EXHIBIT 99.1
FOR IMMEDIATE RELEASE
Symbol: TSX: CRY & CXY; NASDAQ: CRYP; LSE: CRP
CryptoLogic reports profit and growth in cash in Q3 2011
November 10, 2011 (Dublin, IRELAND) – CryptoLogic Limited, 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:
| u | Total revenue increased to $7.2 million (Q2 2011: $7.0 million) |
| u | Total expenses reduced to $5.9 million (Q2 2011: $6.5 million) |
| u | Income before tax increased to $1.3 million (Q2 2011: $0.5 million) |
| u | 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.
For more information, please contact:
CryptoLogic +353 1 234 0400 | Luther Pendragon +44 207 618 9100 |
David Gavagan, Chairman and Interim CEO Huw Spiers, CFO | Neil Thapar, Alexis Gore |
3rd Floor, Marine House, Clanwilliam Place,
Dublin 2, Ireland
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.
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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.
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About CryptoLogicâ (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.
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CRYPTOLOGIC LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(In thousands of U.S. dollars)
(Unaudited)
| As at September 30, 2011 | As at December 31, 2010 | As at January 1, 2010 | ||||||||||
| 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 | |||||||||
| Total non-current assets | 4,475 | 5,659 | 13,281 | |||||||||
| 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 | |||||||||
| Total current assets | 30,322 | 31,886 | 49,705 | |||||||||
| Total assets | $ | 34,797 | $ | 37,545 | $ | 62,986 | ||||||
| EQUITY | ||||||||||||
| Share capital | $ | 34,229 | $ | 34,129 | $ | 33,916 | ||||||
| Share options | 5,584 | 5,564 | 5,646 | |||||||||
| Deficit | (22,252 | ) | (22,878 | ) | (2,766 | ) | ||||||
| Total equity attributable to shareholders of the Company | 17,561 | 16,815 | 36,796 | |||||||||
| Non-controlling interest | 1,166 | 1,226 | 2,948 | |||||||||
| Total equity | 18,727 | 18,041 | 39,744 | |||||||||
| LIABILITIES | ||||||||||||
| Deferred tax liabilities | 47 | 16 | – | |||||||||
| Total non-current liabilities | 47 | 16 | – | |||||||||
| 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 | |||||||||
| Total current liabilities | 16,023 | 19,488 | 23,242 | |||||||||
| Total liabilities | 16,070 | 19,504 | 23,242 | |||||||||
| 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 ended September 30, | For the nine months ended September 30, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Total revenue | $ | 7,219 | $ | 6,095 | $ | 20,213 | $ | 20,475 | ||||||||
| 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 | ||||||||||||
| 5,903 | 9,607 | 18,943 | 41,237 | |||||||||||||
| Results from operating activities | 1,316 | (3,512 | ) | 1,270 | (20,762 | ) | ||||||||||
| Finance income | 13 | 14 | 78 | 442 | ||||||||||||
| Finance costs | (20 | ) | (106 | ) | (30 | ) | (49 | ) | ||||||||
| Net finance income/(costs) | (7 | ) | (92 | ) | 48 | 393 | ||||||||||
| Income/(loss) before income taxes | 1,309 | (3,604 | ) | 1,318 | (20,369 | ) | ||||||||||
| Income tax expense | 259 | 115 | 652 | 380 | ||||||||||||
| Income/(loss) for the period | 1,050 | (3,719 | ) | 666 | (20,749 | ) | ||||||||||
| Other comprehensive income | – | – | – | – | ||||||||||||
Other comprehensive income for the period net of income tax | – | – | – | – | ||||||||||||
Total comprehensive income/(loss) for the period | $ | 1,050 | $ | (3,719 | ) | $ | 666 | $ | (20,749 | ) | ||||||
| Total comprehensive income/(loss) attributable to: | ||||||||||||||||
| Shareholders of the Company | 988 | (3,439 | ) | 626 | (19,297 | ) | ||||||||||
| Non-controlling interests | 62 | (280 | ) | 40 | (1,452 | ) | ||||||||||
Total comprehensive income/(loss) for the period | 1,050 | (3,719 | ) | 666 | (20,749 | ) | ||||||||||
| 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
Share capital | Contributed surplus | Share options | Retained earnings | Total | Non- controlling interest | Total Equity | ||||||||||||||||||||||
Balance, January 1, 2010 | $ | 33,848 | $ | 68 | $ | 5,646 | $ | (2,766 | ) | $ | 36,796 | $ | 2,948 | $ | 39,744 | |||||||||||||
| Total comprehensive income for the period | ||||||||||||||||||||||||||||
| Profit or loss | – | – | – | (19,297 | ) | (19,297 | ) | (1,452 | ) | (20,749 | ) | |||||||||||||||||
| Transactions with owners recorded directly in equity | ||||||||||||||||||||||||||||
| Shares exchanged | 195 | – | – | – | 195 | (195 | ) | – | ||||||||||||||||||||
| Share-based payment transactions | – | – | (89 | ) | – | (89 | ) | – | (89 | ) | ||||||||||||||||||
Balance, September 30, 2010 | $ | 34,043 | $ | 68 | $ | 5,557 | $ | (22,063 | ) | $ | 17,605 | $ | 1,301 | $ | 18,906 | |||||||||||||
Balance, December 31, 2010 | $ | 34,061 | $ | 68 | $ | 5,564 | $ | (22,878 | ) | $ | 16,815 | $ | 1,226 | $ | 18,041 | |||||||||||||
| Total comprehensive income for the period | ||||||||||||||||||||||||||||
| Profit or loss | – | – | – | 626 | 626 | 40 | 666 | |||||||||||||||||||||
| Transactions with owners recorded directly in equity | ||||||||||||||||||||||||||||
| Shares exchanged | 100 | – | – | – | 100 | (100 | ) | – | ||||||||||||||||||||
| Share-based payment transactions | – | – | 20 | – | 20 | – | 20 | |||||||||||||||||||||
| Balance, September 30, 2011 | $ | 34,161 | $ | 68 | $ | 5,584 | $ | (22,252 | ) | $ | 17,561 | $ | 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 ended September 30, | For the nine months ended September 30, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| 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 | ) | |||||||||
| 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 | |||||||||
| Cash from/(used in) operating activities | 2,904 | (4,878 | ) | 481 | (9,609 | ) | ||||||||||
| Change in income taxes receivable/payable | 309 | (69 | ) | 4,356 | (1,176 | ) | ||||||||||
| Net cash from/(used in) operating activities | 3,213 | (4,947 | ) | 4,837 | (10,785 | ) | ||||||||||
| 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 | ) | |||||||||
| Net cash from/(used in) investing activities | 3 | (417 | ) | (205 | ) | (873 | ) | |||||||||
| Financing activities: | ||||||||||||||||
| Cash flows from financing activities | – | – | – | – | ||||||||||||
| Net cash from/(used in) financing activities | – | – | – | – | ||||||||||||
| 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 | ||||||||||||
| Cash and cash equivalents, end of period | $ | 15,216 | $ | 11,789 | $ | 15,216 | $ | 11,789 | ||||||||