LAS VEGAS--(BUSINESS WIRE)--08/13/2004--Paul-Son Gaming Corp. (Nasdaq:PSON), a leading manufacturer and supplier of casino table game equipment, today announced improved financial results for its second quarter and six months ended June 30, 2004, as well as the filing of its Form 10-Q for the quarter.

Net income for the second quarter grew 62% on a 43% increase in revenues for the period, compared with comparable results for the prior year. First half net income climbed 147% from the prior year level on sales that were 22% higher.

For the three months ended June 30, 2004, net income totaled $1,940,000, equal to $0.25 per diluted share ($0.26 basic), up from $1,197,000, or $0.16 per basic and diluted share, in the corresponding period one year ago. Second quarter revenues climbed to $14.8 million from $10.4 million in the prior year.

For the first half, net income amounted to $1,470,000, equal to $0.19 per basic and diluted share, compared with $596,000, or $0.08 per basic and diluted share, in the first half of 2003.

Gerard Charlier, president and CEO, commented: "We are pleased by the company's strong gains in sales and profits in both the second quarter and first half of 2004, reflecting an accelerated pace of shipments during the quarter. These gains followed a somewhat soft first quarter, which reflected timing issues related to customer demand and the opening of new casinos. In the most recent quarter, our Bourgogne et Grasset ('B&G') operation posted substantially higher revenues primarily driven by approximately $6.0 million in sales to three casinos in Asia and one in Canada. The orders to the Asian casinos include sales to the first two 'U.S. owned' casinos to commence operations in Macao. Our U.S. operation recorded one large sale to a casino in Canada, which generated approximately $1.0 million in revenues for the second quarter."

He further emphasized that the company expects to experience continued variability in revenues on a quarter-to-quarter basis due to the timing and volume of customer demand for its casino products and the timing of new casino openings and expansions.

Cost of revenues continued to be reduced as a percentage of sales, decreasing on this basis to 55.2% in the most recent quarter from 56.9% in the same period of 2003. The improvement in cost of revenues on a percentage basis is attributable to better absorption of fixed costs due to the higher volume of sales and the product mix, primarily at B&G. Gross profit strengthened by approximately $2.2 million from the previous year to $6.6 million.

Total operating expenses during the second quarter of 2004 were $3.6 million, compared with $3.2 million a year ago. The increase of $346,000 primarily resulted from higher marketing and sales expenses, which included costs associated with a major U.S. trade show, as well as certain royalties and increased sales compensation. Also, the relocation of the Kansas chip manufacturing operations to Las Vegas resulted in the incurring of $131,000 in expense during the second quarter.

Cash and cash equivalents, and marketable securities at June 30, 2004 totaled $9.3 million, compared with $6.8 million at the December 31, 2003 fiscal year-end. Working capital improved to $9.8 million at June 30, 2004 from $7.3 million at December 31, 2003.

"We are enthusiastic about our company's progress," Charlier concluded, adding: "Our management team has worked effectively to expand and strengthen our product and technology base in order to meet the current and emerging needs of our casino customers around the world. Manufacturing continues to be streamlined, as we seek to further reduce costs and achieve greater operating efficiencies.

"As noted above, our financial position is improving, and additionally, we are taking steps to enhance the company's image and favorable visibility to the gaming industry worldwide. Our management team continues to implement our strategic agenda for further growth and profitability, and we are optimistic about our opportunities to expand our service to our casino customers in North America, Europe and Asia."

Paul-Son manufactures and supplies casino chips, table layouts, playing cards, dice, gaming furniture, table accessories and other products that are used with casino table games such as blackjack, poker, baccarat, craps and roulette. Paul-Son is headquartered in Las Vegas, Nevada, with offices in Beaune, France; San Luis, Mexico; Atlantic City, New Jersey; and other locations. Paul-Son sells its casino products directly to licensed casinos throughout the world.