CryptoLogic Achieves Strong Revenue

Online gaming software developer CryptoLogic has reported record annual financial results for the year ended December 31, 2006.

The company grew both revenue and earnings by 21% to $104.0 million and $24.8 million, respectively. Earnings rose to $1.81 per fully diluted share, a 24% increase over 2005.

CryptoLogic ended the year with $128.4 million in total cash.

CryptoLogic's strong results and new customer acquisitions follow a time of significant change for the industry. On October 13, 2006, the United States government passed legislation that effectively banned online gaming in that country. CryptoLogic had already ensured that its licensees would not take wagers from U.S.-based players. The short-term impact of this event on the company's revenue and earnings was heightened as it occurred in the fourth quarter, which is historically the strongest quarter of the year. Since the company's business was substantially focused in Europe before the legislation, the impact of its passage on CryptoLogic was much less serious than it was for many competitors.

"While 2006 was a challenging year for the industry, it was another record year for CryptoLogic - and we enter 2007 with both focus and momentum," said Lewis Rose, CryptoLogic's President and CEO. "We've launched five new customer sites since December, and have three more in the queue - including two for Holland Casino, CryptoLogic's first government-owned customer. With our largest licensees on long-term agreements, and modest revenue expected this year from our new Asian venture, CryptoLogic is poised for long-term growth in the European markets of today - and the Asian markets of tomorrow."

CryptoLogic's Q4 2006 results were in line with the company's estimates for the quarter with $19.0 million of revenue and $1.7 million in earnings, or $0.12 per share (after deducting an after-tax $1.0 million non-recurring charge, or $0.07 per share, related to reorganization costs for the proposed establishment of CryptoLogic's new executive headquarters in Ireland).