Monday, January 21, 2008, 5:37 PM Eastern Standard Time
SOURCE: GameTech International, Inc.
GameTech International, Inc. (Nasdaq: GMTC), a leading designer, developer and marketer of electronic bingo and gaming equipment, systems, and video lottery terminals, today announced a revision of its results of operations for fiscal fourth quarter 2007 and fiscal year 2007 that were previously announced in its press release dated January 14, 2008. The revision results in a decrease of $665,000 in revenue and a decrease of $337,000 in net income in fiscal fourth quarter 2007 and fiscal year 2007 from the results previously reported. The revision was a result of a closer review by management and the company’s independent auditors of the proper accounting treatment for two invoices related to a single non-standard arrangement involving multiple delivery elements with a customer in our Summit Gaming division. This revenue and related net income will be recognized in the first quarter of fiscal 2008.
As revised, net income totaled $1.3 million for the fourth quarter of fiscal 2007, or $0.10 per fully diluted share, which is up from $1.0 million and $0.08 per fully diluted share for the fourth quarter of fiscal 2006. Net income for fiscal year 2007 reached $4.7 million, or $0.36 per fully diluted share, compared with $4.4 million or $0.34 per fully diluted share for fiscal 2006. Revenue for the fourth quarter of fiscal 2007 was $16.7 million, compared with $12.0 million for the same period in fiscal 2006. Revenue for fiscal year 2007 was $58.8 million, compared with $49.3 million for fiscal year 2006. EBITDA for the fourth quarter of fiscal 2007 was $5.7 million compared with $4.3 million for the same period in fiscal 2006. EBITDA for fiscal year 2007 was $20.5 million compared with $17.3 million for fiscal year 2006.
About GameTech International, Inc.
GameTech International, Inc. is in the business of designing, manufacturing, and marketing computerized bingo and gaming equipment, systems, services and video lottery terminals. Under the GameTech® brand the company provides electronic bingo systems and equipment, and is an innovator in advanced wireless gaming applications and devices. Under the Summit Gaming ™ brand the company provides video lottery terminal devices and related software and content. GameTech International, Inc. serves customers in 43 U.S. States, Canada, Japan, Mexico, Norway, Philippines, and the United Kingdom. The company was incorporated in 1994 and is headquartered in Reno, Nevada.
Statements contained in this press release that are not historical facts are intended to be forward-looking statements subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include our potential expansion of business internationally, our potential expansion of the Summit division’s business, new product and product feature developments, the success of our strategic opportunities and initiatives, and expectations relating to financial and operating results. GameTech cautions that these statements are subject to risks and uncertainties that could cause actual results to differ materially from those reflected by the forward-looking statements contained herein. Such factors include our ability to successfully integrate, operate and grow Summit's business, our dependence on the bingo and video lottery terminal businesses, risks associated with rapid technological change, our ability to retain customers and secure new customers, and other factors disclosed in documents filed by the Company with the Securities and Exchange Commission, including the Company's most recently filed Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Forward-looking statements speak only as of the date of this release, and we undertake no obligation to update such statements.
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(dollars in thousands, except earnings per share) |
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Three Months Ended October 31, |
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Twelve Months Ended October 31, |
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2007 |
2006 |
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2007 |
2006 |
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(Unaudited) |
(Unaudited) |
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(Unaudited) |
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Net revenue |
$ 16,740 |
100.0% |
$ 11,979 |
100.0% |
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$ 58,805 |
100.0% |
$ 49,289 |
100.0% |
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Cost of revenue |
7,626 |
45.6% |
5,209 |
43.5% |
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26,542 |
45.1% |
19,929 |
40.4% |
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Gross profit |
9,114 |
54.4% |
6,770 |
56.5% |
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32,263 |
54.9% |
29,360 |
59.6% |
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Operating expenses: |
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General and administrative |
3,140 |
18.7% |
1,637 |
13.7% |
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9,538 |
16.2% |
8,303 |
16.8% |
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Sales and marketing |
2,459 |
14.7% |
2,752 |
23.0% |
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10,519 |
17.9% |
11,041 |
22.4% |
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Research and development |
1,414 |
8.5% |
660 |
5.5% |
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3,865 |
6.6% |
2,885 |
5.9% |
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Loss contingencies |
- |
0.0% |
- |
0.0% |
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124 |
0.2% |
133 |
0.3% |
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Gain on sale of assets |
(656) |
(3.9%) |
- |
0.0% |
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(656) |
(1.1%) |
- |
0.0% |
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Total operating expenses |
6,357 |
38.0% |
5,049 |
42.2% |
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23,390 |
39.8% |
22,362 |
45.4% |
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Income from operations |
2,757 |
16.4% |
1,721 |
14.3% |
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8,873 |
15.1% |
6,998 |
14.2% |
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Net interest income (expense) |
(826) |
(4.9%) |
130 |
1.1% |
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(1,617) |
(2.8%) |
372 |
0.8% |
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Other income (expense), net |
83 |
0.5% |
(11) |
(0.1%) |
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82 |
0.1% |
(26) |
(0.1%) |
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Income before income taxes |
2,014 |
12.0% |
1,840 |
15.3% |
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7,338 |
12.4% |
7,344 |
14.9% |
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Provision for income taxes |
701 |
4.2% |
804 |
6.7% |
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2,667 |
4.5% |
2,961 |
6.0% |
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Net income |
$ 1,313 |
7.8% |
$ 1,036 |
8.6% |
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$ 4,671 |
7.9% |
$ 4,383 |
8.9% |
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Net income per share: |
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Basic |
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Net income |
$ 0.10 |
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$ 0.08 |
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$ 0.37 |
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$ 0.36 |
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Diluted |
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Net income |
$ 0.10 |
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$ 0.08 |
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$ 0.36 |
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$ 0.34 |
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Shares used in calculated net income |
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per share: |
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Basic |
12,606 |
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12,401 |
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12,566 |
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12,181 |
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Diluted |
12,861 |
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12,894 |
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12,991 |
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12,757 |
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Select Balance Sheet Data: |
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(dollars in thousands) |
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October 31, 2007 |
October 31, 2006 |
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(Unaudited) |
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Cash and cash equivalents |
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$ 3,630 |
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$ 5,411 |
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Short-term investments |
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7,763 |
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7,408 |
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Restricted short-term investments |
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- |
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4,515 |
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Total current assets |
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27,835 |
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23,984 |
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Total assets |
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93,882 |
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59,214 |
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Total current liabilities |
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13,882 |
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8,572 |
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Long term debt, net of current portion |
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25,045 |
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- |
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Total liabilities |
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39,403 |
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9,380 |
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Total stockholders' equity |
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54,479 |
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49,834 |
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Total liabilities and stockholders' equity |
93,882 |
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59,214 |
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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 EBITDA is used 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:
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Reconciliation of U.S. GAAP Net Income to EBITDA: |
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(dollars in thousands) |
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Three Months Ended October 31, |
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Twelve Months Ended October 31, |
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2007 |
2006 |
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2007 |
2006 |
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(Unaudited) |
(Unaudited) |
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(Unaudited) |
(Unaudited) |
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Net income |
$ 1,313 |
$ 1,036 |
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$ 4,671 |
$ 4,383 |
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Add back: |
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Amortization and depreciation |
2,859 |
2,619 |
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11,544 |
10,317 |
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Net interest expense |
826 |
(130) |
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1,617 |
(372) |
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Provision for income taxes |
701 |
804 |
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2,667 |
2,961 |
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EBITDA |
$ 5,699 |
$ 4,329 |
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$ 20,499 |
$ 17,289 |
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