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 second quarter
ended June 30, 2011.
Q2 2011 Highlights:
-- Total revenue increased to $7.0 million (Q1 2011: $6.0 million)
-- Total expenses held at $6.5 million (Q1 2011: $6.5 million)
-- Income before tax of $0.5 million (Q1 2011: $0.4 million loss)
-- Millionaires Club jackpot win of $4.2 million paid in June 2011
-- Cash of $12.0 million (Q1 2011: $14.5 million)
The Board is encouraged by the performance in the quarter and
continues to focus on driving revenues further while managing costs
tightly to enhance shareholder value.
Operating and Financial Review
Total revenue after amortization of royalties and games in Q2
2011 increased to $7.0 million (Q1 2011: $6.0 million). Revenue in
the quarter benefited from a reduction of $0.8 million in
liabilities previously provided against revenue through the
resolution of a dispute with a significant supplier of games.
Hosted Casino
Revenue from Hosted Casino increased to $5.7 million in Q2 2011
(Q1 2011: $5.2 million), reflecting a higher contribution from a
key licensee and $0.3 million related to the above resolution.
Branded Games
Revenue from this segment rose to $2.1 million in Q2 2011 (Q1
2011: $1.5 million), including $0.5 million related to the above
resolution. Six new branded games went live in the quarter taking
the total number of games rolled out by licensees and generating
revenues to date to 185 from 179 at the end of the first
quarter.
Poker and Other
Poker and Other revenue amounted to $0.2 million in Q2 2011 (Q1
2011: $0.4 million).
Expenses
Operating expenses decreased to $4.5 million in Q2 2011 (Q1
2011: $4.7 million).
General and Administrative expenses rose to $1.6 million in Q2
2011 (Q1 2011: $1.4 million).
Income before tax for the quarter amounted to $0.5 million
compared with a loss before tax of $0.4 million in the first
quarter.
Balance Sheet and Cash Flow
Cash and cash equivalents as at June 30, 2011 amounted to $12.0
million (March 31, 2011: $14.5 million). The decrease in cash
during Q2 2011 of $2.5 million is primarily due to a $3.0 million
decrease in jackpot provisions, following a significant jackpot win
during the quarter, and a decrease in other trade payables and
accrued liabilities of $1.8 million, partially offset by cash
generated from operations before changes in non-cash operating
items of $0.7 million and decreased prepayments of $1.0 million.
The Company continues to be debt-free.
Update on Commercial Agreements
Further to the announcement on May 12, 2011, the Company signed
a binding agreement in June 2011 with the significant supplier of
games, which enables the two parties to continue with their
commercial relationship.
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. The brand licensor
has yet to respond to this suit or file 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
June 30, December 31, January 1,
2011 2010 2010
---------------------------------------------------------------------------
ASSETS
Deferred tax assets $ 802 $ 864 $ 1,549
Property, plant and 2,190 2,585 2,826
equipment
Intangible assets 1,871 2,210 8,906
---------------------------------------------------------------------------
Total non-current assets 4,863 5,659 13,281
---------------------------------------------------------------------------
Cash and cash equivalents 12,000 10,584 23,447
Security deposits 657 515 250
User funds held on deposit 3,430 6,069 7,929
Trade and other receivables 4,755 5,046 7,972
Current tax assets 737 730 681
Prepayments 7,476 8,942 9,426
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Total current assets 29,055 31,886 49,705
---------------------------------------------------------------------------
Total assets $ 33,918 $ 37,545 $ 62,986
---------------------------------------------------------------------------
EQUITY
Share capital $ 34,169 $ 34,129 $ 33,916
Share options 5,627 5,564 5,646
Deficit (23,240) (22,878) (2,766)
---------------------------------------------------------------------------
Total equity attributable to 16,556 16,815 36,796
shareholders of the Company
Non-controlling interest 1,164 1,226 2,948
---------------------------------------------------------------------------
Total equity 17,720 18,041 39,744
---------------------------------------------------------------------------
LIABILITIES
Deferred tax liabilities 18 16 -
---------------------------------------------------------------------------
Total non-current liabilities 18 16 -
---------------------------------------------------------------------------
Trade payables and accrued 8,337 13,060 13,156
liabilities
Income taxes payable 4,413 359 2,157
User funds held on deposit 3,430 6,069 7,929
---------------------------------------------------------------------------
Total current liabilities 16,180 19,488 23,242
---------------------------------------------------------------------------
Total liabilities 16,198 19,504 23,242
---------------------------------------------------------------------------
Total equity and liabilities $ 33,918 $ 37,545 $ 62,986
---------------------------------------------------------------------------
CRYPTOLOGIC LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)
(In thousands of U.S. dollars, except per share data)
(Unaudited)
For the three months ended For the six months ended
June 30, June 30,
2011 2010 2011 2010
---------------------------------------------------------------------------
Total revenue $ 6,978 $ 6,739 $ 12,994 $ 14,380
---------------------------------------------------------------------------
Expenses:
Operating 4,528 9,435 9,216 18,013
General and
administrative 1,628 2,637 3,024 4,815
Reorganization - 1,670 - 1,699
Impairment of
intangible assets - 5,624 - 5,624
Depreciation 225 421 453 644
Amortization of
intangible assets 166 318 347 835
---------------------------------------------------------------------------
6,547 20,105 13,040 31,630
---------------------------------------------------------------------------
Results from
operating activities 431 (13,366) (46) (17,250)
---------------------------------------------------------------------------
Finance income 36 114 76 517
Finance costs (11) (17) (21) (32)
---------------------------------------------------------------------------
Net finance income 25 97 55 485
---------------------------------------------------------------------------
Income/(loss) before
income taxes 456 (13,269) 9 (16,765)
---------------------------------------------------------------------------
Income tax expense 213 142 393 265
---------------------------------------------------------------------------
Income/(loss) for the
period 243 (13,411) (384) (17,030)
---------------------------------------------------------------------------
Other comprehensive
income - - - -
Other comprehensive
income for the
period net of
income tax - - - -
---------------------------------------------------------------------------
Total comprehensive
income/(loss) for
the period $ 243 $ (13,411) $ (384) $ $(17,030)
---------------------------------------------------------------------------
Total comprehensive
income/(loss)
attributable to:
Shareholders of the
Company 225 (12,480) (362) (15,858)
Non-controlling
interests 18 (931) (22) (1,172)
---------------------------------------------------------------------------
Total comprehensive
income/(loss) for
the period 243 (13,411) (384) (17,030)
---------------------------------------------------------------------------
Earnings/(loss) per
Common Share
Basic
earnings/(loss) per
share $ 0.02 $ (0.97) $ (0.03) $ (1.23)
Diluted
earnings/(loss) per
share $ 0.02 $ (0.97) $ (0.03) $ (1.23)
---------------------------------------------------------------------------
CRYPTOLOGIC LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In thousands of U.S. dollar)
(Unaudited)
Attributable to Shareholders of the Company
Contributed Retained
Share capital surplus Share options earnings
----------------------------------------------------------------------------
Balance at January
1, 2010 $ 33,848 $ 68 $ 5,646 $ (2,766)
Total comprehensive
income for the
period
Profit or loss - - - (15,858)
Transactions with
owners recorded
directly in equity
Shares exchanged 192 - - -
Share-based
payment
transactions - - 231 -
----------------------------------------------------------------------------
Balance at June 30,
2010 $ 34,040 $ 68 $ 5,877 $ (18,624)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Balance at December
31, 2010 $ 34,061 $ 68 $ 5,564 $ (22,878)
Total comprehensive
income for the
period
Profit or loss - - - (362)
Transactions with
owners recorded
directly in equity
Shares exchanged 40 - - -
Share-based
payment
transactions - - 63 -
----------------------------------------------------------------------------
Balance at June 30,
2011 $ 34,101 $ 68 $ 5,627 $ (23,240)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Non-
controlling
Total interest Total equity
------------------------------------------------------------------
Balance at January
1, 2010 $ 36,796 $ 2,948 $ 39,744
Total comprehensive
income for the
period
Profit or loss (15,858) (1,172) (17,030)
Transactions with
owners recorded
directly in equity
Shares exchanged 192 (192) -
Share-based
payment
transactions 231 - 231
------------------------------------------------------------------
Balance at June 30,
2010 $ 21,361 $ 1,584 $ 22,945
------------------------------------------------------------------
------------------------------------------------------------------
Balance at December
31, 2010 $ 16,815 $ 1,226 $ 18,041
Total comprehensive
income for the
period
Profit or loss (362) (22) (384)
Transactions with
owners recorded
directly in equity
Shares exchanged 40 (40) -
Share-based
payment
transactions 63 - 63
------------------------------------------------------------------
Balance at June 30,
2011 $ 16,556 $ 1,164 $ 17,720
------------------------------------------------------------------
------------------------------------------------------------------
CRYPTOLOGIC LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of U.S. dollar)
(Unaudited)
For the three months For the six months
ended June 30, ended June 30,
2011 2010 2011 2010
---------------------------------------------------------------------------
Cash flows from/(used
in):
Operating activities:
Income/(loss) for the
period $ 243 $ (13,411) $ (384) $ (17,030)
Adjustments for:
Depreciation 225 421 453 644
Amortization of
intangible assets 166 318 347 835
Impairment of
intangible assets - 5,624 - 5,624
Deferred tax 24 44 64 274
Share based payment
transactions 31 (72) 63 231
---------------------------------------------------------------------------
689 (7,076) 543 (9,422)
Change in operating
assets and
liabilities:
Change in trade and
other receivables 239 1,954 291 3,141
Change in prepayments 1,012 273 1,466 (95)
Change in trade
payables and accrued
liabilities (4,783) 2,766 (4,723) 1,645
---------------------------------------------------------------------------
Cash from/(used in)
operating activities (2,843) (2,083) (2,423) (4,731)
---------------------------------------------------------------------------
Change in income
taxes
receivable/payable 181 239 4,047 (1,107)
---------------------------------------------------------------------------
Net cash from/(used
in) operating
activities (2,662) (1,844) 1,624 (5,838)
---------------------------------------------------------------------------
Investing activities:
Acquisition of
property, plant and
equipment (7) (413) (61) (456)
Disposal of property,
plant and equipment 3 3
Acquisition of
intangible assets - - (8) -
Decrease/(increase)
in security deposits 154 - (142) -
---------------------------------------------------------------------------
Net cash from (used
in) investing
activities 150 (413) (208) (456)
---------------------------------------------------------------------------
Financing activities:
Cash flows from
financing activities - - - -
---------------------------------------------------------------------------
Net cash used in
financing activities - - - -
---------------------------------------------------------------------------
Net
increase/(decrease)
in cash and cash
equivalents (2,512) (2,257) 1,416 (6,294)
Cash and cash
equivalents,
beginning of period 14,512 19,410 10,584 23,447
---------------------------------------------------------------------------
Cash and cash
equivalents, end of
period $ 12,000 $ 17,153 $ 12,000 $ 17,153
---------------------------------------------------------------------------
Contacts: CryptoLogic David Gavagan Chairman and Interim CEO
+353 1 234 0400 CryptoLogic Huw Spiers CFO +353 1 234 0400 Corfin
Public Relations Neil Thapar +44 207 596 2860 Corfin Public
Relations Alexis Gore +44 207 596 2860
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