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GameTech Reports Q1 Profits

First quarter revenues of $11.9 million were essentially unchanged from $12.0 million in the previous year's comparable quarter. The small decrease in revenues is attributable to a change in our distribution network in a specific region of the business, mostly offset by gains in other areas of the business. While pricing pressures continue, they are concentrated in certain geographic segments of the business.

According to Clarence Thiesen, Chief Executive Officer, ``We are experiencing a high level of customer acceptance of our color portable unit, the Ted2C, which provides a higher level of entertainment value and player satisfaction compared with previous generation black and white portables. Importantly, this product is helping our customers to create an additional consumer segment in their business and thereby capture additional dollars from their bingo players. GameTech is currently engaged in installing increasing numbers of these new color hand-held bingo units at customer locations.''

The level of earnings was improved in the first quarter of FY 2002 by the decline of $3.2 million in operating expenses from the comparable quarter of 2001. This decline consisted of reduced general and administrative expense, distributor commissions, inventory provisions, and depreciation. The decrease in general and administrative expense was primarily the result of lower provisions for bad debts in the first quarter of FY 2002. The election by the Company of early adoption of FASB 142 regarding goodwill eliminated $423,000 of amortization expense recorded last year.

``We are very pleased,'' Thiesen commented, ``that our management team's efforts to strengthen operations, implement improved systems and controls and build a strong infrastructure for the future are beginning to bear fruit.''

Thiesen added, ``The Company's solid installed base of recurring revenue producing electronic bingo units'' continues to generate positive cash flow. At January 31, 2002, cash and marketable securities were $15.1 million, more than double $7.4 million a year ago, and 16 percent higher than $13.0 million at October 31, 2001. EBITDA in the first quarter totaled $3.1 million.

``Going forward, we are focused on attaining revenue growth through product and market expansion. As an integral part of this effort, GameTech is committed to a strong, well-targeted R&D program. In addition to the new color Ted2C, we have several potential new products and games in development, which will provide a full line of attractive products to the hall operator and bingo player.''

Thiesen concluded: ``GameTech has made a strong start in fiscal 2002, and we look forward to further progress in the balance of the year. Our solid, liquid balance sheet provides strength and flexibility to implement our growth initiatives. At the same time, we will continue the efforts to reduce both product and operating costs.

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.

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