Friday February 27, 9:01 am Eastern Time
SOURCE: GameTech International, Inc.
RENO, Nev., Feb. 27 -- GameTech International, Inc., a leading supplier
of electronic bingo equipment, today announced financial results for the
Company's first fiscal quarter ended January 31, 2004. Revenues for the quarter
were over $12.6 million compared to $13.2 million for the comparable quarter in
2003. The Company experienced a net loss of $15,000 for the three months, equal
to less than $0.01 per diluted share, compared to the previous year's first
quarter net income of approximately $522,000, or $0.04 per diluted share. The
Company attributed the revenue decline to several factors, including fewer
installed terminals in some geographical markets and price erosion due to
competition in others.
The Company's cost of revenues increased approximately $610,000 over the
comparable quarter in 2003. The greater costs were primarily a result of a rise
in service costs of $240,000 due to increased staffing in field and product
support centers, and a $300,000 increase in depreciation expenses as more of the
Company's TED2C(TM) portable color terminals were acquired.
Improvements in sales and marketing and general and administrative expenses
provided a partial offset to the higher costs associated with revenue
production. The Company, however, continues to experience high legal costs
related with ongoing litigation.
The emphasis on new product development continues as a major focus for the
Company. In addition to research and development expenses, the Company
capitalized approximately $150,000 of costs connected with the internal
development of software that meets technological feasibility and recoverability
tests in accordance with Financial Accounting Standards Board Statement No. 86.
Clarence Thiesen, chief executive officer stated, "our industry has become
increasingly competitive and, despite our market share and brand awareness, we
are mindful of the importance of responding to client needs by both introducing
exciting new products and providing increased levels of service. As a result, we
continue to stress research and development, with positive results. Not only are
we developing new product models, but also diversifying our offerings with new
features that can be added to existing models, a strategy that has proven
successful by the launch of Pay-N-Play(TM), our fast-action, credit-based bingo
feature, introduced late last year."
Thiesen also announced that the Company's newest portable product, the
Traveler(TM) terminal, is still in beta testing. "While our beta tests to date
have been very encouraging, we have identified improvements that we believe
should be made prior to general release in order to assure that the Traveler(TM)
terminal will enhance the results for our customers and increase returns for our
stockholders," said Thiesen.
GameTech International, Inc. is a leading supplier of a comprehensive line of
electronic bingo equipment, including hand-held bingo terminals, fixed-base
terminals and turnkey accounting and management software. The Company supports
its bingo operator customers with products that typically increase play,
revenues and profits, and software customized to enhance management and
operations, all backed by unparalleled customer service and support.
Certain statements contained in this press release may be deemed to be forward
looking statements under federal securities laws, and GameTech intends that such
forward-looking statements be subject to the safe harbor created thereby. Such
forward-looking statements include new product and product feature development
and expectations of the financial growth and operating results of the Company.
GameTech cautions that these statements are qualified by important factors that
could cause actual results to differ materially from those reflected by the
forward looking statements contained herein. Such factors include those
disclosed in documents filed by the Company with the Securities and Exchange
Commission, including the Company's annual report on Form 10-K for the fiscal
year ended October 31, 2003.
GAMETECH INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATION
(In thousands, except share and per share amounts)
Three Months Ended
January 31,
2003 2004
(Unaudited)
Revenue $13,198 $12,615
Operating expenses:
Cost of revenues 5,264 5,874
General and administrative 2,902 2,780
Sales and marketing 3,193 3,035
Research and development 996 957
12,355 12,646
Income (loss) from operations 843 (31)
Interest income and other, net 7 6
Income (loss) before provision
for income taxes 850 (25)
Provision (benefit) for income taxes 328 (10)
Net income (loss) $522 $(15)
Basic net income (loss) per share $0.05 $(0.00)
Diluted net income (loss) per share $0.04 $(0.00)
Shares used in the calculation of
net income per share:
Basic 11,588,396 11,737,439
Diluted 11,705,393 11,737,439
Balance Sheet Data
October 31, January 31,
2003 2004
(audited) (unaudited)
Cash and equivalents $10,202 $9,733
Short-term investments 1,750 348
Total current assets 18,361 17,612
Total assets 60,175 59,385
Total current liabilities 3,555 4,203
Total liabilities 7,554 8,187
Total stockholders' equity 52,621 51,198
Total liabilities and stockholders'
equity $60,175 $59,385
Source: GameTech International, Inc.