Tuesday May 28, 2:38 pm Eastern Time
SOURCE: GameTech International, Inc.
RENO, Nev., May 28 -- GameTech International, Inc., a leading supplier in the electronic bingo industry, today announced that net income for the second quarter ended April 30, 2002 increased slightly to $1.1 million, or $.10 per share (fully diluted), from $1.0 million, or $0.09 per share (fully diluted), in the corresponding quarter of fiscal 2001. Second quarter revenues were $12.1 million compared with $12.8 million in the year earlier period.
For the six months ended April 30, 2002, net income advanced to $2.0 million, or $0.17 per share (fully diluted), from $245,000, or $0.02 per share (fully diluted), a year ago. First half revenues were $24.0 million compared with $24.8 million in the first half of the previous year.
Clarence Thiesen, Chief Executive Officer, commented: "We are pleased by our continued progress as we maintained a solid level of profitability. It should be noted that net income for the quarter increased approximately 21 percent sequentially from the first quarter and revenues improved by $255,000 in the second quarter. However, revenues continue to be impacted by pricing pressures in certain regional markets, most notably in Texas and Ohio."
On a comparative six-month basis, general and administrative expenses, distributor commissions, and sales and marketing expenses were reduced by approximately $3.0 million. This reduction was due to a combination of lower provisions for bad debts, lower distributor commission adjustments, and improved cost controls and management systems. Research and development expenditures were higher in the current year, reflecting the Company's investment in and further strengthening of engineering to support GameTech's focus on new product development.
During the first quarter of fiscal 2002, the Company elected early adoption of Statement No. 142 issued by the FASB and eliminated goodwill amortization expense in the current year. The Company completed the required goodwill impairment test and determined there is no impairment of goodwill as a result of the early adoption. In the previous fiscal year, goodwill amortization amounted to approximately $438,000 and $876,000 in the second quarter and first half, respectively.
Thiesen added: "The roll-out of GameTech's new color portable unit, the TED2C(TM), continues to proceed positively with favorable customer acceptance and a growing installed base, with approximately 2,000 units placed during the first six months of this fiscal year. Customer responses indicate that these units with larger screens and enhanced graphics make the bingo experience more enjoyable and entertaining for players. From the halls' perspective, operators are now able to offer TED2C(TM) portables, Diamond(TM) fixed base units, GameTech's black and white Palm Top portable units, and TEDŽ portable units to entertain players in the high, middle and low end market segments. Management believes this ability to differentiate product offerings is a first for the electronic bingo industry and puts extra dollars both onto the prize boards and into the halls' bottom line.
"We continue the development of a full product portfolio targeted at increasing player excitement and operator revenues. We have improved products that provide the operator with tools to enhance hall management, player tracking and marketing."
At April 30, 2002, GameTech had cash and short-term investments totaling $14.2 million, compared with $13.0 million at the October 31, 2001 close of the previous fiscal year. April 30, 2002 cash and cash equivalents are net of significant purchases this year related to new TED2C(TM) units and fixed base unit purchases and upgrades.
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 increase play, revenues and profits, and software customized to enhance management and operations, all backed by unparalleled customer service.
Certain statements contained in this document may be deemed to be forward
looking statements under federal securities laws, and GameTech intended that
such forward looking statements be subject to the safe harbor created thereby.
Such forward-looking statements include but are not limited to 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, but are not limited to (a)
changes in the markets for the company's products; (b) the failure of new
products to deliver commercially acceptable performance; and (c) changes in the
regulatory environment for the Company's products and the ability of the Company
and its products to be licensed; and (d) the ability of GameTech's management,
individually or collectively, to guide the company in a successful manner.
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 & Exchange Commission.
GAMETECH INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATION
(In thousands, except share and per share amounts)
Three Months Ended Six Months Ended
April 30, April 30,
2002 2001 2002 2001
(Unaudited) (Unaudited)
Revenues $12,106 $12,813 $23,956 $24,794
Operating expenses:
Cost of revenues 4,536 4,098 9,499 9,372
General and
administrative 2,130 2,810 4,127 6,622
Sales and marketing 3,115 3,489 6,117 7,475
Research and
development 555 456 974 916
10,336 10,853 20,717 24,385
Income from
operations 1,770 1,960 3,239 409
Interest income and
other, net 27 31 35 101
Income before
provision for
income taxes 1,797 1,991 3,274 510
Provision for
income taxes 686 961 1,250 265
Net income $1,111 $1,030 $2,024 $245
Basic net income per
share $0.10 $0.10 $0.18 $0.02
Diluted net income
per share $0.10 $0.09 $0.17 $0.02
Shares used in the
calculation of net
income per share:
Basic 11,190,356 10,515,898 11,086,937 10,517,075
Diluted 11,680,113 11,181,804 11,640,846 11,047,982
Accounting effect
of SFAS No. 142
Reported net
income $1,111 $1,030 $2,024 $245
Add back: Goodwill
amortization -- 438 -- 876
Adjusted net
income 1,111 1,468 2,024 1,121
Basic net income
per share
Reported net
income $0.10 $0.10 $0.18 $0.02
Add back: Goodwill
amortization -- 0.04 -- 0.08
Adjusted basic net
income per share $0.10 0.14 0.18 0.11
Diluted net income
per share
Reported net
income $0.10 $0.09 $0.17 $0.02
Add back: Goodwill
amortization -- 0.04 -- 0.08
Adjusted diluted
net income per
share $0.10 $0.13 $0.17 $0.10
Balance Sheet Data
April 30, October 31,
2002 2001
(unaudited)
Cash and equivalents $8,532 $10,131
Short-term investments 5,624 2,824
Total assets 57,614 55,676
Total liabilities 7,954 9,092
Total stockholders' equity 49,660 46,584
Total liabilities and stockholders' equity $57,614 $55,676
SOURCE: GameTech International, Inc.