10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_______________________________

FORM 10-Q
___________________ 

(Mark One)
x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended: March 31, 2016
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission file number: 0-23588

__________________________

GAMING PARTNERS INTERNATIONAL CORPORATION

(Exact name of registrant as specified in its charter)

NEVADA	88-0310433
(State or other jurisdiction	(I.R.S. Employer Identification No.)
of incorporation or organization)
3945 West Cheyenne Avenue,	89032
North Las Vegas, Nevada	(Zip Code)
(Address of principal executive offices)

(702) 384-2425

(Registrant’s telephone number, including area code)

None

(Former name, former address, and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on the Corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that registrant was required to submit and post such files).  Yes x  No o

Indicate by check mark whether the registrant is a large accelerated filer an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o	Accelerated filer o
Non-accelerated filer o	Smaller reporting company x
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o  No x

The number of shares outstanding of each of the registrant’s classes of common stock as of April 29, 2016, the latest practicable date, was 7,928,594 shares of Common Stock.

GAMING PARTNERS INTERNATIONAL CORPORATION

QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2016

TABLE OF CONTENTS

PART I.    FINANCIAL INFORMATION	1
ITEM 1.    FINANCIAL STATEMENTS	1
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)	1
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)	2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)	3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (unaudited)	4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)	5
CONDENSED CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (unaudited)	6
ITEM 2.     MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	12
ITEM 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	18
ITEM 4.     CONTROLS AND PROCEDURES	18
PART II.      OTHER INFORMATION	19
ITEM 1.     LEGAL PROCEEDINGS	19
ITEM 1A.  RISK FACTORS	19
ITEM 2.     UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	19
ITEM 3.     DEFAULTS UPON SENIOR SECURITIES	19
ITEM 4.     MINE SAFETY DISCLOSURES	19
ITEM 5.     OTHER INFORMATION	19
ITEM 6.     EXHIBITS	19
SIGNATURES	20

PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(in thousands, except share amounts)

	March 31,			December 31,
	2016			2015
ASSETS
Current Assets:
Cash and cash equivalents	$	17,754		$	17,788
Marketable securities		1,712			3,503
Accounts receivable, net		9,242			10,677
Inventories		11,148			10,199
Prepaid expenses		827			947
Deferred income tax assets		1,943			1,640
Other current assets		1,954			1,576
Total current assets		44,580			46,330
Property and equipment, net		14,431			14,102
Goodwill		10,292			10,292
Intangible assets, net		2,436			2,505
Deferred income tax assets		687			710
Inventories, non-current		688			670
Other assets, non-current		2,690			2,635
Total assets Total assets	$	75,804		$	77,244
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable	$	3,404		$	4,498
Accrued liabilities		5,194			6,456
Customer deposits and deferred revenue		3,261			2,080
Current portion of long-term debt		1,351			1,343
Income taxes payable		510			824
Total current liabilities		13,720			15,201
Long-term debt		7,665			8,002
Deferred income tax liabilities		168			170
Other liabilities, non-current		-			83
Total liabilities Total liabilities		21,553			23,456
Commitments and contingencies - see Note 8
Stockholders' Equity:
Preferred stock, authorized 10,000,000 shares, $.01 par value, none issued and outstanding		-			-
Common stock, authorized 30,000,000 shares, $.01 par value, 8,219,577 and 7,928,594 issued and outstanding, respectively, as of March 31, 2016, and December 31, 2015		82			82
Additional paid-in capital		20,031			20,033
Treasury stock at cost: 290,983 shares		(2,263	)		(2,263	)
Retained earnings		37,732			37,812
Accumulated other comprehensive loss		(1,331	)		(1,876	)
Total stockholders' equity		54,251			53,788
Total liabilities and stockholders' equity	$	75,804		$	77,244

See notes to unaudited condensed consolidated financial statements.

1 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(in thousands, except per-share amounts)

	Three Months Ended
	March 31,
	2016			2015
Revenues	$	16,093		$	18,656
Cost of revenues		12,125			12,332
Gross profit		3,968			6,324
Marketing and sales		1,525			1,800
General and administrative		2,173			2,416
Research and development		307			339
Operating (loss) income		(37	)		1,769
Other (expense) income, net		(82	)		35
(Loss) income before income taxes		(119	)		1,804
Income tax benefit		(39	)		(153	)
Net (loss) income	$	(80	)	$	1,957
(Loss) earnings per share:
Basic	$	(0.01	)	$	0.25
Diluted	$	(0.01	)	$	0.24
Weighted-average shares of common stock outstanding:
Basic		7,929			7,916
Diluted		7,929			8,025

See notes to unaudited condensed consolidated financial statements.

2 

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited)

(in thousands)

	Three Months Ended
	March 31,
	2016			2015
Net (loss) income	$	(80	)	$	1,957
Other comprehensive income:
Foreign currency translation adjustment, net of tax		545			(1,621	)
Total comprehensive income	$	465		$	336

See notes to unaudited condensed consolidated financial statements.

3 

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(unaudited)

(in thousands, except per share amounts)

														Accumulated
	Common Stock				Additional									Other
					Paid-In			Treasury			Retained			Comprehensive
	Shares		Amount		Capital			Stock			Earnings			Loss			Total
Balance, January 1, 2015		7,916,094	$	82	$	19,886		$	(2,263	)	$	30,881		$	(321	)	$	48,265
Net income		-		-		-			-			1,957			-			1,957
Common stock options excercised		12,500		-		87			-			-			-			87
Stock compensation expense		-		-		15			-			-			-			15
Tax impact of stock options		-		-		3			-			-			-			3
Foreign currency translation adjustment, net of tax		-		-		-			-			-			(1,621	)		(1,621	)
Balance, March 31, 2015		7,928,594	$	82	$	19,991		$	(2,263	)	$	32,838		$	(1,942	)	$	48,706
Balance, January 1, 2016		7,928,594	$	82	$	20,033		$	(2,263	)	$	37,812		$	(1,876	)	$	53,788
Net loss		-		-		-			-			(80	)		-			(80	)
Stock compensation expense		-		-		21			-			-			-			21
Tax impact of stock options		-		-		(23	)		-			-			-			(23	)
Foreign currency translation adjustment, net of tax		-		-		-			-			-			545			545
Balance, March 31, 2016		7,928,594	$	82	$	20,031		$	(2,263	)	$	37,732		$	(1,331	)	$	54,251

See notes to unaudited condensed consolidated financial statements.

4 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)

	Three Months Ended
	March 31,
	2016			2015
Cash Flows from Operating Activities
Net (loss) income	$	(80	)	$	1,957
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation of property and equipment		666			680
Amortization of intangible assets		70			77
Provision for bad debt		12			139
Deferred income taxes		(276	)		(672	)
Stock compensation expense		21			15
Tax impacts of stock options		(23	)		3
Loss on sale or disposal of property and equipment		-			35
Gain on sale of marketable securities		(1	)		(1	)
Change in operating assets and liabilities:
Accounts receivable		1,434			1,072
Inventories		(837	)		780
Prepaid expenses and other current assets		(219	)		(495	)
Other assets, non-current		10			63
Accounts payable		(1,127	)		810
Accrued liabilities		(1,340	)		122
Customer deposits and deferred revenue		1,086			(1,086	)
Other current liabilities		13			(87	)
Income taxes payable		(314	)		462
Net cash (used in) provided by operating activities		(905	)		3,874
Cash Flows from Investing Activities
Purchases of marketable securities		-			(6,759	)
Proceeds from sale of marketable securities		1,880			4,508
Proceeds from sale of property and equipment		-			18
Capital expenditures		(851	)		(174	)
Net cash provided by (used in) investing activities		1,029			(2,407	)
Cash Flows from Financing Activities
Principal payments on long-term debt		(330	)		-
Proceeds from exercise of stock options		-			87
Net cash (used in) provided by financing activities		(330	)		87
Effect of exchange rate changes on cash		172			(406	)
Net (decrease) increase in cash and cash equivalents		(34	)		1,148
Cash and cash equivalents, beginning of period		17,788			8,969
Cash and cash equivalents, end of period	$	17,754		$	10,117
Supplemental disclosure of cash flow information:
Cash paid for interest	$	63		$	63
Cash paid for income taxes, net of refunds	$	435		$	3
Supplemental disclosure of non-cash investing and financing activities
Property and equipment acquired through accounts payable	$	36		$	47

See notes to unaudited condensed consolidated financial statements.

5 

CONDENSED CONSOLIDATED NOTES TO FINANCIAL STATEMENTS

(unaudited)

Note 1. Nature of Business and Significant Accounting Policies

Organization and Nature of Business

Gaming Partners International Corporation (GPIC or the Company) is headquartered in North Las Vegas, Nevada. Our business activities include the manufacture and sale of casino currencies, playing cards, table layouts, gaming furniture, table accessories, dice, roulette wheels, and RFID readers and software, all of which are used with casino table games such as blackjack, poker, baccarat, craps, and roulette.

The Company has three operating subsidiaries: Gaming Partners International USA, Inc. (GPI USA) (including GPI Mexicana S.A. de C.V. (GPI Mexicana), our maquiladora manufacturing operation in Mexico, and GPI USA Blue Springs, our manufacturing facility in Missouri); Gaming Partners International SAS (GPI SAS); and Gaming Partners International Asia Limited (GPI Asia).  Our subsidiaries have the following distribution and product focus:

• GPI USA sells in the United States, Canada, the Caribbean, and Latin America. GPI USA sells our full product line, with most of the products manufactured in either San Luis Rio Colorado, Mexico, or Blue Springs, Missouri. The remainder is either manufactured in France or purchased from United States vendors. We warehouse inventory in San Luis, Arizona; Blue Springs, Missouri; and North Las Vegas, Nevada. We have sales offices in North Las Vegas, Nevada; Atlantic City, New Jersey; Gulfport, Mississippi; and Blue Springs, Missouri.

• GPI SAS sells primarily in Europe and Africa out of its office in Beaune, France. GPI SAS predominantly sells casino currencies, including both American-style, known as chips, and European-style, 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, located in Macau S.A.R., China, distributes our full product line in the Asia-Pacific region. GPI Asia also sells table layouts that it manufactures in Macau S.A.R.

Significant Accounting Policies

Basis of Consolidation and Presentation. The accompanying condensed consolidated financial statements include the accounts of GPIC and its wholly-owned subsidiaries GPI SAS, GPI USA, and GPI Asia. All material intercompany balances and transactions have been eliminated in consolidation. The condensed consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim financial information and in the form prescribed by the Securities and Exchange Commission (SEC), and do not include all of the information and notes required by U.S. GAAP for complete financial statements. These statements should be read in conjunction with our annual audited consolidated financial statements and related notes included in our most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2015, filed with the SEC on March 24, 2016.

These unaudited condensed consolidated financial statements, in the opinion of management, reflect only normal and recurring adjustments necessary for a fair presentation of results and cash flows for the interim periods presented. The results of operations for an interim period are not necessarily indicative of the results for any other interim period or a full fiscal year.

Recently Issued Accounting Standards. In March 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-09, Compensation – Stock Compensation (Topic 718), to simplify several aspects of the accounting for share-based payment award transactions including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows. The amendments are effective for public companies for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company has not adopted this guidance for 2016 and is currently evaluating the impact of adoption.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), to increase transparency and comparability among organizations by reporting lease assets and lease liabilities, both finance (capital) and operating leases, on the balance sheet and disclosing key information about leasing arrangements. For public companies, the updated guidance is effective for the financial statements issued for fiscal years beginning after December 15, 2018 (including interim periods within those fiscal years). Early adoption is permitted. The Company has not adopted this guidance for 2016 and is currently evaluating the impact of adoption.

6 

In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. The guidance eliminates the current requirement for organizations to present deferred tax assets and liabilities as current and noncurrent in a classified balance sheet. Instead, organizations will be required to classify all deferred tax assets and liabilities as noncurrent. ASU 2015-17 shall be effective for public business entities for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company has not adopted this guidance for 2016 and is currently evaluating the impact of adoption.

In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory. The guidance applies to any entity measuring inventory using first-in, first-out or average cost. The main provision of this guidance requires an entity to measure inventory within the scope of this ASU at the lower of cost and net realizable value. This guidance is effective for fiscal years beginning after December 15, 2016, and interim periods within fiscal years beginning after December 15, 2017. A reporting entity should apply the amendments prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The Company has not adopted this guidance for 2016 and is currently evaluating the impact of adoption.

In May 2014, the FASB issued ASU 2014-09, Revenues from Contracts with Customers (Topic 606). This guidance applies to any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. The core principle of this guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance supersedes existing revenue recognition guidance, including most industry-specific guidance, as well as certain related guidance on accounting for contract costs. ASU 2016-08 comments on the effective date and transition of ASU 2014-09, stating public entities should apply the amendments in ASU 2014-09 for annual reporting periods beginning after December 15, 2017, including interim reporting periods therein. Early application is permitted though in no case could the new guidance be applied before the original effective date. The Company has not adopted this guidance for 2016 and is currently evaluating the impact of adoption.

Note 2. Cash, Cash Equivalents, and Marketable Securities

We hold our cash, cash equivalents, and marketable securities in various financial institutions in the countries shown below. Substantially all accounts have balances in excess of government-insured limits. The following summarizes our holdings (in thousands):

	March 31, 2016						December 31, 2015
		Cash and  Cash Equivalents		Marketable Securities		Total		Cash and  Cash Equivalents		Marketable Securities		Total
United States (including Mexico)	$	10,615	$	-	$	10,615	$	12,861	$	-	$	12,861
France		3,385		1,712		5,097		887		3,503		4,390
Macau S.A.R., China		3,754		-		3,754		4,040		-		4,040
Total	$	17,754	$	1,712	$	19,466	$	17,788	$	3,503	$	21,291

Available-for-sale marketable securities consist of investments in securities such as certificates of deposit offered by French banks and bond mutual funds (in thousands):

	March 31, 2016						December 31, 2015
	Cost		Unrealized Gain/(Loss)		Fair Value		Cost		Unrealized Gain/(Loss)		Fair Value
Certificates of deposit	$	1,703	$	-	$	1,703	$	2,727	$	-	$	2,727
Bond mutual funds		9		-		9		776		-		776
Total marketable securities	$	1,712	$	-	$	1,712	$	3,503	$	-	$	3,503

We present our marketable securities at their estimated fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We have determined that all of our marketable securities are Level 1 financial instruments, with asset values recorded at quoted prices in active markets for identical assets.

7 

Note 3. Accounts Receivable and Allowance for Doubtful Accounts

At March 31, 2016, one Macau S.A.R. casino customer, whose account is current, accounted for 26% of our accounts receivable balance. At December 31, 2015, a different Macau S.A.R. casino customer, whose account is current, accounted for 33% of our accounts receivable balance.

The allowance for doubtful accounts consists of the following (in thousands):

	Balance at Beginning of Year		Provision (Benefit)		Write-offs, Net of Recoveries			Exchange Rate Effect			Balance at End of Period
March 31, 2016	$	990	$	12	$	(36	)	$	1		$	967
December 31, 2015	$	302	$	711	$	(19	)	$	(4	)	$	990

Note 4. Inventories

Inventories consist of the following (in thousands):

	March 31, 2016		December 31, 2015
Raw materials	$	7,893	$	7,653
Work in progress		1,221		668
Finished goods		2,722		2,548
Total inventories	$	11,836	$	10,869

We classified a portion of our inventories as non-current because we do not expect this portion to be used within one year. The classification of our inventories on our condensed consolidated balance sheets is as follows (in thousands):

	March 31, 2016		December 31, 2015
Current	$	11,148	$	10,199
Non-current		688		670
Total inventories	$	11,836	$	10,869

Note 5. Property and Equipment

Property and equipment consists of the following (in thousands):

	March 31, 2016			December 31, 2015
Land	$	530		$	520
Buildings and improvements		6,986			6,839
Equipment and furniture		27,921			26,912
Vehicles		412			403
Construction in progress		1,646			1,403
		37,495			36,077
Less accumulated depreciation		(23,064	)		(21,975	)
Property and equipment, net	$	14,431		$	14,102

Depreciation expense for the three months ended March 31, 2016 and 2015 was $666,000 and $680,000, respectively. The $1.6 million of construction in progress is primarily related to the building expansion at our Blue Springs, Missouri facility.

8 

Note 6. Goodwill and Intangible Assets

We have goodwill valued at $10,292,000 as of March 31, 2016 and December 31, 2015.

Intangible assets consist of the following (in thousands):

	March 31, 2016							December 31, 2015
		Gross Carrying Amount		Accum Amort			Net Carrying Amount		Gross Carrying Amount		Accum Amort			Net Carrying Amount
Trademarks	$	1,772	$	(485	)	$	1,287	$	1,772	$	(454	)	$	1,318
Customer list		1,324		(274	)		1,050		1,323		(245	)		1,078
Patents		542		(521	)		21		542		(520	)		22
Other intangible assets		372		(294	)		78		372		(285	)		87
Total intangible assets	$	4,010	$	(1,574	)	$	2,436	$	4,009	$	(1,504	)	$	2,505

Amortization expense for intangible assets for the three months ended March 31, 2016 and 2015 was $70,000 and $77,000, respectively.

Note 7. Debt

On June 26, 2015, the Company entered into a Credit Agreement with Nevada State Bank (Lender) for a combined $15.0 million, consisting of a $10.0 million seven-year Term Loan and a $5.0 million five-year Revolving Loan. The Term Loan will mature on June 26, 2022, and the Revolving Loan will mature on June 26, 2020.

Interest on funds borrowed under the Term Loan and the Revolving Loan will be charged at a rate per annum equal to LIBOR plus 2.25%. The Term Loan has a straight-line seven year amortization schedule.

At March 31, 2016, estimated repayment obligations for the principal balance of long-term debt are as follows (in thousands):

Year Ending	Long Term Debt
2016	$	1,013
2017		1,376
2018		1,409
2019		1,444
2020		1,480
Thereafter		2,294
	$	9,016

The above description of the material terms and conditions of the Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the full texts of the Credit Agreement, the Pledge and Security Agreement and Irrevocable Proxy and the Guaranty, which are filed as Exhibits 10.1, 10.2, and 10.3 to Form 8-K filed with the SEC on July 2, 2015.

Note 8. Commitments and Contingencies

Operating Lease Commitments

The company has various operating leases that are used in the normal course of business. Our operating leases consist of buildings and equipment.

Beginning January 1, 2016, the Company has added a new lease for the relocated corporate headquarters of approximately $16,000 per month.

                At March 31, 2016, minimum lease payment obligations are as follows (in thousands):

	Minimum
	Lease
Year Ending	Payments
2016	$	740
2017		842
2018		688
2019		270
2020		274
Thereafter		428
Total	$	3,242

Legal Proceedings and Contingencies

From time to time we are engaged in disputes and claims that arose in the normal course of business. We believe the ultimate outcome of these proceedings will not have a material adverse impact on our consolidated financial position or results of operations, but the outcome of these actions is inherently difficult to predict. There can be no assurance that we will prevail in any such litigation. Liabilities for material claims against us are accrued when a loss is considered probable and can be reasonably estimated. Legal costs associated with claims are expensed as incurred.

9 

Note 9. Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive loss, net of tax, and by component for the three months ended March 31, 2016, were as follows (in thousands):

	Foreign Currency Translation			Unrealized Gains on Securities		Total
Balance at January 1, 2016	$	(1,876	)	$	-	$	(1,876	)
Other comprehensive income		545			-		545
Balance at March 31, 2016	$	(1,331	)	$	-	$	(1,331	)

Note 10. Geographic and Product Line Information

We manufacture and sell casino table game equipment in one operating segment - casino table game products. Although the Company derives its revenues from a number of different product lines, the Company neither allocates resources based on the operating results from the individual product lines, nor manages each individual product line as a separate business unit. Our chief operating decision maker is our Chief Executive Officer (CEO). The CEO manages our operations on a consolidated basis to make decisions about overall corporate resource allocation and to assess overall corporate profitability. Our CEO is also the chief operating manager for each of our entities in the United States, France, and Macau S.A.R.; that is, the individual locations do not have “segment,” or “product line,” managers who report to our CEO.

The following tables present our net sales by geographic area (in thousands):

	Three Months Ended
	March 31,
	2016				2015
Revenues
The Americas	$	12,294	76.4	%	$	12,304	65.9%
Asia-Pacific		2,761	17.2	%		5,969	32.0%
Europe and Africa		1,038	6.4	%		383	2.1%
Total	$	16,093	100.0	%	$	18,656	100.0%

The following tables present our net sales by product line (in thousands):

10 

	Three Months Ended
	March 31,
	2016				2015
Casino currency with RFID	$	2,139	13.3	%	$	3,619	19.4	%
Casino currency without RFID		2,808	17.4	%		3,079	16.5	%
Total casino currency		4,947	30.7	%		6,698	35.9	%
Playing cards		6,565	40.8	%		5,773	30.9	%
Table layouts		1,365	8.5	%		1,694	9.1	%
Table accessories and other products		1,367	8.5	%		1,642	8.8	%
Dice		638	4.0	%		601	3.2	%
Gaming furniture		408	2.5	%		588	3.2	%
RFID solutions		75	0.5	%		860	4.6	%
Shipping		728	4.5	%		800	4.3	%
Total	$	16,093	100.0	%	$	18,656	100.0	%

For the three months ended March 31, 2016, one casino customer accounted for 13% of revenues and for the three months ended March 31, 2015, a different customer accounted for 11% of revenues.

The following table presents our property and equipment by geographic area (in thousands):

Property and equipment, net:	March 31, 2016		December 31, 2015
United States	$	7,169	$	7,000
France		3,628		3,544
Mexico		3,283		3,249
Asia		351		309
Total	$	14,431	$	14,102

The following table presents our intangible assets by geographic area (in thousands):

Intangible assets, net:	March 31, 2016		December 31, 2015
United States	$	1,948	$	2,006
Asia		488		497
France		-		2
Total	$	2,436	$	2,505

Note 11. Earnings per Share (EPS)

Shares used to compute basic and diluted earnings per share from operations are as follows:

	Three Months Ended
	March 31,
	2016		2015
Weighted-average number of common shares outstanding - basic		7,929		7,916
Potential dilution from equity grants		-		109
Weighted-average number of common shares outstanding - diluted		7,929		8,025

Note 12. Subsequent Event

On April 22, 2016, the Company entered into a letter of intent to acquire the assets of Dolphin Products Limited (Dolphin) including fixed assets, raw materials and inventory, and intellectual property for an estimated cash purchase price of approximately $5.9 million, subject to physical inventory counts at closing. The purchase price will be paid out in installments over a 24-month period after closing. In addition, GPIC will make earn out payments to EGT over the next five years based on a varying percentage of net revenues on certain select sales to specific Asian-based casinos. Dolphin is a leading manufacturer and distributor of RFID and traditional gaming chips and plaques under the Dolphin^® brand to major casinos in Asia and Australia. The transaction is expected to close in May 2016. GPI’s ongoing litigation matters against Dolphin shall be settled, pending the final closure of the transaction in May. For more information, see our Current Report on Form 8-K filed with the SEC on April 22, 2016.

11 

ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion is intended to assist in the understanding of our results of operations and our present financial condition and should be read in conjunction with our condensed consolidated financial statements and related notes and the other financial information included in this Quarterly Report on Form 10-Q. The condensed consolidated financial statements and the accompanying notes contain additional detailed information that should be referred to when reviewing this material. Statements in this discussion may be forward-looking. Such forward-looking statements involve risks and uncertainties that could cause actual results to differ significantly from those expressed. See Item 1A. “Risk Factors,” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, filed with the SEC on March 24, 2016.

For a more extensive overview and information on our products, as well as general information, see Item 1. “Business” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, filed with the SEC on March 24, 2016.

Overview of Our Business

We custom manufacture and supply casino currency, with multiple security and design options, playing cards, table layouts, gaming furniture, table accessories, dice, and roulette wheels. We also provide multiple RFID technologies including low- and high-frequency RFID casino currency, RFID solutions for casino currency (consisting of low- and high-frequency RFID casino currency readers, antennas, casino currency authentication software, casino currency inventory software applications, and software maintenance services). Our products and services are used with casino table games such as blackjack, poker, baccarat, craps, and roulette. GPIC sells its casino table game equipment under the brand names of Paulson^®, Bourgogne et Grasset^® (BG^®), Gemaco^®, Blue Chip^® (BC^®) and Bud Jones^®.

GPIC is headquartered in North Las Vegas, Nevada, with offices in Blue Springs, Missouri; Atlantic City, New Jersey; Gulfport, Mississippi; San Luis Rio Colorado, Mexico; Beaune, France; and Macau S.A.R., China. We sell our products to licensed casinos worldwide. We operate in one segment and have three operating subsidiaries: GPI USA (including GPI Mexicana, our maquiladora manufacturing operation in Mexico, and our manufacturing operation in Blue Springs, Missouri), GPI SAS, and GPI Asia. Our subsidiaries have the following distribution and product focus:

• GPI USA sells in the United States, Canada, the Caribbean, and Latin America. GPI USA sells our full product line, with most of the products manufactured in either San Luis Rio Colorado, Mexico, or Blue Springs, Missouri. The remainder is either manufactured in France or purchased from United States vendors. We warehouse inventory in San Luis, Arizona; Blue Springs, Missouri; and North Las Vegas, Nevada. We have sales offices in North Las Vegas, Nevada; Atlantic City, New Jersey; Gulfport, Mississippi; and Blue Springs, Missouri.

• GPI SAS sells primarily in Europe and Africa out of its office in Beaune, France. GPI SAS predominantly sells casino currencies, including both American-style, known as chips, and European-style, 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, located in Macau S.A.R., China, distributes our full product line in the Asia-Pacific region. GPI Asia also sells table layouts that it manufactures in Macau S.A.R.

Historically, we have experienced significant fluctuations in quarterly results primarily due to large, discrete currency orders as a result of casino openings, casino expansions, or large replacement orders. However, we continue to experience steady growth in our consumable products where it has become a larger percentage of our overall revenues. Our backlog, which reflects signed orders for the following twelve months, was as follows at March 31, 2016 and March 31, 2015 (in millions):

	GPI USA		GPI Asia		GPI SAS		Total
March 31, 2016	$     11.1	million	$       2.4	million	$       0.9	million	$     14.4	million
March 31, 2015	$       6.6	million	$       2.9	million	$       0.4	million	$       9.9	million

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Outlook

The decline in the Asian gaming market has not yet hit bottom and remains unpredictable. While we anticipate continuing to win new business in the region, particularly in Macau, opening dates are being delayed and the size of initial orders are smaller than previously anticipated. We anticipate the increase in revenue from the impending acquisition of Dolphin to lessen the variability in our results from Asia. In the Americas, however, we have continued to experience steady growth in our consumable products, particularly playing cards, where it has become a larger percentage of our overall revenues. We expect this trend to continue, providing the Company with a more consistent revenue stream.

Financial and Operational Highlights

For the first quarter of 2016, our revenues were $16.1 million, a decrease of $2.6 million, or 13.7%, compared to revenues of $18.7 million for the same period of 2015. For the first quarter of 2016, our net loss was $0.1 million, a decrease of $2.1 million, or 104.1%, compared to net income of $2.0 million for the same period in 2015. The decrease in our results for the three months ended March 31, 2016 is primarily due to a decline in orders for casino openings/expansions, the postponement of significant orders to future quarters, and manufacturing capacity constraints in our playing card operation related to significant revenue growth.

GPI SAS uses the euro as its functional currency. At March 31, 2016 and December 31, 2015, the U.S. dollar to euro exchange rates were $1.14 and $1.09, respectively, which represents a 4.6% weaker dollar compared to the euro. The average exchange rates for the three months ended March 31, 2016 and 2015 were $1.10 and $1.13, respectively, which represents a 2.7% stronger dollar compared to the euro.

GPI Mexicana uses the U.S. dollar as its functional currency. At March 31, 2016 and December 31, 2015, the Mexican peso to U.S. dollar exchange rates were relatively unchanged at 17.26 and 17.21, respectively. The average exchange rates for the three months ended March 31, 2016 and 2015 were 18.04 pesos and 14.94 pesos to the U.S. dollar, respectively, which represents a 20.7% stronger dollar compared to the Mexican peso.

GPI Asia, our exclusive distributor for GPI USA and GPI SAS products in the Asia-Pacific region, and our table layout manufacturer in the Asia-Pacific region, uses the U.S. dollar as its functional currency. We believe the impact of the Macanese pataca to U.S. dollar exchange rate is immaterial because of the number of transactions using the local currency is minimal.

Other Matters

On April 22, 2016, the Company entered into a letter of intent to acquire the assets of Dolphin Products Limited (Dolphin) including fixed assets, raw materials and inventory, and intellectual property for an estimated cash purchase price of approximately $5.9 million, subject to physical inventory counts at closing. The purchase price will be paid out in installments over a 24-month period after closing. In addition, GPIC will make earn out payments to EGT over the next five years based on a varying percentage of net revenues on certain select sales to specific Asian-based casinos. Dolphin is a leading manufacturer and distributor of RFID and traditional gaming chips and plaques under the Dolphin^® brand to major casinos in Asia and Australia. The transaction is expected to close in May 2016. GPI’s ongoing litigation matters against Dolphin shall be settled, pending the final closure of the transaction in May. For more information, see our Current Report on Form 8-K filed with the SEC on April 22, 2016.

On February 24, 2016, the Company entered into a construction contract with Miller Staunch Construction Co., Inc. (the Contractor) to expand its Blue Springs, Missouri manufacturing facility. The Blue Springs expansion is expected to be completed before the end of the 2016 third quarter at a fixed price of $2.2 million, subject to any additions or deductions agreed to by the Company and the Contractor. The Company expects to fully fund the construction of the Blue Springs expansion with available cash and cash flow from operations.

On December 30, 2015, the Company sold its building and land in Las Vegas, Nevada to an unrelated third party for $3.95 million in cash. In early 2016, the Company relocated its central operations to 3945 West Cheyenne Avenue, North Las Vegas, Nevada. The lease term for the building (approximately 15,000 square feet) is seven years commencing on January 1, 2016.

On June 26, 2015, the Company entered into a Credit Agreement with Nevada State Bank for a combined $15.0 million, consisting of a $10.0 million seven-year term loan and a $5.0 million five-year revolving loan. See Part I – Item 1. Financial Statements – Notes to Condensed Consolidated Notes to Financial Statements – Note 7. Debt.

13 

CRITICAL ACCOUNTING ESTIMATES

Our condensed consolidated financial statements included in this report, while unaudited, have been prepared in accordance with U.S. GAAP. Financial statement preparation requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and disclosure of contingent assets and liabilities. The accompanying condensed consolidated financial statements are prepared using the same critical accounting estimates discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, filed with the SEC on March 24, 2016. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

RESULTS OF OPERATIONS

The following tables summarize selected items from our condensed consolidated statements of operations (in thousands) and as a percentage of revenues:

	Three Months Ended
	March 31,										Period-to-Period
	2016					2015					Change
Revenues	$	16,093		100.0	%	$	18,656		100.0	%	$	(2,563	)	(13.7	)%
Cost of revenues		12,125		75.3	%		12,332		66.1	%		(207	)	(1.7	)%
Gross profit		3,968		24.7	%		6,324		33.9	%		(2,356	)	(37.2	)%
Selling, administrative, and research and development		4,005		24.9	%		4,555		24.4	%		(550	)	(12.1	)%
Operating (loss) income		(37	)	(0.2	)%		1,769		9.5	%		(1,806	)	(102.1	)%
Other (expense) income, net		(82	)	(0.5	)%		35		0.2	%		(117	)	(334.3	)%
(Loss) income before income taxes		(119	)	(0.7	)%		1,804		9.7	%		(1,923	)	(106.6	)%
Income tax benefit		(39	)	(0.2	)%		(153	)	(0.8	)%		114		74.5	%
Net (loss) income	$	(80	)	(0.5	)%	$	1,957		10.5	%	$	(2,037	)	(104.1	)%

The following tables present certain data by geographic area (in thousands) and as a percentage of revenues:

	Three Months Ended
	March 31,								Period-to-Period
	2016				2015				Change
Revenues
The Americas	$	12,294	76.4	%	$	12,304	65.9	%	$	(10	)	(0.1	%)
Asia-Pacific		2,761	17.2	%		5,969	32.0	%		(3,208	)	(53.7	%)
Europe and Africa		1,038	6.4	%		383	2.1	%		655		171.0	%
Total	$	16,093	100.0	%	$	18,656	100.0	%	$	(2,563	)	(13.7	%)

14 

The following tables present our revenues by product line (in thousands) and as a percentage of revenues:

	Three Months Ended
	March 31,								Period-to-Period
	2016				2015				Change
Casino currency with RFID	$	2,139	13.3	%	$	3,619	19.4	%	$	(1,480	)	(40.9	%)
Casino currency without RFID		2,808	17.4	%		3,079	16.5	%		(271	)	(8.8	%)
Total casino currency		4,947	30.7	%		6,698	35.9	%		(1,751	)	(26.1	%)
Playing cards		6,565	40.8	%		5,773	30.9	%		792		13.7	%
Table layouts		1,365	8.5	%		1,694	9.1	%		(329	)	(19.4	%)
Table accessories and other products		1,367	8.5	%		1,642	8.8	%		(275	)	(16.7	%)
Dice		638	4.0	%		601	3.2	%		37		6.2	%
Gaming furniture		408	2.5	%		588	3.2	%		(180	)	(30.6	%)
RFID solutions		75	0.5	%		860	4.6	%		(785	)	(91.3	%)
Shipping		728	4.5	%		800	4.3	%		(72	)	(9.0	%)
Total	$	16,093	100.0	%	$	18,656	100.0	%	$	(2,563	)	(13.7	%)

Comparison of Operations for the Three Months Ended March 31, 2016 and 2015

Revenues. For the three months ended March 31, 2016, our revenues were $16.1 million, a decrease of $2.6 million, or 13.7%, compared to revenues of $18.7 million for the same period in 2015. The decrease in our results for the three months ended March 31, 2016 is primarily due to a decline in orders for casino openings/expansions, and the postponement of significant orders to future quarters. There was also a significant change in product mix in the quarter, with sales of playing cards accounting for more than 40% of revenue, up ten percentage points from a year ago. The completion of the integration of the Gemaco acquisition into our sales and production capabilities has substantially increased our presence in the casino card marketplace.

Cost of Revenues. For the three months ended March 31, 2016, cost of revenues was $12.1 million, a decrease of $0.2 million when compared to the same period in 2015. As a percentage of revenues, our cost of revenues increased to 75.3% in 2016 compared to 66.1% in 2015. The increase in cost of revenues as a percentage of revenues was driven by the same factors described under Revenues above and Gross Profit below. In addition, we experienced some capacity constraints in our playing card manufacturing area, where success in sales required production beyond full capacity. Scrap rates for the quarter grew as we continued to meet customer demands.

Gross Profit. For the three months ended March 31, 2016, gross profit was $4.0 million, a decrease of $2.3 million, or 37.2%, compared to gross profit of $6.3 million for the same period in 2015. As a percentage of revenues, our gross profit decreased to 24.7% from 33.9%. The decrease is primarily attributable to the following factors. First, the change in sales mix from higher margin RFID casino currency products to lower margin non-RFID casino currency products and playing cards. Second, the playing card manufacturing issues discussed above. And last, lower overall revenues resulted in fixed manufacturing costs being allocated over lower production volumes.

Selling, Administrative, and Research and Development Expenses. The following tables present the selling, administrative, and research and development expenses (in thousands) and as a percentage of revenues:

	Three Months Ended
	March 31,								Period-to-Period
	2016				2015				Change
Marketing and sales	$	1,525	9.5	%	$	1,800	9.6	%	$	(275	)	(15.3	%)
General and administrative		2,173	13.5	%		2,416	13.0	%		(243	)	(10.0	%)
Research and development		307	1.9	%		339	1.8	%		(32	)	(9.4	%)
Total selling, administrative, and research and development	$	4,005	24.9	%	$	4,555	24.4	%	$	(550	)	(12.1	%)

For the three months ended March 31, 2016, selling, administrative, and research and development expenses were $4.0 million, a decrease of $0.6 million, or 12.1%, compared to selling, administrative, and research and development expenses of $4.6 million during the same period in 2015. Selling, administrative, and research and development expenses slightly increased as a percent of revenue to 24.9% in the first three months of 2016 from 24.4% in the same period in 2015.

15 

Marketing and sales expenses decreased by $0.3 million during the first quarter of 2016, compared to the same period in 2015 which is primarily due to a decrease in compensation as a result of staff turnover.

General and administrative expenses decreased by $0.3 million during the first quarter of 2016, compared to the same period in 2015 which is primarily due to a decrease in compensation as a result of staff turnover.

Research and development expenses remained relatively unchanged in the first quarter of 2016 compared to the same period in 2015.

Other Income and (Expense), net. The following tables present other income and (expense), net items (in thousands) and as a percentage of revenues:

	Three Months Ended
	March 31,										Period-to-Period
	2016					2015					Change
Interest income	$	5		0.0	%	$	5		0.0	%	$	(0	)	(0.0	%)
Interest expense		(63	)	(0.4	%)		(63	)	(0.3	%)		0		0.0	%
(Loss) gain on foreign currency transactions		(27	)	(0.2	%)		89		0.5	%		(116	)	(130.3	%)
Other income, net		3		0.0	%		4		0.0	%		(1	)	(25.0	)%
Total other (expense) income, net	$	(82	)	(0.6	%)	$	35		0.2	%	$	(117	)	(334.3	%)

Income Taxes. Our effective income tax rate for the three months ended March 31, 2016 and 2015 was 32.8% and (8.5%), respectively. Our effective tax rate for the three months ended March 31, 2016 was favorably affected by the foreign rate differential on income from our Macau S.A.R. subsidiary, GPI Asia, and the benefit from a research credit from our French subsidiary, GPI SAS; partially offset by the current year tax impact of a deemed dividend from GPI Asia and our Subpart F income adjustment.

Our effective tax rate for the three months ended March 31, 2015 was favorably affected by the release of valuation allowance related to foreign tax credits, the foreign rate differential on income from GPI Asia, and the benefit from a research credit from GPI SAS, partially offset by our Subpart F income adjustment. Without the decrease in the valuation allowance related to foreign tax credits, our effective tax rate for the three months ended March 31, 2015 would have been 24.4%.

We account for uncertain tax positions in accordance with applicable accounting guidance. At December 31, 2015, we reported unrecognized tax benefits related to the French Tax Administration’s examination of GPI SAS for tax years 2013 and 2012. As of March 31, 2016, there was no change to the unrecognized tax benefits reported at December 31, 2015.

Liquidity and Capital Resources

Sources of Liquidity and Capital Resources. Historically, our primary source of liquidity and capital resources has been cash from operations. On June 26, 2015, the Company entered into a Credit Agreement with Nevada State Bank for a combined $15.0 million credit facility, consisting of a $10.0 million seven-year Term Loan and a $5.0 million five-year Revolving Loan. The Company borrowed the full amount under the Term Loan and has not drawn any funds under the Revolving Loan.

Interest on funds borrowed under the Term Loan and the Revolving Loan will be charged at a rate per annum equal to LIBOR plus 2.25%. The Term Loan has a straight-line seven year amortization schedule. The Credit Agreement is guaranteed by GPIC and its GPI USA and GPI Asia subsidiaries.

Other potential sources of capital include, but are not limited to, marketable securities and bank credit facilities both in the United States and abroad. We believe that the combination of these resources will satisfy our needs for working capital, capital expenditures, purchases of common stock under our stock repurchase program, litigation, dividends or acquisitions for our operations for a minimum of the next twelve months.

At March 31, 2016, we had $17.8 million in cash and cash equivalents and $1.7 million in marketable securities, totaling $19.5 million. Of this amount, $10.6 million is held by GPI USA, $5.1 million is held by GPI SAS, and $3.8 million is held by GPI Asia. Of those amounts held outside of the United States, we would be subject to taxation in the United States if we were to repatriate those amounts, though foreign tax credits may be available to offset such taxes. All of the amounts currently held in Asia could be repatriated tax free due to the deemed dividend from GPI Asia. Except for the amount of the deemed dividend, the Company continues to assert that earnings from GPI Asia will be permanently reinvested. We may repatriate amounts from GPI SAS and, accordingly, our condensed consolidated financial statements reflect the tax impacts that would result from repatriation.

16 

Working Capital. The following summarizes our cash and cash equivalents, marketable securities, and working capital (all in thousands), and our current ratio:

	March 31,		December 31,		Period-to-Period
	2016		2015		Change
Cash and cash equivalents	$	17,754	$	17,788	$	(34	)	(0.2	)%
Marketable securities		1,712		3,503		(1,791	)	(51.1	)%
Working capital		30,860		31,129		(269	)	(0.9	)%
Current ratio		3.2		3.0

At March 31, 2016, working capital totaled $30.9 million, a decrease of $0.3 million when compared to working capital of $31.1 million at December 31, 2015.

Cash Flows. The following summarizes our cash flows (in thousands):

	Three Months Ended
	March 31,						Period-to-Period
	2016			2015			Change
Operating activities	$	(905	)	$	3,874		$	(4,779	)	(123.4%)
Investing activities		1,029			(2,407	)		3,436		142.8%
Financing activities		(330	)		87			(417	)	(479.3%)
Effect of exchange rates		172			(406	)		578		142.4%
Net change	$	(34	)	$	1,148		$	(1,182	)	(103.0%)

The decrease in cash flows used in operating activities was primarily caused by a decrease in net income, a decrease in liabilities, and an increase in assets.

The increase in cash flows provided by investing activities was primarily due to an increase in proceeds from the sale of marketable securities partially offset by an increase in capital expenditures.

The decrease in cash flows used in financing activities was primarily due to an increase in principal payments on long-term debt.

Capital Expenditures. We intend to purchase approximately $7.3 million in property, plant, and equipment during the remainder of 2016. This is primarily related to the building expansion at our Blue Springs, Missouri facility. In the first quarter of 2016, we purchased $0.9 million of property, plant, and equipment.

Cash Dividend. Our Board of Directors has no current plans to pay a regular dividend on our common stock, but may evaluate the merit of paying a dividend from time to time.

Backlog. At March 31, 2016, our backlog of signed orders for the following twelve months was $14.4 million, consisting of $11.1 million for GPI USA, $2.4 million for GPI Asia, and $0.9 million for GPI SAS. At March 31, 2015, our backlog of signed orders for 2015 was $9.9 million, consisting of $6.6 million for GPI USA, $2.9 million for GPI Asia, and $0.4 million for GPI SAS.

17 

Contractual Obligations and Commercial Commitments

On February 24, 2016, the Company entered into a construction contract with Miller Staunch Construction Co., Inc. (the Contractor) to expand its Blue Springs, Missouri manufacturing facility. The Blue Springs expansion is expected to be completed before the end of the 2016 third quarter at a fixed price of $2.2 million, subject to any additions or deductions agreed to by the Company and the Contractor. The Company expects to fully fund the construction of the Blue Springs expansion with available cash and cash flow from operations.

In early 2016, the Company relocated its central operations to 3945 West Cheyenne Avenue, North Las Vegas, Nevada. The lease term for the building (approximately 15,000 square feet) is seven years commencing on January 1, 2016 for approximately $16,000 per month.

Forward-Looking Information Statements and Risk Factors

Throughout this Quarterly Report on Form 10-Q, we make some forward-looking statements which do not relate to historical or current facts, but are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to analyses and other information based on forecasts of future results and estimates of amounts not yet determinable that, while considered reasonable by us, are inherently subject to significant business, economic, and competitive risks and uncertainties, many of which are beyond our control and are subject to change. The statements also relate to our future prospects and anticipated performance, development, and business strategies such as statements relating to anticipated future sales or the timing thereof, potential acquisitions, the long-term growth and prospects of our business or any jurisdiction, the duration or effects of unfavorable economic conditions which may reduce our product sales, and the long-term potential of the RFID gaming chips market and our ability to capitalize on any such growth opportunities. These statements are identified by their use of terms and phrases such as anticipate, believe, could, would, estimate, expect, intend, may, plan, predict, project, pursue, will, continue, feel, or the negative or other variations thereof, and other similar terms and phrases, including references to assumptions.

Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those expressed or implied. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent known and unknown risks and uncertainties such as those identified in Part I-Item 1A. “Risk Factors,” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, filed with the SEC on March 24, 2016. We do not intend, and undertake no obligation, to update our forward-looking statements to reflect future events or circumstances.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required for a smaller reporting company.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, including the Chief Executive Officer and Chief Financial Officer, has conducted an evaluation of the effectiveness of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act") as of March 31, 2016. Based upon this evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that, as of March 31, 2016, the end of the period covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures were effective at a reasonable assurance level to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is (i) recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms, and (ii) is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

Management has determined that there was no change in our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) during the quarter ended March 31, 2016, that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

18 

PART II. OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS

None.

ITEM 1A. RISK FACTORS

Not required for a smaller reporting company.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

No common shares were repurchased by the Company in the first quarter of 2016.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Principal Financial and Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.1	Binding Letter of Intent to DOLPHIN Products Limited
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

19 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	GAMING PARTNERS INTERNATIONAL CORPORATION
Date: May 10, 2016	By:	/s/ Gregory S. Gronau
		Gregory S. Gronau
		President and Chief Executive Officer
Date: May 10, 2016	By:	/s/ Alain Thieffry
		Alain Thieffry
		Chief Financial Officer, and Chairperson of the Board

20 

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

Section 302 Certification

I, Gregory S. Gronau, certify that:

1.           I have reviewed this quarterly report on Form 10-Q of Gaming Partners International Corporation;

2.           Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.           Based on my knowledge, the financial statements and other financial information included in this report fairly present, in all material respects, the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;

4.           The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)           Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)           Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)           Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)           Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.           The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)           All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

b)           Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 10, 2016	By:	/s/ Gregory S. Gronau
		Gregory S. Gronau President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER

Section 302 Certification

I, Alain Thieffry, certify that:

1.           I have reviewed this quarterly report on Form 10-Q of Gaming Partners International Corporation;

2.           Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.           Based on my knowledge, the financial statements and other financial information included in this report fairly present, in all material respects, the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;

4.           The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)           Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)           Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)           Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)           Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.           The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)           All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

b)           Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 10, 2016	By:	/s/ Alain Thieffry
		Alain Thieffry Chief Financial Officer, and Chairperson of the Board

EX-32.0

Exhibit 32.0

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Gaming Partners International Corporation (the Company), for the quarter ended March 31, 2016, as filed with the Securities and Exchange Commission (SEC) on the date hereof (the Report), Gregory S. Gronau, as Chief Executive Officer of the Company, and Alain Thieffry, as Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

  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: May 10, 2016	By:	/s/ Gregory S. Gronau
		Gregory S. Gronau
		President and Chief Executive Officer
Date: May 10, 2016	By:	/s/ Alain Thieffry
		Alain Thieffry
		Chief Financial Officer, and Chairperson of the Board

EX-99.1

Exhibit 99.1

CONFIDENTIAL

Apri1 21, 2016

DOLPHIN Products Limited

ATTN: Mr. Clarence Chung, Director

Unit Cl, G/F, Koon Wah Building

No.2, Yuen Shun Circuit

Yuen Chau Kok, Sha Tin

New Territories, Hong Kong

RE: BINDING LETTER OF INTENT

Dear Mr. Chung:

Gaming Partners International Corporation ("GPI") is pleased to submit this Binding Letter of Intent (the "LOI") to DOLPHIN Products Limited ("DOLPHIN"). This LOI sets forth the terms under which GPI (or a subsidiary) will purchase the Purchased Assets (as defined below) and assume certain liabilities of DOLPHIN (the "Transaction"). All Purchased Assets must be free and clear of all liens, claims and encumbrances. Assumed liabilities will consist only of customer deposits related to unfilled customer orders which GPI agrees to assume. The Transaction will close (the "Closing") no later than May 11, 2016 (the "Closing Date").

GPI and DOLPHIN (collectively, the "Parties" and individually, each a "Party") agree this LOI is a CONFIDENTIAL document. The terms and conditions of this LOT are based primarily upon documents provided to OPT by DOLPHIN. All references made herein to monetary amounts shall be considered to be in United States Dollars.

Terms & Conditions

The Parties agree as follows:

1. Purchased Assets. The Transaction will be structured as an asset purchase. The assets to be purchased (the "Purchased Assets") are:

a. Certain intellectual property (including without limitation all rights, licenses, trademarks, trade dress, copyrights, patents, trade secrets, know-how, websites, URL's and other confidential information, the right to sue for past infringement or misappropriation of any intellectual property and information technology rights and readable copies of all business records relevant to the existing business operations of DOLPHIN (collectively, the "Intellectual Property");

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b. Computers and related hardware related to product design in the marketing department of DOLPHIN;

c. The fixed assets specified in Exhibit B;

d. All research and development projects ongoing, finished and/or contemplated;

e. Raw materials of the types described in the line items specified in Exhibit C owned by DOLPHIN immediately prior to Closing; no work in process or finished goods shall be purchased, but will remain the property of Dolphin;

f. Certain customer lists and customer contacts;

g. Certain permits and governmental authorizations (if applicable), to the extent transferable;

h. Invention or copyright assignments (if any), and any restrictive covenant agreements for the benefit of DOLPHIN; and

i. All rights against third parties relating to the Purchased Assets.

Assumed Liabilities. Assumed liabilities will consist only of customer deposits related to unfilled customer orders which OPI agrees to assume.

GPI shall have sixty (60) days after the Closing Date to remove the Purchased Assets, at GPI's own cost.

DOLPHIN will retain any cash and cash equivalents and all assets not included above and will retain all liabilities not included above, including any amounts due to DOLPHIN's shareholders, subsidiaries or affiliates, as well as the shares or equity interests in its subsidiaries and their related corporate and tax records; provided GPI will be entitled to have access to such records post-Closing as reasonably necessary in respect of the Purchased Assets.

Promptly following the execution of this LOT, the Parties will cooperate in good faith to obtain any required consents of third parties to effectuate the Transaction. DOLPHIN will remain responsible for and will indemnify and hold GPI and its related parties harmless against: all threatened or pending litigation, taxes, and other undisclosed liabilities, whether fixed or contingent, based on or arising out of events which occurred prior to Closing.

MGM MACAU CONTRACT(S). GPI will have no liability or responsibility with respect to any contract(s) for orders DOLPHIN·has with MGM Macau. GPI agrees to produce said order(s) for MGM Macau but only pursuant to a new contract negotiated directly between MOM Macau and GPI. After Closing, DOLPHIN agrees to use its reasonable endeavors (not requiring incurrence of any material liability by DOLPHIN) to assist GPI

 2

in negotiating such contract with MGM Macau; however, GPI cannot and will not guarantee such contract will be negotiated.

2. Purchase Price, Non-Compete Agreements and Payment Terms. The Purchase Price to be paid by GPI to DOLPHIN will be determined as follows:

a. Net book value as at 31 March 2016 of the fixed assets to be purchased. The agreed net book value of the fixed assets to be purchased is specified in Exhibit B. The fixed assets to be purchased by GPI will be physically counted by GPI on the 3 business days immediately prior to Closing. The fixed assets to be purchased by GPI will be those counted at the physical count and the price will be the aggregate of the agreed net book values specified in Exhibit B of the fixed assets physically counted.

PLUS

b. The amount payable in respect of raw materials (of the types described in the Iine items specified in Exhibit C), calculated in accordance with this Section 2(b). The quantity of raw materials to be purchased by GPI will be physically counted by GPI on the 3 business days immediately prior to Closing. The raw materials to be purchased by GPI will be the actual quantity counted at the physical count and the price will be the quantity counted multiplied by the unit book value as at 31 March 2016 shown in DOLPHlN's quarterly financial statements, less US$200,000.

LESS 

c. The value of assumed liabilities, if any. PLUS

d. US$1,000,000.

For example only, if at the Closing Date, the net book value of the fixed assets is $3,000,000, the aggregate book value of the raw materials to be purchased by GPI is $1 ,000,000, the value of assumed liabilities is $300,000 then the Purchase Price would be $4,500,000 ($3,000,000 plus $800,000 (calculated as $1 ,000,000 minus $200,000) less $300,000 plus $1 ,000,000). Tn determining the agreed book value of the fixed assets and raw materials as at 31 March 2016, DOLPHIN's historical accounting methods have been used. Further, it is agreed by the Parties the $1,000,000 reflects the market value of the equipment and machinery being transferred.

Additionally, GPI shall pay at Closing a total of US$400,000 for ten (10) year non compete agreements from Mr. Clarence Chung, DOLPHIN and Entertainment Gaming Asia, Inc., which non-compete agreements shall preclude any of them from owning, operating, controlling or participating in any way in a company that manufactures gaming

 3

chips, plaques, jetons, playing cards or layouts for gaming tables in competition with GPI.

The Purchase Price shall be paid as follows: sixty percent (60%) upon Closing, twenty percent (20%) 12 months after Closing and twenty percent (20%) 24 months after Closing.

The amount of the Purchase Price to be paid upon the Closing Date will be applied as follows: FIRST, to satisfy any indebtedness encumbering the Purchased Assets, and SECOND, paid to DOLPHIN by wire transfer of immediately available funds to an account designated in writing by DOLPHIN at least FOURTEEN (14) business days prior to the scheduled Closing.

3. Earn Out Payments. In addition to the Purchase Price, GPI shall pay DOLPHIN the following "Earn Out Payments":

a. Territorial Earn Out. For a period of five (5) years following the Closing, three percent (3%) of Net Revenue from gaming chip and plaque sales made by GPI and/or any of its affiliates to Non-Related Party casinos subject to a cap of a total of US$500,000,000 of Net Revenue, in the following countries:

i. In Macau, Louis the XIII and the MGM Macau properties;

ii. In the Philippines, all casinos in the Philippines including but not limited to the next Tiger Resort, Leisure and Entertainment opening, Resort World Manila, Resort World Bayshore, Solaire and any casino where, as of Closing, DOLPHIN's gaming chips were used on the main floor;

iii. In Australia, all casinos within the Crown Resort group, including but not limited to Crown Melbourne, Crown Perth and the planned Crown Sydney property and any casino where, as of Closing, DOLPHIN's gaming chips were used on the main floor;

iv. In Cambodia, all casinos, except NAGA World and any of its affiliated properties; and

v. In Korea, Laos, Nepal, Thailand, and Myanmar, all casinos.

''Net Revenue" means revenue actually received by GPI and/or its affiliates during the year minus (a) all taxes paid during the year (VAT, usage rights, duties, etc.) excluding corporation or profits tax, (b) all credits or discounts given during the year for whatever reason, (c) all products sales commissions paid during the year to sales executives employed by GPI and (d) all freight, transportation, installation and packaging expenses specifically invoiced to customers during the year in respect of the delivery and installation of the customers' respective product orders.

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A "Related Party" is any and all of Melco Crown Entertainment Limited ("MCE"), Melco International Development Limited ("MIDL"), Crown Resorts Limited, each entity directly or indirectly, now or in the future, majority owned by any of the foregoing, City of Dreams, Manila (which is 50:50 indirectly owned joint venture of MCE) and casinos in Vietnam, Cyprus, Spain and Russia in which MIDL or MCE has, now or in the future, a direct or indirect equity investment (regardless of percentage ownership) (collectively "Melco Crown").

b. Melco Crown Earn Out. The following percentages ofNet Revenue from gaming chip and plaque sales made by GPI and/or any of its affiliates to a Related Party:

i. For the first US$1 0,000,000 of Net Revenue at any time after the Closing (without any time limit), fifteen percent (15%); and

ii. For five (5) years after the Closing, and in addition to the payment under (i) above, three percent (3%), capped at a total of US$30,000,000 of Net Revenue.

GPI shall provide a calculation worksheet and, if requested by DOLPHIN, the related invoices and supporting documents for the Earn Out Payments within two (2) months after each calendar year, on an annual basis.

DOLPHlN shall have the rights to assign its rights to the Earn Out Payments and/or the balance of the Purchase Price, to Entertainment Gaming Asia, Inc. ("EGT") or any subsidiary of EGT, without the agreement or consent of GPI.

4. Due Diligence. GPI will have a period of three (3) days following the date of this LOI to complete its due diligence review ("Due Diligence Period"). The purpose of GPI's due diligence review shall be:

a. To verify that the fixed assets specified in Exhibit B are held by DOLPHIN and are in working order. If any fixed assets are shown by GPI's due diligence not to be in working order, GPI shall so notify DOLPHIN not later than three (3) business days after expiry of the Due Diligence Period. DOPHIN shall have an opportunity to cure the notified defect, but if the defect cannot be cured to the satisfaction of GPI (acting reasonably) by the business day immediately preceding Closing, the relevant fixed assets which are not in working order shall be excluded from the fixed assets to be purchased by GPI unless GPI otherwise agrees.

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b. To verify that the raw materials to be purchased by GPI are held by DOLPHIN and are fit for the purpose for which they are ordinarily used. and (if applicable) within the shelf life printed on their packaging. GPI shall only purchase raw materials held by DOLPHIN immediately prior to Closing which are fit for the purpose for which they are ordinarily used and, if applicable, within their shelf life printed on their respective packaging (raw materials which are broken or out of order will not be purchased).

DOLPHIN agrees to provide GPI, its agents, advisors and representatives, with reasonable access to the Purchased Assets and the records, and facilities concerned with the Purchased Assets as may be regarded as necessary or desirable by GPl (acting reasonably) in connection with its review. No investigation made by GPI will limit or affect the representations, warranties, covenants and indemnities of DOLPHIN under this LOI or the APA (as defined below).

5. Execution of Agreement; Closing. The Parties intend to negotiate a definitive asset purchase agreement (the "APA") to effectuate the Transaction consistent with the terms of this LOJ. The first draft of the APA shall be drafted by DOLPHIN's legal representatives and will contain customary representations and warranties dealing with the matters specified in Exhibit A and covenants (including indemnities) and other provisions to address material matters (if any) discovered in due diligence, certain of which would survive the Closing. The APA will also include customary limitations on DOLPHIN's liability as seller of the Purchased Assets and a customary regime for disclosures to be made against the representations and warranties. The parties agree to negotiate fairly and use their reasonable commercial efforts to agree on the form of the APA by no later than April 22, 2016.

Unless otherwise agreed to in the APA, the Closing shall take place no later than May 11, 2016, or such other date as the parties may agree in writing. The APA shall not contain any conditions precedent to Closing other than accuracy of the representations and warranties given and compliance with obligations under the APA up to Closing.

6. Exclusivity. In consideration of GPI's incurrence of costs in connection with the conduct of due diligence, DOLPHIN agrees that, from its acceptance of this LOI until it is terminated by either party or terminated by virtue of the execution of the APA or (if later) May II, 2016, DOLPHIN will not, and will cause its affiliates and their respective officers, directors, stockholders, employees and agents not to, initiate, encourage (including by way of furnishing any non-public information concerning DOLPHIN, the Purchased Assets or business), solicit, conduct or continue any negotiations or discussions with or enter into any agreement with any third party (other than GPI or its affiliates), relating to the acquisition of all or any portion of DOLPHIN or any of its

 6

subsidiaries, or any of their respective assets or business (whether by merger, share purchase, asset purchase, lease, exclusive license or otherwise), other than , in each case, the sale of goods in accordance with past practices and other transactions in the ordinary course of business for the sale of products consistent with past practices.

7. Public Announcement

GPI and DOLPHIN's parent entity, EGT will each be required to make a public announcement (which public announcement shall include an appropriate filing with the Securities and Exchange Commission ("SEC")) of the Transaction contemplated by this LOI. EGT's parent entity, MIDL, may also be required to make a public announcement on the Hong Kong Stock Exchange. GPI and DOLPHIN shall provide drafts of their respective public announcements (in DOLPHIN's case, to be made by EGT and, if applicable, MIDL) to the other Party and shall provide the other Party a reasonable opportunity to provide input on their respective public announcements as they relate to any information or statements regarding the other Party. Each Party acknowledges that GPI and EGT will be required to file a Form 8-K and/or press release regarding this LOI and the Transaction in accordance with applicable securities laws and SEC requirements. Further, all of GPI's and EGT's SEC filing(s) regarding the LOI, the Transaction or the APA and any announcement required to be made by MIDL in relation to the foregoing shall be subject to the prior approval of, and co-ordinated with, both Parties, provided that this requirement shall not prevent GPI, EGT or MIDL complying with the legal, regulatory or stock exchange requirements applicable to it in the circumstances.

ln addition to the public announcements required by applicable law or securities regulations, GPI and EGT may issue a joint press release (the form of which would require agreement between GPI and EGT).

8. Confidentiality. Except as provided in Section 7 above, neither Party to this LOI nor any of their affiliates or their respective officers, directors, stockholders, employees or agents shall make any public or private announcement or issue any press release or other publicity in respect of this LOI or the Transaction without the prior written consent of the other Party (except for such disclosures as are required in applications or by applicable securities or gaming laws or stock market rules). The Parties agree that, except as provided in Section 7 above, the terms of that "Confidentiality and Non-Disclosure Agreement," dated April 1, 2016, the terms of which are hereby incorporated herein by this reference, shall continue in full force and effect.

9. Expenses. Whether or not the Transaction is consummated, each Party to this LOI shall be responsible for its own fees and expenses incurred in connection with its preparation and negotiation of this LOI, the APA and the Transaction, including the fees and

 7

 

disbursements of its respective counsel, advisors, brokers, finders, accountants or other experts.

10. Restrictive Covenants. The Parties agree that the APA shall contain restrictive covenants in respect of non-compete, non-circumvention and non-solicitation.

11. Termination. GPI may terminate this LOI pursuant to the conditions A to C below. Pursuant to any such termination, this LOI shall terminate and become void and of no further force and effect, except Sections 7, 8 and 9 above, which shall survive in accordance with their respective terms.

A. Any material inaccuracy in the documents provided by DOLPHIN to GPI as a result of GPI's due diligence requests which material inaccuracy materially adversely affects the value of the Purchased Assets as a whole, as well DOLPHIN's failure to comply with any material requirement of Section 4 (Due Diligence) above after having been informed by GPI that GPI intends to exercise its termination right under this section as a result of such failure and DOLPHIN having been given not less than three business days to cure such failure and having failed to do so;

B. The occurrence of any action, events, condition or circumstance that, individually or in the aggregate, has had or could reasonably be expected to have a material adverse effect on the value of the Purchased Assets as a whole ("Material Adverse Change"), provided, however, that when determining whether there has been a Material Adverse Change, any adverse effect attributable to any of the following shall be disregarded: (a) general economic, business, industry or financial market conditions (whether in the United States, Asia or otherwise), but that do not disproportionately affect DOLPHIN; (b) the taking of any action required by this LOI or the APA; (c) the announcement of the Transaction; (e) the breach of this LOI or the APA by GPI, (f) any changes in applicable laws, regulations or accounting rules, including GAAP; (g) any existing event, occurrence or circumstance set forth in the disclosure schedule to the APA; or (h) any adverse change in or effect on the Purchased Assets that is cured by or on behalf of DOLPHIN to the reasonable satisfaction of GPT before the termination of this LOI; or

C. Any material misrepresentation or breach of any covenant herein or in the APA by DOLPHIN, which in either case materially adversely affects the value of the Purchased Assets as a whole, or DOLPHIN's refusal to provide customary representations and warranties as reflected on Exhibit A to this LOI in connection with the APA (which representations and warranties will be subject to disclosed exceptions, provided that such disclosures do not include any material liabilities not

 8

reflected in the documentation provided by DOLPHIN to GPI pursuant to GPI's due diligence requests).

12. Litigation Standstill aud Termination of Litigation.

a) Litigation Standstill. GPI and DOLPHIN shall, in a reasonable and professional manner, and as soon as practically possible, instruct their respective outside legal counsel to execute a stay of the two legal proceedings before the High Court of the Hong Kong Special Administrative Region, namely High Court Action No. 3038 of 2015 and High Court Miscellaneous Proceedings No. 3354 of 2015 (collectively, the "Proceedings"), and take the necessary steps accordingly in accordance with the appropriate court procedures.

Subject to what is said in the paragraph immediately following, the Parties hereby agree that their respective legal counsel shall not seek to take any further steps to progress the Proceedings in any way (including, without limiting the generality of the foregoing, any document inspection or discovery) prior to May 11, 2016. If Closing occurs under the APA, the Proceedings shall be permanently withdrawn and terminated as soon as practicable after the Closing, in accordance with the detailed terms of the APA.

Notwithstanding the foregoing, in the legal proceedings against Mr. Paulo Da Silva in France, certain IT experts are in the process of preparing a report to the court. Such preparation of the report may continue, but GPI shall not use the report or the information obtained from the report in the Proceedings, or in any proceedings against Mr. Paulo DaSilva, prior to May 11, 2016 and shall only be permitted to use the report and/or the information in the report in proceedings aga inst Mr. Da Si lva after that date if the full and final settlement of those proceedings referred to in b(iii) below does not occur clue to a failure by Mr. Da Silva to enter into the settlement agreement referred to below.

If, for any reason whatsoever, this LOJ is terminated by either GPI or DOLPHIN, GPJ shall not be restricted from taking steps to restart and progress the Proceedings.

b) Termination of Litigation. The APA shall provide for:

i. the full and final settlement on Closing of the Proceedings and the mutual irrevocable discharge and release of all claims between the Patties (and their respective affiliates and the respective directors,

 9

 

officers and employees of the foregoing) in connection with the matters giving rise to the Proceedings;

ii. the irrevocable withdrawal and termination of the Proceedings;

iii. the full and final termination, promptly following the execution by Mr. Da Silva of the settlement agreement referred to below, of all proceedings (both in Hong Kong and in France) against Mr. Paulo Da Silva and the irrevocable discharge and release by GPI and its affiliates of Mr. Paulo Da Silva from all claims in connection with the matters giving rise to the proceedings against him; and

iv. the irrevocable withdrawal and termination of all proceedings (both in Hong Kong and in France) against Mr. Paulo Da Silva.

The settlement of proceedings and claims and withdrawal and termination of proceedings against Mr. Da Silva referred to in Sections (b)(iii) and (b)(iv) above shall be subject to Mr. Da Silva entering into a settlement agreement with GPI in which Mr. DaSilva agrees (I) to return to GPI any and all confidential information of GPI in his possession, (2) not to use any confidential information of GPI for any purpose and (3) not to be employed in a casino currency manufacturing business which competes with GPI.

13. Conduct of Business.

Operational Wind-Up/Transition. DOLPHIN and GPI (in respect of b. below) shall have specific Closing and post-Closing obligations, including but not limited to:

a. Employment/Severance. DOLPHIN agrees to handle any and all employment related necessities stemming from its current list of employees and/or agents as stipulated by Hong Kong law. This includes but is not limited to: providing appropriate notice, effective contractual termination and any and all payments owed to said employees and/or agents as a result of their termination.

For this, GPI agrees to reimburse DOLPHIN within SIXTY (60) days after Closing for the legally necessitated costs stemming from the termination of employment or appointment of DOLPHIN's employees and agents (including payments made in lieu of notice, severance or long service payments, any other contractual and/or legal entitlements of the employees and related taxes), subject to a cap of $520,000.

Prior to DOLPHIN's provision of notice to its employees, GPl shall notify DOLPHIN of any and all key employees and/or agents it wishes to become GPI employees; said employees shall sign new employment agreements with GPI (as

 10

 

necessary) prior to being rewarded employment. DOLPHIN shall remain responsible for any and all liability stemming from the layoff and/or termination of DOLPHIN employees and/or agents, and agrees that GPI's liability will be strictly limited to the payout of the amount refer red to in the paragraph immediately above, capped at $520,000.

b. Lease Rental. GPI agrees to pay to DOLPHIN on Closing:

i. An amount equal to two (2) months of rent payable (excluding taxes, management fees, electricity and water) under the three (3) lease agreements for the three (3) units comprising DOLPHIN’s factory premises, capped at $130,000.

ii. An additional amount equal to two (2) months rent payable (excluding taxes, management fees, electricity and water) under the three (3) lease agreements for the three (3) units comprising DOLPHIN's factory premises, as compensation for the termination of the three (3) lease agreements, such additional amount capped at $130,000.

Subject to the foregoing, all costs of terminating the three (3) leases shall be for DOLPHIN's account. The three (3) units comprising DOLPHIN's factory premises are Units C1 and C2 on the Ground Floor of, and Unit 303 on the 3rd Floor of, Koon Wah Building, 2 Yuen Shun Circuit, Yuen Chau Kok, Shatin, New Territories, Hong Kong (the "Three Units").

c. Other Obligations. Upon Closing (or, in the case of i. below, within 60 days from Closing, or in the case of ii. below, within 5 business days from Closing), DOLPHIN shall:

i. Complete a name change of its entity;

ii. Stop all manufacturing and distribution activity including but not limited to sales, manufacturing and distribution, except as necessitated to wind down the business;

iii. Complete all necessary paperwork to transfer title in the Purchased Assets to GPI;

iv. Ensure that the location of the Purchased Assets in DOLPHIN's factory premises (comprising the Three Units) remains accessible to GPI for SIXTY (60) days after Closing to help ensure GPI 's prompt removal of the Purchased Assets;

v. Prepare any molds included in the Purchased Assets for GPI 's removal/shipment;

vi. Ensure that GPI’s access to the molds and other Purchased Assets is unrestricted; and

 11

 

vii. To the extent that the terms of such orders permit termination, terminate any and all orders that are not complete and allot GPI the ability (with customer approval, as necessary) to finish said work pursuant to a right of a first refusal. Regarding any and all such work that GPl does not choose to finish, DOLPHIN shall have permission to sub-contract out for the finish of such work.

14. Governing Law. This LOI and the APA shall be governed by and construed in accordance with the laws of Hong Kong. The exclusive forum for the determination of any action relating to this LOI or the APA shall be an appropriate court in Hong Kong and the parties irrevocably consent to the jurisdiction of such courts and agree to such exclusive venue and hereby waive any objection to said terms.

15. Entire Agreement; Counterparts. This LOI supersedes any and all prior understandings among the parties hereto except the Confidentiality and Non-Disclosure Agreement noted above. This LOI may be executed in one or more counterparts, each of which shall be an original, but all of which together shall constitute one and the same agreement.

16. Representations & Covenants.

a. The Parties agree that the Purchased Assets are to be sold and purchased under this LOI and the APA on an "as is" basis and that the representations, warranties and other covenants of DOLPHIN to be given in this LOI and the APA shall be limited accordingly.

b. DOLPHIN hereby represents and warrants that following the date of execution of this LOI and up to Closing:

i. DOLPHIN has and will have good and marketable title to all the Purchased Assets, free and clear of all liens of any kind;

ii. The Purchased Assets are sold on an "as is" basis, fit for the purpose for which they are currently used by DOLPHIN.

iii. That, to the extent permitted by the terms of the relevant guaranties without the consent or approval of any third party, any and all guaranties provided to DOLPHIN concerning the Purchased Assets shall be passed on to GPI;

iv. That DOLPHIN's execution of this LOI and the future APA does not and will not violate any contractual or legal obligation of DOLPHIN or Entertainment Gaming Asia, Inc.; and

 12

 

v. DOLPHIN will not take any action that will harm or injure the rights or business relationship of any other person as a result of the APA or GPI’s purchase of the Purchased Assets.

DOLPHIN undertakes not to dispose of any or raw materials following GPI’s pre-Closing physical counts referred to in Sections 2(a) and 2(b) and up to Closing.

Lastly, DOLPHIN agrees to defend, indemnify and hold harmless GPI, its affiliates and their respective agents, employees, officers, directors, successors and assigns, from and against any and all liabilities and claims for demands, suits, actions, liabilities, losses, damages, injuries judgments, costs and expenses, directly or indirectly arising from any untruth, inaccuracy or breach of any representation, covenant or agreement made by DOLPHIN in this LOI or in the APA, any excluded asset or liability not purchased by GPI, including claims from DOLPHIN's employees, agents, customers, vendors, landlords or Entertainment Gaming Asia, Inc.'s shareholders.

c. GPI represents and warrants that it has all necessary approvals and licenses to manufacture and sell gaming chips and plaques in all necessitated jurisdictions. GPI covenants and agrees to defend, indemnify and hold harmless DOLPHIN, its affiliates and their respective agents, employees, officers, directors, consultants, successors and assigns, from and against any and all liabilities and claims, including, without limitation, future liabilities and claims by third parties, for demands, suits, actions, liabilities, losses, damages, injuries, judgments, costs and expenses (including reasonable attorney's fees and costs), directly or indirectly arising from any untruth, inaccuracy or breach of any representations, covenants or agreements made by GPI in this LOI or the APA and from use of the Purchased Assets post-Closing, except that the foregoing indemnity shall not apply in respect of any matter arising out of: (a) a breach of any representation, warranty or covenant of DOLPHIN in this LOI or the APA, (b) any excluded liability retained by DOLPHIN or (c) any pre-Closing act or omission by DOLPHIN or any of its representatives.

17. Binding Covenants. Under any and all circumstances, regardless of termination, the binding covenants of this LOI shall include Sections 6 (Exclusivity), 7 (Public Announcement), 8 (Confidentiality), 9 (Expenses), 12(a) (Litigation Standstill), 14 (Governing Law), 15 (Entire Agreement; Counterparts) and 16 (Representations & Covenants).

[Signatures on Following Page]

 13

 

If the foregoing correctly sets forth the understanding of the Parties hereto, please so indicate by executing both originals of the LOI in the spaces provided below and returning ONE (1) fully executed original to us. GPI reserves the right to withdraw this LOI at any time prior to GPI's receipt of such written acceptance by DOLPHIN.

	Sincerely,
	GPI
	/s/ Gregory S. Gronau
	Gregory S. Gronau, President & CEO
DOLPHIN
/s/ Clarence Chung
Clarence Chung, Director

 14

EXHIBIT A

Customary Representations & Warranties

• DOLPHIN has good title to the Purchased Assets, free and clear of all claims, liens and encumbrances

• The written financial information relating to the Purchased Assets provided by DOLPHIN to GPI for the purpose of this Transaction is correct in all material respects

• Equipment maintenance has not been deferred with respect to equipment that is material to the operation of DOLPHIN's business in the ordinary course where such deferral adversely affects the value of the Purchased Assets as a whole

• DOLPHIN has all required permits and licenses required for the sale of the Purchased Assets, and is and has been in material compliance with all laws, regulations and permits applicable to the Purchased Assets

• Complete copies of all material contracts and governmental /judicial restrictions (if any) have been delivered; neither DOLPHIN nor, to DOLPHIN's knowledge, any counterparty is in default under any such material contract

• A reasonable insurance program is in effect; accurate disclosure of three years insurance loss runs

• To DOLPHIN's knowledge, there has been no Material Adverse Effect in relation to the Purchased Assets since 31 December 2015

• To DOLPHIN's knowledge, no person, entity or party, has in any way, shape or form threatened or instituted any form of legal or otherwise material proceeding against DOLPHIN, nor is any such proceeding currently in existence, over the last five (5) years, aside from any such proceedings brought by GPI or any such threats or proceedings which have been withdrawn or settled by agreement.

A-1 

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Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2016	Apr. 29, 2016
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q1
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		7,928,594

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Current Assets:
Cash and cash equivalents	$ 17,754	$ 17,788
Marketable securities	1,712	3,503
Accounts receivable, net	9,242	10,677
Inventories	11,148	10,199
Prepaid expenses	827	947
Deferred income tax assets	1,943	1,640
Other current assets	1,954	1,576
Total current assets	44,580	46,330
Property and equipment, net	14,431	14,102
Goodwill	10,292	10,292
Intangible assets, net	2,436	2,505
Deferred income tax assets	687	710
Inventories, non-current	688	670
Other assets, non-current	2,690	2,635
Total assets Total assets	75,804	77,244
Current Liabilities:
Accounts payable	3,404	4,498
Accrued liabilities	5,194	6,456
Customer deposits and deferred revenue	3,261	2,080
Current portion of long-term debt	1,351	1,343
Income taxes payable	510	824
Total current liabilities	13,720	15,201
Long-term debt	7,665	8,002
Deferred income tax liabilities	168	170
Other liabilities, non-current	0	83
Total liabilities Total liabilities	$ 21,553	$ 23,456
Commitments and contingencies - see Note 8
Stockholders' Equity:
Preferred stock, authorized 10,000,000 shares, $.01 par value, none issued and outstanding	$ 0	$ 0
Common stock, authorized 30,000,000 shares, $.01 par value, 8,219,577 and 7,928,594 issued and outstanding, respectively, as of March 31, 2016, and December 31, 2015	82	82
Additional paid-in capital	20,031	20,033
Treasury stock at cost: 290,983 shares	(2,263)	(2,263)
Retained earnings	37,732	37,812
Accumulated other comprehensive loss	(1,331)	(1,876)
Total stockholders' equity	54,251	53,788
Total liabilities and stockholders' equity	$ 75,804	$ 77,244

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CONDENSED CONSOLIDATED BALANCE SHEETS [Parenthetical] - $ / shares	Mar. 31, 2016	Dec. 31, 2015
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, shares authorized	30,000,000	30,000,000
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares issued	8,219,577	8,219,577
Common stock, shares outstanding	7,928,594	7,928,594
Treasury stock, shares	290,983	290,983

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Revenues	$ 16,093	$ 18,656
Cost of revenues	12,125	12,332
Gross profit	3,968	6,324
Marketing and sales	1,525	1,800
General and administrative	2,173	2,416
Research and development	307	339
Operating (loss) income	(37)	1,769
Other (expense) income, net	(82)	35
(Loss) income before income taxes	(119)	1,804
Income tax benefit	(39)	(153)
Net (loss) income	$ (80)	$ 1,957
(Loss) earnings per share:
Basic (in dollars per share)	$ (0.01)	$ 0.25
Diluted (in dollars per share)	$ (0.01)	$ 0.24
Weighted-average shares of common stock outstanding:
Basic (in shares)	7,929	7,916
Diluted (in shares)	7,929	8,025

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Net (loss) income	$ (80)	$ 1,957
Other comprehensive income:
Foreign currency translation adjustment, net of tax	545	(1,621)
Total comprehensive income	$ 465	$ 336

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) $ in Thousands	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Treasury Stock [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]
Balance at Dec. 31, 2014	$ 48,265	$ 82	$ 19,886	$ (2,263)	$ 30,881	$ (321)
Balance (in shares) at Dec. 31, 2014		7,916,094
Net income (Loss)	1,957	$ 0	0	0	1,957	0
Common stock options exercised	87	$ 0	87	0	0	0
Common stock options exercised (in shares)		12,500
Stock compensation expense	15	$ 0	15	0	0	0
Tax impacts of stock options	3	0	3	0	0	0
Foreign currency translation adjustment, net of tax	(1,621)	0	0	0	0	(1,621)
Balance at Mar. 31, 2015	48,706	$ 82	19,991	(2,263)	32,838	(1,942)
Balance (in shares) at Mar. 31, 2015		7,928,594
Balance at Dec. 31, 2015	53,788	$ 82	20,033	(2,263)	37,812	(1,876)
Balance (in shares) at Dec. 31, 2015		7,928,594
Net income (Loss)	(80)	$ 0	0	0	(80)	0
Stock compensation expense	21	0	21	0	0	0
Tax impacts of stock options	(23)	0	(23)	0	0	0
Foreign currency translation adjustment, net of tax	545	0	0	0	0	545
Balance at Mar. 31, 2016	$ 54,251	$ 82	$ 20,031	$ (2,263)	$ 37,732	$ (1,331)
Balance (in shares) at Mar. 31, 2016		7,928,594

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Cash Flows from Operating Activities
Net income (Loss)	$ (80)	$ 1,957
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation of property and equipment	666	680
Amortization of intangible assets	70	77
Provision for bad debt	12	139
Deferred income taxes	(276)	(672)
Stock compensation expense	21	15
Tax impacts of stock options	(23)	3
Loss on sale or disposal of property and equipment	0	35
Gain on sale of marketable securities	(1)	(1)
Change in operating assets and liabilities:
Accounts receivable	1,434	1,072
Inventories	(837)	780
Prepaid expenses and other current assets	(219)	(495)
Other assets, non-current	10	63
Accounts payable	(1,127)	810
Accrued liabilities	(1,340)	122
Customer deposits and deferred revenue	1,086	(1,086)
Other current liabilities	13	(87)
Income taxes payable	(314)	462
Net cash (used in) provided by operating activities	(905)	3,874
Cash Flows from Investing Activities
Purchases of marketable securities	0	(6,759)
Proceeds from sale of marketable securities	1,880	4,508
Proceeds from sale of property and equipment	0	18
Capital expenditures	(851)	(174)
Net cash provided by (used in) investing activities	1,029	(2,407)
Cash Flows from Financing Activities
Principal payments on long-term debt	(330)	0
Proceeds from exercise of stock options	0	87
Net cash (used in) provided by financing activities	(330)	87
Effect of exchange rate changes on cash	172	(406)
Net (decrease) increase in cash and cash equivalents	(34)	1,148
Cash and cash equivalents, beginning of period	17,788	8,969
Cash and cash equivalents, end of period	17,754	10,117
Supplemental disclosure of cash flow information:
Cash paid for interest	63	63
Cash paid for income taxes, net of refunds	435	3
Supplemental disclosure of non-cash investing and financing activities
Property and equipment acquired through accounts payable	$ 36	$ 47

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Nature of Business and Significant Accounting Policies

3 Months Ended

Mar. 31, 2016

Accounting Policies [Abstract]

Business Description and Accounting Policies [Text Block]

Note 1. Nature of Business and Significant Accounting Policies

Organization and Nature of Business

Gaming Partners International Corporation (GPIC or the Company) is headquartered in North Las Vegas, Nevada. Our business activities include the manufacture and sale of casino currencies, playing cards, table layouts, gaming furniture, table accessories, dice, roulette wheels, and RFID readers and software, all of which are used with casino table games such as blackjack, poker, baccarat, craps, and roulette.

The Company has three operating subsidiaries: Gaming Partners International USA, Inc. (GPI USA) (including GPI Mexicana S.A. de C.V. (GPI Mexicana), our maquiladora manufacturing operation in Mexico, and GPI USA Blue Springs, our manufacturing facility in Missouri); Gaming Partners International SAS (GPI SAS); and Gaming Partners International Asia Limited (GPI Asia).  Our subsidiaries have the following distribution and product focus:

• GPI USA sells in the United States, Canada, the Caribbean, and Latin America. GPI USA sells our full product line, with most of the products manufactured in either San Luis Rio Colorado, Mexico, or Blue Springs, Missouri. The remainder is either manufactured in France or purchased from United States vendors. We warehouse inventory in San Luis, Arizona; Blue Springs, Missouri; and North Las Vegas, Nevada. We have sales offices in North Las Vegas, Nevada; Atlantic City, New Jersey; Gulfport, Mississippi; and Blue Springs, Missouri.

• GPI SAS sells primarily in Europe and Africa out of its office in Beaune, France. GPI SAS predominantly sells casino currencies, including both American-style, known as chips, and European-style, 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, located in Macau S.A.R., China, distributes our full product line in the Asia-Pacific region. GPI Asia also sells table layouts that it manufactures in Macau S.A.R.

Significant Accounting Policies

Basis of Consolidation and Presentation. The accompanying condensed consolidated financial statements include the accounts of GPIC and its wholly-owned subsidiaries GPI SAS, GPI USA, and GPI Asia. All material intercompany balances and transactions have been eliminated in consolidation. The condensed consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim financial information and in the form prescribed by the Securities and Exchange Commission (SEC), and do not include all of the information and notes required by U.S. GAAP for complete financial statements. These statements should be read in conjunction with our annual audited consolidated financial statements and related notes included in our most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2015, filed with the SEC on March 24, 2016.

These unaudited condensed consolidated financial statements, in the opinion of management, reflect only normal and recurring adjustments necessary for a fair presentation of results and cash flows for the interim periods presented. The results of operations for an interim period are not necessarily indicative of the results for any other interim period or a full fiscal year.

Recently Issued Accounting Standards. In March 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-09, Compensation – Stock Compensation (Topic 718), to simplify several aspects of the accounting for share-based payment award transactions including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows. The amendments are effective for public companies for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company has not adopted this guidance for 2016 and is currently evaluating the impact of adoption.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), to increase transparency and comparability among organizations by reporting lease assets and lease liabilities, both finance (capital) and operating leases, on the balance sheet and disclosing key information about leasing arrangements. For public companies, the updated guidance is effective for the financial statements issued for fiscal years beginning after December 15, 2018 (including interim periods within those fiscal years). Early adoption is permitted. The Company has not adopted this guidance for 2016 and is currently evaluating the impact of adoption.

In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. The guidance eliminates the current requirement for organizations to present deferred tax assets and liabilities as current and noncurrent in a classified balance sheet. Instead, organizations will be required to classify all deferred tax assets and liabilities as noncurrent. ASU 2015-17 shall be effective for public business entities for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company has not adopted this guidance for 2016 and is currently evaluating the impact of adoption.

In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory. The guidance applies to any entity measuring inventory using first-in, first-out or average cost. The main provision of this guidance requires an entity to measure inventory within the scope of this ASU at the lower of cost and net realizable value. This guidance is effective for fiscal years beginning after December 15, 2016, and interim periods within fiscal years beginning after December 15, 2017. A reporting entity should apply the amendments prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The Company has not adopted this guidance for 2016 and is currently evaluating the impact of adoption.

In May 2014, the FASB issued ASU 2014-09, Revenues from Contracts with Customers (Topic 606). This guidance applies to any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. The core principle of this guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance supersedes existing revenue recognition guidance, including most industry-specific guidance, as well as certain related guidance on accounting for contract costs. ASU 2016-08 comments on the effective date and transition of ASU 2014-09, stating public entities should apply the amendments in ASU 2014-09 for annual reporting periods beginning after December 15, 2017, including interim reporting periods therein. Early application is permitted though in no case could the new guidance be applied before the original effective date. The Company has not adopted this guidance for 2016 and is currently evaluating the impact of adoption.

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Cash, Cash Equivalents, and Marketable Securities

3 Months Ended

Mar. 31, 2016

Cash and Cash Equivalents [Abstract]

Cash, Cash Equivalents, and Marketable Securities [Text Block]

Note 2. Cash, Cash Equivalents, and Marketable Securities

We hold our cash, cash equivalents, and marketable securities in various financial institutions in the countries shown below. Substantially all accounts have balances in excess of government-insured limits. The following summarizes our holdings (in thousands):

	March 31, 2016						December 31, 2015
	Cash and  Cash Equivalents		Marketable Securities		Total		Cash and  Cash Equivalents		Marketable Securities		Total
United States (including Mexico)	$	10,615	$	-	$	10,615	$	12,861	$	-	$	12,861
France		3,385		1,712		5,097		887		3,503		4,390
Macau S.A.R., China		3,754		-		3,754		4,040		-		4,040
Total	$	17,754	$	1,712	$	19,466	$	17,788	$	3,503	$	21,291

Available-for-sale marketable securities consist of investments in securities such as certificates of deposit offered by French banks and bond mutual funds (in thousands):

	March 31, 2016						December 31, 2015
	Cost		Unrealized Gain/(Loss)		Fair Value		Cost		Unrealized Gain/(Loss)		Fair Value
Certificates of deposit	$	1,703	$	-	$	1,703	$	2,727	$	-	$	2,727
Bond mutual funds		9		-		9		776		-		776
Total marketable securities	$	1,712	$	-	$	1,712	$	3,503	$	-	$	3,503

We present our marketable securities at their estimated fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We have determined that all of our marketable securities are Level 1 financial instruments, with asset values recorded at quoted prices in active markets for identical assets.

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Accounts Receivable and Allowance for Doubtful Accounts

3 Months Ended

Mar. 31, 2016

Valuation and Qualifying Accounts [Abstract]

Schedule of Valuation and Qualifying Accounts Disclosure [Text Block]

Note 3. Accounts Receivable and Allowance for Doubtful Accounts

At March 31, 2016, one Macau S.A.R. casino customer, whose account is current, accounted for 26% of our accounts receivable balance. At December 31, 2015, a different Macau S.A.R. casino customer, whose account is current, accounted for 33% of our accounts receivable balance.

The allowance for doubtful accounts consists of the following (in thousands):

			Provision
	Balance at Beginning of Year		(Benefit)		Write-offs, Net of Recoveries		Exchange Rate Effect		Balance at End of Period
March 31, 2016	$	990	$	12	$	(36)	$	1	$	967
December 31, 2015	$	302	$	711	$	(19)	$	(4)	$	990

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Inventories

3 Months Ended

Mar. 31, 2016

Inventory Disclosure [Abstract]

Inventory Disclosure [Text Block]

Note 4. Inventories

Inventories consist of the following (in thousands):

	March 31, 2016		December 31, 2015
Raw materials	$	7,893	$	7,653
Work in progress		1,221		668
Finished goods		2,722		2,548
Total inventories	$	11,836	$	10,869

We classified a portion of our inventories as non-current because we do not expect this portion to be used within one year. The classification of our inventories on our condensed consolidated balance sheets is as follows (in thousands):

	March 31, 2016		December 31, 2015
Current	$	11,148	$	10,199
Non-current		688		670
Total inventories	$	11,836	$	10,869

XML

Property and Equipment

3 Months Ended

Mar. 31, 2016

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment Disclosure [Text Block]

Note 5. Property and Equipment

Property and equipment consists of the following (in thousands):

	March 31, 2016		December 31, 2015
Land	$	530	$	520
Buildings and improvements		6,986		6,839
Equipment and furniture		27,921		26,912
Vehicles		412		403
Construction in progress		1,646		1,403
		37,495		36,077
Less accumulated depreciation		(23,064)		(21,975)
Property and equipment, net	$	14,431	$	14,102

Depreciation expense for the three months ended March 31, 2016 and 2015 was $666,000 and $680,000, respectively. The $1.6 million of construction in progress is primarily related to the building expansion at our Blue Springs, Missouri facility.

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Goodwill and Intangible Assets

3 Months Ended

Mar. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets Disclosure [Text Block]

Note 6. Goodwill and Intangible Assets

We have goodwill valued at $10,292,000 as of March 31, 2016 and December 31, 2015.

Intangible assets consist of the following (in thousands):

	March 31, 2016						December 31, 2015
	Gross Carrying Amount		Accum Amort		Net Carrying Amount		Gross Carrying Amount		Accum Amort		Net Carrying Amount
Trademarks	$	1,772	$	(485)	$	1,287	$	1,772	$	(454)	$	1,318
Customer list		1,324		(274)		1,050		1,323		(245)		1,078
Patents		542		(521)		21		542		(520)		22
Other intangible assets		372		(294)		78		372		(285)		87
Total intangible assets	$	4,010	$	(1,574)	$	2,436	$	4,009	$	(1,504)	$	2,505

Amortization expense for intangible assets for the three months ended March 31, 2016 and 2015 was $70,000 and $77,000, respectively.

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Debt

3 Months Ended

Mar. 31, 2016

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

Note 7. Debt

On June 26, 2015, the Company entered into a Credit Agreement with Nevada State Bank (Lender) for a combined $15.0 million, consisting of a $10.0 million seven-year Term Loan and a $5.0 million five-year Revolving Loan. The Term Loan will mature on June 26, 2022, and the Revolving Loan will mature on June 26, 2020.

Interest on funds borrowed under the Term Loan and the Revolving Loan will be charged at a rate per annum equal to LIBOR plus 2.25%. The Term Loan has a straight-line seven year amortization schedule.

At March 31, 2016, estimated repayment obligations for the principal balance of long-term debt are as follows (in thousands):

Year Ending	Long Term Debt
2016	$	1,013
2017		1,376
2018		1,409
2019		1,444
2020		1,480
Thereafter		2,294
	$	9,016

The above description of the material terms and conditions of the Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the full texts of the Credit Agreement, the Pledge and Security Agreement and Irrevocable Proxy and the Guaranty, which are filed as Exhibits 10.1, 10.2, and 10.3 to Form 8-K filed with the SEC on July 2, 2015.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

Note 8. Commitments and Contingencies

Operating Lease Commitments

The company has various operating leases that are used in the normal course of business. Our operating leases consist of buildings and equipment.

Beginning January 1, 2016, the Company has added a new lease for the relocated corporate headquarters of approximately $16,000 per month.

At March 31, 2016, minimum lease payment obligations are as follows (in thousands):

	Minimum
	Lease
Year Ending	Payments
2016	$	740
2017		842
2018		688
2019		270
2020		274
Thereafter		428
Total	$	3,242

Legal Proceedings and Contingencies

From time to time we are engaged in disputes and claims that arose in the normal course of business. We believe the ultimate outcome of these proceedings will not have a material adverse impact on our consolidated financial position or results of operations, but the outcome of these actions is inherently difficult to predict. There can be no assurance that we will prevail in any such litigation. Liabilities for material claims against us are accrued when a loss is considered probable and can be reasonably estimated. Legal costs associated with claims are expensed as incurred.

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Accumulated Other Comprehensive Income (Loss)

3 Months Ended

Mar. 31, 2016

Equity [Abstract]

Comprehensive Income (Loss) Note [Text Block]

Note 9. Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive loss, net of tax, and by component for the three months ended March 31, 2016, were as follows (in thousands):

	Foreign Currency Translation		Unrealized Gains on Securities		Total
Balance at January 1, 2016	$	(1,876)	$	-	$	(1,876)
Other comprehensive income		545		-		545
Balance at March 31, 2016	$	(1,331)	$	-	$	(1,331)

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Geographic and Product Line Information

3 Months Ended

Mar. 31, 2016

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

Note 10. Geographic and Product Line Information

We manufacture and sell casino table game equipment in one operating segment - casino table game products. Although the Company derives its revenues from a number of different product lines, the Company neither allocates resources based on the operating results from the individual product lines, nor manages each individual product line as a separate business unit. Our chief operating decision maker is our Chief Executive Officer (CEO). The CEO manages our operations on a consolidated basis to make decisions about overall corporate resource allocation and to assess overall corporate profitability. Our CEO is also the chief operating manager for each of our entities in the United States, France, and Macau S.A.R.; that is, the individual locations do not have “segment,” or “product line,” managers who report to our CEO.

The following tables present our net sales by geographic area (in thousands):

	Three Months Ended
	March 31,
	2016				2015
Revenues
The Americas	$	12,294	76.4	%	$	12,304	65.9	%
Asia-Pacific		2,761	17.2	%		5,969	32.0	%
Europe and Africa		1,038	6.4	%		383	2.1	%
Total	$	16,093	100.0	%	$	18,656	100.0	%

The following tables present our net sales by product line (in thousands):

	Three Months Ended
	March 31,
	2016				2015
Casino currency with RFID	$	2,139	13.3	%	$	3,619	19.4	%
Casino currency without RFID		2,808	17.4	%		3,079	16.5	%
Total casino currency		4,947	30.7	%		6,698	35.9	%
Playing cards		6,565	40.8	%		5,773	30.9	%
Table layouts		1,365	8.5	%		1,694	9.1	%
Table accessories and other products		1,367	8.5	%		1,642	8.8	%
Dice		638	4.0	%		601	3.2	%
Gaming furniture		408	2.5	%		588	3.2	%
RFID solutions		75	0.5	%		860	4.6	%
Shipping		728	4.5	%		800	4.3	%
Total	$	16,093	100.0	%	$	18,656	100.0	%

For the three months ended March 31, 2016, one casino customer accounted for 13% of revenues and for the three months ended March 31, 2015, a different customer accounted for 11% of revenues.

 

The following table presents our property and equipment by geographic area (in thousands):

Property and equipment, net:	March 31, 2016		December 31, 2015
United States	$	7,169	$	7,000
France		3,628		3,544
Mexico		3,283		3,249
Asia		351		309
Total	$	14,431	$	14,102

The following table presents our intangible assets by geographic area (in thousands):

Intangible assets, net:	March 31, 2016		December 31, 2015
United States	$	1,948	$	2,006
Asia		488		497
France		-		2
Total	$	2,436	$	2,505

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Earnings per Share (EPS)

3 Months Ended

Mar. 31, 2016

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

Note 11. Earnings per Share (EPS)

Shares used to compute basic and diluted earnings per share from operations are as follows:

	Three Months Ended
	March 31,
	2016		2015
Weighted-average number of common shares outstanding - basic		7,929		7,916
Potential dilution from equity grants		-		109
Weighted-average number of common shares outstanding - diluted		7,929		8,025

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Subsequent Event

3 Months Ended

Mar. 31, 2016

Subsequent Events [Abstract]

Subsequent Events [Text Block]

Note 12. Subsequent Event

On April 22, 2016, the Company entered into a letter of intent to acquire the assets of Dolphin Products Limited (Dolphin) including fixed assets, raw materials and inventory, and intellectual property for an estimated cash purchase price of approximately $5.9 million, subject to physical inventory counts at closing. The purchase price will be paid out in installments over a 24-month period after closing. In addition, GPIC will make earn out payments to EGT over the next five years based on a varying percentage of net revenues on certain select sales to specific Asian-based casinos. Dolphin is a leading manufacturer and distributor of RFID and traditional gaming chips and plaques under the Dolphin^® brand to major casinos in Asia and Australia. The transaction is expected to close in May 2016. GPI’s ongoing litigation matters against Dolphin shall be settled, pending the final closure of the transaction in May. For more information, see our Current Report on Form 8-K filed with the SEC on April 22, 2016.

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Nature of Business and Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2016

Accounting Policies [Abstract]

Consolidation, Policy [Policy Text Block]

Basis of Consolidation and Presentation. The accompanying condensed consolidated financial statements include the accounts of GPIC and its wholly-owned subsidiaries GPI SAS, GPI USA, and GPI Asia. All material intercompany balances and transactions have been eliminated in consolidation. The condensed consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim financial information and in the form prescribed by the Securities and Exchange Commission (SEC), and do not include all of the information and notes required by U.S. GAAP for complete financial statements. These statements should be read in conjunction with our annual audited consolidated financial statements and related notes included in our most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2015, filed with the SEC on March 24, 2016.

These unaudited condensed consolidated financial statements, in the opinion of management, reflect only normal and recurring adjustments necessary for a fair presentation of results and cash flows for the interim periods presented. The results of operations for an interim period are not necessarily indicative of the results for any other interim period or a full fiscal year.

New Accounting Pronouncements, Policy [Policy Text Block]

Recently Issued Accounting Standards. In March 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-09, Compensation – Stock Compensation (Topic 718), to simplify several aspects of the accounting for share-based payment award transactions including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows. The amendments are effective for public companies for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company has not adopted this guidance for 2016 and is currently evaluating the impact of adoption.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), to increase transparency and comparability among organizations by reporting lease assets and lease liabilities, both finance (capital) and operating leases, on the balance sheet and disclosing key information about leasing arrangements. For public companies, the updated guidance is effective for the financial statements issued for fiscal years beginning after December 15, 2018 (including interim periods within those fiscal years). Early adoption is permitted. The Company has not adopted this guidance for 2016 and is currently evaluating the impact of adoption.

In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. The guidance eliminates the current requirement for organizations to present deferred tax assets and liabilities as current and noncurrent in a classified balance sheet. Instead, organizations will be required to classify all deferred tax assets and liabilities as noncurrent. ASU 2015-17 shall be effective for public business entities for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company has not adopted this guidance for 2016 and is currently evaluating the impact of adoption.

In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory. The guidance applies to any entity measuring inventory using first-in, first-out or average cost. The main provision of this guidance requires an entity to measure inventory within the scope of this ASU at the lower of cost and net realizable value. This guidance is effective for fiscal years beginning after December 15, 2016, and interim periods within fiscal years beginning after December 15, 2017. A reporting entity should apply the amendments prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The Company has not adopted this guidance for 2016 and is currently evaluating the impact of adoption.

In May 2014, the FASB issued ASU 2014-09, Revenues from Contracts with Customers (Topic 606). This guidance applies to any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. The core principle of this guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance supersedes existing revenue recognition guidance, including most industry-specific guidance, as well as certain related guidance on accounting for contract costs. ASU 2016-08 comments on the effective date and transition of ASU 2014-09, stating public entities should apply the amendments in ASU 2014-09 for annual reporting periods beginning after December 15, 2017, including interim reporting periods therein. Early application is permitted though in no case could the new guidance be applied before the original effective date. The Company has not adopted this guidance for 2016 and is currently evaluating the impact of adoption.

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Cash, Cash Equivalents, and Marketable Securities (Tables)

3 Months Ended

Mar. 31, 2016

Cash and Cash Equivalents [Abstract]

Cash and Cash Equivalents and Marketable Securities [Table Text Block]

The following summarizes our holdings (in thousands):

	March 31, 2016						December 31, 2015
	Cash and  Cash Equivalents		Marketable Securities		Total		Cash and  Cash Equivalents		Marketable Securities		Total
United States (including Mexico)	$	10,615	$	-	$	10,615	$	12,861	$	-	$	12,861
France		3,385		1,712		5,097		887		3,503		4,390
Macau S.A.R., China		3,754		-		3,754		4,040		-		4,040
Total	$	17,754	$	1,712	$	19,466	$	17,788	$	3,503	$	21,291

Available-for-sale Securities [Table Text Block]

Available-for-sale marketable securities consist of investments in securities such as certificates of deposit offered by French banks and bond mutual funds (in thousands):

	March 31, 2016						December 31, 2015
	Cost		Unrealized Gain/(Loss)		Fair Value		Cost		Unrealized Gain/(Loss)		Fair Value
Certificates of deposit	$	1,703	$	-	$	1,703	$	2,727	$	-	$	2,727
Bond mutual funds		9		-		9		776		-		776
Total marketable securities	$	1,712	$	-	$	1,712	$	3,503	$	-	$	3,503

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Accounts Receivable and Allowance for Doubtful Accounts (Tables)

3 Months Ended

Mar. 31, 2016

Valuation and Qualifying Accounts [Abstract]

Schedule of Allowance for Doubtful Accounts Receivable Roll Forward [Table Text Block]

The allowance for doubtful accounts consists of the following (in thousands):

			Provision
	Balance at Beginning of Year		(Benefit)		Write-offs, Net of Recoveries		Exchange Rate Effect		Balance at End of Period
March 31, 2016	$	990	$	12	$	(36)	$	1	$	967
December 31, 2015	$	302	$	711	$	(19)	$	(4)	$	990

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Inventories (Tables)

3 Months Ended

Mar. 31, 2016

Inventory Disclosure [Abstract]

Schedule of Inventory, Current [Table Text Block]

Inventories consist of the following (in thousands):

	March 31, 2016		December 31, 2015
Raw materials	$	7,893	$	7,653
Work in progress		1,221		668
Finished goods		2,722		2,548
Total inventories	$	11,836	$	10,869

Schedule of Inventory, Noncurrent [Table Text Block]

The classification of our inventories on our condensed consolidated balance sheets is as follows (in thousands):

	March 31, 2016		December 31, 2015
Current	$	11,148	$	10,199
Non-current		688		670
Total inventories	$	11,836	$	10,869

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Property and Equipment (Tables)

3 Months Ended

Mar. 31, 2016

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment [Table Text Block]

Property and equipment consists of the following (in thousands):

	March 31, 2016		December 31, 2015
Land	$	530	$	520
Buildings and improvements		6,986		6,839
Equipment and furniture		27,921		26,912
Vehicles		412		403
Construction in progress		1,646		1,403
		37,495		36,077
Less accumulated depreciation		(23,064)		(21,975)
Property and equipment, net	$	14,431	$	14,102

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Goodwill and Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finite-Lived Intangible Assets [Table Text Block]

Intangible assets consist of the following (in thousands):

	March 31, 2016						December 31, 2015
	Gross Carrying Amount		Accum Amort		Net Carrying Amount		Gross Carrying Amount		Accum Amort		Net Carrying Amount
Trademarks	$	1,772	$	(485)	$	1,287	$	1,772	$	(454)	$	1,318
Customer list		1,324		(274)		1,050		1,323		(245)		1,078
Patents		542		(521)		21		542		(520)		22
Other intangible assets		372		(294)		78		372		(285)		87
Total intangible assets	$	4,010	$	(1,574)	$	2,436	$	4,009	$	(1,504)	$	2,505

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Debt (Tables)

3 Months Ended

Mar. 31, 2016

Debt Disclosure [Abstract]

Schedule of Maturities of Long-term Debt [Table Text Block]

At March 31, 2016, estimated repayment obligations for the principal balance of long-term debt are as follows (in thousands):

Year Ending	Long Term Debt
2016	$	1,013
2017		1,376
2018		1,409
2019		1,444
2020		1,480
Thereafter		2,294
	$	9,016

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Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

Contractual Obligation, Fiscal Year Maturity Schedule [Table Text Block]

At March 31, 2016, minimum lease payment obligations are as follows (in thousands):

	Minimum
	Lease
Year Ending	Payments
2016	$	740
2017		842
2018		688
2019		270
2020		274
Thereafter		428
Total	$	3,242

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Accumulated Other Comprehensive Income (Loss) (Tables)

3 Months Ended

Mar. 31, 2016

Equity [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

Changes in accumulated other comprehensive loss, net of tax, and by component for the three months ended March 31, 2016, were as follows (in thousands):

	Foreign Currency Translation		Unrealized Gains on Securities		Total
Balance at January 1, 2016	$	(1,876)	$	-	$	(1,876)
Other comprehensive income		545		-		545
Balance at March 31, 2016	$	(1,331)	$	-	$	(1,331)

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Geographic and Product Line Information (Tables)

3 Months Ended

Mar. 31, 2016

Segment Reporting [Abstract]

Schedule of Revenue from Foreign Countries by Geographic Area [Table Text Block]

The following tables present our net sales by geographic area (in thousands):

	Three Months Ended
	March 31,
	2016				2015
Revenues
The Americas	$	12,294	76.4	%	$	12,304	65.9	%
Asia-Pacific		2,761	17.2	%		5,969	32.0	%
Europe and Africa		1,038	6.4	%		383	2.1	%
Total	$	16,093	100.0	%	$	18,656	100.0	%

Schedule of Product Revenue [Table Text Block]

The following tables present our net sales by product line (in thousands):

	Three Months Ended
	March 31,
	2016				2015
Casino currency with RFID	$	2,139	13.3	%	$	3,619	19.4	%
Casino currency without RFID		2,808	17.4	%		3,079	16.5	%
Total casino currency		4,947	30.7	%		6,698	35.9	%
Playing cards		6,565	40.8	%		5,773	30.9	%
Table layouts		1,365	8.5	%		1,694	9.1	%
Table accessories and other products		1,367	8.5	%		1,642	8.8	%
Dice		638	4.0	%		601	3.2	%
Gaming furniture		408	2.5	%		588	3.2	%
RFID solutions		75	0.5	%		860	4.6	%
Shipping		728	4.5	%		800	4.3	%
Total	$	16,093	100.0	%	$	18,656	100.0	%

Schedule of Property Plant and Equipment by Geographic Area [Table Text Block]

The following table presents our property and equipment by geographic area (in thousands):

Property and equipment, net:	March 31, 2016		December 31, 2015
United States	$	7,169	$	7,000
France		3,628		3,544
Mexico		3,283		3,249
Asia		351		309
Total	$	14,431	$	14,102

Schedule of Intangible Assets and Goodwill [Table Text Block]

The following table presents our intangible assets by geographic area (in thousands):

Intangible assets, net:	March 31, 2016		December 31, 2015
United States	$	1,948	$	2,006
Asia		488		497
France		-		2
Total	$	2,436	$	2,505

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Earnings per Share (EPS) (Tables)

3 Months Ended

Mar. 31, 2016

Earnings Per Share [Abstract]

Schedule of Weighted Average Number of Shares [Table Text Block]

	Three Months Ended
	March 31,
	2016		2015
Weighted-average number of common shares outstanding - basic		7,929		7,916
Potential dilution from equity grants		-		109
Weighted-average number of common shares outstanding - diluted		7,929		8,025

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Cash, Cash Equivalents, and Marketable Securities (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015	Mar. 31, 2015	Dec. 31, 2014
Cash and Cash Equivalents [Line Items]
Cash and Cash Equivalents	$ 17,754	$ 17,788	$ 10,117	$ 8,969
Marketable Securities	1,712	3,503
Total	19,466	21,291
United States (including Mexico) [Member]
Cash and Cash Equivalents [Line Items]
Cash and Cash Equivalents	10,615	12,861
Marketable Securities	0	0
Total	10,615	12,861
France [Member]
Cash and Cash Equivalents [Line Items]
Cash and Cash Equivalents	3,385	887
Marketable Securities	1,712	3,503
Total	5,097	4,390
Macau S.A.R., China [Member]
Cash and Cash Equivalents [Line Items]
Cash and Cash Equivalents	3,754	4,040
Marketable Securities	0	0
Total	$ 3,754	$ 4,040

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Cash, Cash Equivalents, and Marketable Securities (Details 1) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
Cost	$ 1,712	$ 3,503
Unrealized Gain/(Loss)	0	0
Fair Value	1,712	3,503
Certificates of Deposit [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost	1,703	2,727
Unrealized Gain/(Loss)	0	0
Fair Value	1,703	2,727
Bond Mutual Funds [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost	9	776
Unrealized Gain/(Loss)	0	0
Fair Value	$ 9	$ 776

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Accounts Receivable and Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance at Beginning of Year	$ 990	$ 302	$ 302
Provision (Benefit)	12	$ 139	711
Write-offs, Net of Recoveries	(36)		(19)
Exchange Rate Effect	1		(4)
Balance at End of Period	$ 967		$ 990

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Accounts Receivable and Allowance for Doubtful Accounts (Details Textual)	3 Months Ended		12 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Concentration Risk, Percentage	100.00%	100.00%
One Casino Customer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Concentration Risk, Percentage	13.00%	11.00%
One Casino Customer [Member] | Accounts Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Concentration Risk, Percentage	26.00%		33.00%

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Inventories (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Inventory [Line Items]
Raw materials	$ 7,893	$ 7,653
Work in progress	1,221	668
Finished goods	2,722	2,548
Total inventories	$ 11,836	$ 10,869

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Inventories (Details 1) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Current	$ 11,148	$ 10,199
Non-current	688	670
Total inventories	$ 11,836	$ 10,869

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Property and Equipment (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Property, Plant and Equipment [Line Items]
Land	$ 530	$ 520
Buildings and improvements	6,986	6,839
Equipment and furniture	27,921	26,912
Vehicles	412	403
Construction in progress	1,646	1,403
Property, Plant and Equipment, Gross	37,495	36,077
Less accumulated depreciation	(23,064)	(21,975)
Property and equipment, net	$ 14,431	$ 14,102

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Property and Equipment (Details Textual) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Property, Plant and Equipment [Line Items]
Depreciation	$ 666	$ 680
Construction in Progress, Gross	1,646		$ 1,403
Building Improvements [Member]
Property, Plant and Equipment [Line Items]
Construction in Progress, Gross	$ 1,600

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Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Finite-Lived Intangible Assets [Line Items]
Goodwill and Intangible assets, Gross Carrying Amount	$ 4,010	$ 4,009
Goodwill and Intangible assets, Accumulated Amortization	(1,574)	(1,504)
Goodwill and Intangible assets, Net Carrying Amount	2,436	2,505
Trademarks [Member]
Finite-Lived Intangible Assets [Line Items]
Goodwill and Intangible assets, Gross Carrying Amount	1,772	1,772
Goodwill and Intangible assets, Accumulated Amortization	(485)	(454)
Goodwill and Intangible assets, Net Carrying Amount	1,287	1,318
Customer List [Member]
Finite-Lived Intangible Assets [Line Items]
Goodwill and Intangible assets, Gross Carrying Amount	1,324	1,323
Goodwill and Intangible assets, Accumulated Amortization	(274)	(245)
Goodwill and Intangible assets, Net Carrying Amount	1,050	1,078
Patents [Member]
Finite-Lived Intangible Assets [Line Items]
Goodwill and Intangible assets, Gross Carrying Amount	542	542
Goodwill and Intangible assets, Accumulated Amortization	(521)	(520)
Goodwill and Intangible assets, Net Carrying Amount	21	22
Other Intangible Assets [Member]
Finite-Lived Intangible Assets [Line Items]
Goodwill and Intangible assets, Gross Carrying Amount	372	372
Goodwill and Intangible assets, Accumulated Amortization	(294)	(285)
Goodwill and Intangible assets, Net Carrying Amount	$ 78	$ 87

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Goodwill and Intangible Assets (Details Textual) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Finite-Lived Intangible Assets [Line Items]
Amortization Of Intangible Assets	$ 70	$ 77
Goodwill	$ 10,292		$ 10,292

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Debt (Details) $ in Thousands	Mar. 31, 2016 USD ($)
Principal Balance
2016	$ 1,013
2017	1,376
2018	1,409
2019	1,444
2020	1,480
Thereafter	2,294
Long-term Debt	$ 9,016

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Debt (Details Textual) $ in Millions	1 Months Ended
	Jun. 26, 2015 USD ($)
Line of Credit Facility [Line Items]
Line of Credit Facility, Interest Rate Description	LIBOR plus 2.25%.
Nevada State Bank [Member]
Line of Credit Facility [Line Items]
Long-term Line of Credit	$ 15.0
Long-term Debt [Member]
Line of Credit Facility [Line Items]
Long-term Line of Credit	$ 10.0
Line of Credit Facility, Expiration Date	Jun. 26, 2022
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Long-term Line of Credit	$ 5.0
Line of Credit Facility, Expiration Date	Jun. 26, 2020

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Commitments and Contingencies (Details) $ in Thousands	Mar. 31, 2016 USD ($)
Operating Leases, Future Minimum Payments
2016	$ 740
2017	842
2018	688
2019	270
2020	274
Thereafter	428
Total	$ 3,242

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Commitments and Contingencies (Details Textual)	3 Months Ended
	Mar. 31, 2016 USD ($)
Commitments and Contingencies [Line Items]
Operating Leases, Rent Expense, Minimum Rentals	$ 16,000

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Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Accumulated Other Comprehensive Income [Line Items]
Foreign Currency Translation, Beginning Balance	$ (1,876)
Foreign Currency Translation, Other comprehensive income	545	$ (1,621)
Foreign Currency Translation, Ending Balance	(1,331)
Unrealized Gains on Securities, Beginning Balance	0
Unrealized Gains on Securities, Other comprehensive income	0
Unrealized Gains on Securities, Ending Balance	0
Accumulated other comprehensive income, Beginning Balance	(1,876)
Accumulated other comprehensive income, Other comprehensive income	545
Accumulated other comprehensive income, Ending Balance	$ (1,331)

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Geographic and Product Line Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Segment Reporting Information [Line Items]
Revenues	$ 16,093	$ 18,656
Revenues, Percentage	100.00%	100.00%
The Americas [Member]
Segment Reporting Information [Line Items]
Revenues	$ 12,294	$ 12,304
Revenues, Percentage	76.40%	65.90%
Asia-Pacific [Member]
Segment Reporting Information [Line Items]
Revenues	$ 2,761	$ 5,969
Revenues, Percentage	17.20%	32.00%
Europe and Africa [Member]
Segment Reporting Information [Line Items]
Revenues	$ 1,038	$ 383
Revenues, Percentage	6.40%	2.10%

XML

Geographic and Product Line Information (Details 1) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Segment Reporting Information [Line Items]
Revenues	$ 16,093	$ 18,656
Revenues, Percentage	100.00%	100.00%
Casino currency without RFID [Member]
Segment Reporting Information [Line Items]
Revenues	$ 2,808	$ 3,079
Revenues, Percentage	17.40%	16.50%
Casino currency with RFID [Member]
Segment Reporting Information [Line Items]
Revenues	$ 2,139	$ 3,619
Revenues, Percentage	13.30%	19.40%
Total casino currency [Member]
Segment Reporting Information [Line Items]
Revenues	$ 4,947	$ 6,698
Revenues, Percentage	30.70%	35.90%
Playing Cards [Member]
Segment Reporting Information [Line Items]
Revenues	$ 6,565	$ 5,773
Revenues, Percentage	40.80%	30.90%
Table Layouts [Member]
Segment Reporting Information [Line Items]
Revenues	$ 1,365	$ 1,694
Revenues, Percentage	8.50%	9.10%
Table Accessories and Other Products [Member]
Segment Reporting Information [Line Items]
Revenues	$ 1,367	$ 1,642
Revenues, Percentage	8.50%	8.80%
Dice [Member]
Segment Reporting Information [Line Items]
Revenues	$ 638	$ 601
Revenues, Percentage	4.00%	3.20%
Gaming Furniture [Member]
Segment Reporting Information [Line Items]
Revenues	$ 408	$ 588
Revenues, Percentage	2.50%	3.20%
RFID Solutions [Member]
Segment Reporting Information [Line Items]
Revenues	$ 75	$ 860
Revenues, Percentage	0.50%	4.60%
Shipping [Member]
Segment Reporting Information [Line Items]
Revenues	$ 728	$ 800
Revenues, Percentage	4.50%	4.30%

XML

Geographic and Product Line Information (Details 2) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Segment Reporting Information [Line Items]
Property and equipment, net	$ 14,431	$ 14,102
United States [Member]
Segment Reporting Information [Line Items]
Property and equipment, net	7,169	7,000
France [Member]
Segment Reporting Information [Line Items]
Property and equipment, net	3,628	3,544
Mexico [Member]
Segment Reporting Information [Line Items]
Property and equipment, net	3,283	3,249
Asia [Member]
Segment Reporting Information [Line Items]
Property and equipment, net	$ 351	$ 309

XML

Geographic and Product Line Information (Details 3) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Segment Reporting Information [Line Items]
Intangible assets, net	$ 2,436	$ 2,505
United States [Member]
Segment Reporting Information [Line Items]
Intangible assets, net	1,948	2,006
France [Member]
Segment Reporting Information [Line Items]
Intangible assets, net	0	2
Asia [Member]
Segment Reporting Information [Line Items]
Intangible assets, net	$ 488	$ 497

XML

Geographic and Product Line Information (Details Textual)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Segment Reporting Information [Line Items]
Revenues, Percentage	100.00%	100.00%
One Casino Customer [Member]
Segment Reporting Information [Line Items]
Revenues, Percentage	13.00%	11.00%

XML

Earnings per Share (EPS) (Details) - shares shares in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Basic and Diluted Earnings Per Share [Line Items]
Weighted-average number of common shares outstanding - basic	7,929	7,916
Potential dilution from equity grants	0	109
Weighted-average number of common shares outstanding - diluted	7,929	8,025

XML

Subsequent Events (Details Textual) $ in Millions	1 Months Ended
	Apr. 22, 2016 USD ($)
Subsequent Event [Member] | Dolphin Products Limited [] [Member]
Subsequent Event [Line Items]
Payments to Acquire Productive Assets, Total	$ 5.9