Cryptologic Casinonachrichten

[Newsflash]

12.September 2005

CRYPTOLOGIC DELIVERS SUPER HERO EXCITEMENT TO THE INTERNET WITH X-MEN, THE HULK, AND MORE
Marvel Enterprises becomes newest addition to CryptoLogic's elite network of relationships

September 12, 2005 (Toronto, ON) - CryptoLogic Inc., a leading software developer to the global Internet gaming market, announced that it will soon be rolling out new products based on an exclusive multi-year licensing agreement signed in late 2004, with Marvel Enterprises Inc., one of the world's most prominent character-based entertainment companies. The new relationship, made through CryptoLogic's wholly-owned subsidiary, WagerLogic Limited, makes CryptoLogic the sole developer of Marvel-branded casino slot games on the Internet. You have seen them in the comics and on the big screen, and now CryptoLogic is bringing your favorite Marvel Super Heroes for high-impact action on the Internet - for the first time.

"CryptoLogic's new relationship with Marvel - home to some of the world's legendary entertainment brands - will strengthen our competitive edge through new, exciting Super Hero-themed Internet casino games," said Lewis Rose, CryptoLogic's President and CEO. "By delivering big-name action like the X-Men and The Hulk to the Internet, we're enhancing the entertainment factor of CryptoLogic games - and helping our customers appeal to an even wider player audience."

In today's competitive and increasingly sophisticated Internet casino market, players want more choice and more chances to win. With Marvel, CryptoLogic is delivering great brands, great games and great entertainment. Under the agreement, an initial six Marvel-themed, multi-currency jackpot video slot games are set for release this autumn. Internet casino players will be able to experience big-screen excitement with their favorite Marvel characters - and win cash prizes in US dollars, Euros and Pounds Sterling.

Characters including The Hulk, Daredevil, The X-Men, Blade and The Punisher will swing into action in five new 9-line progressive jackpot video slot games. The new games offer multi-stage, interactive bonus levels with three separate jackpots available to be won - the first multi-level jackpot games ever to be offered on the Internet. In addition, The Hulk will add his power to a new Hulk Fruit Machine - another in the series of British-style slot machines developed by CryptoLogic and favored by the strong UK player base of WagerLogic licensees.

As a pioneer and global leader in the estimated $12 billion online gaming industry, CryptoLogic continues to strengthen its position with a growing range of software products for the world's major Internet casino and poker markets. The company is also expanding its system capacity to accommodate rapid growth and player demand, and continues to work with many of the world's most trusted gaming brands.

[Newsflash]

19.September 2005

NOTICE OF OWNERSHIP INTEREST IN CRYPTOLOGIC

September 19, 2005 (Toronto, ON) - CryptoLogic Inc., a leading software developer to the global Internet gaming market, announced that Fidelity Management and Research Co., a US investment fund, has an interest of 359,300 common shares in CryptoLogic or approximately 3% of the Company's current shares outstanding as indicated in Fidelity's most recent public filing.

[Newsflash]

26.09.2005

CRYPTOLOGIC ANNOUNCES RENEWAL OF NORMAL COURSE ISSUER BID

September 26, 2005 (Toronto, ON) - CryptoLogic Inc., a leading software developer to the global Internet gaming industry, announced today that its Board of Directors has authorized the company to renew its Normal Course Issuer Bid. Purchases under the bid may commence on September 28, 2005 and will terminate on September 27, 2006.

CryptoLogic's share purchase program authorizes the company to purchase up to 1.34 million shares of the issued common shares, representing approximately 10% of the public float. There are currently 13,549,600 common shares issued and outstanding. Purchases will be made on the open market through the facilities of the Toronto Stock Exchange and at the market price at the time of purchase. No more than 2% of the outstanding shares may be purchased within any 30 day period in accordance with exchange rules. The common shares purchased by CryptoLogic during the course of the Normal Course Issuer Bid will be cancelled.

CryptoLogic and its Directors believe that the company's common shares have been trading at prices that do not reflect the underlying value of the company, given its earnings, positive cash flow and strong balance sheet. As a result, the company believes that its common shares are a good investment at current and recent prices. Under its 2004/2005 bid, CryptoLogic most recently repurchased and cancelled 270,500 shares at an average price of Cdn$23.61.

[Newsflash]

6.Oktober 2005

CRYPTOLOGIC-DEVELOPED SOFTWARE HELPS PLAYERS WIN THEIR WAY INTO THE 2005 CARIBBEAN POKER CLASSIC™

Poker champions to Internet hopefuls worldwide to compete for an estimated $2 million prize pool

October 6, 2005 (Toronto, ON) - Big poker excitement, big names and big cash prizes will be found at
this year's annual Caribbean Poker Classic™, which will take place on the Caribbean island of St. Kitts, from November 25th to December 4th, 2005. Players who play on poker software developed by CryptoLogic, and licensed through its WagerLogic subsidiary, are winning their way into this estimated $2 million land-based tournament, including a seat in the $6,300 main event.

"The Caribbean Poker Classic™ is THE place to be in late November for world-class poker action," said Andy Goetsch, CryptoLogic's Vice President of Poker Software Development and a world-class player in his own right. "Thanks to CryptoLogic software focused on meeting the needs of the Internet poker player, the CPC is attracting the champions and stars of land-based poker, including Jennifer Tilly - the 2004 WSOP Ladies Champion, and Robert Varkonyi - the 2002 WSOP Champion, as well as drawing Internet players vying for their spot in paradise and potentially at the final table and televised poker fame."

WagerLogic licensees are hosting the 2nd annual Caribbean Poker Classic™ in association with Thomas Kremser and the International Poker Federation. This year's tournament promises to attract even more skilled Internet hopefuls and poker elites from around the world. The lineup already includes World Series of Poker champions Robert Varkonyi, Kathy Liebert, Jennifer Tilly, Willie Tann, as well as World Poker Tour winners Juha Helppi, Antonio Esfandiari, Phil Laak, and top European pros such as Julian Thew, Simon Trumper, Xuyen Pham and Steve Vladar.

The Caribbean Poker Classic™ will take place at the exclusive St. Kitts Marriott Resort & The Royal Beach Casino. Players can qualify through online tournaments at: williamhillpoker.com, interpoker.com, betfairpoker.com, ukbettingpoker.co.uk, littlewoodspoker.com, theritzclublondon.com, sunpoker.com, classicpoker.com, totalbetpoker.co.uk and pokerplex.com. The $10,000 prize package includes the $6,300 championship event buy-in, nine nights at the luxurious resort and $2,400 in cash.

Players fly to St. Kitts on the Caribbean Poker Classic™ Private Poker Jet - a unique poker experience that will offer on-board poker action, in-flight movies featuring poker classics such as "Rounders", and poker professionals providing tips and strategies to improve players' games en route to the Caribbean. The televised trip on the Poker Jet will see players and their guests have chances to win thousands of dollars in poker prizes.

"The success of Caribbean Poker Classic™ shows the incredible popularity of Internet poker, and that our software has great player appeal," added A.J. Slivinski, WagerLogic's Managing Director. "This major annual event is also an excellent vehicle for our customers to drive increasing traffic to their poker sites."

In addition to the estimated $2 million pot, the Caribbean Poker Classic™ will offer a number of action-packed side tournaments, satellites and cash games, including entry into seven different Freeroll games with total cash prizes exceeding $20,000 - and a designer watch for the winner of each of the seven events.

CryptoLogic-developed poker software powers one of the top revenue generating rooms on the Internet, and now attracts more than 7,000 live simultaneous players online. As a pioneer and global leader in the estimated $12 billion online gaming industry, CryptoLogic continues to strengthen its position by developing a growing range of software products for the world's major Internet casino and poker markets. The company is also expanding its system capacity to accommodate rapid growth and player demand, and continues to work with many of the world's most trusted gaming brands.

About CryptoLogic® (www.cryptologic.com)
Focused on integrity and innovation, CryptoLogic Inc. is a world leading, public developer and supplier of Internet gaming software. CryptoLogic's leadership in regulatory compliance makes it one of the very few companies with software that is certified to strict standards similar to those of land-based gaming. WagerLogic Limited, a wholly-owned subsidiary of CryptoLogic, is responsible for the licensing of its gaming software and services to a blue-chip customer base worldwide. For information on WagerLogic®, visit www.wagerlogic.com.

CryptoLogic's common shares trade on the Toronto Stock Exchange (symbol: CRY), on the NASDAQ National Market (symbol: CRYP), and on the Main Market of the London Stock Exchange (symbol: CRP).

[Newsflash]

17.Oktober 2005

CRYPTOLOGIC ANNOUNCES BOARD CHANGE

October 17, 2005 (Toronto, ON) - CryptoLogic Inc., a leading software developer to the global Internet gaming market, announced today that Mr. Lorne Abony has resigned as a Director of the Board of the company. The Chairman of the Board, Mr. Robert Stikeman, noted that Mr. Abony has provided a unique perspective to the discussions amongst directors, as a CEO of another online entertainment company. Mr. Stikeman understands that Mr. Abony's responsibilities at FUN Technologies no longer permit him to devote the appropriate time to serve as Director of CryptoLogic, and thanked him for his contributions over the past two and half years.

[Newsflash]

24.Oktober 2005

CRYPTOLOGIC CONFIRMS BETFAIR CONTINUES RELATIONSHIP UNTIL AT LEAST JUNE 2006 WITH NO MATERIAL FINANCIAL EFFECT IN 2005 AND 2006

October 24, 2005 (Toronto, ON) - CryptoLogic Inc., a leading software developer to the global Internet gaming market, confirmed today that Betfair, one of the company's poker software licensees, will continue its exclusive agreement with WagerLogic Limited, CryptoLogic's licensing subsidiary, until June 2006, with an option to extend until January 2007. As CryptoLogic indicated in August, Betfair has embarked on plans to bring its poker software in-house, in line with its long term strategy to own and operate all of its core products. As part of this agreement, WagerLogic will receive fees from Betfair such that it is expected there will be no material effect on CryptoLogic's 2005 and 2006 results.

Betfair's decision to establish its own internally-operated poker room is in keeping with its core competency as a technology-driven betting company. Other WagerLogic customers, which are primarily gaming and/or casino organizations, continue to benefit from the liquidity, outsourced technical expertise and an ever-expanding game and product offering developed by CryptoLogic.

"We have enjoyed a mutually profitable relationship with Betfair, and we are pleased that the relationship will continue in 2006," said Lewis Rose, CryptoLogic's President and CEO. "CryptoLogic has grown into a well-diversified organization - in its customers, products and markets. This means continued growth from our core customers, continued financial strength to invest in new products, and the continued prospect of new partnerships."

"Betfair has built a fast-growing Internet poker business as part of WagerLogic's central poker room, and we are pleased to continue this association into the coming year," said A.J. Slivinski, WagerLogic's Managing Director.

A year of excellent growth continues
WagerLogic's central poker room, shared by all of its poker licensees, continues to be one of the fastest-growing poker rooms on the Internet. Excluding Betfair, revenue from WagerLogic's other poker licensees is up approximately 100% on a year-to-date basis over the same period in 2004. Although Betfair fees have typically accounted for 5-10% of the company's revenue, CryptoLogic expects to continue its record of profitable growth from strong poker revenue from continuing licensees, healthy results from its core casino business, and the potential signing of new licensees that meet the company's rigorous criteria.

[Newsflash]

01.11.2005

CRYPTOLOGIC INCREASES QUARTERLY DIVIDEND

40% increase reflects continued earnings and cash flow generation
November 1, 2005 (Toronto, ON) - CryptoLogic Inc., a leading software developer to the global Internet gaming market, announced today that its Board of Directors has approved a 40% increase in its quarterly cash dividend to US$0.07 per common share (an annual rate of US$0.28), up from US$0.05 per common share. The US$0.07 per share quarterly dividend will commence with the company's next dividend payable on December 15, 2005 to shareholders of record as at December 8, 2005. The ex-dividend date will be December 6, 2005.



01.11.2005

CRYPTOLOGIC ANNOUNCES APPOINTMENT OF NIGEL SIMON TO ITS AUDIT COMMITTEE
November 1, 2005 (Toronto, ON) - CryptoLogic Inc., a leading software developer to the global Internet gaming market, is pleased to announce that at today's quarterly scheduled Board of Directors' meeting, Mr. Nigel Simon was appointed to the Board's Audit Committee. Simon's appointment ensures full compliance with NASDAQ's Audit Committee Composition Rule as set out in the notice received from the exchange.

As previously reported on September 2, 2005, Mr. Simon was appointed as a Non-Executive Director to CryptoLogic's Board of Directors. Simon, a veteran British business executive, has more than 25 years of broad senior management and strategic experience in leading and managing international businesses. He brings particular global expertise in strategy, marketing, regulatory issues, sales, banking, corporate governance and mergers and acquisitions.



03.November 2005

Cryptologic Delivers Record Revenue & Near Record Earnings In Q3 05

TEL (416) 545-1455 FAX (416) 545-1454
55 ST. CLAIR AVENUE WEST, 3TRD FLOOR, TORONTO, CANADA M4V 2Y7
w w w . c r y p t o l o g i c . c o m
NEWS FOR IMMEDIATE RELEASE
Symbol: TSX: CRY; NASDAQ: CRYP; LSE: CRP
ALL FINANCIAL FIGURES ARE IN US$
CRYPTOLOGIC DELIVERS RECORD REVENUE & NEAR RECORD EARNINGS IN Q3 05
Q3 revenue up 35%, earnings up 80%
Poker fees up 89%, casino fees up 12% on growth in core markets, new products
November 3, 2005 (Toronto, ON) – CryptoLogic Inc., a leading software developer to the global
Internet gaming market, today announced its financial results for the third quarter and nine months ended
September 30, 2005. CryptoLogic’s record revenue, near record earnings and positive operating cash
flow reflected strong organic growth from existing customers in the company’s primary Internet casino
and Internet poker markets, even in the traditionally soft summer season for Internet gaming.
“CryptoLogic remains a model of consistent performance, even in fast-changing times for the industry,”
said Lewis Rose, CryptoLogic’s President and CEO. “For CryptoLogic, it’s all about delivering
innovative games to selected blue-chip customers in the world’s most lucrative markets for Internet
gaming. CryptoLogic’s diversified, disciplined strategy and its trusted reputation as a long-standing
public company are delivering excellent results. This quarter’s casino revenue was up 12% and poker
fees grew 89% over last year.”
Financial Highlights
(in millions of US dollars, except per share data)
Three months ended
September 30,
Nine months ended
September 30,
2005 2004 2005 2004
Revenue $21.0 $15.6 $61.2 $45.8
Earnings $5.1 $2.9 $14.7 $9.9
Earnings per diluted share $0.36 $0.21 $1.04 $0.73
Fiscal 2005 third quarter highlights included:
· Quarterly revenue grew 35% to a record $21.0 million, and earnings rose 80% over Q3 2004 to a near
record $5.1 million or $0.36 per diluted share. This exceeded analysts’ average consensus of $0.31
per diluted share;
· Internet poker fees derived from the company’s WagerLogic licensing subsidiary grew 89% over Q3
2004, and were up 6% sequentially over Q2 2005. Poker software fees accounted for more than 30%
of Q3 2005 revenue;
· The central Internet poker room shared by WagerLogic licensees now attracts more than 7,500
simultaneous online players – making it one of the most populated poker sites on the Internet;
· Internet casino revenue derived from WagerLogic rose 12% over Q3 2004, and was up 8%
sequentially over Q2 2005. Fees from casino software represented 60% of total Q3 2005 revenue;
· The launch of seven new multi-line video slots featuring Marvel Super Heroes such as The Hulk,
Daredevil and The X-Men, and the well-known, gem-matching game, Bejeweled, gained immediate
popularity with players;
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· The company secured its first patent in the UK, for both online and land-based gaming, for
Millionaires ClubÔ, one of the company’s own innovations. Millionaires ClubÔ is one of the most
popular progressive jackpot slots with a current jackpot in excess of $1.3 million;
· Geographic diversification remained strong with licensees’ revenue from international markets
exceeding 65% of total revenue, up from over 60% in 2004;
· A 40% increase in the quarterly cash dividend to US$0.07 per share to be payable on December 15,
2005 to shareholders of record as at December 8, 2005;
· In Q3 2005, CryptoLogic repurchased and cancelled 270,500 shares at an approximate average price
of $19.32 per share under its 2004/2005 Normal Course Issuer Bid. Subsequent to the quarter-end,
the company bought back a further 222,800 shares at an approximate average price of $16.49 per
share, for a total of 493,300 shares ($8.9 million) for 2005 year-to-date; and
· Subsequent to the quarter-end, Betfair confirmed continuation of its poker software agreement with
WagerLogic until June 2006, with an option to extend until January 2007. Regardless of the timing
of Betfair's departure, WagerLogic will receive fees from Betfair such that CryptoLogic's annual
results for 2006 are not expected to be materially affected.
Q3 Results: Record Revenue, Near Record Earnings (all financial figures expressed in US dollars)
CryptoLogic achieved record revenue and excellent earnings momentum in the third quarter ended
September 30, 2005. Revenue rose 35% to $21.0 million (Q3 2004: $15.6 million). EBITDA(1) for the
quarter grew 67% to $5.9 million (Q3 2004: $3.6 million). EBITDA(1) margin for the quarter increased
significantly to 28% as a percentage of revenue (Q3 2004: 23%). Earnings for the quarter rose 80% to
$5.1 million or $0.36 per diluted share (Q3 2004: $2.9 million or $0.21 per diluted share).
CryptoLogic delivered excellent third quarter results despite the traditional softness of the summer season
for online gaming. The company attributed this success to very strong organic growth from existing
casino licensees and the benefits of launching innovative new games. Fuelled by poker software
enhancements, tournament offerings and growing player volumes, Internet poker licensees also
contributed record revenue levels in Q3 2005.
Increased earnings and improved margins in 2005 also reflect the early benefits of higher revenue as a
result of investing in the company’s business, including from its major investment program.
As announced a year ago, CryptoLogic has been implementing a $12.5 million investment program to
support the company’s long term growth. As at Q3 2005, the company had invested approximately 84%
($10.4 million) of this program, of which $3.6 million were operating costs and $6.8 million were capital
expenditures (comprising $3.1 million for the purchase of capital assets and $3.7 million in capitalized
software development related to the investment program). This investment program will be substantially
completed this year as planned.
Going forward, we will continue to manage normal course expenditures in proportion to revenue
generation, while also planning for incremental investments that may be necessary to position our
company for a regulated UK market for online gaming, once the new rules and requirements are finalized.
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Revenue for the nine months ended September 30, 2005 increased 34% to $61.2 million (Q3 2004 YTD:
$45.8 million). EBITDA(1) for the first nine months in 2005 rose by 38% to $17.3 million (Q3 2004
YTD: $12.6 million). EBITDA(1) margin for the first nine months in 2005 remained strong at 28% as a
percentage of revenue (Q3 2004 YTD: 28%). Earnings for the first nine months of 2005 increased by
49% to $14.7 million or $1.04 per diluted share (Q3 2004 YTD: $9.9 million or $0.73 per diluted share).
Balance Sheet Strength: Positive Operating Cash Flow, No Debt
CryptoLogic’s financial strength remains evident from its healthy operating cash flow and strong balance
sheet. At September 30, 2005, CryptoLogic had no debt, and total cash was $92.1 million or $6.49 per
diluted share (comprising cash and cash equivalents, short term investments, and including security
deposits of $2.0 million). CryptoLogic’s working capital was $69.5 million or $4.90 per diluted share.
Given CryptoLogic’s continued earnings and cash generation, on November 1, the Board approved a 40%
increase in its quarterly cash dividend to US$0.07 per share, up from US$0.05 per share. The increase
will commence with the company’s next quarterly dividend payable on December 15, 2005 to
shareholders of record as at December 8, 2005.
Operating cash flow for the third quarter of 2005 rose significantly to $14.2 million (Q3 2004: $2.2
million). This increase was attributed largely to higher earnings and a significant reduction in security
deposit requirements with payment processors.
Geographic Diversification: A Major Presence in the UK and Europe
CryptoLogic’s strategic diversification across the world’s key gaming markets continues to pay off.
Revenue derived from licensees’ international players accounted for more than 65% of Q3 2005 revenue,
up from over 60% in 2004. The UK and Continental Europe continued to be the company’s largest
markets.
Product Innovation: Great Brands, Great Games, Great Entertainment
CryptoLogic continues to reap the returns from its investment in extending its poker software and system
scalability. This continued investment has contributed to poker licensees achieving record levels. Fees
earned from Internet poker rose 89% over Q3 2004, and up 6% over Q2 05. Online poker fees exceeded
30% of total Q3 2005 revenue, and grew 143% on a year-to-date basis over the same 2004 period.
By delivering a broad choice of games at different speed and stake levels, and enabling online and offline
tournament offerings – such as this year’s second annual Caribbean Poker Classic Ô tournament in St.
Kitts – CryptoLogic-developed software is helping customers increase player traffic to their Internet
poker sites.
Internet casino continues to be a main revenue contributor for CryptoLogic, accounting for 60% of total
Q3 2005 revenue. Online casino performed strongly, rising 12% over Q3 2004, and up 8% over Q2 2005.
On a year-to-date basis, casino revenue increased 7% over Q3 2004 YTD. The launch of 20 new games
released this year was a contributing factor and key to helping customers attract, retain and re-activate
player interest.
CryptoLogic continues to bring the latest product innovation and exciting entertainment concepts to its
Internet casino software. The company’s recently released seven-game pack offers high-impact video
game play and multi-level jackpots, and are already among the most popular games with players.
CryptoLogic is the exclusive developer of Marvel-branded casino slot games on the Internet, and the first
to offer a play-for-real slot version of Bejeweled, the wildly popular, gem-matching game. The first ever
Marvel-themed progressive jackpot video slots feature The Hulk, Daredevil, The X-Men, Blade and The
Punisher – with exciting bonus sequences allowing players to battle villains, hunt vampires and smash
tanks to win cash prizes in US dollars, Euros and Pounds Sterling.
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Patenting Our Innovations
CryptoLogic also received its first game patent in the UK for one of its most popular progressive jackpot
slots, Millionaires ClubÔ, and the game’s distinctive three-wheel bonus concept. The patent is pending
in other major markets and will be applicable for both online and land-based gaming. The patenting of
the company’s proprietary game innovations and technologies creates incremental revenue-generating
opportunities and provides a competitive advantage for CryptoLogic.
Betfair Poker Continues in 2006
As announced in August, Betfair, one of WagerLogic’s poker licensees, plans to bring its poker software
in-house. Uniquely positioned as a technology-driven betting organization, Betfair’s long term strategy is
to own and operate all of its core products. Betfair will continue its exclusive agreement with
WagerLogic until June 2006, with an option to extend until January 2007. Regardless of the timing of
Betfair’s departure, WagerLogic will receive fees from Betfair such that CryptoLogic's annual results for
2006 are not expected to be materially affected. Excluding Betfair, poker revenue from other
WagerLogic licensees was up approximately 100% on a year-to-date basis over the same period in 2004.
Executive, Director Appointments
In August, CryptoLogic appointed Stephen Taylor as Chief Financial Officer. Mr. Taylor is a Chartered
Accountant, having qualified in the top one percent in Canada and has held senior positions at two of the
country’s large accounting firms. He brings more than two decades of experience in financial and
business management, public markets, and mergers and acquisitions.
In September, Nigel Simon was appointed as a Non-Executive Director of CryptoLogic’s Board of
Directors. Mr. Simon, a veteran British business executive, has more than 25 years of broad senior
management and strategic experience in leading and managing international businesses, including senior
roles at a multi-billion-dollar FTSE 50 and NYSE-listed global organization based in the UK. He brings
particular expertise in strategy, marketing, regulatory issues, sales, banking, corporate governance and
mergers and acquisitions.
On November 1, at a quarterly scheduled Board of Directors’ meeting, Nigel Simon was appointed to the
Board’s Audit Committee, which ensures full compliance with Nasdaq’s Audit Committee Composition
Rule. While Nasdaq Rules provide the company a cure period until the earlier of the Company’s next
annual shareholders’ meeting or up to one year, CryptoLogic received a Nasdaq Deficiency Letter
indicating non-compliance with Nasdaq Marketplace Rule 4350, which requires the Board of Directors’
Audit Committee be composed of three independent members. Mr. Simon’s appointment to the Audit
Committee resolves this temporary 12-day period of non-compliance. As of November 2, the company
has received a notification from Nasdaq that it is in full compliance with this rule.
Outlook
CryptoLogic’s disciplined execution and focused investments are proving successful in generating strong
revenue, profitability and healthy cash flow. The company’s diversified strategy – in its customers,
products and markets – and proven record of performance and transparency as a long-established public
company continue to set it apart in the global Internet gaming industry.
CryptoLogic will remain clearly focused on working with a core group of major international customers
to achieve the highest returns in the lucrative Internet casino and Internet poker sectors. Management
expects fourth quarter revenue to range from $22.2-$22.6 million, with earnings of $5.4-$5.6 million or
$0.39-$0.40 per diluted share.
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While CryptoLogic continues to seek new substantial licensees that meet its rigorous criteria, the
company is experiencing significant organic growth from its customers. In today’s fast-paced
environment where players demand more choice and value, CryptoLogic will continue to develop
innovative new games and expand its back-office offering with sophisticated business intelligence, data
mining and marketing support tools to help customers effectively compete for player attention and drive
incremental revenue in the world’s major Internet casino and poker markets – both of which continue to
grow.
2005 Third Quarter Analyst Call
A conference call is scheduled for 8:30 a.m. (Eastern) (1:30 p.m. GMT) on Thursday, November 3, 2005.
Interested parties should call either 416-695-6120, 1-877-888-3855 (North America) or international toll
free number at (Country Code) 800-4222-8835. Instant replay will be available until Thursday,
November 10, 2005 by calling 416-695-5275 or 1-866-518-1010.
About CryptoLogic (www.cryptologic.com)
Focused on integrity and innovation, CryptoLogic Inc. is a world leading, blue-chip public developer and supplier of
Internet gaming software. Its leadership in regulatory compliance makes it one of the very few companies with
gaming software that is certified to strict standards similar to land-based gaming. WagerLogic Limited, a whollyowned
subsidiary of CryptoLogic, is responsible for the licensing of its gaming software and services to an
internationally-recognized blue-chip customer base worldwide. For information on WagerLogic, visit
www.wagerlogic.com.
CryptoLogic’s common shares trade on the Toronto Stock Exchange (symbol: CRY), on the Nasdaq National
Market (symbol: CRYP), and on the Main Market of the London Stock Exchange (symbol: CRP).
For more information, please contact:
CryptoLogic, (416) 545-1455 Argyle Rowland, (416) 968-7311 (North American Media)
Nancy Chan-Palmateer, Director of Communications Daniel Tisch, ext. 223/ dtisch@argylerowland.com
Stephen Taylor, Chief Financial Officer Karen Passmore, ext. 228/ kpassmore@argylerowland.com
At Catullus Consulting, + 44 20 7736 2938 (UK Media)
Alex Mackey, alex.mackey@catullusconsulting.com
(
1) Management believes that EBITDA (earnings before interest, taxes, and amortization) is a useful supplemental measure of performance.
However, EBITDA is not a recognized earnings measure under generally accepted accounting principles (GAAP) and does not have a
standardized meaning. Therefore, EBITDA may not be comparable to similar measures presented by other companies.
CRYPTOLOGIC FORWARD LOOKING STATEMENT DISCLAIMER:
Statements in this press release which are not historical are forward-looking statements made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Investors are cautioned that all forward-looking statements involve risks and uncertainties including,
without limitation, risks associated with the Company’s financial condition and prospects, legal risks associated with Internet gaming and risks of
governmental legislation and regulation, risks associated with market acceptance and technological changes, risks associated with dependence on
licensees and key licensees, risks relating to international operations, risks associated with competition and other risks detailed in the Company’s
filings with securities regulatory authorities. These risks may cause results to differ materially from those projected in the forward-looking
statements.
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MANAGEMENT’S DISCUSSION AND ANALYSIS
CryptoLogic Inc. and our subsidiaries are referred collectively as “CryptoLogic”, “the Company”, “we”,
“us” and “our” throughout Management’s Discussion and Analysis (“MD&A”), unless otherwise
specified. The following MD&A should be read in conjunction with the unaudited consolidated interim
financial statements of CryptoLogic, including the notes thereto, for the three and nine months ended
September 30, 2005 and September 30, 2004, and the audited consolidated financial statements and the
MD&A for the year ended December 31, 2004 as set out in our 2004 Annual Report. Except where
otherwise indicated, the reader may assume that economic and industry factors are substantially
unchanged from the 2004 year-end MD&A. This MD&A is dated November 3, 2005. Additional
information relating to CryptoLogic, including our Annual Information Form, is available on SEDAR at
www.sedar.com or EDGAR at www.sec.gov.
All currency amounts are in US dollars, unless otherwise indicated.
BUSINESS OVERVIEW
CryptoLogic is a world leading and long-standing publicly traded online gaming software developer and
supplier serving the global Internet gaming market. WagerLogic Limited (“WagerLogic”), a whollyowned
subsidiary of CryptoLogic, provides software licensing, e-cash management and customer support
services for our Internet gaming software to an internationally-recognized blue-chip client base
(“licensees” or “customers”) around the world who operate under government authority where their
Internet businesses are domiciled.
OVERVIEW OF RESULTS
In the third quarter of 2005, CryptoLogic delivered strong performance in both our primary Internet
casino and Internet poker markets through excellent organic growth from a core group of blue-chip
international customers, supported by strategic investments in key areas of our business.
New casino games continued to help licensees attract, re-energize and retain players, which contributed to
a 12% increase in fees from Internet casino over Q3 2004. Online casino revenue remains a major cash
generator, and accounted for 60% of total Q3 2005 revenue. WagerLogic’s poker licensees continued to
perform strongly, fuelled by ongoing poker enhancements and tournament offerings, which provide one
of the broadest range of game options, stake and speed levels to attract a wide range of players. Fees
from Internet poker for Q3 2005 grew 89% over Q3 2004.
Revenue rose 35% for Q3 2005 to a record $21.0 million (Q3 2004: $15.6 million) and was up 34% to
$61.2 million for the first nine months of 2005 (Q3 2004 YTD: $45.8 million). EBITDA(1) increased
67% for Q3 2005 to $5.9 million (Q3 2004: $3.6 million), and 38% to $17.3 million on a year-to-date
basis (Q3 2004 YTD: $12.6 million). EBITDA(1) margin rose considerably to 28% as a percentage of
revenue for Q3 2005 (Q3 2004: 23%) and was 28% for the first nine months of 2005 (Q3 2004 YTD:
28%). Furthermore, earnings rose 80% to $5.1 million or $0.36 per diluted share (Q3 2004: $2.9 million
or $0.21 per diluted share), and grew by 49% to $14.7 million or $1.04 per diluted share in the first nine
months of 2005 (Q3 2004 YTD: $9.9 million or $0.73 per diluted share).
CryptoLogic’s balance sheet strength continued to be reflected with no debt, and cash, cash equivalents
and short term investments of $92.1 million (including $2.0 million in security deposits) at quarter-end.
Working capital was $69.5 million.
The early returns of CryptoLogic’s major investment program, which is aimed at driving long term
growth, contributed to excellent third quarter performance. Since the program’s implementation a year
ago, approximately 84%, or $10.4 million of this program, has been invested.
7
RESULTS OF OPERATIONS
Revenue
Revenue reached record levels in Q3 2005, up 35% to $21.0 million (Q3 2004: $15.6 million), and up
34% on a year-to-date basis to $61.2 million (Q3 2004 YTD: $45.8 million). CryptoLogic generated
strong third quarter revenue in 2005 in what is one of the two seasonally slowest quarters of the year for
Internet gaming. Strong top-line results were fuelled by licensees’ strengthening market position and
growth in both the major Internet poker and Internet casino markets. CryptoLogic continued to derive
near term incremental returns from our major investment program, which is aimed at key areas of our
business: our casino and poker software offerings, system infrastructure and scalability, and back-office
and customer care improvements.
Ongoing enhancements to WagerLogic’s poker software that extend the choice of games, stakes and
tournament opportunities for players have contributed to the continued growth of existing poker licensees.
During the quarter, Internet poker fees rose 89% over Q3 2004, and up 6% sequentially over Q2 2005.
Poker software fees exceeded 30% of Q3 2005 revenue, and grew 143% on a year-to-date basis over the
same 2004 period. We expect poker licensees to continue this strong positive momentum as they benefit
from our broad poker offering and the greater liquidity of being part of WagerLogic’s central poker room,
which now attracts more than 7,500 live players simultaneously online.
Internet casino software fees rose 12% over Q3 2004, and up 8% sequentially over Q2 2005. Casino
remained a large contributor to our business, and represented 60% of total Q3 2005 revenue. On a yearto-
date basis, online casino software revenue increased 7% over the same 2004 period.
In the third quarter when summer seasonality is usually a factor, online casino licensees enjoyed excellent
growth, which was attributed to the incremental returns derived from new casino games added this year.
Our innovative new offerings have included a multi-line version of Millionaires ClubÔ, a hugely popular
progressive Internet slot game that is contributing meaningful revenue. Most recently, we introduced the
Internet’s first casino games based on well-known Marvel comic characters – The Hulk, Daredevil, The
X-Men, Blade and The Punisher – and the first online play-for-real slot version of Bejeweled, one of the
most popular titles online. By delivering a comprehensive casino portfolio and ongoing roll out of
market-targeted games – 20 in the past few months – we expect our licensees to continue to strengthen
their market position in this competitive and highly demanding market segment.
The enhancement of our back-office solutions is intended to aid customers in attracting, retaining and reactivating
players. We have recently introduced sophisticated business intelligence, data warehousing
and marketing tools, which are helping customers better understand, respond and serve their players.
CryptoLogic continued to be well-diversified in the key global markets for online gaming. Licensees’
revenue derived from international players accounted for more than 65% of overall Q3 2005 revenue, up
from over 60% in fiscal 2004. The UK and Continental Europe represented the vast majority, and
together accounted for more than 60% of total Q3 2005 revenue.
Operating Costs
Operating costs comprise software development and support costs that include all personnel and
compensation costs, licensee support, customer service costs and compliance-related expenditures.
Operating costs were $12.8 million in Q3 2005 or 61% of revenue (Q3 2004: $10.4 million or 66%). For
the nine months ended September 30, 2005, operating costs were $38.0 million or 62% of revenue (Q3
2004 YTD: $28.6 million or 63%).
Increased costs were in line with CryptoLogic’s investments directed at new casino games, enhancement
of our poker offering, an expanding system infrastructure to support growing player traffic and volumes,
and improvement of our customer care and back-office processing and support services. Operating costs
also rose with increased processing fees associated with growing financial transaction volumes.
8
Last year’s third quarter operating costs were higher as a percentage of revenue due to higher
expenditures related to CryptoLogic initiating a major investment program in Q3 2004 without the
commensurate revenue benefits. This investment program is above and beyond our normal course
expenditures, and aimed at significantly upgrading our gaming platform and system and service
infrastructure. Over the last five quarters, approximately 84%, or $10.4 million of this $12.5 million
program, has been invested as follows: $3.6 million in operating costs and $6.8 million in capital
expenditures (comprising $3.1 million for purchases of capital assets and $3.7 million in capitalized
software development associated with the program). CryptoLogic continues to benefit from these
investments as evidenced by strong top-line performance and improved margins. Our major investment
program will be substantially completed in 2005 as planned.
Going forward, we will continue to manage normal course expenditures in proportion to revenue
generation, while also planning for incremental investments that may be necessary to position our
company for a regulated UK market for online gaming, once the new rules and requirements are finalized.
General and Administrative Costs
General and administrative (G&A) expenses were $2.2 million for the quarter (Q3 2004: $1.6 million).
For the first nine months of 2005, G&A expenses were $5.7 million (Q3 2004 YTD: $4.3 million). The
rise in G&A costs reflected higher costs associated with a growing organization and increased facilities
and infrastructure expenditures. Given our larger company, G&A expenses will rise modestly, although
will be expected to remain fairly consistent as a percentage of revenue.
Finance Costs
Finance costs include bank charges and fees for bank drafts. These costs were fairly consistent at $0.1
million for Q3 2005 and Q3 2004, and similarly on a year-to-date basis at $0.3 million for both 2004 and
2005.
EBITDA(1)
EBITDA(1) improved significantly by 67% for Q3 2005 to $5.9 million (Q3 2004: $3.6 million), and up
38% on a year-to-date basis to $17.3 million (Q3 2004 YTD: $12.6 million). EBITDA(1) margin
increased significantly to 28% for Q3 2005 (Q3 2004: 23%) as a percentage of revenue, and was 28% on
a year-to-date basis in 2005 (Q3 2004 YTD: 28%). Improved margins in Q3 2005 reflected the early
benefits of higher revenue from ongoing and major investment plans. EBITDA(1) is expected to remain at
solid levels as major investments are substantially completed in 2005, and normal course expenditures are
managed in proportion to revenue generation.
(1) Management believes that EBITDA (earnings before interest, taxes, and amortization) is a useful supplemental measure of
performance. However, EBITDA is not a recognized earnings measure under generally accepted accounting principles
(GAAP) and does not have a standardized meaning. Therefore, EBITDA may not be comparable to similar measures
presented by other companies.
EBITDA is reconciled to earnings as follows:
For the three months
ended September 30,
For the nine months
ended September 30,
(In thousands of US dollars) 2005 2004 2005 2004
Earnings $5,127 $2,856 $14,705 $9,874
Income taxes 747 525 2,361 2,176
Interest income (967) (361) (2,478) (867)
Amortization 1,042 548 2,741 1,415
EBITDA $5,949 $3,568 $17,329 $12,598
9
Amortization
Amortization expense during the quarter rose to $1.0 million (Q3 2004: $0.5 million), and to $2.7 million
in the first nine months of 2005 (Q3 2004 YTD: $1.4 million). The increase reflected higher investments
in computer equipment, leasehold improvements, software and licenses to support our growing
organization and the Company’s major investment program.
Interest Income
Interest income rose to $1.0 million in the third quarter (Q3 2004: $0.4 million), and $2.5 million in the
first nine months of 2005 (Q3 2004 YTD: $0.9 million). The increase was a result of a higher cash
position and better interest yield.
Provision for Income Taxes
Income taxes for the quarter were $0.7 million (Q3 2004: $0.5 million), and $2.4 million for the first nine
months of 2005 (Q3 2004 YTD: $2.2 million), which reflected a taxable income mix that was lower in
certain markets. The change in future income taxes arose from the fluctuation in foreign exchange rates
during the third quarter of 2005.
Earnings
Earnings for the third quarter rose 80% to $5.1 million or $0.36 per diluted share (Q3 2004: $2.9 million
or $0.21 per diluted share). On a year-to-date basis in 2005, earnings increased by 49% to $14.7 million
or $1.04 per diluted share (Q3 2004 YTD: $9.9 million or $0.73 per diluted share).
Summary of Quarterly Results
Fiscal
2005
Fiscal
2004
Fiscal
2003
(In thousands of US dollars, except per share data) Q3 05 Q2 05 Q1 05 Q4 04 Q3 04 Q2 04 Q1 04 Q4 03
Revenue $21,049 $19,923 $20,274 $17,949 $15,616 $14,925 $15,224 $13,540
Interest income 967 874 637 426 361 262 244 160
Earnings 5,127 4,739 4,839 3,794 2,856 3,197 3,821 3,033
Earnings per share
Basic
Diluted
0.37
0.36
0.34
0.33
0.36
0.34
0.29
0.27
0.22
0.21
0.25
0.23
0.30
0.28
0.25
0.23
Basic weighted average number of shares (000’s) 13,681 13,736 13,573 13,185 13,076 12,979 12,641 12,280
Diluted weighted average number of shares (000’s) 14,063 14,361 14,184 13,871 13,642 13,734 13,419 12,972
Typically, our first and fourth quarters (during the winter and fall seasons) are our strongest periods, and
revenue in the middle two quarters can slow down as Internet usage moderates in the summer months
when players tend to be outdoors. The sequential increase in Q3 2005 over Q2 2005 was due to
continued high growth in Internet poker fees as well as strong online casino revenue attributed to the
popularity of new games, which helped offset the usual summer softness expected in the more developed
casino segment during this period.
LIQUIDITY AND CAPITAL RESOURCES
In the quarter, CryptoLogic continued to report a strong financial position. As at September 30, 2005, the
Company had no debt, and a total cash position of $92.1 million or $6.49 per diluted share, which
comprised cash and cash equivalents, short term investments, and included $2.0 million of security
deposits. Working capital was $69.5 million or $4.90 per diluted share.
Operating cash flow in Q3 2005 increased significantly to $14.2 million (Q3 2004: $2.2 million),
compared with $23.4 million on a year-to-date basis (Q3 2004 YTD: $9.9 million). This increase was
largely due to higher earnings, a significant decline in security deposits required as collateral to payment
processors, and changes in working capital requirements.
10
Under the 2004/2005 Normal Course Issuer Bid, which expired on September 22, 2005, we repurchased
and cancelled 270,500 shares at an approximate average price of $19.32 per share in Q3 2005. On
September 26 2005, the Board of Directors announced the renewal of its Normal Course Issuer Bid,
which authorizes the Company to purchase up to 1.34 million common shares from September 28, 2005
to September 27, 2006. Subsequent to the quarter-end, the Company bought back a further 222,800
shares at an approximate average price of $16.49 under our current 2005/2006 bid. For 2005 year-todate,
we have repurchased a total of 493,300 shares ($8.9 million).
CryptoLogic currently has 13.3 million common shares and 1.2 million stock options outstanding.
CRITICAL ACCOUNTING POLICIES, CHANGES IN ACCOUNTING POLICIES AND OFFBALANCE
SHEET ARRANGEMENTS
These items are substantially unchanged as discussed in the Company’s MD&A for the year ended
December 31, 2004 as contained in our 2004 Annual Report.
RISKS AND UNCERTAINTIES
The primary risks and uncertainties that affect and may affect us and our business, financial condition and
results of operations are substantially unchanged from those discussed in the Company’s MD&A for the
year ended December 31, 2004 as contained in our 2004 Annual Report.
OUTLOOK
While the global online gaming market continues to promise vast growth potential, competition is
intensifying for players and market position. In Internet casino, we will continue to deliver an array of
new and engaging games to help our customers refresh their offerings to players, and foster player
loyalty. In Internet poker, we will continue to enhance our poker solution to build on the strong liquidity
and wide choice of games, stake levels and tournaments we provide today. We have also enhanced our
back-office solution with sophisticated new relationship management tools and reporting options, which
are aimed at helping customers better understand and serve their players and foster player loyalty.
As announced in August, Betfair, one of our poker licensees, plans to establish its own internally-operated
Internet poker room in keeping with its core strength as a technology-driven betting company. Betfair
will remain in the WagerLogic central poker room until June 2006, with an option to extend to January
2007. Regardless of when Betfair leaves, WagerLogic will receive fees from Betfair such that
CryptoLogic's annual results for 2006 are not expected to be materially affected. Betfair’s departure may
affect the liquidity of the central poker room next year, although the continued substantial organic growth
of our other customers is expected to be an offsetting factor. Other WagerLogic customers, which are
primarily gaming and/or casino companies, continue to benefit from the greater liquidity, outsourced
technical expertise and an ever-expanding product offering developed by CryptoLogic.
CryptoLogic has achieved increasing returns – as evidenced by strong Q3 results – by executing a
strategy of customer, product and market diversification. We remain committed to this disciplined
approach to drive the organic growth of a core group of high quality international brand-name customers
that target the major Internet casino and Internet poker sectors.
11
CRYPTOLOGIC INC.
CONSOLIDATED BALANCE SHEETS
(In thousands of US dollars)
As at
September 30,
2005
(unaudited)
As at
December 31,
2004
ASSETS
Current assets:
Cash and cash equivalents $77,133 $43,182
Security deposits 2,000 7,000
Short term investments 12,963 35,782
Accounts receivable and other 7,764 6,487
Prepaid expenses 4,830 1,754
104,690 94,205
User funds on deposit 23,716 18,908
Capital assets 16,400 9,227
Intangible assets 85 106
Goodwill 1,776 1,776
$146,667 $124,222
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities $32,612 $30,056
Income taxes payable 2,589 1,331
35,201 31,387
User funds held on deposit 23,716 18,908
Future income taxes 2,094 1,840
61,011 52,135
Shareholders’ equity:
Share capital 25,456 20,380
Stock options 1,674 1,114
Retained earnings 58,526 50,593
85,656 72,087
$146,667 $124,222
CRYPTOLOGIC INC.
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
(In thousands of US dollars)
(Unaudited)
For the three months
ended September 30,
For the nine months
ended September 30,
2005 2004 2005 2004
Retained earnings, beginning of period
$58,800
$45,000
$50,593
$38,758
Earnings 5,127 2,856 14,705 9,874
Excess of purchase price of treasury shares
over stated value
(4,722)
--
(4,722)
--
Dividends paid (679) (393) (2,050) (1,169)
Retained earnings, end of period $58,526 $47,463 $58,526 $47,463
12
CRYPTOLOGIC INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands of US dollars, except per share information)
(Unaudited)
For the three months
ended September 30,
For the nine months
ended September 30,
2005 2004 2005 2004
Revenue
$21,049
$15,616
$61,246
$45,765
Expenses
Operating costs 12,797 10,382 37,950 28,626
General and administrative 2,179 1,564 5,654 4,255
Finance 124 102 313 286
Amortization 1,042 548 2,741 1,415
16,142 12,596 46,658 34,582
Earnings before undernoted 4,907 3,020 14,588 11,183
Interest income 967 361 2,478 867
Earnings before income taxes 5,874 3,381 17,066 12,050
Income taxes:
Current 243 31 2,107 780
Future 504 494 254 1,396
747 525 2,361 2,176
Earnings $5,127 $2,856 $14,705 $9,874
Earnings per common share
Basic $0.37 $0.22 $1.08 $0.77
Diluted $0.36 $0.21 $1.04 $0.73
Weighted average number of shares (‘000s)
Basic 13,681 13,076 13,664 12,899
Diluted 14,063 13,642 14,187 13,562
13
CRYPTOLOGIC INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of US dollars)
(Unaudited)
For the three months
ended September 30,
For the nine months
ended September 30,
2005 2004 2005 2004
Cash provided by (used in):
Operating activities:
Earnings $5,127 $2,856 $14,705 $9,874
Adjustments to reconcile earnings to
cash provided by (used in) operating activities:
Amortization 1,042 548 2,741 1,415
Future income taxes 504 494 254 1,396
Stock options 440 326 1,285 863
Changes in operating assets and liabilities:
Security deposits 5,000 -- 5,000 (450)
Accounts receivable and other (859) (3,608) (1,277) (4,970)
Prepaid expenses 2,353 (80) (3,076) (633)
Accounts payable and accrued liabilities 1,096 2,385 2,556 2,365
Income taxes payable (465) (701) 1,258 87
14,238 2,220 23,446 9,947
Financing activities:
Issue of capital stock 420 271 4,854 6,163
Dividends paid (679) (393) (2,050) (1,169)
Repurchase of common shares (5,225) -- (5,225) --
(5,484) (122) (2,421) 4,994
Investing activities:
Purchase of capital assets (4,683) (2,210) (9,891) (5,547)
Purchase of intangible assets -- -- (2) (89)
Short term investments (10,963) 1,683 22,819 (28,875)
(15,646) (527) 12,926 (34,511)
Increase (decrease) in cash and cash equivalents (6,892) 1,571 33,951 (19,570)
Cash and cash equivalents, beginning of period 84,025 22,869 43,182 44,010
Cash and cash equivalents, end of period $77,133 $24,440 $77,133 $24,440
Supplemental cash flow information:
Non cash portion of options exercised
$137
$8
$725
$477
14
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
As at September 30, 2005
(All figures are in thousands of US dollars, except per share disclosure and where otherwise indicated)
(Unaudited)
These consolidated interim financial statements of CryptoLogic Inc. (the “Company”) have been prepared in
accordance with Canadian generally accepted accounting principles using the same accounting policies as were used
for the audited consolidated financial statements for the year ended December 31, 2004. These consolidated interim
financial statements should be read in conjunction with the audited consolidated financial statements for the year
ended December 31, 2004, as set out in the 2004 Annual Report.
1. Stock Option Plan
In accordance with the guidelines of the Canadian Institute of Chartered Accountants, the Company has expensed
the costs of all stock option grants issued on or after January 1, 2003. The fair value of the options granted in 2004
and 2005 was made using the Black-Scholes option pricing model under the following weighted assumptions:
2005 2004
Dividend yield 0.75% 0.75%
Risk-free rate 3.25% 2.75%
Expected volatility 50.0% 50.0%
Expected life of options in years 5.0 5.0
The estimated fair value of options is recorded over the vesting period of the options. The costs of stock options of
$440 in Q3 2005 ($326 in Q3 2004), and $1,285 YTD 2005 ($863 YTD 2004) are included in operating costs.
Consideration paid by employees on the exercise of stock options is recorded as share capital.
Had compensation expense been determined based on the fair value of the employee stock option awards for 2002
grants at the grant dates in accordance with the new recommendations, the Company’s earnings and earnings per
common share would have been changed to the following pro forma amounts:
Three months ended
September 30,
Nine months ended
September 30,
2005 2004 2005 2004
As
reported
Pro forma
As
reported
Pro forma
As
reported
Pro forma
As
reported
Pro forma
(‘000) (‘000) (‘000) (‘000) (‘000) (‘000) (‘000) (‘000)
Earnings $5,127 $4,993 $2,856 $2,718 $14,705 $14,309 $9,874 $9,428
Earnings per share:
Basic $0.37 $0.37 $0.22 $0.21 $1.08 $1.05 $0.77 $0.73
Diluted $0.36 $0.36 $0.21 $0.20 $1.04 $1.01 $0.73 $0.70
15
2. Share Capital
Authorized:
Unlimited common shares
Issued and Outstanding:
Common Shares Series F Warrants Total
Issued Stated Value Issued Stated Value Stated Value
(‘000) (‘000) (‘000)
Balance, December 31, 2003 12,300 $11,078 30 $272 $11,350
Exercise of stock options 1,011 9,030 -- -- 9,030
Balance, December 31, 2004 13,311 $20,108 30 $272 $20,380
Balance, December 31, 2004 13,311 $20,108 30 $272 $20,380
Share repurchase (271) (503) -- -- (503)
Exercise of stock options 486 5,153 -- -- 5,153
Exercise of Series F warrants 23 630 (23) (204) 426
Balance, September 30, 2005 13,549 $25,388 7 $68 $25,456
3. Normal Course Issuer Bid
In September 2004, the Board of Directors approved a share repurchase plan, under a Normal Course Issuer Bid, to
repurchase and cancel up to 1,250,000 of the Company’s outstanding common shares for the period commencing
September 23, 2004 and ending September 22, 2005. Under this plan, the Company had repurchased and cancelled
270,500 common shares during the three months ended September 30, 2005 for total cost, including transaction cost,
of $5.2 million.
In September 2005, the Board of Directors approved the renewal of the share repurchase plan, under a Normal
Course Issuer Bid, to repurchase and cancel up to 1,340,000 of the Company’s outstanding common shares for the
period commencing September 28, 2005 and ending September 27, 2006. As at September 30, 2005, the Company
had not repurchased any shares from the renewed Normal Course Issuer Bid.
4. Comparative Figures
Certain of the prior period’s figures have been reclassified for consistency with the current period’s presentation.

[Newsflash]

28.11.2005

CRYPTOLOGIC DEVELOPS FIRST MULTI-LANGUAGE INTERNET POKER OFFERING FOR WILLIAM HILL

Internet poker growth, strong customer relationship extend European reach for CryptoLogic software

November 28, 2005 (Toronto, ON) - CryptoLogic Inc., a leading software developer for the global Internet gaming industry, has launched a new Greek-language Internet poker site for William Hill Poker under exclusive license from WagerLogic Limited, CryptoLogic's wholly-owned subsidiary. William Hill, one of the world's most trusted gaming brands and the largest sports bookmaker in the UK, is extending the global reach of its highly successful online poker service to the Greek speaking population worldwide.

"William Hill's Greek-language launch points to the global potential of Internet poker, and that CryptoLogic software enables leading gaming brands to localize their online offerings for worldwide appeal," said Lewis Rose, CryptoLogic's President and CEO. "CryptoLogic's decade of experience in delivering multi-language, multi-currency software has long been a strategic advantage in the Internet casino market, and it's exciting to bring the same strategy for success to the world of Internet poker."

William Hill's new site (www.williamhillpoker.gr) is the first deployment of CryptoLogic-developed online poker software in a European language. This offering gives Greek-speaking gamers the ease of playing in their local language and convenient deposits and withdrawals in multi-currencies, with access to multi-currency tables (in Euros, US dollars and UK sterling). As part of the WagerLogic licensee central room, which attracts more than 7,500 poker players online simultaneously from around the globe, William Hill players enjoy the games they want, when they want, at the speed they want, and in a choice of languages and currencies.

"Whether it's playing for fun, playing for pennies or playing for high stakes, Internet poker is one of the fastest-growing games in Europe," said Peter Nolan, Group Director of Interactive Business at William Hill. "One of the key benefits of our long relationship using CryptoLogic software is the flexibility with which we can take the fun and excitement of William Hill Poker to new people and new places."

"Europe is one of the most promising Internet gaming markets," said A.J. Slivinski, WagerLogic's Managing Director. "We're delighted to enable William Hill to be one of the first to offer a world-class multi-currency poker room in the Greek language - and look forward to seeing excellent results."

[Newsflash]

20.Dezember 2005


CRYPTOLOGIC WINS GOLD FOR WORLD'S TOP CASINO SOFTWARE

Top Casino Software Award voted on by more than 27,000 players

December 20, 2005 (Toronto, ON) - CryptoLogic Inc. has been recognized with the Top Casino Software Award in Gambling Online Magazine's 2005 Reader's Poll Awards, staking its claim as the leading software developer to the global Internet gaming market. The awards, determined by the votes of more than 27,000 players worldwide, are recognized widely as the industry's top honours. CryptoLogic was honoured for its "groundbreaking and ingeniously realistic" casino software, blue-chip clientele and the high level of online player security licensed by its wholly-owned subsidiary, WagerLogic Limited.

"CryptoLogic is focused on developing the world's most innovative games for the world's blue-chip gaming brands - and the award for Top Casino Software is industry validation of this strategy," said Lewis Rose, CryptoLogic's President and CEO. "CryptoLogic's success in delivering the games players want to play is contributing to strong performance in our casino business. Recognition for Top Casino Software is a proud tribute to the talent and commitment of our employees at CryptoLogic."

CryptoLogic is bringing the latest product innovation and exciting entertainment concepts to its Internet casino software. The company has developed and introduced more than 50 new casino games since 2004. Recent launches include Bejeweled, the wildly popular gem-matching game, and six new multi-stage, multi-bonus and multi-jackpot games. These games, which feature Marvel Super Heroes such as The Hulk, Daredevil, X-Men, Blade and The Punisher, are among the most popular games with Internet players.

"We're proud that players are enjoying our casino innovations, and have recognized CryptoLogic with the industry's Gold Standard for Casino Software," added Justin Thouin, CryptoLogic's Director of Casino and High-Margin Gaming.

"CryptoLogic's games deliver the excitement, the online entertainment and the jackpots to suit everyone," said A.J. Slivinski, WagerLogic's Managing Director. "In fact, one lucky British player very recently walked away with more than US$1.7 million by playing one of our own patented games, Millionaires Club - on a US$0.90 bet! This is the second-largest online win in the history of the industry."

[Boni]

10.Januar 2006

UKBETTING RENEWS AGREEMENT TO USE CRYPTOLOGIC-DEVELOPED INTERNET POKER SOFTWARE

Europe's largest online sports content network extends exclusive poker contract to 2009; casino contract to 2008

01/10/2006 (Toronto, ON) - CryptoLogic Inc., a leading software developer to the global Internet gaming market, announced today the renewal of its relationship with ukbetting plc - Europe's largest online sports content network - through the extension of the agreement with CryptoLogic's wholly-owned subsidiary, WagerLogic Limited. ukbetting will continue to use WagerLogic's Internet poker solution exclusively through to 2009 for its betting brands, www.ukbetting.com and www.totalbet.com. The contract also extends ukbetting's use of WagerLogic's casino software until 2008.

"CryptoLogic is growing its business with the world's blue-chip gaming brands - and ukbetting is one of the major European names on that list," said Lewis Rose, CryptoLogic's President and CEO. "CryptoLogic is proud that ukbetting has reaffirmed its confidence in our award-winning Internet gaming software, particularly benefiting from the liquidity of our poker network. By leveraging CryptoLogic's proven poker offering with ukbetting's extensive user base, we continue a winning combination to generate the highest returns."

A customer since 2003, ukbetting introduced WagerLogic's state-of-the-art poker and casino software to its highly popular betting brands, www.ukbetting.com and www.totalbet.com, and have experienced strong results, especially in the high-growth poker segment. Poker has accounted for the majority of ukbetting's revenue generated from CryptoLogic-developed software, which has been driven by the strong crossover from ukbetting's sports content users to poker. The contract renewal provides for WagerLogic's poker product to be integrated into ukbetting's single E-Cash wallet, to enhance the cross-marketing opportunities between ukbetting's 8.75 million monthly UK and European sports fans to its Internet poker services.

"I'm delighted that WagerLogic and ukbetting will continue this mutually rewarding relationship, which has contributed to a more than 100% year-over-year increase in our poker and casino revenue," said Eric Semel, CEO of ukbetting plc. "It is an extremely important move for ukbetting to have our poker product integrated into our back end systems, thereby allowing our customers to be able to use a single wallet solution rather than to have to register a new account to play poker."

"The contract extension with ukbetting reinforces how major gaming operators continue to benefit from WagerLogic's poker liquidity and our decade of industry experience to deliver sophisticated innovations that enhance player loyalty and drive incremental revenue," added A.J. Slivinski, WagerLogic's Managing Director.

About CryptoLogic® (www.cryptologic.com)
Focused on integrity and innovation, CryptoLogic Inc. is a world-leading, blue-chip public developer and supplier of Internet gaming software. Its leadership in regulatory compliance makes it one of the very few companies with gaming software that is certified to strict standards similar to land-based gaming. WagerLogic Ltd., a wholly-owned subsidiary of CryptoLogic, is responsible for the licensing of its gaming software and services to customers worldwide. For information on WagerLogic®, visit www.wagerlogic.com.

CryptoLogic's common shares trade on the Toronto Stock Exchange (symbol: CRY), on the NASDAQ National Market (symbol: CRYP), and on the Main Market of the London Stock Exchange (symbol: CRP).

About ukbetting (www.ukbetting.com)
ukbetting plc (LSE symbol: UKB) operates the UK's leading sports content and betting sites. This portfolio of sites includes www.sportinglife.com, the original multi-sports web site that provides the fastest news, scores, results and reviews for all major sports including football, racing, golf and rugby and cricket and much more. Its sister sites, www.sportal.com and the www.bettingzone.co.uk, deliver leading edge interactive sports content and independent betting news, preview, analysis, selections and stats respectively.

In addition to its sports content division the group has two primary betting sites, www.ukbetting.com and www.totalbet.com that offer a wide range of fixed odds markets for all the major sports as well as play poker and casino games. Customers of www.totalbet.com are also able to place bets directly into the tote pools giving them access to popular bets such as the placepot, jackpots and scoop6.



10.Januar 2006

UKBETTING erneuert die Vereinbarung, Internet-Poker-Software von Cryptologic zu verwenden

Europas größtes Online Sports-Themen Netzwerk erweitert den exclusiven Poker Vertrag bis 2009 und den Casino Vertrag bis 2008


10.Januar 2006 (Toronto, AN) - CryptoLogic Inc., einer der führenden Software-Entwickler am globalen Internet-Spielmarkt, verkündete heute die Intensivierung seiner Partnerschaft mit Ukbetting plc - Europas größtes Online-Sport-Netzwerk - durch die Verlängerung der Vereinbarung mit CryptoLogicer vollständig-besessener Tochtergesellschaft, fährt das WagerLogic begrenzte Ukbetting fort, Internet-Pokerlösung WagerLogics durch bis 2009 für seine Wettenmarken, www.ukbetting.com und www.totalbet.com ausschließlich zu benutzen. Der Vertrag verlängert auch Gebrauch der ukbettings von casino-Software WagerLogics bis 2008.

"CryptoLogic wächst sein Geschäft mit den erstrangigen Spielmarken der Welt - und das Ukbetting ist einer der wichtigsten europäischen Anbieter auf dieser Liste,", sagte Lewis Rose, Präsident und CEO von CryptoLogic. "CryptoLogic ist stolz, daß ukbetting sein Vertrauen in unserer award-winning internet-Casinosoftware nochmals versichert hat und besonders von der Liquidität unseres Pokernetzes profitiert. Durch den CryptoLogic nachgewiesenen Poker der Aufnahme von Fremdmitteln, der mit umfangreicher Benutzerunterseite der ukbettings anbietet, setzen wir eine Gewinnenkombination fort, um die höchstmöglichen Einnahmen zu generieren."

Ein Kunde seit 2003, ukbetting eingeführten WagerLogics state-of-the-art Poker und casino-Software zu seinen in hohem Grade populären Wettenmarken, www.ukbetting.com und www.totalbet.com und haben starke Resultate, besonders im Hochwachstumpokersegment erfahren. Poker hat die Majorität des Einkommens der ukbettings erzeugt von CryptoLogic-entwickelter Software erklärt, die durch die starke Überkreuzung von den zufriedenen Benutzern des Sports der ukbettings zum Poker angetrieben. Die Vertragserneuerung stellt für das in einzelne E-Cashmappe der ukbettings, um die Kreuz-Marketing-Gelegenheiten zu integrierende Pokerprodukt WagerLogics zwischen Million Monats-Großbritannien der ukbettings 8,75 und europäischen Sportventilatoren zu seinen Internet-Pokerdienstleistungen zu erhöhen zur Verfügung.

"Ich bin froh, dass WagerLogic und Ukbetting diese beiderseitig vorteilhafte Zusammenarbeit fortsetzen, das zu einer Jahr-über-Jahr-Zunahme mehr als 100% unseres Poker- und Casinoeinkommens beigetragen hat," sagte Eric Semel, CEO von Ukbetting plc erfreut. "es ist eine extrem wichtige Bewegung, damit das Ukbetting unser Pokerprodukt in unsere rückseitigen Endsysteme integrieren läßt, dadurch eserlaubt eserlaubt unseren Kunden, in der Lage zuSEIN, eine einzelne Mappenlösung zu benutzen anstatt ein neues Konto registrieren zu müssen, um Poker zu spielen."

"Die Vertragsverlängerung mit Ukbetting verstärkt, wie Hauptspieloperatoren fortfahren, von der Pokerliquidität WagerLogics und von unserer Dekade der Industrieerfahrung zu profitieren zum Liefern der hoch entwickelten Innovationen, die Spielerloyalität erhöhen und zusätzliches Einkommen fahren," addiertes A.J. Slivinski, WagerLogics geschäftsführender Geschäftsführer. Ungefähr CryptoLogic® (www.cryptologic.com) gerichtet auf Vollständigkeit und Innovation, CryptoLogic Inc. ist ein Welt-Führen, ein erstrangiger allgemeiner Entwickler und ein Lieferant von Internet-Spiel-Software. Seine Führung in der regelnden Befolgung bildet es ein von den sehr wenigen Firmen mit Spiel-Software, die zu den strengen Standards bestätigt wird, die land-based Spiel ähnlich sind.

(Grösstenteils mit Übersetzungssoftware aus dem Englischen übersetzt)