After cutting costs, GameTech looks to rebuild its revenues

Reno's GameTech Inernational Inc., which saved its way back to profitability in 2005, now looks to grow enough to stay that way.

The company reported last week that it earned $947,000 on revenues of $12.1 million in the quarter ended Oct. 31 compared with a loss of nearly $10 million on revenues of $12.6 million in the comparable quarter a year earlier.

For the fiscal year that ended Oct. 31, the maker of electronic bingo equipment reported income of $1.34 million on revenues of $49.6 million compared with a loss of $9.9 million on revenues of $51.5 million in its previous fiscal year.

The figures from 2004 included a $6.6 million charge when the company wrote down the value of goodwill associated with earlier acquisitions.

Jay Meilstrup, GameTech's president and chief executive officer, said the turnaround was partly the result of cost-savings moves that included:

* Reduction in litigation costs. A year ago, the company had set aside $3.6 million to cover legal losses. It had been embroiled in litigation with distributors in Texas, Mississippi and Kentucky.

* Reduced expense for depreciation of bingo equipment.

* Reduced investment in research and development, although Meilstrup said the company's R&D now is more focused than it was in the past.

He said the company now is focused on growing domestic and international markets.

GameTech said its business in Canada has increased by 56 percent and it's posting sales growth in Nevada, Michigan and Texas, which is its biggest market.

Its revenues fell in its last fiscal year, says Meilstrup, largely because it lost business in Oklahoma after legislative changes.