VendingData(TM) Corporation Reports First Quarter 2006 Financial Results16 May 2006
VendingData(TM) Corporation (Amex: VNX), today reported financial results for its first quarter ended March 31, 2006. The Company reported gross revenues of $1.0 million, a 70% increase compared to gross revenues of $590,000 for the first quarter of 2005. The Deck Checker(TM) achieved a record level of sales during the quarter of 47 units and $600,000, representing approximately 60 percent of total gross revenues.
(Logo: http://www.newscom.com/cgi-bin/prnh/20020325/LAM034LOGO )
The Company reported a net loss applicable to common stockholders for the first quarter of $(2.75) million or $(0.16) per share versus a net loss of $(2.7) million or $(0.16) per share for the first quarter 2005 and a net loss of $(5.8) million or $(0.34) per share for the fourth quarter of 2005. The sequential decrease in net loss over the prior quarter was primarily due to decreased service costs, lower SG&A costs and little first quarter inventory write-down as compared to the $500,000 inventory write-down in fourth quarter 2005.
For the three months ended March 31, 2006, the Company's cost of sales was $692,000, or 62% greater than the prior year's first quarter, excluding the respective inventory write downs of $23,000 in 2006. The increase was primarily due to the roll out of RandomPlus(TM) machines in Washington and upgrading the existing RandomPlus(TM) units from version 3 software to version 4. This was offset by a decrease in costs for shuffler rental depreciation because units were converted to sales or cancelled. The gross margin on revenue (excluding service expense) for the three months ended March 31, 2006, was $387,201 or 15% less than the three months ended March 31, 2005, excluding the respective inventory write down of $23,153 in 2006.
Selling, general and administrative expenses were $2.2 million during the quarter compared to $2.4 million for the three months ended March 31, 2005. The reduction is primarily due to significant reductions in consulting and legal costs. These cash savings have been offset by higher non-cash option expenses.
For the three months ended March 31, 2006, research and development expenses were $222,000, or 17% more than the period ended March 31, 2005. The increase in research and development expenses was due to activity related to the ChipWasher product line.
Interest expense during the first quarter of 2006 totaled $352,000 compared $317,000 for the first quarter 2005. This increase was attributable to the additional debt service related to our previously outstanding 9% credit facility and the previously outstanding 10% senior secured convertible notes.
Cash and equivalents on March 31, 2005 were $211,000 compared to $935,000 on December 31, 2005. On May 2, 2006, the company closed on an $18 million financing. During the three months, accounts receivable (trade) totaled $1.9 million versus $2.2 million in the preceding quarter. Inventories decreased by $200,000 during the quarter to $2.8 million. Total liabilities remained approximately flat over the prior quarter at $19.6 million as of March 31, 2006.
"This quarter we were freed from most of the operational issues of the past and now, with the recent financing in place, we can close the door on legacy constraints," commented Mark Newburg, president and CEO of VendingData(TM). "During the quarter, two of our products achieved noteworthy status. The Deck Checker(TM) posted record sales validating a trend we have been observing in the casino industry, and we believe we will continue to see activity at these levels for the balance of the year. Secondly, we received the industry's first order for a high frequency RFID casino chip, receiving validation from one of the leaders in the casino industry, responsible for a large percentage of the new casino build-out occurring in Macau. Our expectations for the next two quarters is to further a serious effort of lifting revenues to an unprecedented level for the company. With the validations of the RFID casino chip, the strong interest in the Deck Checker(TM), and the very high level of interest we have seen in the ChipWasher(TM) we have the opportunity to deliver outstanding revenue growth this year."
QUARTER HIGHLIGHTS AND RECENT DEVELOPMENTS
VendingData(TM) closed on $18 million private placement
On May 3, 2006, VendingData(TM) announced that it completed a financing totaling $18 million with Bricoleur Capital Management, of which $13 million was raised through an 8% senior debt placement and $5 million through an equity put agreement to be exercised at VendingData(TM)'s discretion. The senior debt placement includes detachable warrants to purchase 3.2 million shares at $2.50 per share, some of which are recallable based on early retirement of $6 million of the debt portion of the transaction. Concurrent with closing this financing, VendingData(TM) will retire its $12 million 10% Senior Notes and the $5 million 9% line of credit. As part of the 12% Senior Note retirement, approximately $5.4 million was converted to equity as per the convertibility provisions of the Note.
VendingData(TM) appointed leading gaming legal and regulatory expert as
VP of Legal, Compliance and General Counsel
Effective May 1, 2006, VendingData(TM) Corporation hired Walter B. Stowe, Jr., a nationally recognized figure in the U.S. gaming industry, as its Vice President of Legal and Compliance and General Counsel. Mr. Stowe has 26 years of proven success, first with the FBI, and then as a manager, legal and compliance expert in the gaming industry. Most recently, Mr. Stowe served as Vice President of Legal and Compliance of Aristocrat Technologies. Prior to Aristocrat, Mr. Stowe served as Director or Compliance and Associate Corporate Counsel at Konami Gaming, Inc. Mr. Stowe served as president of the Association of Gaming Equipment Manufacturers, a gaming trade association from 2003 - 2005.
VendingData(TM) received its first Dolphin High Frequency (13.56MHz) RFID
casino chip order from Galaxy Entertainment Group
April 24, 2006, VendingData(TM) announced that it secured its first official Dolphin High Frequency RFID casino gaming chip purchase agreement from Galaxy Entertainment Group Limited ("Galaxy"). Galaxy's initial order is in excess of half million 13.56MHz RFID casino chips. VendingData(TM) will ship the casino chips to Galaxy's Starworld Casino during the third quarter of 2006.
VendingData(TM) to acquire Dolphin Products, exclusive manufacturer of the
Dolphin high frequency (13.56MHz) RFID casino chip
VendingData(TM) Corporation has entered into a binding Letter of Intent to acquire the manufacturing operations and all remaining intellectual property of Melbourne, Australia based Dolphin Advanced Technologies Pty Ltd., as well as its wholly-owned subsidiaries (collectively, "Dolphin Products"). Under the terms of the proposed transaction, Dolphin Products will mainly receive stock for its company, in addition to a small amount of cash. Dolphin Product's CEO, William Purton, will be given a seat on VendingData(TM)'s Board of Directors. The transaction is expected to close during the third quarter of 2006 and is subject to Legal and Regulatory due diligence efforts. Details of the acquisition will be forthcoming in an SEC Form 8-K expected to be filed by VendingData(TM) Corporation at the market close today.
VendingData(TM) receives total of 44 Deck Checker(TM) orders for Macau
casinos
During March 2006, VendingData(TM) secured purchase orders for 44 Deck Checkers(TM), 22 each from Galaxy Entertainment Group Limited and Sociedade de Jogos de Macau ("SJM"). This order exceeds the number of Deck Checkers(TM) sold in all of 2005.
CONFERENCE CALL
Conference Call Details:
Date/Time: Monday, May 15, 2006 - 4:30 p.m. (ET)
Telephone Number: 866-831-6272
International Dial-In Number: 617-213-8859
Participant Pass code: 58284016
Internet Access: http://www.vendingdata.com or
http://www.streetevents.com
It is recommended that participants phone-in at least 10 minutes before the call is scheduled to begin. A replay of the conference call in its entirety will be available approximately one hour after its completion for 7 days by dialing 888-286-8010 (U.S.), 617-801-6888 (International) and entering the pass code 44916593, and on the Internet at http://www.streetevents.com.
About VendingData(TM) Corporation
VendingData(TM) Corporation is a Las Vegas-based developer, manufacturer and distributor of innovative products for the gaming industry. The company's products include the Deck Checker(TM), PokerOne(TM) and Random Ejection Shuffler(TM) lines, which are installed in various casinos throughout the United States. VendingData(TM)'s newest innovative products include the ChipWasher(TM) and high-frequency RFID Casino Chips. The company's customers include mega-gaming corporations such as Caesars Entertainment, MGM Mirage, Station Casinos, and Boyd Gaming as well as major casinos such as The Venetian, Foxwoods Resort Casino and the world's largest poker room, Commerce Casino. International customers include casinos in Argentina, China, Columbia, Korea, Macau, Malaysia, Peru, United Kingdom, and Uruguay. Visit the VendingData Web site at http://www.vendingdata.com
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties, and actual circumstances, events or results may differ materially from those projected in such forward-looking statements. Factors that could cause or contribute to differences include, but are not limited to, the Company's ability to obtain capital as and when needed; the success of the transition of the Company's manufacturing and assembly to China; changes in the level of consumer or commercial acceptance of the Company's existing products and new products as introduced; competitive advances; acceleration and/or deceleration of various product development and roll out schedules; higher than expected manufacturing, service, selling, administrative, product development and/or roll out costs; current and future litigation; regulatory and jurisdictional issues involving VendingData(TM) Corporation or its products specifically, and for the gaming industry in general; general and casino industry economic conditions; the financial health of the Company's casino and distributor customers both nationally and. For a discussion of these and other factors, which may cause actual events or results to differ from those projected, please refer to the Company's most recent annual report on Form 10-KSB and quarterly reports on Form 10-QSB, as well as other subsequent filings with the Securities and Exchange Commission. The Company cautions readers not to place undue reliance on any forward- looking statements. The Company does not undertake, and specifically disclaims any obligation, to update or revise such statements to reflect new circumstances or unanticipated events as they occur.
Source: prnewswire
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