CryptoLogic Achieves Record Revenue & Excellent Earnings In 2004.TORONTO -- CryptoLogic Inc CryptoLogic Inc. is a Toronto-based online gambling software supplier, one of the four largest in the industry along with Microgaming, Playtech, and Real Time Gaming. CryptoLogic was founded by brothers Andrew and Mark Rivkin in 1995 from the basement of their parent's house. . (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :CRY)(NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CRYP CRYP Cheyenne River Youth Project (Eagle Butte, SD) )(LSE LSE - Language Sensitive Editor :CRP C-reactive protein (CRP) A protein present in blood serum in various abnormal states, like inflammation. Mentioned in: Pelvic Inflammatory Disease CRP, n.pr See C-reactive protein. ) - Fourth quarter revenue up 33%, earnings up 25% Focused strategy delivers "blue-chip" results, global strength in online casino Online casinos, also known as virtual casinos or internet casinos, are online versions of traditional ("brick and mortar") casinos. Online casinos enable gamblers to play and wager on casino games through the Internet. and poker poker, card game, believed to have originated in Asia and first played in the United States in the 19th cent. A traditional cutthroat gambling game at first, it is now also an internationally popular social pastime. CryptoLogic Inc., a leading software developer to the global Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the gaming market, announced today its financial results for the fourth quarter and year ended December 31, 2004. Record revenue, excellent earnings and healthy operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. in 2004 are evidence of the company's focused strategy and growth momentum in both the casino casino or cassino (both: kəsē`nō). 1 Card game played with a full deck by two to four players. Its origins are obscure though it probably traces back to the Italian game of Scopa. and poker segments of the global online gaming See gaming. market. "CryptoLogic cryp·tol·o·gy n. The study of cryptanalysis or cryptography. cryp  to·log continues to be the blue-chip e-gaming software
company, with a winning hand in both the thriving thrive intr.v. thrived or throve , thrived or thriv·en , thriv·ing, thrives 1. To make steady progress; prosper. 2. online casino and poker markets," said Lewis Rose, CryptoLogic's President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "2004 marked another year of revenue growth, profitability and cash generation for CryptoLogic. In 2005, we will continue to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. our strong financial performance to invest for the future, build on our market strength and continue to drive profitable returns."
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Financial Highlights
(in millions of US dollars, Three months ended Years ended
except per share data) December 31, December 31,
2004 2003 2004 2003
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Revenue $17.9 $13.5 $63.7 $44.2
Earnings $3.8 $3.0 $13.7 $9.4
Earnings per diluted share $0.27 $0.23 $1.01 $0.75
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Highlights for the fourth quarter included: - Fourth quarter earnings grew to $0.27 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, ahead of analysts' average forecast and the 2003 fourth quarter of $0.23. Fiscal 2004 full year earnings were also strong at $1.01 per diluted share on a 44% increase in revenue to a record $63.7 million; - Consistent cash generation led to the previously announced 67% increase in the quarterly dividend to $0.05 per share; - Online poker Online poker is the game of poker played over the Internet. It has been partly responsible for a dramatic increase in the number of poker players worldwide. In 2005, revenues from online poker were estimated at US$ 200 million per month. fees rose by more than 165% over the same previous year quarter, and accounted for over 20% of Q4 2004 revenue. Internet casino revenue grew 15% from the fourth quarter of 2003; - International diversification International diversification The attempt to reduce risk by investing in more than one nation. By diversifying across nations whose economic cycles are not perfectly correlated, investors can typically reduce the variability of their returns. remained strong, with overseas markets exceeding 60% of licensees' revenue for the year, up from over 55% in 2003; and - Subsequent to year-end, the company renewed and extended its multi-year, exclusive agreement with an existing UK licensee licensee n. a person given a license by government or under private agreement. (See: license, licensor) LICENSEE. One to whom a license has been given. 1 M. Q. & S. 699 n. , The Ritz Ritz elegant and luxurious hotel opened in Paris in 1898 by César Ritz; hence, ‘ritzy, putting on the ritz.’ [Fr. Hist.: Wentworth, 429] See : Luxury Club London Online, for both online casino and poker solutions developed by CryptoLogic. Strong 2004 Financial Performance (All figures are expressed in US dollars) CryptoLogic posted record revenue and excellent earnings for the fourth quarter ended December 31, 2004. The first and fourth quarters are typically the strongest periods as players tend to spend more time indoors during the winter and fall seasons. Revenue rose 33% to $17.9 million (Q4 2003: $13.5 million). EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become (1) for the quarter grew 25% to $4.7 million (Q4 2003: $3.8 million). EBITDA(1) margin for the quarter was 26% as a percentage of revenue, despite higher investments to drive long term returns (Q4 2003: 28%). Earnings for Q4 2004 rose 25% to $3.8 million or $0.27 per diluted share (Q4 2003: $3.0 million or $0.23 diluted share). The fourth quarter results reflected strong organic growth from existing customers, recently launched poker licensees, new casino games Games available in most casinos are commonly called casino games. In a casino game, the players gamble casino chips on various possible random outcomes or combinations of outcomes. Casino games are available in online casinos, where permitted by law. and product enhancements. The introduction of poker tournament A poker tournament is a tournament in which the winners are decided by playing poker, usually a particular style of poker. Contrast this to a ring game, where the game is ongoing with no formal structure to determine a single winner in a certain length of time. capabilities, an expanding poker clientele, and increased system scalability translated into rising online poker fees. The company's poker customers also benefited from the success of their first land-based poker tournament, the Caribbean Poker Classic(, which was televised and a great marketing draw for players. An expanded casino game portfolio, particularly in the popular slot category, helped growth in Internet casino revenue. Revenue for the year ended December 31, 2004 increased by 44% to $63.7 million (2003: $44.2 million). EBITDA(1) for fiscal 2004 rose by 51% to $17.3 million (2003: $11.5 million). This translated into EBITDA(1) margin for the year rising to 27% (2003: 26%) despite increased investments, which are already producing early returns. Earnings for the full year improved by 45% to $13.7 million or $1.01 per diluted share (2003: $9.4 million or $0.75 per diluted share). In the second half of 2004, CryptoLogic announced and embarked upon a major investment program, which is over and above its normal course expenditures, to support long term growth. Approximately 70%, or $7.1 million, of this program was invested in 2004. Most of the remaining 30% balance will be completed in the first half of 2005. In 2004, these expenditures included $2.6 million in operating costs operating costs npl → gastos mpl operacionales and $4.5 million in capital expenditures (comprising $3.2 million for the purchase of capital assets capital assets n. equipment, property, and funds owned by a business. (See: capital, capital account) and $1.3 million in capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. software development costs related to the investment program). Balance Sheet Strength CryptoLogic continued to add to its strong balance sheet. At December 31, 2004, the company had no debt, and total cash grew to $86.0 million or a cash value of $6.33 per diluted share (comprising cash and cash equivalents, short term investments, and including security deposits of $7.0 million). Working capital grew to $62.8 million or $4.62 per diluted share. Operating cash flow for the fourth quarter of 2004 was $9.0 million (Q4 2003: $7.7 million). For fiscal 2004, operating cash flow was $18.9 million (2003: $38.7 million). The year-over-year decline related primarily to increased receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed in 2004 resulting from two licensees assuming responsibility for their own e-cash processing. In addition, cash generated from operations was exceptionally high in 2003 due to more favourable security deposit arrangements beginning that year and the timing of accounts payable. Increased Quarterly Dividend On November 4, 2004, CryptoLogic's Board approved a 67% increase in the company's quarterly dividend to US$0.05 per common share or an annual rate of US$0.20 (up from US$0.03 per share each quarter), reflecting the company's consistent earnings and cash generation. The increased rate began with the quarterly dividend paid on December 15, 2004. On February 16, 2005, the Board declared the company's quarterly dividend of US$0.05 per share, payable on March 15, 2005 to shareholders of record as at March 8, 2005. CryptoLogic continues to be one of the few software companies with a regular dividend policy - a sign of its financial strength. Internationally Diversification Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. CryptoLogic has established an internationally diversified diversified (di·verˑ·s business. In 2004, more than 60% of licensees' revenue was derived from international players, up from over 55% in 2003 and 40% in 2002 . The UK and Continental Europe Continental Europe, also referred to as mainland Europe or simply the Continent, is the continent of Europe, explicitly excluding European islands and, at times, peninsulas. remain the company's key geographic focus, having grown to more than 30% and 20% respectively of licensees' overall revenue. CryptoLogic continues to work with some of the most prominent international gaming brands. Subsequent to the year-end, in February 2005, The Ritz Club London Online renewed and extended a multi-year contract with CryptoLogic's subsidiary, WagerLogic Limited, to continue to use the company's online casino and poker offerings exclusively during the term of the agreement. Market-Oriented Solutions CryptoLogic continued to deliver profitable growth in both its core casino and the burgeoning online poker areas. The company further expanded its online casino suite - launching more than 30 new choices of the most popular table and slot games in 2004, which helped grow Internet casino revenue by 15% in Q4 2004 over a year ago. CryptoLogic continued to demonstrate its reputation for innovation by being the first to bring "Fruit Machine" style slots, a UK pub favourite, to the Internet. CryptoLogic is also building a strong presence in the global online poker segment. Enhanced tournament capabilities, increased system scalability and the growing momentum of brand name poker licensees have all contributed to a more than 165% rise in online poker fees in Q4 2004 over a year ago. Online poker accounted for over 20% of total Q4 revenue, ahead of CryptoLogic's target of 15% for the year. Today, CryptoLogic-developed software powers one of the top five revenue-generating poker rooms on the Web, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. PokerPulse, an independent industry research website. Management Team During the fourth quarter, CryptoLogic appointed Andrew Goetsch as Vice President of Poker Software Development. As a senior executive with more than 20 years experience in strategic planning Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people. , technology, finance and mergers and acquisitions, Goetsch helped increase sales and profits for consumer goods consumer goods Any tangible commodity purchased by households to satisfy their wants and needs. Consumer goods may be durable or nondurable. Durable goods (e.g., autos, furniture, and appliances) have a significant life span, often defined as three years or more, and and manufacturing companies. He obtained his Certified Public Accountant Certified Public Accountant (CPA) An accountant who has met certain standards, including experience, age, and licensing, and passed exams in a particular state. Designation at one of the big accounting firms. As a seasoned executive and accomplished poker player - including several final table appearances, and more than 200 "in the money" finishes in poker tournaments held both online and around the world, including the main event in the 2004 World Series of Poker The World Series of Poker is the largest set of poker tournaments in the world. It is held annually in Las Vegas, lasting just over a month. A bracelet is awarded to the winner of each of the fifty-plus events which include all the major varieties of poker. - Goetsch's extensive expertise will help the company continue the growth and development of its software product plans in Internet poker. Outlook CryptoLogic's focused strategy and investment in key markets and fast-growing product segments have continued to translate into revenue growth, solid earnings and positive cash flow, notwithstanding a competitive online gaming industry marked by US regulatory uncertainty. By remaining disciplined in its execution, CryptoLogic will build on its positive momentum into 2005. Revenue in the traditionally strong first quarter is forecast to range from $19.0-$19.4 million, with earnings of $4.1-$4.3 million or $0.29-$0.30 per diluted share. Given CryptoLogic's revenue generation and financial strength, Management believes this is the best time to invest for growth in both its core casino and poker businesses. CryptoLogic will continue its major capital investment program largely in the first half of 2005, substantially enhancing its game offerings, infrastructure, scalability, customer care and back-office systems - all to secure continued global leadership in the major segments of the online gaming market, and intended to enhance returns in the near and long term. 2004 Fourth Quarter and Year End Analyst Call A conference call is scheduled for 8:30 a.m. (EST EST electroshock therapy. EST abbr. electroshock therapy ) (1:30 p.m. GMT (Greenwich Mean Time) See UTC. GMT - Universal Time 1 ) on Friday, February 18, 2005. Interested parties should call either 416-695-5259, 1-877-888-3490 (North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. ) or international toll free number at (Country Code) 800-4222-8835. Instant replay will be available until February 25, 2005 by calling 416-695-5275 or 1-866-518-1010. About CryptoLogic(R) (www.cryptologic.com) Focused on integrity and innovation, CryptoLogic Inc. is the world's largest public online gaming software developer and supplier. Its leadership in regulatory compliance makes it one of the very few companies with gaming software that is certified See certification. to strict standards similar to land-based gaming. WagerLogic Limited, a wholly-owned subsidiary of CryptoLogic, is responsible for the licensing of its gaming software and services to customers worldwide. For information on WagerLogic(R), visit www.wagerlogic.com. CryptoLogic's common shares trade on the Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. (symbol: CRY), on the Nasdaq National Market (symbol: CRYP), and on the Main Market of the London Stock Exchange London Stock Exchange London marketplace for securities. It was formed in 1773 by a group of stockbrokers who had been doing business informally in local coffeehouses. (symbol: CRP). (1) Management believes that EBITDA (earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) and does not have a standardized standardized pertaining to data that have been submitted to standardization procedures. standardized morbidity rate see morbidity rate. standardized mortality rate see mortality rate. meaning. Therefore, EBITDA may not be comparable to similar measures presented by other companies. CRYPTOLOGIC FORWARD LOOKING STATEMENT DISCLAIMER (networking) disclaimer - Statement ritually appended to many Usenet postings (sometimes automatically, by the posting software) reiterating the fact (which should be obvious, but is easily forgotten) that the article reflects its author's opinions and not necessarily those of the : Statements in this press release which are not historical are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. , risks associated with competition and other risks detailed in the Company's filings with securities regulatory authorities Noun 1. regulatory authority - a governmental agency that regulates businesses in the public interest regulatory agency administrative body, administrative unit - a unit with administrative responsibilities . These risks may cause results to differ materially from those projected in the forward-looking statements.
CRYPTOLOGIC INC.
CONSOLIDATED BALANCE SHEETS
(In thousands of US dollars)
---------------------------------------------------------------------
As at As at
December 31, December 31,
2004 2003
(unaudited) (audited)
---------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash equivalents $43,182 $44,010
Security deposits 7,000 6,550
Short term investments 35,782 16,747
Accounts receivable and other 6,487 2,389
Prepaid expenses 1,754 1,163
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94,205 70,859
User funds on deposit 18,908 9,394
Capital assets 9,227 3,915
Intangible assets 106 122
Goodwill 1,776 1,776
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$124,222 $86,066
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $30,056 $25,063
Income taxes payable 1,331 1,063
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31,387 26,126
User funds held on deposit 18,908 9,394
Future taxes 1,840 --
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52,135 9,394
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Shareholders' equity:
Capital stock 20,380 11,350
Stock options 1,114 438
Retained earnings 50,593 38,758
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72,087 50,546
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$124,222 $86,066
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CRYPTOLOGIC INC.
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
(In thousands of US dollars)
---------------------------------------------------------------------
For the three months For the years
ended December 31, ended December 31,
2004 2003 2004 2003
(unaudited) (unaudited) (unaudited) (audited)
---------------------------------------------------------------------
Retained earnings,
beginning of period $47,463 $36,450 $38,758 $30,376
Earnings 3,794 3,033 13,668 9,441
Dividends paid (664) (369) (1,833) (369)
Registration costs -- (356) -- (690)
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Retained earnings,
end of period $50,593 $38,758 $50,593 $38,758
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CRYPTOLOGIC INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands of US dollars, except per share information)
---------------------------------------------------------------------
For the three months For the years
ended December 31, ended December 31,
2004 2003 2004 2003
(unaudited) (unaudited) (unaudited) (audited)
---------------------------------------------------------------------
Revenue $17,949 $13,540 $63,714 $44,211
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Expenses
Operating costs 11,349 8,371 39,975 27,204
General and
administrative 1,773 1,296 6,028 5,161
Finance 88 91 374 350
Amortization 674 474 2,089 1,533
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13,884 10,232 48,466 34,248
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Earnings before undernoted 4,065 3,308 15,248 9,963
Interest income 426 160 1,293 691
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Earnings before taxes 4,491 3,468 16,541 10,654
Income taxes 697 435 2,873 1,213
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Earnings $3,794 $3,033 $13,668 $9,441
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Earnings per share
Basic $0.29 $0.25 $1.05 $0.77
Diluted $0.27 $0.23 $1.01 $0.75
Weighted average
number of shares ('000s)
Basic 13,185 12,280 12,971 12,245
Diluted 13,871 12,972 13,586 12,604
CRYPTOLOGIC INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of US dollars)
---------------------------------------------------------------------
For the three months For the years
ended December 31, ended December 31,
2004 2003 2004 2003
(unaudited) (unaudited) (unaudited) (audited)
---------------------------------------------------------------------
Cash provided by (used in):
Operating activities:
Earnings $3,794 $3,033 $13,668 $9,441
Adjustments to reconcile
earnings to cash
provided by (used in)
operating activities:
Amortization 674 474 2,089 1,533
Future taxes 444 -- 1,840 --
Gain on sale of
investment -- -- -- (31)
Stock options 337 148 1,200 438
Changes in operating
assets and liabilities:
Security deposits -- (1,000) (450) 9,190
Accounts receivable and
other 872 (2,016) (4,098) (729)
Prepaid expenses 42 57 (591) (246)
Accounts payable and
accrued liabilities 2,628 6,770 4,993 17,458
Income taxes payable 181 243 268 1,646
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8,972 7,709 18,919 38,700
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Financing activities:
Issue of capital stock 2,343 360 8,506 630
Registration costs -- (356) -- (690)
Dividends paid (664) (369) (1,833) (369)
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1,679 (365) 6,673 (429)
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Investing activities:
Purchase of capital
assets, net of
disposals (1,749) (349) (7,296) (2,618)
Purchase of intangible
assets -- (5) (89) (13)
Short term investments 9,840 (3,657) (19,035) (5,890)
Sale of investment -- -- -- 711
Investment in subsidiary -- (111) -- (111)
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8,091 (4,122) (26,420) (7,921)
---------------------------------------------------------------------
Increase (decrease) in
cash and cash equivalents 18,742 3,222 (828) 30,350
Cash and cash equivalents,
beginning of period 24,440 40,788 44,010 13,660
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Cash and cash equivalents,
end of period $43,182 $44,010 $43,182 $44,010
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2004
(All figures are in thousands of US dollars, except per share
disclosure and where otherwise indicated)
(Unaudited)
These consolidated interim financial statements of CryptoLogic Inc. (the "Company") have been prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with Canadian generally accepted accounting principles (GAAP) using the same accounting policies as were used for the audited consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge for the year ended December 31, 2003. These consolidated interim financial statements do not contain all annual disclosures required by GAAP and, as such, should be read in conjunction with the audited consolidated financial statements, including the notes thereto there·to adv. 1. To that, this, or it. 2. Archaic In addition to that; furthermore. thereto Adverb Formal 1. to that or it 2. , for the year ended December 31, 2003, as set out in the 2003 Annual Report. 1. Stock Option Plan In accordance with the guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. of the Canadian Institute of Chartered Accountants The Canadian Institute of Chartered Accountants (CICA) is the umbrella body for the Chartered Accountant profession in Canada and Bermuda. Membership of the CICA totals 70,000 Chartered Accountants and 8,500 students. , the Company has expensed the costs of all stock option grants issued on or after January 1, 2003. The fair value of the options granted in 2003 and 2004 was made using the Black-Scholes option pricing model option pricing model A mathematical formula for determining the price at which an option should trade. The model expresses the value of an option as a function of the value of the underlying asset, length of time until maturity, exercise price, yields on under the following weighted assumptions:
2004 2003
---- ----
Dividend yield 0.75% 0.75%
Risk-free rate 2.75% 2.75%
Expected volatility 50.0% 50.0%
Expected life of options in years 5.0 5.0
The estimated fair value of options is recorded over the vesting
period of the options. The cost of stock options is included in
operating costs. Consideration paid by employees on the exercise of
stock options is credited to share capital.
The impact of expensing stock options on earnings is as follows:
Three months ended Years ended
December 31, December 31, December 31, December 31,
2004 2003 2004 2003
---------------------------------------------------------------------
('000) ('000) ('000) ('000)
Stock options expense $337 $148 $1,200 $438
Stock options expense
(per share):
Basic $0.03 $0.01 $0.09 $0.03
Diluted $0.02 $0.01 $0.09 $0.03
---------------------------------------------------------------------
For the year ended December 31, 2002, no compensation cost was
recorded on the grant of stock options during that year. In
accordance with the transitional provisions of the accounting
guideline, additional pro forma disclosure is presented as if the
fair value method of accounting had been used to account for stock
options. The fair value of the options granted was made using the
Black-Scholes option pricing model under the following weighted
assumptions:
2002
----
Dividend yield --
Risk-free rate 2.0%
Expected volatility 100.0%
Expected life of options in years 5.0
Had compensation expense been determined based on the fair value of
the employee stock option awards for 2002 grants at the grant dates
in accordance with the new recommendations, the Company's earnings
and earnings per share would have been changed to the following pro
forma amounts:
Three months ended December 31, Years ended December 31,
2004 2003 2004 2003
---------------------------------------------------------------------
As Pro As Pro As Pro As Pro
reported forma reported forma reported forma reported forma
---------------------------------------------------------------------
('000) ('000) ('000) ('000) ('000) ('000) ('000) ('000)
Earnings $3,794 $3,662 $3,033 $2,849 $13,668 $13,090 $9,441 $8,706
Earnings
per share:
Basic $0.29 $0.28 $0.25 $0.23 $1.05 $1.01 $0.77 $0.71
Diluted $0.27 $0.26 $0.23 $0.22 $1.01 $0.96 $0.75 $0.69
2. Capital Stock
Authorized:
Unlimited common shares
Issued and Outstanding:
Common Shares Series F Warrants Total
Stated Stated Stated
In thousands Issued Value Issued Value Value
---------------------------------------------------------------------
Balance,
December 31, 2002 12,206 $10,448 30 $272 $10,720
Exercise of
stock options 94 630 -- -- 630
---------------------------------------------------------------------
Balance,
December 31, 2003 12,300 $11,078 30 $272 $11,350
---------------------------------------------------------------------
Balance,
December 31, 2003 12,300 $11,078 30 $272 $11,350
Exercise of
stock options 1,011 9,030 -- -- 9,030
---------------------------------------------------------------------
Balance,
December 31, 2004 13,311 $20,108 30 $272 $20,380
---------------------------------------------------------------------
3. Normal Course Issuer Bid In September 2004, the Board of Directors approved a share repurchase plan share repurchase plan A corporation's plan for buying back a predetermined number of its own shares in the open market. Institution of a share repurchase plan derives from management's view that the company has limited outside investment opportunities and , under a Normal Course Issuer Bid, to repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. and cancel up to 1,250,000 of the Company's outstanding common shares for the period commencing September 23, 2004 and ending September 22, 2005. As at December 31, 2004, the Company has not repurchased any shares. 4. Comparative Figures Certain of the prior year's figures have been reclassified for consistency with the current presentation, and reflect the expensing of stock options effective January 1, 2003. CryptoLogic Inc. (TSX:CRY) (NASDAQ:CRYP) (LSE:CRP) |
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