Elixir Gaming narrows loss in third quarter

By Steve Green (contact)

Wednesday, Nov. 11, 2009 | 9:28 a.m.

Asian casino supplier Elixir Gaming Technologies Inc. narrowed its quarterly loss in the third quarter, even after flooding disrupted gaming locations in the Philippines.

Elixir, with offices in Las Vegas and Hong Kong, on Tuesday reported a quarterly loss of $3.67 million or 3 cents per share compared to a loss in 2008's third quarter of $7.316 million or 6 cents per share.

Revenue of $3.611 million was up from $3.408 million.

As of Sept. 30, the company operated 742 gaming machines at six venues in the Philippines and 385 machines at NagaWorld in Cambodia.

In the fourth quarter the company opened another venue in the Philippines with 145 machines.

The machines are typically operated on a revenue-participation basis with the venues.

Elixir said that during the quarter:

-- Tropical Storm Ondoy struck the Philippines on Sept. 26, causing flooding, some flood damage and disrupting business at some venues. The company recorded a flood damage loss of $98,450, which was its deductible for insurance claims.

--The company exited the chip washing business and in the quarter posted an impairment loss of $424,500 to write down the value of its chip washer patents.

--In order to cut costs, Elixir reduced the size of its board of directors from nine members to five members. Directors Lorna Patajo-Kapunan, Paul A. Harvey, Daniel Sham and Ted Chan did not seek re-election to the board and left the board.

In investor presentations, Elixir has been telling potential investors it's poised for growth as the success of gaming in the Chinese region of Macau has prompted several nations to consider gaming to boost their economies.

Elixir says the emerging gaming markets it targets are "significantly under-penetrated," with the Philippines having 13,800 people per gaming machine vs. 110 people per machine in Australia and 370 in the United States.

"Asian market gaming growth is driven by emerging affluent and middle classes with a strong propensity for gaming," Elixir said in its presentation, adding gaming giant Melco Group owns about 40 percent of Elixir.