Executives
Yvonne Zappulla – Grannus Financial Advisors, IR Consultant
Lee Cole – Interim Chief Executive Officer
Roger Holdom - Chief Financial Officer
Analysts
Todd Eilers – Roth Capital Partners
Boyd Hines – Private Investor
Larry [Kay] – Tele Business USA
David Watson – Private Investor
Andrew Cowen – Tricadia Capital
Electronic Game Card Inc. (EGMI) Q3 2008 Earnings Call November 12, 2008 10:00 AM ET
Operator
Welcome to the third quarter 2008 Electronic Game Card Incorporated earnings conference call. (Operator Instructions) I would now like to turn the call over to your host for today's call, Ms. Yvonne Zappulla.
Yvonne Zappulla
I'm Yvonne Zappulla of Grannus Financial Advisor, Electronic Game Card's Investor Relations Consultant. The third quarter earnings report press release was issued last evening after the close. The press release is available on the company's homepage under the investor relations section also at www.electronicgamecard.com as well as through Thompson Financial, which is simulcasting the conference call at www.earnings.com. An archive copy of this call will be available for review one hour after its completion on both the Thompson Financial and the Electronic Game Card's website.
Before we begin I'd like to state the following. During this call the management of Electronic Game Card may make comments about future expectations, plans and prospects which could constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the applicable statements. These risks and uncertainties include but are not limited to those described in the press release, the company's filings with the Securities and Exchange Commission, forms 10-KSB and forms 10-QSB.
With us today is Lee Cole Interim CEO of Electronic Game Card and Roger Holdom who will be reviewing the quarter and update us on the current operations of the company.
Roger Holdom
During the third quarter 2008 Electronic Game Card generated revenues of $3 million slightly ahead of analyst expectations, 70% higher than the prior year quarter level and 22% higher than the previous quarter, which ended the 30th of June 2008. Revenue growth during this quarter was predominantly driven by the further penetration of the Electronic Game Card units into the sales promotions and charity lotteries market.
The current backlog is expected to generate the majority of our business for the remainder of the year further validating our guidance for 2008. EGC is in the process of developing additional partnerships for distribution and licensing agreements and further progressing our global sports division, as well as the educational toy card. All of which are expected to support for the group growth and revenue growth.
The opportunities that the company is currently looking at and working hard to formalize include the Far East where we are looking at both promotions and charity gaming, developing new markets for our new products while continuing to work hard at making sure that all Electronic Game Cards are taken up and used in markets across the world.
We're seeing increased interest in new Europe, which is the Europe that is coming into the economic union which includes countries like Romania also Serbia, Poland, Czechoslovakia, and were seeing growth in our Australasian development area including the opportunity with our current existing portfolio, and also the new products which we've eluded to in previous calls and also at our AGM which was held in New York in September of this year.
Due to this we're looking at increasing our manufacturer capability not only in finding other production people to help with our operation and other production facilities, but also looking at the tooling and the necessary manufacturing agents to make sure that our new line can be both made economically and also meeting our high levels for reliability and robustness. We are now receiving inquires from a number of areas for both our existing products and our new products which we are discussing and have publicized through promotions and also publicity.
Electronic Game Card's net income more than doubled over last year as we reported our seventh consecutive profitable quarter with comprehensive net income of $1.7 million or $0.032 per basic share and $0.028 diluted versus $818,000 or $0.019 per basic share and $0.015 diluted share in the prior year third quarter, and $1.3 million or $0.026 per basic share and $0.021 diluted share for the prior quarter of this year.
As of September 30, 2008, Electronic Game Card had approximately 53 million shares of common stock outstanding. Our fully diluted share count assuming the exercise of all options and warrants, which is exercised, would generate approximately proceeds of $2.8 million, and the common stock on the line the convertible redeemable preferred debt totals approximately 6.5 million shares. The figure upon which we have calculated our guidance for the purpose of reporting our diluted share count using the treasury method totaled approximately 61.3 million shares during the quarter.
Gross profit for the three months ending September 30, 2008 was $2.3 million. Operating expenses during this third quarter of 2008 totaled $525,000, an increase of approximately $142,000 over the third quarter of 2007, an increase of $73,000 over the previous 2008 quarter. This increase was attributed predominantly to high consulting expenses of $157,000 due to the continued work on new products, but this was also offset by reduction in general administrative expenses over the previous quarters.
Going forward we may need to increase personnel particularly within the executive ranks and marketing, but we will only do this to enhance our market opportunities. Expansion will only be considered to expeditiously accommodate increased business. We will not compromise the company's cost efficient operations with new stuff unless there are viable markets to be explored or new products to be developed to increase our overall revenue and penetration of new opportunities and markets.
For the nine months ended September 30, 2008, Electronic Game Card's revenues increased 84% to $7.8 million over the prior year nine-month period. Net income totaled $4.3 million or $0.08 per basic share and $0.07 per diluted share compared to a net income of $1.7 million or $0.04 per basic share and $0.03 per diluted share during prior year's first nine-month period.
Cash and equivalents on September 30, 2008 were at $7.9 million. Accounts receivable remain consistent all year at approximately $2.7 million. As of September 30, 2008, current assets were $11 million and current liabilities were $1.5 million. Total liabilities remain consistent with prior second quarter 2008 at approximately $1.9 million, excluding $6.5 million in the form of a 6% convertible redeemable preferred debt instrument which converts at $1.01.
As of December 31, 2007, Electronic Game Card achieved positive shareholder equity for the third time in the company's history. On September 31, 2008, the company's stockholder equity totaled $7.9 million, an increase of $2 million from June 30, 2008.
In conservatively reviewing our level of business activity, EGC believes that the current contracted backlog gives us confidence on our revenue guidance for the full year 2008. In addition, at this level of business combined with our target gross margin and quarterly operating costs and interests combined of approximately $650,000, EGC believes that it will deliver a minimum of $0.10 fully diluted EPS in 2008.
For 2009, we continue to project an increase to both revenue and earnings over 2008. Now after reading all those numbers let me change the conference call focus from the actual figures and financial to tell you how our business and products are now developing.
In the last quarter our new Executive Chairman, Lou Steinberg, a well known personality in the gaming industry and one of Britain's most successful businessmen, has purchased approximately 11% of EGC stock in the open market. Lou Steinberg founded Stanley Leisure in Belfast with one licensed betting shop and eventually became the largest casino operator on the fourth largest retail bookmaker in the United Kingdom with over 600 shops.
In 2005, Stanley Leisure sold its retail bookmaking operations for approximately $1 million and in 2006 sold its 45 casinos to Genting International for approximately $1.3 billion. During Lord Steinberg’s tenure, Stanley Leisure grew organically through acquisitions. In its last five years as a publicly traded company, Stanley Leisure generated a compound annual rate of return in excess of 25% for shareholders.
Lord Steinberg’s extensive experience in international gaming is expected to play a critical role in guiding EGC in the version in gaming business on a global basis. Also we announced that Eugene Christiansen has joined the EGC board as Head of the Nominating Committee. Mr. Christiansen has been active as an executive and a consultant in the commercial gaming and entertainment industries since 1976 through his New York based Christiansen Capital Advisors.
Mr. Christiansen has conducted studies of the economic taxation and financial structure and regulation of casino gaming, pari-mutuel wagering and lotteries and has counseled Manhattan and Washington DC law firms in legal proceedings regarding gaming issues. He’s also authored numerous articles dealing with all aspects of the gaming industry. EGC will look to Mr. Christiansen for guidance in seeking out opportunities in the global lottery business and across America.
We also had Anna Houssels join us as a non-executive director. She’s currently working with Dubai World, which is a development joint venture with the MGM Mirage. She is an accomplished international businesswoman who has operated on a global basis and across America. She works predominantly in the development of commercial and retail and residential opportunity. Her commercial ability and negotiation skills will help EGC develop its business across the world. Using her contacts and knowledge of local markets and local opportunities to take not only our game cards but our new developing products and portfolio of games into these markets.
But our newest addition to the board is Paul Farrell, Paul now chairs the Board Audit Committee. Paul has over 23 years of asset management experience most recently as Managing Director and Co Portfolio Manager and Chief Operating Officer of the Scouts Fund Group of Pequot Capital, Electronic Game Card’s largest shareholder. Mr. Farrell’s extensive background in business and investment analysis and finance will further the company’s financial controls and oversight.
Now let’s just give you a quick update on our business initiative and what’s happening within the company. During the quarter we’ve been very happy to announce that we’ve managed to increase our exposure in Native American gaming by finding a new distributor to work with. It’s a massive market. It actually generates $26 billion in revenue annually within the United States alone.
Just prior to the end of the third quarter we announced the five-year licensing agreement with a minimum royalty fee of $9.2 million for distribution to the Native American Indian owned casinos by Arizona-based Sovereign Game Card. Tom Darwin, the founder of Sovereign Game Card, has a 30-year history in the service of Native American Indian communities and has financed many projects over the years.
Sovereign will produce, market, sell and distribute Electronic Game Card units meeting EGC and Gaming Laboratories International GLI, the manufacturing standards for both security and robustness. These cards will be used by Native American Indian owned casinos and Native American Indian charities and beneficial lotteries within the United States and Canada.
EGC will be entitled to a royalty fee that will range from 10% to 15% of the gross selling price. EGC will receive a minimum royalty fee of $1 million during the first 12 months increasing each successive 12-month period thereafter.
We’ve talked a lot about educational toys and games, and the educational toys and games industry is a key area of focus where we can take the essence of our technology and expand it into areas where we know there is high consumer interest and also great growth opportunities globally. EGC announced on July 15th our entry into the market as we signed a multi-year licensing agreement with Hit Entertainment to produce Thomas and Friends educational game cards.
Well as we develop this product and continue to work hard with distribution partners, I can update on our progress. Software development is continuing and we are in the stage of actually starting to demo both the projects for focus groups and internally. We’ve seen the different opportunities that work and are working hard with the various children’s groups to ensure that our product is both safe and educational.
We look forward to making further announcements about the success and the development of our educational toys and games with Thomas and Friends but also with other licensees in future calls. We’re also making good progress with our sports products. We continue to build distribution and find the right partners to market these to the various global sports bodies that are so prevalent around the world.
Our sports division is targeting a $100 billion market and establishing a good product at the right price with our global partners. Getting sporting relationships correct and ensuring that we deliver the right product is a major part of our activity towards 2008 and into 2009. Ensuring that those franchises and also the regulatory bodies that control these sports see that our game cards continue to meet their standards for both customer value but also generating the right licensing revenue.
Again we hope to announce more news about how we intend to structure, build and develop this division within 2008 and 2009. As we’ve stated our promotional business continues to do well and it continues to be a strong part of the revenues of the company.
Before we go on let me just talk about some of the milestones that we will expect to be announcing between now in 2008 and in 2009. We’re working very hard on developing our products that we discussed in our last conference call, and I think I got very animated and excited about, which is linked to the work of mobile phones or cell phones.
Those of you that attended our AGM in September in New York would have seen some of the software that we were able to demonstrate on mobile phones or cell phones. We continue to work very hard on the development of this technology. We are very pleased with our progress and hopefully this quarter not only will we be able to announce the development of more games and more software, but also we would have completed our ability to list this company within the UK.
The distribution partnerships continue to look forward. We are always looking for new distribution partners around the world, and as I started with this presentation I highlighted the growth and success we are making in people contacting us but not only on Electronic Game Cards but for also for our other range of products, as word is spreading of our work with both Thomas and also with our Quiz Cards.
Again, there was some packaging and some demos available at our AGM so some of you may be aware of the progress that we are making of those from September 2008. Though we are talking about developing our distribution partners, it’s important to understand that EGC continues to work on an outsource business model.
While EGC will continue to work with internal sales effort, EGC firmly believes in the power of distribution partnerships, their relationships, local market knowledge. EGC is active in discussing today with several parties globally including the Far East, Europe, Australasia and South America.
We’ve also spoken in other calls about extending our management team and will continue to appoint senior managers to run each of our business divisions and are working diligently to identify and appoint new senior managers including a new CEO. The CEO will have extensive industry knowledge and will have a credibility which will enable us to move forward quickly and rapidly within our sectors and also to ensure that we do so in a manner which creates shareholder value.
Well that’s the end of the written or scripted portion of this particular call. I’d now like to give you the opportunity to ask questions of both myself and interim CEO Lee Cole. So with that I will open up and ask the operator to present the first call.
Question-and-Answer Session
Operator
(Operator Instructions). Your first question comes from Todd Eilers – Roth Capital Partners.
Todd Eilers – Roth Capital Partners
I was wondering if you guys could possibly breakdown your revenue a little bit further, maybe identify how much of the revenue came from card sales, maybe how much of it was recurring revenue. Also how much was Sci Games licensing fees?
Lee Cole
Of the revenue probably about 60% was in promotion market. Probably about 80% of the revenue was from card sales and the other 20% was from what we describe as licensing programs.
Todd Eilers – Roth Capital Partners
And of that 20% would that include the Scientific Games?
Lee Cole
Right, yes.
Todd Eilers – Roth Capital Partners
So, 80% of the revenue, what does that equate to in terms of unit sales or actual game card sales for you guys?
Lee Cole
About $1.5 million.
Todd Eilers – Roth Capital Partners
I'm wondering, could you maybe talk a little bit just, obviously there's a lot of macroeconomic issues out there worldwide. Can you maybe talk a little bit about how you guys are able to continue to grow your business as you did in the quarter and maintain your guidance? Maybe just talk a little bit about are you seeing any sort of impact at all and just your thoughts on the outlook there.
Lee Cole
Yes, as we are still a growth company we are pretty fortunate. Even though some of our existing clients have not reordered as much as we would have expected because of the macroeconomic circumstances, because we're only really only starting on our product range and because we haven't touched gaming we're still very comfortable with our earnings projections. As we've always said, we're constantly expanding our product range and with new products, like the Quiz Cards, one of those products hits and that can hit the ball out of the park in terms of units and sales and we're talking to some big distribution partners for our Quiz products.
Todd Eilers – Roth Capital Partners
How about with regards to your tribal gaming opportunity and the deal that you've signed already. Have you guys, or has your partner signed any contracts yet, and if not, when do you expect to see that first contract?
Lee Cole
Yes, when we signed the deal that we would like a 90-day ramp up period so we could look at all the different intricacies of the tribal, because state-by-state there's different gaming laws to get the trial products, to get partnerships with the tribes. To answer your question we expect to see the first meaningful orders come through next year and the nature of the agreement is like Sci Games we get a minimum royalty, and I think over the period of the agreement we get somewhere like $10 million of royalties minimum, which is all net income obviously.
Todd Eilers – Roth Capital Partners
How about with respect to uses of cash? You guys now have surpassed the value of the convertible preferred stock considering where your common stock is at right now. Can you maybe walk us through what your thoughts are in terms of priorities for using your existing excess cash and potential future free cash flow?
Lee Cole
Well obviously we want to reserve enough cash to repay the preferred, but so looking at our free cash flow going forward, I think we're looking to develop the business and grow the business. We're looking at I think two acquisitions which would increase cash flow and be accretive which is synergistic, obviously they are in a early stage, but that's one of the reasons for Lord Steinberg coming on.
Obviously apart from his vast experience, Leonard's increased Stanley Leisure. I think in his tenure at Stanley Leisure he did 70 acquisitions and were all very accretive. So, we're looking for synergistic acquisitions that will really help increase our sales volume and complements our proprietary range of products.
So to answer your question, we're looking to use the cash to develop the business and repay the preferred. Again, the board might decide on a stock buyback program, but at the moment they haven't decided on that.
Todd Eilers – Roth Capital Partners
Then last two questions, first where are you guys at in terms of listing requirements for NASDAQ and, I know you guys are actively looking for a new - -
Lee Cole
CEO, yes.
Todd Eilers – Roth Capital Partners
CEO, maybe timing on that as well.
Lee Cole
Yes sure, along with the NASDAQ obviously we stated that we want to get onto a senior exchange as soon as possible because obviously [inaudible] in many ways. The only qualification we don't have for going up to a senior exchange is stock price. So we're looking into getting that coming to the fold, very conscious of getting us on the senior exchange, but with our share price like it is, the only way to get up there would be to do a split.
With regards to the CEO, as you know we recently appointed Lord Steinberg as Chairman and obviously other senior board members recently came on and they started the CEO search and I think there's half a dozen candidates who will be in, in the next couple of weeks. So we're active in that area because getting the right CEO in who's got the extensive gaming experience and, again will help drive the company to the next level.
Operator
Your next question comes from the line of Boyd Hines – Individual Investor.
Boyd Hines – Private Investor
Has the company ever released revenue guidance for fiscal year '09?
Lee Cole
Yes we have and it was approximately $14 million.
Boyd Hines – Private Investor
I wanted to ask you to comment on the schedule, that 13D filing from a large institution that's recently been selling stock in a position that it's held previously. Has the company had any discussions with that large institutional shareholder?
Lee Cole
The company hasn't directly, but the company did inquire, but the company's representatives have spoken to that large institutional shareholder, and we believe that they're now out of their position.
Boyd Hines – Private Investor
They still seem to control through an affiliate well over three million shares of your stock.
Lee Cole
I think they've got 2.7 million of redeemable preferred, so they were approximately 40% of that preferred a couple years ago. If they converted their preferred to common it would come to approximately three million shares, but what the actual price of conversion is $1.00 a share.
Boyd Hines – Private Investor
That makes sense.
Lee Cole
So I don't think we're going to see that in the market.
Operator
Your next question comes from the line of Larry [Kay] – Tele Business USA.
Larry [Kay] – Tele Business USA
Yes I would just like to know where is the status of the lottery cards, the ones that were sold in Iowa and Kansas. Are they still being marketed in the US, and are there any intentions of broadening that market?
Lee Cole
Yes, about 18 months ago we signed an exclusive license with Scientific Games and basically our deal with Scientific Games is they pay us a minimum annual royalty and they market exclusively in the US and they manufacture themselves. So, they're not actually selling them in Iowa and Kansas in the moment, so unfortunately they're not available in the US at the moment as a lottery product.
From an economic standpoint that doesn't really affect us because we've got a minimum royalty coming in. We'd obviously prefer to have them out there, but economically we're getting the benefit anyway.
Operator
Your next question comes from David Watson – Individual Investor.
David Watson – Private Investor
Regarding the Scientific Games, I believe that was like a three-year contract, so in a year and a half I'm supposing that expires. When that expires what's the plan for you guys in the North American gaming market?
Lee Cole
Well Sci Games just have states lotteries, so we're still able to serve the rest of the gaming market. Obviously state lotteries is a big area. One of the things that we're working on is a new card for the lottery market which will be a lower price to hopefully get us into the $10 lottery market as well as the $20, but at the moment we’ve got our agreement with [Solar] games which expires as you say approximately April ’11 and until that time we’re in their hands in the US market.
David Watson – Private Investor
Is the nature of that agreement such that they can re-up that agreement at their discretion?
Lee Cole
Actually it is providing they've met certain criteria.
David Watson – Private Investor
And next year, can you give us an idea of the breakout of the revenue you’re expecting by end market?
Lee Cole
Yes, sure. For 2009 we’re expecting the revenue to come from probably about 10% lotteries. These will approximate about 15% gaming somewhere in the region of 15% sports and approximately on the promotion side that should be about 40% – 40% to 50% next year.
David Watson – Private Investor
Okay, my math gives me 80% there?
Lee Cole
Yes. So I haven't got it in front of me, actually the promotions is 50%.
David Watson – Private Investor
Okay.
Lee Cole
Lottery’s is 10%, gaming is 15%, sports is 15% –
David Watson – Private Investor
When you say gaming is that the tribal gaming?
Lee Cole
That is tribal gaming and other initiatives that we’re looking which we’re in casinos globally.
David Watson – Private Investor
Okay, and then 15% sport, what category is the Thomas the Train stuff under?
Lee Cole
That would be in the balance, which is in toys and games. It’s not just Thomas; that’s other toy and game initiatives that we are driving.
David Watson – Private Investor
I think on the last call Roger had talked about you guys kind of felt that I think it was sort of 20% to 30% EPS annualized growth is sort of the target. Is that still – and I know you’ve reiterated guidance for $0.14 for next year. Is that still sort of the long-term goal?
Lee Cole
I think the long-term goal is much more aggressive EPS growth but $0.14 is what we’re comfortable with for next year. Given current economic circumstances and given where we’re at with certainly these new initiatives where we’re not sure exactly how many they are going to sell. If we can get that magic product that we keep alluding to. If one of the game initiatives takes off, if the Quiz Card takes off then we could see tens of millions of units going out.
David Watson – Private Investor
I’m sorry, what’s the Quiz Card?
Lee Cole
Quiz Card is a new product, which we’ve patented, which is a handheld game that you use as a quiz.
Roger Holdom
It’s basically a self-help, a promotion new device, it’s not a gaming device, it’s aimed at the markets where there is no requirement in terms of getting approval by any regulators. It’s a general knowledge type product, which challenges you within certain sectors say that be sports, movies, literature, music and things of that nature.
They are being used very much to aim at the market which we found, especially within the United States, our products are being used by people to distract them on either boring work or long shifts and giving them an opportunity not just to gamble but also to test their general knowledge and to also simultaneously learn more about their particular core subject and it takes the essence of our chip technology but moves it into a less gaming environment to something which is more domestic and usable by every facet of the population.
Lee Cole
It would be sold retail for about $5 and would be sold in stores like Target and Wal-Mart, etc.
David Watson – Private Investor
I see, and the $0.14 how many shares are you assuming for next year? Fully diluted?
Lee Cole
I think we’ve – the way it averages is $68 billion.
David Watson – Private Investor
$68 million?
Lee Cole
Yes.
Operator
(Operator Instructions). Your next question comes from Mr. Andrew Cowen – Tricadia Capital.
Andrew Cowen – Tricadia Capital
Hey, guys, great quarter, really nice work on the revenue on the cost side. When do you start – when do you think you’re going to start launching some of the sports and quiz type products?
Lee Cole
Won’t be until Q1.
Andrew Cowen – Tricadia Capital
Of ’09 so nothing this year?
Lee Cole
Yes, no, without the first prototype, I mean they weren’t in our numbers anyway but –
Andrew Cowen – Tricadia Capital
And is the sports going to be launched in both Europe and the U.S. or do you think you’ll focus in Europe this time.
Lee Cole
We’ve initially been working in Europe but we’re hoping we’re going to launch in the U.S. as well. We should have an announcement out on that pretty soon.
Andrew Cowen – Tricadia Capital
Okay, so you’re – and is this something that your contacting – is this like a team type thing or are your going through retail outlets?
Lee Cole
Initially we’re going for some theme type things, but we’re still in discussions.
Andrew Cowen – Tricadia Capital
Okay and do you anticipate a move into European lotteries soon or since it looks like the Scientific Games isn’t really doing a whole lot with you on the U.S. lottery front?
Lee Cole
We’re in active discussion with European lotteries. The European lottery raises probably accounts in the $20 market. They’re probably about the same size globally. The rest of the world is – the U.S. sales about 220 million cards annually.
Andrew Cowen – Tricadia Capital
Okay.
Lee Cole
The $10 market, which we haven’t got a product yet, but we’re working on it. The U.S. sales, I think 450 million cards annually and again you double it up for global. So if we can get a product significantly cheaper into the market then that can be very interesting.
Andrew Cowen – Tricadia Capital
Okay and the terms of listing requirements for doing the – for potentially doing a reverse split is that something that you’ll talk about at the next board meeting or is that something that’s on the table for ’08 or ’09 or?
Lee Cole
We’re I think that the board's interested in doing wherever is best for the company to get it up to a [inaudible] or exchange as soon as possible.
Operator
(Operator Instructions). Your next question is a follow-up from the line of David Watson – individual investor.
David Watson – Private Investor
Yes, I just wanted to clarify. If you get a $10 card you still can’t sell that in the U.S. and still – that would still be under Scientific Games?
Lee Cole
Yes. Scientific Games would be able to sell that in the U.S. but who knows maybe they might if they got the $10 card, they might try promoting it.
David Watson – Private Investor
Do you guys have any ongoing discussions with Scientific Games about what they are doing or not doing?
Lee Cole
Yes, yes, we speak to them regularly.
David Watson – Private Investor
And is it a function of them not pushing the product or I mean, I am just trying to understand that you said they were in Kansas and Iowa and now they’re not even in Kansas and Iowa.
Lee Cole
I think the function of maybe, I mean I can’t speak for Scientific Games, but that $20 that price of $1.50 didn’t leave a lot of margins for the lotteries so for whatever reason that’s why we think in a lower price card for U.S. lotteries would hopefully open up that market.
David Watson – Private Investor
And do you guys have sort of a target date on when you think you might be able to get an economical $10 card?
Lee Cole
Sometime during – we’re hoping to have a prototype Q1 next year.
Operator
(Operator Instructions). I would now like to turn the call back to management for closing remarks.
Lee Cole
Well as the Operator said that concludes the questions and answers. I’d like to thank you all for taking time out of your day to attend the call today. Since January 2006 EGC has shifted as a company into a financially sound and profitable entity.
The management talent we are now attracting is impressive and precisely the type of high-level well-established and knowledgeable people that we need to ultimately accelerate the performance of this company to the next level with an increased portfolio of products, focusing global markets, and making sure that within every sector we are driving a clear profit margin that delivers shareholder value.
In the short term our specific mission is to deliver on the 2008 earnings per share guidance to $0.10; our long-term mission though is to deliver quality at every level of our organization to expand the product offering, increase the IP and further our distribution capabilities and reach globally within every market sector where we feel our technology can produce a profitable return.
And that’s it. Thanks for your company today. I encourage you as ever to stay in touch with the company and join us for our next call, which we’ll be reviewing 2008 results. I look forward to talking to you in 2009. Have a great day and thank you very much for joining the call.
Operator
Thank you for joining today’s conference. That concludes the presentation you may now disconnect and have a wonderful day.
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