GTECH Announces New Contract with Caixa Economica Federal in Brazil
May 12 2005 - 6:18PM
PR Newswire (US)
GTECH Announces New Contract with Caixa Economica Federal in Brazil
WEST GREENWICH, R.I., May 12 /PRNewswire-FirstCall/ -- GTECH
Holdings Corporation (NYSE:GTK) today announced that its
wholly-owned subsidiary, GTECH Brazil Ltda., has signed a new
one-year contract with Caixa Economica Federal, the administrator
of the National Lottery in Brazil. Under the terms of the new
contract, which is to commence on the termination date of the
existing Caixa contract on May 15, 2005, GTECH will continue to
operate the existing lottery and financial transaction processing
systems for Caixa until a new system, being developed in-house by
Caixa, is installed and operational. At its sole discretion, Caixa
may extend GTECH's contract beyond the expiration date of May 14,
2006. The new contract retains all of GTECH's service offerings
under the current contract, and reflects a fixed and variable fee
schedule. In return for the new contract, GTECH has agreed to a
reduction in rate of approximately 12 percent from the previous
contract pricing. "GTECH has reached an agreement with Caixa that
will support their migration path to a new business model," said
GTECH President and CEO W. Bruce Turner. "We will continue to work
closely with Caixa and its vendors in order to assist in a seamless
transition and gradual exit by GTECH." Based upon Caixa's
de-installation schedule, and in accordance with previous guidance,
the Company expects revenues of approximately US$105 million to
$120 million from the Caixa contract during fiscal 2006, including
the recovery of withholding payments from fiscal 2005. With respect
to the new contract, the Company expects to generate approximately
US$80 million to $85 million in service revenue over the contract
term, which essentially runs from the second quarter of fiscal 2006
through the end of the first quarter of fiscal 2007. Certain
statements contained in this press release are forward looking
statements within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934. The
Company identifies forward looking statements by words such as
"may," "will," "should," "could," "expect," "plan," "anticipate,"
"intend," "believe," "estimate," "continue," or similar words that
refer to the future. Such statements include, without limitation,
statements relating to the prospects and financial outlook for the
Company, which reflect management assumptions regarding: (i) the
future prospects for and stability of the lottery industry and
other businesses in which the Company is engaged or expects to be
engaged, (ii) the future operating and financial performance of the
Company (including, without limitation, expected future growth in
revenues, profit margins and earnings per share), and (iii) the
ability of the Company to retain existing business and to obtain
and retain new business. Such forward looking statements reflect
management's assessment based on information currently available,
but are not guarantees and are subject to risks and uncertainties
that could cause actual results to differ materially from those
contemplated in the forward looking statements. These risks and
uncertainties include, but are not limited to, those set forth
above, in the Company's subsequent press releases and on reports by
the Company on Forms 10-K, 10-Q and 8-K, and other reports and
filings with the Securities and Exchange Commission, as well as
risks and uncertainties respecting: (i) the potential impact of
extensive and evolving government regulations upon the Company's
business; (ii) the ability of the Company to continue to retain and
extend its existing contracts and win new contracts; (iii) the
possibility of slower than expected growth or declines in sales of
lottery and gaming goods and services by the Company or the
Company's customers; (iv) exposure to foreign currency
fluctuations; (v) risks and uncertainties inherent in doing
business in foreign jurisdictions; (vi) the relatively large
percentage of the Company's revenues attributable to a relatively
small number of the Company's customers; (vii) the possibility of
significant fluctuation of quarterly operating results; (viii) the
intensity of competition in the lottery and gaming industries; (ix)
the possibility of substantial penalties under and/or termination
of the Company's contracts; (x) the ability of the Company to
respond to technological change and to satisfy the future
technological demands of its customers; (xi) opposition to
expansion of lottery and gaming; (xii) the Company's ability to
attract and retain key employees; and (xiii) the possibility of
adverse determinations in pending legal proceedings. GTECH, a
leading global information technology company with over $1 billion
in revenues and 5,300 people in over 50 countries, provides
software, networks, and professional services that power
high-performance, transaction processing solutions. The Company's
core market is the lottery industry, with a growing presence in
commercial gaming technology and financial services transaction
processing. For more information about the Company, please visit
GTECH's website at http://www.gtech.com/. Contact: Robert K.
Vincent Public Affairs GTECH Corporation 401-392-7452 DATASOURCE:
GTECH Holdings Corporation CONTACT: Robert K. Vincent, Public
Affairs of GTECH Corporation, +1-401-392-7452 Web site:
http://www.gtech.com/
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