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GAMING PARTNERS INTERNATIONAL CORP - 10-Q - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

August 12, 2014

The following discussion is intended to assist in the understanding of our results of operations and our present financial condition. The condensed consolidated financial statements and the accompanying notes contain additional detailed information that should be referred to when reviewing this material. When we cross-reference to a "Note" herein, we are referring to the notes in Part I, Item 1. of this Form 10-Q. Statements in this discussion may be forward-looking. Such forward-looking statements involve risks and uncertainties that could cause actual results to differ significantly from those expressed. See Item 1A, "Risk Factors," of our Form 10-K for the period ended December

31, 2013.



For a more extensive overview and information on our products, as well as general information, see Item 1. "Business" of our Form 10-K for the period ended December 31, 2013.

Overview of Our Business We custom manufacture and supply casino currency including low- and high-frequency radio frequency identification device (RFID) casino currency, RFID solutions for casino currency (consisting of low- and high-frequency RFID casino currency readers, antennas, casino currency authentication software, casino currency inventory software applications, and software maintenance services), table layouts, playing cards, dice, gaming furniture, roulette wheels, table accessories, and other products that are used with casino table games such as blackjack, poker, baccarat, craps, and roulette. GPIC sells its casino table game equipment under the brand names of Paulson®, Bourgogne et Grasset® (BG®), Blue Chip (BC®) and Bud Jones®. On July 1, 2014, GPIC started manufacturing and selling playing cards and table layouts under the recently acquired Gemaco® brand name (see Note 14 - Subsequent Events). GPIC is headquartered in Las Vegas, Nevada, with offices in Beaune, France; Macau S.A.R., China; San Luis Rio Colorado, Mexico; Blue Springs, Missouri; Atlantic City, New Jersey; and Gulfport, Mississippi. We sell our products to licensed casinos worldwide. We operate in one segment and have three operating subsidiaries: GPI USA (including GPI Mexicana, our maquiladora manufacturing operation in Mexico and our manufacturing operation in Blue Springs, Missouri), GPI SAS, and GPI Asia. Our subsidiaries have the following distribution and product focus:



? GPI USA sells in the United States, Canada, the Caribbean, and Latin America.

GPI USA sells our full product line, with most of the products manufactured at

our facility in San Luis Rio Colorado, Mexico and, since July 1, 2014, at our

facility in Blue Springs, Missouri. The remainder is either manufactured in

France or purchased from United States vendors. We also warehouse inventory in

San Luis, Arizona and at our Las Vegas, Nevada headquarters, and have sales

offices in Las Vegas; Atlantic City, New Jersey; and Gulfport, Mississippi.

? GPI SAS sells primarily in Europe and Africa out of its office in Beaune,

France. GPI SAS predominantly sells casino currencies, including both

American-style, known as chips, and European-style, known as plaques and

jetons. Most of the products sold by GPI SAS are manufactured in France, with

the remainder manufactured in Mexico.

? GPI Asia, with an office in Macau S.A.R., China, is the exclusive distributor

of GPI USA and GPI SAS products in the Asia-Pacific region. GPI Asia primarily

sells casino currency, manufactured in France or in Mexico, as well as RFID

product solutions. Since July 1, 2014, GPI Asia also sells layouts manufactured

in Macau.

Historically, we have experienced significant fluctuations in our quarterly operating results and expect such fluctuations to continue. These fluctuations primarily reflect the opening of new casinos, the expansion of existing casinos, or large replacement orders for casino currency, our primary product line, which typically represents approximately 60% of our revenues. The timing of these events is difficult to forecast and largely beyond our ability to influence, and results in variability in our revenues and earnings. While we pursue most large projects years in advance, both large and small sales opportunities arise with little prior notice. Our backlog, which reflects signed orders, was as follows at June 30, 2014 and June 30, 2013 (in millions): GPI Asia GPI USA GPI SAS Total June 30, 2014 $ 7.0$ 4.0$ 0.4$ 11.4 June 30, 2013 $ 3.2$ 4.7$ 0.6$ 8.5 14 Outlook We do not anticipate that we will benefit from any casino openings in the remainder of 2014. We have received a significant order to supply new chips and plaques for a casino expansion in Macau. The order includes nearly 900,000 chips and over 137,000 plaques from the Company's Bourgogne et Grasset® and Bud Jones® brands totaling just under $6.4 million of revenue which should be recognized in the remainder of 2014.



In addition, the acquisition of the gaming assets of GemGroup will add the Gemaco® brand playing cards and table layouts to our domestic product portfolio and increase our US market share in both products. It also adds the manufacturing and sale of layouts to our Asia Pacific product offerings.

Financial and Operational Highlights

For the second quarter of 2014, our revenues were $10.2 million, a decrease of $3.9 million, or 27.8%, compared to revenues of $14.1 million for the same period of 2013. For the second quarter of 2014, our net loss was $1.2 million, compared to a net loss of $0.1 million for the same period in 2013. For the first six months of 2014, our revenues were $20.8 million, a decrease of $8.1 million, or 28.1%, compared to revenues of $28.9 million for the same period of 2013. For the first six months of 2014, our net loss was $2.3 million, compared to net income of $0.5 million for the same period of 2013.



The decrease in our results for the three and six months ended June 30, 2014, was directly attributable to the lack of orders for casino openings/expansions.

GPI SAS uses the euro as its functional currency. At June 30, 2014 and December 31, 2013, the US dollar to euro exchange rates were $1.36 and $1.38, respectively, which represents a 1.4% stronger dollar compared to the euro. The average exchange rates for the six months ended June 30, 2014 and 2013 were $1.36 and $1.31, respectively, which represents a 3.8% weaker dollar compared to the euro. GPI Mexicana uses the US dollar as its functional currency. At June 30, 2014 and December 31, 2013, the Mexican peso to US dollar exchange rates were 13.00 and 13.07, respectively, which represents a 0.5% weaker dollar compared to the peso. The average exchange rates for the six months ended June 30, 2014 and 2013 were 13.11 pesos and 12.56 pesos to the US dollar, respectively, which represents a 4.4% stronger dollar compared to the Mexican peso. GPI Asia uses the US dollar as its functional currency. At June 30, 2014 and December 31, 2013, the Macanese pataca to US dollar exchange rates were 7.84 and 7.87, respectively, which represents a 0.4% weaker dollar compared to the pataca. The average exchange rates for the six months ended June 30, 2014 and 2013 were 7.84 patacas to the US dollar. Other Matters

On July 1, 2014, we acquired substantially all of the net gaming assets of GemGroup for $19.75 million, subject to post-closing working capital adjustments, using a combination of cash and bank financing. GemGroup was a manufacturer of casino currency, cards and table layouts primarily sold under the Gemaco® brand. We acquired the gaming assets of GemGroup to increase our card and layout recurring revenue and expand our footprint in the Asia market by manufacturing layouts in Macau. For additional information, see Note 14 - Subsequent Events. In May 2013, we purchased certain assets of Blue Chip, a manufacturer of casino currency. The acquisition is part of our overall acquisition strategy to use our cash to acquire companies, products or technologies that enable us to grow and diversify our product offerings. We completed the asset acquisition on May 31, 2013 for a total consideration of $0.8 million. For additional information,

see Note 2 - Acquisition. On December 1, 2011, our Board of Directors approved a stock repurchase program which authorized the repurchase of up to five percent, or 409,951 shares, of common stock. On November 30, 2012, the Board of Directors increased the number of shares available for repurchase to 498,512 shares. As of June 30, 2014, we have repurchased 282,922 shares and 215,590 shares remain authorized for repurchase. On August 5, 2013, our Board of Directors voted to terminate our 10b5-1 purchase plan effective August 12, 2013. While the 10b5-1 purchase plan was terminated, the repurchase program remains in effect. However, there is no assurance that we will repurchase any additional shares under the repurchase program. For more information regarding the repurchase program, see Note 12 - Stockholders' Equity. 15 CRITICAL ACCOUNTING ESTIMATES Financial statement preparation requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and disclosure of contingent assets and liabilities. The accompanying condensed consolidated financial statements are prepared using the same critical accounting estimates discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013. RESULTS OF OPERATIONS



The following tables summarize selected items from our condensed consolidated statements of operations (in thousands) and as a percentage of revenues:

Three Months Ended June 30, Period-to-Period 2014 2013 Change Revenues $ 10,216 100.0 % $ 14,146 100.0 % $ (3,930 ) (27.8 )% Cost of revenues 7,463 73.1 % 9,761 69.0 % (2,298 ) (23.5 )% Gross profit 2,753 26.9 % 4,385 31.0 % (1,632 ) (37.2 )% Selling, administrative, and research and development 3,803 37.2 % 4,381 31.0 % (578 ) (13.2 )% Operating (loss) income (1,050 ) (10.3 )% 4 0.0 % (1,054 ) (26,350.0 )% Other income and (expense), net 49 0.5 % (40 ) (0.3 )% 89 (222.5 )% Loss before income taxes (1,001 ) (9.8 )% (36 ) (0.3 )% (965 ) 2,680.6 % Income tax provision 154 1.5 % 18 0.1 % 136 755.6 % Net loss $ (1,155 ) (11.3 )% $ (54 ) (0.4 )% $ (1,101 ) 2,038.9 % Six Months Ended June 30, Period-to-Period 2014 2013 Change Revenues $ 20,775 100.0 % $ 28,914 100.0 % $ (8,139 ) (28.1 )% Cost of revenues 15,263 73.5 % 20,249 70.0 % (4,986 ) (24.6 )% Gross profit 5,512 26.5 % 8,665 30.0 % (3,153 ) (36.4 )% Selling, administrative, and research and development 7,611 36.6 % 8,518 29.5 % (907 ) (10.6 )% Operating (loss) income (2,099 ) (10.1 )% 147 0.5 % (2,246 ) (1,527.9 )% Other income and (expense), net 106 0.5 % 38 0.1 % 68 178.9 % (Loss) income before income taxes (1,993 ) (9.6 )% 185 0.6 % (2,178 ) (1,177.3 )% Income tax provision (benefit) 292 1.4 % (293 ) (1.0 )% 585 - Net (loss) income $ (2,285 ) (11.0 )% $ 478 1.6 % $ (2,763 ) (578.0 )% 16 The following tables present certain data by geographic area (in thousands) and as a percentage of revenues: Three Months Ended June 30, Period-to-Period 2014 2013 Change Revenues:



The Americas$ 6,960 68.1 % $ 8,475 60.0 % $ (1,515 ) (17.9 %)

Asia Pacific 2,685 26.3 % 4,886 34.5 %



(2,201 ) (45.0 %)

Europe and Africa 571 5.6 % 785 5.5 %

(214 ) (27.3 %) Total $ 10,216 100.0 % $ 14,146 100.0 % $ (3,930 ) (27.8 %) Six Months Ended June 30, Period-to-Period 2014 2013 Change Revenues:



The Americas$ 12,230 58.8 % $ 15,749 54.5 % $ (3,519 ) (22.3 %)

Asia Pacific 7,490 36.1 % 11,705 40.5 %



(4,215 ) (36.0 %)

Europe and Africa 1,055 5.1 % 1,460 5.0 %

(405 ) (27.7 %)

Total $ 20,775 100.0 % $ 28,914 100.0 % $ (8,139 ) (28.1 %)



The following tables present our revenues by product line (in thousands) and as a percentage of revenues:

Three Months Ended June 30, Period-to-Period 2014 2013 Change Casino currency without RFID $ 3,987 39.1 % $ 4,319 30.5 % $ (332 ) (7.7 %) Casino currency with RFID 781 7.6 % 4,000 28.3 % (3,219 ) (80.5 %) Total casino currency 4,768 46.7 % 8,319 58.8 % (3,551 ) (42.7 %) Playing cards 1,649 16.2 % 1,576 11.1 % 73 4.6 % Table layouts 1,005 9.8 % 1,174 8.3 % (169 ) (14.4 %) Table accessories and other products 988 9.7 % 916 6.4 % 72 7.9 % Dice 655 6.4 % 618 4.4 % 37 6.0 % Gaming furniture 577 5.6 % 673 4.8 % (96 ) (14.3 %) RFID solutions 130 1.3 % 407 2.9 % (277 ) (68.1 %) Shipping 444 4.3 % 463 3.3 % (19 ) (4.1 %) Total $ 10,216 100.0 % $ 14,146 100.0 % $ (3,930 ) (27.8 %) Six Months Ended June 30, Period-to-Period 2014 2013 Change Casino currency without RFID $ 6,264 30.2 % $ 9,396 32.5 % $ (3,132 ) (33.3 %) Casino currency with RFID 4,661 22.4 % 8,349 28.9 % (3,688 ) (44.2 %) Total casino currency 10,925 52.6 % 17,745 61.4 % (6,820 ) (38.4 %) Playing cards 3,187 15.3 % 3,023 10.5 % 164 5.4 % Table layouts 1,861 9.0 % 2,210 7.6 % (349 ) (15.8 %) Table accessories and other products 1,639 7.9 % 1,716 5.9 % (77 ) (4.5 %) Dice 1,165 5.6 % 1,236 4.3 % (71 ) (5.7 %) Gaming furniture 833 4.0 % 1,211 4.2 % (378 ) (31.2 %) RFID solutions 376 1.8 % 904 3.1 % (528 ) (58.4 %) Shipping 789 3.8 % 869 3.0 % (80 ) (9.2 %) Total $ 20,775 100.0 % $ 28,914 100.0 % $ (8,139 ) (28.1 %) 17



Comparison of Operations for the Three and Six Months Ended June 30, 2014 and 2013

Revenues. For the three months ended June 30, 2014, our revenues were $10.2 million, a decrease of $3.9 million, or 27.8%, compared to revenues of $14.1 million during the same period in 2013. The decrease in revenues was primarily attributable to the lack of orders for casino openings/ expansions during the same period in 2014. For the six months ended June 30, 2014, our revenues were $20.8 million, a decrease of $8.1 million, or 28.1%, compared to revenues of $28.9 million during the same period in 2013. The decrease in revenues was primarily attributable to the lack of orders for casino openings/ expansions during the same period in 2014. Cost of Revenues. For the three months ended June 30, 2014, cost of revenues was $7.5 million, a decrease of $2.3 million, or 23.5%, compared to cost of revenues of $9.8 million for the same period in 2013. As a percentage of revenues, our cost of revenues increased to 73.1% in 2014 compared to 69.0% in 2013. For the six months ended June 30, 2014, cost of revenues was $15.3 million, a decrease of $4.9 million, or 24.6%, compared to cost of revenues of $20.2 million for the same period in 2013. As a percentage of revenues, our cost of revenues increased to 73.5% in 2014 compared to 70.0% in 2013. Gross Profit. For the three months ended June 30, 2014, gross profit was $2.8 million, a decrease of $1.6 million, or 37.2%, compared to gross profit of $4.4 million for the same period in 2013. As a percentage of revenues, our gross profit decreased from 31.0% to 26.9%. This is mainly due to a decrease in sales of our currency products which caused fixed manufacturing costs to be allocated over a lower revenue base. For the six months ended June 30, 2014, gross profit was $5.5 million, a decrease of $3.2 million, or 36.4%, compared to gross profit of $8.7 million for the same period in 2013. As a percentage of revenues, our gross profit decreased from 30.0% to 26.5%. This is mainly due to a decrease in sales of our currency products which caused fixed manufacturing costs to be allocated over a lower revenue base.



Selling, Administrative, and Research and Development Expenses. The following tables present the selling, administrative, and research and development expenses (in thousands) and as a percentage of revenues:

Three Months Ended June 30, Period-to-Period 2014 2013 Change Marketing and sales $ 1,343 13.1 % $ 1,505 10.6 % $ (162 ) (10.8 )% General and administrative 2,043 20.0 % 2,382 16.9 % (339 ) (14.2 )% Research and development 417 4.1 % 494 3.5 % (77 ) (15.6 )% Total selling, administrative, and research and development $ 3,803 37.2 % $ 4,381 31.0 % $ (578 ) (13.2 )% For the three months ended June 30, 2014, selling, administrative, and research and development expenses were $3.8 million, a decrease of $0.6 million, or 13.2%, compared to selling, administrative, and research and development expenses of $4.4 million during the same period in 2013. Selling, administrative, and research and development expenses increased as a percent of revenue to 37.3% in the second quarter of 2014 from 31.0% in the same period in 2013. Marketing and sales expenses decreased by $0.2 million during the second quarter of 2014, compared to the same period in 2013. This is primarily due to a decrease of $0.1 million in sales development expenses related to our marketing and sales in Asia. General and administrative expenses, decreased by $0.3 million during the second quarter of 2014, compared to the same period in 2013. This is primarily due to a decrease of $0.1 million in compensation expense and $0.2 million in legal,

consulting and audit costs. 18



Research and development expenses remained relatively unchanged in the second quarter of 2014 compared to the same period in 2013.

Six Months Ended June 30, Period-to-Period 2014 2013 Change Marketing and sales $ 2,646 12.7 % $ 3,010 10.4 % $ (364 ) (12.1 )% General and administrative 4,111 19.8 % 4,481 15.5 % (370 ) (8.3 )% Research and development 854 4.1 % 1,027 3.6 % (173 ) (16.8 )% Total selling, administrative, and research and development $ 7,611 36.6 % $ 8,518 29.5

% $ (907 ) (10.6 )% For the six months ended June 30, 2014, selling, administrative, and research and development expenses were $7.6 million, a decrease of $0.9 million, or 10.6%, compared to selling, administrative, and research and development expenses of $8.5 million during the same period in 2013. Selling, administrative, and research and development expenses increased as a percent of revenue to 36.7% in the first six months of 2014 from 29.5% in the same period in 2013.

Marketing and sales expenses decreased by $0.4 million during the first six months of 2014, compared to the same period in 2013. This is primarily due to a decrease of $0.1 million in compensation related costs, $0.1 million in sales development expenses related to our marketing and sales in Asia and $0.1 million in travel and trade-show related costs. General and administrative expenses decreased by $0.4 million during the first six months of 2014, compared to the same period in 2013. This is primarily due to a decrease of $0.3 million in legal, consulting and audit cost. Research and development expenses decreased by $0.2 million during the first six months of 2014, compared to the same period in 2013. This is primarily due to a decrease of $0.1 million in compensation expense.



Other Income and (Expense). The following tables present other income and (expense) items (in thousands) and as a percentage of revenues:

Three Months Ended June 30, Period-to-Period 2014 2013 Change Interest income $ 49 0.5 % $ 54 0.4 % $ (5 ) (9.3 )% Other income 2 0.0 % 13 0.1 % (11 ) (84.6 )% Interest expense - 0.0 % (2 ) 0.0 % 2 (100.0 )% Loss on foreign currency transactions (2 ) 0.0 % (105 ) (0.8 )% 103 (98.1 )% Total other income and (expense) $ 49 0.5 % $ (40 ) (0.3 )% $ 89 (222.5 )% Six Months Ended June 30, Period-to-Period 2014 2013 Change Interest income $ 128 0.6 % $ 115 0.4 % $ 13 11.3 % Other income 5 0.0 % 18 0.1 % (13 ) (72.2 )% Interest expense - 0.0 % (4 ) 0.0 % 4 (100.0 )% Loss on foreign currency transactions (27 ) (0.1 )% (91 ) (0.4 )% 64 (70.3 )% Total other income and (expense) $ 106 0.5 % $ 38 0.1 % $ 68 178.9 %

Income Taxes. Our effective income tax rate for the three months ended June 30, 2014 and 2013 was (15.4%) and (50.0%), respectively. Our effective tax rate for the three months ended June 30, 2014 was unfavorably affected by an increase in our estimate for the valuation allowance related to our foreign tax credits, offset by a favorable impact from the foreign rate differential on the income from our Macau subsidiary, GPI Asia, compared to the prior quarter. Our effective income tax rate for the six months ended June 30, 2014 and 2013 was (14.7%) and (158.4%), respectively. Our effective tax rate for the six months ended June 30, 2014 was unfavorably affected by an increase in the valuation allowance related to our foreign tax credits, offset by a favorable impact from the foreign rate differential on income from our Macau subsidiary, GPI Asia, and the tax benefit from a research credit from our French subsidiary, GPI SAS. Without the increase in the valuation allowance related to foreign tax credits, our effective tax rate for the three and six months ended June 30, 2014 would have been 0.6% and 9.1%, respectively. 19 We account for uncertain tax positions in accordance with applicable accounting guidance. There were no unrecognized tax benefits reported at June 30, 2014

or December 31, 2013.



Liquidity and Capital Resources

Sources of Liquidity and Capital Resources. Historically our primary source of liquidity and capital resources has been cash from operations. On June 26, 2014, GPI USA and HSBC Bank USA entered into a demand line of credit agreement with a limit of $10.0 million. Interest on the line of credit is LIBOR plus 2.25%. GPI USA borrowed $10.0 million under the line of credit to finance the acquisition of GemGroup. The line of credit is secured by a lien on all of the assets of GPI USA and is guaranteed by GPIC. The line of credit is subject to renewal by the bank in its sole discretion on June 30 of each year. Other potential sources of liquidity and capital resources include, but are not limited to, marketable securities and potential bank credit facilities, both in the United States and abroad. We believe that the combination of these resources will satisfy our needs for working capital, capital expenditures, any purchases of common stock under our stock repurchase program, litigation, potential dividends or acquisitions. At June 30, 2014, we had $15.5 million in cash and cash equivalents, $10.0 million in current restricted cash and $5.0 million in marketable securities, totaling $30.5 million. Of this amount, $22.3 million is held by GPI USA, of which $18.7 million was used for the acquisition of GemGroup, $6.5 million is held by GPI SAS, and $1.7 million is held by GPI Asia. Of those amounts held outside the United States, we would be subject to taxation if we were to repatriate those amounts, though foreign tax credits may be available to offset such taxes. We may repatriate amounts from GPI SAS and, accordingly, our financial statements reflect the tax impacts that would result from repatriation. We do not anticipate repatriation from GPI Asia and, accordingly, our financial statements do not reflect the tax impacts that would result from repatriation.



Working Capital (See Condensed Consolidated Balance Sheets). The following summarizes our cash and cash equivalents, marketable securities, and working capital (all in thousands), and our current ratio:

June 30, December 31, Period-to-Period 2014 2013 Change

Cash and cash equivalents $ 15,517$ 14,492$ 1,025 7.1 % Marketable securities 4,989 5,724 (735 ) (12.8 )% Working capital 29,800 32,069 (2,269 ) (7.1 )% Current ratio 2.8 6.3

At June 30, 2014, working capital totaled $29.8 million, a decrease of $2.3 million, or 7.1%, compared to working capital of $32.1 million at December 31, 2013. The change in working capital was due to an increase in current liabilities of $10.8 million, offset by an increase in current assets of $8.5 million. The increase in current liabilities was due primarily to increases in short term debt of $10.0 million and in customer deposits and deferred revenue of $0.7 million. The increase in current assets was due primarily to increases in restricted cash for $10.0 million, in cash and cash equivalents for $1.0 million and in inventories for $0.7 million, offset by decreases in accounts receivables of $1.7 million, in marketable securities of $0.7 million and in other current expenses of $0.6 million. 20



Cash Flows (See Condensed Consolidated Statements of Cash Flows). The following summarizes our cash flows (in thousands):

Six Months Ended June 30, Period-to-Period 2014 2013 Change Operating activities $ 1,590$ (4,369 )$ 5,959 (136.4 %) Investing activities (10,543 ) 5,907 (16,450 ) (278.5 %) Financing activities 10,000 (885 ) 10,885 (1,229.9 %)

Effect of exchange rates (22 ) (217 ) 195 (89.9 %) Net change $ 1,025$ 436$ 589 135.1 % The increase in cash flows provided by operating activities was primarily caused by an increase in liabilities of $4.8 million and an increase in assets of $2.6 million, offset by a decrease in non-cash items of $1.5 million. The decrease in cash flows provided by investing activities was primarily due to the allocation of $10.0 million of funds from the demand line of credit to restricted cash (see Note 8 - Restricted Cash and Debt), a decrease in net sales of marketable securities of $7.2 million, and by the payment of a $1.0 million deposit for the acquisition of GemGroup (see Note 9 - Commitments and Contingencies), offset by a decrease in the purchase of business assets of $0.8 million and a decrease of capital expenditures of $1.0 million during the six months ended June 30, 2014, compared to the same period in 2013. The increase in cash flows provided by financing activities was due to the inflow of funds from the demand line of credit for $10.0 million (see Note 8 - Restricted Cash and Debt) and the lack of common stock repurchases in the six months ended June 30, 2014.



Capital Expenditures. We plan to purchase approximately $1.7 million in property, plant, and equipment during the remainder of 2014. In the first six months of 2014, we purchased $0.2 million of property, plant, and equipment.

Cash Dividend. Our Board of Directors has no current plans to pay a regular dividend on our common stock, but may evaluate the merit of paying a dividend from time to time.

Backlog. At June 30, 2014, our backlog of signed orders for 2014 was $11.4 million, consisting of $7.0 million for GPI Asia, $4.0 million for GPI USA, and $0.4 million for GPI SAS. At June 30, 2013, our backlog of signed orders for 2013 was $8.5 million, consisting of $3.2 million for GPI Asia, $4.7 million for GPI USA, and $0.6 million for GPI SAS.



Contractual Obligations and Commercial Commitments

On June 26, 2014, GPI USA and HSBC Bank USA entered into a demand line of credit agreement with a limit of $10.0 million (see Note 8 - Restricted Cash and Debt).

21



Forward-Looking Information Statements and Risk Factors

Throughout this Form 10-Q, we make some forward-looking statements which do not relate to historical or current facts, but are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to analyses and other information based on forecasts of future results and estimates of amounts not yet determinable that, while considered reasonable by us, are inherently subject to significant business, economic, and competitive risks and uncertainties, many of which are beyond our control and are subject to change. The statements also relate to our future prospects and anticipated performance, development, and business strategies such as statements relating to anticipated future sales or the timing thereof, potential acquisitions and integrations, the long-term growth and prospects of our business or any jurisdiction, the duration or effects of unfavorable economic conditions which may reduce our product sales, and the long-term potential of the RFID gaming chips market and our ability to capitalize on any such growth opportunities. These statements are identified by their use of terms and phrases such as anticipate, believe, could, would, estimate, expect, intend, may, plan, predict, project, pursue, will, continue, feel, or the negative or other variations thereof, and other similar terms and phrases, including references to assumptions. Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those expressed or implied. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent known and unknown risks and uncertainties such as those identified in Part I-Item 1A, "Risk Factors," of our Form 10-K for the period ended December 31, 2013. We do not intend, and undertake no obligation, to update our forward-looking statements to reflect future events or circumstances.


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