CryptoLogic Limited (TSX:CRY)(TSX:CXY)(NASDAQ:CRYP)(LSE:CRP), a
developer of branded online betting games and Internet casino
software, announces its financial results for the third quarter
ended September 30, 2011.
Q3 2011 Highlights:
-- Total revenue increased to $7.2 million (Q2 2011: $7.0 million)
-- Total expenses reduced to $5.9 million (Q2 2011: $6.5 million)
-- Income before tax increased to $1.3 million (Q2 2011: $0.5 million)
-- Cash increased to $15.2 million (Q2 2011: $12.0 million)
The Board is encouraged by the performance in the quarter and
continues to focus on increasing revenues while managing costs
tightly to enhance shareholder value.
Operating and Financial Review
Total revenue after amortization of royalties and games in Q3
2011 increased to $7.2 million (Q2 2011: $7.0 million). Q3 2011
included $0.9 million as a result of a reanalysis of jackpot
provisions; Q2 2011 included $0.8 million as a result of a
reduction in liabilities previously provided against revenue
following the resolution of a dispute with a significant supplier
of games.
Hosted Casino
Revenue from Hosted Casino increased to $6.5 million in Q3 2011,
including $0.9 million related to the above jackpot provisions (Q2
2011: $5.7 million, including $0.3 million related to the above
dispute resolution), reflecting a higher contribution from a key
licensee.
Branded Games
Revenue from this segment decreased to $1.4 million in Q3 2011
(Q2 2011: $2.1 million, including $0.5 million related to the above
dispute resolution). Three new branded games went live in the
quarter taking the total number of games rolled out by licensees
and generating revenues to date to 188 from 185 at the end of the
second quarter.
Poker and Other
Poker and Other revenue amounted to $0.3 million in Q3 2011 (Q2
2011: $0.2 million).
Expenses
Operating expenses decreased to $4.1 million in Q3 2011 (Q2
2011: $4.5 million).
General and administrative expenses decreased to $1.5 million in
Q3 2011 (Q2 2011: $1.6 million).
Income before tax for the quarter amounted to $1.3 million,
including $0.9 million related to the above jackpot provisions,
compared with $0.5 million in the second quarter, including $0.8
million related to the above dispute resolution.
Balance Sheet and Cash Flow
Cash and cash equivalents as at September 30, 2011 amounted to
$15.2 million (June 30, 2011: $12.0 million). The increase in cash
during Q3 2011 of $3.2 million is primarily due to net cash flows
from operating activities. The Company continues to be
debt-free.
Update on Commercial Agreements
Further to the announcement on May 12, 2011, the Company remains
in dispute with a brand licensor. In June 2011, the Company filed
suit against the brand licensor seeking judgment that any breach
was cured and the agreement remains in force. In October 2011, the
brand licensor answered the complaint, denying any cure and filed a
countersuit.
Strategic Review
On March 25, 2011, the Company announced that it had appointed
Deloitte Corporate Finance as financial advisor to assist it with a
strategic review of the Company. The strategic review is ongoing
and further announcements will be made as and when appropriate.
About CryptoLogic® (www.cryptologic.com)
Focused on integrity and innovation, CryptoLogic Limited is a
leading developer and supplier of Internet gaming software. With
more than 300 games, CryptoLogic has one of the most comprehensive
casino suites on the Internet, with award-winning games featuring
some of the world's most famous action and entertainment
characters. The Company's licensees include many top Internet
gaming brands. CryptoLogic's leadership in regulatory compliance
makes it one of the few companies with gaming software certified to
strict standards similar to land-based gaming. The CryptoLogic
Group licenses gaming software and services to blue-chip customers
that offer their games to non-U.S. based players around the
world.
CryptoLogic's common shares trade on the Toronto Stock Exchange
(CRY, CXY), the NASDAQ Global Select Market (CRYP) and the Main
Market of the London Stock Exchange (CRP).
CRYPTOLOGIC FORWARD LOOKING STATEMENT DISCLAIMER:
This press release contains forward-looking statements within
the meaning of applicable securities laws. Statements in this press
release, which are not historical are forward-looking statements
made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. The words "believe",
"expect", "anticipate", "estimate", "intend", "may", "will",
"would" and similar expressions and the negative of such
expressions are intended to identify forward-looking statements,
although not all forward-looking statements contain these
identifying words. Forward-looking statements are based on certain
factors and assumptions including expected growth, results of
operations, performance, business prospects and opportunities,
foreign exchange rates and effective income tax rates. While the
Company considers these factors and assumptions to be reasonable
based on information currently available, they may prove to be
incorrect. Forward-looking statements involve known and unknown
risks and uncertainties that may cause actual results, performance
or achievements of the Company to differ materially from the
anticipated results, performance or achievements expressed or
implied by such forward-looking statements. Risks related to
forward-looking statements include, without limitation, risks
associated with the Company's financial condition, prospects and
opportunities, legal risks associated with Internet gaming and
risks of governmental legislation and regulation, risks associated
with market acceptance and technological changes, risks associated
with dependence on licensees and key licensees, risks relating to
international operations and risks associated with competition.
Additional risks and uncertainties can be found in the Company's
Form 20-F for the fiscal year ended December 31, 2010 under the
heading "Item 3 - Key Information - Risk Factors" and in the
Company's other filings with the US Securities and Exchange
Commission and Canadian provincial securities commissions. Given
these risks and uncertainties, readers are cautioned not to place
undue reliance on such forward-looking statements. Forward-looking
statements are given only as at the date of this release and the
Company disclaims any obligation to update or revise the
forward-looking statements, whether as a result of new information,
future events or otherwise, except as otherwise required by
law.
CRYPTOLOGIC LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(In thousands of U.S. dollars)
(Unaudited)
As at As at As at
September 30, December 31, January 1,
2011 2010 2010
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ASSETS
Deferred tax assets $ 763 $ 864 $ 1,549
Property, plant and equipment 1,977 2,585 2,826
Intangible assets 1,735 2,210 8,906
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Total non-current assets 4,475 5,659 13,281
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Cash and cash equivalents 15,216 10,584 23,447
Security deposits 641 515 250
User funds held on deposit 3,007 6,069 7,929
Trade and other receivables 3,622 5,046 7,972
Current tax assets 753 730 681
Prepayments 7,083 8,942 9,426
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Total current assets 30,322 31,886 49,705
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Total assets $ 34,797 $ 37,545 $ 62,986
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EQUITY
Share capital $ 34,229 $ 34,129 $ 33,916
Share options 5,584 5,564 5,646
Deficit (22,252) (22,878) (2,766)
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Total equity attributable to
shareholders of the Company 17,561 16,815 36,796
Non-controlling interest 1,166 1,226 2,948
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Total equity 18,727 18,041 39,744
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LIABILITIES
Deferred tax liabilities 47 16 -
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Total non-current liabilities 47 16 -
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Trade payables and accrued
liabilities 8,278 13,060 13,156
Income taxes payable 4,738 359 2,157
User funds held on deposit 3,007 6,069 7,929
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Total current liabilities 16,023 19,488 23,242
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Total liabilities 16,070 19,504 23,242
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Total equity and liabilities $ 34,797 $ 37,545 $ 62,986
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CRYPTOLOGIC LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)
(In thousands of U.S. dollars, except per share data)
(Unaudited)
For the three months For the nine months
ended September 30, ended September 30,
2011 2010 2011 2010
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Total revenue $ 7,219 $ 6,095 $ 20,213 $ 20,475
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Expenses:
Operating 4,090 7,265 13,305 25,278
General and administrative 1,451 1,655 4,476 6,470
Reorganization - 209 - 1,908
Impairment of intangible
assets - - - 5,624
Depreciation 226 303 679 947
Amortization of intangible
assets 136 175 483 1,010
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5,903 9,607 18,943 41,237
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Results from operating
activities 1,316 (3,512) 1,270 (20,762)
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Finance income 13 14 78 442
Finance costs (20) (106) (30) (49)
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Net finance income/(costs) (7) (92) 48 393
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Income/(loss) before income
taxes 1,309 (3,604) 1,318 (20,369)
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Income tax expense 259 115 652 380
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Income/(loss) for the period 1,050 (3,719) 666 (20,749)
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Other comprehensive income - - - -
Other comprehensive income
for the period net of
income tax - - - -
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Total comprehensive
income/(loss) for the
period $ 1,050 $ (3,719) $ 666 $ (20,749)
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Total comprehensive
income/(loss) attributable
to:
Shareholders of the
Company 988 (3,439) 626 (19,297)
Non-controlling interests 62 (280) 40 (1,452)
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Total comprehensive
income/(loss) for the
period 1,050 (3,719) 666 (20,749)
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Earnings/(loss) per Common
Share
Basic earnings/(loss) per
share $ 0.08 $ (0.27) $ 0.05 $ (1.50)
Diluted earnings/(loss)
per share $ 0.08 $ (0.27) $ 0.05 $ (1.50)
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CRYPTOLOGIC LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In thousands of U.S. dollars)
(Unaudited)
Attributable to Shareholders of the Company
Contri-
Share buted Share Retained
capital surplus options earnings Total
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Balance, January 1,
2010 $ 33,848 $ 68 $ 5,646 $ (2,766) $ 36,796
Total comprehensive
income for the period
Profit or loss - - - (19,297) (19,297)
Transactions with
owners recorded
directly in equity
Shares exchanged 195 - - - 195
Share-based payment
transactions - - (89) - (89)
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Balance, September 30,
2010 $ 34,043 $ 68 $ 5,557 $ (22,063) $ 17,605
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Balance, December 31,
2010 $ 34,061 $ 68 $ 5,564 $ (22,878) $ 16,815
Total comprehensive
income for the period
Profit or loss - - - 626 626
Transactions with
owners recorded
directly in equity
Shares exchanged 100 - - - 100
Share-based payment
transactions - - 20 - 20
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Balance, September 30,
2011 $ 34,161 $ 68 $ 5,584 $ (22,252) $ 17,561
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CRYPTOLOGIC LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In thousands of U.S. dollars)
(Unaudited)
Attributable to Shareholders of the Company
Non-
controlling Total
interest equity
-----------------------------------------------------------
-----------------------------------------------------------
Balance, January 1,
2010 $ 2,948 $ 39,744
Total comprehensive
income for the period
Profit or loss (1,452) (20,749)
Transactions with
owners recorded
directly in equity
Shares exchanged (195) -
Share-based payment
transactions - (89)
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Balance, September 30,
2010 $ 1,301 $ 18,906
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Balance, December 31,
2010 $ 1,226 $ 18,041
Total comprehensive
income for the period
Profit or loss 40 666
Transactions with
owners recorded
directly in equity
Shares exchanged (100) -
Share-based payment
transactions - 20
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Balance, September 30,
2011 $ 1,166 $ 18,727
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CRYPTOLOGIC LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of U.S. dollars)
(Unaudited)
For the three months For the nine months
ended September 30, ended September 30,
2011 2010 2011 2010
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Cash flows from/(used in):
Operating activities:
Income/(loss) for the period $ 1,050 $ (3,719) $ 666 $ (20,749)
Adjustments for:
Depreciation 226 303 679 947
Amortization of intangible
assets 136 175 483 1,010
Impairment of intangible
assets - - - 5,624
Deferred tax 68 (54) 132 220
Share based payment
transactions (43) (320) 20 (89)
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1,437 (3,615) 1,980 (13,037)
Change in operating assets and
liabilities:
Change in trade and other
receivables 1,133 (496) 1,424 2,645
Change in prepayments 393 345 1,859 250
Change in trade payables and
accrued liabilities (59) (1,112) (4,782) 533
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Cash from/(used in) operating
activities 2,904 (4,878) 481 (9,609)
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Change in income taxes
receivable/payable 309 (69) 4,356 (1,176)
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Net cash from/(used in)
operating activities 3,213 (4,947) 4,837 (10,785)
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Investing activities:
Acquisition of property, plant
and equipment (13) (166) (74) (622)
Disposal of property, plant
and equipment - 21 3 21
Acquisition of intangible
assets - - (8) -
Decrease/(increase) in
security deposits 16 (272) (126) (272)
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Net cash from/(used in)
investing activities 3 (417) (205) (873)
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Financing activities:
Cash flows from financing
activities - - - -
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Net cash from/(used in)
financing activities - - - -
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Net increase/(decrease) in cash
and cash equivalents 3,216 (5,364) 4,632 (11,658)
Cash and cash equivalents,
beginning of period 12,000 17,153 10,584 23,447
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Cash and cash equivalents, end
of period $ 15,216 $ 11,789 $ 15,216 $ 11,789
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Contacts: CryptoLogic David Gavagan Chairman and Interim CEO
+353 1 234 0400 CryptoLogic Huw Spiers CFO +353 1 234
0400www.cryptologic.com Luther Pendragon Neil Thapar, Alexis Gore
+44 207 618 9100
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