Electronic Game Card Deals 4Q Earnings

Look up the PowerRating of EGMIE and see how it has performed over the past week as well as the current proprietary PowerRating.

Mar 17, 2009 (Close-Up Media via COMTEX) -- EGMIE | Quote | Chart | News | PowerRating -- Electronic Game Card has reported financial results for its full year and fourth quarter ended December 31, 2008.

In a release dated March 16, the company stated:

- Revenues for the full year 2008 increased over 76 percent to $10.6 million from $6.0 million in 2007. The 76 percent revenue growth in 2008 was achieved despite adverse currency fluctuations impacting the reporting of the company's sales in the United Kingdom and Continental Europe. The British Pound declined by 26 percent against the dollar and the Euro declined by 6 percent against the dollar during 2008.

- The company reported an 81 percent year-over-year increase in net income applicable to common stockholders for 2008 of $6.3 million or $0.11 per basic share or $0.10 per diluted share, versus net income of $3.4 million or $0.07 per basic share or $0.06 per diluted share for 2007. Operating income was $6.0 million in 2008 compared to $3.0 million in the previous year. Electronic Game Card's gross profit on revenue was $8.1 million or 76 percent in 2008. As the company moves into new markets led by new products such as the Know-It-All QuizCard, the gross margin percentage may decline due to an increase in high volume direct product sales into large consumer markets. It is anticipated that these sales will achieve higher volumes with lower margins than the company currently achieves, and although this has the effect of reducing the company's overall gross margin percentage the actual effect on the company's overall business would be accretive to earnings per share.

- In line with increased revenues, total operating expenses increased 35 percent during 2008 to $2.1 million, and represented 19.5 percent of revenues, which is down from 25.5 percent of revenue incurred in 2007. Selling, general and administrative expenses increased by approximately $105,000 during 2008 to $760,000 as a result of an increase in marketing activity. Salaries and wages increased slightly during the twelve month period, while consulting expenses increased approximately 58 percent to $927,000 as the company sought advice of regional gaming industry experts to support its market expansion. Company management expects to continue the use of regional consultants in the interim as it develops new markets, both in terms of products and geography. Interest expense for 2008 decreased by $61,000 to $591,000 due to the conversion of 3.1 million shares of Series A preferred stock to common stock during the year.

- For the fourth quarter ended December 31, 2008, Electronic Game Card reported revenues of $2.8 million, a 58 percent increase over the prior year fourth quarter of $1.8 million, and compares to third quarter 2008 revenues of $3.0 million. The decrease in revenue from third quarter to the fourth quarter is predominately the result of adverse currency movements. A percentage of the company's fourth quarter sales were denominated in British Pound Sterling, which witnessed a 25 percent decline in valuation in the final three months of 2008. The company reported comprehensive net income applicable to common stockholders for the fourth quarter of $1.8 million or $0.03 per basic and diluted share and versus net income of $1.6 million or $0.03 per basic and diluted share for the fourth quarter 2007 and net income of $1.7 million or $0.03 per basic and diluted share for the third quarter 2008.

"2008 marked the company's second successful profitable growth year. Our balance sheet is strong and our net cash balance is building consistently. Our company's technology platform is robust and has been prepared to quickly evolve into the next stage of the company's growth. Electronic Game Card is securely positioned to achieve its earnings guidance of $0.14 per share for 2009," said Kevin Donovan, CEO of Electronic Game Card. "The arrival of new management with new, innovative ideas, enthusiasm and key business relationships, will mark an inflection point in the growth of EGC, which should add to growth during 2009 as new opportunities in each of the company's three core business segments of gaming, promotions, and education materialize."

Electronic Game Card develops, produces and markets games to the promotional industry, toys and games, casinos and lottery.

((Comments on this story may be sent to newsdesk@closeupmedia.com))

More News:   Market Updates | Stock Alerts | All Trading News | Stock Index