Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Jan. 31, 2014 | Mar. 13, 2014 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'INTERNATIONAL LOTTERY & TOTALIZATOR SYSTEMS INC | ' |
Entity Central Index Key | '0000354813 | ' |
Current Fiscal Year End Date | '--04-30 | ' |
Entity Well-known Seasoned Issuer | 'No | ' |
Entity Voluntary Filers | 'No | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 12,962,999 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 31-Jan-14 | ' |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (USD $) | Jan. 31, 2014 | Apr. 30, 2013 | |
In Thousands, unless otherwise specified | |||
Current assets: | ' | ' | |
Cash and cash equivalents | $11,609 | $7,259 | [1] |
Certificates of deposit | 249 | 1,245 | [1] |
Accounts receivable, net of allowance for doubtful accounts of $75 | 626 | 2,054 | [1] |
Deferred cost of revenues | 1 | 132 | [1] |
Inventories | 1,431 | 3,665 | [1] |
Deferred income taxes | 0 | 1,555 | [1] |
Other current assets | 181 | 298 | [1] |
Total current assets | 14,097 | 16,208 | [1] |
Equipment, furniture and fixtures, net | 541 | 573 | [1] |
Other noncurrent assets | 49 | 53 | [1] |
Total assets | 14,687 | 16,834 | [1] |
Current liabilities: | ' | ' | |
Accounts payable | 791 | 2,180 | [1] |
Accrued payroll and related taxes | 321 | 384 | [1] |
Warranty reserves | 218 | 139 | [1] |
Payable to Parent | 202 | 202 | [1] |
Other current liabilities | 334 | 38 | [1] |
Deferred revenues | 785 | 5,451 | [1] |
Total current liabilities | 2,651 | 8,394 | [1] |
Long-term liabilities | 12 | 0 | [1] |
Total liabilities | 2,663 | 8,394 | [1] |
Commitments and contingencies | ' | ' | [1] |
Shareholders' equity: | ' | ' | |
Preferred shares, no par value; 20,000 shares authorized; no shares issued or outstanding | 0 | 0 | [1] |
Common shares, no par value; 50,000 shares authorized; 12,963 shares issued and outstanding | 56,370 | 56,370 | [1] |
Accumulated deficit | -44,346 | -47,930 | [1] |
Total shareholders' equity | 12,024 | 8,440 | [1] |
Total liabilities and shareholders' equity | $14,687 | $16,834 | [1] |
[1] | Derived from the consolidated audited financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended April 30, 2013 filed with the SEC. |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) (USD $) | Jan. 31, 2014 | Apr. 30, 2013 | |
In Thousands, except Per Share data, unless otherwise specified | |||
Current assets: | ' | ' | |
Accounts receivable, allowance for doubtful accounts | $75 | $75 | [1] |
Shareholders' equity: | ' | ' | |
Preferred shares, par value (in dollars per share) | $0 | $0 | [1] |
Preferred shares, shares authorized (in shares) | 20,000 | 20,000 | [1] |
Preferred shares, shares issued (in shares) | 0 | 0 | [1] |
Preferred shares, shares outstanding (in shares) | 0 | 0 | [1] |
Common shares, par value (in dollars per share) | $0 | $0 | [1] |
Common shares, shares authorized (in shares) | 50,000 | 50,000 | [1] |
Common shares, shares issued (in shares) | 12,963 | 12,963 | [1] |
Common shares, shares outstanding (in shares) | 12,963 | 12,963 | [1] |
[1] | Derived from the consolidated audited financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended April 30, 2013 filed with the SEC. |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Jan. 31, 2014 | Jan. 31, 2013 | Jan. 31, 2014 | Jan. 31, 2013 |
Revenues: | ' | ' | ' | ' |
Sales of products | $3,699 | $1,709 | $19,724 | $6,769 |
Services | 298 | 297 | 1,013 | 924 |
Total revenues | 3,997 | 2,006 | 20,737 | 7,693 |
Cost of sales: | ' | ' | ' | ' |
Cost of product sales | 2,083 | 1,372 | 12,829 | 4,222 |
Cost of services | 76 | 146 | 314 | 349 |
Total cost of sales | 2,159 | 1,518 | 13,143 | 4,571 |
Gross profit | 1,838 | 488 | 7,594 | 3,122 |
Selling, general and administrative expenses | 688 | 580 | 2,112 | 1,803 |
Income (loss) from operations | 1,150 | -92 | 5,482 | 1,319 |
Other income: | ' | ' | ' | ' |
Interest and dividend income | 0 | 0 | 1 | 0 |
Income (loss) before provision for income taxes | 1,150 | -92 | 5,483 | 1,319 |
Provision (benefit) for income taxes | 200 | -3 | 1,899 | 20 |
Net income (loss) | $950 | ($89) | $3,584 | $1,299 |
Net income (loss) per share: | ' | ' | ' | ' |
Basic (in dollars per share) | $0.07 | ($0.01) | $0.27 | $0.10 |
Weighted average shares used in computation of net income (loss) per share: | ' | ' | ' | ' |
Basic (in shares) | 12,963 | 12,963 | 12,963 | 12,963 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) | 9 Months Ended | ||
In Thousands, unless otherwise specified | Jan. 31, 2014 | Jan. 31, 2013 | |
Cash flows from operating activities: | ' | ' | |
Net income | $3,584 | $1,299 | |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' | |
Depreciation and amortization | 139 | 133 | |
Warranty reserve expense | 170 | 75 | |
Loss on disposal of equipment | 25 | 0 | |
Deferred income taxes | 1,555 | 0 | |
Changes in operating assets and liabilities: | ' | ' | |
Accounts receivable | 1,428 | -116 | |
Costs and estimated earnings in excess of billings on uncompleted contracts | 0 | 666 | |
Deferred cost of revenues | 131 | 3 | |
Inventories | 2,234 | 1,089 | |
Other current and noncurrent assets | 121 | -215 | |
Accounts payable | -1,389 | -845 | |
Accrued payroll and related taxes | -63 | 94 | |
Warranty reserves | -91 | -137 | |
Other liabilities | 308 | -33 | |
Deferred revenues | -4,666 | 1,721 | |
Net cash provided by operating activities | 3,486 | 3,734 | |
Cash flows from investing activities: | ' | ' | |
Proceeds from redemption of certificates of deposit | 996 | 250 | |
Additions to equipment, furniture and fixtures | -132 | -217 | |
Net cash provided by investing activities | 864 | 33 | |
Net increase in cash and cash equivalents | 4,350 | 3,767 | |
Cash and cash equivalents at beginning of period | 7,259 | [1] | 2,783 |
Cash and cash equivalents at end of period | 11,609 | 6,550 | |
Supplemental cash flow information: | ' | ' | |
Cash paid for income taxes | $243 | $43 | |
[1] | Derived from the consolidated audited financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended April 30, 2013 filed with the SEC. |
Description_of_the_Business
Description of the Business | 9 Months Ended | |||||
Jan. 31, 2014 | ||||||
Description of the Business [Abstract] | ' | |||||
Description of the Business | ' | |||||
Description of the Business | ||||||
International Lottery & Totalizator Systems, Inc. (“ILTS” or the “Company,” together with its subsidiary) designs, manufactures, sells, manages, supports and services computerized wagering systems and terminals for the global lottery and pari-mutuel racing industries. The wagering system features include real-time, secure processing of data received from multiple locations, hardware redundancy and complete communications redundancy in order to provide the highest level of fault tolerant operation. In addition, although the Company is not presently doing so, ILTS has demonstrated capability to provide full facilities management services to customer organizations authorized to conduct lotteries. The Company is largely dependent upon significant contracts for its revenue, which typically include a deposit upon contract signing and up to six months lead time before delivery of hardware begins. | ||||||
The Company, through its wholly-owned subsidiary Unisyn Voting Solutions, Inc. (“Unisyn”), has devoted significant resources to developing federally certified end-to-end optical scan voting systems and a full-featured Election Management Software that provides precinct tabulation, ballot review and audio voting capability. In addition to the InkaVote Plus Precinct Ballot Counter (“PBC”) system certified to the National Association of State Election Directors (“NASED”) 2002 Voting System Standards (“VSS”), the Company received the 2005 Voluntary Voting System Guidelines (“VVSG”) certification from the United States Election Assistance Commission (“EAC”) for its OpenElect® digital optical scan election system – a digital scan voting system built with Java on a streamlined and hardened Linux platform. As part of a jurisdiction’s procurement process, the Company will provide the OpenElect® products’ source code for independent review. | ||||||
These efforts leverage the Company’s extensive experience to develop highly secure, mission-critical solutions that meet the NASED 2002 VSS and the EAC 2005 VVSG standards. In addition, the Company’s voting systems offer the following features: | ||||||
· | High level of security and vote encryption to ensure integrity and voter privacy; | |||||
· | Electronic and paper audit trails that offer added security and redundancy for recounts; | |||||
· | Reduce the cost of ballot printing while offering operational efficiencies; | |||||
· | Minimal training required for poll workers to set-up and operate; and | |||||
· | Minimal voter re-education required. | |||||
Berjaya Lottery Management (H.K.) Ltd. (“BLM” or the “Parent”) owns 71.3% of the outstanding voting stock of ILTS. |
Principles_of_Consolidation
Principles of Consolidation | 9 Months Ended |
Jan. 31, 2014 | |
Principles of Consolidation [Abstract] | ' |
Principles of Consolidation | ' |
Principles of Consolidation | |
The accompanying condensed consolidated financial statements include the accounts of ILTS and its wholly-owned subsidiary, Unisyn. All significant intercompany accounts and transactions are eliminated in consolidation. |
Basis_of_Presentation
Basis of Presentation | 9 Months Ended |
Jan. 31, 2014 | |
Basis of Presentation [Abstract] | ' |
Basis of Presentation | ' |
Basis of Presentation | |
The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information and with the Securities and Exchange Commission’s (“SEC”) instructions to Form 10-Q. Accordingly, they do not include all of the information and notes required by US GAAP for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of financial position, results of operations and cash flows have been included. | |
The results of operations for the interim periods shown in this report are not necessarily indicative of the results to be expected for the full year. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2013 filed with the SEC on July 9, 2013. The condensed consolidated balance sheet as of April 30, 2013 has been derived from the audited financial statements included in the Form 10-K for that year. |
Use_of_Estimates
Use of Estimates | 9 Months Ended |
Jan. 31, 2014 | |
Use of Estimates [Abstract] | ' |
Use of Estimates | ' |
Use of Estimates | |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions. Actual results could differ from those estimates. Estimates may affect the reported amounts of assets and liabilities and revenues and expenses, and the disclosure of contingent assets and liabilities. |
Deferred_Revenues
Deferred Revenues | 9 Months Ended |
Jan. 31, 2014 | |
Deferred Revenues [Abstract] | ' |
Deferred Revenues | ' |
Deferred Revenues | |
Deferred revenues of approximately $785,000 as of January 31, 2014 represent prepayments for products and services related to the use of the OpenElect® and PBC voting systems, and other software and technical support services. The Company will recognize the revenues upon the fulfillment of the prescribed criteria for revenue recognition. |
Warranty_Reserves
Warranty Reserves | 9 Months Ended | ||||
Jan. 31, 2014 | |||||
Warranty Reserves [Abstract] | ' | ||||
Warranty Reserves | ' | ||||
Warranty Reserves | |||||
Estimated warranty costs are accrued as revenues are recognized. Included in the warranty cost accruals are costs for basic warranties on products sold. A summary of product warranty reserve activity for the nine months ended January 31, 2014 is as follows: | |||||
(Amounts in thousands) | |||||
Balance at May 1, 2013 | $ | 139 | |||
Additional reserves | 355 | ||||
Warranty reserve expense adjustments | (185 | ) | |||
Charges incurred | (91 | ) | |||
Balance at January 31, 2014 | $ | 218 |
Income_Taxes
Income Taxes | 9 Months Ended |
Jan. 31, 2014 | |
Income Taxes [Abstract] | ' |
Income Taxes | ' |
Income Taxes | |
The Company uses the asset and liability method for financial reporting of income taxes. Deferred tax assets and liabilities are determined based on temporary differences between financial reporting and the tax basis of assets and liabilities, and are measured by applying enacted rates and laws to taxable years in which such differences are expected to be recovered or settled. Any changes in tax rates or laws are recognized in the period when such changes are enacted. Valuation allowances have been established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company records a valuation allowance to reduce its deferred tax assets when uncertainty exists regarding the realizability of the deferred tax assets. | |
The provisions for income taxes were approximately $200,000 and $1.9 million for the three and nine months ended January 31, 2014, respectively. The effective rate was 34.73% for 2014, compared to a minimal effective rate for 2013. The increase in the effective rate for 2014 was due to the reversal of a portion of the valuation allowance and recording of a deferred tax asset at April 30, 2013. This deferred tax asset was fully recognized in the nine months ended January 31, 2014. |
Segment_Information
Segment Information | 9 Months Ended | ||||||||||||
Jan. 31, 2014 | |||||||||||||
Segment Information [Abstract] | ' | ||||||||||||
Segment Information | ' | ||||||||||||
Segment Information | |||||||||||||
The Company reports segment information based on the “management” approach. Under this approach, operating segments are identified in substantially the same manner as they are reported internally and used by the Company’s chief operating decision maker for purposes of evaluating performance and allocating resources. | |||||||||||||
The Company divides its operations into two operating segments: the gaming business and the voting business. The gaming segment designs and develops computerized wagering systems and terminals for the lottery and pari-mutuel racing industries worldwide. Presently the voting segment generates revenues from the sales of the voting systems and hardware, software licensing, product servicing and software support services. | |||||||||||||
The Company’s segment information is presented below (in thousands): | |||||||||||||
As of and for the Three Months Ended | |||||||||||||
31-Jan-14 | |||||||||||||
Gaming | Voting | Totals | |||||||||||
Business | Business | ||||||||||||
Total revenues | $ | 2,944 | $ | 1,053 | $ | 3,997 | |||||||
Income from operations | 1,092 | 58 | 1,150 | ||||||||||
Depreciation and amortization | 23 | 21 | 44 | ||||||||||
Segment assets | 12,510 | 2,177 | 14,687 | ||||||||||
As of and for the Three Months Ended | |||||||||||||
31-Jan-13 | |||||||||||||
Gaming | Voting | Totals | |||||||||||
Business | Business | ||||||||||||
Total revenues | $ | 1,724 | $ | 282 | $ | 2,006 | |||||||
Income (loss) from operations | 185 | (277 | ) | (92 | ) | ||||||||
Depreciation and amortization | 27 | 19 | 46 | ||||||||||
Segment assets | 8,214 | 1,942 | 10,156 | ||||||||||
As of and for the Nine Months Ended | |||||||||||||
31-Jan-14 | |||||||||||||
Gaming | Voting | Totals | |||||||||||
Business | Business | ||||||||||||
Total revenues | $ | 18,475 | $ | 2,262 | $ | 20,737 | |||||||
Income (loss) from operations | 5,810 | (328 | ) | 5,482 | |||||||||
Depreciation and amortization | 78 | 61 | 139 | ||||||||||
Segment assets | 12,510 | 2,177 | 14,687 | ||||||||||
As of and for the Nine Months Ended | |||||||||||||
31-Jan-13 | |||||||||||||
Gaming | Voting | Totals | |||||||||||
Business | Business | ||||||||||||
Total revenues | $ | 5,356 | $ | 2,337 | $ | 7,693 | |||||||
Income (loss) from operations | 1,350 | (31 | ) | 1,319 | |||||||||
Depreciation and amortization | 83 | 50 | 133 | ||||||||||
Segment assets | 8,214 | 1,942 | 10,156 |
Inventories
Inventories | 9 Months Ended | ||||||||
Jan. 31, 2014 | |||||||||
Inventories [Abstract] | ' | ||||||||
Inventories | ' | ||||||||
Inventories | |||||||||
Inventories are stated at the lower of cost or the current estimated market values. Cost is determined using the first-in, first-out method. | |||||||||
Inventories consisted of the following: | |||||||||
January 31, | April 30, | ||||||||
2014 | 2013 | ||||||||
(Amounts in thousands) | |||||||||
Raw materials and subassemblies | $ | 1,211 | $ | 2,872 | |||||
Work-in-process | 5 | 33 | |||||||
Finished goods | 215 | 760 | |||||||
$ | 1,431 | $ | 3,665 |
Equipment_Furniture_and_Fixtur
Equipment, Furniture and Fixtures | 9 Months Ended | ||||||||
Jan. 31, 2014 | |||||||||
Equipment, Furniture and Fixtures [Abstract] | ' | ||||||||
Equipment, Furniture and Fixtures | ' | ||||||||
Equipment, Furniture and Fixtures | |||||||||
Net equipment, furniture and fixtures consisted of the following: | |||||||||
January 31, | April 30, | ||||||||
2014 | 2013 | ||||||||
(Amounts in thousands) | |||||||||
Plant and machinery | $ | 661 | $ | 757 | |||||
Computer equipment | 1,728 | 1,662 | |||||||
Leasehold improvement | 201 | 201 | |||||||
Furniture, fixtures and equipment | 96 | 96 | |||||||
Construction in progress | - | 25 | |||||||
2,686 | 2,741 | ||||||||
Accumulated depreciation and amortization | (2,145 | ) | (2,168 | ) | |||||
Net equipment, furniture and fixtures | $ | 541 | $ | 573 |
Net_Income_Loss_per_Share
Net Income (Loss) per Share | 9 Months Ended |
Jan. 31, 2014 | |
Net Income (Loss) per Share [Abstract] | ' |
Net Income (Loss) per Share | ' |
Net Income (Loss) per Share | |
Basic net income (loss) per share is based on the weighted average number of shares outstanding during the periods. |
Major_Customers
Major Customers | 9 Months Ended | |||||||
Jan. 31, 2014 | ||||||||
Major Customers [Abstract] | ' | |||||||
Major Customers | ' | |||||||
Major Customers | ||||||||
The following table summarizes major customers who individually accounted for more than 10% of revenues for the periods presented: | ||||||||
Three Months Ended | Nine Months Ended | |||||||
January 31, | January 31, | |||||||
2014 | 2013 | 2014 | 2013 | |||||
Revenue: | ||||||||
From unrelated customers | One customer from the voting segment accounted for 22% of total revenue | One customer from the gaming segment accounted for 54% of total revenue | ||||||
One customer from the gaming segment accounted for 33% of total revenue | One customer from the voting segment accounted for 22% of total revenue and one customer from the gaming segment accounted for 21% of total revenue | |||||||
One customer from the gaming segment accounted for 30% of total revenue | One customer from the gaming segment accounted for 56% of total revenue | Two customers from the gaming segment accounted for 47% of total revenue | ||||||
From related customers | One customer from the gaming segment accounted for 72% of total revenue |
Related_Party_Transactions
Related Party Transactions | 9 Months Ended | |||
Jan. 31, 2014 | ||||
Related Party Transactions [Abstract] | ' | |||
Related Party Transactions | ' | |||
Related Party Transactions | ||||
During the three months ended January 31, 2014 and 2013, revenues from all related party transactions for the sales of products and services totaled approximately $2.9 million (73% of total revenue) and $646,000 (32% of total revenue), respectively. Related party revenues for the nine months ended January 31, 2014 and 2013 were approximately $11.7 million (56% of total revenue) and $3.7 million (48% of total revenue), respectively. Included in accounts receivable at January 31, 2014 was approximately $157,000 from these customers. Descriptions of the transactions with the Company’s related parties in the three and nine months ended January 31, 2014 and 2013 are presented below. | ||||
Berjaya Lottery Management (H.K.) Ltd. | ||||
In 1996, the Company entered into an agreement to purchase specific inventory on behalf of Berjaya Lottery Management (H.K.) Ltd. (“BLM”), the owner of 71.3% of ILTS’s outstanding voting stock as of January 31, 2014. | ||||
Over time, the Company has sold or used portions of the BLM inventory in unrelated third party transactions. The sale or use of the inventory resulted in a liability to BLM for the cost of the items utilized. | ||||
The financial activities and balances related to BLM were as follows: | ||||
· | There were no related party sales to BLM in the three and nine months ended January 31, 2014 and 2013; | |||
· | There were no accounts receivable balances from BLM as of January 31, 2014 and April 30, 2013; | |||
· | Liabilities to BLM arising from the sale or use of the BLM inventory, recorded as “Payable to Parent,” were $202,000 as of both January 31, 2014 and April 30, 2013; and | |||
· | There were no inventory balances held for BLM as of January 31, 2014 and April 30, 2013. | |||
Sports Toto Malaysia Sdn. Bhd. | ||||
The Company provides lottery products, software development and software support services to Sports Toto Malaysia Sdn. Bhd. (“STM”), an affiliate of BLM and a related party. | ||||
In January 2013, the Company received from STM, an order valued at approximately $11 million for lottery products. Shipments of these products were completed in the third quarter of fiscal 2014, and the related revenue was recognized. | ||||
The financial activities and balances related to transactions with STM were as follows: | ||||
· | Revenues of approximately $2.9 million and $11.5 million were recognized on the sale of lottery products and support services during the three and nine months ended January, 31, 2014, respectively. Revenues of $609,000 and $2.5 million were recognized on the performance of contract deliverables and support services during the three and nine months ended January 31, 2013, respectively; | |||
· | There was no cost of deferred revenues as of January 31, 2014. Cost of deferred revenues in connection with the lottery product order received in January 2013 mentioned above totaled $104,000 as of April 30, 2013; | |||
· | There was deferred revenue of $7,000 on lottery products and software support services as of January 31, 2014, compared to $3.3 million as of April 30, 2013; and | |||
· | Accounts receivable totaled $146,000 as of January 31, 2014, compared to $410,000 as of April 30, 2013. | |||
Philippine Gaming Management Corporation | ||||
The Company provides lottery products and software development to Philippine Gaming Management Corporation (“PGMC”), a related party and a subsidiary of BLM. | ||||
In addition, the Company provides PGMC with terminal spare parts on an ongoing basis and support services on an as-needed basis. | ||||
The financial activities and balances related to transactions with PGMC were as follows: | ||||
· | Revenues recognized on the sale of lottery products during the three and nine months ended January 31, 2014 totaled $7,000 and $72,000, respectively. Revenues of $2,000 and $1.1 million were recognized on the sale of lottery products during the three and nine months ended January 31, 2013, respectively; | |||
· | There were no deferred revenue balances as of January 31, 2014 and April 30, 2013; and | |||
· | There were no accounts receivable balances as of January 31, 2014 and April 30, 2013. | |||
Natural Avenue Sdn. Bhd. | ||||
The Company provides Natural Avenue Sdn. Bhd. (“Natural Avenue”), an affiliate of BLM and a related party, with lottery products and support services. | ||||
The financial activities and balances related to transactions with Natural Avenue were as follows: | ||||
· | Revenues of $36,000 and $107,000 were recognized on the sale of support services and licensing during the three and nine months ended January 31, 2014, respectively. Revenues of $35,000 and $105,000 were recognized on the sale of support services and licensing during the three and nine months ended January 31, 2013, respectively; | |||
· | There was deferred revenue of $8,000 as of January 31, 2014. Deferred revenue balance on lottery product licensing totaled $4,000 as of April 30, 2013; and | |||
· | Accounts receivable was $11,000 as of January 31, 2014, compared to $1,000 as of April 30, 2013. | |||
Sports Toto Computers Sdn. Bhd. | ||||
The Company engages Sports Toto Computers Sdn. Bhd. (“STC”), a related party, to provide consulting, programming and other related services to the Company. | ||||
During the three and nine months ended January 31, 2014, the Company incurred services of approximately $51,000 and $152,000, respectively, which are shown as part of cost of sales. During the three and nine months ended January 31, 2013, the Company incurred approximately $65,000 and $145,000, respectively, which are shown as part of cost of sales. |
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 9 Months Ended |
Jan. 31, 2014 | |
Fair Value of Financial Instruments [Abstract] | ' |
Fair Value of Financial Instruments | ' |
Fair Value of Financial Instruments | |
The Company’s material financial instruments consist of its cash and cash equivalents, certificates of deposit, accounts receivable, accounts payable and related party payables. The carrying amounts of the Company’s financial instruments generally approximated their fair values as of January 31, 2014 and April 30, 2013 due to the short-term maturity of the instruments. |
Subsequent_Events
Subsequent Events | 9 Months Ended |
Jan. 31, 2014 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
Subsequent Events | |
On January 8, 2014, the Company’s board of directors approved (i) the Company’s reincorporation from California to Delaware by means of a merger with and into a wholly-owned Delaware subsidiary (the “Reincorporation”) and (ii) a subsequent amendment to the surviving company’s certificate of incorporation to effect a 9,245,317-for-1 reverse stock split (the “Reverse Stock Split”) on outstanding shares of common stock. On January 8, 2014 (January 9, 2014 Malaysia Time), Berjaya Lottery Management (H.K.) Limited (“BLM”), the holder of 9,245,317 shares of the Company’s common stock, representing 71.3% of the Company’s outstanding shares of common stock as of that date, approved the Reincorporation and Reverse Stock Split by written consent. Each shareholder holding less than one full share of common stock following the Reverse Stock Split, being every shareholder of the Company other than BLM, will receive a cash payment from the Company for their fractional share interests equal to $1.33 in cash, without interest, for each share of common stock held by such shareholder immediately prior to the Reverse Stock Split. The Reincorporation and the Reverse Stock Split will be effected on or about the date 20 calendar days following the date on which the Company’s Information Statement on Schedule 14C relating to the Reincorporation and Reverse Stock Split is mailed to the Company’s shareholders. Following consummation of the transactions, the Company will promptly terminate its registration and reporting obligations under the Securities Exchange Act of 1934, as amended. |
Warranty_Reserves_Tables
Warranty Reserves (Tables) | 9 Months Ended | ||||
Jan. 31, 2014 | |||||
Warranty Reserves [Abstract] | ' | ||||
Product warranty reserve activity | ' | ||||
A summary of product warranty reserve activity for the nine months ended January 31, 2014 is as follows: | |||||
(Amounts in thousands) | |||||
Balance at May 1, 2013 | $ | 139 | |||
Additional reserves | 355 | ||||
Warranty reserve expense adjustments | (185 | ) | |||
Charges incurred | (91 | ) | |||
Balance at January 31, 2014 | $ | 218 |
Segment_Information_Tables
Segment Information (Tables) | 9 Months Ended | ||||||||||||
Jan. 31, 2014 | |||||||||||||
Segment Information [Abstract] | ' | ||||||||||||
Segment information | ' | ||||||||||||
The Company’s segment information is presented below (in thousands): | |||||||||||||
As of and for the Three Months Ended | |||||||||||||
31-Jan-14 | |||||||||||||
Gaming | Voting | Totals | |||||||||||
Business | Business | ||||||||||||
Total revenues | $ | 2,944 | $ | 1,053 | $ | 3,997 | |||||||
Income from operations | 1,092 | 58 | 1,150 | ||||||||||
Depreciation and amortization | 23 | 21 | 44 | ||||||||||
Segment assets | 12,510 | 2,177 | 14,687 | ||||||||||
As of and for the Three Months Ended | |||||||||||||
31-Jan-13 | |||||||||||||
Gaming | Voting | Totals | |||||||||||
Business | Business | ||||||||||||
Total revenues | $ | 1,724 | $ | 282 | $ | 2,006 | |||||||
Income (loss) from operations | 185 | (277 | ) | (92 | ) | ||||||||
Depreciation and amortization | 27 | 19 | 46 | ||||||||||
Segment assets | 8,214 | 1,942 | 10,156 | ||||||||||
As of and for the Nine Months Ended | |||||||||||||
31-Jan-14 | |||||||||||||
Gaming | Voting | Totals | |||||||||||
Business | Business | ||||||||||||
Total revenues | $ | 18,475 | $ | 2,262 | $ | 20,737 | |||||||
Income (loss) from operations | 5,810 | (328 | ) | 5,482 | |||||||||
Depreciation and amortization | 78 | 61 | 139 | ||||||||||
Segment assets | 12,510 | 2,177 | 14,687 | ||||||||||
As of and for the Nine Months Ended | |||||||||||||
31-Jan-13 | |||||||||||||
Gaming | Voting | Totals | |||||||||||
Business | Business | ||||||||||||
Total revenues | $ | 5,356 | $ | 2,337 | $ | 7,693 | |||||||
Income (loss) from operations | 1,350 | (31 | ) | 1,319 | |||||||||
Depreciation and amortization | 83 | 50 | 133 | ||||||||||
Segment assets | 8,214 | 1,942 | 10,156 |
Inventories_Tables
Inventories (Tables) | 9 Months Ended | ||||||||
Jan. 31, 2014 | |||||||||
Inventories [Abstract] | ' | ||||||||
Inventories | ' | ||||||||
Inventories consisted of the following: | |||||||||
January 31, | April 30, | ||||||||
2014 | 2013 | ||||||||
(Amounts in thousands) | |||||||||
Raw materials and subassemblies | $ | 1,211 | $ | 2,872 | |||||
Work-in-process | 5 | 33 | |||||||
Finished goods | 215 | 760 | |||||||
$ | 1,431 | $ | 3,665 |
Equipment_Furniture_and_Fixtur1
Equipment, Furniture and Fixtures (Tables) | 9 Months Ended | ||||||||
Jan. 31, 2014 | |||||||||
Equipment, Furniture and Fixtures [Abstract] | ' | ||||||||
Net equipment, furniture and fixtures | ' | ||||||||
Net equipment, furniture and fixtures consisted of the following: | |||||||||
January 31, | April 30, | ||||||||
2014 | 2013 | ||||||||
(Amounts in thousands) | |||||||||
Plant and machinery | $ | 661 | $ | 757 | |||||
Computer equipment | 1,728 | 1,662 | |||||||
Leasehold improvement | 201 | 201 | |||||||
Furniture, fixtures and equipment | 96 | 96 | |||||||
Construction in progress | - | 25 | |||||||
2,686 | 2,741 | ||||||||
Accumulated depreciation and amortization | (2,145 | ) | (2,168 | ) | |||||
Net equipment, furniture and fixtures | $ | 541 | $ | 573 |
Major_Customers_Tables
Major Customers (Tables) | 9 Months Ended | |||||||
Jan. 31, 2014 | ||||||||
Major Customers [Abstract] | ' | |||||||
Major Customers | ' | |||||||
The following table summarizes major customers who individually accounted for more than 10% of revenues for the periods presented: | ||||||||
Three Months Ended | Nine Months Ended | |||||||
January 31, | January 31, | |||||||
2014 | 2013 | 2014 | 2013 | |||||
Revenue: | ||||||||
From unrelated customers | One customer from the voting segment accounted for 22% of total revenue | One customer from the gaming segment accounted for 54% of total revenue | ||||||
One customer from the gaming segment accounted for 33% of total revenue | One customer from the voting segment accounted for 22% of total revenue and one customer from the gaming segment accounted for 21% of total revenue | |||||||
One customer from the gaming segment accounted for 30% of total revenue | One customer from the gaming segment accounted for 56% of total revenue | Two customers from the gaming segment accounted for 47% of total revenue | ||||||
From related customers | One customer from the gaming segment accounted for 72% of total revenue |
Description_of_the_Business_De
Description of the Business (Details) | 9 Months Ended |
Jan. 31, 2014 | |
Description of the Business [Abstract] | ' |
Lead time of deposit upon contract signing before delivery of hardware begins, maximum | '6 months |
Outstanding voting stock held by Berjaya Lottery Management (H.K.) Ltd. (in hundredths) | 71.30% |
Deferred_Revenues_Details
Deferred Revenues (Details) (USD $) | Jan. 31, 2014 | Apr. 30, 2013 | |
In Thousands, unless otherwise specified | |||
Deferred Revenues [Abstract] | ' | ' | |
Deferred revenues | $785 | $5,451 | [1] |
[1] | Derived from the consolidated audited financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended April 30, 2013 filed with the SEC. |
Warranty_Reserves_Details
Warranty Reserves (Details) (USD $) | 9 Months Ended |
In Thousands, unless otherwise specified | Jan. 31, 2014 |
Product warranty reserve activity [Roll Forward] | ' |
Balance, beginning of period | $139 |
Additional reserves | 355 |
Warranty reserve expense adjustments | -185 |
Charges incurred | -91 |
Balance, end of period | $218 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Jan. 31, 2014 | Jan. 31, 2013 | Jan. 31, 2014 | Jan. 31, 2013 |
Income Taxes [Abstract] | ' | ' | ' | ' |
Provision for income taxes | $200 | ($3) | $1,899 | $20 |
Income taxes effective rate (in hundredths) | ' | ' | 34.73% | ' |
Segment_Information_Details
Segment Information (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||
In Thousands, unless otherwise specified | Jan. 31, 2014 | Jan. 31, 2013 | Jan. 31, 2014 | Jan. 31, 2013 | Apr. 30, 2013 | |
Segment | ||||||
Segment Information [Abstract] | ' | ' | ' | ' | ' | |
Number of operating segments | ' | ' | 2 | ' | ' | |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | |
Total revenues | $3,997 | $2,006 | $20,737 | $7,693 | ' | |
Income (loss) from operations | 1,150 | -92 | 5,482 | 1,319 | ' | |
Depreciation and amortization | 44 | 46 | 139 | 133 | ' | |
Segment assets | 14,687 | 10,156 | 14,687 | 10,156 | 16,834 | [1] |
Gaming Business [Member] | ' | ' | ' | ' | ' | |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | |
Total revenues | 2,944 | 1,724 | 18,475 | 5,356 | ' | |
Income (loss) from operations | 1,092 | 185 | 5,810 | 1,350 | ' | |
Depreciation and amortization | 23 | 27 | 78 | 83 | ' | |
Segment assets | 12,510 | 8,214 | 12,510 | 8,214 | ' | |
Voting Business [Member] | ' | ' | ' | ' | ' | |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | |
Total revenues | 1,053 | 282 | 2,262 | 2,337 | ' | |
Income (loss) from operations | 58 | -277 | -328 | -31 | ' | |
Depreciation and amortization | 21 | 19 | 61 | 50 | ' | |
Segment assets | $2,177 | $1,942 | $2,177 | $1,942 | ' | |
[1] | Derived from the consolidated audited financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended April 30, 2013 filed with the SEC. |
Inventories_Details
Inventories (Details) (USD $) | Jan. 31, 2014 | Apr. 30, 2013 | |
In Thousands, unless otherwise specified | |||
Inventories [Abstract] | ' | ' | |
Raw materials and subassemblies | $1,211 | $2,872 | |
Work-in-process | 5 | 33 | |
Finished Goods | 215 | 760 | |
Total | $1,431 | $3,665 | [1] |
[1] | Derived from the consolidated audited financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended April 30, 2013 filed with the SEC. |
Equipment_Furniture_and_Fixtur2
Equipment, Furniture and Fixtures (Details) (USD $) | Jan. 31, 2014 | Apr. 30, 2013 | |
In Thousands, unless otherwise specified | |||
Property, Plant and Equipment [Line Items] | ' | ' | |
Gross equipment, furniture and fixtures | $2,686 | $2,741 | |
Accumulated depreciation and amortization | -2,145 | -2,168 | |
Net equipment, furniture and fixtures | 541 | 573 | [1] |
Plant and Machinery [Member] | ' | ' | |
Property, Plant and Equipment [Line Items] | ' | ' | |
Gross equipment, furniture and fixtures | 661 | 757 | |
Computer Equipment [Member] | ' | ' | |
Property, Plant and Equipment [Line Items] | ' | ' | |
Gross equipment, furniture and fixtures | 1,728 | 1,662 | |
Leasehold Improvement [Member] | ' | ' | |
Property, Plant and Equipment [Line Items] | ' | ' | |
Gross equipment, furniture and fixtures | 201 | 201 | |
Furniture, Fixtures and Equipment [Member] | ' | ' | |
Property, Plant and Equipment [Line Items] | ' | ' | |
Gross equipment, furniture and fixtures | 96 | 96 | |
Construction in Progress [Member] | ' | ' | |
Property, Plant and Equipment [Line Items] | ' | ' | |
Gross equipment, furniture and fixtures | $0 | $25 | |
[1] | Derived from the consolidated audited financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended April 30, 2013 filed with the SEC. |
Major_Customers_Details
Major Customers (Details) | 3 Months Ended | 9 Months Ended | ||
Jan. 31, 2014 | Jan. 31, 2013 | Jan. 31, 2014 | Jan. 31, 2013 | |
Customer | Customer | Customer | Customer | |
Concentration Risk [Line Items] | ' | ' | ' | ' |
Concentration risk, percentage (in hundredths) | ' | ' | 10.00% | ' |
Revenue [Member] | Customer Concentration Risk [Member] | From Unrelated Customers [Member] | Gaming Business [Member] | ' | ' | ' | ' |
Concentration Risk [Line Items] | ' | ' | ' | ' |
Number of major customers | ' | 1 | 1 | 1 |
Concentration risk, percentage (in hundredths) | ' | 54.00% | 33.00% | 21.00% |
Revenue [Member] | Customer Concentration Risk [Member] | From Unrelated Customers [Member] | Voting Business [Member] | ' | ' | ' | ' |
Concentration Risk [Line Items] | ' | ' | ' | ' |
Number of major customers | 1 | ' | ' | 1 |
Concentration risk, percentage (in hundredths) | 22.00% | ' | ' | 22.00% |
Revenue [Member] | Customer Concentration Risk [Member] | From Related Customers [Member] | Gaming Business [Member] | ' | ' | ' | ' |
Concentration Risk [Line Items] | ' | ' | ' | ' |
Number of major customers | 1 | 1 | 1 | 2 |
Concentration risk, percentage (in hundredths) | 72.00% | 30.00% | 56.00% | 47.00% |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||
Jan. 31, 2014 | Jan. 31, 2013 | Jan. 31, 2014 | Jan. 31, 2013 | Apr. 30, 2013 | ||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | |
Revenue from related party | $2,900,000 | $646,000 | $11,700,000 | $3,700,000 | ' | |
Sales revenue, related party, percentage (in hundredths) | 73.00% | 32.00% | 56.00% | 48.00% | ' | |
Accounts receivable from related parties | 157,000 | ' | 157,000 | ' | ' | |
Outstanding voting stock held by Berjaya Lottery Management (H.K.) Ltd. (in hundredths) | 71.30% | ' | 71.30% | ' | ' | |
Payable to parent | 202,000 | ' | 202,000 | ' | 202,000 | [1] |
Inventories | 1,431,000 | ' | 1,431,000 | ' | 3,665,000 | [1] |
Deferred Costs, Current | 1,000 | ' | 1,000 | ' | 132,000 | [1] |
Deferred revenues | 785,000 | ' | 785,000 | ' | 5,451,000 | [1] |
BLM [Member] | ' | ' | ' | ' | ' | |
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | |
Revenue from related party | 0 | ' | 0 | ' | ' | |
Accounts receivable from related parties | 0 | ' | 0 | ' | 0 | |
Outstanding voting stock held by Berjaya Lottery Management (H.K.) Ltd. (in hundredths) | 71.30% | ' | 71.30% | ' | ' | |
Payable to parent | 202,000 | ' | 202,000 | ' | 202,000 | |
Inventories | 0 | ' | 0 | ' | 0 | |
Sports Toto Malaysia Sdn. Bhd. [Member] | ' | ' | ' | ' | ' | |
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | |
Revenue from related party | 11,000,000 | ' | ' | ' | ' | |
Accounts receivable from related parties | 146,000 | ' | 146,000 | ' | 410,000 | |
Sports Toto Malaysia Sdn. Bhd. [Member] | Lottery Products [Member] | ' | ' | ' | ' | ' | |
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | |
Deferred Costs, Current | 0 | ' | 0 | ' | 104,000 | |
Sports Toto Malaysia Sdn. Bhd. [Member] | Lottery Products and Support Services [Member] | ' | ' | ' | ' | ' | |
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | |
Revenue from related party | 2,900,000 | ' | 11,500,000 | ' | ' | |
Deferred revenues | 7,000 | ' | 7,000 | ' | 3,300,000 | |
Sports Toto Malaysia Sdn. Bhd. [Member] | Contract Deliverables and Sale of Support Services [Member] | ' | ' | ' | ' | ' | |
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | |
Revenue from related party | ' | 609,000 | ' | 2,500,000 | ' | |
PGMC [Member] | Lottery Products [Member] | ' | ' | ' | ' | ' | |
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | |
Revenue from related party | 7,000 | 2,000 | 72,000 | 1,100,000 | ' | |
Accounts receivable from related parties | 0 | ' | 0 | ' | 0 | |
Deferred revenues | 0 | ' | 0 | ' | 0 | |
Natural Avenue Sdn. Bhd. [Member] | ' | ' | ' | ' | ' | |
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | |
Accounts receivable from related parties | 11,000 | ' | 11,000 | ' | 1,000 | |
Deferred revenues | 8,000 | ' | 8,000 | ' | ' | |
Natural Avenue Sdn. Bhd. [Member] | Lottery Product Licensing [Member] | ' | ' | ' | ' | ' | |
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | |
Deferred revenues | ' | ' | ' | ' | 4,000 | |
Natural Avenue Sdn. Bhd. [Member] | Support Services and Licensing [Member] | ' | ' | ' | ' | ' | |
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | |
Revenue from related party | 36,000 | 35,000 | 107,000 | 105,000 | ' | |
Sports Toto Computers Sdn. Bhd. [Member] | ' | ' | ' | ' | ' | |
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | |
Services incurred | $51,000 | $65,000 | $152,000 | $145,000 | ' | |
[1] | Derived from the consolidated audited financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended April 30, 2013 filed with the SEC. |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | Jan. 31, 2014 | Apr. 30, 2013 | Jan. 31, 2014 | Jan. 31, 2014 | Jan. 31, 2014 | |
BLM [Member] | Subsequent Event [Member] | Subsequent Event [Member] | ||||
BLM [Member] | ||||||
Subsequent Event [Line Items] | ' | ' | ' | ' | ' | |
Reverse stock split | ' | ' | ' | '9,245,317-for-1 | ' | |
Common shares, shares outstanding (in shares) | 12,963,000 | 12,963,000 | [1] | ' | ' | 9,245,317 |
Outstanding voting stock held by Berjaya Lottery Management (H.K.) Ltd. (in hundredths) | 71.30% | ' | 71.30% | ' | 71.30% | |
Cash paid for fractional share owned (in dollars per share) | ' | ' | ' | $1.33 | ' | |
Period after which reincorporation and reverse stock split will be effective | ' | ' | ' | '20 days | ' | |
[1] | Derived from the consolidated audited financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended April 30, 2013 filed with the SEC. |