Press Releases
Parlay Entertainment Announces Financial Results for Q1 2005
All amounts in United States Dollars
OAKVILLE, Ont. — April 29, 2005 — Parlay Entertainment Inc. (Pink Sheets: PRYNF), the world's leading supplier of Internet Bingo solutions, today announced its results for the three-month period ended March 31, 2005.
Highlights for the first quarter of fiscal 2005 include:
- New corporate record for revenue at $1,322,339, up 7% from the prior record and up 33% on a sequential basis;
- New corporate record for royalty revenue at $1,136,974, up 21% from both the prior record and on a sequential basis;
- Net income of $103,861 or $0.01 per share, fully diluted.
Achievements include:
- Installation of software on three new licensee sites;
- New licensee wins including agreements with St. Minver Limited and Sportingbet plc;
- Conditional approval of Parlay's application for listing on the TSX Venture Exchange;
- Establishment of Malta licensing company with Tier 4 license approved in principle by Malta Gaming Authority;
- Certification of Parlay's Random Number Generator by Technical System Testing.
"The first quarter of 2005 reflects the positive result of our ongoing efforts since Q3 2003 to focus on our clients and our leading edge bingo technologies", said Scott F. White, President and CEO. "We have worked with our clients to maintain our leadership position in online Bingo and, towards the end of 2004, we started to see the long anticipated growth in this market. In particular, this is taking place amongst licensees in the UK and continental Europe who focus their efforts on 90-number bingo. For the balance of 2005, our efforts will be even more focussed on these markets," Mr. White continued, "and we anticipate growth in both the number and quality of licensees, as well as the associated revenue opportunities. Our recently announced agreement with St. Minver and the recent and anticipated launch of major brands as our network partners, validates our belief that the UK and Europe represent excellent markets for the growth of online bingo."
Parlay generates revenue from software licensing, installation fees and e-digital and support services. Consolidated revenues increased to $1.3 million in Q1 2005 from $0.9 million in Q1 2004 or 44% quarter over quarter. This growth represents continuing growth across Parlay's portfolio of licensees and the impact of new licensees during the quarter.
Expenses in Q1 2005 were $1.1 million, compared with $1.1 million in Q1 2004. Although cost levels were similar quarter over quarter, there were savings in 2005 from non-recurring costs in 2004. These savings were offset by increased compensation costs in 2005, due to the adverse impact of the increase in the value of the Canadian dollar, together with costs associated with the Company's application to list its shares on the TSX Venture Exchange.
Net income for the quarter was $0.1 million, or $0.01 per diluted share, compared to a net loss of $0.2 million, or $(0.02) per diluted share in Q1 2004.
Parlay remains debt free with a stable cash position.
PARLAY ENTERTAINMENT INC.
CONSOLIDATED BALANCE SHEETS
(incorporated under the laws of the province of Ontario)
in whole U.S. dollars
---------------------
(Unaudited) (Audited)
March 31, December 31,
ASSETS 2005 2004
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Current assets:
Cash and cash equivalents $ 455,948 $ 708,897
Accounts receivable:
Trade, less allowance of
approximately $194,000 831,628 701,963
($269,000 - 2004)
Other 32,651 13,130
Prepaid expenses, deposits and
other assets 93,674 76,522
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Total current assets 1,413,901 1,500,512
Equipment - net 74,880 81,554
Future income tax asset 20,000 20,000
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$ 1,508,781 $ 1,602,066
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LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and
accrued liabilities $ 256,692 $ 316,211
Income taxes payable 106,025 275,645
Deferred revenue 234,377 300,299
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Total current liabilities 597,094 892,155
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Shareholders' equity:
Common shares, 50,000,000
shares authorized,
11,475,500 shares issued
and outstanding 927,292 927,292
Contributed surplus 1,696,915 1,599,000
Retained earnings
(accumulated deficit) (1,712,520) (1,816,381)
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911,687 709,911
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$ 1,508,781 $ 1,602,066
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PARLAY ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND
RETAINED EARNINGS (ACCUMULATED DEFICIT)
(in whole U.S. dollars, except for per share amounts).
(Unaudited)
Three-Months Ended
------------------
March 31
--------------
2005 2004
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Revenues:
Royalties $ 1,136,974 $ 842,070
Installation fees 124,841 16,187
e-digital and support services 60,524 37,900
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1,322,339 896,157
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Expenses:
Sales, marketing and
services to licensees 245,797 158,676
Research, software development
and support services 452,406 496,332
General and administrative 285,310 345,854
Amortization 14,869 23,025
TSX Venture Exchange Listing 102,330 -
------------- -------------
1,100,712 1,023,887
Restructuring provision - 5,000
License agreement termination
write-off - 60,317
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1,100,712 1,089,204
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Income (loss) before income taxes 221,627 (193,047)
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Income tax provision (recovery)
Current 117,766 (15,038)
Future - -
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117,766 (15,038)
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Net income (loss) for the period 103,861 (178,009)
Retained earnings (accumulated
deficit), beginning of period (1,816,381) (1,222,599)
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Retained earnings (accumulated
deficit), end of period $ (1,712,520) $ (1,400,608)
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Net income (loss) per share:
Basic $ 0.01 $ (0.02)
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Diluted $ 0.01 $ (0.02)
------------- -------------
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Weighted average number of common
shares outstanding:
Basic 11,475,500 10,870,500
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Diluted 12,775,084 10,870,500
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PARLAY ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in whole U.S. dollars)
(Unaudited)
Three-Months Ended
------------------
March 31
--------------
2005 2004
------------- -------------
Cash flows from operating activities:
Net income (loss) for the period $ 103,861 $ (178,009)
Adjustments to reconcile net
income (loss) to
net cash (used in) operating
activities:
Stock option and share expense 97,915 104,589
Amortization 14,869 23,025
Restructuring provision - 5,000
License agreement termination write-off - 60,317
Changes in non-cash working
capital items:
Accounts receivable (149,186) (83,113)
Prepaid expenses, deposits and
other assets (17,152) (14,982)
Accounts payable and accrued
liabilities (59,519) (110,631)
Restructuring reserve payments - (52,350)
Income taxes recoverable / payable (169,620) 41,818
Deferred revenue (65,922) 71,313
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Net cash used in operating activities (244,754) (133,023)
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Cash flows from investing activities:
Purchases of equipment (8,195) -
Proceeds on disposal of equipment - 1,509
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Net cash provided by (used in)
investing activities (8,195) 1,509
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Net decrease in cash (252,949) (131,514)
Cash and cash equivalents,
beginning of period 708,897 368,560
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Cash and cash equivalents,
end of period $ 455,948 $ 237,046
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------------- -------------
Cash and cash equivalents consist
of the following:
Cash $ 382,229 $ 164,605
Cash equivalents 73,719 72,441
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$ 455,948 $ 237,046
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Supplemental cash flow activities:
Income taxes paid / (received) $ 287,386 $ (56,856)
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Interest paid $ - $ -
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About Parlay Entertainment
Parlay Entertainment Inc. is the world's leading developer and dominant licensor of Internet Bingo solutions. As the inventor and patent holder of Internet Bingo¹, Parlay is the first company in the world to develop and deploy a commercial Internet Bingo product, offering a best-in-class suite that features 75-number and 90-number Bingo, Lottery and Casino entertainment software. With its unmatched depth of industry experience and a comprehensive range of products and services, Parlay offers business solutions to fit every need. Parlay has a seven year proven track record built on the success of our clients: in 2004, more than 1,850,000 paying players enjoyed the experience of playing Parlay games on our licensees' gaming websites. Parlay is headquartered in Oakville, Canada with offices in Bridgetown, Barbados, and Valletta, Malta.
Contact:
Parlay Entertainment Inc.
Scott White, President & CEO
Tel: +1 (905) 337-6505
Email:
David Callander, CFO
Tel: +1 (905) 337-6516
Email:
¹ United States Patent No. 6,585,590 "Method and system for operating a bingo game on the internet", with other Patent applications pending in other countries