PokerTek reports Q3 results

CHARLOTTE, North Carolina -- (PRESS RELEASE) -- PokerTek, Inc. (NASDAQ: PTEK) today announced financial results for the three and nine months ended September 30, 2006. Net loss for the third quarter of fiscal 2006 was approximately $2,316,000, or ($0.24) per diluted share, compared with net loss of approximately $871,000, or ($0.12) per diluted share, in the third quarter of 2005. Net loss for the nine months ended September 30, 2006 was approximately $6,139,000, or ($0.65) per diluted share, compared with net loss of approximately $2,452,000, or ($0.35) per diluted share, in the nine months ended September 30, 2005.

Third Quarter Financial Results

Revenues from both license fees and equipment sales relating to the PokerPro(TM) system totaled approximately $239,000 during the three-month period ended September 30, 2006, up from approximately $47,000 in the same period in 2005. Revenues consisted of: aggregate license fees for the three month period ended September 30, 2006 and the same period in 2005 of approximately $135,000 and $42,000, respectively. License fees for the third quarter of 2006 were from the Seminole Hardrock properties in Florida, three major cruise lines and the Chickasaw property in Oklahoma; and the remainder from equipment sales to our international distributor, Aristocrat International Pty. Limited.

The net loss increased to approximately $2,316,000 from approximately $871,000 in the same period in 2005, creating a net loss per common share, basic and diluted, of ($0.24) compared to ($0.12) for the third quarter of fiscal year 2005. The increases in the following factors were the primary components affecting the increased loss for the third quarter of 2006 as compared to the third quarter of 2005: employees' salaries and benefits; costs associated with being a public company; fees related to compliance with licensing and regulatory requirements; and non-cash stock option expense recorded in accordance with Statement of Financial Accounting Standards No. 123R. Partially offsetting the increase in expenses was an increase in interest income.

"We are pleased with the continued growth of the company," stated Lou White, PokerTek's Chief Executive Officer. "Demand is strong, our product continues to do well in the field and we have made further progress in Q3 toward additional installations, building our pipeline, and regulatory approvals in all major jurisdictions. The PokerPro Heads-Up table is an exciting addition to our product line that further establishes us as the market leader. PokerPro Heads-Up will provide incremental revenue to operators, an exciting new poker option for players and a product that should help speed player adoption of automated poker."

Year-to-Date Financial Results

Revenues from both license fees and equipment sales totaled approximately $1,026,000, up from approximately $47,000 in the same period in 2005. Revenues consisted of: aggregate license fees for the nine month period ended September 30, 2006 and the same period in 2005 of approximately $629,000 and $42,000, respectively, from the Seminole Hardrock properties in Florida, three major cruise lines and the Chickasaw properties in Oklahoma; and the remainder from equipment sales to our international distributor, Aristocrat International Pty. Limited.

The net loss increased to approximately $6,139,000 from approximately $2,452,000 in the same period in 2005, creating a net loss per common share, basic and diluted, of ($0.65) compared to ($0.35) for the first nine months of fiscal year 2005. The increases in the following factors were the primary components affecting the increased loss for the first nine months of 2006 as compared to the same period of 2005: employees' salaries and benefits; costs associated with being a public company; fees related to compliance with licensing and regulatory requirements; and non-cash stock option expense recorded in accordance with Statement of Financial Accounting Standards No. 123R. Partially offsetting the increase in expenses was an increase in interest income. At September 30, 2006, PokerTek had no debt and approximately $12.9 million total cash and cash equivalents.