CryptoLogic Reports Decline in First Quarter Income

The decline in income was largely due to a one-time payout in last year's first quarter, company officials said.

CryptoLogic Limited reported a 59% drop in first quarter profit in relation to the same quarter of 2007. Net income declined from $1.48 million in 2007 to $609,000 in 2008.

The company reported only a slight drop in revenue, down 1.3% to $19.3 million.

The decline in income was largely due to a one-time payout in last year's first quarter, company officials said. Cryptologic's reserve account to pay off potential jackpots had grown larger than necessary to guarantee jackpot funds were covered, so the additional money, in excess of $4.5 million, was paid out as a one-time benefit.

CryptoLogic develops and licenses gambling software for such online casinos as the Maharajah Club, 888.com, and OPoker.com. Playboy Enterprises is another customer.

Among the software CryptoLogic creates are programs for online poker, casino games, and bingo. Sixteen licensees currently use CryptoLogic software, with plans to add as many as four more.

Despite the understandable reason for the differnce in quarterly income, CryptoLogic stock declined by 11% in the wake of the report.