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To: Country Tyme who wrote (913)	2/11/1999 12:04:00 AM
From: Jeffrey L. Henken	Read Replies (1) \| Respond to of 939

RomTech plays eGames, investor says cbs.marketwatch.com By Thom Calandra, CBS MarketWatch Last Update: 10:49 PM ET Feb 10, 1999 The CBS.MW poll story SAN FRANCISCO (CBS.MW) -- RomTech Inc., a Philadelphia-area maker of family-friendly computer games, may be poised to see its shares rise, says one large investor. Private investor Lambert Thom says the company soon will change its name to eGames Inc. The www.egames.com Web site is already up and selling about $750 worth of games a day, said San Francisco-based Thom. RomTech (ROMT), with a $28 million market capitalization, intends to distribute its compact-disc games directly to retailers such as Wal-Mart (WMT), he said. "We couldn't believe no one had taken the eGames name," Thom said. Thom, who has a seat on RomTech's board, owns 180,000 shares of the company directly or through options and convertible preferred stock. The company sells about 5 million CDs a year, making it the sixth- or seventh-largest software developer in the country, Thom said. The company's challenge is to boost profit margins on those CD games. RomTech distributes its GameMaster and other game titles through mass merchandisers such as GT Interactive Software (GTIS), whose market cap is about 12 times that of RomTech. The company is perhaps best known for turning tried-and-true arcade games like FrogMan into interactive CD-ROMs for computers. About 60 percent of RomTech's games are geared toward girls, Thom said. One of the company's software brands is called Galaxy. Thom says RomTech, which is profitable, is comfortable with earnings expectations of 25 cents a share in the year that ends June 30. The company earned 13 cents a share in the first six months of its fiscal 1999. At 25 cents a year, the stock, at 3 on the Nasdaq Small Cap Market, would sell for 12 times yearly profits. Thom, who describes himself as an early-stage investor in small companies, said the company hopes to double profits on a yearly basis. RomTech reported a 39 percent increase in sales for the first six months of fiscal 1999. "Look, GT Interactive controls the space at stores. The way I look at it, GT gets $16 million of gross margin from us a year," Thom said. "Our sale price to them is $2.50 a CD." The games retail for about $15. For the second quarter, ended Dec. 31, 1998, gross margins and operating margins were 69 percent and 25 percent, respectively, compared with 64 percent and 22 percent for the same quarter a year earlier, according to the company's earnings statement. GT distributes 95 percent of RomTech's products, Thom said. "That's a lot of loose change on the table," he said. Thom also said the Langhorne, Penn., company is working with Digital River (DRIV) on marketing and presentation of the new Web site. RomTech's ticker will change to "EGAM" March 1.