SEARCH NEWS:

 

Jackpot Enterprises, Inc. Reports Results for the Q1 of Fiscal 2001

The net loss for the first quarter was due primarily to the Company's equity in losses of its investments in Internet-related businesses accounted for under the equity method of $1.8 million and interest expense related to the 8% convertible subordinated notes of $1.2 million. Included in net income for the quarter ended September 30, 1999, was a nonrecurring pretax income item of $11.0 million representing a net fee from a terminated merger agreement.

Jackpot Enterprises, Inc. is in the process of implementing a series of actions to transform itself from a gaming company to a technology company and a manager of technology investment funds. The company intends to leverage its assets, cash position and online and offline expertise to invest and/or acquire Internet-related business-to-business and e-service enterprises, and to support the migration of traditional businesses to the Internet. As part of this shift, the Company established J Net Ventures I, LLC, an investment fund focused on such investments.

Cash and cash equivalents at September 30, 2000 were $58.7 million compared to $60.1 million at June 30, 2000. During the first quarter ended September 30, 2000, the Company invested over $10 million in Internet-related businesses, and has approximately $34 million, at cost, in such investments at September 30, 2000. On November 10, 2000, the Company completed the closing on its initial $20 million investment in convertible preferred stock of InterWorld Corporation.

As previously announced, the Company entered into a definitive agreement on July 8, 2000 to sell its Gaming Machine Route Operations. On October 30, 2000, the Company agreed to a conditional modification of the agreement due to issues relating to the purchaser's financing. The modification will reduce the net after-tax cash proceeds from the sale by approximately $4.5 million.

The Company expects to complete the closing of the sale on these revised terms by the end of November. The financial results for the quarters ended September 30, 2000 and 1999 reflect the Route Operations as discontinued.

``We are pleased with our progress in our change in business direction of the Company,'' said Allan R. Tessler, the Company's Chairman and Chief Executive Officer. Mr. Tessler continued, ``We announced our intent to transform the Company in March 2000. Since then, we have successfully implemented and integrated a new management team, created an investment fund with substantial resources and commitments, and are well underway in creating a portfolio of assets which will allow the Company to utilize existing cash resources in an effort to maximize shareholder value.''

Mr. Tessler also added, ``With the completion of the initial investment in InterWorld, we intend to actively move forward on a potential second step to this transaction.''

< Gaming News