Game Trading Technologies Reports Third Quarter 2010 Financial Results

HUNT VALLEY, Md., Oct. 28 /PRNewswire-FirstCall/ -- Game Trading Technologies, Inc. (OTC Bulletin Board: GMTD, "GTTI", the "Company"), a leading provider of comprehensive trading solutions for video game retailers, publishers, rental companies and consumers, reported financial results for the third quarter ended September 30, 2010.

Revenue for the third quarter 2010 increased 37% to $9.1 million from $6.6 million in the prior quarter and increased 39% from $6.5 million in the same year-ago quarter. The increase was primarily attributable to increased sales to the company's largest customer.

Gross margin in the third quarter of 2010 was 17.9% as compared to 11.7% in the prior quarter and 21.2% in the same year-ago quarter.

Net income for the third quarter of 2010 was $210,716 or $0.02 per diluted share, an improvement from a net loss of $901,560 or $(0.11) per diluted share in the prior quarter, and an improvement from a net income of $57,288 or $0.01 per diluted share in the same year-ago quarter.

Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization, including non-cash stock-based compensation) was $669,202, an improvement from an adjusted EBITDA loss of $499,433 in the prior quarter, and an increase of 122% from $301,417 in the same period a year-ago (for more information about adjusted EBITDA, see "Non-GAAP Financial Measures" below).

Cash and cash equivalents totaled $411,003 at September 30, 2010 as compared to $641,088 at December 31, 2009.

"Our performance in the quarter demonstrated the increasing demand from retailers for high quality pre-owned video games through our proprietary trading platform," said Todd Hays, GTTI's CEO. "It also reflected the strengthened foundation of our business through partnering with key retail trade-in and off-rental suppliers, as well as the developing relationship with our largest customer, a leading national game retailer."

About Game Trading Technologies, Inc.

Founded in 2003 and headquartered in Hunt Valley, MD, Game Trading Technologies, Inc. is a leading video game trading services provider focused on valuation, procurement, refurbishment, and redistribution of pre-owned video games. Game Trading Technologies currently offers unique services, supported by innovative technologies to an array of national firms, allowing them to better serve customers who want to trade their games for store credit or purchase pre-owned games. The foundation of most of these relationships is Game Trading Technologies' proprietary game trading database, which updates values on more than 10,000 video games and consoles on a daily basis according to market conditions. Game Trading Technologies, Inc. shares are traded on the OTCBB under the symbol "GMTD." For more information, visit www.gtti.com or call 1-877-631-GAME (4263).

Non-GAAP Financial Measures

In compliance with Regulation G promulgated pursuant to the Sarbanes-Oxley Act, Game Trading Technologies, Inc. has attached to this news release (below) and posted to the company's investor relations web site (www.GTTI.com) a reconciliation of the differences between GAAP and non-GAAP financial information as required in connection with issuing the company's financial results.

The Company, as is common in its industry, uses adjusted EBITDA as a measure of performance to demonstrate earnings exclusive of interest and non-cash events. The Company manages its business based on its cash flows. The Company, in its daily management of its business affairs and analysis of its monthly, quarterly and annual performance, makes its decisions based on cash flows, not on the amortization of assets obtained through historical activities. The Company, in managing its current and future affairs, cannot affect the amortization of the intangible assets to any material degree, and therefore uses adjusted EBITDA as its primary management guide. Since an outside investor may base its evaluation of the Company's performance based on the Company's net loss not its cash flows, there is a limitation to the adjusted EBITDA measurement. Adjusted EBITDA is not, and should not be considered, an alternative to net loss, loss from operations, or any other measure for determining operating performance of liquidity, as determined under generally accepted accounting principals in the United States (GAAP). The most directly comparable GAAP reference in the Company's case is the removal of interest, depreciation, taxes and other non-cash expense. In assessing the overall health of its business during the quarter ended September 30, 2010 and 2009, the Company excluded items in the following general categories, each of which are described below:

Stock-Based Compensation: The Company believes that because of the variety of equity awards used by companies, varying methodologies for determining stock-based compensation and the assumptions and estimates involved in those determinations, the exclusion of non-cash stock-based compensation enhances the ability of management and investors to understand the impact of non-cash stock-based compensation on the company's operating results. Further, the Company believes that excluding stock-based compensation expense allows for a more transparent comparison of its financial results to previous periods.

Each of the non-GAAP financial measures described above, and used in this press release, should not be considered in isolation from, or as a substitute for, a measure of financial performance prepared in accordance with GAAP. Further, investors are cautioned that there are inherent limitations associated with the use of each of these non-GAAP financial measures as an analytical tool. In particular, these non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles and many of the adjustments to the GAAP financial measure reflect the exclusion of items that are recurring and will be reflected in the Company's financial results for the foreseeable future. The Company compensates for these limitations by providing specific information in the reconciliation included in this press release regarding the GAAP amounts excluded from the non-GAAP financial measures. In addition, as noted above, the Company evaluates the non-GAAP financial measures together with the most directly comparable GAAP financial information.

Forward Looking Statements

This news release includes forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 including statements that reflect Game Trading Technologies' current expectations about its future results, performance, prospects and opportunities. Game Trading Technologies has tried to identify these forward-looking statements by using words and phrases such as "may," "will," "expects," "anticipates," "believes," "intends," "estimates," "plan," "should," "typical," "preliminary," "hope," or similar expressions. These forward-looking statements are based on information currently available to Game Trading Technologies and are subject to a number of risks, uncertainties and other factors that could cause Game Trading Technologies' actual results, performance, prospects or opportunities during the remainder of 2010 and beyond to differ materially from those expressed in, or implied by, these forward-looking statements. These risks are referenced in Game Trading Technologies' current report on Form 10-Q, which may be found at www.sec.gov or as may be described from time to time in Game Trading Technologies' subsequent SEC filings.

SOURCE Game Trading Technologies, Inc.

WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?

440k+
Newsrooms &
Influencers

9k+
Digital Media
Outlets

270k+
Journalists
Opted In

GET STARTED