|
Got a chance to listen to the conference call late last night. It would seem that there were enough positives to keep me around for the next year. Nice revenues, rotten earnings and net margins with alot of blame passed off to GT interactive but claims as to changes at GT and some nice recent talks with them made them sound hopeful that things might be resolved by the next conference call. GT interactive, correct me if I am wrong, does the buying for thelikes of kmart and walmart and they were said to control 30% of the market so this is an important thing for the company to get resolved. Lots of positives with the browser and 70 million viewing opportunities were mentioned for the first 2 weeks of the year. Sounded like the browser will be a popular selling point and a good potential revenue maker in the next 12-18 months. Internet sales of $20,000 for december, not impressive. Will need to give it some time though as the browser was really just starting to ship with the new product. International sales disappointing, had some margin pressure related to a price war which they realized late in the game in England. An interesting note was that they said that they hoped that all intrnl sales will eventually be greater than domestic sales. Some games might be ported to linux if they feel it is important and might release a game or two for the iMac. I think they missed the boat on the macintosh(my own opinion) and could have taken a significant share of the market. I think with apples new kidsafe browser, egames family friendly stuff could be a great match for the mac platform. Said that they are continually looking at internet players and looking for something that makes sense for the company. Also, they are looking for distribution deals with lots of people but if they are too aggressive, with the low share price, would be worried about being taken over very cheaply and are being very cautious.
Like I said, it was a nice call, mentioned they hoped for growing revenues and I think they said good earnings(especially if they get the gt interactive situation straight) for the year and I got the impression that they were working hard to increase shareholder value and that they were concerned about this and this was a significant priority with them. I also got the feeling that they were taking the company in the right direction but we still may see a miscue or two before all cylinders are firing correctly. I didn't take any notes so this is all from memory. Any misquotes and misperceptions are purely unintentional and I would welcome any comment and corrections on what I have written here. I would also mention that I have been a long term holder of egames/romtec shares and continue to be long the stock. Good luck and hope this helps somebody out there.
Neal |
