** ITSI Reports Net Income for Third Quarter **
Thursday November 5, 6:01 am Eastern Time
Company Press Release
SOURCE: International Lottery & Totalizator Systems, Inc.
International Lottery & Totalizator Systems, Inc. Reports Net Income for Third Quarter
CARLSBAD, Calif., Nov. 5 /PRNewswire/ -- International Lottery & Totalizator Systems, Inc. (Nasdaq: ITSIC - news) announced net income for the quarter ended September 30, 1998, of $122 thousand, or $0.02 per share, on $4.3 million in revenue. For the same quarter in the prior year, the Company had a loss of $1.5 million, or $0.25 per share, on $1.8 million in revenue.
The 1998 third quarter net income was primarily attributable to a higher level of product revenues and improved gross margins. The 1998 third quarter gross margin was greater than the 1997 comparable period due to a favorable mix of contracts delivered in the quarter. Other items affecting cost of sales in the quarter included a reduction in 1998 year-to-date expenses due to a change in the company's employee compensation plan and the recording of approximately $300 thousand in reserves for excess inventory and related costs pertaining to an Australian terminal maintenance contract.
''We are pleased with the progress made this quarter,'' said ILTS President Mark Michalko. ''It is an important step in moving the Company forward. It reflects the dedication and resolve of our management and employees, and indicates that management's long-term plan is beginning to yield positive results.''
The Company is presently responding to comments received from the SEC regarding its preliminary proxy filing for the proposed acquisition of a controlling interest in Prime Gaming Philippines, Inc. After SEC approval has been received, the proxy statement will be submitted to ILTS shareholders to approve the transaction. Approval of the transaction will result in ILTS' ownership of 52.25% of Prime, the provider of lottery hardware, software, management and technical equipment to the Philippine National Lottery in the Luzon region.
During the quarter ILTS was notified by Nasdaq that its stock would be traded as ITSIC and listed on the Nasdaq SmallCap market effective October 23, 1998. In order to maintain its SmallCap listing, Nasdaq determined that the Company must increase its Net Tangible Assets to at least $6.0 million by December 15, 1998. The Prime transaction if completed will meet that test.
Backlog at September 30, 1998, is approximately $5.4 million, of which $2.2 million is scheduled for completion by the end of this year.
The Company is working closely with a number of its long-term customers for future orders in Europe, Australia, Latin America and Asia and is also working with a consortium bidding for the South African National lottery.
International Lottery & Totalizator Systems, Inc. provides computerized wagering systems, equipment and services to lottery and racing organizations in 180 countries on four continents. For more information about the Company, please visit ILTS' website at ilts.com.
Matters discussed in this news release contain forward-looking statements within the meaning of section 27A of the Securities Act of 1933, as amended, and the Securities and Exchange Act of 1934, as amended, that involve risks and uncertainties. The Company's results may differ significantly from the results indicated by forward-looking statements. Factors that could cause future events to differ from such forward-looking statements include the uncertainty of whether present trends will continue and other factors set forth in reports, forms and documents of the Company on file with the Securities and Exchange Commission.
SOURCE: International Lottery & Totalizator Systems, Inc.
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