Entertainment Gaming Asia Incor (NASDAQ:EGT)

HONG KONG, May 8, 2017 /PRNewswire/ -- The Board of Directors of Entertainment Gaming Asia Inc. (Nasdaq: EGT) (the "Company") today confirmed that Melco International Development Limited (HKG: 0200) ("Melco"), through its wholly-owned subsidiary EGT Nevada Holding Inc., has commenced an unsolicited cash tender offer ("Offer") to acquire all outstanding shares of common stock, $0.001 par value, of the Company ("Company Common Stock"), other than shares of Company Common Stock owned by Melco or its affiliates, at a price of $2.35 net per share.

In accordance with its fiduciary duties, the Board of Directors of the Company (the "Board") is carefully reviewing and considering, in consultation with its advisors, all aspects of the Offer so that the Board can determine whether the Board recommends acceptance or rejection of the Offer, remains neutral with respect to the Offer, or is unable to take a position with respect to the Offer. Such determination and recommendation to the Company's stockholders, together with the reasons therefor, will be disclosed in the Company's Solicitation/Recommendation Statement on Schedule 14D-9 which will be filed by the Company with the Securities and Exchange Commission ("SEC") on or before May 19, 2017 and disseminated to the Company's stockholders.

Fourth Quarter 2016 Financial Results

• Consolidated revenue from continuing operations of $357,000 for the fourth quarter and $2.0 million for the 2016 fiscal year.
• Net loss from continuing operations was $2.4 million, or $0.17 per share, for the fourth quarter of 2016 compared to a loss of $1.3 million, or $0.09 per share, for the fourth quarter of 2015. The Company reported a net loss from continuing operations of $5.3 million, or $0.37 per share, for the 2016 fiscal year compared to a loss of $3.9 million, or $0.27 per share, for the 2015 fiscal year.

Clarence Chung, Chairman and Chief Executive Officer of Entertainment Gaming Asia, commented, "During 2016, we disposed of all of our gaming assets in Cambodia, certain gaming assets in the Philippines and the principal assets of the gaming products business. These sales have provided cash proceeds of $10.3 million and the potential for earn-outs on certain gaming chip and plaque sales related to the now discontinued gaming products business. To date, we have received $8.1 million of the sales proceeds and no earn-outs on gaming chip and plaque sales.

"Our reduced base of operations coupled with the expenses related to the social gaming operations, which remain in the testing phase, and corporate overhead, presently have a negative impact on our cash flow. We currently have approximately $32 million in cash and are exploring avenues to apply these resources in ways to enhance value for our shareholders."

Third Quarter 2016 Financial Results

• The Company's third quarter of 2016 consolidated revenue was $690,000 compared to $4.5 million in the third quarter of 2015.
• The Company reported a net loss from continuing operations of $122,000, or $0.01 per share, for the third quarter of 2016 compared to net income from continuing operations of $797,000, or $0.06 per share, for the third quarter of 2015.

Clarence Chung, Chairman and Chief Executive Officer of Entertainment Gaming Asia, commented, "We continue our efforts to refine our business operations and position ourselves for new opportunities. Following the disposition of our gaming products assets in May 2016 for cash proceeds of $5.9 million and our EGMs in NagaWorld and Leisure World in July 2016 for cash proceeds of $3.3 million, we sold all 71 EGMs seats in Thansur Bokor in October 2016 for cash proceeds of $250,000. While our reduced base of operations will have a negative impact on our near-term earnings, these transactions provide us a total of approximately $9.4 million in cash proceeds, excluding $765,000 in expense reimbursements for severance costs and factory lease payments and the potential for earn outs on certain gaming chip and plaque sales related to the now discontinued gaming products business. To date, we have received $7.3 million of the sale proceeds and have cash resources of approximately $35 million which, we believe, enhances our ability to pursue and execute on new projects.

"We are actively pursuing projects that we believe will provide long-term growth potential for the Company. These potential projects are in new businesses, such as the film and related businesses, for the Company and would provide us a new strategic direction. We are eager to share more information on these potential opportunities should they become more definitive in nature.

"In addition, we continue our efforts to develop a free-to-play, mobile, social games platform for the Pan-Asian market. We are testing the platform in certain markets to assess its potential as a provider to long-term earnings."

Second Quarter 2016 Financial Results

• The Company's second quarter of 2016 consolidated revenue, which comprised its gaming operations, was $2.3 million, a decrease of 54% compared to $4.9 million in the second quarter of 2015
• Per share data (basic and diluted): was $(0.05) vs last years same quarter of $0.10.

Clarence Chung, Chairman and Chief Executive Officer of Entertainment Gaming Asia, commented, "We continued our strategic efforts to refine our business operations and position ourselves for new opportunities. While our exit from the gaming products business in the second quarter and two EGM leasing contracts as of June 30, 2016 will have a negative impact on our near-term potential earnings, these transactions provide us a total of approximately $10 million in cash, excluding the potential for earn outs on certain gaming chip and plaque sales. To date, we have received $7.3 million of these proceeds and have built cash resources of over $36 million which, we believe, enhances our ability to pursue and execute on new projects that will fuel long-term growth for the Company.

"Our efforts to develop an online social casino platform are progressing and we expect to commence initial testing in a single market in Asia in the third quarter of 2016. We have developed this free-to-play, mobile, social games app for the Pan-Asian market and intend to monetize it through the in-game-sale of virtual coins that allow players to extend play time or accelerate their progress.

"We are also actively pursuing other projects in new businesses. However, there is no guarantee we will be successful in securing these projects. We look forward to sharing more details should they become more definitive in nature."

HONG KONG, July 6, 2016 /PRNewswire/ -- Entertainment Gaming Asia Inc. (EGT) (the "Company") announced today that it will sell all 670 of its electronic gaming machine (EGM) seats placed at NagaWorld Casino to a third-party in Cambodia for $2.5 million. The purchase price is payable by the purchaser in full in cash on completion of the sale, which is expected to occur on or around July 6, 2016.  Prior to the sale, the Company had leased EGMs to NagaWorld and that arrangement was terminated effective June 30, 2016 in connection with the sale transaction.

Also today the Company announced it sold all 154 of its EGM seats placed at Leisure World VIP Slot Club in the Philippines to the venue owner for $750,000, of which 70% was paid on July 4, 2016 and 30% is payable on or before August 1, 2016.  Prior to the sale, the Company had leased EGMs to Leisure World until June 30, 2016 when the contract expired.

The Company continues its EGM leasing operations in two venues in Cambodia and two venues in the Philippines. The contracts for these two venues in the Philippines expired on June 30, 2016. However, the EGMs remain in operation as the Company is working to swiftly renew these contracts retroactive to July 1, 2016.

Clarence Chung, Chairman and Chief Executive Officer of Entertainment Gaming Asia, commented, "We continue our strategic efforts to refine our business operations and position ourselves for new potential opportunities. While the exit from two EGM leasing contracts will have a negative impact on our near-term cash flow, we believe the cash proceeds of the sales will further enhance our ability to pursue new growth opportunities that will fuel long-term growth for the Company."

Item 1.01 Entry into a Material Definitive Agreement

On May 11, 2016, we entered into an Asset Purchase Agreement pursuant to which we sold substantially all of our assets dedicated to the design, manufacture and distribution of chips, plaques and layouts for gaming tables to Gaming Partners International Corporation (“GPI”). The transaction under the Agreement closed on May 11, 2016.

Under the terms of the Agreement, we sold to GPI certain assets of our wholly-owned subsidiary, Dolphin Products Limited (“Dolphin”), including fixed assets, raw materials and inventory and intellectual property for cash consideration of approximately $5.9 million. The consideration includes a purchase price of approximately $5.4 million and $530,000 for restrictive covenants related to a non-compete arrangement given by us, Dolphin and Mr. Clarence Chung. The purchase price will be paid out in installments over a 24-month period after closing, with approximately $3.2 million paid at closing and approximately $1.1 million to be paid on each of the first two anniversaries of the closing. Payment related to the restrictive covenants was paid after closing. GPI also paid to us an amount equal to four months’ rental for the Dolphin factory subject to a cap of $260,000 after closing and will pay a fixed sum of $520,000 for costs related to the termination of Dolphin employees within 60 days of closing.

In addition, GPI will make earn-out payments to Dolphin. These earn-out payments include: 3% of net revenue on certain sales to specific Asian-based casinos over the next five years subject to a cap of a total of $500,000,000 of net revenue; and 15% of net revenues on sales to our related party casinos for an indefinite time period for the first $10,000,000 of net revenue and, in addition, 3% of net revenue from these related party casino sales over the next five years subject to a cap of $30,000,000 of net revenue. Dolphin shall only be entitled to earn-out payments above $900,000.

The Agreement includes customary representations, warranties and covenants by us and GPI, including each party’s agreement to indemnify the other against certain claims or losses resulting from certain breaches of representations, warranties or covenants under the Agreement and third-party claims arising before and after the close. The asset sale represents our exit from the business of design, manufacture and distribution of chips, plaques and layouts for gaming tables and, as part of the transaction, we have agreed with GPI not to engage in the manufacture of gaming chips, plaques, jetons, playing cards and layouts for gaming tables in competition with GPI.

In connection with the close of the transaction under the Agreement, Dolphin and GPI settled and released each other of all claims relating to the civil actions instituted by GPI against Dolphin in the High Court of the Hong Kong Special Administrative Region in December 2015.

ENTERTAINMENT GAMING ASIA INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Loss / Income

(amounts in thousands, except per share data)

(Unaudited)

 

 

		Three-Month Periods Ended March 31,
		2016				2015
Revenues:
Gaming operations		$	3,851			$	4,010
Gaming products			1,305				4,272
Total revenues			5,156				8,282
Operating costs and expenses:
Cost of gaming operations
Gaming property and equipment depreciation			482				819
Casino contract amortization			434				611
Other gaming related intangibles amortization			63				63
Other operating costs			1,396				822
Cost of gaming products			1,761				3,662
Selling, general and administrative expenses			1,960				1,612
Gain on disposition of assets			—				(5	)
Research and development expenses			448				35
Depreciation and amortization			52				54
Total operating costs and expenses			6,596				7,673
(Loss)/income from operations			(1,440	)			609
Other income/(expenses):
Interest expense and finance fees			—				(1	)
Interest income			3				3
Foreign currency gains/(losses)			72				(30	)
Other			9				9
Total other income/(expenses)			84				(19	)
Loss/(income) before income tax			(1, 356	)			590
Income tax expenses			(119	)			(20	)
Net (loss)/income attributable to EGT stockholders		$	(1,475	)		$	570
Other comprehensive income:
Foreign currency translation			29				1
Total other comprehensive income, net of tax			29				1
Comprehensive (loss)/income attributable to EGT stockholders		$	(1,446	)		$	571
Per share data (basic and diluted):
(Loss)/earnings		$	(0.10	)		$	0.04
Weighted average common shares outstanding:
Basic			14,460				14,450
Diluted			14,460				14,467

First Quarter 2016 Financial Results

• The Company's first quarter of 2016 consolidated revenue was $5.2 million, a decrease of 38% compared to $8.3 million in the first quarter of 2015 due primarily to a decrease in the gaming products business.
• The Company reported a net loss of $1.5 million, or $0.10 per share, on a weighted average diluted share count of 14.5 million shares for the first quarter of 2016. This compared to net income of $570,000, or $0.04 per share,

Clarence Chung, Chairman and Chief Executive Officer of Entertainment Gaming Asia, commented, "We had a challenging first quarter primarily due to operating losses from the gaming products business and incremental costs associated with the development of the new social casino gaming platform. Despite this, our cash position of $30.7 million as of March 31, 2016 was essentially unchanged from December 31, 2015.

The 2016 year is one of transition for the Company. In April, we made the strategic decision to sell our Dolphin assets and exit the gaming products business. The transaction closed on May 11, 2016. We believe this strategic move will enable us to focus our resources on new projects that will drive long-term growth for the Company. We are actively seeking and/or pursuing opportunities to enter new markets. This includes, but is not limited to, efforts to develop an online social casino platform."

HONG KONG, April 22, 2016 /PRNewswire/ -- Entertainment Gaming Asia Inc. (NASDAQ: EGT) and Gaming Partners International Corporation (NASDAQ: GPIC), today announced that EGT's wholly-owned Hong Kong subsidiary, Dolphin Products Limited ("Dolphin"), has entered into a binding letter of intent ("LOI") to sell its assets to GPIC. 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.  GPIC is a leading manufacturer and supplier of casino table game equipment,  including gaming chips and plaques, to licensed casinos worldwide under the brand names Paulson, Bourgogne et Grasset, Gemaco and Bud Jones.

Under the terms of the LOI, GPIC will acquire the assets of 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. The asset sale represents Dolphin's and EGT's exit from the table game equipment business and, as part of the transaction, Dolphin and EGT will each agree not to engage in the manufacture of table game equipment in competition with GPIC.

The companies anticipate negotiating a definitive asset purchase agreement to effect the transaction consistent with the terms of the LOI and closing the transaction in May 2016. The closing of the transaction will be subject to GPIC's satisfactory due diligence review of Dolphin and customary closing conditions to be set forth in the definitive asset purchase agreement. Accordingly, there is no guarantee the transaction will be consummated.

Fourth Quarter 2015 Financial Results

• Consolidated revenues of $7.3 million for the fourth quarter and $31.5 million for the 2015 fiscal year
• The 2014 fiscal year included a net loss of $325,000 from discontinued operations related to Dreamworld Pailin. Excluding the discontinued operations, the Company reported a net loss from continuing operations of $2.5 million, or $0.31 per share, for the 2014 fiscal year. 

The increase in net income from continuing operations was primarily a result of the significant improvement in gaming products sales and gross margin, an increase in gaming operations revenue and a reduction in SG&A expenses. The increase was partially offset by the $2.6 million non-cash impairment charge and the loss on the disposition of obsolete gaming equipment for the gaming products division in the fourth quarter of 2015, tax expenses compared to benefits in the prior year period and higher foreign currency losses due to the settlement of U.S. dollar denominated payables for the Philippines operations with an appreciated U.S. dollar in the 2015 fiscal year.

Clarence Chung, Chairman and Chief Executive Officer of Entertainment Gaming Asia, commented, "We are pleased to report a profitable 2015 fiscal year driven by strong gaming operations revenue, record gaming products performance and cost controls.  We accomplished this despite incurring approximately $3.0 million in non-cash charges associated with both impairments of certain gaming operations assets and the loss on disposal of obsolete equipment for the gaming products division in the fourth quarter.

Item 1.01   Entry Into a Material Definitive Agreement

On February 29, 2016, we entered into a Lease of Machines Agreement with NagaWorld Limited (“NagaWorld”) pursuant to which NagaWorld has agreed to lease from us 670 slot machines and related equipment commencing March 1, 2016. Since May 25, 2010, we had placed and jointly operated a total of 670 seats of our slot machines on NagaWorld’s casino floor pursuant to a machines operation and participation contract and its supplemental agreements under which we split with NagaWorld the net win from all the machines and certain operating costs on a respective basis of 25%/75%. This contract expired on February 29, 2016.

Under the terms of the Lease of Machines Agreement, NagaWorld will lease all 670 seats of our slot machines and related equipment in their present locations on the NagaWorld casino floor commencing March 1, 2016. The Company will be responsible to pay the withholding tax and provide onsite machine and system maintenance but will not provide any other operational support staff.

NagaWorld will pay us, on a monthly basis, a fixed fee per machine seat per day. The lease payments will be graduated for the first six months of the agreement. From March 1 through May 31, 2016, the lease payments per machine seat per day will be $22. From June 1 through August 31, 2016, the lease payments will be $20 per machine seat per day. Beginning September 1, 2016, the lease payments will be $18 per machine seat per day. NagaWorld may terminate the agreement upon not less than 30 calendar days’ prior written notice.

Item 1.01 Entry Into a Material Definitive Agreement

On January 27, 2016, Entertainment Gaming Asia Inc. (the “Company) entered into a management services agreement, or “the Agreement,” with Melco Services Limited, or Melco Services, a wholly-owned subsidiary of Melco International Development Limited, which is also the parent of the Company’s majority shareholder, EGT Entertainment Holding Limited. The Agreement has been approved by the Conflicts Committee of the Company’s board of directors and the Audit Committee of the board approved those portions of the Agreement relating to internal audit services.

The Agreement is regarding the provision of management and administrative services by Melco Services to the Company, commencing January 1, 2015, as follows:

 1) Office secretary support for the Company’s CEO;

 2) Internal Audit services for the Company as requested and/or approved by the Company’s Audit Committee from time to time;

 3) Office facilities for the Company’s CEO, Internal Audit and other departments, as and when needed, and Company meetings, including meetings of the board and its committees; and

 4) Ad hoc advice on finance, accounting, legal and human resources together with general administration needs as requested.

The consideration payable by the Company for the aforesaid management and administrative services is as follows:

 a) For the period from January 1, 2015 to December 31, 2015, the Company shall pay to Melco Services a fee of HKD1.6 million (approximately US$206,400 based on the exchange rate of HKD1 to US$0.129), within fourteen days after signing of Agreement.

 b) For periods after end of year 2015, the fee payable by the Company shall be reviewed annually before March 20 of the relevant year and shall, unless otherwise agreed to between the Company and Melco Services by such time, be HKD1.8 million (approximately US$232,200 based on the exchange rate of HKD1 to US$0.129). The fee for each year shall be paid in four (4) equal installments, with each installment to be paid no later than one week before each quarter end.

 c) In case the services or any part thereof are required to be performed by personnel of Melco Services outside Hong Kong, on top of the services fee, the Company shall reimburse Melco Services for all out-of-pocket expenses incurred by Melco Services during any overseas business trips solely for the provision of the services (provided that such business trips are approved by the Company in advance (such approval not to be unreasonably withheld or delayed) and provided further that the same fares and charges are not being paid or undertaken to be paid by the Company in advance or otherwise) against invoices submitted by Melco Services.

The Agreement continues for a term with effect from January 1, 2015 until termination by either party, for any reason, upon 30 days prior written notice to the other. Meanwhile, the Agreement contains the customary confidentiality provisions, and each party and its personnel shall abide by such provisions during and after the performance of the relevant services.

 

Third Quarter 2015 Financial Results

The Company's third quarter of 2015 consolidated revenue was $8.3 million, an increase of 88% compared to $4.4 million in the third quarter of 2014 due to increases in both the gaming operations and gaming products business divisions.

The Company reported net income of $1.4 million, or $0.10 per share, on a weighted average diluted share count of 14.5 million shares for the third quarter of 2015. This compared to a net loss of $261,000, or $0.04 per share, on a weighted average diluted share count of 7.5 million shares for the third quarter of 2014.

Clarence Chung, Chairman and Chief Executive Officer of Entertainment Gaming Asia, commented, "We are pleased to report that the strong top and bottom-line year-over-year improvements achieved in the first two quarters continued in the third quarter of 2015. The primary drivers of our performance in the quarter and year-to-date were the significant improvements in gaming products sales and gross margin as well as the growth in gaming operations revenue.

"Our gaming products business benefitted from strong sales and production volumes for gaming chips and plaques for both a new casino opening and from existing customers, as well as increased sales of other high-margin third-party gaming products. With an attractive fourth quarter order pipeline, the gaming products division is on target to achieve record performance of over $13 million in revenue for 2015. However, looking further ahead, we expect to experience sales fluctuations due to the natural uneven order flow for this business driven by the timing of orders for new casino openings.

"Gaming operations posted solid year-over-year gains for the third quarter of 2015 primarily driven by the Cambodia operations and, particularly, NagaWorld. Increased player traffic and proactive marketing initiatives have resulted in continued improvement in average net wins in NagaWorld in the fourth quarter. Thansur Bokor and Dreamworld Poipet made small, yet positive, contributions to overall revenue growth and EBITDA in the third quarter of 2015. In the Philippines, the competitive landscape remains a challenge however, we continue efforts to improve returns on these assets and have seen average net wins return to the mid-$60 range in the month of October. 

"With the benefits of the proceeds from our November 2014 equity rights offering and strong operating performance so far in 2015, we have accumulated a net cash position of over $27 million as of the end of October. It is our mission to responsibly invest these resources in ways that will drive long-term earnings growth and enhance shareholder value. To this end, we have been active in our efforts to secure new projects, in existing and new businesses, that would enable us to best capitalize on growth opportunities in gaming markets in Asia and, ultimately, replace cash flow from NagaWorld in the event we do not renew this contract by March 2016. We are in the early stages for one potential new project that we believe could provide an exciting opportunity for the Company. We look forward to sharing more about this project as plans materialize in the coming months."

HONG KONG, Sept. 1, 2015 /PRNewswire/ -- Entertainment Gaming Asia Inc. (NASDAQ: EGT) ("Entertainment Gaming Asia" or "the Company"), a gaming company focused on emerging gaming markets in Pan-Asia, today announced that  Andy Tsui, Chief Accounting Officer, has served notice to resign effective as of September 30, 2015 to pursue another career opportunity. Ms. Traci Mangini, the Company's Senior Vice President Corporate Finance, has been appointed the interim Chief Financial Officer effective as ofOctober 1, 2015. Mr. Tsui has agreed to continue to assist the Company on an as needed basis for a period following his departure to best ensure a seamless transition. 

Clarence Chung, Chairman and Chief Executive Officer of Entertainment Gaming Asia, commented, "Andy has been a valued member of our management team for more than seven years and was instrumental in building a solid finance organization. On behalf of the Company and our board of directors, I thank him for his dedicated service and his willingness to stay on board to ensure a successful transition.  We wish him well in his future endeavors.

"We are pleased that Traci has agreed to step into the role of interim Chief Financial Officer as we continue our efforts to grow and expand our operations. Traci has more than 15 years of financial experience, including over seven years at the Company where she has worked closely with our financial statements and public disclosures."

Ms. Mangini joined Entertainment Gaming Asia in June 2008 as senior vice president corporate finance after spending approximately eight years in equity research. For five years prior to joining the Company, she worked at ThinkEquity, a then subsidiary of Panmure Gordon & Co., where she became a partner and was a senior equity research analyst responsible for coverage of companies in the domestic and international gaming sector. Previously, she also served as a vice president and research analyst covering consumer companies at both Merriman Curhan Ford & Company and First Security Van Kasper, which was acquired by Wells Fargo & Company. Ms. Mangini holds a master of science in quantitative analysis from Boston University and a bachelor of arts in business administration from the University of San Diego.

ENTERTAINMENT GAMING ASIA INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income/Loss

(amounts in thousands, except per share data)

(Unaudited)

 

		Three-Month Periods Ended June 30,								Six-Month Periods Ended June 30,
		2015				2014				2015				2014
Revenues:
Gaming operations		$	4,914			$	4,420			$	8,924			$	8,303
Gaming products			2,723				524				6,995				1,335
Total revenues			7,637				4,944				15,919				9,638
Operating costs and expenses:
Cost of gaming operations
Gaming property and equipment depreciation			782				908				1,601				1,789
Casino contract amortization			611				612				1,222				1,222
Other gaming related intangibles amortization			63				63				126				126
Other operating costs			969				895				1,791				1,740
Cost of gaming products			2,328				925				5,990				2,413
Selling, general and administrative expenses			1,323				1,167				2,935				2,720
Gain on disposition of assets			(17	)			(8	)			(22	)			(8	)
Impairment of assets			—				19				—				19
Product development expenses			34				101				69				156
Depreciation and amortization			52				50				106				99
Total operating costs and expenses			6,145				4,732				13,818				10,276
Income/(loss) from operations			1,492				212				2,101				(638	)
Other (expenses)/income:
Interest expense and finance fees			(2	)			—				(3	)			(2	)
Interest income			3				—				6				—
Foreign currency (losses)/gains			(25	)			16				(54	)			1
Other			10				4				19				12
Total other (expenses)/income			(14	)			20				(32	)			11
Income/(loss) from continuing operations before income tax			1,478				232				2,069				(627	)
Income tax expenses			(17	)			(15	)			(37	)			(30	)
Net income/(loss) from continuing operations			1,461				217				2,032				(657	)
Net loss from discontinued operations, net of tax			—				(239	)			—				(395	)
Net income/(loss) attributable to EGT stockholders		$	1,461			$	(22	)		$	2,032			$	(1,052	)
Other comprehensive (loss)/income:
Foreign currency translation			(16	)			99				(15	)			58
Total other comprehensive (loss)/income, net of tax			(16	)			99				(15	)			58
Comprehensive income/(loss) attributable to EGT stockholders		$	1,445			$	77			$	2,017			$	(994	)
Per share data (basic and diluted):
Earnings/(loss)		$	0.10			$	—			$	0.14			$	(0.14	)
Earnings/(loss) from continuing operations		$	0.10			$	0.03			$	0.14			$	(0.09	)
Loss from discontinued operations, net of tax		$	—			$	(0.03	)		$	—			$	(0.05	)
Weighted average common shares outstanding:
Basic			14,458				7,503				14,454				7,500
Diluted			14,477				7,537				14,474				7,500

Management Discussion and Analysis

Total revenues increased approximately $2.7 million to $7.6 million for the three-month period ended June 30, 2015 compared to approximately $4.9 million in the same period of the prior year due to increases in both business divisions. Revenue from gaming operations increased primarily as a result of higher slot operations revenue from NagaWorld partially offset by lower revenues from the Philippines operations. Revenue from the gaming products division increased as a result of higher sales of gaming chips and plaques to existing customers compared to the prior year period.

Net income from continuing operations increased approximately $1.3 million to $1.5 million for the three-month period ended June 30, 2015 compared to approximately $217,000 in the same period of the prior year. The increase in net income from continuing operations was primarily a result of the higher operating income from continuing operations, as explained above. Net income increased approximately $1.5 million to $1.5 million for the three-month period ended June 30, 2015 compared to a net loss of approximately $22,000 in the same period of the prior year. The net loss for the three-month period ended June 30, 2014 included a net loss of approximately $239,000 from discontinued operations.

Second Quarter of 2015 Financial Results

• The Company's second quarter of 2015 consolidated revenue was $7.6 million, an increase of 54% compared to $4.9 million in the second quarter of 2014 due to increases in both the gaming operations and gaming products business divisions.
• The second quarter of 2014 net loss included a net loss of $239,000 from discontinued operations related to Dreamworld Pailin. Excluding the discontinued operations, the Company reported net income from continuing operations of $217,000, or $0.03 per share, for the second quarter of 2014.

Clarence Chung, Chairman and Chief Executive Officer of Entertainment Gaming Asia, commented, "We are pleased to report that the strong top and bottom-line year-over-year improvement achieved in the first quarter continued in the second quarter of 2015. The primary drivers of our performance were the significant improvements in gaming products sales and gross margin as well as the growth in gaming operations revenue. Gaming products benefitted from an attractive reorder pipeline from existing customers and our efforts to improve profitability while growth in gaming operations was largely due to strong performance from NagaWorld.

"We are focused on continuing to improve our operating performance. Through proactive marketing and machine management, we aim to maximize performance and return potential for our slot operations. For gaming products, we continue efforts to expand our market presence and build on our present confirmed order pipeline of$4.5 million for the second half of 2015.

"In addition, we are actively pursuing new projects that would drive long-term growth for the Company. With over $24.0 million in net cash and the benefits of being an indirect, majority-owned subsidiary of Melco International Development Limited, we believe we have greatly improved our ability to secure new projects that could enhance our existing operations and provide the opportunity to expand into new businesses and markets."

First Quarter of 2015 Financial Results

• The Company's first quarter of 2015 consolidated revenue was $8.3 million, an increase of 76% compared to $4.7 million in the first quarter of 2014
• The Company reported net income of $570,000, or $0.04 per share, on a weighted average diluted share count of 14.5 million shares for the first quarter of 2015. This compared to a net loss of $1.0 million, or $0.14 per share, on a weighted average diluted share count of 7.5 million shares for the first quarter of 2014

Clarence Chung, Chairman and Chief Executive Officer of Entertainment Gaming Asia, commented, "We are pleased to report a positive net profit for the first quarter of 2015. The primary drivers of our performance were the significant improvements in gaming products sales and gross margin as well as the growth in gaming operations revenue. Gaming products benefitted from an attractive reorder pipeline from existing customers and our continuing efforts to improve profitability while growth in gaming operations was largely due to solid performance from NagaWorld.

We are focused on continuing to improve our operating performance and securing new projects that will drive long-term growth and earnings visibility for the Company. With a cash position of over $20.0 million and as an indirect, majority-owned subsidiary of Melco International Development Limited, a leader in Asian gaming, we believe we have greatly enhanced our financial flexibility and improved our access to a broader pool of potential growth opportunities in growing gaming markets in Asia. We are actively seeking new projects that would further enhance our existing business lines and provide the opportunity to add new ones."

HONG KONG, March 16, 2015 /PRNewswire/ -- Entertainment Gaming Asia Inc. (EGT) ("Entertainment Gaming Asia" or "the Company"), a gaming company focused on emerging gaming markets in Pan-Asia, today announced that it has regained compliance with the listing requirements of the NASDAQ Capital Market.

As previously reported, on April 17, 2014, NASDAQ notified the Company that its common stock was not in listing compliance as it failed to maintain a minimum bid price of $1.00 over the previous 30 consecutive business days as required by NASDAQ's listing rules. On March 12, 2015, the Company received a notice from the NASDAQ indicating that since the closing bid price of the Company's common stock had been at $1.00 per share or greater for the last 10 consecutive business days, from February 26 to March 11, 2015, the Company has regained compliance with Listing Rule 5550(a)(2) and this matter is now closed.   

Fourth Quarter 2014 Financial Results

• Consolidated revenue was $8.3 million, an increase of 63% compared to $5.1 million in the fourth quarter of 2013 due to higher gaming products sales partially offset by lower gaming operations revenue
• Basic and diluted earnings per share was $(0.04) vs. last years loss of $(0.14),

HONG KONG, Dec. 1, 2014 /PRNewswire/ -- Entertainment Gaming Asia Inc. (NASDAQ: EGT) ("Entertainment Gaming Asia" or "the Company"), a gaming company focused on emerging gaming markets in Pan-Asia, reported today the completion of its previously announced rights offering, which expired on Tuesday, November 25, 2014. The Company sold 27,777,673 shares of its common stock, representing 100% of the shares offered in the rights offering, at the $0.54 per share offering price, for aggregate gross proceeds of approximately $15.0 million. As a result of the rights offering, the total number of outstanding shares of the Company's common stock has increased to 57,879,835.

In the offering, the Company's stockholders purchased a total of 11,394,689 shares of common stock pursuant to their basic subscription privilege, and those stockholders who fully exercised their basic subscription privilege elected to purchase a total of 18,196,497 shares of common stock pursuant to their oversubscription privilege. Since only 16,382,984 shares were available for purchase pursuant to the oversubscription privilege, those persons who exercised their oversubscription privilege received their pro rata allotment of the 16,382,984 shares eligible for purchase based on the number of shares issued to them under their basic subscription privilege.

EGT Entertainment Holding Limited, a wholly-owned subsidiary of Melco International Development Limited ("Melco") and the Company's largest stockholder, subscribed for 27,777,673 shares by exercising its basic and oversubscription privileges. After giving effect to the proration of oversubscription shares, Melco, through its subsidiary EGT Entertainment Holding Limited, was issued 26,062,294 shares, or 93.8% of the offering, and is now the majority owner of the Company with approximately 64.8% of its outstanding shares of common stock. The Company's officers and members of its Board of Directors collectively subscribed for a total of 1,732,756 shares by exercising their basic and oversubscription privileges. They were issued a combined total of 1,634,679 shares of EGT common stock, or 5.9% of the offering.

Clarence Chung, Chairman and Chief Executive Officer of Entertainment Gaming Asia, commented, "We are pleased to announce the completion of a successful rights offering and thank all those participating stockholders, particularly Melco whose support has been instrumental in this process. This offer is an important step in our plan to improve our capital resources and liquidity as we seek to secure meaningful new gaming projects in our target markets. We believe that the strong participation by Melco as well as our Board of Directors in this offering demonstrates their continued support of the Company."  

Third Quarter 2014 Financial Results 

• Revenue was $4.4 million, a decrease of 19% compared to $5.4 million in the third quarter of 2013.
• EPS Basic and Diluted was $(0.01) the same as last years same quarter.

Clarence Chung, Chairman and Chief Executive Officer of Entertainment Gaming Asia, commented, "The decrease in gaming operations revenue for the third quarter of 2014 was largely due to a decline in revenue from NagaWorld. In addition to increased player jackpot payouts for our NagaWorld operations, we experienced some business disruption and a temporary reduction in installed machines during the quarter due to NagaWorld's renovation of certain parts of its casino floor. With this floor renovation now complete, our installed machine base and player traffic levels have returned to more normalized levels.

"In our gaming products division, we experienced a gross margin loss for the third quarter. This was a result of lower sales to existing customers, under-absorption of fixed costs stemming from the lower sales volumes and certain production inefficiencies. During the quarter, we also focused production efforts on fulfilling two previously announced gaming chip and plaque orders for the Philippines totaling over $4.0 million in revenue. These orders are scheduled to be delivered in the fourth quarter of 2014. We are presently implementing initiatives to both expand and enhance our production operations with a goal to improve efficiencies and capacity in preparation for large potential order flow in the years ahead.

"We are focused on improving our operating performance and building our financial resources in an effort to better position us to secure new projects that will drive long-term growth for the Company. By leveraging our established presence and relationships, we selectively seek both slot participation and casino development projects in more established markets in Indo-China and other growing gaming markets in Asia, which offer the potential for greater operational scale and returns."

HONG KONG, Oct. 30, 2014 /PRNewswire/ -- Entertainment Gaming Asia Inc. (NASDAQ: EGT) ("Entertainment Gaming Asia" or "the Company"), a gaming company focused on emerging gaming markets in Pan-Asia, announced today the commencement of its previously announced common stock rights offering to its stockholders. Under the terms of the rights offering, the Company will distribute at no charge to the holders of its common stock on September 15, 2014, the record date for the rights offering, 0.92278 non-transferable rights for every share of common stock owned as of September 15, 2014. Each right will entitle the holder to purchase one share of common stock at a subscription price of $0.54 per share. The rights offering will expire at 5:00 p.m., New York City time, on November 25, 2014, unless extended by the Board of Directors. Rights holders who fully exercise their basic subscription rights will be entitled to subscribe, subject to certain limitations and allotment, for additional shares that are unsubscribed as a result of any unexercised basic subscription rights.

A registration statement with respect to these securities was declared effective by the Securities and Exchange Commission on October 30, 2014. The Company will be distributing to its stockholders of record as ofSeptember 15, 2014 their subscription rights certificate, a copy of the prospectus made part of the registration statement and instructions for participating in the rights offering. Those stockholders of the Company who hold their shares in "street name" through a broker, custodian bank or other nominee will not receive an actual subscription rights certificate or other documents from the Company and, instead, will receive information and instructions from their broker, custodian bank or other nominee.  Stockholders of the Company eligible to participate in the rights offering who have questions about the rights offering or requests for additional copies of the rights offering documents may contact:

Title of Each Class of Securities to be Registered		Amount to be Registered				Proposed Maximum Offering Price Per Unit				Proposed Maximum Aggregate Offering Price				Amount of Registration Fee
Non-Transferable Subscription Rights(1)			N/A				N/A				N/A	(2)			N/A	(2)
Common Stock, $.001 par value			27,777,673			$	0.54			$	14,999,943.00	(3)		$	1,932.00	(3)
Total										$	14,999,943.00			$	1,932.00	(4)

HONG KONG, Oct. 17, 2014 /PRNewswire/ -- Entertainment Gaming Asia Inc. (NASDAQ: EGT) ("Entertainment Gaming Asia" or "the Company"), a gaming company focused on emerging gaming markets in Pan-Asia, today announced that on October 15, 2014, the Company was notified by The NASDAQ Stock Market LLC ("NASDAQ") that it has granted the Company an additional 180-day grace period, or until April 13, 2015, to regain compliance with the minimum $1.00 bid price per share listing requirement. The determination was based on the Company meeting the continued listing requirement for market value of publicly held shares and all other applicable requirements for initial listing on The NASDAQ Capital Market with the exception of the bid price requirement, and the Company's intent to cure the deficiency during the second compliance grace period by effecting a reverse stock split, if necessary.

According to the notification, if at any time during the second 180-day grace period, the minimum closing bid price per share of the Company's common stock closes at or above $1.00 for a period of ten consecutive business days, the Company will regain compliance and the matter will be closed.  If the Company fails to regain compliance by the end of the second 180-day grace period, the Company's common stock will be subject to delisting by NASDAQ.

During the second 180-calendar day grace period, the Company's common stock will continue to trade on The NASDAQ Capital Market under the symbol "EGT". Therefore, the notification has no immediate impact on the listing of the Company's common stock.

The Company will work to regain listing compliance and believes that it has options available to ensure continued listing on NASDAQ. Management and the Board of Directors are evaluating these options to determine the optimal course of action. As of yesterday, the closing bid price of the Company's shares was$0.58, and it will actively monitor the performance of the stock with respect to the listing standards.

Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing

On April 17, 2014, Entertainment Gaming Asia Inc. (the “Company”) received a deficiency letter from The NASDAQ Stock Market LLC (“NASDAQ”) advising that, based on the Company’s closing bid price for the prior 30 consecutive business days, the Company did not comply with the minimum bid price requirement of $1.00 per share, as set forth in NASDAQ Listing Rule 5550(a)(2). In accordance with NASDAQ Listing Rule 5810(c)(3)(A), the Company was provided with an initial grace period of 180 calendar days, or until October 14, 2014, to regain compliance with the minimum closing price requirement for continued listing.

The Company was unable to regain compliance with NASDAQ’s minimum closing price requirement during the initial 180-day grace period. However, on October 15, 2014, the Company was notified by NASDAQ that it has received an additional 180-day grace period, or until April 13, 2015, to regain compliance with the minimum closing price requirement. The determination to grant the extension was based on the Company meeting the continued listing requirement for market value of publicly held shares and all other applicable requirements for initial listing on The NASDAQ Capital Market with the exception of the bid price requirement, and the Company’s written notice of its intention to cure the deficiency during the second grace period by effecting a reverse stock split, if necessary. If at any time during this additional time period the closing bid price of the Company’s common stock is at least $1.00 per share for a minimum of 10 consecutive business days, NASDAQ will provide written confirmation of compliance and this matter will be closed. If the Company fails to regain compliance during the second 180-day grace period, its common stock will be subject to delisting by NASDAQ.

The notification has no immediate effect on the listing of the Company’s common stock on The NASDAQ Capital Market.

HONG KONG, Sept. 9, 2014 /PRNewswire/ -- Entertainment Gaming Asia Inc. (EGT) ("Entertainment Gaming Asia" or "the Company"), a gaming company focused on emerging gaming markets in Pan-Asia, today announced that it has set a record date of September 15, 2014 for its proposed offering of subscription rights to purchase shares of its common stock at a price of $0.54 per share.

On August 13, 2014, the Company filed with the U.S. Securities and Exchange Commission ("SEC") a Registration Statement on Form S-1 with respect to the offering.  The rights offering will be made to the holders of record of the Company's common stock as of September 15, 2014. Each shareholder as of the record date will receive 0.92278 non-transferable subscription rights for each share of common stock held by the shareholder as of the record date. Each subscription right will allow its holder to purchase one share of common stock of the Company, at a price of $0.54 per share, over the 30-day period following the date of distribution. The Company intends to apply the proceeds from the rights offering towards the development of future casino and gaming club projects, expanding its slot participation operations and general working capital for its gaming products division.

The rights offering is subject to the effectiveness of the Registration Statement filed with the SEC.

HONG KONG, Aug. 13, 2014 /PRNewswire/ -- Entertainment Gaming Asia Inc. (NASDAQ: EGT) ("Entertainment Gaming Asia" or "the Company"), a gaming company focused on emerging gaming markets in Pan-Asia, today announced that it proposes to conduct an offering of subscription rights to purchase shares of its common stock at a price of $0.54 per share.

On August 13, 2014, the Company filed with the U.S. Securities and Exchange Commission ("SEC") a Registration Statement on Form S-1 with respect to the offering.  The rights offering will be made to the holders of record of the Company's common stock as of a date to be determined, but which is expected to be shortly before the date the Registration Statement is declared effective by the SEC.  Each shareholder as of the record date will receive 0.92278 non-transferable subscription rights for each share of common stock held by the shareholder as of the record date. Each subscription right will allow its holder to purchase one share of common stock of the Company, at a price of $0.54 per share, over the 30-day period following the date of distribution. The Company intends to apply the proceeds from the rights offering towards the development of future casino and gaming club projects, expanding its slot participation operations and general working capital for its gaming products division.

The rights offering is subject to the effectiveness of the Registration Statement filed with the SEC.

 ENTERTAINMENT GAMING ASIA INC

 

Title of Each Class of Securities to be Registered		Amount to be Registered				Proposed Maximum Offering Price Per Unit				Proposed Maximum Aggregate Offering Price				Amount of Registration Fee
Non-Transferable Subscription Rights(1)			N/A				N/A				N/A	(2)			N/A	(2)
Common Stock, $.001 par value			27,777,673			$	0.54			$	14,999,943.00	(3)		$	1,932.00	(3)
Total										$	14,999,943.00			$	1,932.00

Second Quarter 2014 Financial Results:

• Total Revenue was $4.9 million, a decrease of 4.8% from $5.2 million in the same quarter last year.
• Adjusted EPS was $0.01 vs $0.01 in prior year.

Clarence Chung, Chairman and Chief Executive Officer of Entertainment Gaming Asia, commented, "The decrease in gaming operations revenue for the second quarter of 2014 was largely due to the decline in revenue from NagaWorld. While player traffic levels have improved significantly from the first quarter of 2014, we experienced increased player jackpots in the second quarter, which dampened overall net win performance. The decline was partially offset by improved revenue from Dreamworld Poipet, which experienced volatility in the quarter due to the political unrest in Thailand but continued to make progress in improving the quality of its customer base. Revenue from the Philippines operations was relatively stable, with a slight improvement in average daily net win mainly due to new marketing initiatives.

"Our gaming products division experienced a gross margin loss for the quarter largely due to inefficiencies and under-absorption of fixed costs stemming, in part, from the delay of certain new automation equipment, which has now been installed. We are focused on improving production efficiencies and capacity to prepare for large order flow. With the two previously announced gaming chip and plaque orders in the Philippines for a combined total of over $4.0 million in revenue, along with normal reorders from existing customers, we believe we have an attractive pipeline for the second half of 2014.

"We are focused on improving our operating performance and on leveraging our established presence and relationships to secure new projects that will drive long-term growth for the Company. We continue to selectively seek both slot participation and casino development projects in more established markets in Indo-China and other growing gaming markets in Asia, which offer the potential for greater operational scale and returns."

HONG KONG, June 26, 2014 /PRNewswire/ -- Entertainment Gaming Asia Inc. (NASDAQ: EGT) ("Entertainment Gaming Asia" or the "Company"), a gaming company focused on emerging gaming markets in Pan-Asia, today announced that it has entered into an agreement to sell 100% of the issued capital shares of Dreamworld Leisure (Pailin) Limited ("DWP"), a wholly-owned Cambodian subsidiary of the Company established for the purposes of owning and operating Dreamworld Casino (Pailin) ("Dreamworld Pailin"), to a local Cambodian individual (the "Purchaser"). In connection with the sale, the Company also entered into an agreement to terminate all previous agreements with the Company's partner in the operations (the "Partner"), who is a relative of the Purchaser. Dreamworld Pailin, a regional casino developed and operated by the Company, opened in May 2012 and was constructed on land owned by the Partner in the Pailin Province of Northwestern Cambodia next to theThailand border.

While operating losses for Dreamworld Pailin have narrowed in recent months, due to an inability to secure a long-term third-party table game operator, a low level of natural player traffic and the political unrest in Thailand, the Company has been exploring strategic alternatives for the property. After careful evaluation of all options, on June 20, 2014 the Company entered into an agreement to sell 100% of the issued shares of DWP to the Purchaser. The sale includes all assets of DWP with the exception of all electronic gaming machines, certain surveillance equipment and other assets excluded in the agreement and prohibits any use of the Dreamworld brand name by the Purchaser. Total consideration paid to the Company by the Purchaser will be $500,000, of which $100,000 was paid at the time of entering the agreement and the balance is to be paid in sixteen $25,000 monthly installments commencing within one month of the signed agreement. The parties expect to complete the sale transaction subject to the Purchaser's receipt of certain government approvals, which is expected within the next few months.

In connection with the sale of the issued capital shares of DWP, on June 20, 2014the Company and the Partner entered into an agreement to terminate the previous agreements with the Partner and all future obligations thereunder including future lease payments owed by the Company.

As previously reported, the Company recorded an impairment charge of approximately$2.5 million as of December 31, 2013 related to Dreamworld Pailin. The impairment charge represented the entire capital expenditure incurred for the property as ofDecember 31, 2013 with the exception of those assets that the Company believes could be redeployed to other existing properties.

Item 1.01 Entry into a Material Definitive Agreement

On June 20, 2014, Elixir Gaming Technologies (Cambodia) Limited (“EGT”), a wholly-owned subsidiary of Entertainment Gaming Asia Inc. (the “Company”), entered into a share purchase agreement to sell 100% of the issued capital shares of Dreamworld Leisure (Pailin) Limited (“DWP”), a wholly-owned Cambodian subsidiary of EGT established for purposes of owning and operating Dreamworld Casino (Pailin) (“Dreamworld Pailin”), to a local Cambodian individual (the “Purchaser”). The Purchaser is a relative of the Company’s partner in the operations (the “Partner”). The sale of the shares pursuant to the agreement is expected to be completed subject to, amongst others, the Purchaser’s receipt of certain government approvals, which is expected within the next few months.

Total consideration to be paid to EGT by the Purchaser will be $500,000, of which $100,000 was paid at the time of signing the agreement and the balance is to be paid in sixteen $25,000 monthly installments commencing within one month of the signed agreement. The sale includes all assets of DWP with the exception of all electronic gaming machines, certain surveillance equipment and other assets as excluded in the agreement and prohibits any use of the Dreamworld brand name by the Purchaser.

In connection with the sale of the issued capital shares of DWP, EGT and the Partner entered into a termination agreement dated June 20, 2014 pursuant to which the parties agreed to terminate, effective as of June 20, 2014, a lease agreement and an undertaking agreement previously entered into between the parties, both dated July 13, 2011, with respect to Dreamworld Pailin. Pursuant to the termination agreement, the parties agreed to terminate all future obligations, claims and liabilities of the parties under the lease agreement and undertaking agreement, including DWP’s obligation to pay to the Partner lease payments of $5,000 per month over the next 17 years.

First Quarter 2014 Financial Results

• Revenue was $4.9 million, a decrease of 29% compared to $6.9 million in the first quarter of 2013
• Net loss of $1.0 million, or $0.03 per share, on a weighted average diluted share count of approximately 30.1 million in the first quarter of 2014. This compared to a net loss of $2.5 million, or $0.08 per share, on a weighted average diluted share count of approximately 30.0 million for the first quarter of 2013.

"Our gaming operations benefited from incremental revenue from Dreamworld Poipet. While performance for this property was dampened due to the political unrest in Thailand, we continue to implement targeted marketing programs which have resulted in improvements in the quality of our player base.

"We are focused on improving the performance of our gaming operations despite the political tensions that impact certain of our markets. In April, our operations in NagaWorld achieved approximately $200 in average daily net wins. For gaming products, we are focused on enhancing production efficiencies and expect to achieve a normalized cost structure for this business this year. We have recently announced two meaningful new gaming chip and plaque orders in the Philippines for a combined total of over $4.0 million. We believe that this, along with normal reorders from existing customers, provide an attractive pipeline for this division for the second half of 2014.

"We remain committed to our gaming development strategy and are actively seeking new projects in Indo-China and other growing gaming markets in Asia that have the potential to drive meaningful long-term growth for the Company. We seek to leverage our established presence and relationships to capitalize on growth opportunities in our target markets."

HONG KONG--(BUSINESS WIRE)--Entertainment Gaming Asia Inc. (NASDAQ: EGT) (Entertainment Gaming Asia or the Company), a gaming company focused on emerging gaming markets in Pan-Asia, today announced its Dolphin subsidiary has received a $3.3 million gaming chip and plaque order to supply Melco Crown (Philippines) Resorts Corporation (PSE:MCP) new City of Dreams Manila resort in the Philippines. The order is expected to be booked in the fourth quarter of 2014 and marks Dolphin's second major gaming chip order in the growing Philippine gaming market. City of Dreams Manila, a premier integrated resort expected to open in 2014, will be the second property to open in the Entertainment City casino and tourist complex in Manila Bay. The property will include the ultra luxurious Crown Towers Hotel, trend-setting Nobu Hotel and a five-star luxury hotel as well as a casino, entertainment facilities, retail outlets and restaurants.

Panos Makridis, Senior Vice President Gaming Products of Dolphin Products Limited, commented, Dolphin is pleased to be the supplier of gaming chips and plaques to the new City of Dreams Manila. The order includes a range of Dolphin's high-level security features including RFID. We believe this order reflects Dolphin�s commitment to the highest quality and value as well as demonstrates our strong relationships in the Asian gaming market."

HONG KONG--(BUSINESS WIRE)--Entertainment Gaming Asia Inc. (NASDAQ: EGT) (�Entertainment Gaming Asia� or �the Company), a gaming company focused on emerging gaming markets in Pan-Asia, today announced its Dolphin subsidiary has secured a major reorder to supply its gaming chips and plaques to Bloomberry Resorts Corp.'s (PSE: BLOOM) Solaire Resort & Casino (�Solaire�). Dolphin was the supplier of gaming chips for Solaire�s Phase 1, which opened in March 2013, and has now been selected to supply both gaming chips and plaques for its Phase 1A expansion, which is expected to open in the third quarter of 2014. The order is valued at $700,000 in revenue, which the Company expects to record in the third quarter of 2014. Solaire, a premier integrated resort, is the first property to open in the Entertainment City casino and tourist complex in Manila Bay, Philippines. Solaire�s Phase 1 features approximately 200,000 square feet of gaming space, approximately 500 hotel rooms and suites, restaurants, entertainment amenities and conference facilities. Phase 1A will include a new 300-suite hotel tower, an expanded gaming floor, additional restaurants and a retail promenade.

Panos Makridis, Senior Vice President Gaming Products of Dolphin Products Limited, commented, "Dolphin is proud to be Solaire�s provider of casino currency. We believe this reorder, which includes both gaming chips and plaques with a range of Dolphin�s high-level security features, further strengthens our relationship with this prominent customer and demonstrates their acknowledgment of the superior quality of Dolphin's chips and plaques and their value for the

Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing

On April 17, 2014, Entertainment Gaming Asia Inc. (the “Company”) received a deficiency letter (the “Notice Letter”) from The NASDAQ Stock Market LLC (“NASDAQ”) advising that, based on the Company’s closing bid price for the last 30 consecutive business days, the Company does not comply with the minimum bid price requirement of $1.00 per share, as set forth in NASDAQ Listing Rule 5550(a)(2).

The notification has no immediate effect on the listing of the Company’s common stock on The NASDAQ Capital Market.

In accordance with NASDAQ Listing Rule 5810(c)(3)(A), the Company has a grace period of 180 calendar days, until October 14, 2014, to regain compliance with the minimum closing price requirement for continued listing. If at any time during the 180-day notice period, the minimum closing bid price per share of the Company’s common stock closes at or above $1.00 for a period of ten consecutive business days, the Company will regain compliance and the matter will be closed. In the event the Company does not regain compliance within the 180-day grace period, the Company may be eligible to receive an additional 180-day grace period, provided that it meets the continued listing requirement for market value of publicly held shares and all other applicable standards for initial listing on The NASDAQ Capital Market, except for the bid price requirement, and provides written notice of its intention to cure the minimum bid price deficiency during the second 180-day grace period. If the Company fails to regain compliance after the second 180-day grace period, the Company’s common stock will be subject to delisting by NASDAQ.

On April 23, 2014, the Company issued a press release, attached to this Current Report on Form 8-K as Exhibit 99.1, reporting that it had received the Notice from NASDAQ.

Fourth Quarter 2013 Financial Results

• Total consolidated revenue of $6.1 million for the fourth quarter of 2013 and $24.3 million for the 2013 fiscal year
• Net loss of $4.2 million, or $0.14 per share, for the fourth quarter of 2013 vs. last years earnings of $0.01.

Clarence Chung, Chairman and Chief Executive Officer of Entertainment Gaming Asia, commented, �The 2013 operating results were not satisfactory but we remain steadfast in our efforts to improve performance. We continue proactive marketing strategies at NagaWorld to minimize the impact of political and labor tensions in Phnom Penh. We are focused on continuing to ramp up performance at Dreamworld Poipet, which made a meaningful contribution to revenue for the 2013 fiscal year.

�For the gaming products division, we are optimistic about the future potential. With efforts to improve efficiency and capacity, we are preparing for anticipated large new orders. With the potential for a major gaming chip and plaque order for a new casino resort in the Philippines combined with our typical reorder flow, the expected sales pipeline for 2014 is attractive.

�We are focused on building our resources and deepening our established market presence and relationships in our markets to capitalize on potential growth opportunities. We are exploring new potential gaming projects located in more established gaming markets that can add meaningful scale to our operations and drive long-term growth for the Company.�

Third Quarter 2013 Financial Results

• Total consolidated revenue of $5.7 million vs. last years $6.2 million
• Basic and diluted earnings per share: was $0.01 vs. last years $0.00.

Clarence Chung, Chairman and Chief Executive Officer of Entertainment Gaming Asia, commented, �Gaming operations revenue improved slightly for the third quarter compared to the prior year period due to incremental revenue contribution from Dreamworld Poipet and improvement in Dreamworld Pailin, which offset declines in other slot operations.

�Dreamworld Poipet, a slot hall which we developed in an established regional gaming market in Cambodia, posted quarterly sequential improvement and contributed positive EBITDA to the quarter. Since the opening in May 2013, we have been focused on the implementation of targeted marketing programs to develop and expand a quality player base with a goal to capture a meaningful share of this vibrant market.

�Slot operations performance in the quarter was negatively impacted primarily by a decrease in revenue for our operations in NagaWorld and in the Philippines. In NagaWorld, we experienced lower player traffic levels as a result of events related to the national Cambodian elections held in July 2013 and, in the Philippines, we had higher jackpot payouts and increased competition from a major casino resort which opened in Manila earlier in the year.

�For Dreamworld Pailin, we have completed the repositioning of the operations to a leasing model. Under the new operating model, we have leased 10 gaming tables to a third-party operator. We believe this will allow us to leverage the operator�s existing player network in Thailand and provide us with an increase in quality player traffic. In addition, in early November 2013, we added semi-live multi-game electronic gaming tables with 30 seats, increasing the machine base from 58 to 88 seats. We placed these machines on a revenue sharing basis resulting in minimal capital investment to us. These changes to the operating model provide us recurring revenue and a substantially reduced cost structure.

�We believe our gaming products division provides a diversified revenue stream with attractive earnings potential. With the plant relocation completed, we booked approximately $1.1 million in revenue in the third quarter of 2013. Presently, we have a solid confirmed order pipeline for gaming chips and plaques of approximately $1.3 million in revenue and we are optimistic about the potential to secure some major orders in 2014.

�In addition, we recently expanded our gaming products offerings with several distribution agreements with third-party gaming suppliers. Adding to the product mix should further deepen our existing customer relationships and increase marketability to new customers. With a strong gaming chip and plaque product line and an expanding product mix, we are preparing to benefit from the expected growth in Asian gaming over the next several years.

�We believe that our business model offers growth potential and the ability to generate quality recurring cash flow. We are focused on building our resources as we actively seek new projects in the high-growth economies of Indo-China. With our established presence and strong relationships in our markets, we believe we have a solid foundation from which to capitalize on the growth opportunities in our target markets in Asia.�

HONG KONG--(BUSINESS WIRE)--Entertainment Gaming Asia Inc. (NASDAQ: EGT) (�Entertainment Gaming Asia� or �the Company�), a leading gaming company focused on emerging gaming markets in Pan-Asia, announced today agreements with gaming equipment supplier LT Game Limited (�LTG�), a leading supplier of electronic multi-game machines and equipment in Macau and the Asia Pacific region. These agreements serve to help facilitate the refocusing of the Company�s Dreamworld Pailin casino operations in Cambodia and enhance the offerings for its gaming products division.

As part of its previously-announced efforts to refocus its operations and streamline costs for Dreamworld Pailin casino in Cambodia, the Company entered into a machine participation agreement with LTG who will supply, install and provide maintenance for 30 electronic gaming machine seats on a revenue sharing basis. The LTG gaming offering will consist of semi-live electronic baccarat and roulette table games. Under the terms of this agreement, Dreamworld Pailin and LTG will share in the gross net win before tax from these machines on an 85%/15% respective basis. The contract term is five years commencing with the live operation of the machines, which is expected to occur in October.

In addition, the Company has signed a distribution agreement with LTG which grants the Company the exclusive right to market and sell LTG gaming products to designated casinos and gaming venues within Cambodia, Vietnam and the Philippines. The initial duration of the agreement is six months in Cambodia and Vietnam and one year in the Philippines. Subject to the achievement of certain sales targets, the Company is entitled to renew the agreement for successive one year periods under the same terms.

Clarence Chung, Chairman and Chief Executive Officer of Entertainment Gaming Asia, commented, �We are delighted to be able to offer the LTG range of products in our markets and expand our gaming product mix beyond our extensive line of Dolphin gaming chips and plaques. We are excited about the potential derived from combining our market knowledge, relationships and resources with LTG�s innovative gaming products. With the ability to fully leverage our relationships and existing infrastructure in both Indo-China and the Philippines, this agreement provides the opportunity for incremental revenue, which should directly impact the bottom line.�

Jay Chun, Chairman of LTG added, �We are pleased to work with Entertainment Gaming Asia. With their relationships and market presence, they are a natural fit for our expansion efforts. We look forward to building on the success we have experienced in Macau in these new markets.

Second Quarter 2013 Financial Results

• Revenue was $5.8 million, a decrease of 5% compared to $6.2 million in the second quarter of 2012.
• Net loss from continuing operations of $385,000, or $0.01 per share, on a weighted average diluted share count of approximately 30.0 million in the second quarter of 2013. This compared to net income of $429,000, or $0.02 per share, on a weighted average diluted share count of approximately 31.3 million for the second quarter of 2012.

Clarence Chung, Chairman and Chief Executive Officer of Entertainment Gaming Asia, commented, �It has been an eventful quarter for the Company with the opening of our new Dreamworld Poipet slot club, the completion of the relocation and repositioning of our gaming products division and the formulation of a strategic plan to drive improved earnings performance for Dreamworld Pailin.

Quarterly performance benefited from strong contribution from our operations in NagaWorld. However, overall results were negatively impacted by lower revenue and high non-recurring costs for the gaming products division primarily due to the relocation of the manufacturing facilities from Australia to Hong Kong during the quarter and a gross margin loss for Dreamworld Pailin.

In addition to strong performance from NagaWorld, slot operations revenue benefited from Dreamworld Poipet. Our targeted marketing efforts have helped to begin building a quality player base for these operations and the achievement of positive EBITDA for the month of July. Slot operations performance in the quarter was negatively impacted by a decrease in revenue for our operations in the Philippines. This market is experiencing increasing competition from the development of major integrated casino resorts in Manila. With a solid local player base and proactive approach to marketing to our target customers, we are focused on improving customer loyalty. Further, this increasing competition is likely to bring consolidation at the slot club level and, we believe, this could provide an opportunity for us.

For Dreamworld Pailin, we are preparing to implement efforts to refocus these operations that we believe will better allow us to capitalize on the existing market conditions and substantially reduce operating costs. We intend to introduce a new operating model with an increased focus on VIP players and a shift in the mix of gaming offerings, with the goal of improving the earnings potential for these operations.

In addition to our gaming operations, our gaming products provide a diversified revenue stream with attractive earnings potential. With the production plant relocation behind us, we entered the third quarter of 2013 with a gaming chip and plaque order pipeline of approximately $2 million in revenue expected to be recorded during the third quarter, a more normalized operating cost structure and a focus on expanding our product offerings and customer base.

We believe we have developed a business model that provides the ability to generate quality recurring cash flow. This has allowed us to invest in and grow our operations and pay down all of our debt. We are focused on growing our existing businesses and building our resources as we actively seek new growth opportunities in the high-growth economies of Indo-China.�

First Quarter 2013 Financial Results

• Revenue from gaming operations, which included slot and casino operations, was $5.3 million in the first quarter of 2013, an increase of 6% compared to $5.0 million in the first quarter of 2012.
• Net loss from continuing operations of $329,000, or $0.01 per share, on a weighted average diluted share count of approximately 30.0 million in the first quarter of 2013. This compared to net income from continuing operations of $881,000, or $0.03 per share, on a weighted average diluted share count of approximately 30.2 million for the first quarter of 2012.
• Net loss of $2.5 million, or $0.08 per share, for the first quarter of 2013 vs. earning $0.03 a share in first quarter 2012.

Clarence Chung, Chairman and Chief Executive Officer of Entertainment Gaming Asia, commented, �Our consolidated revenue was up 22% for the first quarter of 2013 compared to the prior year period driven by significantly higher sales of gaming chips and plaques and incremental revenue from Dreamworld Pailin.

Our gaming chips and plaques benefited from strong reorder flow due to our growing customer base. We incurred high labor costs in Australia for these operations during the quarter as we accelerated the fulfillment of existing orders to expedite the relocation of the manufacturing plant from Australia to Hong Kong to accommodate our near-term order pipeline of over $1.0 million. Dreamworld Pailin contributed $1.1 million revenue in the quarter. While Dreamworld Pailin revenue was down slightly from the prior sequential quarter, we continue to refine our marketing programs and believe that we are making progress toward improving the quality of the player base.

Top-line gains were partially offset by lower slot revenue, primarily from our operations at Nagaworld, compared to the prior year period due to lower player traffic as a result of both the subdued atmosphere during the mourning period for the deceased King of Cambodia and the NagaWorld employee strike. Average net wins for these operations declined to $217 per machine for the quarter. However, net wins for our operations at NagaWorld have since climbed to $276 per machine for the month of April 2013.

We made great progress during the first quarter and to-date in further refining our business operations. We sold a non-core legacy business, opened our new Dreamworld Poipet property, took steps to implement our junket program to further increase high-quality player traffic at Dreamworld Pailin and completed the relocation of our gaming chips and plaques operations to a high-security, lower-cost plant in Hong Kong.

With solid recurring cash flow anticipated from our business divisions and planned capital expenditures largely concentrated early in the year, we are focused on building our resources in preparation for new potential growth opportunities.

HONG KONG--(BUSINESS WIRE)--Entertainment Gaming Asia Inc. (NYSE MKT: EGT) (“Entertainment Gaming Asia” or “the Company”), a leading gaming company focused on emerging gaming markets in Pan-Asia, today announced an update on a civil action complaint filed against the Company and certain of its current and former directors and officers on March 26, 2010 (as subsequently amended on May 28, 2010 and December 20, 2011) by certain former shareholders of the Company including Prime Mover Capital Partners L.P., Strata Fund L.P., Strata Fund Q.P. L.P., and Strata Offshore Fund, Ltd (collectively, the “Plaintiffs”) in the United States District Court for the Southern District of New York (the “Complaint”).

The Complaint concerns various allegations of federal and state securities violations, breaches of fiduciary duty, negligent misrepresentation, and breaches of contract. The most current summary of the Complaint can be found in the Company's 2012 Second Quarter Form 10-Q.

On September 27, 2012, the district court ruled on the Company’s motion to dismiss the Complaint filed against the Company and certain of its current and former officers and directors. Similar to the June 22, 2011 ruling issued on the Company’s motion to dismiss in the previously amended Complaint, the district court dismissed all of Prime Mover's claims and dismissed all of Strata's claims except for two breach-of-contract counts against the Company. All claims against the current and former officers and directors were dismissed. It is not known at this time whether or when the Plaintiffs may seek leave to amend their dismissed claims. If the Plaintiff's do not seek leave to amend their dismissed claims, or if their request to amend is denied, the civil action will be limited to the Plaintiff's further pursuit of their breach of contract claims against the Company.

HONG KONG--(BUSINESS WIRE)--Entertainment Gaming Asia Inc. (NYSE MKT: EGT) (“Entertainment Gaming Asia” or “the Company”), a leading gaming company focused on emerging gaming markets in Pan-Asia, today announced its Dolphin subsidiary has secured a $1.3 million gaming chip order to supply Bloomberry Resorts Corp.’s (PSE: BLOOM) new Solaire Resort & Casino (“Solaire”) in the Philippines. This order will be booked in the fourth quarter of 2012 and marks Dolphin’s entrance into the growing Philippine gaming market. Solaire, a premier integrated resort, will be the first property to open in the highly-anticipated Entertainment City casino and tourist complex in Manila Bay in early 2013.

Clarence Chung, Chairman and Chief Executive Officer of Entertainment Gaming Asia, commented, “Dolphin is delighted to be appointed as the supplier of Solaire’s peso-denominated cash, non-negotiable and reserve bank chips. The order includes approximately 765,000 chips with a range of Dolphin’s high-level security features. We believe this order reflects the recognition by Solaire management of the superior product quality and service offered by the Dolphin team and our commitment to developing a range of products that is considered by casino customers to be preeminent.”

Also today, the Company announced that its Dolphin subsidiary is in the process of delivering its previously-announced order of RFID gaming chips and plaques to long-time customer, Crown Perth, formerly known as Burswood Entertainment Complex, in Perth, Western Australia. This $2.2 million order, of which approximately $1.6 million will be booked in the third quarter of 2012 and the remaining $600,000 will be booked in the fourth quarter of 2012, includes over 500,000 chips and 25,000 plaques as part of the rebranding of the property to the world renowned “Crown” brand. The newly expanded and refurbished Crown Perth, which is part of the integrated urban entertainment resorts owned by Crown Limited (ASX: CWN), was launched at a gala opening on September 20, 2012.

Clarence Chung concluded, “Our Dolphin team worked closely with Crown Perth to design a series of chips and plaques that include the highest level security features available and capture the new branding befitting Crown Perth. This order further strengthens our relationship with this prominent customer and we believe demonstrates their acknowledgment of the superior quality and security features of Dolphin’s chips and plaques and their value for the money.

“We believe these orders are further evidence that our efforts to derive greater value from our Dolphin gaming chip assets are paying off. Through Dolphin’s expanded product offerings and our targeted marketing programs, we continue to strengthen our existing customer relationships in our core markets of Australia and Macau and broaden our customer base to new geographies, such as the Philippines.”

Second Quarter ended June 30, 2012 

• Record quarterly total revenue from gaming operations of $5.2 million for the second quarter of 2012
• Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization and non-cash charges) of $2.8 million for the second quarter of 2012
• Net income of $484,000 for the second quarter of 2012
• Average consolidated win per unit per day (WUD) for the slot operations (formerly referred to as the participation business) of $147 for the second quarter of 2012
• Gaming chip and plaque sales of $978,000 for the second quarter of 2012, representing nearly 50% of total gaming chip and plaque sales for the full year 2011
• Cash balance of $11.8 million as of June 30, 2012
• Total debt reduced to $3.1 million as of June 30, 2012
• In May 2012, the Company opened the mass market floor of Dreamworld Pailin in Cambodia, its first casino development project. Operations are in the early ramp-up stages and results are not yet normalized.
• Dreamworld Poipet in Cambodia is under development and expected to open in the first quarter of 2013.
• The Company has secured a $2 million gaming chip and plaque order from an existing customer to be delivered in the third quarter of 2012.

Clarence Chung, Chairman and Chief Executive Officer of Entertainment Gaming Asia, commented, The second quarter of 2012 was a strong quarter for our slot and gaming chips and plaques operations. Our slot operations experienced record revenues due to strong performance at NagaWorld, improvements in the Philippines and the addition of our newest operations in Thansur Bokor during the quarter. Consolidated average daily net wins were a solid $147 per seat for the quarter. Our gaming chips and plaques business posted strong revenue growth and we have secured a $2 million order for delivery later this year. In May 2012, we opened the mass market floor of Dreamworld Pailin and are working to ramp up revenues for this operation. Further, we have been actively developing our next project, Dreamworld Poipet. With steady recurring cash flow from our slot machine operations and meaningful improvement in our casino chips and plaques business, we are now focused on the execution our new casino development strategy.

On June 12, 2012, we filed a Certificate of Change with the Secretary of State of Nevada to effect a reverse split of the issued and outstanding shares of our common stock at a ratio of one share for every four shares outstanding prior to the effective date of the reverse stock split. The reverse stock split will become effective on June 12, 2012. Effective at the same time as the reverse stock split, the authorized shares of our common stock will be proportionately decreased from 300,000,000 shares to 75,000,000 shares.

 First quarter ended March 31, 2012

Highlights:

• New record-high quarterly net income of $1.0 million for the first quarter of 2012, an increase of 41% compared to the first quarter of 2011.
• Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization and non-cash charges) was $3.2 million, an increase of 6% from the first quarter of 2011.
• Total revenue from gaming operations was a record $5.0 million for the first quarter of 2012, an increase of 19% from the first quarter of 2011.
• Average consolidated win per unit per day (WUD) reached a new high of $154 for the first quarter of 2012, an increase of 15% from the first quarter of 2011.
• As of March 31, 2012, total installed electronic gaming machine (EGM) seats in operation were 1,560 in eight venues, comprised of three venues in Cambodia with a total of 799 seats and five venues in the Philippines with a total of 761 seats.
• Gaming chip and plaque sales were $532,000, more than double that of the first quarter of 2011.
• Cash balance was $11.7 million as of March 31, 2012 compared to $12.8 million as of December 31, 2011.
• Total debt was $4.7 million as of March 31, 2012 compared to $6.2 million as of December 31, 2011.
• On May 3, 2012, the Company completed on target the initial installation of 200 EGM seats on a participation basis in Sokha Hotels and Resort’s new five-star Thansur Bokor Resort and Casino in Cambodia.
• On May 9, 2012, the Company successfully opened Dreamworld Pailin in Cambodia, its first casino development project.
• On May 10, 2012, the Company held the groundbreaking ceremony for Dreamworld Poipet in Cambodia, which is expected to open before the end of 2012.

Clarence Chung, Chairman and Chief Executive Officer of Entertainment Gaming Asia, commented, “After record-breaking 2011 financial results, I am pleased to report another strong quarter for the first quarter of 2012. Our gaming operations generated a record-high $5.0 million in revenue, driven by significant improvement in both our Cambodia and Philippines operations. Consolidated average daily net wins reached a new high of $154 per seat for the quarter. This strong top-line growth combined with continued focus on cost control resulted in adjusted EBITDA of $3.2 million and a record net profit of nearly $1.0 million for the first quarter of 2012. We have achieved this growth while investing in our strategic growth plans to expand our gaming operations and strengthening our balance sheet. With the successful repositioning of our operations behind us, we look to the future armed with an attractive mix of gaming operations including a solid and growing participation business, exciting casino development plans, and prospects for continued improvement in our gaming chip and plaque business.”

 Fourth quarter and fiscal year ended December 31, 2011

• 2011 fiscal year produced record-breaking financial performance with adjusted EBITDA (earnings before interest, taxes, depreciation, amortization and non-cash charges) of $11.7 million, an increase of 41% from the 2010 fiscal year, and net income of $642,000, marking the first time in the Company�s history to achieve an annual net profit.
• Total net revenue from gaming operations was $4.3 million for the fourth quarter of 2011, an increase of 12% from the fourth quarter of 2010 and $17.4 million for the 2011 fiscal year, an increase of 22% from the 2010 fiscal year.
• Average consolidated win per unit per day (WUD) was $136 for the fourth quarter of 2011, an increase of 14% from the fourth quarter of 2010 and $140 for the 2011 fiscal year, an increase of 20% from the 2010 fiscal year.
• As of December 31, 2011, total installed EGM seats in operation were 1,477 in seven venues, comprised of five venues in the Philippines with a total of 758 seats and two venues in Cambodia with a total of 719 seats.
• As part of its annual impairment review, the Company recorded a $1.4 million non-cash impairment charge as of December 31, 2011 associated with the write-down of certain gaming machines and systems in inventory as well as infrastructure costs related to the closure of one venue in the Philippines in April 2011.
• Cash balance was $12.8 million as of December 31, 2011 compared to $10.2 million as of December 31, 2010.
• Total debt was $6.2 million as of December 31, 2011 compared to $9.2 million as of December 31, 2010.

• The Company intends to expand its gaming machine participation and management operations in Cambodia with the placement of an initial 200 EGM seats in Sokha Hotels and Resort�s new five-star Thansur Bokor Resort and Casino expected to open in April 2012.
• The Company is making progress on the development of its casino projects in the Pailin and Kampot Provinces of Cambodia with Dreamworld Casino Pailin expected to open on May 9, 2012 and Dreamworld Casino Kampot expected to open in the third quarter of 2012.

Clarence Chung, Chairman and Chief Executive Officer of Entertainment Gaming Asia, commented, �2011 was a milestone year for the Company. It marks the third consecutive year of earnings growth since we began to implement our restructuring efforts and the achievement of record-breaking financial performance. For the 2011 fiscal year, we generated nearly $12 million in adjusted EBITDA, demonstrating dramatic improvement from essentially breakeven results just three years ago, and recorded an annual net profit for the first time in the Company�s history. This enhanced ability to generate cash flow enabled us to increase our cash position for the year while still investing in our strategic growth plans and strengthening our balance sheet. We enter 2012 a stronger Company with a solid foundation from which to invest in our core participation business and to expand our gaming operations to include the development and operation of our own casinos in the Indo-China region.�

Third Quarter 2011 Highlights:

• Net income was $647,000 for the third quarter of 2011 compared to $725,000 for the third quarter of 2010. The third quarter of 2010 included $320,000 in a one-time tax benefit.
• Consolidated adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, and non-cash charges) was $2.8 million for the third quarter of 2011 compared to $3.2 million for the third quarter of 2010.
• Total net revenue from EGMs on participation for the third quarter of 2011 was $4.4 million, an increase of 7% from the third quarter of 2010.
• Average consolidated win per unit per day (WUD) for the third quarter of 2011 was $145, an increase of 16% from the third quarter of 2010.
• As of September 30, 2011, total installed EGM seats in operation were 1,495 in seven venues, comprised of five venues in the Philippines with a total of 780 seats and two venues in Cambodia with a total of 715 seats.
• Cash-based selling, general and administrative (SG&A) expense was $1.5 million for the third quarter of 2011 compared to $1.3 million for the third quarter of 2010.
• Cash balance was $14.3 million as of September 30, 2011 compared to $10.2 million as of December 31, 2010.
• Total debt was $7.7 million as of September 30, 2011 compared to $9.2 million as of December 31, 2010.
• Recent agreement to increase revenue sharing in one of the Company’s most promising participation venues in the Philippines is expected to improve market positioning and long-term overall returns of its Philippine gaming participation operations.
• Targeted marketing initiatives result in an expanded customer base for the Company’s Dolphin gaming chips and plaques including a new customer in the Indo-China region and in Macau.
• The Company is making progress in the pre-construction phases of its casino development projects in the Pailin and Kampot Provinces of Cambodia and intends to open both projects in the second quarter of 2012 beginning with the Pailin project.
• The Company continues to pursue potential new gaming projects in the Indo-China region.
• EPS was flat at $0.01

Clarence Chung, Chairman and Chief Executive Officer of Entertainment Gaming Asia, commented, “I am pleased to announce that Entertainment Gaming Asia has reported another quarter of solid operating results. For our third quarter of 2011, we have continued to achieve strong EGM participation revenue and consolidated average net win in our core gaming participation operations and another quarter of positive GAAP earnings. With a healthy adjusted EBITDA run rate of approximately $1 million per month, we have maintained our cash position at over $14 million while investing in our strategic growth plans and strengthening our balance sheet. We remain focused on improving overall returns through investment in our core participation operations and our casino development growth strategy within emerging gaming markets in the Indo-China region.”

ENTERTAINMENT GAMING ASIA INC. AND SUBSIDIARIES

Consolidated Statements of Operations

(amounts in thousands, except per share data)

(Unaudited)

 

						Old Basis							Old Basis
		Three-Month Periods Ended June 30,							Six-Month Periods Ended June 30,
		2011				2010			2011				2010
Revenues:
Gaming		$	4,553			$	3,539		$	8,718			$	6,374
Other products		2,165				1,526			4,235				3,058
Total Revenues		6,718				5,065			12,953				9,432
Operating costs and expenses:
Cost of gaming machine participation
Electronic gaming machine depreciation		1,197				1,970			2,387				3,857
Casino contract amortization		607				—			1,225				—
Other operating costs		287				206			569				432
Cost of other products		1,898				1,493			3,662				2,984
Selling, general and administrative expenses		1,169				1,516			2,368				2,937
Stock-based compensation expenses		799				246			1,022				540
Impairment of assets		—				75			—				191
Product development expenses		133				372			213				456
Depreciation and amortization		29				229			60				458
Restructuring charges		—				210			—				247
Total operating costs and expenses		6,119				6,317			11,506				12,102
Income/(loss) from operations		599				(1,252		)	1,447				(2,670		)
Other income/(expense):
Interest expense and finance fees		(106		)		(84		)	(200		)		(206		)
Interest income		18				25			41				38
Foreign currency losses		(17		)		(69		)	(24		)		(60		)
(Loss)/gain on dispositions		(152		)		5			(152		)		4
Other		67				61			127				152
Total other expenses		(190		)		(62		)	(208		)		(72		)
Income/(loss) before income tax		409				(1,314		)	1,239				(2,742		)
Income tax expense		(102		)		(220		)	(240		)		(455		)
Net income/(loss)		$	307			$	(1,534	)	$	999			$	(3,197	)
Attributable to:
Equity shareholders		$	307			$	(1,534	)	$	999			$	(3,197	)
Non-controlling interest		—				—			—				—
		$	307			$	(1,534	)	$	999			$	(3,197	)
Earnings/(loss) per share:
Basic		$	0.00			$	(0.01	)	$	0.01			$	(0.03	)
Diluted		$	0.00			$	(0.01	)	$	0.01			$	(0.03	)
Weighted average common shares outstanding
Basic		118,068				115,879			117,137				115,426
Diluted		120,387				115,879			119,740				115,426

 

The notes to consolidated financial statements are an integral part of these consolidated statements.

We presently expect that our capital expenditures in 2011 for our existing plans as of the date of this report, which include the development of our Kampot Project, the purchase of EGMs and general maintenance for our current operations will be approximately $2 million to $4 million. Given our current and projected future cash flow generation capability from our operations at NagaWorld, our ability to source previously-owned EGMs at attractive prices relative to new EGMs and our strong relationships with gaming equipment manufacturers, we anticipate funding the above-mentioned capital expenditures for 2011 from cash on hand and expected net cash flow from operations.

As noted above, however, we are currently pursuing additional casino and gaming projects. While there is no guarantee we will successfully conclude these negotiations, if we were to secure these projects we would require additional capital expenditure in 2011 beyond the $2 million to $4 million currently contemplated.

ENTERTAINMENT GAMING ASIA INC. AND SUBSIDIARIES

Consolidated Statements of Operations

 

		Years Ended December 31,
(amounts in thousands, except per share data)		2010				2009
Revenues:
Electronic gaming machine participation		$	14,312			$	6,998
Table game products		1,293				4,516
Non-gaming products		6,600				4,109
Total Revenues		22,205				15,623
Operating costs and expenses:
Cost of gaming machine participation
Machine depreciation		8,020				10,054
Other operating costs		759				1,051
Cost of table game products		806				2,551
Cost of non-gaming products		6,110				4,220
Selling, general and administrative		5,880				7,953
Stock-based compensation expense		887				876
Impairment of assets
Gaming assets, property and equipment		1,053				14,262
Goodwill and intangibles		2,407				425
Flood damage losses		—				83
Product development expenses		610				277
Depreciation and amortization		885				1,037
Restructuring charges		310				623
Total operating costs and expenses		27,727				43,412
Loss from operations		(5,522		)		(27,789		)
Other (expenses)/income:
Interest expense and finance fees		(411		)		(537		)
Interest income		92				85
Foreign currency losses		(72		)		(89		)
Loss on dispositions of assets		(164		)		(107		)
Legal settlement gain		—				656
Other		202				368
Total other (expenses)/income		(353		)		376
Loss before income tax and discontinued operations		(5,875		)		(27,413		)
Income tax benefit/(expense)		665				(486		)
Net loss from continuing operations		(5,210		)		(27,899		)
Net income from discontinued operations, net of tax		—				1,540
Net loss		$	(5,210	)		$	(26,359	)
Loss per share:
Loss from continuing operations		$	(0.05	)		$	(0.24	)
Income from discontinued operations		$	—			$	0.01
Basic and diluted loss per share		$	(0.05	)		$	(0.23	)

In May 2010, we announced our intention to expand our gaming operations and become an owner and operator of regional casinos under the “Dreamworld” brand in select emerging gaming markets in Pan Asia. We believe this expanded business strategy will allow us the potential for higher long-term incremental returns on our operations given the ability to collect a greater share of the net win compared to our existing participation contracts. In addition, it provides us greater long-term control over our operations.

Pursuant to this growth strategy, we have secured two casino projects in Cambodia near the Vietnam border. These projects are strategically located in two separate provinces in southern Cambodia in order to capitalize on what we believe are attractive target markets in the nearby respective major cities and towns. On May 26, 2010, we formed a new company in Cambodia, Dreamworld (Takeo) Investment Holding Limited, which entered into a Land Sale & Purchase Agreement for the acquisition of a parcel of land in the Takeo province of Cambodia where we intend to develop and operate a casino-hotel. On March 4, 2011, we entered into a shareholder agreement with a local partner with respect to our participation in a joint venture company with the tentative name of “Dreamworld Leisure (Kampot) Limited” for the development, ownership and operation of a casino located in Kampot province of Cambodia, near the Vietnam border.

Clarence Chung, Chairman and Chief Executive Officer of Entertainment Gaming Asia, commented, “Our third quarter performance marks a new chapter for Entertainment Gaming Asia with the achievement of positive GAAP earnings. The achievement of this important milestone reflects our successful efforts over the last two years to refocus our operations and dramatically improve our cost structure. With strong contribution from our 670 gaming machine seats in operation at NagaWorld in Cambodia, in the third quarter we more than doubled our adjusted EBITDA on a quarterly sequential basis and have greatly improved our annualized adjusted EBITDA run rate going forward. With solid recurring cash flow contribution from our core gaming participation operations, we believe that we are positioned to execute on our expansion plans and achieve our goal of becoming a leading regional casino owner and operator in select emerging gaming markets in Asia. We are actively pursuing attractive casino projects in our target markets and are in late stage discussions with one particular project.”