Parlay Entertainment Inc. (TSX VENTURE: PEI), the world's leading
supplier of Internet and TV bingo software solutions, today
announced its results for the three and nine-month periods ended
September 30, 2008.
Results for the third quarter of fiscal 2008 include:
- Total revenue at $2,531,998, up 27% from Q3 2007.
- Royalty revenue at $796,612, down 55% from Q3 2007.
- Software license fees of $1,457,500, a new caption from Q3
2007.
- New corporate record for support services revenue of $211,871,
up 32% from Q3 2007.
- New corporate record for net income of $544,253, or $0.04 per
share, fully diluted, up from net income of $173,492 in Q3
2007.
- EBITDA(1) increased to $894,666, from $271,538 in Q3 2007 and
EBITDA(1) margin increased to 35% from 14% in Q3 2007.
Results for the first three quarters of fiscal 2008 include:
- Total revenue at $7,158,118, up 19% from the first three
quarters of 2007.
- Royalty revenue at $3,772,420, down 31% from the first three
quarters of 2007.
- Software license fees of $2,762,500, a new caption from the
first three quarters of 2007.
- Net income of $535,707, or $0.04 per share, fully diluted, up
from net income of $296,242 in the first three quarters of
2007.
- EBITDA(1) increased to $1,050,524, from $583,810 in the first
three quarters of 2007 and EBITDA(1) margin increased to 15% from
10% in the first three quarters of 2007.
"We remain committed to increasing our cash reserves through
revenue growth from existing and new customers as well as from new
product and service offerings and software licensing fees," said
Scott White, Parlay's Chief Executive Officer. "We have a number of
new customers who are in various stages of advancing their Internet
bingo offerings and we anticipate these new customer launches to
contribute to revenue commencing in Q1 2009. Our quarter just
passed also included significant foreign exchange expense
reflecting the remarkable strength of our reporting currency
against each of sterling, the Euro and the Canadian dollar."
"We are also beginning to see," continued Mr. White, "the
results of various restructuring initiatives which we commenced in
Q2 2008 and which we have expanded. We anticipate that the full
benefit of these adjustments will fully impact our cost structure
in Q1 2009."
Parlay generates revenue from software licensing, installation
fees and support services. Consolidated revenues were $2.5 million
in Q3 2008 compared to $2.0 million in Q3 2007.
Expenses in Q3 2008 were $1.7 million, down from $1.8 million in
Q3 2007. The decrease represented reduced compensation expenses
offset by adverse foreign exchange effects and the absence of
certain non-recurring expense reductions in Q3 2007.
Net income for the quarter was $0.5 million, or $0.04 per
diluted share, compared to net income of $0.2 million, or $0.01 per
diluted share in Q3 2007.
Consolidated revenues were $7.2 million for the first three
quarters of 2008 compared to $6.0 million in the first three
quarters of 2007.
Expenses in the first three quarters of 2008 were $6.2 million,
up from $5.5 million in the first three quarters of 2007. The
increase represented adverse foreign exchange effects, certain
non-recurring costs in the first three quarters of 2008 and the
absence of certain non-recurring expense reductions in Q3 2007
offset by reduced compensation expenses.
Net income for the first three quarters of 2008 was $0.5
million, or $0.04 per diluted share, compared to net income of $0.3
million, or $0.02 per diluted share, in the first three quarters of
2007.
Parlay remains debt free and Parlay's cash balance at September
30, 2008 was $3.2 million.
PARLAY ENTERTAINM ENT INC.
CONSOLIDATED BALANCE SHEETS
(incorporated under the laws of the province of Ontario)
in whole U.S. dollars
(Unaudited) (Audited)
September 30, December 31,
ASSETS 2008 2007
------------ -----------
Current assets:
Cash $ 3,162,816 $ 1,832,178
Accounts receivable:
Trade, less allowance
of approximately $95,000 1,074,260 1,480,956
($388,000 - 2007)
GST receivable 20,902 78,108
Income taxes recoverable - 552,936
Prepaid expenses, deposits and other assets 161,674 130,167
Future income taxes 114,130 114,130
------------ -----------
Total current assets 4,533,782 4,188,475
Equipment - net 104,876 203,127
Future income taxes, net of
valuation allowance 50,000 65,000
------------ -----------
$ 4,688,658 $ 4,456,602
------------ -----------
------------ -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 475,114 $ 1,018,301
Income taxes payable 42,797 -
Deferred revenue 471,831 291,544
------------ -----------
Total current liabilities 989,742 1,309,845
------------ -----------
Shareholders' equity:
Common shares, an unlimited number of
shares authorized, 12,930,265 shares issued
and outstanding (13,012,265 - 2007) 1,476,925 1,465,676
Contributed surplus 2,289,461 2,087,925
Retained earnings (accumulated deficit) (67,470) (406,844)
------------ -----------
3,698,916 3,146,757
------------ -----------
$ 4,688,658 $ 4,456,602
------------ -----------
------------ -----------
PARLAY ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(in whole U.S. dollars, except for per share amounts)
Three-Months Ended Nine-Months Ended
------------------ -----------------
September 30 September 30
2008 2007 2008 2007
---------- ----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues:
Royalties $ 796,612 $ 1,788,223 $ 3,772,420 $ 5,438,569
Installation fees 66,015 53,326 201,325 121,157
Software license fees 1,457,500 - 2,762,500 -
Support services 211,871 159,982 421,873 431,032
---------- ----------- ----------- -----------
2,531,998 2,001,531 7,158,118 5,990,758
---------- ----------- ----------- -----------
Expenses:
Sales, marketing and
services to licensees 145,392 257,822 621,926 783,081
Research, software
development and
support services 895,405 1,278,629 3,247,715 3,751,992
General and
administrative 336,979 554,758 1,201,955 1,256,226
Amortization 30,210 40,186 104,711 118,850
Foreign exchange
(gain)/loss 246,704 (25,417) 335,931 (48,552)
Transaction fees - - 554,407 -
Restructuring - - 113,533 -
Net benefit of prior
years' research
incentives - (335,799) - (335,799)
---------- ----------- ----------- -----------
1,654,690 1,770,179 6,180,178 5,525,798
Income before
income taxes 877,308 231,352 977,940 464,960
---------- ----------- ----------- -----------
Income tax provision
Current 333,055 57,860 427,233 168,718
Future - - 15,000 -
---------- ----------- ----------- -----------
333,055 57,860 442,233 168,718
---------- ----------- ----------- -----------
Net income for
the period 544,253 173,492 535,707 296,242
Retained earnings
(accumulated deficit),
beginning of period (464,499) (37,438) (406,844) (3,547)
Repurchase and
cancellation of
common shares (147,224) (131,952) (196,333) (288,593)
---------- ----------- ----------- -----------
Retained earnings
(accumulated deficit),
end of period $ (67,470) $ 4,102 $ (67,470) $ 4,102
---------- ----------- ----------- -----------
---------- ----------- ----------- -----------
Net income per share:
Basic $ 0.04 $ 0.01 $ 0.04 $ 0.02
---------- ----------- ----------- -----------
---------- ----------- ----------- -----------
Diluted $ 0.04 $ 0.01 $ 0.04 $ 0.02
---------- ----------- ----------- -----------
---------- ----------- ----------- -----------
Weighted average
number of common
shares outstanding:
Basic 12,999,765 12,817,432 13,155,043 12,977,182
---------- ----------- ----------- -----------
---------- ----------- ----------- -----------
Diluted 13,397,405 13,710,625 13,586,770 13,899,898
---------- ----------- ----------- -----------
---------- ----------- ----------- -----------
PARLAY ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in whole U.S. dollars)
Three-Months Ended Nine-Months Ended
------------------ -----------------
September 30 September 30
2008 2007 2008 2007
---------- ----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Cash flows from
operating activities:
Net income for
the period $ 544,253 $ 173,492 $ 535,707 $ 296,242
Adjustments to
reconcile net income
to net cash provided
by operating
activities:
Stock option expense 60,255 78,786 201,536 139,183
Amortization 30,210 40,186 104,711 118,850
Future income
tax provision - - 15,000 -
Changes in non-cash
working capital items:
Accounts receivable 552,632 232,775 463,902 (321,587)
Prepaid expenses,
deposits and
other assets (26,795) (56,509) (31,507) (49,616)
Accounts payable and
accrued liabilities (163,185) (104,295) (543,187) (79,866)
Income taxes
recoverable/payable 333,054 (421,814) 595,733 (1,107,127)
Deferred revenue (1,420,885) (24,949) 180,287 78,987
---------- ----------- ----------- -----------
Net cash provided by
(used in) operating
activities (90,461) (82,328) 1,522,182 (924,934)
---------- ----------- ----------- -----------
Cash flows from
investing activities:
Purchases of equipment (1,848) (31,246) (6,460) (73,233)
(Decrease) in accounts
payable and accrued
liabilities related to
purchases of equipment - (7,756) - (17,547)
---------- ----------- ----------- -----------
Net cash (used in)
investing activities (1,848) (39,002) (6,460) (90,780)
---------- ----------- ----------- -----------
Cash flows from
financing activities:
Repurchase of
common shares (179,641) (155,646) (237,844) (335,437)
(Decrease) in accounts
payable and accrued
liabilities related to
repurchase of
common shares - - - (35,871)
---------- ----------- ----------- -----------
Cash used for
Repurchase of
common shares (179,641) (155,646) (237,844) (371,308)
Proceeds from issuance
of common shares 7,000 6,000 52,760 11,417
---------- ----------- ----------- -----------
Net cash (used in)
financing activities (172,641) (149,646) (185,084) (359,891)
---------- ----------- ----------- -----------
Net increase (decrease)
in cash (264,950) (270,976) 1,330,638 (1,375,605)
Cash, beginning
of period 3,427,766 2,024,587 1,832,178 3,129,216
---------- ----------- ----------- -----------
Cash, end of period $ 3,162,816 $ 1,753,611 $ 3,162,816 $ 1,753,611
---------- ----------- ----------- -----------
Supplemental cash
flow activities:
Income taxes
paid/(received) $ (174,003) $ 55,366 $ (174,003) $ 849,036
---------- ----------- ----------- -----------
---------- ----------- ----------- -----------
Interest (received) $ (12,852) $ - $ (32,127) $ -
---------- ----------- ----------- -----------
---------- ----------- ----------- -----------
(1) Management believes that EBITDA (earnings before interest, income
taxes and amortization) is a useful supplemental measure of performance.
However, EBITDA is not a recognized earnings measure under generally
accepted accounting principles ("GAAP") and does not have a standardized
meaning. Therefore, EBITDA may not be comparable to similar measures
presented by other companies.
EBITDA is reconciled to net income as follows:
Three-Months Ended Nine-Months Ended
------------------ -----------------
September 30, September 30,
2008 2007 2008 2007
----------- ----------- ----------- -----------
Net income $ 544,253 $ 173,492 $ 535,707 $ 296,242
Interest (12,852) - (32,127) -
Taxes 333,055 57,860 442,233 168,718
Amortization 30,210 40,186 104,711 118,850
----------- ----------- ----------- -----------
EBITDA $ 894,666 $ 271,538 $ 1,050,524 $ 583,810
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Revenue $ 2,531,998 $ 2,001,531 $ 7,158,118 $ 5,990,758
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
% 35% 14% 15% 10%
----------- ----------- ----------- -----------
About Parlay Entertainment
Parlay Entertainment Inc. is the world's leading developer and
licensor of Internet and TV bingo solutions. As the inventor and
holder of Internet bingo(2) patents, Parlay was the first company
in the world to develop and deploy a commercial Internet bingo
product. Parlay Bingo is available in both 75-number and 90-number
versions and is complemented by a full suite of lottery and casino
games. Our multi-player, multi-platform technology is used to power
more online bingo sites than any other software provider in the
world. Some of the world's best known brands use Parlay Bingo
solutions, including Virgin, Yahoo!, Paddy Power, NetPlay TV and
the St. Minver, TGN and BingoNexus bingo networks. Parlay's head
offices are in Oakville, Canada with offices in Bridgetown,
Barbados, and Valletta, Malta.
For more information on Parlay solutions and services, please
visit our website at www.parlaygroup.com.
This document may contain statements about expected future
events and/or financial and operating results of Parlay
Entertainment Inc. that are forward-looking. By their nature,
forward-looking statements require the Company to make assumptions
and are subject to inherent risks and uncertainties. There is
significant risk that predictions and other forward-looking
statements will not prove to be accurate. Readers are cautioned not
to place undue reliance on forward-looking statements as a number
of factors could cause actual future results,
(2) United States Patent No. 6,585,590, Canadian Patents No.
2,340,152 and 2,618,843, with other Patent applications pending in
other countries conditions, actions or events to differ materially
from the targets, expectations, estimates or intentions expressed
in the forward-looking statements.
The TSX Venture Exchange does not accept any responsibility for
the adequacy or accuracy of this release.
Contacts: Parlay Entertainment Inc. Scott White CEO (905)
337-6505 Email: swhite@parlaygroup.com Parlay Entertainment Inc.
David Callander CFO (905) 337-6516 Email:
dcallander@parlaygroup.com Website: www.parlaygroup.com
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