Gaming Partners International (GPI) posted a net loss of $54,000 for the second quarter and six months ended June 30, 2013, compared to net income of $1.8m for the same period a year earlier.
The decrease in earnings for the second quarter and first six months of 2013 was caused by lower gross margins and higher general and administrative expenses.
Revenue came in at $14.1m, compared to revenues of $13m whilst gross profit for the quarter was $4.4m.
The primary reasons for the increase in revenue in the second quarter of 2013 compared to the second quarter of 2012 were a $0.6m increase in sales of RFID casino currency and RFID solutions to casinos in the Asia-Pacific region and a $0.4m increase in sales of cards, layouts, dice, and furniture and accessories to casinos in the United States.
Greg Gronau, GPI President and Chief Executive Officer, said: “As in the first quarter, our results reflect the variability of our global customers’ product demands from quarter to quarter. We are not satisfied with our gross margins and bottom line for the first half of 2013 and expect lower earnings for the rest of the year when compared to last year. At the same time, we are working to balance production in our manufacturing facilities and to collaborate with our customers to provide new products and increase sales of our current offerings.”
Mr. Gronau continued: “Our gross profit percentage decreased in the second quarter of 2013, compared with the second quarter of 2012, primarily due to a reduction in volumes of American-style RFID and non-RFID chips sold in Asia during the second quarter of 2013 which lowered the utilisation and cost absorption of our production facilities for these product lines; and lower margins in our Paulson chip line due to increased labour costs related to rush orders; offset by an increase in volumes of European-style RFID plaques sold at higher sales prices and gross margins.”
He added that gross profit percentage decreased in the first six months of 2013, compared with the first six months of 2012, primarily related to a large imbalance in product demand in the first quarter of 2013, which significantly affected the utilisation of production facilities, resulting in one production facility incurring significant overtime and the other to have low utilisation rates. A shift in GPI’s mix of revenues from higher-margin Paulson chips toward lower-margin products also affected profit in the first six months.