¶ Excellent Prospects for CRYP....
CryptoLogic Comments On Positive Outlook For 2001 & Provides 2002 Guidance; On
Track With Management's Growth Targets
TORONTO--(BUSINESS WIRE)--May 24, 2001--CryptoLogic (NASDAQ:CRYP)
(TSE:CRY.)
Internet Gaming Expected to Grow 35%+ Per Year; Global Trend
Towards Regulation Will Increase Market Opportunities; CryptoLogic
Well Positioned to Extend Leadership to New Gaming Verticals
CryptoLogic Inc., a leading software supplier to the Internet
gaming and e-commerce industries, is pleased to announce the company's
outlook for the next few quarters in 2001 and provide targets for
2002.
"Almost five months on the job now, I am even more excited about
the prospects for CryptoLogic and the Internet gaming market," said
Jean Noelting, president and CEO of CryptoLogic Inc. "The market
fundamentals are strong, growing at plus 35% for the next few years
and moving towards mainstream entertainment with broader gaming
options. As well, global regulation is becoming the trend, reinforcing
CryptoLogic's compliance efforts. In response, we have decided to step
up our regulatory investment to take advantage of this opportunity. As
we help our licensees leverage and increase their user base in casino
and other gaming areas, CryptoLogic is well positioned for long term
growth."
Noelting continued, "Heading into my first annual meeting with
shareholders and in the spirit of fair disclosure, I felt it apropos
to provide further guidance for this year and extend our view into
2002. This year's revenue growth and net margin targets remain solidly
on track and consistent with market expectations. As expected,
interest income will be reduced significantly reflecting lower
interest rates and lower invested capital due to our share repurchase.
CryptoLogic will continue to see strong performance in 2002 as we
benefit from new licensees, acquisitions and expansion into new gaming
verticals. We continue to believe that our focus on large, brand name
customers, regulatory compliance and proven financial track record
will help us realize our vision to be the leading global provider in
e-gaming areas in casino, bingo, poker, lotteries and sports betting
powered by CryptoLogic."
The following forward-looking statements are based on the
company's current expectations and are subject to risks and
uncertainties. Actual results may differ materially.
Fiscal and Quarter Targets for 2001:
CryptoLogic maintains its guidance for 20% revenue growth and 45%
net margins for the full year of 2001. As has been the historical
pattern, the first and fourth quarters will post the strongest
performance and the middle quarters will reflect Internet seasonality.
*T
-- Fiscal 2001: revenue ranging between US$41.0-$42.0 million; net
income ranging between US$19.0-US$20.0 million.
-- Second quarter 2001: revenue between US$9.5-$10.0 million; net
income between US$4.2-$4.6 million.
-- Third quarter 2001: revenue between US$9.7-$10.2 million; net
income between US$4.2-$4.6 million.
-- Fourth quarter 2001: revenue between US$10.8-$11.3 million; net
income between US$5.4-$5.9 million.
-- Interest income for fiscal 2001: Due to the buy back in 2001, the
company bought back approximately 1.5 million shares to date at a
cost of US$13.4 million and lower than anticipated interest rates,
interest income for the year is expected to be between US$2.3-$2.5
million, a decline of US$1.7 million versus earlier projection.
-- Cash position for fiscal 2001: CryptoLogic expects to generate
approximately US$5.0 million in free cash flow each quarter, which
would see 2001 end with approximately US$65.0 million in total
cash, not accounting for any further share buy back and
acquisition activity.
-- Total expenses for fiscal 2001: CryptoLogic has accelerated its
plans towards regulatory compliance as well as enhancing the
management team. The company will invest another US$750,000 this
year. Expenses are expected to amount to US$21.0-$23.0 million.
-- Fully diluted shares outstanding for fiscal 2001 are expected to
increase from 15.7 million to about 16.0 million shares, excluding
acquisition and share buy back activities.
-- For the year, CryptoLogic expects to sign 4 new, major licensees,
deploy its strong cash reserves to make at least one acquisition
and expand into at least one new gaming vertical.
*T
Fiscal 2002 Targets:
With the contribution of new licensees, acquisitions and entry
into new gaming verticals in 2001, CryptoLogic is comfortable with
targets of 25% revenue growth and 45% net margins in fiscal 2002.
About CryptoLogic Inc.
CryptoLogic Inc. is the leading software development company
serving the Internet gaming market. The company's proprietary
technologies enable secure, high-speed financial transactions over the
Internet. CryptoLogic continues to innovate and develop state of the
art Internet software applications for both the electronic commerce
and Internet gaming industries.
CryptoLogic's common shares trade on the Toronto Stock Exchange
under symbol the CRY and on the Nasdaq National Market under the
symbol CRYP. There are currently 13.1 million common shares
outstanding (15.7 million shares fully diluted).
CRYPTOLOGIC FORWARD LOOKING STATEMENT DISCLAIMER:
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. Investors are
cautioned that all forward-looking statements involve risks and
uncertainties, including without limitation risks associated with the
Company's financial condition and prospects, 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, risks
associated with competition and other risks detailed in the Company's
filings with securities regulatory authorities. These risks may cause
results to differ materially from those projected in the
forward-looking statements.
--30--tjs/in*
CONTACT: CryptoLogic Inc.
Jean Noelting, 416/545-1455
or
CryptoLogic Inc.
Nancy Chan-Palmateer, 416/545-1455
E-mail: nancycp@cryptologic.com
or
Environics Communications
Media Relations, 416/920-9000, ext. 260/239
E-mail: dtisch@pr.environics.ca
E-mail: amorris@pr.environics.ca
