Monday December 22, 9:29 am Eastern Time
SOURCE: GameTech International, Inc.
RENO, Nev., Dec. 22 -- GameTech International, Inc., a leading supplier
of electronic bingo equipment, today announced financial results for the fiscal
year and fourth quarter ended October 31, 2003. Revenues for fiscal year 2003
improved by over 7% to $52.3 million compared with $48.9 million for fiscal
2002. Net income for fiscal year 2003 was $1.2 million, equal to $0.10 per
diluted share, compared with $2.7 million, or $0.23 per diluted share, for
fiscal year 2002.
The improvement in fiscal year revenue was due to the substantial increase in
fixed-base installed units resulting from the acquisition of the assets of
International Gaming Systems, LLC (IGS), shortly after the start of the 2003
fiscal year and an increase in the number of installed TED(2)C(TM) color
portable units during the year. The continued roll-out of Pay-N-Play(TM), the
Company's fast-action, credit-based pari-mutuel bingo feature, also contributed
to the growth in revenue.
The Company's net income decline for fiscal 2003 was due to higher operating
expenses, including service, depreciation and research and development where
staffing more than doubled over fiscal 2002. In addition, general and
administrative expenses increased by 20% over the prior period due primarily to
legal costs associated with ongoing litigation.
Fourth quarter 2003 revenues totaled $13.0 million, up $600,000, compared with
$12.4 million in the fourth quarter of 2002. The Company realized net income of
$191,000 or $0.02 per diluted share for the quarter ended October 31, 2003
compared with a net loss of $385,000, equal to ($0.03) per diluted share, for
the fourth quarter of fiscal 2002.
During fiscal 2003, the Company invested over $9.5 million in new bingo units
and equipment, primarily for the TED(2)C(TM), and paid $3.5 million in cash for
the assets of IGS. The Company ended the year in a strong financial position
with cash and marketable securities amounting to $12.0 million compared with
$9.3 million at year-end 2002.
According to Clarence Thiesen, chief executive officer, the Company's
accomplishments during fiscal 2003 included the development of the Traveler(TM)
unit, the new lightweight, highly reliable portable unit with RF capability. The
Traveler(TM) unit, which was unveiled at the September Global Gaming Expo to
positive reviews, began successful beta-tests in mid-December 2003. General
release to customers is expected during the first quarter of calendar 2004. The
Traveler(TM) unit contains key technology building blocks that can be repackaged
easily and cost-effectively in additional products.
"We believe the Traveler(TM) unit will set the standard for electronic bingo
devices," said Thiesen. "This product, along with our new Pay-N-Play(TM) feature
and the ongoing successful expansion of the installed TED(2)C(TM) units, all
point to the Company's continued growth. Our drive for product superiority and
commitment to research and development will continue to bring forth new and
enhanced products as well as the opening of new markets for GameTech."
The Company's Board of Directors declared a special cash dividend of $0.12 per
share, which will be payable on January 16, 2004 to stockholders of record as of
January 2, 2004. The one-time special dividend is a reflection of the positive
cash flow for fiscal 2003 and the Company's healthy year-end cash position.
In addition, after reviewing current business conditions and future prospects,
GameTech's Board of Directors announced an intention to pay regular quarterly
dividends. The Company expects to declare the first regular quarterly dividend
of approximately $0.03 per share in conjunction with the announcement of
GameTech's financial results for the first quarter of fiscal 2004. The amount of
subsequent quarterly dividends will depend upon various factors, including
GameTech's financial results for future periods.
The Board of Directors also announced the resignation from the Board of
Frederick C. Lane, who had served as the Company's Chairman of the Board for the
past three years, and the election of Richard T. Fedor to serve as Chairman.
Fedor is a co-founder of GameTech and has served as CEO and Chairman of the
Company in the past.
GameTech International, Inc. is a leading supplier of a comprehensive line of
electronic bingo equipment, including hand-held bingo units, fixed base units
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 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 (a) the ability of the Company to introduce
products in the future that achieve commercial success; (b) the level of
research and development costs and legal expenses, (c) changes in the regulatory
environment for the Company's products and the ability of the Company and its
products to be licensed; (d) the ability of the Company's management,
individually or collectively, to guide the Company in a successful manner; and
(e) the ability of the Company to generate sufficient cash flow to pay dividends
in the future. Additional information on these risk factors that could
potentially affect the Company's financial results may be found in documents
filed by the Company with the Securities and Exchange Commission.
GAMETECH INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATION
(In thousands, except share and per share amounts)
Three Months Ended Twelve Months Ended
October 31, October 31,
2002 2003 2002 2003
(Unaudited) (Unaudited)
Revenues $12,408 $13,034 $48,861 $52,329
Operating expenses:
Cost of revenues 5,221 5,871 19,556 22,639
General and
administrative 3,240 2,776 9,535 11,426
Sales and marketing 3,964 2,999 13,245 12,323
Research and
development 514 977 2,097 3,828
12,939 12,623 44,433 50,216
Income (loss) from
operations (531) 411 4,428 2,113
Interest income and
other, net (92) (9) (7) 3
Income (loss) before
provision for
income taxes (623) 402 4,421 2,116
Provision for
income taxes (238) 211 1,688 925
Net income (loss) $(385) $191 $2,733 $1,191
Basic net income
(loss) per share $(0.03) $0.02 $0.25 $0.10
Diluted net income
(loss) per share $(0.03) $0.02 $0.23 $0.10
Shares used in the
calculation of net
income per share:
Basic 11,221,689 11,737,439 11,150,064 11,696,118
Diluted 11,221,689 11,754,334 12,012,514 11,790,314
Balance Sheet Data
October 31, October 31,
2002 2003
(unaudited)
Cash and equivalents $4,233 $10,202
Short-term investments 5,045 1,750
Total current assets 20,393 18,361
Total assets 58,101 60,175
Total current liabilities 3,831 3,555
Total liabilities 7,611 7,554
Total stockholders' equity 50,490 52,621
Total liabilities and stockholders' equity 58,101 60,175
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Source: GameTech International, Inc.