Company Returns to Profitability NEW YORK, May 21 /PRNewswire/ -- AUTOTOTE CORPORATION (Amex: TTE) today announced record revenue and EBITDA for its fiscal second quarter and six months ended April 30, 1999 along with earlier than anticipated quarterly net income. In the second quarter of fiscal 1999, revenue increased by $16.9 million to $53.1 million from $36.2 million in the second quarter of fiscal 1998. EBITDA (earnings before interest, taxes, depreciation and amortization) increased by $1.9 million to $10.2 million from $8.3 million in the second quarter of fiscal 1998. The Company reported net income of $0.6 million compared to a net loss of $2.1 million in the second quarter of fiscal 1998. Basic and diluted earnings per share were $0.02 in 1999, compared to a loss of $0.06 per share in the second quarter of fiscal 1998. For the first six months of fiscal 1999, Autotote recorded revenue of $98.7 million compared to $70.6 million in the first six months of fiscal 1998 and EBITDA increased to $17.8 million from $14.0 million in the prior period. Autotote's net loss declined to $1.9 million in the first six months of fiscal 1999 from a net loss of $7.3 million in the comparable 1998 period and basic and diluted loss per share declined to $0.05 in fiscal 1999 from a loss of $0.20 in the first six months of fiscal 1998. The year-over-year increases in revenue and EBITDA in the second quarter and first six months are primarily due to shipments of Extrema(TM) lottery terminals to Italy, the launching of the Montana lottery, the addition of pari-mutuel wagering operations in the Netherlands, the start-up of the NASRIN(TM) communications network, and the opening of the Race Book at the Mohegan Sun Casino. These increases were partially offset by the previously disclosed loss of a French pari-mutuel service contract. Lorne Weil, Chairman and CEO of Autotote Corporation, commented, "The second quarter represents a real milestone for Autotote and proves that we are on the right track with our strategy to improve profitability and significantly increase revenue on several fronts. The new Montana Lottery system successfully came on line in April and, as announced last month, we added to our equipment backlog as a result of important bookings in Latin America, Europe and Asia. In addition, revenue from existing customers continues to grow. SISAL Sport Italia S.A., one of the largest private operators of lotteries in the world, recently confirmed they will accept delivery of its entire 20,000 Extrema(TM) terminal order. That order, along with the British Tote order confirmed in February, means we will be shipping equipment to these customers throughout the next several quarters." "While EBITDA growth in the quarter was a healthy 22%, the rate of increase lagged revenue growth for a number of important reasons. Equipment sales typically carry lower margins than service revenue, although we are making good progress in this regard. Despite adding significantly to revenue, neither NASRIN(TM) nor the Netherlands pari-mutuel operations are yet profitable, and start-up expenses in Montana negated growth in service revenue in that sector." "Nevertheless, as we deliver on our promises of last year, we are further developing avenues for growth for the quarters ahead. In the quarter just ended, we advanced a number of steps forward in the development of a new wagering teletheater in Western Connecticut and will be seeking final town approval for the site within the next several months. In New Jersey, legislation is pending which should allow us to enter into OTB operations in that State by the end of the year. Also during the quarter, we began to examine a number of opportunities to position Autotote to participate in the coming interactive wagering environment and entered into our first agreement in this arena with eLottery." AUTOTOTE CORPORATION provides computerized wagering equipment, computer software, facilities management and satellite broadcast services for on-track, off-track and inter-track wagering, lotteries and legalized sports betting facilities. Autotote's systems are in use in the United States, Europe, Canada, Mexico, Latin America, New Zealand and the Far East. This press release includes statements which may constitute forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. This information may involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. For certain information regarding these risks and uncertainties, reference is made to the Company's Annual Report on Form 10-K for the year ended October 31, 1998. AUTOTOTE CORPORATION AND SUBSIDIARIES Consolidated Statements of Operations (Unaudited) (in Thousands, Except Per Share Amounts) Three Months Ended April 30Six Months Ended April 30 1999 1998 1999 1998 Operating revenues Services $36,496 32,925 70,725 64,252 Sales 16,583 3,290 28,006 6,394 53,079 36,215 98,731 70,646 Operating expenses (exclusive of depreciation and amortization shown below): Services 23,730 20,297 46,893 40,005 Sales 12,718 1,972 20,874 3,762 36,448 22,269 67,767 43,767 Total gross profit 16,631 13,946 30,964 26,879 Selling, general and administrative expenses 6,425 5,686 13,213 12,845 Gain on sale of business -- (684) -- (684) Depreciation and amortization 5,278 7,230 11,011 14,615 Operating income 4,928 1,714 6,740 103 Interest expense 4,039 3,825 8,109 7,654 Other (income) expense 256 (214) 301 (585) 4,295 3,611 8,410 7,069 Income (loss) before income tax expense 633 (1,897) (1,670) (6,966) Income tax expense 61 169 192 294 Net income (loss) $572 (2,066) (1,862) (7,260) Net income (loss) per diluted share $0.02 (0.06) (0.05) (0.20) Basic shares outstanding 36,032 35,504 36,027 35,447 Diluted shares outstanding 37,371 35,504 36,027 35,447  