Monday June 13, 9:00 AM Eastern Time
SOURCE: GameTech International, Inc.
RENO, Nev., June 13 -- GameTech International, Inc., a leading supplier of electronic bingo equipment, today announced financial results for the Company's second fiscal quarter and six-month period ended April 30, 2005. Revenue for the second quarter was $12.7 million compared with $13.4 million for the comparable quarter in fiscal 2004. Despite the lower revenue, net income increased for the second quarter of 2005 to $303,000, or $0.03 per fully diluted share, up from $58,000, or $0.00 per fully diluted share, for the comparable quarter in 2004.
For the six months ended April 30, 2005, revenue was $25.1 million compared with $26.0 million for the comparable period in fiscal 2004. Net income for the six months ended April 30, 2005 approximated $304,000, or $0.03 per fully diluted share, compared with $44,000, or $0.00 per fully diluted share, for the first six months of 2004.
As previously announced, the Company attributed the reduction in comparative revenue during the period, to the loss of certain customer accounts in the fourth fiscal quarter of 2004 and, in part, to the unfavorable legislative changes leading to loss of business in Oklahoma offset by increased business in Texas and Michigan and new accounts and products in Canada. The Company has continued its increased placement of its Traveler(TM) portable color terminals. Profitability for the quarter and six months ended April 30, 2005 improved as a result of an increase of over 1% in gross margin, as well as reductions in distributor commissions, research and development and administrative costs.
"We are pleased with our financial results for the second quarter. We are continuing our successful, focused and aggressive efforts in product development, field service operations, and the customer services we provide. We do, however, expect to see regulatory licensing and Sarbanes-Oxley related expenses which were limited in the first and second quarters, increase in the second half of our fiscal year," said John Furman, President and Chief Executive Officer.
Furman also indicated that the continued roll out of new product applications and games, along with the Company's continuing efforts of increased customer service and cost reductions will continue to contribute to achieving the Company's goals. Furman also added, "We continue to pursue strategic opportunities and will look aggressively to extend our customer and revenue base in the coming months."
GameTech International is a leading developer and marketer of a comprehensive line of electronic bingo equipment, including hand-held bingo terminals, fixed-base terminals, turnkey accounting and management software. The Company supports its bingo operator customers with products that typically increase play, revenue, 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 developments, the success of the strategic opportunities and initiatives, and expectations of the financial results and operating results of the Company, including revenue, profitability, and income expectations for the current fiscal year. 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, 2004.
GameTech International Inc
Condensed Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
Three Months Six Months
Ended April 30, Ended April 30,
2005 2004 2005 2004
(Unaudited) (Unaudited)
Revenue $12,746 $13,359 $25,066 $25,973
Cost of revenue 5,146 5,615 10,616 11,325
Gross profit 7,600 7,744 14,450 14,648
Operating expenses:
General and
administrative 2,809 2,957 5,551 5,736
Sales and marketing 3,055 3,397 6,114 6,431
Research and
development 1,049 1,263 2,131 2,385
Total operating
expenses 6,913 7,617 13,796 14,552
Income from
operations 687 127 654 96
Interest and other
income (expense), net (15) (26) 20 (20)
Income before
provision for
income taxes 672 101 674 76
Provision for
income taxes 369 43 370 32
Net income $303 $58 $304 $44
Basic net income
per share $0.03 $0.00 $0.03 $0.00
Diluted net income
per share $0.03 $0.00 $0.03 $0.00
Weighted average
number of
common shares
Basic 11,875 11,757 11,861 11,747
Diluted 11,906 11,818 11,929 11,820
Select Balance Sheet Data April 30, 2005 October 31, 2004
(Unaudited) (Audited)
Cash and cash equivalents $5,701 $6,101
Short-term Investments $501 $2,605
Total current assets $17,154 $15,327
Total assets $51,294 $51,679
Total current liabilities $7,983 $10,118
Total liabilities $10,476 $11,009
Total stockholders' equity $40,818 $40,670
Total liabilities and
stockholders' equity $51,294 $51,679
EBITDA is defined as earnings before interest, taxes, depreciation and amortization. Although EBITDA is not a measure of performance calculated in accordance with generally accepted accounting principles ("GAAP"), GameTech believes the use of the non-GAAP financial measure EBITDA enhances an overall understanding of GameTech's past financial performance, and provides useful information to the investor because the use of EBITDA by virtually all companies in the gaming equipment sector as a measure of performance. However, investors should not consider this measure in isolation or as a substitute for net income, operating income, or any other measure for determining GameTech's operating performance that is calculated in accordance with GAAP. In addition, because EBITDA is not calculated in accordance with GAAP, it may not necessarily be comparable to similarly titled measures employed by other companies. A reconciliation of EBITDA to the most comparable GAAP financial measure, net income, follows:
Reconciliation of U.S. GAAP Net Income to EBITDA
(Dollars in thousands)
Three Months Six Months
Ended April 30, Ended April 30,
2005 2004 2005 2004
(Unaudited) (Unaudited)
Net income $303 $58 $304 $44
Add back:
Amortization and
depreciation $3,024 $2,815 $6,099 $5,545
Interest income
and other (income)
expense, net $15 $26 $(20) $20
Provision for
income taxes $369 $43 $370 $32
EBITDA $3,711 $2,942 $6,753 $5,641