURITIES
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21
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ITEM 4.
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RESERVED
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21
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ITEM 5.
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OTHER INFORMATION
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21
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ITEM 6.
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EXHIBITS
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21
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SIGNATURES
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22
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September 30,
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December 31,
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|||||||
2011
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2010
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|||||||
ASSETS
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||||||||
Current Assets:
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||||||||
Cash and cash equivalents
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$ | 8,521 | $ | 11,400 | ||||
Marketable securities
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16,635 | 18,350 | ||||||
Accounts receivable, net
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5,115 | 6,838 | ||||||
Inventories
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7,973 | 7,160 | ||||||
Prepaid expenses
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1,028 | 790 | ||||||
Deferred income tax asset
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536 | 949 | ||||||
Other current assets
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2,285 | 1,578 | ||||||
Total current assets
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42,093 | 47,065 | ||||||
Property and equipment, net
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11,857 | 11,926 | ||||||
Intangibles, net
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675 | 782 | ||||||
Deferred income tax asset
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1,279 | 1,108 | ||||||
Inventories, non-current
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304 | 496 | ||||||
Other assets, net
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387 | 430 | ||||||
Total assets
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$ | 56,595 | $ | 61,807 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current Liabilities:
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||||||||
Short-term debt
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$ | 17 | $ | 6,696 | ||||
Accounts payable
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2,943 | 3,216 | ||||||
Accrued liabilities
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5,464 | 6,204 | ||||||
Customer deposits and deferred revenue
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3,136 | 3,919 | ||||||
Income taxes payable
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173 | 273 | ||||||
Total current liabilities
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11,733 | 20,308 | ||||||
Long-term debt
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19 | 32 | ||||||
Deferred income tax liability
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564 | 491 | ||||||
Other liabilities
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42 | 41 | ||||||
Total liabilities
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12,358 | 20,872 | ||||||
Commitments and contingencies - see Note 8
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||||||||
Stockholders' Equity:
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||||||||
Preferred stock, authorized 10,000,000 shares, $.01 par value,
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||||||||
none issued or outstanding
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||||||||
Common stock, authorized 30,000,000 shares, $.01 par value,
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||||||||
8,199,016 issued and outstanding
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82 | 82 | ||||||
Additional paid-in capital
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19,360 | 19,196 | ||||||
Treasury stock, at cost; 8,061 shares
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(196 | ) | (196 | ) | ||||
Retained earnings
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23,383 | 20,269 | ||||||
Accumulated other comprehensive income
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1,608 | 1,584 | ||||||
Total stockholders' equity
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44,237 | 40,935 | ||||||
Total liabilities and stockholders' equity
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$ | 56,595 | $ | 61,807 |
Three Months Ended
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Nine Months Ended
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|||||||||||||||
September 30,
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September 30,
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|||||||||||||||
2011
|
2010
|
2011
|
2010
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|||||||||||||
Revenues
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$ | 13,834 | $ | 12,383 | $ | 46,446 | $ | 43,235 | ||||||||
Cost of revenues
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9,596 | 8,319 | 31,347 | 26,914 | ||||||||||||
Gross profit
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4,238 | 4,064 | 15,099 | 16,321 | ||||||||||||
Marketing and sales
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1,194 | 1,088 | 3,604 | 3,363 | ||||||||||||
General and administrative
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2,587 | 1,899 | 7,432 | 7,336 | ||||||||||||
Operating income
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457 | 1,077 | 4,063 | 5,622 | ||||||||||||
Other income and (expense)
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125 | 75 | 357 | 229 | ||||||||||||
Income before income taxes
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582 | 1,152 | 4,420 | 5,851 | ||||||||||||
Income tax provision
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105 | 391 | 1,306 | 2,387 | ||||||||||||
Net income
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$ | 477 | $ | 761 | $ | 3,114 | $ | 3,464 | ||||||||
Earnings per share:
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||||||||||||||||
Basic
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$ | 0.06 | $ | 0.09 | $ | 0.38 | $ | 0.42 | ||||||||
Diluted
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$ | 0.06 | $ | 0.09 | $ | 0.38 | $ | 0.42 | ||||||||
Weighted-average shares of common stock outstanding:
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||||||||||||||||
Basic
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8,199 | 8,199 | 8,199 | 8,199 | ||||||||||||
Diluted
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8,234 | 8,207 | 8,226 | 8,205 |
Accumulated
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||||||||||||||||||||||||||||||||
Common Stock
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Additional
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Other
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||||||||||||||||||||||||||||||
Comprehensive
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Paid-In
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Treasury
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Retained
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Comprehensive
|
||||||||||||||||||||||||||||
Income (Loss)
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Shares
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Amount
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Capital
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Stock
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Earnings
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Income (Loss)
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Total
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|||||||||||||||||||||||||
Balance, January 1, 2010
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8,199,016 | $ | 82 | $ | 18,985 | $ | (196 | ) | $ | 17,346 | $ | 3,273 | $ | 39,490 | ||||||||||||||||||
Net income
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$ | 3,464 | - | - | - | - | 3,464 | - | 3,464 | |||||||||||||||||||||||
Unrealized gain on securities, net of tax
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2 | - | - | - | - | - | 2 | 2 | ||||||||||||||||||||||||
Stock compensation expense
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- | - | - | 162 | - | - | - | 162 | ||||||||||||||||||||||||
Amortization of pension transition asset, net of tax
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(9 | ) | - | - | - | - | - | (9 | ) | (9 | ) | |||||||||||||||||||||
Foreign currency translation adjustment
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(979 | ) | - | - | - | - | - | (979 | ) | (979 | ) | |||||||||||||||||||||
Total comprehensive loss
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$ | 2,478 | ||||||||||||||||||||||||||||||
Balance, September 30, 2010
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8,199,016 | $ | 82 | $ | 19,147 | $ | (196 | ) | $ | 20,810 | $ | 2,287 | $ | 42,130 | ||||||||||||||||||
Balance, January 1, 2011
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8,199,016 | $ | 82 | $ | 19,196 | $ | (196 | ) | $ | 20,269 | $ | 1,584 | $ | 40,935 | ||||||||||||||||||
Net income
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$ | 3,114 | - | - | - | - | 3,114 | - | 3,114 | |||||||||||||||||||||||
Unrealized gain on securities, net of tax
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22 | - | - | - | - | - | 22 | 22 | ||||||||||||||||||||||||
Stock compensation expense
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- | - | - | 164 | - | - | - | 164 | ||||||||||||||||||||||||
Amortization of pension transition asset, net of tax
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(9 | ) | - | - | - | - | - | (9 | ) | (9 | ) | |||||||||||||||||||||
Foreign currency translation adjustment
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11 | - | - | - | - | - | 11 | 11 | ||||||||||||||||||||||||
Total comprehensive income
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$ | 3,138 | ||||||||||||||||||||||||||||||
Balance, September 30, 2011
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8,199,016 | $ | 82 | $ | 19,360 | $ | (196 | ) | $ | 23,383 | $ | 1,608 | $ | 44,237 |
Nine Months Ended
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||||||||
September 30,
|
||||||||
2011
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2010
|
|||||||
Cash Flows from Operating Activities
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||||||||
Net income
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$ | 3,114 | $ | 3,464 | ||||
Adjustments to reconcile net income to net cash provided by operating activities:
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||||||||
Depreciation
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1,563 | 1,442 | ||||||
Amortization
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176 | 46 | ||||||
Provision for bad debt
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91 | 106 | ||||||
Deferred income taxes
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335 | 523 | ||||||
Stock compensation expense
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164 | 162 | ||||||
(Gain) loss on sale of property and equipment
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(7 | ) | (5 | ) | ||||
(Gain) on sale of marketable securities
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(37 | ) | (34 | ) | ||||
Impairment of goodwill and intangibles
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- | 8 | ||||||
Change in operating assets and liabilities:
|
||||||||
Accounts receivable
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1,690 | 1,457 | ||||||
Inventories
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(462 | ) | 982 | |||||
Prepaid expenses and other current assets
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(947 | ) | 150 | |||||
Non-current other assets
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63 | (92 | ) | |||||
Accounts payable
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(302 | ) | (305 | ) | ||||
Customer deposits and deferred revenue
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(899 | ) | (2,252 | ) | ||||
Accrued liabilities
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(793 | ) | 536 | |||||
Income taxes payable
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(118 | ) | (359 | ) | ||||
Net cash provided by operating activities
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3,631 | 5,829 | ||||||
Cash Flows from Investing Activities
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||||||||
Purchases of marketable securities
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(16,615 | ) | (13,885 | ) | ||||
Proceeds from sale of marketable securities
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18,697 | 12,398 | ||||||
Capital expenditures
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(886 | ) | (828 | ) | ||||
Purchase of business assets
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(718 | ) | - | |||||
Proceeds from sales of property and equipment
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28 | 49 | ||||||
Net cash provided by (used in) investing activities
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506 | (2,266 | ) | |||||
Cash Flows from Financing Activities
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||||||||
Repayment of debt obligations
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(7,046 | ) | (740 | ) | ||||
Net cash used in financing activities
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(7,046 | ) | (740 | ) | ||||
Effect of exchange rate changes on cash
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30 | (10 | ) | |||||
Net (decrease) increase in cash and cash equivalents
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(2,879 | ) | 2,813 | |||||
Cash and cash equivalents, beginning of period
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11,400 | 3,238 | ||||||
Cash and cash equivalents, end of period
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$ | 8,521 | $ | 6,051 | ||||
Supplemental disclosures of cash flow information:
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||||||||
Cash paid for interest
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$ | 47 | $ | 14 | ||||
Cash paid for income taxes, net of refunds
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$ | 1,862 | $ | 1,786 | ||||
Supplemental disclosures of non-cash investing and financing activities
|
||||||||
Accrued capital asset additions
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$ | - | $ | 10 |
September 30, 2011
|
December 31, 2010
|
|||||||||||||||||||||||
Cash and
Cash
Equivalents
|
Marketable
Securities
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Total
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Cash and
Cash
Equivalents
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Marketable
Securities
|
Total
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|||||||||||||||||||
France
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$ | 697 | $ | 14,017 | $ | 14,714 | $ | 710 | $ | 17,332 | $ | 18,042 | ||||||||||||
United States
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6,257 | 2,618 | 8,875 | 10,690 | 1,018 | 11,708 | ||||||||||||||||||
Macau S.A.R., China
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1,567 | - | 1,567 | - | - | - | ||||||||||||||||||
$ | 8,521 | $ | 16,635 | $ | 25,156 | $ | 11,400 | $ | 18,350 | $ | 29,750 |
September 30, 2011
|
December 31, 2010
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|||||||||||||||||||||||
Cost
|
Unrealized
Gain/(Loss)
|
Fair Value
|
Cost
|
Unrealized
Gain/(Loss)
|
Fair Value
|
|||||||||||||||||||
Certificates of deposit
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$ | 15,467 | $ | - | $ | 15,467 | $ | 15,817 | $ | - | $ | 15,817 | ||||||||||||
Bond mutual funds
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548 | - | 548 | 1,336 | - | 1,336 | ||||||||||||||||||
Term bonds
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621 | (1 | ) | 620 | 686 | (23 | ) | 663 | ||||||||||||||||
Term notes
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- | - | - | 534 | - | 534 | ||||||||||||||||||
Total marketable securites
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$ | 16,636 | $ | (1 | ) | $ | 16,635 | $ | 18,373 | $ | (23 | ) | $ | 18,350 |
Beginning
Balance
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Provision
|
Write-offs,
Net of
Recoveries
|
Exchange Rate
Effect
|
Ending
Balance
|
||||||||||||||||
September 30, 2011
|
$ | 208 | $ | 91 | $ | - | $ | (2 | ) | $ | 297 | |||||||||
December 31, 2010
|
$ | 220 | $ | 96 | $ | (69 | ) | $ | (39 | ) | $ | 208 |
September 30, 2011
|
December 31, 2010
|
|||||||
Raw materials
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$ | 3,995 | $ | 4,611 | ||||
Work in progress
|
1,863 | 1,713 | ||||||
Finished goods
|
2,419 | 1,332 | ||||||
Total inventories
|
$ | 8,277 | $ | 7,656 |
September 30, 2011
|
December 31, 2010
|
|||||||
Current
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$ | 7,973 | $ | 7,160 | ||||
Non-current
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304 | 496 | ||||||
Total inventories
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$ | 8,277 | $ | 7,656 |
September 30, 2011
|
December 31, 2010
|
|||||||
Land
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$ | 1,786 | $ | 1,782 | ||||
Buildings and improvements
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8,714 | 8,618 | ||||||
Furniture and equipment
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19,253 | 18,180 | ||||||
Vehicles
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503 | 511 | ||||||
30,256 | 29,091 | |||||||
Less accumulated depreciation
|
(18,399 | ) | (17,165 | ) | ||||
Property and equipment, net
|
$ | 11,857 | $ | 11,926 |
September 30, 2011
|
December 31, 2010
|
|||||||||||||||||||||||||||
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
Carrying
Amount
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
Carrying
Amount
|
Estimated
Useful Life
(Years)
|
||||||||||||||||||||||
Patents
|
$ | 690 | $ | (618 | ) | $ | 72 | $ | 690 | $ | (609 | ) | $ | 81 | 13-14 | |||||||||||||
Trademark
|
620 | (130 | ) | 490 | 620 | (94 | ) | 526 | 12 | |||||||||||||||||||
Licenses
|
225 | (153 | ) | 72 | 225 | (50 | ) | 175 | 1-3 | |||||||||||||||||||
Other intangibles
|
67 | (26 | ) | 41 | - | - | - | 5 | ||||||||||||||||||||
Total intangible assets
|
$ | 1,602 | $ | (927 | ) | $ | 675 | $ | 1,535 | $ | (753 | ) | $ | 782 |
September 30, 2011
|
December 31, 2010
|
|||||||
Foreign currency translation
|
$ | 1,598 | $ | 1,587 | ||||
Unrealized (loss) on securities, net of tax
|
(1 | ) | (23 | ) | ||||
Unrecognized pension transition asset, net of tax
|
11 | 20 | ||||||
Total accumulated other comprehensive income
|
$ | 1,608 | $ | 1,584 |
Three Months Ended
|
||||||||||||||||
September 30,
|
||||||||||||||||
2011
|
2010
|
|||||||||||||||
Revenues
|
||||||||||||||||
Asia (1)
|
$ | 7,017 | 50.7 | % | $ | 4,328 | 35.0 | % | ||||||||
United States
|
5,566 | 40.2 | % | 6,111 | 49.3 | % | ||||||||||
Europe (includes Russia)
|
478 | 3.5 | % | 352 | 2.8 | % | ||||||||||
Other (2)
|
773 | 5.6 | % | 1,592 | 12.9 | % | ||||||||||
Total
|
$ | 13,834 | 100.0 | % | $ | 12,383 | 100.0 | % |
(1)
|
Primarily Macau and Singapore.
|
(2)
|
Includes Canada, Australia, and countries in South America and Africa.
|
Nine Months Ended
|
||||||||||||||||
September 30,
|
||||||||||||||||
2011
|
2010
|
|||||||||||||||
Revenues
|
||||||||||||||||
Asia (1)
|
$ | 25,389 | 54.6 | % | $ | 15,105 | 34.9 | % | ||||||||
United States
|
16,471 | 35.5 | % | 22,793 | 52.7 | % | ||||||||||
Europe (includes Russia)
|
2,072 | 4.5 | % | 2,273 | 5.3 | % | ||||||||||
Other (2)
|
2,514 | 5.4 | % | 3,064 | 7.1 | % | ||||||||||
Total
|
$ | 46,446 | 100.0 | % | $ | 43,235 | 100.0 | % |
(1)
|
Primarily Macau and Singapore.
|
(2)
|
Includes Canada, Australia, and countries in South America and Africa.
|
Three Months Ended
|
||||||||||||||||
September 30,
|
||||||||||||||||
2011
|
2010
|
|||||||||||||||
Casino chips
|
||||||||||||||||
American-style casino chips
|
$ | 5,757 | 41.7 | % | $ | 5,730 | 46.3 | % | ||||||||
European-style casino chips
|
3,316 | 24.0 | % | 2,371 | 19.1 | % | ||||||||||
Total casino chips
|
9,073 | 65.7 | % | 8,101 | 65.4 | % | ||||||||||
Playing cards
|
1,248 | 9.0 | % | 1,188 | 9.6 | % | ||||||||||
Table layouts
|
1,074 | 7.8 | % | 1,004 | 8.1 | % | ||||||||||
Table accessories and other products
|
823 | 5.9 | % | 824 | 6.7 | % | ||||||||||
Dice
|
531 | 3.8 | % | 547 | 4.4 | % | ||||||||||
Gaming furniture
|
463 | 3.3 | % | 318 | 2.6 | % | ||||||||||
RFID solutions
|
256 | 1.9 | % | - | 0.0 | % | ||||||||||
Shipping
|
366 | 2.6 | % | 401 | 3.2 | % | ||||||||||
Total
|
$ | 13,834 | 100.0 | % | $ | 12,383 | 100.0 | % |
Nine Months Ended
|
||||||||||||||||
September 30,
|
||||||||||||||||
2011
|
2010
|
|||||||||||||||
Casino chips
|
||||||||||||||||
American-style casino chips
|
$ | 17,333 | 37.2 | % | $ | 21,587 | 49.9 | % | ||||||||
European-style casino chips
|
14,287 | 30.8 | % | 6,032 | 14.0 | % | ||||||||||
Total casino chips
|
31,620 | 68.0 | % | 27,619 | 63.9 | % | ||||||||||
Playing cards
|
3,845 | 8.3 | % | 3,620 | 8.4 | % | ||||||||||
Table layouts
|
3,115 | 6.7 | % | 3,213 | 7.4 | % | ||||||||||
Table accessories and other products
|
2,164 | 4.7 | % | 2,915 | 6.7 | % | ||||||||||
Dice
|
1,631 | 3.5 | % | 1,581 | 3.7 | % | ||||||||||
Gaming furniture
|
1,461 | 3.1 | % | 2,818 | 6.5 | % | ||||||||||
RFID solutions
|
1,330 | 2.9 | % | - | 0.0 | % | ||||||||||
Shipping
|
1,280 | 2.8 | % | 1,469 | 3.4 | % | ||||||||||
Total
|
$ | 46,446 | 100.0 | % | $ | 43,235 | 100.0 | % |
September 30, 2011
|
December 31, 2010
|
|||||||
Property and equipment, net:
|
||||||||
France
|
$ | 5,628 | $ | 5,495 | ||||
United States
|
3,494 | 3,484 | ||||||
Mexico
|
2,659 | 2,947 | ||||||
Macau S.A.R., China
|
76 | - | ||||||
Total
|
$ | 11,857 | $ | 11,926 |
September 30, 2011
|
December 31, 2010
|
|||||||
Intangibles, net:
|
||||||||
United States
|
$ | 634 | $ | 782 | ||||
France
|
41 | - | ||||||
Total
|
$ | 675 | $ | 782 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Weighted-average number of common shares outstanding - basic
|
8,199 | 8,199 | 8,199 | 8,199 | ||||||||||||
Potential dilution from stock options
|
35 | 8 | 27 | 6 | ||||||||||||
Weighted-average number of common shares outstanding - diluted
|
8,234 | 8,207 | 8,226 | 8,205 |
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONS
|
|
·
|
GPI USA sells in the Americas, primarily in the United States and Canada, out of regional offices in the United States. GPI USA sells our full product line, with most of the products manufactured at our facility in Mexico and with the remainder either manufactured in France or purchased from United States vendors. We also hold inventory at a warehouse in San Luis, Arizona and at our Las Vegas, Nevada headquarters.
|
|
·
|
GPI SAS sells internationally out of Beaune, France, with most sales in Europe and Asia. GPI SAS predominantly sells casino chips, including both American-style casino chips and European-style casino chips, which are also known as plaques and jetons. Most of the products sold by GPI SAS are manufactured in France, with the remainder manufactured in Mexico.
|
|
·
|
GPI Asia, formed in December 2010, currently sells chips, plaques and jetons, as well as RFID solutions for casino currency in the Asia Pacific region, with such products being manufactured in our plants in France and Mexico. We leased a warehouse in Macau S.A.R. in February 2011.
|
GPI USA
|
GPI SAS
|
GPI Asia
|
Total
|
|||||||||||||
September 30, 2011
|
$ | 3.9 | $ | 5.7 | $ | 0.3 | $ | 9.9 | ||||||||
September 30, 2010
|
$ | 3.4 | $ | 7.1 | $ | - | $ | 10.5 |
Three Months Ended
|
||||||||||||||||||||||||
September 30,
|
||||||||||||||||||||||||
2011
|
2010
|
Period-to-Period Change
|
||||||||||||||||||||||
Revenues
|
$ | 13,834 | 100.0 | % | 12,383 | 100.0 | % | $ | 1,451 | 11.7 | % | |||||||||||||
Cost of revenues
|
9,596 | 69.4 | % | 8,319 | 67.2 | % | 1,277 | 15.4 | % | |||||||||||||||
Gross profit
|
4,238 | 30.6 | % | 4,064 | 32.8 | % | 174 | 4.3 | % | |||||||||||||||
Selling, general, and administrative
|
3,781 | 27.3 | % | 2,987 | 24.1 | % | 794 | 26.6 | % | |||||||||||||||
Operating income
|
457 | 3.3 | % | 1,077 | 8.7 | % | (620 | ) | (57.6 | )% | ||||||||||||||
Other income and (expense)
|
125 | 0.9 | % | 75 | 0.6 | % | 50 | 66.7 | % | |||||||||||||||
Income before income taxes
|
582 | 4.2 | % | 1,152 | 9.3 | % | (570 | ) | (49.5 | )% | ||||||||||||||
Income tax provision
|
105 | 0.8 | % | 391 | 3.2 | % | (286 | ) | (73.1 | )% | ||||||||||||||
Net income
|
$ | 477 | 3.4 | % | $ | 761 | 6.1 | % | $ | (284 | ) | (37.3 | )% |
Nine Months Ended
|
||||||||||||||||||||||||
September 30,
|
||||||||||||||||||||||||
2011
|
2010
|
Period-to-Period Change
|
||||||||||||||||||||||
Revenues
|
$ | 46,446 | 100.0 | % | $ | 43,235 | 100.0 | % | $ | 3,211 | 7.4 | % | ||||||||||||
Cost of revenues
|
31,347 | 67.5 | % | 26,914 | 62.3 | % | 4,433 | 16.5 | % | |||||||||||||||
Gross profit
|
15,099 | 32.5 | % | 16,321 | 37.7 | % | (1,222 | ) | (7.5 | )% | ||||||||||||||
Selling, general, and administrative
|
11,036 | 23.8 | % | 10,699 | 24.8 | % | 337 | 3.1 | % | |||||||||||||||
Operating income
|
4,063 | 8.7 | % | 5,622 | 12.9 | % | (1,559 | ) | (27.7 | )% | ||||||||||||||
Other income and (expense)
|
357 | 0.8 | % | 229 | 0.5 | % | 128 | 55.9 | % | |||||||||||||||
Income before income taxes
|
4,420 | 9.5 | % | 5,851 | 13.4 | % | (1,431 | ) | (24.5 | )% | ||||||||||||||
Income tax provision
|
1,306 | 2.8 | % | 2,387 | 5.5 | % | (1,081 | ) | (45.3 | )% | ||||||||||||||
Net income
|
$ | 3,114 | 6.7 | % | $ | 3,464 | 7.9 | % | $ | (350 | ) | (10.1 | )% |
Three Months Ended
|
||||||||||||||||||||||||
September 30,
|
||||||||||||||||||||||||
2011
|
2010
|
Period-to-Period Change
|
||||||||||||||||||||||
Revenues
|
||||||||||||||||||||||||
Asia (1)
|
$ | 7,017 | 50.7 | % | $ | 4,328 | 35.0 | % | $ | 2,689 | 62.1 | % | ||||||||||||
United States
|
5,566 | 40.2 | % | 6,111 | 49.3 | % | (545 | ) | (8.9 | )% | ||||||||||||||
Europe (includes Russia)
|
478 | 3.5 | % | 352 | 2.8 | % | 126 | 35.8 | % | |||||||||||||||
Other (2)
|
773 | 5.6 | % | 1,592 | 12.9 | % | (819 | ) | (51.4 | )% | ||||||||||||||
Total
|
$ | 13,834 | 100.0 | % | $ | 12,383 | 100.0 | % | $ | 1,451 | 11.7 | % |
(1)
|
Primarily Macau and Singapore.
|
(2)
|
Includes Canada, Australia, and countries in South America and Africa.
|
Nine Months Ended
|
||||||||||||||||||||||||
September 30,
|
||||||||||||||||||||||||
2011
|
2010
|
Period-to-Period Change
|
||||||||||||||||||||||
Revenues
|
||||||||||||||||||||||||
Asia (1)
|
$ | 25,389 | 54.6 | % | $ | 15,105 | 34.9 | % | $ | 10,284 | 68.1 | % | ||||||||||||
United States
|
16,471 | 35.5 | % | 22,793 | 52.7 | % | (6,322 | ) | (27.7 | )% | ||||||||||||||
Europe (includes Russia)
|
2,072 | 4.5 | % | 2,273 | 5.3 | % | (201 | ) | (8.8 | )% | ||||||||||||||
Other (2)
|
2,514 | 5.4 | % | 3,064 | 7.1 | % | (550 | ) | (18.0 | )% | ||||||||||||||
Total
|
$ | 46,446 | 100.0 | % | $ | 43,235 | 100.0 | % | $ | 3,211 | 7.4 | % |
(1)
|
Primarily Macau and Singapore.
|
(2)
|
Includes Canada, Australia, and countries in South America and Africa.
|
Three Months Ended
|
||||||||||||||||||||||||
September 30,
|
||||||||||||||||||||||||
2011
|
2010
|
Period-to-Period Change
|
||||||||||||||||||||||
Casino chips
|
||||||||||||||||||||||||
American-style casino chips
|
$ | 5,757 | 41.7 | % | $ | 5,730 | 46.3 | % | $ | 27 | 0.5 | % | ||||||||||||
European-style casino chips
|
3,316 | 24.0 | % | 2,371 | 19.1 | % | 945 | 39.9 | % | |||||||||||||||
Total casino chips
|
9,073 | 65.7 | % | 8,101 | 65.4 | % | 972 | 12.0 | % | |||||||||||||||
Playing cards
|
1,248 | 9.0 | % | 1,188 | 9.6 | % | 60 | 5.1 | % | |||||||||||||||
Table layouts
|
1,074 | 7.8 | % | 1,004 | 8.1 | % | 70 | 7.0 | % | |||||||||||||||
Table accessories and other products
|
823 | 5.9 | % | 824 | 6.7 | % | (1 | ) | (0.1 | )% | ||||||||||||||
Dice
|
531 | 3.8 | % | 547 | 4.4 | % | (16 | ) | (2.9 | )% | ||||||||||||||
Gaming furniture
|
463 | 3.3 | % | 318 | 2.6 | % | 145 | 45.6 | % | |||||||||||||||
RFID solutions
|
256 | 1.9 | % | - | 0.0 | % | 256 | 0.0 | % | |||||||||||||||
Shipping
|
366 | 2.6 | % | 401 | 3.2 | % | (35 | ) | (8.7 | )% | ||||||||||||||
Total
|
$ | 13,834 | 100.0 | % | $ | 12,383 | 100.0 | % | $ | 1,451 | 11.7 | % |
Nine Months Ended
|
||||||||||||||||||||||||
September 30,
|
||||||||||||||||||||||||
2011
|
2010
|
Period-to-Period Change
|
||||||||||||||||||||||
Casino chips
|
||||||||||||||||||||||||
American-style casino chips
|
$ | 17,333 | 37.2 | % | $ | 21,587 | 49.9 | % | $ | (4,254 | ) | (19.7 | )% | |||||||||||
European-style casino chips
|
14,287 | 30.8 | % | 6,032 | 14.0 | % | 8,255 | 136.9 | % | |||||||||||||||
Total casino chips
|
31,620 | 68.0 | % | 27,619 | 63.9 | % | 4,001 | 14.5 | % | |||||||||||||||
Playing cards
|
3,845 | 8.3 | % | 3,620 | 8.4 | % | 225 | 6.2 | % | |||||||||||||||
Table layouts
|
3,115 | 6.7 | % | 3,213 | 7.4 | % | (98 | ) | (3.1 | )% | ||||||||||||||
Table accessories and other products
|
2,164 | 4.7 | % | 2,915 | 6.7 | % | (751 | ) | (25.8 | )% | ||||||||||||||
Dice
|
1,631 | 3.5 | % | 1,581 | 3.7 | % | 50 | 3.2 | % | |||||||||||||||
Gaming furniture
|
1,461 | 3.1 | % | 2,818 | 6.5 | % | (1,357 | ) | (48.2 | )% | ||||||||||||||
RFID solutions
|
1,330 | 2.9 | % | - | 0.0 | % | 1,330 | 0.0 | % | |||||||||||||||
Shipping
|
1,280 | 2.8 | % | 1,469 | 3.4 | % | (189 | ) | (12.9 | )% | ||||||||||||||
Total
|
$ | 46,446 | 100.0 | % | $ | 43,235 | 100.0 | % | $ | 3,211 | 7.4 | % |
Three Months Ended
|
||||||||||||||||||||||||
September 30,
|
||||||||||||||||||||||||
2011
|
2010
|
Period-to-Period Change
|
||||||||||||||||||||||
Marketing and sales
|
$ | 1,194 | 8.6 | % | $ | 1,088 | 8.8 | % | $ | 106 | 9.7 | % | ||||||||||||
General and administrative
|
2,587 | 18.7 | % | 1,899 | 15.3 | % | 688 | 36.2 | % | |||||||||||||||
Total selling, general, and administrative expenses
|
$ | 3,781 | 27.3 | % | $ | 2,987 | 24.1 | % | $ | 794 | 26.6 | % |
Nine Months Ended
|
||||||||||||||||||||||||
September 30,
|
||||||||||||||||||||||||
2011
|
2010
|
Period-to-Period Change
|
||||||||||||||||||||||
Marketing and sales
|
$ | 3,604 | 7.8 | % | $ | 3,363 | 7.8 | % | $ | 241 | 7.2 | % | ||||||||||||
General and administrative
|
7,432 | 16.0 | % | 7,336 | 17.0 | % | 96 | 1.3 | % | |||||||||||||||
Total selling, general, and administrative expenses
|
$ | 11,036 | 23.8 | % | $ | 10,699 | 24.8 | % | $ | 337 | 3.1 | % |
Three Months Ended
|
||||||||||||||||||||||||
September 30,
|
||||||||||||||||||||||||
2011
|
2010
|
Period-to-Period Change
|
||||||||||||||||||||||
Interest income
|
$ | 92 | 0.6 | % | $ | 67 | 0.5 | % | $ | 25 | 37.3 | % | ||||||||||||
Interest expense
|
(2 | ) | 0.0 | % | (2 | ) | 0.0 | % | - | - | ||||||||||||||
Gain on foreign currency transactions
|
7 | 0.1 | % | 11 | 0.1 | % | (4 | ) | 36.4 | % | ||||||||||||||
Other income, net
|
28 | 0.2 | % | (1 | ) | 0.0 | % | 29 | - | |||||||||||||||
Total other income and (expense)
|
$ | 125 | 0.9 | % | $ | 75 | 0.6 | % | $ | 50 | 66.7 | % |
Nine Months Ended
|
||||||||||||||||||||||||
September 30,
|
||||||||||||||||||||||||
2011
|
2010
|
Period-to-Period Change
|
||||||||||||||||||||||
Interest income
|
$ | 332 | 0.7 | % | $ | 195 | 0.4 | % | $ | 137 | 70.3 | % | ||||||||||||
Interest expense
|
(55 | ) | (0.1 | )% | (13 | ) | 0.0 | % | (42 | ) | - | |||||||||||||
Gain on foreign currency transactions
|
36 | 0.1 | % | 15 | 0.0 | % | 21 | 140.0 | % | |||||||||||||||
Other income, net
|
44 | 0.1 | % | 32 | 0.1 | % | 12 | 37.5 | % | |||||||||||||||
Total other income and (expense)
|
$ | 357 | 0.8 | % | $ | 229 | 0.5 | % | $ | 128 | 55.9 | % |
September 30,
|
December 31,
|
|||||||||||||||
2011
|
2010
|
Period-to-Period Change
|
||||||||||||||
Cash and cash equivalents
|
$ | 8,521 | $ | 11,400 | $ | (2,879 | ) | (25.3 | )% | |||||||
Marketable securities
|
$ | 16,635 | $ | 18,350 | $ | (1,715 | ) | (9.3 | )% | |||||||
Working capital
|
$ | 30,360 | $ | 26,757 | $ | 3,603 | 13.5 | % | ||||||||
Current ratio
|
3.6 | 2.3 |
Nine Months Ended
|
||||||||||||||||
September 30,
|
||||||||||||||||
2011
|
2010
|
Period-to-Period Change
|
||||||||||||||
Operating activities
|
$ | 3,631 | $ | 5,829 | $ | (2,198 | ) | (37.7 | )% | |||||||
Investing activities
|
506 | (2,266 | ) | 2,772 | - | |||||||||||
Financing activities
|
(7,046 | ) | (740 | ) | (6,306 | ) | (852.2 | )% | ||||||||
Effect of exchange rates
|
30 | (10 | ) | 40 | - | |||||||||||
Net change
|
$ | (2,879 | ) | $ | 2,813 | $ | (5,692 | ) | (202.3 | )% |
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM4.
|
CONTROLS AND PROCEDURES
|
ITEM 1A.
|
RISK FACTORS
|
31.1
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
Certification of Chief Financial and Principal Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.0
|
Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002.
|
101.INS**
|
XBRL Instance
|
101.SCH**
|
XBRL Taxonomy Extension Schema
|
101.CAL**
|
XBRL Taxonomy Extension Calculation
|
101.DEF**
|
XBRL Taxonomy Extension Definition
|
101.LAB**
|
XBRL Taxonomy Extension Labels
|
101.PRE**
|
XBRL Taxonomy Extension Presentation
|
**XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes
|
of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18
|
of the Securities Act of 1934, as amended, and is otherwise not subject to liability under these sections.
|
GAMING PARTNERS INTERNATIONAL CORPORATION
|
||
Date: November 10, 2011
|
By:
|
/s/ Gregory S. Gronau
|
Gregory S. Gronau
|
||
President and Chief Executive Officer
|
||
Date: November 10, 2011
|
By:
|
/s/ Gerald W. Koslow
|
Gerald W. Koslow
|
||
Chief Financial Officer
|
Date: November 10, 2011
|
By:
|
/s/ Gregory S. Gronau
|
Gregory S. Gronau | ||
President and Chief Executive Officer
|
Date: November 10, 2011
|
By:
|
/s/ Gerald W. Koslow
|
Gerald W. Koslow
|
||
Chief Financial Officer
|
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
GAMING PARTNERS INTERNATIONAL CORPORATION
|
||
Date: November 10, 2011
|
By:
|
/s/ Gregory S. Gronau
|
Gregory S. Gronau
|
||
President and Chief Executive Officer
|
||
Date: November 10, 2011
|
By:
|
/s/ Gerald W. Koslow
|
Gerald W. Koslow
|
||
Chief Financial Officer
|
CONDENSED CONSOLIDATED BALANCE SHEETS [PARENTHETICAL] (USD $) | Sep. 30, 2011 | Dec. 31, 2010 |
---|---|---|
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 30,000,000 | 30,000,000 |
Common stock, shares issued | 8,199,016 | 8,199,016 |
Common stock, shares outstanding | 8,199,016 | 8,199,016 |
Treasury stock, shares | 8,061 | 8,061 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Per Share data | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
Revenues | $ 13,834 | $ 12,383 | $ 46,446 | $ 43,235 |
Cost of revenues | 9,596 | 8,319 | 31,347 | 26,914 |
Gross profit | 4,238 | 4,064 | 15,099 | 16,321 |
Marketing and sales | 1,194 | 1,088 | 3,604 | 3,363 |
General and administrative | 2,587 | 1,899 | 7,432 | 7,336 |
Operating income | 457 | 1,077 | 4,063 | 5,622 |
Other income and (expense) | 125 | 75 | 357 | 229 |
Income before income taxes | 582 | 1,152 | 4,420 | 5,851 |
Income tax provision | 105 | 391 | 1,306 | 2,387 |
Net income | $ 477 | $ 761 | $ 3,114 | $ 3,464 |
Earnings per share: | ||||
Basic (in dollars per share) | $ 0.06 | $ 0.09 | $ 0.38 | $ 0.42 |
Diluted (in dollars per share) | $ 0.06 | $ 0.09 | $ 0.38 | $ 0.42 |
Weighted-average shares of common stock outstanding: | ||||
Basic (in shares) | 8,199 | 8,199 | 8,199 | 8,199 |
Diluted (in shares) | 8,234 | 8,207 | 8,226 | 8,205 |
DOCUMENT AND ENTITY INFORMATION | 9 Months Ended | |
---|---|---|
Sep. 30, 2011 | Nov. 05, 2011 | |
Entity Registrant Name | Gaming Partners International CORP | |
Entity Central Index Key | 0000918580 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Trading Symbol | gpic | |
Entity Common Stock, Shares Outstanding | 8,199,016 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2011 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2011 |
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Property and Equipment | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment Disclosure [Text Block] | Note 6. Property and Equipment
Property and equipment consist of the following (in thousands):
Depreciation expense for the three months ended September 30, 2011 and 2010 was $543,000 and $479,000, respectively. Depreciation expense for the nine months ended September 30, 2011 and 2010 was $1,563,000 and $1,442,000, respectively.
|
Earnings per Share (EPS) | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Text Block] | Note 11. Earnings per Share (EPS)
Basic EPS is calculated by dividing net income by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the effect of potential common stock, which consists of assumed stock options. Potentially dilutive securities are not taken into account when their effect would be antidilutive.
The weighted-average number of common shares outstanding used in the computation of basic and diluted earnings per share is as follows (in thousands):
|
Acquisition | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Business Combinations [Abstract] | |
Business Acquisition, Integration, Restructuring and Other Related Costs [Text Block] | Note 2. Acquisition
In April 2011, the Company purchased certain assets of OMC SARL and its subsidiary OMC Industries (“OMC”), a private French-based manufacturer of high-quality plastic injection molds. The acquisition is part of the Company's overall acquisition strategy to use its cash position to acquire companies, products, or technologies that enable it to diversify and grow its product and service offerings. The Company completed the acquisition of OMC on April 6, 2011 for a total cash consideration of $0.7 million. We did not present pro forma results of operations, actual results of operations from the acquisition date through September 30, 2011, or other disclosure, because the acquisition was not material. The consolidated statement of operations for the period ended September 30, 2011 includes the results of OMC from the acquisition date.
|
Commitments and Contingencies | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | Note 8. Commitments and Contingencies
Legal Proceedings and Contingencies
Liabilities for material claims against the Company are accrued when a loss is considered probable and can be reasonably estimated. Legal costs associated with claims are expensed as incurred.
On January 18, 2011, a former employee of GPI SAS filed a complaint with the Employment Tribunal of Dijon, France, entitled Christophe Leparoux vs. Gaming Partners International SAS related to his termination of employment in November 2010. The complaint seeks damages of 600,000 euros (approximately $810,000 at September 30, 2011) for unfair dismissal, 2,500 euros (approximately $3,400 at September 30, 2011) for legal fees, and unspecified damages for back pay. Under French law, terminated employees may be entitled to a dismissal indemnity or severance based on seniority and a three-month-notice period in which they continue to be paid. The Company has engaged counsel and will vigorously defend the matter.
We are also engaged in disputes and claims in the normal course of business. We believe the ultimate outcome of these proceedings will not have a material adverse impact on the consolidated financial position or results of operations.
Commitments
The Company has exclusive intellectual property license agreements from an unrelated third party which grant the Company the exclusive rights to manufacture and distribute gaming chips, RFID equipment, and software worldwide under patents for a gaming chip tracking system and method that utilize gaming chips with embedded electronic circuits scanned by antennas in gaming chip placement areas (gaming tables and casino cage) and other RFID-related intellectual property. The duration of these agreements ranges from annual renewal to the life of the patents, the last of which expires in 2015. Minimum net annual royalty payments are $375,000, of which $125,000 is required to be made annually by GPIC over the remaining life of the exclusive patent license agreements.
We purchase certain security technology from an unrelated third party for use in our gaming chips under an exclusive contract which requires that we purchase a minimum of $50,000 in product each year through 2016, or $250,000 during the remaining life of the contract.
|
Accumulated Other Comprehensive Income | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive Income (Loss) Note [Text Block] | Note 9. Accumulated Other Comprehensive Income
Accumulated other comprehensive income consists of the following (in thousands):
|
Intangible Assets | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets Disclosure [Text Block] | Note 7. Intangible Assets
Intangible assets consist of the following (in thousands):
In August 2010, the Company licensed certain RFID intellectual property and purchased certain software to converge high- and low-frequency RFID applications to improve functionality, security, and communications for a variety of casino management systems. In April 2011, the Company acquired in its OMC acquisition certain intangibles, including a customer list.
Amortization expense for intangible assets for the three months ended September 30, 2011 and 2010 was $53,000 and $15,000, respectively. Amortization expense for intangible assets for the nine months ended September 30, 2011 and 2010 was $176,000 and $46,000, respectively.
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