Tales of SuccessRecently launched online casino My Casino has enjoyed plenty of success in its early existence. The site announced a turnover of $10 million for the first two weeks of May. That obliterates forecasts of $2.5 for the period.
Arena Leisure, perhaps the hottest of all I-gaming-related stocks last week, found itself atop the FTSE 250 leader board, jumping 23 1/2 p to 189p, thanks to rumors that Ladbrokes is looking into buying a stake.
On the Flip Side...
ENIC Plc's stock has dropped a bit since the company announced its acquisition of U.K. Internet bookmaker ukbetting.com. It closed Friday at 180 1/2p, opened today at 178p and closed the day at 175p.
News broke Tuesday of BSkyB's purchase of Sports Internet Group PLC (London:SRT.L). Since then Sports Internet's stock has taken a hit. It was over 700p Thursday when it started to dive. Today it closed at 520p.
Autotote Acquires Scientific Games
Autotote Corporation announced Friday that it has signed a definitive merger agreement with Scientific Games Holdings Corp.--a world leading supplier of lottery products, pre-paid telephone cards and integrated lottery systems and support services--in which Autotote will pay $26 per share in cash, or a total of approximately $310 million, to the shareholders of Scientific Games. The merger is subject to approval by Scientific Games' shareholders and certain government entities and agencies. Certain affiliates of Donaldson Lufkin Jenrette and Lehman Brothers have issued a commitment letter to provide debt financing for the acquisition and related costs. In a separate transaction, Olivetti has issued a commitment letter for $100 million of preferred stock, convertible into Autotote shares, which, upon conversion, would result in an approximately 30 percent participation in the combined entity. Other investors have issued similar commitment letters for an additional $10 million of convertible preferred stock. Ramius Securities, LLC acted as placement agent for the preferred stock issue. The acquisition merges the largest company in the pari-mutuel wagering business with the only full service instant ticket and lottery systems company in the world. The combined companies have reported revenue of $450 million and adjusted EBITDA (earnings before interest, taxes, depreciation, amortization and one time charges) of about $95 million for the last twelve months ending 1/31/00 (TTE) and 3/31/00 (SG). Autotote intends to combine its rapidly growing lottery on-line systems and terminal sales businesses with Scientific Games, already the second largest provider of lottery services worldwide.
Autotote also announced second fiscal quarter results for the quarter ended April 30, 2000. In the second quarter of fiscal 2000, revenue was $51.1 million compared to $53.1 million in the second quarter of fiscal 1999, a decrease of 4 percent. EBITDA increased 18 percent to $12.0 million from $10.2 million for the earlier period. Net income was $2.3 million or $0.06 per diluted share in the second fiscal quarter of 2000 versus net income of $0.6 million or $0.02 per diluted share in the second fiscal quarter of 1999. For the first six months of fiscal 2000, the company's revenue was $100.6 million compared to $98.7 million in the first six months of fiscal 1999, an increase of 2 percent. EBITDA increased 24 percent to $22.1 million from $17.8 million in the prior period. Autotote's net income increased to $2.8 million in the first six months of fiscal 2000 from a loss of $1.9 million in the comparable period in fiscal 1999. Fully diluted earnings per share increased to $0.07 in the first 6 months of fiscal 2000 from a loss of $0.05 in the first six months of fiscal 1999.
CryptoLogic Announces Exercising of All Outstanding 3.3 Million Class A Warrants
CryptoLogic Inc. (NASDAQ:CRYP; TSE:CRY) confirmed last Monday that Andrew Rivkin and Mark Rivkin, as directors of various holding companies, have arranged for the exercise of all the outstanding 3.3 million Class A warrants at Cdn$0.50 each for an aggregate of Cdn$1.65 million. The result will be the holding companies owning a total of 3.65 million common shares (approximately 25 percent) of the issued and outstanding common shares of CryptoLogic. The holding companies will be holding the common shares as an investment, with no immediate plans for acquiring any additional common shares in the near future.
Quarterly Earnings
Magna Entertainment
Magna Entertainment. (Toronto:MIEa.TO - news), Frank Stronach's racing spinoff, showed a $12 million profit in its first quarter report. Revenue, which is net of purses, for the first quarter ended March 31, 2000 was $80.7 million, income before income taxes was $21.2 million and fully diluted earnings per share were $0.15. The company says its impressive first-quarter results reflect the full quarter's operations for all of the company's racetracks, other than Great Lakes Downs. (The company acquired Great Lakes Downs in Muskegon, Michigan during the quarter.) During the first quarter of 2000, cash generated from operations was $7.6 million. Total investment activities used a net $3.4 million, including the acquisition of Great Lakes Downs for $1.8 million and fixed asset additions of $2.4 million. Also during the period, bank indebtedness and long-term debt totaling $7.5 million was repaid. The company, one of the largest operators of premier horse racetracks in the United States, acquires, develops and operates horse racetracks and related pari-mutuel wagering operations. These racetracks, which include Santa Anita Park and Golden Gate Fields in California, Gulfstream Park in Florida, Remington Park in Oklahoma, Thistledown in Ohio and Great Lakes Downs in Michigan, accounted for 23 percent of the amounts wagered on pari-mutuel racing in the United States in 1999. As a complement to its horse racing business, the company is exploring the development of media sports wagering operations, including telephone account, interactive television, and Internet-based wagering, as well as certain leisure and retail-based real estate projects. The company's stock, after dipping to under $4 in April, is nearing its previous high of $8.75, the price at which it began trading in February. It closed Friday at $7.90.
Unaudited results for first quarter ended March 31 (United States dollars in thousands):
|
2000 |
1999 |
| Revenue |
$80.7 |
$39.9 |
| Income Before Income Taxes |
$21.2 |
$16.2 |
| Net Income |
$12.0 |
$9.3 |
| Fully Diluted Earnings Per Share |
$0.15 |
$0.12 |
*All amounts are reported in millions of U.S. dollars, except per share figures.
Online Gaming Systems
Online Gaming Systems Inc. (OGAM.OB) announced its quarterly results Wednesday. The company's net revenues increased approximately 98 percent in 2000 over the same period in 1999. Revenues from operations in the first quarter 2000 were $ 2,023,733 as compared with $ 29,000 for the same period in 1999. The company attributes the increase in revenues to global expansion and the enhancement and upgrading of its product. The company also reports that its overseas distribution outlets, namely Australia, have begun generating substantial revenues. Cost of revenues decreased 60 percent in 2000 over the same period in 1999, a result of capitalized software development costs being written off in 1999. The company expects amortization of development costs to be consistent going forward. Operating expenses increased by 17 percent or $ 192,621. Provision for doubtful accounts were $0 as compared with $ 325,335 for the same period in 1999. The decrease resulted from management only recording revenues when more than 50 percent of monies have been received from a sale. Other income decreased by approximately $1.4 million in 2000. In 1999 a gain on sale of $1,256,743 resulted from a percentage interest sold of the company's wholly owned subsidiary. A $170,000 gain was recognized in a full and final settlement of a payable in 1999 as well. Cash, cash equivalents and marketable securities, which consist primarily of high risk, priced securities totaled $743,887 at March 31, 2000 compared to $3,384,029 at March 31, 1999. The decrease in cash, cash equivalents and marketable securities was due primarily to high risk priced securities decreasing in value and negative cash flow from operations in 1999. Management believes that cash generated from current and future operations will be sufficient to satisfy the
company's currently anticipated cash requirements.
Youbet.com (for the quarter ending March 31, 2000)
(In thousands, except for share and per share amounts)
|
2000 quarter ended March 31 (unaudited) |
1999 quarter ended March 31 |
| Revenues |
$1,705,237 |
$460,606 |
| Total operating expenses |
4,763,880 |
8,543 |
| Loss from operations |
3,058,643 |
2,155,601 |
| Total other income |
70,951 |
1,414 |
| Net loss |
$(2,987,692) |
$(2,147,058) |
| Net loss per common share-basic and diluted |
$(0.15) |
$(0.15) |
| Weighted avg. No. of common shares outstanding. |
19,379,909 |
14,059,310 |
eLOT Inc. (for the quarter ending March 31, 2000)
(In thousands, except for share and per share amounts)
|
2000 quarter ended March 31 (unaudited) |
1999 quarter ended December 31 |
|
Assets |
| |
| Cash and Cash Equivalents |
$14,278 |
$1,060 |
| Restricted Cash |
4,000 |
-- |
| Accounts Receivable |
158 |
12 |
| Prepaid Expenses & Other Current Assets |
521 |
174 |
| Net Assets of Discontinued Operations |
17,016 |
53,402 |
| Total Current Assets |
35,973 |
54,648 |
| Current Liabilities
|
|
|
| Current portion of long-term debt |
$133 |
$19,818 |
| Accounts payable |
1,895 |
5,342 |
| Accrued payroll and related costs |
115 |
772 |
| Accrued liabilities |
3,392 |
3,808 |
| Total Current Liabilities |
5,535 |
29,740 |
| Long-Term Debt |
13,351 |
13,660 |
| Total Liabilities |
18,886 |
43,400 |