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  Paul-Son designs and manufactures casino chips to meet a variety of customer preferences and specifications, including size, weight, ability to stack, ease of handling, texture, color, graphics, durability, and security and anti-counterfeit features. Casino chips are manufactured from a proprietary formulation of approximately ten raw materials using a compression molding system that management believes is unique to the industry. The Company has developed the ability to mold detailed graphics bearing casino logos or other designs onto both sides of a chip. In addition, customized security and identifying features are incorporated into a chip.
 
  A casino will generally order all of its chips, including replacement chips after wear and usage, from a single supplier. Accordingly, Paul-Son strives to become the original chip supplier to a casino upon its opening. A new casino order will typically include approximately five distinct chip colors and styles, ranging in denomination from $1 to $1,000. The Company's selling price is generally between $.60 and $.80 per chip, depending upon the specification, design, and security features. Given this relatively low cost and a chip's expected lifespan of five or more years, management believes that competition is generally based upon factors other than price.
 
  To protect its market position and satisfy the demands of its customers, the Company continuously seeks to improve the quality and features of its chips. For example, in 1993, the Company introduced a new line of full-color chips with detailed customized graphics which cover virtually the entire face of the chip. Also, in 1993, the Company developed a chip featuring a wide selection of popular pictures to be sold to individuals through retail outlets and by mail-order. Every year since 1994, the Company has introduced improved formulations and additional security features which are incorporated in the manufacture of its casino chips.
 
  The Company manufactures all of its chips at its facilities in San Luis, Mexico. To meet the increasing demand for its chips, in 1993, and again in 1997, the Company expanded production capacity at the facility to its current annual capacity of approximately 65 million chips. Management believes that given its current production level of approximately 18 million chips a year, the Company will have sufficient manufacturing capacity to meet anticipated future demand.
 
  In January 1994, Paul-Son began to market commemorative chips more aggressively. Management of Paul-Son and its casino customers determined that casino patrons often retained casino chips which commemorated certain types of events such as title boxing matches, significant anniversaries, and premier entertainment events. Casinos benefit to the extent that casino chips purchased are not redeemed, thereby resulting in added cash flow to the casino. Paul-Son believes that promoting such additional benefits to casinos has assisted the Company in sales of new racks of primary casino chips. The Company is also pursuing opportunities to sell commemorative chips outside of the gaming industry.