TWOC Trans World Corporation Announces 2013 Third Quarter Financial Results
Company to host quarterly conference call today at 2:00 p.m. ET
Highlights of 2013 Third Quarter (comparisons year-over-year)
Income from continuing operations, after income taxes, increased by 41.8%, to $706,000, or $0.08 per diluted share, versus $498,000, or $0.06 per diluted share, earned for the same quarter of 2012;
Total revenue decreased 1.8% to $8.8 million;
Slot game attendance increased 17.0%, while live game attendance decreased 8.5%; and,
EBITDA from continuing operations decreased 11.4% to approximately $1.4 million.
Highlights of 2013 Year-to-Date (comparisons year-over-year)
Income from continuing operations, after income taxes, increased by 10.6% to $1.4 million, or $0.15 per diluted share, as compared with $1.2 million, or $0.14 per diluted share, for the same nine period last year;
Total revenue decreased 1.3% to $26.1 million;
EBITDA from continuing operations was $3.2 million, compared with $4.0 million in the prior year period; and,
Stockholders’ equity per diluted share was $4.73, as compared with $4.56 at December 31, 2012.
TWC re-launched operations at the newly-expanded and renovated Ceska Kubice Casino
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 third quarter and nine months ended September 30, 2013.
Mr. Rami Ramadan, Chief Executive Officer, commented, “We continue to see a drive towards our slot business as well as higher drop per head by table players. Live game revenue decreased for the quarter over the prior year, in part due to a proportionally higher level of live game wins by our regular players. Although these wins reduce our total revenue, this is the nature of the industry and wins such as these are integral to increasing positive market awareness and help to drive attendance levels at our casinos.”
Ceska Kubice Casino
At the end of the second quarter, TWC launched the newly expanded Ceska Kubice Casino. The Company has received numerous positive reviews, which include extensive local media coverage of the casino’s gala re-opening. The casino has since begun to show incremental increases in attendance.
During the third quarter, the Company added an additional twenty slot machines to the casino which has further contributed to an increase in slot revenue over the prior year period. Over time, TWC expects the larger, renovated casino to bring in greater business volume and further secure the Company’s standing in the community and amongst its competitors.
2013 Third Quarter
Third quarter total revenue decreased to $8.8 million, compared with approximately $9.0 million for the same quarter in the prior year. The decrease in revenue was primarily attributed to higher live game wins by regular clientele at each of the Company’s casinos.
Income from continuing operations after taxes increased 41.8%, to $706,000, or $0.08 per diluted share, from $498,000, or $0.06 per diluted share, earned for the same quarter a year ago. The increase in income from continuing operations after taxes was primarily due to a reduction in overhead expenses.
Net income decreased 12.2%, to $706,000, or an equivalent of $0.08 per diluted share, from $804,000, or an equivalent of $0.09 per diluted share, earned for the same quarter a year ago. Last year’s net income was higher due to a one-time gain of $306,000, from the sale of the Rozvadov casino.
EBITDA decreased to approximately $1.4 million, from approximately $1.6 million, an 11.4% decrease from the same quarter in 2012. Beside the lower total revenue, the reduction resulted from the additional marketing and promotional costs incurred to re-launch the Ceska Kubice Casino as well as to higher VAT expenses. A table reconciling EBITDA, a non-GAAP (Generally Accepted Accounting Principles) financial measure, to the appropriate GAAP measure is included with the Company’s financial information below.
2013 Year-to-Date
For the nine months ended September 30, 2013, total revenue decreased 1.3%, to $26.1 million, from $26.4 million a year ago. The decrease in revenue for the nine month period was primarily due to the severe winter weather and widespread flooding that plagued Europe during the first six months of the year. These conditions decreased attendance at each of the Company’s casinos. Sizable jackpots paid out during the second and third quarters also contributed to the reduction in revenue for the nine month period.
The Company incurred an expense for the provision for foreign income taxes of $623,000, versus approximately $1.3 million a year ago. The lower income taxes resulted from a shift toward a higher burden of value added taxes (VAT) on the Company’s expenses. Net income was $1,379,000, as compared with $1,447,000 for the nine month period of the prior year, which had included a one-time net gain of $200,000, comprising of the net proceeds from sale of the former casino at Rozvadov and the six-month operating losses in that year.
EBITDA was $3.2 million, a 19.4% decrease from $4.0 million for the same nine-month period in 2012. The reduction resulted mainly from factors highlighted above.
Balance Sheet Highlights
The Company had cash of approximately $4.2 million at September 30, 2013 compared with approximately $6.9 million at December 31, 2012. At September 30, 2013, stockholders’ equity was approximately $42.8 million, or $4.73 per diluted share, an increase from approximately $41.2 million, or $4.56 per diluted share, at December 31, 2012.
Commerzbank Loan
During the third quarter, TWC retired the Company’s amortized loan. The loan was set to mature in November, but given TWC’s available cash flow from operations, the Company decided to retire the loan in July. With the repayment of this loan, the Company has gained outright ownership of all of its assets.
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/q3-2013
About Trans World Corporation
Trans World Corporation, founded in 1993, is a publicly-traded, US corporation with all of its gaming and hotel operations in Europe. Additional information about TWC and its Czech subsidiaries, American Chance Casinos and Hotel Savannah, can be found at www.transwc.com, www.american-chance-casinos.com and www.hotel-savannah.com.
The press release herein contains certain forward-looking statements and data. 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. The company undertakes no 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 Nine Months Ended September 30, 2013 and 2012
(in thousands, except for share data)
Three Months Ended September 30, Nine Months Ended September 30,
2013 2012 2013 2012
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
REVENUES $ 8,831 $ 8,996 $ 26,074 $ 26,428
COSTS AND EXPENSES:
Cost of revenues 4,854 4,306 14,326 14,288
Depreciation and amortization 408 422 1,193 1,301
Selling, general and administrative 2,587 3,122 8,505 8,116
7,849 7,850 24,024 23,705
INCOME FROM CONTINUING OPERATIONS, before other expense and foreign income taxes
982 1,146 2,050 2,723
OTHER EXPENSE:
Interest expense, net (8 ) (65 ) (48 ) (209 )
INCOME FROM CONTINUING OPERATIONS, before income taxes 974 1,081 2,002 2,514
FOREIGN INCOME TAXES (268 ) (583 ) (623 ) (1,267 )
INCOME FROM CONTINUING OPERATIONS 706 498 1,379 1,247
DISCONTINUED OPERATIONS, gain from operation of discontinued Rozvadov Casino, net of tax
306 200
NET INCOME 706 804 1,379 1,447
Other comprehensive income, foreign currency translation adjustments, net of tax
2,031 2,224 33 654
TOTAL COMPREHENSIVE INCOME $ 2,737 $ 3,028 $ 1,412 $ 2,101
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic 8,825,335 8,871,635 8,826,375 8,871,635
Diluted 9,051,787 9,022,346 9,052,827 9,022,346
EARNINGS PER COMMON SHARE:
From continuing operations:
Basic $ 0.08 $ 0.06 $ 0.16 $ 0.14
Diluted $ 0.08 $ 0.06 $ 0.15 $ 0.14
From discontinued operations:
Basic $ - $ 0.03 $ - $ 0.02
Diluted $ - $ 0.03 $ - $ 0.02
TRANS WORLD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, 2013 and December 31, 2012
(in thousands, except for share data)
ASSETS
September 30, 2013 December 31, 2012
CURRENT ASSETS: (Unaudited)
Cash $ 4,159 $ 6,887
Prepaid expenses 301 316
Notes receivable 300 663
Other current assets 273 262
Total current assets 5,033 8,128
PROPERTY AND EQUIPMENT, less accumulated depreciation of $13,305 and $12,877, respectively 35,229 34,067
OTHER ASSETS:
Goodwill 6,381 6,396
Deposits and other assets 2,504 2,439
Total other assets 8,885 8,835
$ 49,147 $ 51,030
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Long-term debt, current maturities $ 161 $ 1,836
Capital lease, current portion 53 55
Accounts payable 424 804
Interest payable 15
Czech gaming tax accrual 1,803 1,943
Foreign income tax accrual 714 1,480
Accrued expenses and other current liabilities 1,288 1,612
Total current liabilities 4,443 7,745
LONG-TERM LIABILITIES:
Long-term debt, less current maturities 1,255 1,376
Capital lease, less current portion 95 134
Deferred foreign tax liability 579 581
Total long-term liabilities 1,929 2,091
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, 8,825,335 shares in 2013 and 8,836,735 shares in 2012, issued and outstanding, respectively
9 9
Additional paid-in capital 52,623 52,454
Accumulated other comprehensive income 7,595 7,562
Accumulated deficit (17,452) (18,831)
Total stockholders' equity 42,775 41,194
$ 49,147 $ 51,030
Reconciliation of Non-GAAP Measures to GAAP
The below table reconciles EBITDA, a non-GAAP (Generally Accepted Accounting Principles) financial measure, to the appropriate GAAP measure. The Company believes that EBITDA, a non-GAAP financial measure, provides 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 where the substance of these talks has centered around historical and prospective EBITDA measurements. Based on management’s observations, it appears that, even though the EBITDA measurement is not “GAAP,” it does enhance investors’ understanding of the Company’s business. In short, this 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.
TRANS WORLD CORPORATION AND SUBSIDIARIES
EBITDA RECONCILIATION
Three and Nine Months Ended September 30, 2013 and 2012
(in thousands)
Nine Months Ended September 30, Three Months Ended September 30,
2013 2012 2013 2012
(unaudited) (unaudited) (unaudited) (unaudited)
NET INCOME $ 1,379 $ 1,447 $ 706 $ 804
Add back: loss from discontinued operations (200 ) (306 )
Add back: Interest expense, net 48 209 8 65
Add back: Foreign income taxes 623 1,267 268 583
Add back: Depreciation and amortization expense 1,193 1,301 408 422
EBITDA $ 3,243 $ 4,024 $ 1,390 $ 1,568
EBITDA margin (EBITDA/revenues) 12.4 % 15.2 % 15.7 % 17.4 %
Trans World Corporation
www.transwc.com
Jill Yarussi, 212-983-3355
Manager of Communications
JYarussi@transwc.com
or
Investor Relations Contact:
The Equity Group Inc.
www.theequitygroup.com
Adam Prior, 212-836-9606
Senior Vice President
APrior@equityny.com
or
Terry Downs, 212-836-9615
Associate
TDowns@equityny.com
Company to host quarterly conference call today at 2:00 p.m. ET
Highlights of 2013 Third Quarter (comparisons year-over-year)
Income from continuing operations, after income taxes, increased by 41.8%, to $706,000, or $0.08 per diluted share, versus $498,000, or $0.06 per diluted share, earned for the same quarter of 2012;
Total revenue decreased 1.8% to $8.8 million;
Slot game attendance increased 17.0%, while live game attendance decreased 8.5%; and,
EBITDA from continuing operations decreased 11.4% to approximately $1.4 million.
Highlights of 2013 Year-to-Date (comparisons year-over-year)
Income from continuing operations, after income taxes, increased by 10.6% to $1.4 million, or $0.15 per diluted share, as compared with $1.2 million, or $0.14 per diluted share, for the same nine period last year;
Total revenue decreased 1.3% to $26.1 million;
EBITDA from continuing operations was $3.2 million, compared with $4.0 million in the prior year period; and,
Stockholders’ equity per diluted share was $4.73, as compared with $4.56 at December 31, 2012.
TWC re-launched operations at the newly-expanded and renovated Ceska Kubice Casino
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 third quarter and nine months ended September 30, 2013.
Mr. Rami Ramadan, Chief Executive Officer, commented, “We continue to see a drive towards our slot business as well as higher drop per head by table players. Live game revenue decreased for the quarter over the prior year, in part due to a proportionally higher level of live game wins by our regular players. Although these wins reduce our total revenue, this is the nature of the industry and wins such as these are integral to increasing positive market awareness and help to drive attendance levels at our casinos.”
Ceska Kubice Casino
At the end of the second quarter, TWC launched the newly expanded Ceska Kubice Casino. The Company has received numerous positive reviews, which include extensive local media coverage of the casino’s gala re-opening. The casino has since begun to show incremental increases in attendance.
During the third quarter, the Company added an additional twenty slot machines to the casino which has further contributed to an increase in slot revenue over the prior year period. Over time, TWC expects the larger, renovated casino to bring in greater business volume and further secure the Company’s standing in the community and amongst its competitors.
2013 Third Quarter
Third quarter total revenue decreased to $8.8 million, compared with approximately $9.0 million for the same quarter in the prior year. The decrease in revenue was primarily attributed to higher live game wins by regular clientele at each of the Company’s casinos.
Income from continuing operations after taxes increased 41.8%, to $706,000, or $0.08 per diluted share, from $498,000, or $0.06 per diluted share, earned for the same quarter a year ago. The increase in income from continuing operations after taxes was primarily due to a reduction in overhead expenses.
Net income decreased 12.2%, to $706,000, or an equivalent of $0.08 per diluted share, from $804,000, or an equivalent of $0.09 per diluted share, earned for the same quarter a year ago. Last year’s net income was higher due to a one-time gain of $306,000, from the sale of the Rozvadov casino.
EBITDA decreased to approximately $1.4 million, from approximately $1.6 million, an 11.4% decrease from the same quarter in 2012. Beside the lower total revenue, the reduction resulted from the additional marketing and promotional costs incurred to re-launch the Ceska Kubice Casino as well as to higher VAT expenses. A table reconciling EBITDA, a non-GAAP (Generally Accepted Accounting Principles) financial measure, to the appropriate GAAP measure is included with the Company’s financial information below.
2013 Year-to-Date
For the nine months ended September 30, 2013, total revenue decreased 1.3%, to $26.1 million, from $26.4 million a year ago. The decrease in revenue for the nine month period was primarily due to the severe winter weather and widespread flooding that plagued Europe during the first six months of the year. These conditions decreased attendance at each of the Company’s casinos. Sizable jackpots paid out during the second and third quarters also contributed to the reduction in revenue for the nine month period.
The Company incurred an expense for the provision for foreign income taxes of $623,000, versus approximately $1.3 million a year ago. The lower income taxes resulted from a shift toward a higher burden of value added taxes (VAT) on the Company’s expenses. Net income was $1,379,000, as compared with $1,447,000 for the nine month period of the prior year, which had included a one-time net gain of $200,000, comprising of the net proceeds from sale of the former casino at Rozvadov and the six-month operating losses in that year.
EBITDA was $3.2 million, a 19.4% decrease from $4.0 million for the same nine-month period in 2012. The reduction resulted mainly from factors highlighted above.
Balance Sheet Highlights
The Company had cash of approximately $4.2 million at September 30, 2013 compared with approximately $6.9 million at December 31, 2012. At September 30, 2013, stockholders’ equity was approximately $42.8 million, or $4.73 per diluted share, an increase from approximately $41.2 million, or $4.56 per diluted share, at December 31, 2012.
Commerzbank Loan
During the third quarter, TWC retired the Company’s amortized loan. The loan was set to mature in November, but given TWC’s available cash flow from operations, the Company decided to retire the loan in July. With the repayment of this loan, the Company has gained outright ownership of all of its assets.
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/q3-2013
About Trans World Corporation
Trans World Corporation, founded in 1993, is a publicly-traded, US corporation with all of its gaming and hotel operations in Europe. Additional information about TWC and its Czech subsidiaries, American Chance Casinos and Hotel Savannah, can be found at www.transwc.com, www.american-chance-casinos.com and www.hotel-savannah.com.
The press release herein contains certain forward-looking statements and data. 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. The company undertakes no 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 Nine Months Ended September 30, 2013 and 2012
(in thousands, except for share data)
Three Months Ended September 30, Nine Months Ended September 30,
2013 2012 2013 2012
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
REVENUES $ 8,831 $ 8,996 $ 26,074 $ 26,428
COSTS AND EXPENSES:
Cost of revenues 4,854 4,306 14,326 14,288
Depreciation and amortization 408 422 1,193 1,301
Selling, general and administrative 2,587 3,122 8,505 8,116
7,849 7,850 24,024 23,705
INCOME FROM CONTINUING OPERATIONS, before other expense and foreign income taxes
982 1,146 2,050 2,723
OTHER EXPENSE:
Interest expense, net (8 ) (65 ) (48 ) (209 )
INCOME FROM CONTINUING OPERATIONS, before income taxes 974 1,081 2,002 2,514
FOREIGN INCOME TAXES (268 ) (583 ) (623 ) (1,267 )
INCOME FROM CONTINUING OPERATIONS 706 498 1,379 1,247
DISCONTINUED OPERATIONS, gain from operation of discontinued Rozvadov Casino, net of tax
306 200
NET INCOME 706 804 1,379 1,447
Other comprehensive income, foreign currency translation adjustments, net of tax
2,031 2,224 33 654
TOTAL COMPREHENSIVE INCOME $ 2,737 $ 3,028 $ 1,412 $ 2,101
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic 8,825,335 8,871,635 8,826,375 8,871,635
Diluted 9,051,787 9,022,346 9,052,827 9,022,346
EARNINGS PER COMMON SHARE:
From continuing operations:
Basic $ 0.08 $ 0.06 $ 0.16 $ 0.14
Diluted $ 0.08 $ 0.06 $ 0.15 $ 0.14
From discontinued operations:
Basic $ - $ 0.03 $ - $ 0.02
Diluted $ - $ 0.03 $ - $ 0.02
TRANS WORLD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, 2013 and December 31, 2012
(in thousands, except for share data)
ASSETS
September 30, 2013 December 31, 2012
CURRENT ASSETS: (Unaudited)
Cash $ 4,159 $ 6,887
Prepaid expenses 301 316
Notes receivable 300 663
Other current assets 273 262
Total current assets 5,033 8,128
PROPERTY AND EQUIPMENT, less accumulated depreciation of $13,305 and $12,877, respectively 35,229 34,067
OTHER ASSETS:
Goodwill 6,381 6,396
Deposits and other assets 2,504 2,439
Total other assets 8,885 8,835
$ 49,147 $ 51,030
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Long-term debt, current maturities $ 161 $ 1,836
Capital lease, current portion 53 55
Accounts payable 424 804
Interest payable 15
Czech gaming tax accrual 1,803 1,943
Foreign income tax accrual 714 1,480
Accrued expenses and other current liabilities 1,288 1,612
Total current liabilities 4,443 7,745
LONG-TERM LIABILITIES:
Long-term debt, less current maturities 1,255 1,376
Capital lease, less current portion 95 134
Deferred foreign tax liability 579 581
Total long-term liabilities 1,929 2,091
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, 8,825,335 shares in 2013 and 8,836,735 shares in 2012, issued and outstanding, respectively
9 9
Additional paid-in capital 52,623 52,454
Accumulated other comprehensive income 7,595 7,562
Accumulated deficit (17,452) (18,831)
Total stockholders' equity 42,775 41,194
$ 49,147 $ 51,030
Reconciliation of Non-GAAP Measures to GAAP
The below table reconciles EBITDA, a non-GAAP (Generally Accepted Accounting Principles) financial measure, to the appropriate GAAP measure. The Company believes that EBITDA, a non-GAAP financial measure, provides 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 where the substance of these talks has centered around historical and prospective EBITDA measurements. Based on management’s observations, it appears that, even though the EBITDA measurement is not “GAAP,” it does enhance investors’ understanding of the Company’s business. In short, this 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.
TRANS WORLD CORPORATION AND SUBSIDIARIES
EBITDA RECONCILIATION
Three and Nine Months Ended September 30, 2013 and 2012
(in thousands)
Nine Months Ended September 30, Three Months Ended September 30,
2013 2012 2013 2012
(unaudited) (unaudited) (unaudited) (unaudited)
NET INCOME $ 1,379 $ 1,447 $ 706 $ 804
Add back: loss from discontinued operations (200 ) (306 )
Add back: Interest expense, net 48 209 8 65
Add back: Foreign income taxes 623 1,267 268 583
Add back: Depreciation and amortization expense 1,193 1,301 408 422
EBITDA $ 3,243 $ 4,024 $ 1,390 $ 1,568
EBITDA margin (EBITDA/revenues) 12.4 % 15.2 % 15.7 % 17.4 %
Trans World Corporation
www.transwc.com
Jill Yarussi, 212-983-3355
Manager of Communications
JYarussi@transwc.com
or
Investor Relations Contact:
The Equity Group Inc.
www.theequitygroup.com
Adam Prior, 212-836-9606
Senior Vice President
APrior@equityny.com
or
Terry Downs, 212-836-9615
Associate
TDowns@equityny.com
