CryptoLogic Shares Plunge As CEO Quits Following $12.7 Million Q2 Losses

CEO Brian Hadfield of Gaming software provider CryptoLogic has just announced his resignation after the company posted a record Q2 loss of $12.7m.
CryptoLogic had previously posted a $3.2m loss for Q1 and the huge loss for Q2 of $12.7m was enough to have Chairman David Gavagan stepping in as an interim chief executive in order to replace the former CEO of two years.
The company’s wider than expected loss was affected by a decline in total revenue, which had plummeted from the 2009 Q2 figure of $10.14 million to $6.74 million.
Although branded game revenue had risen from $1.3m in Q1 to $1.5m in Q2, casino revenue stayed largely unchanged at $5.8 million, while the company’s poker revenues continued to slide dramatically from $1.3m the previous quarter to $0.7 million in Q2.
In addition, CryptoLogic’s Operating, general & administrative and amortization costs had risen to $12.9 million from $11.0 million in Q1.
Commenting on the poor results, a company spokesman, as reported by egrmagazine said:
“In the light of continuing difficult trading conditions, a further restructuring is being implemented to reduce significantly the cost base including a reduction in the total workforce by the end of Q4 2010.
“Following a review by a leading firm of industry consultants announced previously, a number of measures are being implemented to improve the performance of the hosted casino business.”
On receiving the second quarter results, the market reacted badly to the news with shares in the company losing over a third of their value. The 105 pence per share now offered on the LSE is a new 52 week low and a long way off the 447.5 pence per share price reached in September 2009.