Gtech (NYSE:GTK)
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GTECH Announces Development with Customer in Mexico
Pronosticos Ends Procurement for New Online Lottery Contract
WEST GREENWICH, R.I., April 30 /PRNewswire-FirstCall/ -- GTECH Holdings
Corporation today announced that its wholly-owned subsidiary, GTECH
Corporation, has been notified that the Company's selection as the apparent
successful vendor to provide equipment and services for a new online lottery
system and associated telecommunications network in Mexico to Pronosticos para
la Asistencia Publica (Pronosticos) has been revoked. As part of a ruling by
Secretaria de la Funcion Publica (Mexican Comptroller Ministry) on a protest
filed by unsuccessful competitors, GTECH's bid was declared non-compliant and
disqualified. Subsequently, Pronosticos announced that it has disqualified the
sole remaining bidder as also being non-compliant and has formally ended the
procurement.
In making the announcement, GTECH President and CEO W. Bruce Turner said, "It
is our belief that GTECH submitted a fully compliant bid to Pronosticos that is
in the best interest of the lottery. We intend to pursue all appropriate
avenues available to us to contest the Comptroller's decision in this matter.
We have been advised that we have very strong grounds to challenge this
decision."
GTECH's bid was disqualified because it was determined that a section of the
proposal concerning the methodology for the calculation of revenues, in the
event that the government decided to apply a Value Added Tax to lottery
tickets, was deemed to be conditional in nature and therefore not compliant
with the provisions of the Request For Proposals. The decision by the
Comptroller can be directly challenged.
Pronosticos had previously determined that GTECH's proposal was technologically
compliant and over the six year life of the contract provided a US$25 million
savings over its nearest competitor.
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. 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 5,400 people in 45 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 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
CONTACT: Robert K. Vincent, Public Affairs, GTECH Corporation,
+1-401-392-7452
Web site: http://www.gtech.com/