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(Mark One) | | |
x | | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| | |
NEVADA | | 88-0310433 |
(State or other jurisdiction | | (I.R.S. Employer Identification No.) |
of incorporation or organization) | | |
| | |
1700 Industrial Road, | | 89102 |
Las Vegas, Nevada | | (Zip Code) |
(Address of principal executive offices) | | |
Large accelerated filer ¨ | | Accelerated filer ¨ |
| | |
Non-accelerated filer ¨ | | Smaller reporting company x |
(Do not check if a smaller reporting company) | | |
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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 | 14 |
| | |
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 22 |
| | |
ITEM 4. | CONTROLS AND PROCEDURES | 22 |
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PART II. | OTHER INFORMATION | 23 |
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ITEM 1. | LEGAL PROCEEDINGS | 23 |
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ITEM 1A. | RISK FACTORS | 23 |
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ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | 23 |
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ITEM 3. | DEFAULTS UPON SENIOR SECURITIES | 23 |
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ITEM 4. | MINE SAFETY DISCLOSURES | 23 |
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ITEM 5. | OTHER INFORMATION | 23 |
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ITEM 6. | EXHIBITS | 24 |
| | |
SIGNATURES | 25 |
| | September 30, | | December 31, | | ||
| | 2013 | | 2012 | | ||
ASSETS | | | | | | | |
Current Assets: | | | | | | | |
Cash and cash equivalents | | $ | 12,877 | | $ | 14,038 | |
Marketable securities | | | 6,430 | | | 13,546 | |
Accounts receivable, net | | | 6,758 | | | 5,802 | |
Inventories | | | 7,763 | | | 7,337 | |
Prepaid expenses | | | 1,027 | | | 893 | |
Deferred income tax asset | | | 1,407 | | | 2,908 | |
Other current assets | | | 2,280 | | | 1,311 | |
Total current assets | | | 38,542 | | | 45,835 | |
Property and equipment, net | | | 11,283 | | | 11,190 | |
Intangibles, net | | | 1,015 | | | 540 | |
Deferred income tax asset | | | 3,590 | | | 3,857 | |
Inventories, non-current | | | 136 | | | 207 | |
Other assets | | | 1,579 | | | 1,653 | |
Total assets | | $ | 56,145 | | $ | 63,282 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | |
Current Liabilities: | | | | | | | |
Accounts payable | | $ | 2,488 | | $ | 2,842 | |
Accrued liabilities | | | 2,997 | | | 5,179 | |
Customer deposits and deferred revenue | | | 1,668 | | | 3,037 | |
Deferred income tax liability | | | - | | | 2,858 | |
Income taxes payable | | | 244 | | | 571 | |
Total current liabilities | | | 7,397 | | | 14,487 | |
Deferred income tax liability | | | 2,246 | | | 2,174 | |
Total liabilities | | | 9,643 | | | 16,661 | |
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, 8,207,077 and 7,916,094 issued and outstanding, respectively, as of September 30, 2013, and 8,207,077 and 8,045,904 issued and outstanding, respectively, as of December 31, 2012 | | | 82 | | | 82 | |
Additional paid-in capital | | | 19,731 | | | 19,563 | |
Treasury stock at cost: 290,983 and 161,173 shares | | | (2,263) | | | (1,250) | |
Retained earnings | | | 27,601 | | | 27,039 | |
Accumulated other comprehensive income | | | 1,351 | | | 1,187 | |
Total stockholders' equity | | | 46,502 | | | 46,621 | |
Total liabilities and stockholders' equity | | $ | 56,145 | | $ | 63,282 | |
1 | ||
| | Three Months Ended | | Nine Months Ended | | ||||||||
| | September 30, | | September 30, | | ||||||||
| | 2013 | | 2012 | | 2013 | | 2012 | | ||||
Revenues | | $ | 13,519 | | $ | 16,939 | | $ | 42,433 | | $ | 45,394 | |
Cost of revenues | | | 9,095 | | | 11,454 | | | 29,343 | | | 29,745 | |
Gross profit | | | 4,424 | | | 5,485 | | | 13,090 | | | 15,649 | |
| | | | | | | | | | | | | |
Marketing and sales | | | 1,683 | | | 1,413 | | | 4,692 | | | 4,239 | |
General and administrative | | | 2,249 | | | 2,140 | | | 6,730 | | | 5,338 | |
Research and development | | | 467 | | | 405 | | | 1,495 | | | 1,237 | |
Operating income | | | 25 | | | 1,527 | | | 173 | | | 4,835 | |
Other income and (expense), net | | | (8) | | | 185 | | | 30 | | | 313 | |
Income before income taxes | | | 17 | | | 1,712 | | | 203 | | | 5,148 | |
Income tax provision (benefit) | | | (66) | | | 455 | | | (359) | | | 809 | |
Net income | | $ | 83 | | $ | 1,257 | | $ | 562 | | $ | 4,339 | |
| | | | | | | | | | | | | |
Earnings per share: | | | | | | | | | | | | | |
Basic | | $ | 0.01 | | $ | 0.16 | | $ | 0.07 | | $ | 0.53 | |
Diluted | | $ | 0.01 | | $ | 0.15 | | $ | 0.07 | | $ | 0.53 | |
Weighted-average shares of common stock outstanding: | | | | | | | | | | | | | |
Basic | | | 7,917 | | | 8,105 | | | 7,950 | | | 8,132 | |
Diluted | | | 8,001 | | | 8,113 | | | 8,033 | | | 8,152 | |
2 | ||
| | Three Months Ended | | Nine Months Ended | | ||||||||
| | September 30, | | September 30, | | ||||||||
| | 2013 | | 2012 | | 2013 | | 2012 | | ||||
Net income | | $ | 83 | | $ | 1,257 | | $ | 562 | | $ | 4,339 | |
Other comprehensive income: | | | | | | | | | | | | | |
Unrealized (loss) gain on securities, net of tax | | | - | | | - | | | (1) | | | 2 | |
Amortization of pension transition asset, net of tax | | | - | | | (3) | | | 4 | | | (9) | |
Foreign currency translation adjustment | | | 606 | | | 342 | | | 161 | | | (229) | |
Other comprehensive income (loss), net of tax | | | 606 | | | 339 | | | 164 | | | (236) | |
Total comprehensive income | | $ | 689 | | $ | 1,596 | | $ | 726 | | $ | 4,103 | |
3 | ||
| | | | | | | | | | | | | | | | | Accumulated | | | | | |
| | | | | | | | Additional | | | | | | | | Other | | | | | ||
| | Common Stock | | Paid-In | | Treasury | | Retained | | Comprehensive | | | | | ||||||||
| | Shares | | Amount | | Capital | | Stock | | Earnings | | Income | | Total | | |||||||
Balance, January 1, 2012 | | | 8,187,764 | | $ | 82 | | $ | 19,401 | | $ | (267) | | $ | 22,442 | | $ | 826 | | $ | 42,484 | |
Net income | | | - | | | - | | | - | | | - | | | 4,339 | | | - | | | 4,339 | |
Repurchases of common stock | | | (87,260) | | | - | | | - | | | (590) | | | - | | | - | | | (590) | |
Unrealized gain on securities, net of tax | | | - | | | - | | | - | | | - | | | - | | | 2 | | | 2 | |
Stock compensation expense | | | - | | | - | | | 149 | | | - | | | - | | | - | | | 149 | |
Amortization of pension transition asset, net of tax | | | - | | | - | | | - | | | - | | | - | | | (9) | | | (9) | |
Foreign currency translation adjustment | | | - | | | - | | | - | | | - | | | - | | | (229) | | | (229) | |
Balance, September 30, 2012 | | | 8,100,504 | | $ | 82 | | $ | 19,550 | | $ | (857) | | $ | 26,781 | | $ | 590 | | $ | 46,146 | |
Balance, January 1, 2013 | | | 8,045,904 | | $ | 82 | | $ | 19,563 | | $ | (1,250) | | $ | 27,039 | | $ | 1,187 | | $ | 46,621 | |
Net income | | | - | | | - | | | - | | | - | | | 562 | | | - | | | 562 | |
Repurchases of common stock | | | (129,810) | | | - | | | - | | | (1,013) | | | - | | | - | | | (1,013) | |
Unrealized (loss) on securities, net of tax | | | - | | | - | | | - | | | - | | | - | | | (1) | | | (1) | |
Stock compensation expense | | | - | | | - | | | 168 | | | - | | | - | | | - | | | 168 | |
Amortization of pension transition asset, net of tax | | | - | | | - | | | - | | | - | | | - | | | 4 | | | 4 | |
Foreign currency translation adjustment | | | - | | | - | | | - | | | - | | | - | | | 161 | | | 161 | |
Balance, September 30, 2013 | | | 7,916,094 | | $ | 82 | | $ | 19,731 | | $ | (2,263) | | $ | 27,601 | | $ | 1,351 | | $ | 46,502 | |
4 | ||
| | Nine Months Ended | | ||||
| | September 30, | | ||||
| | 2013 | | 2012 | | ||
Cash Flows from Operating Activities | | | | | | | |
Net income | | $ | 562 | | $ | 4,339 | |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | | | | | | | |
Depreciation | | | 1,704 | | | 1,613 | |
Amortization of intangible assets | | | 105 | | | 80 | |
Amortization of bond premium | | | - | | | 10 | |
Provision for bad debt | | | (6) | | | (117) | |
Deferred income taxes | | | (1,005) | | | 127 | |
Stock compensation expense | | | 168 | | | 149 | |
Loss on sale of property and equipment | | | - | | | 2 | |
(Gain) on sale of marketable securities | | | (13) | | | (9) | |
Change in operating assets and liabilities: | | | | | | | |
Accounts receivable | | | (943) | | | (1,056) | |
Inventories | | | (227) | | | 796 | |
Prepaid expenses and other current assets | | | (1,056) | | | (475) | |
Non-current other assets | | | 75 | | | (1,352) | |
Accounts payable | | | (373) | | | (176) | |
Customer deposits and deferred revenue | | | (1,380) | | | (1,765) | |
Accrued liabilities | | | (1,886) | | | 113 | |
Income taxes payable | | | (327) | | | 337 | |
Other current liabilities | | | (320) | | | (844) | |
Net cash (used in) provided by operating activities | | | (4,922) | | | 1,772 | |
| | | | | | | |
Cash Flows from Investing Activities | | | | | | | |
Purchases of marketable securities | | | - | | | (15,452) | |
Proceeds from sale of marketable securities | | | 7,244 | | | 18,587 | |
Capital expenditures | | | (1,542) | | | (926) | |
Purchase of business assets | | | (775) | | | - | |
Proceeds from sale of property and equipment | | | - | | | 25 | |
Net cash provided by investing activities | | | 4,927 | | | 2,234 | |
| | | | | | | |
Cash Flows from Financing Activities | | | | | | | |
Repayment of debt obligations | | | - | | | (32) | |
Repurchases of common stock | | | (1,013) | | | (590) | |
Net cash (used in) financing activities | | | (1,013) | | | (622) | |
Effect of exchange rate changes on cash | | | (153) | | | (136) | |
Net (decrease) increase in cash and cash equivalents | | | (1,161) | | | 3,248 | |
Cash and cash equivalents, beginning of period | | | 14,038 | | | 9,282 | |
Cash and cash equivalents, end of period | | $ | 12,877 | | $ | 12,530 | |
| | | | | | | |
Supplemental disclosures of cash flow information: | | | | | | | |
Cash paid for interest | | $ | - | | $ | 3 | |
Cash paid for income taxes, net of refunds | | $ | 1,684 | | $ | 1,086 | |
| | | | | | | |
Supplemental disclosure of non-cash investing and financing activities | | | | | | | |
Property and equipment acquired through accounts payable | | $ | - | | $ | 31 | |
5 | ||
• | 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 at our facility in San Luis Rio Colorado, Mexico and the remainder either manufactured in France or purchased from United States vendors. We also warehouse inventory in San Luis, Arizona and at our Las Vegas, Nevada headquarters, and have sales offices in Las Vegas; Atlantic City, New Jersey; and Gulfport, Mississippi. | |
• | GPI SAS sells primarily in Europe and Africa out of its office in Beaune, France. GPI SAS predominantly sells casino currency, which includes radio frequency identification device (RFID) and non-RFID versions of both American-style chips and European-style plaques and jetons. Most of the products sold by GPI SAS are manufactured in France, with the remainder manufactured in Mexico. | |
• | GPI Asia, with offices in Macau S.A.R., China, is the exclusive distributor for GPI USA and GPI SAS products in the Asia-Pacific region. GPI Asia primarily sells casino currency, as well as RFID product solutions. |
6 | ||
| | September 30, 2013 | | December 31, 2012 | | ||||||||||||||
| | Cash and Cash Equivalents | | Marketable Securities | | Total | | Cash and Cash Equivalents | | Marketable Securities | | Total | | ||||||
United States | | $ | 10,072 | | $ | - | | $ | 10,072 | | $ | 8,120 | | $ | - | | $ | 8,120 | |
France | | | 594 | | | 6,430 | | | 7,024 | | | 1,084 | | | 13,546 | | | 14,630 | |
Macau S.A.R., China | | | 2,211 | | | - | | | 2,211 | | | 4,834 | | | - | | | 4,834 | |
Total | | $ | 12,877 | | $ | 6,430 | | $ | 19,307 | | $ | 14,038 | | $ | 13,546 | | $ | 27,584 | |
| | September 30, 2013 | | December 31, 2012 | | ||||||||||||||
| | Cost | | Unrealized Gain/(Loss) | | Fair Value | | Cost | | Unrealized Gain/(Loss) | | Fair Value | | ||||||
Certificates of deposit | | $ | 4,597 | | $ | - | | $ | 4,597 | | $ | 7,137 | | $ | - | | $ | 7,137 | |
Bond mutual funds | | | 1,833 | | | - | | | 1,833 | | | 6,409 | | | - | | | 6,409 | |
Total marketable securities | | $ | 6,430 | | $ | - | | $ | 6,430 | | $ | 13,546 | | $ | - | | $ | 13,546 | |
7 | ||
| | | Balance at Beginning of Year | | | Provision | | | Write-offs, Net of Recoveries | | | Exchange Rate Effect | | | Balance at End of Period | |
September 30, 2013 | | $ | 152 | | $ | (6) | | $ | - | | $ | - | | $ | 146 | |
December 31, 2012 | | $ | 366 | | $ | (214) | | $ | - | | $ | - | | $ | 152 | |
| | September 30, 2013 | | December 31, 2012 | | ||
Raw materials | | $ | 5,349 | | $ | 4,147 | |
Work in progress | | | 738 | | | 1,875 | |
Finished goods | | | 1,812 | | | 1,522 | |
Total inventories | | $ | 7,899 | | $ | 7,544 | |
| | September 30, 2013 | | December 31, 2012 | | ||
Current | | $ | 7,763 | | $ | 7,337 | |
Non-current | | | 136 | | | 207 | |
Total inventories | | $ | 7,899 | | $ | 7,544 | |
| | September 30, 2013 | | December 31, 2012 | | ||
Land | | $ | 1,786 | | $ | 1,779 | |
Buildings and improvements | | | 8,909 | | | 8,662 | |
Equipment and furniture | | | 21,965 | | | 20,189 | |
Vehicles | | | 447 | | | 432 | |
| | | 33,107 | | | 31,062 | |
Less accumulated depreciation | | | (21,824) | | | (19,872) | |
Property and equipment, net | | $ | 11,283 | | $ | 11,190 | |
8 | ||
| | September 30, 2013 | | December 31, 2012 | | | | ||||||||||||||
| | Gross Carrying Amount | | Accum. Amort. | | Net Carrying Amount | | Gross Carrying Amount | | Accum. Amort. | | Net Carrying Amount | | Estimated Useful Life (Years) | | ||||||
Patents | | $ | 517 | | $ | (478) | | $ | 39 | | $ | 690 | | $ | (633) | | $ | 57 | | 13-14 | |
Trademarks | | | 631 | | | (228) | | | 403 | | | 620 | | | (191) | | | 429 | | 5-15 | |
Customer list | | | 513 | | | (17) | | | 496 | | | - | | | - | | | - | | 5-15 | |
Licenses | | | 225 | | | (225) | | | - | | | 225 | | | (200) | | | 25 | | 1-3 | |
Trade secret formulas | | | 56 | | | (2) | | | 54 | | | - | | | - | | | - | | 5-15 | |
Other intangible assets | | | 46 | | | (23) | | | 23 | | | 44 | | | (15) | | | 29 | | 5 | |
Total intangible assets | | $ | 1,988 | | $ | (973) | | $ | 1,015 | | $ | 1,579 | | $ | (1,039) | | $ | 540 | | | |
9 | ||
| | Foreign Currency Translation | | Unrealized Gains on Securities | | Unrecognized Pension Transition Asset | | Total | | ||||
Balance at June 30, 2013 | | $ | 745 | | $ | - | | $ | - | | $ | 745 | |
Other comprehensive income | | | 606 | | | - | | | - | | | 606 | |
Balance at September 30, 2013 | | $ | 1,351 | | $ | - | | $ | - | | $ | 1,351 | |
| | Foreign Currency Translation | | Unrealized Gains on Securities | | Unrecognized Pension Transition Asset | | Total | | ||||
Balance at January 1, 2013 | | $ | 1,190 | | $ | 1 | | $ | (4) | | $ | 1,187 | |
Other comprehensive income | | | 161 | | | (1) | | | 4 | | | 164 | |
Balance at September 30, 2013 | | $ | 1,351 | | $ | - | | $ | - | | $ | 1,351 | |
| | Three Months Ended | | |||||||||
| | September 30, | | |||||||||
| | 2013 | | 2012 | | |||||||
Revenues: | | | | | | | | | | | | |
The Americas | | $ | 8,173 | | 60.4 | % | | $ | 7,952 | | 46.9 | % |
Asia Pacific | | | 4,414 | | 32.7 | % | | | 8,282 | | 48.9 | % |
Europe and Africa | | | 932 | | 6.9 | % | | | 705 | | 4.2 | % |
Total | | $ | 13,519 | | 100.0 | % | | $ | 16,939 | | 100.0 | % |
| | Nine Months Ended | | |||||||||
| | September 30, | | |||||||||
| | 2013 | | | 2012 | | ||||||
Revenues: | | | | | | | | | | | | |
The Americas | | $ | 23,922 | | 56.4 | % | | $ | 24,068 | | 53.0 | % |
Asia Pacific | | | 16,119 | | 38.0 | % | | | 17,613 | | 38.8 | % |
Europe and Africa | | | 2,392 | | 5.6 | % | | | 3,713 | | 8.2 | % |
Total | | $ | 42,433 | | 100.0 | % | | $ | 45,394 | | 100.0 | % |
10 | ||
| | September 30, 2013 | | December 31, 2012 | | ||
Property and equipment, net: | | | | | | | |
France | | $ | 4,583 | | $ | 4,874 | |
Mexico | | | 3,384 | | | 2,935 | |
United States | | | 3,156 | | | 3,327 | |
Asia | | | 160 | | | 54 | |
Total | | $ | 11,283 | | $ | 11,190 | |
| | September 30, 2013 | | December 31, 2012 | | ||
Intangible assets, net: | | | | | | | |
United States | | $ | 992 | | $ | 511 | |
France | | | 23 | | | 29 | |
Total | | $ | 1,015 | | $ | 540 | |
| | Three Months Ended | | |||||||||
| | September 30, | | |||||||||
| | 2013 | | | 2012 | | ||||||
Casino currency without RFID (1) | | $ | 4,402 | | 32.6 | % | | $ | 7,767 | | 45.8 | % |
Casino currency with RFID (1) | | | 2,590 | | 19.2 | % | | | 3,416 | | 20.2 | % |
Total casino currency | | | 6,992 | | 51.8 | % | | | 11,183 | | 66.0 | % |
| | | | | | | | | | | | |
Playing cards | | | 1,803 | | 13.3 | % | | | 1,335 | | 7.9 | % |
Table accessories and other products | | | 1,129 | | 8.3 | % | | | 1,086 | | 6.4 | % |
Table layouts | | | 991 | | 7.3 | % | | | 1,037 | | 6.1 | % |
Gaming furniture | | | 871 | | 6.4 | % | | | 1,028 | | 6.1 | % |
RFID solutions | | | 674 | | 5.0 | % | | | 106 | | 0.6 | % |
Dice | | | 576 | | 4.3 | % | | | 596 | | 3.5 | % |
Shipping | | | 483 | | 3.6 | % | | | 568 | | 3.4 | % |
Total | | $ | 13,519 | | 100.0 | % | | $ | 16,939 | | 100.0 | % |
11 | ||
| | Nine Months Ended | | |||||||||
| | September 30, | | |||||||||
| | 2013 | | | 2012 | | ||||||
Casino currency without RFID (1) | | $ | 13,798 | | 32.5 | % | | $ | 20,890 | | 46.1 | % |
Casino currency with RFID (1) | | | 10,939 | | 25.8 | % | | | 7,769 | | 17.1 | % |
Total casino currency | | | 24,737 | | 58.3 | % | | | 28,659 | | 63.2 | % |
| | | | | | | | | | | | |
Playing cards | | | 4,827 | | 11.4 | % | | | 4,113 | | 9.0 | % |
Table accessories and other products | | | 2,845 | | 6.7 | % | | | 2,854 | | 6.3 | % |
Table layouts | | | 3,200 | | 7.5 | % | | | 3,358 | | 7.4 | % |
Gaming furniture | | | 2,082 | | 4.9 | % | | | 2,531 | | 5.6 | % |
RFID solutions | | | 1,578 | | 3.7 | % | | | 671 | | 1.5 | % |
Dice | | | 1,812 | | 4.3 | % | | | 1,733 | | 3.8 | % |
Shipping | | | 1,352 | | 3.2 | % | | | 1,475 | | 3.2 | % |
Total | | $ | 42,433 | | 100.0 | % | | $ | 45,394 | | 100.0 | % |
(1) | Casino currency includes our American-style gaming chips and our European-style plaques and jetons, as well as our new currency products. |
12 | ||
| | Three Months Ended | | Nine Months Ended | | ||||
| | September 30, | | September 30, | | ||||
| | 2013 | | 2012 | | 2013 | | 2012 | |
Weighted-average number of common shares outstanding - basic | | 7,917 | | 8,105 | | 7,950 | | 8,132 | |
Potential dilution from equity grants | | 84 | | 8 | | 83 | | 20 | |
Weighted-average number of common shares outstanding - diluted | | 8,001 | | 8,113 | | 8,033 | | 8,152 | |
13 | ||
| ⋅ | 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 at our facility in San Luis Rio Colorado, Mexico and the remainder either manufactured in France or purchased from United States vendors. We also warehouse inventory in San Luis, Arizona and at our Las Vegas, Nevada headquarters. |
| ⋅ | GPI SAS sells primarily in Europe and Africa out of its office in Beaune, France. GPI SAS predominantly sells casino currency, which includes RFID and non-RFID versions of both American-style chips and European-style plaques and jetons. Most of the products sold by GPI SAS are manufactured in France, with the remainder manufactured in Mexico. |
| ⋅ | GPI Asia, with offices in Macau S.A.R., China, is the exclusive distributor for GPI USA and GPI SAS products in the Asia-Pacific region. GPI Asia primarily sells casino currency, as well as RFID product solutions. |
| | GPI USA | | GPI SAS | | GPI Asia | | Total | | ||||
September 30, 2013 | | $ | 3.1 | | $ | 1.2 | | $ | 2.3 | | $ | 6.6 | |
September 30, 2012 | | $ | 4.6 | | $ | 0.4 | | $ | 3.1 | | $ | 8.1 | |
14 | ||
15 | ||
| | Three Months Ended | | | | | | | | | | |||||||||||
| | September 30, | | | Period-to-Period | | | |||||||||||||||
| | 2013 | | | 2012 | | | Change | | | ||||||||||||
Revenues | | $ | 13,519 | | | 100.0 | % | | $ | 16,939 | | | 100.0 | % | | $ | (3,420) | | | (20.2) | % | |
Cost of revenues | | | 9,095 | | | 67.3 | % | | | 11,454 | | | 67.6 | % | | | (2,359) | | | (20.6) | % | |
Gross profit | | | 4,424 | | | 32.7 | % | | | 5,485 | | | 32.4 | % | | | (1,061) | | | (19.3) | % | |
Selling, administrative, and research and development | | | 4,399 | | | 32.5 | % | | | 3,958 | | | 23.4 | % | | | 441 | | | 11.1 | % | |
Operating income | | | 25 | | | 0.2 | % | | | 1,527 | | | 9.0 | % | | | (1,502) | | | (98.4) | % | |
Other income and (expense) | | | (8) | | | (0.1) | % | | | 185 | | | 1.1 | % | | | (193) | | | - | | |
Income before income taxes | | | 17 | | | 0.1 | % | | | 1,712 | | | 10.1 | % | | | (1,695) | | | (99.0) | % | |
Income tax provision (benefit) | | | (66) | | | (0.5) | % | | | 455 | | | 2.7 | % | | | (521) | | | - | | |
Net income | | $ | 83 | | | 0.6 | % | | $ | 1,257 | | | 7.4 | % | | $ | (1,174) | | | (93.4) | % | |
| | Nine Months Ended | | | | | | | | | | |||||||||||
| | September 30, | | | Period-to-Period | | | |||||||||||||||
| | 2013 | | | 2012 | | | Change | | | ||||||||||||
Revenues | | $ | 42,433 | | | 100.0 | % | | $ | 45,394 | | | 100.0 | % | | $ | (2,961) | | | (6.5) | % | |
Cost of revenues | | | 29,343 | | | 69.2 | % | | | 29,745 | | | 65.5 | % | | | (402) | | | (1.4) | % | |
Gross profit | | | 13,090 | | | 30.8 | % | | | 15,649 | | | 34.5 | % | | | (2,559) | | | (16.4) | % | |
Selling, administrative, and research and development | | | 12,917 | | | 30.4 | % | | | 10,814 | | | 23.8 | % | | | 2,103 | | | 19.4 | % | |
Operating income | | | 173 | | | 0.4 | % | | | 4,835 | | | 10.7 | % | | | (4,662) | | | (96.4) | % | |
Other income | | | 30 | | | 0.1 | % | | | 313 | | | 0.7 | % | | | (283) | | | (90.4) | % | |
Income before income taxes | | | 203 | | | 0.5 | % | | | 5,148 | | | 11.4 | % | | | (4,945) | | | (96.1) | % | |
Income tax (benefit) provision | | | (359) | | | (0.8) | % | | | 809 | | | 1.8 | % | | | (1,168) | | | - | | |
Net income | | $ | 562 | | | 1.3 | % | | $ | 4,339 | | | 9.6 | % | | $ | (3,777) | | | (87.0) | % | |
| | Three Months Ended | | | | | | | | | |||||||||||
| | September 30, | | | Period-to-Period | | |||||||||||||||
| | 2013 | | | 2012 | | | Change | | ||||||||||||
Revenues: | | | | | | | | | | | | | | | | | | | | | |
The Americas | | $ | 8,173 | | | 60.4 | % | | $ | 7,952 | | | 46.9 | % | | $ | 221 | | | 2.8 | % |
Asia Pacific | | | 4,414 | | | 32.7 | % | | | 8,282 | | | 48.9 | % | | | (3,868) | | | (46.7) | % |
Europe and Africa | | | 932 | | | 6.9 | % | | | 705 | | | 4.2 | % | | | 227 | | | 32.2 | % |
Total | | $ | 13,519 | | | 100.0 | % | | $ | 16,939 | | | 100.0 | % | | $ | (3,420) | | | (20.2) | % |
16 | ||
| | Nine Months Ended | | | | | | | | | |||||||||||
| | September 30, | | | Period-to-Period | | |||||||||||||||
| | 2013 | | | 2012 | | | Change | | ||||||||||||
Revenues: | | | | | | | | | | | | | | | | | | | | | |
The Americas | | $ | 23,922 | | | 56.4 | % | | $ | 24,068 | | | 53.0 | % | | $ | (146) | | | (0.6) | % |
Asia Pacific | | | 16,119 | | | 38.0 | % | | | 17,613 | | | 38.8 | % | | | (1,494) | | | (8.5) | % |
Europe and Africa | | | 2,392 | | | 5.6 | % | | | 3,713 | | | 8.2 | % | | | (1,321) | | | (35.6) | % |
Total | | $ | 42,433 | | | 100.0 | % | | $ | 45,394 | | | 100.0 | % | | $ | (2,961) | | | (6.5) | % |
| | Three Months Ended | | | | | | | | | |||||||||||
| | September 30, | | | Period-to-Period | | |||||||||||||||
| | 2013 | | | 2012 | | | Change | | ||||||||||||
| | | | | | | | | | | | | | | | | | | | | |
Casino currency without RFID (1) | | $ | 4,402 | | | 32.6 | % | | $ | 7,767 | | | 45.8 | % | | $ | (3,365) | | | (43.3) | % |
Casino currency with RFID (1) | | | 2,590 | | | 19.2 | % | | | 3,416 | | | 20.2 | % | | | (826) | | | (24.2) | % |
| | | | | | | | | | | | | | | | | | | | | |
Total casino currency | | | 6,992 | | | 51.8 | % | | | 11,183 | | | 66.0 | % | | | (4,191) | | | (37.5) | % |
| | | | | | | | | | | | | | | | | | | | | |
Playing cards | | | 1,803 | | | 13.3 | % | | | 1,335 | | | 7.9 | % | | | 468 | | | 35.1 | % |
Table accessories and other products | | | 1,129 | | | 8.3 | % | | | 1,086 | | | 6.4 | % | | | 43 | | | 4.0 | % |
Table layouts | | | 991 | | | 7.3 | % | | | 1,037 | | | 6.1 | % | | | (46) | | | (4.4) | % |
Gaming furniture | | | 871 | | | 6.4 | % | | | 1,028 | | | 6.1 | % | | | (157) | | | (15.3) | % |
RFID solutions | | | 674 | | | 5.0 | % | | | 106 | | | 0.6 | % | | | 568 | | | 535.8 | % |
Dice | | | 576 | | | 4.3 | % | | | 596 | | | 3.5 | % | | | (20) | | | (3.4) | % |
Shipping | | | 483 | | | 3.6 | % | | | 568 | | | 3.4 | % | | | (85) | | | (15.0) | % |
Total | | $ | 13,519 | | | 100.0 | % | | $ | 16,939 | | | 100.0 | % | | $ | (3,420) | | | (20.2) | % |
| (1) | Casino currency includes our American-style gaming chips and our European-style plaques and jetons, as well as our new currency products. |
| | Nine Months Ended | | | | | | | | | |||||||||||
| | September 30, | | | Period-to-Period | ||||||||||||||||
| | 2013 | | | 2012 | | | Change | | ||||||||||||
Casino currency without RFID (1) | | $ | 13,798 | | | 32.5 | % | | $ | 20,890 | | | 46.1 | % | | $ | (7,092) | | | (33.9) | % |
Casino currency with RFID (1) | | | 10,939 | | | 25.8 | % | | | 7,769 | | | 17.1 | % | | | 3,170 | | | 40.8 | % |
Total casino currency | | | 24,737 | | | 58.3 | % | | | 28,659 | | | 63.2 | % | | | (3,922) | | | (13.7) | % |
| | | | | | | | | | | | | | | | | | | | | |
Playing cards | | | 4,827 | | | 11.4 | % | | | 4,113 | | | 9.0 | % | | | 714 | | | 17.4 | % |
Table accessories and other products | | | 2,845 | | | 6.7 | % | | | 2,854 | | | 6.3 | % | | | (9) | | | (0.3) | % |
Table layouts | | | 3,200 | | | 7.5 | % | | | 3,358 | | | 7.4 | % | | | (158) | | | (4.7) | % |
Gaming furniture | | | 2,082 | | | 4.9 | % | | | 2,531 | | | 5.6 | % | | | (449) | | | (17.7) | % |
RFID solutions | | | 1,578 | | | 3.7 | % | | | 671 | | | 1.5 | % | | | 907 | | | 135.2 | % |
Dice | | | 1,812 | | | 4.3 | % | | | 1,733 | | | 3.8 | % | | | 79 | | | 4.6 | % |
Shipping | | | 1,352 | | | 3.2 | % | | | 1,475 | | | 3.2 | % | | | (123) | | | (8.3) | % |
Total | | $ | 42,433 | | | 100.0 | % | | $ | 45,394 | | | 100.0 | % | | $ | (2,961) | | | (6.5) | % |
| (1) | Casino currency includes our American-style gaming chips and our European-style plaques and jetons, as well as our new currency products. |
17 | ||
| · | a shift in our mix of revenues from our higher-margin currency products toward lower-margin products such as cards; and |
| · | an exceptionally large imbalance in product demand in the first quarter of 2013, which significantly affected the utilization of our production facilities, resulting in one production facility incurring significant overtime and the other to have low utilization rates. |
| | Three Months Ended | | | | | | | | | |||||||||||
| | September 30, | | | Period-to-Period | | |||||||||||||||
| | 2013 | | | 2012 | | | Change | | ||||||||||||
| | | | | | | | | | | | | | | | | | | | | |
Marketing and sales | | $ | 1,683 | | | 12.4 | % | | $ | 1,413 | | | 8.3 | % | | $ | 270 | | | 19.1 | % |
General and administrative | | | 2,249 | | | 16.7 | % | | | 2,140 | | | 12.6 | % | | | 109 | | | 5.1 | % |
Research and development | | | 467 | | | 3.5 | % | | | 405 | | | 2.4 | % | | | 62 | | | 15.3 | % |
Total selling, administrative, and research and development | | $ | 4,399 | | | 32.6 | % | | $ | 3,958 | | | 23.3 | % | | $ | 441 | | | 11.1 | % |
18 | ||
| | Nine Months Ended | | | | | | | | | |||||||||||
| | September 30, | | | Period-to-Period | | |||||||||||||||
| | 2013 | | | 2012 | | | Change | | ||||||||||||
| | | | | | | | | | | | | | | | | | | | | |
Marketing and sales | | $ | 4,692 | | | 11.1 | % | | $ | 4,239 | | | 9.3 | % | | $ | 453 | | | 10.7 | % |
General and administrative | | | 6,730 | | | 15.9 | % | | | 5,338 | | | 11.9 | % | | | 1,392 | | | 26.1 | % |
Research and development | | | 1,495 | | | 3.5 | % | | | 1,237 | | | 2.7 | % | | | 258 | | | 20.9 | % |
Total selling, administrative, and research and development | | $ | 12,917 | | | 30.5 | % | | $ | 10,814 | | | 23.9 | % | | $ | 2,103 | | | 19.4 | % |
19 | ||
| | Three Months Ended | | | | | | | | | |||||||||||
| | September 30, | | | Period-to-Period | | |||||||||||||||
| | 2013 | | | 2012 | | | Change | | ||||||||||||
Interest income | | $ | 52 | | | 0.4 | % | | $ | 100 | | | 0.6 | % | | $ | (48) | | | (48.0) | % |
Other income (expense), net | | | 5 | | | 0.0 | % | | | 5 | | | 0.0 | % | | | - | | | - | |
Interest expense | | | (4) | | | 0.0 | % | | | (3) | | | 0.0 | % | | | (1) | | | 33.3 | % |
(Loss) Gain on foreign currency transactions | | | (61) | | | (0.5) | % | | | 83 | | | 0.5 | % | | | (144) | | | - | |
Total other income and (expense) | | $ | (8) | | | (0.1) | % | | $ | 185 | | | 1.1 | % | | $ | (193) | | | - | |
| | Nine Months Ended | | | | | | | | | |||||||||||
| | September 30, | | | Period-to-Period | | |||||||||||||||
| | 2013 | | | 2012 | | | Change | | ||||||||||||
Interest income | | $ | 167 | | | 0.4 | % | | $ | 314 | | | 0.7 | % | | $ | (147) | | | (46.8) | % |
Other income (expense), net | | | 23 | | | 0.1 | % | | | 3 | | | 0.0 | % | | | 20 | | | 666.7 | % |
Interest expense | | | (8) | | | 0.0 | % | | | (4) | | | 0.0 | % | | | (4) | | | 100.0 | % |
(Loss) on foreign currency transactions | | | (152) | | | (0.4) | % | | | - | | | 0.0 | % | | | (152) | | | - | |
Total other income and (expense) | | $ | 30 | | | 0.1 | % | | $ | 313 | | | 0.7 | % | | $ | (283) | | | (90.4) | % |
20 | ||
| | September 30, | | December 31, | | Period-to-Period | | ||||||
| | 2013 | | 2012 | | Change | | ||||||
Cash and cash equivalents | | $ | 12,877 | | $ | 14,038 | | $ | (1,161) | | | (8.3) | % |
Marketable securities | | | 6,430 | | | 13,546 | | | (7,116) | | | (52.5) | % |
Working capital | | | 31,145 | | | 31,348 | | | (203) | | | (0.6) | % |
Current ratio | | | 5.2 | | | 3.2 | | | | | | | |
| | Nine Months Ended | | | | | | | | ||||
| | September 30, | | Period-to-Period | | ||||||||
| | 2013 | | 2012 | | Change | | ||||||
Operating activities | | $ | (4,922) | | $ | 1,772 | | $ | (6,694) | | | - | |
Investing activities | | | 4,927 | | | 2,234 | | | 2,693 | | | 120.5 | % |
Financing activities | | | (1,013) | | | (622) | | | (391) | | | 62.9 | % |
Effect of exchange rates | | | (153) | | | (136) | | | (17) | | | 12.5 | % |
Net change | | $ | (1,161) | | $ | 3,248 | | $ | (4,409) | | | (135.7) | % |
21 | ||
22 | ||
Periods | | Total Number of Shares Purchased | | Average Price Paid per Share | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) | | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (1) | | ||||
July 1 to 31 | | | 15,869 | | $ | 8.04 | | | 15,869 | | | 215,590 | |
August 1 to 31 | | | - | | $ | 0.00 | | | - | | | 215,590 | |
September 1 to 30 | | | - | | $ | 0.00 | | | - | | | 215,590 | |
Total | | | 15,869 | | $ | 8.04 | | | 15,869 | | | | |
| (1) | On December 1, 2011, our Board of Directors approved a stock repurchase program which authorized the repurchase of up to five percent, or 409,951 shares, of common stock. On November 30, 2012, the Board of Directors increased the number of shares available for repurchase to 498,512 shares. As of September 30, 2013, we have repurchased 282,922 shares and 215,590 shares remain authorized for repurchase. Repurchases are subject to market conditions, share price, and other factors, as well as periodic review by the Board of Directors. Repurchase have been and will be made in accordance with applicable securities laws in the open market or in privately negotiated transactions and/or pursuant to Rule 10b5-1 for trading plans. |
| | On August 5, 2013, our Board of Directors voted to terminate our 10b5-1 purchase plan effective August 12, 2013 and to cease any repurchases of our common stock under the repurchase program for a minimum of six months after that date. While the 10b5-1 purchase plan was terminated, the repurchase program remains in effect. However, there is no assurance that we will repurchase any additional shares under the repurchase program. The shares repurchased during the quarter ended September 30, 2013 were not the result of an accelerated share repurchase agreement and did not result in any derivative transactions. |
23 | ||
31.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| |
31.2 | Certification of Chief Financial and Principal Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| |
32.0 | Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002. |
| |
101.INS** | XBRL Instance |
| |
101.SCH** | XBRL Taxonomy Extension Schema |
| |
101.CAL** | XBRL Taxonomy Extension Calculation |
| |
101.DEF** | XBRL Taxonomy Extension Definition |
| |
101.LAB** | XBRL Taxonomy Extension Labels |
| |
101.PRE** | XBRL Taxonomy Extension Presentation |
24 | ||
| GAMING PARTNERS INTERNATIONAL CORPORATION | |
| | |
Date: November 8, 2013 | By: | /s/ Gregory S. Gronau |
| | Gregory S. Gronau |
| | President and Chief Executive Officer |
| | |
Date: November 8, 2013 | By: | /s/ Michael D. Mann |
| | Michael D. Mann |
| | Chief Financial Officer and Treasurer |
25 | ||