Long opportunity in Table Trac on any pullback.During the second quarter of 2019, the Company delivered two casino management systems. In addition, Table Trac signed an exclusivity contract with the Japanese company, BroadBand Security Inc., in Tokyo, to rebrand, adapt and market their casino management system (CMS) to the developing Japanese gaming market. The contract deliverables were satisfied early in the third quarter; $1.2 million will be recognized during the third quarter. At the end of the quarter, the Company had casino management systems, table games management systems and ancillary products installed with on-going support and maintenance contracts with 97 casino operators in over 160 casinos worldwide.
Results of Operations - Three Months Ended June 30, 2019 Compared to Three months ended June 30, 2018
During the three months ended June 30, 2019, income from operations was $316,249 compared to income from operations of $577,169 for the three months ended June 30, 2018. The major components of revenues, cost of sales and selling, general and administrative expenses, and the reasons for changes in each, are discussed below.
Revenues
Revenues totaled $2,254,339 for the three months ended June 30, 2019 compared to $3,003,135 for the three months ended June 30, 2018.
Refer to Note 1 - Revenue, disaggregated revenues by major product line table
During the three months ended June 30, 2019, the Company delivered two systems plus an exclusive supplier installed our system in three locations in Australia. During the same period in 2018, the Company delivered three systems. In the periods presented, the Company continues to recognize revenue as payments become due for systems that were previously installed and for which revenue was deferred.
Cost of Sales
Cost of sales decreased to $720,978 for the three months ended June 30, 2019 from $1,196,531 for the three months ended June 30, 2018 due to decreased corresponding sales. The following table summarizes our cost of sales for the three months ended June 30, 2019 and 2018, respectively:
Three Months Ended June 30, 2019 2018 2019 2018 (percent of revenues) System sales $ 680,968 $ 1,155,998 30.2 % 38.4 % Maintenance fees 11,000 32,040 0.5 % 1.1 % Service and other sales 29,010 8,493 1.3 % 0.3 % Total cost of sales $ 720,978 $ 1,196,531 32.0 % 39.8 % Gross profit $ 1,533,361 $ 1,806,604 68.0 % 60.2 %
The Company's gross profit was 68.0% and 60.2% for the three months ended June 30, 2019 and 2018, respectively. This increase is due to lower per unit pricing on systems hardware sold and system sales made in Australia during the three months ended June 30, 2019.
Selling, General and Administrative Expenses
For the three months ended June 30, 2019, selling, general and administrative expenses were $1,217,112 compared to $1,229,435 for the same period in 2018. These expenses decreased due to decreased commission payments.
COMPANY PROFILE
Table Trac, Inc. engages in the design, development, and marketing of casino management systems. It has developed a proprietary information and management system that automates and monitors the operations of casino table game operations. Its casino products include CasinoTrac, KioskTrac, Progressive, and Text-to-Win. The company was founded by Chad B. Hoehne in 1994 and is headquartered in Minnetonka, MN.
