GPWA Times Magazine - Issue 12 - April 2010

D UBLIN, Ireland – In March, Cryp- toLogic announced it had lost $35.5 million in2009. “2009wasatoughyearasanumberofad- verse factors includingaglobal economic downturn overshadowed the company’s progress in implementing its innovative new strategy to reduce costs and return to growth,” said CryptoLogic’s President andCEOBrianHadfield. “We have entered 2010 in better shape withasubstantiallyreducedcostbasethat will continue to be managed tightly. At the same time, new businessmomentum remains encouraging as branded games continue to roll out and hosted casino li- censees implement new initiatives. With new licensing activity staying strong and the overall online casino/gaming market showing some improvement, we look to theyearwithcautiousoptimism.” Here’s part of the full-year 2009 sum- maryCryptoLogicprovided thepress. To see the entire summary, visit the news sectionatGPWA.org. Revenue decreased to $39.8 million (2008: $61.5million), reflecting lower wagering activity across the industry, adversecurrency factorsandareduced contribution fromakey licensee. Net loss of $35.5million (2008: $32.7 million), reflecting$24.8millionnon- recurring charges for asset impair- ments and restructuring to align the company’s costswith its revenuebase. • • Totalannualrecurringcostbase,which comprises operating, general and ad- ministrative, financeandamortization expenses, reduced by $20.6million to $55.0million. Merged poker network with that of GTECHCorporation,eliminatingcosts of a standalonebusiness. Branded games revenue increased to $2.8 million (2008: $0.3 million), accounting for 7.1% of total revenue (2008: 0.5%) despite slower-than-an- ticipated roll-out by licensees. Total licensee base expanded by 20 to more than30 leading Internet gaming operators including Betfair, Sporting- bet, totesport andVirginGames. Signed deals with DC Comics, a divi- sion of Warner Bros., to develop bet- ting games featuring Batman, Super- man and Wonder Woman; and with Paramount Digital Entertainment for games based on 20 movies including Braveheart, ForrestGumpandGhost. Diluted loss per share of $2.78 (2008: $2.55diluted lossper share). Total dividend for the year amounted to$1.4million (2008:$5.4million);no dividendwasdeclared inQ42009. Fourthquarter2009highlights: Branded games revenue rose 51.7% se- quentially to$1.2million. Doubled the number of branded games inproduction to66 from33 inQ32009. • • • • • • • • • Major relaunch and investment in vir- tual casino lobby toenhance long-term revenueopportunities. Cyprus office to relocate to Malta in line with the company’s plan to streamlineoperations. Signed three major licensees for branded games –BetClic, Rank Inter- activeandUniBet. LaunchedfirstgamesbasedonBatman and Wonder Woman as well as Mon- keys to Mars, Triple Action Hold’em andAces andFaces. 2010outlook: Improved revenue from hosted casino as new licensees go live and existing licensees benefit from investment in major rebranding, anew lobbyandad- vertising initiatives. Branded games continue to gain mo- mentumwith the annual run rate cur- rently at $5 million as more games comeon stream. Number of new branded games launchedby licensees todate and gen- eratingrevenuescurrentlyat74,witha backlogof approximately 125games. Costs expected to reduce further in 2010 as additional measures are im- plemented tomanageoverheads. • • • • • • • • Cryptologic loses$35.5million in2009 “Rush Poker is the greatest innovation in online poker since poker started on the Internet.” —TeamFullTiltmemberChrisFerguson “We knew we wanted to launch the sickest poker site possible. By joining a network that focuses on player rewards and accepts players worldwide we knew we would be starting out on the right track.” —PhilLaak,on launching“UnabomberPoker” on theCakeNetwork “I want to challenge the rest of this industry to contribute to Oxfam to help out in Haiti and my private foundation will match any proven payment to Oxfam by an online gaming person up to $1,000,000.” —CalvinAyre