HispanicBusiness

Gross profit was $2.8 million for the first nine months of 2012 compared to $3.6 million in 2011, a reduction of $0.8 million, or 22.0%. Gross profit was $0.8 million for the third quarter of 2012 compared to $1.2 million in 2011, a reduction of $0.4 million, or 31.5%.

Gross profit margins increased to 73.6% in the first nine months of 2012 compared to 70.1% for the same period in 2011. Gross profit margins increased to 70.8% in the third quarter of 2012 compared to 68.1% in 2011. The changes in gross profit margin are attributable to changes in sales mix which are more heavily weighted to high margin recurring revenue in the current periods, as well as reduced product costs and depreciation.

Operating expenses decreased 28.8% to $3.4 million for the first nine months of 2012 from $4.7 million in 2011. Operating expenses decreased 35.3% to $1.0 million in the third quarter of 2012 from $1.6 million in 2011. We have implemented cost reduction initiatives which have streamlined our overhead and reduced spending on personnel, regulatory approvals, and professional fees in both the quarterly and year-to-date periods.

Net loss from continuing operations improved 45.4% to $662 thousand ($0.09 per share) for the first nine months of 2012 from $1.2 million ($0.18 per share) in 2011. Net loss from continuing operations improved 34.1% for the third quarter of 2012 to $326 thousand ($0.04 per share) compared to $495 thousand ($0.07 per share) for the comparable period of 2011.

Including results of discontinued operations, net loss improved 50.0% to $612 thousand ($0.08 per share) for the first nine months of 2012 from $1.2 million ($0.19 per share) in 2011. Net loss improved 33.0% to $331 thousand ($0.04 per share) for the third quarter of 2012 from $494 thousand ($0.07 per share) in 2011.

EBITDAS from continuing operations, a non-GAAP financial measure (described below), was a profit of $290 thousand for the first nine months of 2012, compared to a profit of $501 thousand in 2011. EBITDAS was a profit of $8 thousand for the third quarter of 2012, compared to a profit of $144 thousand in the prior-year period.

Balance Sheet and Cash Flow Information
The Company's cash used in continuing operations improved 28% to $472 thousand for the first nine months of 2012, from $659 thousand for 2011. The improvement in operating cash flow was primarily due to improved profitability.

Total debt was $300 thousand as of the September 30, 2012. During the year, we have reduced debt by $400 thousand or 57%. In addition, we completed a private placement transaction in the third quarter for net proceeds of $240 thousand, further strengthening our balance sheet.

Gaming Positions Information
Gaming positions deployed worldwide totaled 2,442 as of September 30, 2012 composed of 2,304 PokerPro and 138 ProCore gaming positions. As of September 30, 2011, 1,958 gaming positions were deployed worldwide composed of 1,874 PokerPro and 84 ProCore gaming positions.

Conference Call
Interested parties may listen to and participate in the conference call by dialing 866.383.8003 (U.S./Canada) or +1 617.597.5330 (Other) and entering passcode 77061043. A live webcast of the conference call will be available through a link on our website, www.pokertek.com, under the heading "Investors". For those unable to participate in the live call, an archived replay will be made available on our website. A replay of the conference call will also be available approximately two hours after the conclusion of the call for approximately one week by dialing 888.286.8010 (U.S./Canada) or +1 617.801.6888 (Other) and entering passcode 23304666.