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Tough economic conditions, restructuring and industry consolidation moves that impacted licensees meant that online bingo software provider Parlay Entertainment "generated very little return from this significant investment in 2009, resulting in a substantial loss and cash burn."
The Canadian company was reporting on a lacklustre performance in the year 2009 ended December 31st, and a fourth quarter in which consolidated revenues dropped to Cdn$ 800,000 from the previous year's Q4 of Cdn$ 1.2 million
Expenses in Q4,2009 at Cdn$ 1.4 million remained unchanged from the fourth quarter of 2008, but increased foreign exchange losses offset reduced compensation expenses.
A beneficial tax adjustment increased the tax recovery recorded in Q4,2009 by Cdn$ 400,000.
Net loss for Q4,2009 was Cdn$ 600,000, unchanged from the net loss in Q4,2008.
For the full year 2009, consolidated revenues were Cdn$ 3.4 million, a substantial drop from the comparative figure for FY 2008 Cdn$ 8.5 million, although the 2008 numbers included Cdn$ 2.9 million in non-recurring software license fees.
Expenses for 2009 were Cdn$ 5.6 million, down from Cdn$ 7.7 million in 2008, mainly due to reduced compensation expenses together with the absence of some non-recurring expenses from 2008.
A beneficial tax adjustment increased the tax recovery recorded in 2009 by Cdn$ 400,000.
Net loss for 2009 was Cdn$ 1.4 million compared to a net income of Cdn$ 500,000 in FY 2008.
Management advised that Parlay remains debt free and its cash balance at December 31, 2009 was Cdn$ 1.1 million. Corporate income tax refunds received (and to be received) in 2010 are estimated at Cdn$ 1.2 million.
Scott White, chief executive officer at Parlay Entertainment said: "Given the significant consolidation in the online bingo sector, and the fact that some of our customers were part of that consolidation, timing was such that our business model could be expanded, allowing us to move into the business of operating gaming platforms.
"Throughout 2009 we invested significant financial and human capital resources in the development of our Alderney and North American gaming platforms, which operate under the brand Parlay Games Services.
"Although these platforms are accelerating in terms of growth today, we generated very little return from this significant investment in 2009, resulting in a substantial loss and cash burn."
White revealed that the company has in excess of 40 networked partner sites, either launched or launching within Parlay Games Services.
"We have numerous prospective partner arrangements in various stages of development. With the market changing again because of additional consolidation, we are now in a unique position to offer services to various customers who are searching for new solutions in the bingo vertical.
"With a revised cost structure and a robust and envied technology platform, it will be our intention to supplement our traditional software licensing model throughout 2010 with the growth of PGS throughout the world. Our offering will be flexible and unique, fostering customer access into multiple software technologies offering multiple software vendors, both gaming and non-gaming products and multiple languages and currencies."
Source: InfoPowa News