Fair Disclosure Now a Reality
All U.S. public companies, under the Fair Disclosure Rule, are now required to fully disclose material data and any relevant information that could influence investors' decisions regarding stock investments. The rule, which went in effect today, results from the Security and Exchange Commission's concerns that investors should receive relevant material at the same time it's made available to analysts and insiders.
EDGAR Online, which provides SEC data on many companies, followed up the rule change with the launch of a new comprehensive site that makes the new filings available to users on its Fair Disclosure Express site (www.fd-express.com). Users will find today's 8-K and 425 filings, a real-time list of new documents reporting unscheduled material events icluding changes in control, acquisition or disposition of assets, bankruptcy, director resignations, and other major developments, along with an analysis of Regulation FD by the law firm Morrison & Foerster LLP.
Flotation Plans Dropped
The operators of U.K. bookmaker Coral have dropped plans for a stock market flotation, which had been
scheduled for later this year, according to Reuters. The flotation would likely have been valued at nearly one billion pounds. Investment bankers advised against the flotation after deciding that volatile market conditions, especially for Internet firms like Coral's Internet gaming site Eurobet, could jeopardize the flotation's success.
Losses Don't Worry Bookmaker
Despite a sevenfold increase in betting turnover, Isle of Man bookmaker betinternet.com (BET.L) suffered £1.04 million in losses. The losses, reports the Irish Times, have been attributed mainly to the bookmaker's
investment in technological infrastructure and marketing. Vincent Caldwell, betinternet.com chairman,
remained optimistic, however, saying, "We'll be in profit very soon." A float on the London stock exchange earlier this year netted the company £3 million, while punters wagered £11.7 million via telephone and the Internet. Last year, betinternet received £1.54 million in turnover. Caldwell said the company had successfully expanded its betting focus to include football and Formula 1 betting along with horserace betting. "From contributing just 10 percent of bets in the previous year, non-racing bets now bring in 60 percent of betinternet.com's revenue, largely boosted by betting on football," Caldwell added.
Filings
United Trading.com (UTDT), a Cook Island company with stock traded over the counter, just released its third-quarter earnings report, which shows revenues of $1.4 million and pre-tax earnings of $1.3 million, compared with zero earnings and a $21,532 loss during the previous quarter ending June 30, 2000. "The record revenues and earnings reported for the quarter ended Sept. 30, 2000 clearly show that United Trading.com has achieved the status of an extremely profitable operating company. The results validate the company's business model of working in high profit market niches," commented Norman Wright, the company president. "Substantial sales of the company's current product lines and exciting new products are expected to be announced throughout this next quarter. The company further believes that the effects of the recent downturn in the OTC BB market on the company's stock price as well as any confusion caused by our recent three-for-one forward stock split and the mandatory exchange of Certificates for the company's stock should now be behind us. We look forward to seeing the market price of the company's stock increase in the near term to reflect the true value of our company to its shareholders."
Canadian firm Cryptologic Inc. (CRYP) also issued its third quarter report, which showed a 13 percent revenue growth. Third quarter revenues were impacted by the release of the version 4.0 software release as well as an aggressive investment to launch a rapid succession of major new licensees on and ahead of schedule. "2000 has been a pivotal year, focused on advancing the company to the next level with next generation technology, significant infrastructure investment and adding leading land-based licensees," said
Cryptologic's president and CEO, Andrew Rivkin. "By year end, Cryptologic will have the largest number of brand name Internet gaming licensees in the world with the brand power, top-notch technology and financial strength to gain major market share."
In addition, total revenue for the third quarter ending September 30, 2000 increased to $9.0 million, up
13 percent from $8.0 million for the third quarter of 1999. Net income was $2.6 million compared to $4.8
million in the same period in 1999. On a fully diluted basis, earnings per share from continuing operations
were $0.19 for the third quarter of 2000 compared to $0.32 in the same 1999 period. On net income,
earnings per share on a fully diluted basis were $0.17 for the third quarter of 2000 compared to $0.31 in
1999.
Following a change in accounting procedures, Cryptologic began recording expenditures related to its
wholly owned e-cash subsidiary as a discontinued operation. The company has decided to spin out this
entity to enhance shareholder value. During the third quarter of 2000, $317,000 was expensed.
The company's revenue for the nine months ended September 30, 2000 rose 12 percent to $27.0 million compared to $24.1 million in the prior year period. Net income for the nine-month period was $11.4 million versus $15.1 million in 1999. On a fully diluted basis, earnings per share from continuing operations were $0.78 in the 2000 nine-month period compared to $1.00 in 1999. On net income, earnings per share were $0.75 for the nine months ended September 30, 2000 compared to $0.98 in 1999.
The company also reported that expenditures were higher than expected in the third quarter as a result
of costs to add and launch major new licensees. Cryptologic accelerated investment in development and
support services to get new licensees up and running quickly as well as enhancing infrastructure capacity
and the cost of continuing software certification in Australia. The company continues to maintain profitability and anticipates this to improve in the future as today's investments drive increased revenues. Further, the company reported that by end of third quarter 2000, it continued to be well capitalized with approximately $56.0 million in total cash including restricted cash.
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FINANCIAL HIGHLIGHTS (in millions of US dollars, except per share disclosure)
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Three Months Ended Nine Months Ended
September 30, September 30,
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2000 1999 2000 1999
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Total revenue $9.0 $8.0 $27.0 $24.1
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Net income from continuing
operations $2.9 $4.9 $11.8 $15.4
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Discontinued operations $0.3 $0.1 $0.4 $0.3
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Net income $2.6 $4.8 $11.4 $15.1
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EPS from continuing operations $0.20 $0.57 $0.93 $1.81
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Earnings per share $0.18 $0.56 $0.89 $1.77
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Fully diluted EPS from continuing
operations $0.19 $0.32 $0.78 $1.00
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Fully diluted EPS $0.17 $0.31 $0.75 $0.98
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Weighted average number of
shares 14.3M 8.6M 12.8M 8.5M
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Weighted average fully diluted
number of shares 15.7M 15.6M 15.6M 15.6M
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