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| Vol. 33 No. 13-- Monday December 26, 2005 |
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GTECH Announces Strong Third Quarter Results WEST GREENWICH, Rhode Island, USA (December 16, 2005) -- GTECH Holdings Corporation (NYSE: GTK) today announced third quarter earnings for fiscal year 2006, which ended November 26, 2005. "We are pleased with GTECH's performance in the third quarter and we remain on track to meet our financial objectives for the full fiscal year," said GTECH President and CEO W. Bruce Turner. "Our financial results were at the high end of our targeted expectations. We won several key new contracts, new game content is driving new revenues, and we continue to make progress in our Gaming Solutions strategy." "We believe the contributions from new contracts won over the past 12 to 18 months, combined with the impact of our acquisitions, will help drive our continued success, and we remain excited about the long-term growth prospects of the business," said GTECH Senior Vice President and CFO Jaymin B. Patel. Operating Results
Revenues for the third quarter of fiscal 2006 were $300.1 million, down 4.9% from revenues of $315.6 million in the third quarter of fiscal 2005. Net income was $47.8 million, or $0.37 per diluted share, compared to net income of $45.9 million, or $0.35 per diluted share for the same period last year. Revenues for the first nine months of fiscal 2006 were $936.5 million, up 1.9% over revenues of $919.4 million in the first nine months of fiscal 2005. Net income was $151.6 million, or $1.17 per diluted share, compared to net income of $152.6 million, or $1.16 per diluted share for the same period last year. Net income in the first nine months of the prior year includes a one- time, after-tax gain of $7.0 million, or approximately $0.05 per diluted share, associated with the sale of the Company's 50% interest in Gaming Entertainment (Delaware) L.L.C. Prior year earnings and dividends per share reflect the 2-for-1 common stock split declared in June 2004. Cash Flow and Investments During the first nine months of fiscal 2006, the Company generated $308.5 million of cash from operations. This cash was principally used to fund $92.4 million of systems, equipment, and other assets relating to contracts; to repurchase $32.1 million, or 1,326,100 shares of the Company's common stock; and to pay cash dividends of $30.9 million. At November 26, 2005, the Company had $167.6 million of cash and cash equivalents and $261.3 million of short- term investment securities on hand. At the end of the third quarter of fiscal 2006, the Company had $493 million available under its senior revolving credit facility. Financial Outlook The Company provided guidance for the fourth quarter and full year of fiscal 2006. For the fourth quarter of fiscal 2006, the Company expects service revenue growth in the range of 5% to 7% and product sales in the range of $85 million to $95 million. The Company expects service margins in the range of 39% to 41% and product sale margins in the range of 41% to 43%. Accordingly, the Company expects diluted earnings per share to be in the range of $0.45 to $0.48 per share for the quarter. For the fiscal year ending February 25, 2006, the Company expects service revenue growth in the range of 9% to 10% and product sales in the range of $190 million to $200 million. The Company expects service margins to be in the range of 40% to 41%, and product sale margins to be in the range of 40% to 42%. Based upon this outlook, the Company now expects earnings per share for fiscal 2006 to be in the range of $1.63 to $1.66 on a fully-diluted basis. Third Quarter Highlights In the third quarter, GTECH continued to execute against its growth strategy. The Company defended its core lottery business by receiving contract awards from customers in New Jersey and Arizona, following competitive procurements. In California, GTECH received an order for a variety of lottery products including additional Altura® terminals, Instant Ticket Vending Machines (ITVMs), and other self-service lottery solutions. Additionally, the Company signed a five-year contract extension with Supreme Ventures Limited to continue providing online lottery products and services in Jamaica through January 11, 2016. Also in the quarter, GTECH introduced its "Dynamic Floor Management" system at the Global Gaming Expo (G2E) in Las Vegas, Nevada. The system will give casino operators the flexibility to select the game, denomination, and mode of play for a single machine or a group of machines, thus allowing casinos to better serve their customers' needs based on the time of day or the type of players they are expecting. Moreover, the Company recently entered into an agreement with a leading gaming company, Aristocrat Technologies, to distribute some of its most popular products in Rhode Island. In the quarter, GTECH installed approximately 280 Aristocrat machines at Lincoln Park in Rhode Island, which are performing at more than 115% efficiency. This Aristocrat-supported installation augments product placements from Spielo and Atronic International (existing GTECH subsidiary and partner, respectively), under GTECH's 20-year master contract with the State of Rhode Island. The Company also announced a partnership with Dresser Wayne for GTECH's Lottery Inside solution. This will integrate lottery ticket sales with Dresser Wayne's Nucleus®, the leading petroleum retail point-of-sale platform.
Lotteries in New York, California, and Georgia launched GTECH's "KING KONG"-themed games. The New York Lottery introduced its "KING KONG" Millions online game in early November. By the time the game concluded on December 5, sales had exceeded $20 million. The California and Georgia lotteries joined New York by offering "KING KONG" themed instant-ticket offerings with multiple price points. The Company further strengthened its senior management team by appointing Atul Bali Vice President of Corporate Development and Strategic Planning, reporting directly to Mr. Patel. In addition, GTECH was named Corporation of the Year by the Florida Department of Management Services, Office of Supplier Diversity, for its subcontracting of minority- and women-owned businesses in support of the Florida Lottery's operations. GTECH is a leading gaming technology and services company. With more than $1.25 billion in annual revenues and 5,300 people in over 50 countries, GTECH provides integrated technology, creative content, and business services to effectively manage and grow today's evolving gaming markets. In targeted emerging economies, GTECH also leverages its operational presence and infrastructure to supply commercial transaction processing services. For more information about the Company, please visit GTECH's website at http://www.gtech.com. * "KING KONG" is copyrighted by Universal Studios and licensed to GTECH Corporation by Universal Studios Licensing LLLP. All Rights Reserved. SOURCE: GTECH Corporation media
release. COLUMBIA, South Carolina, USA (December 15, 2005) -- The South Carolina Education Lottery (SCEL) is pleased to announce that more than $1 billion of net lottery proceeds has been transferred to the Education Lottery Account (ELA) since operations began on January 7, 2002.
SCEL transfers its net proceeds monthly to the State Treasurer and the money is invested to accumulate interest. According to the State Treasurer, total interest earnings of the ELA amount to more than $14.3 million. Annually, the South Carolina General Assembly appropriates lottery proceeds to enhance the educational opportunities for the people of the Palmetto State. When the state budget is signed into law by the Governor, the funds are disbursed to the appropriate state agencies. Net proceeds of $1.154 billion have been appropriated through the end of fiscal year 2006. John C.B. Smith, Chairman of the SCEL Commission, stated, “I am proud of what we have been able to accomplish during the last four years. Transferring a billion dollars is the result of the efforts of a talented staff and a committed retailer network. Based on past achievements, I anticipate future success in 2006. Thanks a billion, South Carolina!” SOURCE: SCEL media release. MONTREAL, Quebec, Canada (December 15, 2005) -- With the holiday season right around the corner, many parents and family members are searching to find fun and exciting gift ideas to finish up their last minute shopping. Gambling products such as instant scratch tickets and lottery tickets are often popular stocking stuffers or great items to slip into someone’s Christmas card.
Lottery products are popular because they are affordable and easily obtainable. Results from a recent study in Quebec show that 31% of high school students have received one or several lottery products as a gift during the preceding 12 months. This finding, coupled with the growing concern of adolescent problem gambling in general, prompted the International Centre for Youth Gambling Problems and High-Risk Behaviors to partner with Loto-Québec to raise public awareness on the issue that underage youth should not receive lottery products as gifts. This holiday season, we are pleased to once again join efforts with Loto-Québec in order to continue to promote this important message. It is important to inform parents that the sale of lottery products is reserved to those 18 years of age and older for the protection of their well-being. We are hopeful that parents will not offer their children and adolescents lottery products this holiday season. When offering a lottery product as a present, make sure you keep the person’s age in mind. For further information: Carmen Messerlian, Director of Program Development and Communications, International Centre for Youth Gambling Problems and High-Risk Behaviors, McGill University, (514) 398-4438, carmen.messerlian@mcgill.ca; Jean-Pierre Roy, Director of media relations, Loto-Québec, Phone: (514) 499-5151. New Board of Directors and Supervisory Board Appointed for Veikkaus VEIKKAUS, Finland (December 20, 2005) --Veikkaus' General Meeting elected a new Board of Directors and Supervisory Board for the years 2006 and 2007. The Board of Directors will continue to be chaired by Juha Niemelä. Doctor of Political Science Maija-Riitta Ollila, a new member of the Board, was appointed Vice Chairman.
The new members of the Board are Mr. Jouko Ahtola, CFO of the Finnish Literature Society, Mr. Timo Kenakkala, Director of the Oulu Research Centre of Kemira Oyj, Mr. Matti Saarinen, Managing Partner of Kreab Oy, and Ms. Paula Tuomikoski, Special Government Adviser of the Ministry of Education. Two members of the previous Board of Directors besides Chairman Niemelä will continue at the new Board: Mr. Ari Lahti, Managing Director of ICECAPITAL Securities and Ms. Leena Paananen, M.Sc., Econ. Veikkaus' Supervisory Board has 14 members. At the new Supervisory Board, there are three new members, one of whom is a representative of the personnel. The Supervisory Board appoints two of its members to be the Chairman and the Vice Chairman for one year at a time. Veikkaus' owner, the Finnish State, was represented by Minister of Culture Tanja Karpela at the General Meeting. SOURCE: Veikkaus' eNews distributed by Veikkaus Communications. JCM and TransAct Formally Combine Gaming Sales Efforts WALLINGFORD, Conn., USA (December 20, 2005) -- TransAct Technologies Incorporated (Nasdaq: TACT), a leading producer of transaction-based printers for customers worldwide, today announced that it has executed an agreement on its previously announced letter of intent with JCM American Corporation, to combine the gaming sales efforts of both companies. JCM is the industry leader in currency handling systems, including providing products, software and services to the gaming, vending, banking, amusement, and petroleum industries. JCM’s sales force has started offering TransAct’s gaming thermal printers in North and South America in combination with JCM’s many bill acceptor and currency handling products. In addition, the companies are working together to offer world-class service and support for TransAct printers by utilizing the network of sales and service centers that JCM already has in place.
JCM President Aki Isoi said, “We are very pleased to have finalized this agreement with TransAct, a company that we see as being as innovative and dedicated to the industry as we are. This agreement creates an environment that is above all, convenient for our customers. By combining our sales team efforts, we have created the most convenient, customer-focused team imaginable -- a value-driven, one-stop shop for the best currency handling, printing and monitor products anywhere.” Bart C. Shuldman, Chairman, President and Chief Executive Officer of TransAct Technologies, said, “We are excited to have signed this important deal with JCM. This venture combines each of our core strengths, JCM’s bill acceptor and other products with TranAct’s printers. As a result, we are in a great position to offer the very best printers on the market today, while leveraging both TransAct and JCM’s relationships to create the most value and convenience for our customers. For TransAct this means that in addition to our sales team, JCM’s many salespeople across all jurisdictions and around the country, will be selling our slot machine printers while selling their bill acceptor solutions. This is a huge win for TransAct and one we believe will help to grow our market share quickly.” About TransAct Technologies (http://www.transact-tech.com) About JCM (http://www.jcm-american.com) SOURCE: TransAct Technologies
Incorporated. GTECH and The Hasbro Properties Group Announce Licensing
Agreement WEST GREENWICH, Rhode Island, USA (December 20, 2005) -- GTECH Holdings Corporation (NYSE: GTK) announced today that its wholly-owned subsidiary, GTECH Corporation, signed a licensing agreement with the Hasbro Properties Group, the intellectual property development arm of Hasbro, Inc. (NYSE: HAS). The license grants GTECH the exclusive rights in the United States and Canada to develop and market slot machines and video lottery terminals (VLTs) featuring THE GAME OF LIFE property brand in the casino and government-sponsored environments. “GTECH’s focus remains on enhancing the entertainment value of the gaming experience for our players,” said Marc Crisafulli, Senior Vice President of Gaming Solutions for GTECH. “THE GAME OF LIFE is one of the world’s most popular board games and will become the foundation of a multi-game development effort by GTECH in the gaming machine market. In fact, this is the first license for branded content in our Gaming Solutions’ efforts. With the familiar icons and game play of the classic board game, THE GAME OF LIFE is sure to evoke fond memories and create new ones for anyone that plays.” “GTECH presented a compelling business opportunity that we believe will maximize the strength of THE GAME OF LIFE brand in the gaming environment and allow millions of adults to enjoy this classic game in new and unique ways,” said Jane Ritson-Parsons, President of Hasbro Properties Group. “We look forward to many years of entertaining gaming products themed to THE GAME OF LIFE from GTECH’s team of creative game developers.” “We are excited about working with Hasbro and expanding our gaming business through the licensing of proven and popular game content, such as THE GAME OF LIFE,” continued Mr. Crisafulli. Spielo, a GTECH subsidiary, will develop the games on its platforms and manufacture and distribute the games to the government-sponsored gaming markets. Global gaming machine supplier, Atronic, has been pre-approved by Hasbro to be one of GTECH’s sub-licensees, granting Atronic the right to develop the games on its platforms and manufacture and distribute the games to Native American and commercial gaming markets. GTECH acquired leading gaming machine manufacturer Spielo in 2004, and, in the past year, announced an agreement to acquire a 50 percent controlling equity interest in Atronic. Game development plans include linked progressive games and stand-alone dedicated games themed to THE GAME OF LIFE. Joint efforts between GTECH, Atronic, and Spielo resulted in the positive outcome of this transaction and demonstrate the strength of the new alliance in the gaming industry.
The first GAME OF LIFE branded slot games are expected to be available to the North American gaming market in the second half of calendar 2006. About GTECH About Hasbro Properties Group SOURCE GTECH Holdings Corporation (http://www.gtech.com).
Szerencsejáték and EssNet Implement a New Putto Rapid
Draw Game 
Putto is a Powerball game with draws taking place every five minutes. The winning numbers are presented in the Hungarian Text TV. Players select 8 to 20 numbers (out of 20) in the regular panel and also 1 to 4 numbers (out of 4) in the Powerball panel. By matching 8 regular numbers and the Powerball correctly, players win the jackpot, which is 10,000 times the stake. The minimum stake is HUF 150 (EUR 0.6). The overall odds of winning the top prize in Putto are better than 1 in 500 000. Szerencsejáték has been operating an EssNet ELOS system for many years, offering an extensive range of games: Lotto, Joker, sports betting, SuperBingo, a daily Keno game, several instant games and now also Putto a rapid draw game. All games, except instant ticket games and Putto, are available via retailers, telephones (landbased as well as mobile) and Internet. "We have enjoyed a very successful partnership with Szerencsejáték for over a decade," said EssNet CEO and President Hans Vigmostad. "Szerencsejáték has a reputation of being a customer that values techno-logical innovation, and we are delighted they have chosen EssNet for our industry-leading solutions."
Competition is tough in Hungary but through technological development Szerencsejáték's turnover has increased around 70 per cent over the past two years. The company has strengthened its leading position in the Hungarian market and now stands out as the most successful lottery in those East European countries that are EU members. Szerencsejáték's ELOS central system hardware was renewed last year and with the yearly software updates from EssNet, the lottery operates a very modern system with 4,331 online terminals. About EssNet (www.essnet.se) SOURCE: EssNet media release. Electronic Game Card Confirms Orders
Of the 300,000 cards ordered, 120,000 will be used by the Kansas Lottery. The Kansas Lottery delayed the launch of the Company’s electronic games in late 2005 due to errors related to battery connections in a small number of cards. The new game cards are scheduled to be launched in the Spring of 2006 in the same play style and card quantity as originally planned. The game features a “match three numbers’ play style and is identical to the game card currently on sale in the US. The remaining 180,000 cards feature the all-new “five card stud poker” play format. EGC estimates that the game will go on sale in the US market as early as the Spring of 2006. EGC expects recent quality control measures implemented by the Joint Venture to strengthen the long term performance of the product. In addition, customized high speed labeling equipment, scheduled to be installed in the US in February 2006, is expected to expedite the delivery of electronic game cards to the North American market. SOURCE: Electronic Game Card Inc. NZ Lotteries Celebrating Community Spirit at Christmas NEW ZEALAND (December 20, 2005) This Christmas NZ Lotteries is celebrating the $110 million distributed to the community via the Lottery Grant Board by placing The Lottery Grants Record in its Lottery outlets. The Lottery Grants Record lists all of the grants made in each region of New Zealand in the past year. It breaks these down by Lottery Grants Distribution Committee and shows how much each one distributed. It also highlights some of the community success stories that lottery funds have assisted. “Having the Lottery Grants Record available in our Lottery outlets is a great way to ensure that our players, retailers and other New Zealanders recognise the benefits that playing NZ Lotteries games brings to the broader community,” said NZ Lotteries Chief Executive Trevor Hall.
“Lottery grants are made with a focus on long term benefit to communities and with $110 million being distributed over a 12 month period that’s a lot of benefit. “All through the year community groups and individuals received grants made from lottery profits – funding generated by communities for communities – totalling more than $54 million. “On top of this the Lottery Grants Board has also allocated $55.4 million to its Statutory Bodies - Creative New Zealand, The New Zealand Film Commission, The New Zealand Film Archive and Sport and Recreation New Zealand (SPARC),” said Mr Hall Internal Affairs Minister and presiding Lottery Grants Board Member Rick Barker, celebrated the $110 million investment yesterday (19 December) by launching The Lottery Grants Record at Kirby’s Candies in Wellington. “Along with our communities I thank the NZ Lotteries for raising the funds and the Lottery Grants Board committees for distributing them wisely. “In the current funding round the committees will distribute $110 million to strengthen and support communities," said Mr. Barker The Lottery Grants Record is available, free of charge, from Lottery outlets and Department of Internal Affairs Local Government and Community Branch regional offices. SOURCE: NZ Lotteries media release.
Finland’s Lotto to Turn 35 at the Beginning of January
VEIKKAUS, Finland (December 20, 2005) -- Round 1/2006 will
be a celebration of Lotto's 35th anniversary. Lotto found its way to the hearts
of Finns right from the beginning, and hundreds of thousands of players still
submit their Lotto weekly entries in the pursuit of the jackpot of their
dreams. As many as 70 percent of Finns say they play Lotto at least
occasionally. Last year, Finns played Lotto with an average of 83.3 euros per
capita.
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