Bullet Business

Results for the third quarter of fiscal 2008 include:

• Total revenue at $2,531,998, up 27% from Q3 2007.
• Royalty revenue at $796,612, down 55% from Q3 2007.
• Software license fees of $1,457,500, a new caption from Q3 2007.
• New corporate record for support services revenue of $211,871, up 32% from Q3 2007.
• New  corporate  record  for  net  income  of  $544,253,  or  $0.04  per  share,  fully  diluted,  up from net income of $173,492 in Q3 2007.
• EBITDA (1) increased to $894,666, from $271,538 in Q3 2007 and EBITDA (1) margin increased to 35% from 14% in Q3 2007.

Results for the first three quarters of fiscal 2008 include:

• Total revenue at $7,158,118, up 19% from the first three quarters of 2007.
• Royalty revenue at $3,772,420, down 31% from the first three quarters of 2007.
• Software license fees of $2,762,500, a new caption from the first three quarters of 2007.
• Net income of $535,707, or $0.04 per share, fully diluted, up from net income of $296,242in the first three quarters of 2007.
• EBITDA (1) increased to $1,050,524, from $583,810 in the first three quarters of 2007 andEBITDA(1) margin increased to 15% from 10% in the first three quarters of 2007

"We remain committed to increasing our cash reserves through revenue growth from existing and new customers as well as from new product and service offerings and software licensing fees," said Scott White, Parlay's Chief Executive Officer.   "We have a number of new customers who are in various stages of advancing their Internet bingo offerings and we anticipate these new customer launches to contribute to revenue commencing in Q1 2009. Our quarter just passed also included significant foreign exchange expense reflecting the remarkable strength of our reporting currency against each of sterling, the Euro and the Canadian dollar."

"We are also beginning to see," continued Mr. White, "the results of various restructuring initiatives which we commenced in Q2 2008 and which we have expanded.   We anticipate that the full benefit of these adjustments will fully impact our cost structure in Q1 2009."

Parlay generates revenue from software licensing, installation fees and support services. Consolidated revenues were $2.5 million in Q3 2008 compared to $2.0 million in Q3 2007. Expenses in Q3 2008 were $1.7 million, down from $1.8 million in Q3 2007. The decrease represented reduced compensation expenses offset by adverse foreign exchange effects and the absence of certain non-recurring expense reductions in Q3 2007.

Net income for the quarter was $0.5 million, or $0.04 per diluted share, compared to net income of $0.2 million, or $0.01 per diluted share in Q3 2007. Consolidated revenues were $7.2 million for the first three quarters of 2008 compared to $6.0
million in the first three quarters of 2007. Expenses in the first three quarters of 2008 were $6.2 million, up from $5.5 million in the first three quarters of 2007.   The increase represented adverse foreign exchange effects, certain non- recurring costs in the first three quarters of 2008 and the absence of certain non-recurring expense reductions in Q3 2007 offset by reduced compensation expenses.

Net income for the first three quarters of 2008 was $0.5 million, or $0.04 per diluted share, compared to net income of $0.3 million, or $0.02 per diluted share, in the first three quarters of 2007.

Parlay remains debt free and Parlay's cash balance at September 30, 2008 was $3.2 million.

© 2008 by Parlay Entertainment Inc.