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Wednesday, March 21, 2007

Table Trac (TBTC) revisited

TBTC, chart, website, sec
I had looked at Table Trac back in Dec 2005: 10-K, Q1-to-Q3, more stuff, Googling, competitors, conclusion

The conclusion was that recurring revenue was too small and installations would only take them so far.

At that time, the stock was trading at around 70 cents. It has now doubled in price (it had reached as high as $2). So what happened?

Looking at the most recent 10-Q (Sept 30, 2006):
The balance sheet looks very strong, lots of cash, nearly all equity. $131K net cash. 4.4 million diluted shares.

Revenues for the 9 months are actually down from 2005. Margins is still good, but operating income is down for 9 months (up for the quarter vs prior year). They earned 5.9 cents per share for the quarter, but only 4.7 cents for 9 months.

Cash flow from operations is terrible, only 1/3 of income (AR and inventory).

This seems to be the reason:
Anticipating the 4 casino system sale announced July 18, 2006 to a Customer in Central America and the Oklahoma Casino sale announced August 4, 2006, the Company acquired inventory in the second and third quarter of 2006. The company acquired computer hardware and outsourced the manufacture of the custom hardware for these orders.
So we need to back up and look at the announcements. Oddly, there are no 8-K filings during that time period (or anywhere near that time). Looks like they registered for more shares, but then withdrew... wait, no, they filed the wrong form. Hehe.
A FORM 10SB12 Registration of securities for small business [Section 12(b)] was inadvertantly filed instead of the intended Filing for extention [sic] of time

And it looks like an investor picked up 5.4% of the company (217K shares), perhaps inadvertantly? Doucet Asset Management (awful "under construction" website).

Well, the news has all expired and there's nothing on their website. Google shows nothing. They never filed any 8-K statements. That's pretty funny.

So it seems they picked up 5 casinos. Maybe more (if they got more than one in Oklahoma). I don't see anything to change my mind about the business. But at least they did better than most of their competitors:
IGT up about 30%
Shufflemaster down about 20%
Progressive Gaming down nearly 50%
and Venture Catalyst (sec) merged into IGT at $2.58 value. According to the 10-K, the market price of shares was 71 cents to $1.60 in their Q2 ending Dec 31, 2005.

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