NEW YORK--(BUSINESS WIRE)--Trans World Corporation (“TWC” or the “Company”) (OTCQB: TWOC), a premier owner and operator of casinos and a hotel in Europe, today reported financial results for the second quarter and six months ended June 30, 2014.
Highlights of 2014 Second Quarter (year-over-year comparisons)
- Net income increased 59.8% to $647,000, or $0.07 per diluted share, compared with $405,000, or $0.04 per diluted share, in the prior year;
- Total revenue increased by 4.5% to $9.4 million;
- Income before foreign income taxes rose by 55.9% to $915,000;
- Slot game attendance increased 19.8%, while live game attendance decreased 3.3%; and,
- EBITDA increased 33.9% to approximately $1.3 million.
Highlights of 2014 Year-to-Date (year-over-year comparisons)
- Net income rose by 68.4% to $1.1 million, or $0.12 per diluted share for the first half of 2014, compared with $673,000, or $0.07 per diluted share, in the prior year;
- Total revenue increased by 7.5% to $18.5 million for the first half of 2014;
- EBITDA increased 32.3% to approximately $2.5 million; and,
- Stockholders’ equity per diluted share was $4.70, as compared with $4.63 at December 31, 2013.
Mr. Rami Ramadan, Chief Executive Officer, commented, “We are very proud of the numbers we reported this morning and are pleased that the 2014 FIFA World Cup did not have a similar negative impact on attendance levels and revenues that we experienced in 2010 when the last World Cup was played. In fact, TWC generated improvements in revenue, net income and EBITDA for the second quarter, as well as for the first half of 2014 over the prior year. We credit this success, in part, to the efforts of our staff and the quality customer service they provide. I commend TWC’s employees for providing our guests with enjoyable gaming experiences at our casinos. We are optimistic that this momentum will continue for the remainder of the year.”
2014 Second Quarter
Second quarter 2014 total revenue increased 4.5% to $9.4 million, compared with approximately $9.0 million for the same quarter of the prior year. The increase in revenue was largely the result of stronger slot business during the quarter, which rose by 9.8% over the same quarter of the prior year. Drop per head also increased by 5.9% for the second quarter of 2014, compared with the same period of the prior year. Revenues for live games decreased by 5.0% over the prior year, which was attributed to a 1.8 percentage point decrease in win percentage for the second quarter of 2014.
The Company reported foreign income taxes for the three month period ending June 30, 2014 of $268,000, as compared with a foreign income tax expense of $182,000 for the second quarter of the prior year. The rise in income tax is attributed to a higher net income base over last year.
Net income increased 59.8%, to $647,000, or $0.07 per diluted share, for the second quarter of 2014 from $405,000, or $0.04 per diluted share, for the same period of the prior year.
EBITDA was approximately $1.3 million for the second quarter 2014 as a result of an increase in net income, from approximately $993,000 for the same three-month period in 2013.
2014 Year-to-date
For the six months ended June 30, 2014, total revenue was $18.5 million, an increase of 7.5% when compared with $17.2 million for the six month period a year ago, primarily driven by an increase in slot business.
The Company incurred a foreign income tax expense of $498,000 for the first six months of 2014, as compared with $355,000 for the same period of the prior year. As mentioned above, the additional expense was due to a higher income base.
Net income rose 68.4% for the six months ended June 30, 2014 to $1.1 million, or $0.12 per diluted share, as compared with approximately $673,000, or $0.07 per diluted share, for the first six months of the prior year.
EBITDA was approximately $2.5 million, a 32.3% increase from approximately $1.9 million for the same six-month period in 2013 due to the rise in net income, as mentioned above. A table reconciling EBITDA, a non-US GAAP (United States Generally Accepted Accounting Principles) financial measure, to the appropriate US GAAP measure is included with the Company’s financial information below.
Balance Sheet Highlights
The Company had cash of approximately $6.1 million at June 30, 2014 compared with approximately $6.3 million at December 31, 2013. At June 30, 2014, stockholders’ equity was approximately $42.9 million, or a corporate book value of $4.70 per diluted share, from approximately $41.9 million, or a corporate book value of $4.63 per diluted share, at December 31, 2013. A table reconciling corporate book value, a non-US GAAP financial measure, to the appropriate US GAAP measure is included with the Company’s financial information below.
Non-US GAAP Financial Measures
This press release utilizes a number of financial measures that are not used when preparing our financial statements in accordance with United States generally accepted accounting principles (“US GAAP”). Management believes that these non-US GAAP financial measures reflect in other ways the results of our operations or financial condition, are common to the gaming industry and are commonly used by our investors and the investing public in evaluating our performance in comparison to our competitors and the market in general. This belief is based on conversations and meetings our management has had with our investors where the substance of these talks has typically centered on historical and prospective EBITDA measurements. Based on management’s observations, even though the EBITDA and other noted measurements are not “US GAAP,” they do enhance investors’ understanding of the Company’s business.
In short, these performance measurements give an analytic view of the Company’s operational earnings and EBITDA, in particular, reflect earnings on a cash-basis, excluding the impact of debt obligations and (non-cash) depreciation and amortization. Corporate book value represents our stockholders’ equity on a diluted per share basis.
Management presents, and uses for its own analysis, EBITDA, corporate book value and other non-US GAAP financial measures as supplemental disclosure because management believes that they are widely used in the gaming industry to measure our performance and the basis for the valuation of our Company in the market. EBITDA measures our ability to meet our working capital requirements, make capital expenditures and perform analyses on possible acquisitions that might include the need for debt service requirements. Corporate book value measures our retained earnings on a diluted per share basis.
The following defines the non-US GAAP financial measures used in this press release:
- “Corporate book value” is our stockholders’ equity divided by our diluted weighted average common shares outstanding for a particular period.
- “Drop per head” is the per guest average dollar value of gaming chips purchased.
- “EBITDA” is our earnings before interest, taxes, depreciation and amortization.
- “Live game attendance” is the number of patrons who played our table games during a particular period.
- “Live games (business)” is the total dollar value of revenues generated by our table games.
- “Slot business” is the total dollar value of revenues generated by our slot machines.
- “Slot game attendance” is the number of patrons who played our slot machines during a particular period.
- “Win percentage” is the ratio of net win (the difference between gaming wagers and the amount paid out to patrons) to total drop (the dollar value of gaming chips purchased in a given period).
The Company has presented below tables to reconcile these non-US GAAP financial measures to their most directly comparable US GAAP measures.
For further information regarding our results of operations and financial condition for the quarter ended June 30, 2014, please refer to our Quarterly Report on Form 10-Q as filed with the Securities and Exchange Commission today.
Conference Call
The Company will discuss these results in a conference call today at 2:00 PM ET.
| The dial-in numbers are: | |||||||
| Live Participant Dial In (Toll Free): | 877-407-9037 | ||||||
| Live Participant Dial In (International): | 201-493-6738 |
The conference call will also be webcast live via the Investor Relations section of Trans World’s website at www.transwc.com, or by clicking the following link: http://transwc.equisolvewebcast.com/q2-2014
About Trans World Corporation
Trans World Corporation, founded in 1993, is a publicly traded, Nevada corporation, headquartered in the U.S., with all of its gaming and hotel operations in Europe. Additional information about TWC can be found on the Company’s website at www.transwc.com.
The press release herein contains certain forward-looking statements and data regarding operating trends and future results of operations. For this purpose, any statements and data contained herein that are not historical fact may be deemed to be forward-looking data. Without limiting the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipates,” “estimates,” or “continue” or comparable terminology or the negative thereof are intended to identify certain forward-looking statements. These statements, by their nature, involve substantial risks and uncertainties, both known and unknown, and actual results may differ materially from any future results expressed or implied by such forward-looking statements. Such risks include but are not limited to, our dependence on our current management, the regulatory environment in which our operations reside, uncertainties over the development and success of our current and future gaming and hotel operations, general global macroeconomic and local economic conditions, extreme weather, and changes in tax or gaming laws or regulations. Additional information concerning potential factors that could affect the Company’s financial results, including other risks and uncertainties, is disclosed in our periodic reports filed with the U.S. Securities and Exchange Commission, including our Form 10-K for the year ended December 31, 2013. The Company undertakes no obligation (and expressly disclaims any such obligation) to publicly update or revise any forward-looking statements or data whether as a result of new information, future events or otherwise.
| TRANS WORLD CORPORATION AND SUBSIDIARIES | |||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||||
| AND COMPREHENSIVE INCOME (LOSS) | |||||||||||||||||||
| Three and Six Months Ended June 30, 2014 and 2013 | |||||||||||||||||||
| (in thousands, except for share data) | |||||||||||||||||||
| Six Months Ended June 30, | Three Months Ended June 30, | ||||||||||||||||||
| 2014 | 2013 | 2014 | 2013 | ||||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||
| REVENUES | $ | 18,540 | $ | 17,243 | $ | 9,418 | $ | 9,012 | |||||||||||
| COSTS AND EXPENSES: | |||||||||||||||||||
| Cost of revenues | 10,016 | 9,472 | 5,030 | 4,875 | |||||||||||||||
| Depreciation and amortization | 816 | 785 | 413 | 389 | |||||||||||||||
| Selling, general and administrative | 6,073 | 5,918 | 3,058 | 3,144 | |||||||||||||||
| 16,905 | 16,175 | 8,501 | 8,408 | ||||||||||||||||
| INCOME FROM OPERATIONS, before other expense and | |||||||||||||||||||
| foreign income taxes | 1,635 | 1,068 | 917 | 604 | |||||||||||||||
| OTHER EXPENSE: | |||||||||||||||||||
| Interest expense, net | (4 | ) | (40 | ) | (2 | ) | (17 | ) | |||||||||||
| INCOME BEFORE FOREIGN INCOME TAXES | 1,631 | 1,028 | 915 | 587 | |||||||||||||||
| FOREIGN INCOME TAXES | (498 | ) | (355 | ) | (268 | ) | (182 | ) | |||||||||||
| NET INCOME | 1,133 | 673 | 647 | 405 | |||||||||||||||
| Other comprehensive income (loss), foreign currency | |||||||||||||||||||
| translation adjustments, net of tax | (399 | ) | (1,998 | ) | (353 | ) | 170 | ||||||||||||
| COMPREHENSIVE INCOME (LOSS) | $ | 734 | $ | (1,325 | ) | $ | 294 | $ | 575 | ||||||||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | |||||||||||||||||||
| Basic | 8,809,663 | 8,826,904 | 8,809,435 | 8,825,343 | |||||||||||||||
| Diluted | 9,127,326 | 9,051,684 | 9,127,098 | 9,050,123 | |||||||||||||||
| EARNINGS PER COMMON SHARE: | |||||||||||||||||||
| Basic | $ | 0.13 | $ | 0.08 | $ | 0.07 | $ | 0.05 | |||||||||||
| Diluted | $ | 0.12 | $ | 0.07 | $ | 0.07 | $ | 0.04 | |||||||||||
| TRANS WORLD CORPORATION AND SUBSIDIARIES | |||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
| June 30, 2014 and December 31, 2013 | |||||||
| (in thousands, except for share data) | |||||||
| ASSETS | |||||||
| June 30, 2014 | December 31, 2013 | ||||||
| CURRENT ASSETS: | (Unaudited) | ||||||
| Cash | $ | 6,086 | $ | 6,284 | |||
| Prepaid expenses | 270 | 267 | |||||
| Prepaid foreign income tax | 217 | ||||||
| Other current assets | 274 | 297 | |||||
| Total current assets | 6,847 | 6,848 | |||||
| PROPERTY AND EQUIPMENT, less accumulated depreciation | |||||||
| of $12,823 and $12,246, respectively | 32,983 | 33,464 | |||||
| OTHER ASSETS: | |||||||
| Goodwill | 6,030 | 6,093 | |||||
| Deposits and other assets | 1,206 | 1,218 | |||||
| Total other assets | 7,236 | 7,311 | |||||
| TOTAL ASSETS | $ | 47,066 | $ | 47,623 | |||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
| CURRENT LIABILITIES: | |||||||
| Long-term debt, current maturities | $ | - | $ | 138 | |||
| Capital lease, current portion | 35 | 48 | |||||
| Accounts payable | 286 | 583 | |||||
| Czech gaming tax accrual | 1,785 | 1,948 | |||||
| Foreign income tax accrual | 676 | ||||||
| Accrued expenses and other current liabilities | 1,507 | 1,702 | |||||
| Total current liabilities | 3,613 | 5,095 | |||||
| LONG-TERM LIABILITIES: | |||||||
| Capital lease, less current portion | 46 | 80 | |||||
| Deferred foreign tax liability | 555 | 560 | |||||
| Total long-term liabilities | 601 | 640 | |||||
| COMMITMENTS AND CONTINGENCIES | |||||||
| STOCKHOLDERS' EQUITY: | |||||||
| Preferred stock, $0.001 par value, 4,000,000 shares authorized, | |||||||
| none issued | |||||||
| Common stock, $0.001 par value, 20,000,000 shares authorized, | |||||||
| 8,809,435 shares in 2014 and 8,810,135 shares in 2013, issued and outstanding | 9 | 9 | |||||
| Additional paid-in capital | 52,808 | 52,578 | |||||
| Accumulated other comprehensive income | 5,343 | 5,742 | |||||
| Accumulated deficit | (15,308) | (16,441) | |||||
| Total stockholders' equity | 42,852 | 41,888 | |||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 47,066 | $ | 47,623 | |||
Reconciliation of Non-US GAAP Measures to US GAAP
The below table reconciles EBITDA and corporate book value, non-US GAAP (Generally Accepted Accounting Principles) financial measures, to their most directly comparable US GAAP measures. Th EBITDA performance measurement gives an analytic view of the Company’s operational earnings on a cash-basis, excluding the impact of debt obligations and (non-cash) depreciation and amortization. The corporate book value is derived from stockholders’ equity divided by the weighted average of diluted common shares outstanding (rounded). The Company believes that these non-US GAAP financial measures provide useful information to its investors as well as to others who might be interested in purchasing shares of TWC common stock. This belief is based on conversations and meetings TWC’s management has had with its investors. Based on management’s observations, it appears that, even though these measurements are not “US GAAP,” they do enhance investors’ understanding of the Company’s business.
|
EBITDA RECONCILIATION Three and Six Months Ended June 30, 2014 and 2013 (in thousands) |
|||||||||||||||
| Six Months Ended June 30, | Three Months Ended June 30, | ||||||||||||||
| 2014 | 2013 | 2014 | 2013 | ||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||
| NET INCOME | $ | 1,133 | $ | 673 | $ | 647 | $ | 405 | |||||||
| Add back: Interest expense, net | 4 | 40 | 2 | 17 | |||||||||||
| Add back: Foreign income taxes | 498 | 355 | 268 | 182 | |||||||||||
| Add back: Depreciation and amortization expense | 816 | 785 | 413 | 389 | |||||||||||
| EBITDA | $ | 2,451 | $ | 1,853 | $ | 1,330 | $ | 993 | |||||||
| EBITDA margin (EBITDA/revenues) | 13.2% | 10.7% | 14.1% | 11.0% | |||||||||||
