Subdued first quarter for Cryptologic

Online gambling software developer Cryptologic has released its first quarter 2010 numbers, showing a subdued performance with lower revenue than the previous quarter, but better returns from branded games and marked savings in costs.  
The company’s financial summary disclosed:
* Revenue of $7.6 million (Q4 2009: $9.9 million) reflected subdued wagering activity and reduced contribution from a key customer.
* Branded games revenue rose to $1.3 million (Q4 2009: $1.2 million), the fifth sequential quarter of growth
* Operating expenses decreased by 36 percent to $8.1 million (Q4 2009: $12.6 million)
* General and administrative expense decreased 12 percent to $2.2 million (Q4/2009: $2.5 million)
* Loss of $3.2 million (Q4 2009 Loss: $24.8 million)
* Net cash at March 31, 2010: $19.7 million (Q4, 2009: $23.7 million). The decrease due to the timing of a tax payment of $1.4 million, which is ultimately recoverable, and the cash impact of the operating losses of $2.4 million
Operating highlights included:
* Live branded games increased to 92 at March 31, 2010 from 66 at December 31, 2009
* Multi-year licensing deals for branded casino games with William Hill, Bet24 and Betsson
* Deliver of a new virtual casino lobby and streamlined registration process.
* The company participated in a rebranding and relaunch for a major licensee
* The first suite of six 3D games were made available for play
Management reported that in 2010:
* Revenue will improve gradually, driven by recent improvement in wagering activity and new licensees.
* Q2/2010 revenue to date is ahead of the same period in the previous quarter
* Branded games revenue will gain momentum as new games come on stream
* Number of new branded games launched by licensees to date and generating revenues currently stands at108, with a backlog of approximately 92 games.
* Cryptologic’s full Internet casino hosting suite for Betsafe.com will go live in Q2
Brian Hadfield, Cryptologic’s President and CEO, said: “While subdued wagering activity impacted our revenues in the first quarter, the outlook for 2010 as a whole remains encouraging.
“Operating costs have declined further while our revenue base is showing signs of improvement in the second quarter.
“The start of the World Cup soccer tournament in June provides short term uncertainty, however with a strong backlog of new business we expect our results to improve gradually as the year unfolds. As would be expected, the company continues to assess its revenue streams, costs, and strategic direction as it moves towards profitability.”

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