Horseplayers who find themselves with a short bankroll know that playing with "scared" money affects their wagering decisions.
Gary Marshall, president and CEO of Youbet.com, is finding himself a similar decision. His company, although showing improvement during the past six months of the calendar year, has the "shorts" and without an infusion of additional cash will be forced to "consider a formal or informal restructuring or reorganization, severely curtail or cease operations."
That kind of language, Marshall explained, is required by their accountants because the company has been operating with negative cash flow. But things have improved substantially, he said, since the company took measures to reduce their operating costs; opened a wagering hub in Oregon and obtained a license to operate in California.
During the second quarter, the company reported a record $39.6 million in betting handle, an increase of 39% over the $28.9 million in the second quarter of 2001. Marshall noted that the handle has increased sequentially month-over-month throughout the second quarter.
Revenue for the second quarter increased 250% to more than $6 million. However, the company reported a net loss for the period of $2.58 million or $0.13 a diluted share. In the comparable period of a year earlier, the company had a loss of $3.25 million or $0.17 a diluted share.
Still, Marshall was encouraged by the most recent fiscal results. "In the second quarter of 2002, the first full quarter with Youbet.com’s new management team in place" he said, "our focus was on improving fundamental operations and taking the necessary steps to drive towards break-even. We made substantial progress toward those goals."
."..our focus was on improving fundamental operations and taking the necessary steps to drive towards break-even."
Gary Marshall, President and CEO