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Software developer CryptoLogic has recorded its first quarterly profit in 3 years.
The Canadian online branded games and casino outfit saw its total revenues for the second quarter of this year lift to just below US$7m compared to $6.74m for the same period last year...an increase of a modest $260,000, which in some industries may be seen as pretty good, but no so for the igaming sector.
Crypto advised its Q2 numbers benefited from a reduction of $0.8m in liabilities previously provided against revenue through the resolution of a dispute with a “significant supplier of games”. Readers may may recall in late September last year CryptoLogic settled with entertainment firm and comic publisher Marvel Entertainment, with the new contract terms including the redrawing of the licensing agreement between the two parties on a “non-exclusive” basis. The company’s revenues for the first quarter were $6m.
Proceedings were launched in April by CryptoLogic’s subsidiary WagerLogic against Marvel Enterprises Inc and Marvel Enterprises BV, with the igaming supplier claiming the terms of its October 2005 deal with Marvel Enterprises to be the “sole developer of Marvel-branded casino slot games on the internet” had been breached.
WagerLogic stalling the roll-out of Marvel-branded titles and launching legal proceedings against the comic book company followed competitor Playtech signing an “exclusive multi-year licensing agreement” with Marvel Entertainment’s Netherlands-based subsidiary, Marvel Characters BV in March 2008 to produce Marvel-branded casino, poker and bingo games across its web, mobile and other platforms.
In March CryptoLogic engaged consultants Deloitte to carry out a strategic review of the firm suggesting it could soon be part or completely sold. In a statement the company chose to only say that the review was still "ongoing" and that further announcements would be made “as and when appropriate”.
CryptoLogic has yet to return to its former glory since its former chief executive Brian Hadfield resigned a year ago following continuing losses and hampered progress being made to restructure the business model. Chairman David Gavagan has been running things since Hadfield’s departure and has been forced to substantially slash the outfit's workforce.
Despite continuing the restructuring process its board advised was “encouraged” by the performance in the quarter and that it “continues to focus on driving revenues further while managing costs tightly to enhance shareholder value”.
Something tells us that this company is one to continue to watch closely this year and that developments may be in order with a Bwin.Party Digital Entertainment or Virgin Games, but this may take considerable time to verify.
Media Man believes CryptoLogic are a takeover target and a deal could potentially be reached by year end.
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