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GameTech Reports Q3 Results

7 September 2005

RENO, Nevada – (PRESS RELEASE) -- GameTech International, Inc. (Nasdaq: GMTC), a leading designer, developer and marketer of electronic bingo equipment and bingo systems, today announced financial results for the Company's third fiscal quarter and nine-month period ended July 31, 2005. Net income continued to improve over the same periods in 2004, with $85,000 in net income for the three month period in 2005, or $0.01 per fully diluted share, up from $33,000, or $0.00 per fully diluted share for the comparable quarter in 2004. Year-to-date net income for fiscal 2005 reached $389,000, or $0.03 per fully diluted share, compared with $76,000, or $0.01 per fully diluted share for the comparable nine month period in 2004.

Higher profitability was achieved despite lower revenue for both the quarter and year-to-date. Third quarter revenue totaled $12.4 million compared with $12.9 million for the comparable quarter in fiscal 2004. For the nine months ended July 31, 2005, revenue reached $37.5 million compared with $38.9 million for the comparable period in fiscal 2004.

According to Jay Meilstrup, GameTech's President and Chief Executive Officer, the Company's lower revenues were expected due to the continuing effects of the loss in 2004 of business in Oklahoma as a result of unfavorable legislative changes. At the same time, the Company has gained new business and expanded business in key markets including Texas, Michigan, Nevada and Canada. "We expect that new business and increased efficiencies will diminish the effects of the Oklahoma reductions within the next six months," said Meilstrup. "Our cost of revenue has dropped more proportionately than the loss in top line revenues, which has led to higher gross profit and overall profitability than in 2004, despite higher depreciation as a result of the deployment of Traveler(TM) terminals. We have brought refurbishing in-house to cut costs, negotiated lower commissions with certain distributors, and paved the way for revenue growth through new accounts and an emphasis on the popular Traveler(TM) terminals."

The Company accrued costs of over $1.1 million in the third quarter of 2005 related to severance issues and resolutions of certain legal matters and settlements. "We are committed to wrapping up legal matters as quickly as possible, and we are pleased to have resolved the administrative complaint brought against us by the Texas Lottery Commission," said Meilstrup. "At the same time, we will continue to protect our intellectual property and our market share. Our continued focus on operations, new products and the pursuit of strategic opportunities will play a significant role in achieving our goals."

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