A Letter from our CEO
When I
joined GameTech during fiscal 2005, it was obvious to me that our
company was full of both opportunities and potential. Such
opportunity and potential can be found in any company recognized as
a dominant force in its industry. GameTech is known to be a leading
player in bingo and that position provides our company with
opportunities to expand our presence in the world market. We can
summarize fiscal 2005 through three key points: bottom line
performance, non-recurring costs, and technology.
Bottom
Line Performance: During fiscal 2005, we implemented a number of
expense reducing and cost containing programs which had immediate
impact on our bottom line. Although we encountered a number of
events such as regulatory changes in Oklahoma that had an
unfavorable impact to our revenue, those revenue reductions have
been more than offset by our ability to increase revenue in other
regions and better manage the expense side of our business. Not
only will our expense efficiencies affect our current reporting
period, but they will have a long-term effect on our financial
performance and will help us to maximize returns to our
stockholders. In the future, we will be better able to respond
quickly to changes in the market, as well as implement new ideas and
strategies far more efficiently and timely. We believe these
efficiencies will make GameTech a more profitable company in the
future.
Non-recurring Costs: During fiscal 2005, we incurred expenses
related to employee severance and legal expenses. Although we
expect a certain amount of legal costs in the normal course of
business, fiscal 2005 represented a year where a majority of these
issues "turned the corner" and may be behind us. We look forward to
shifting our focus back to more productive activities without the
backdrop of these legal issues. We have also shifted our philosophy
with regard to the company's employment relationships. During the
past year, we have asked employees to align their professional
interests more with the company by focusing on employee incentives
through stock-based and other forms of performance-related
compensation, which should also align employee interests with those
of our shareholders.
Technology Focus: Also during fiscal 2005, we redefined our
technology. To assure that we continue to produce reliable products
that provide our customers more capability than our competitor's
products, we found it necessary to redefine our products' technology
platform and streamline the development process. As a result, we
plan to introduce a new portable device and an entirely new platform
in the upcoming year, which will also support our current product
line. The real news, however, is that we will be developing our
technology in a fraction of the time and at a fraction of the cost
of what we have in prior years.
To summarize fiscal 2005, I would describe it as a year of transition.
We have had to overcome some unusual circumstances to maintain our
business and at the same time set ourselves up for success in the
future. Similar to major sports franchises that experience a
"rebuilding year," we believe that most of our structural problems
have been addressed and now we can enjoy the results of our efforts
in the form of growth in our core business and success in new
markets that would not have been possible a year ago.
Jay M. Meilstrup
President, Chief Executive Officer
