GPI reports results

14 November 2006

LAS VEGAS, Nevada – (PRESS RELEASE) -- Gaming Partners International Corporation (Nasdaq: GPIC), the leading worldwide provider of casino currency and table gaming equipment, today announced financial results for the third quarter and nine months ended September 30, 2006.

For the third quarter of 2006, the Company reported revenues of $20.1 million, an increase of 50% over revenues of $13.4 million for the third quarter of 2005. Gross profit for the quarter was $6.1 million, or 30.1% of revenues, compared to $4.9 million or 36.3% of revenues in the same period a year ago. The decline in gross profit margin was primarily related to difficulty in initial manufacturing of gaming chips using Magellan/PGIC RFID high-frequency technology in very large volume. The Company is working to improve yields and expects to see such improvement as it gains experience and identifies ways in which to maximize efficiency in this area of manufacturing.

Net income for the third quarter increased 314%, to $1.0 million, or $0.13 per basic and $0.12 per diluted share, from $246,000 or $0.03 per basic and diluted share in the three months ended September 30, 2005. Weighted average shares outstanding were 8.0 million basic and 8.2 million diluted for third quarter of 2006, and 7.8 million basic and 8.2 million diluted for the three months ended September 30, 2005.

For the nine month period ended September 30, 2006, revenues were $57.9 million, an increase of 41.6% compared to revenues of $40.9 million in the first nine months of 2005. Gross profit for the period was $21.4 million, or 36.9% of revenues, compared to $16.5 million or 40.3% of revenues in the comparable period in 2005. Decline in gross profit margin for the period was due to initial start up costs, as well as the above mentioned difficulty in the manufacture of high frequency RFID gaming chips.

Net income for the period was $5.0 million, or $0.63 per basic and $0.62 per diluted share, an increase of 125% over net income of $2.2 million or $0.29 per basic and $0.27 per diluted share for the nine months ended September 30, 2005. Weighted average shares outstanding were 7.9 million basic and 8.1 million diluted for first nine months of 2006, and 7.8 million basic and 8.1 million diluted for the comparable period in 2005.

As of September 30, 2006, the Company had cash and marketable securities of $10.8 million, compared to $13.6 million on December 31, 2005.

The Company also announced a one-time cash dividend of $0.125 per share, payable on December 15, 2006 to shareholders of record at the close of business on November 27, 2006. This marks the second cash dividend paid to the shareholders of Gaming Partners and reflects the continued improvement in the Company's profitability and operational performance. Backlog of production orders, which are expected to be filled in 2006, at the end of the third quarter was approximately $4.2 million at GPI-USA and $7.4 million at GPI-SAS. This compares to backlog of $3.9 million and $8.0 million for GPI-USA and GPI-SAS respectively on September 30, 2005.

Commenting on the results, Gerard Charlier, President and CEO said, "In the third quarter we saw a continuation of strong year-over-year revenue growth, fueled by the strength of our GPI-SAS subsidiary, which saw revenue double compared to the third quarter last year. Our U.S. business remained strong as well, achieving sales growth of approximately 4% over last year through re-racking orders from our casino partners throughout the United States."

Mr. Charlier added, "Looking ahead, we remain encouraged by the opportunities in the RFID space, as demand for our next generation casino currency solutions is continuing to build. As mentioned last quarter, we expect full-year sales of our RFID gaming chips to be approximately $16 million, more than three-fold growth over 2005. RFID technology is still in its infancy particularly in the U.S. and expected to be a significant growth driver for GPI going forward. Additionally, broader trends in the gaming market bode well for our full range of casino currency products as we believe the market will be driven by new casino openings in the U.S. and abroad, customer re-orders necessitated by re-branding or technological obsolescence and overall growth in the popularity of table gaming.

"As the recognized leader in the global market for casino currency and table gaming supplies, we are excited about what the future holds for the industry, and more importantly, for GPI and our shareholders."