Trans World Corporation Announces 2013 First Quarter Financial Results

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Trans World Corporation Announces 2013 First Quarter Financial Results

Company to host quarterly conference call today at 2:00 p.m. ET

First Quarter 2013 Financial Highlights versus First Quarter 2012

  • Net income was $268,000, or equivalent to $0.03 per diluted share, compared with $358,000, or equivalent to $0.04 per diluted share;
  • Revenue from continuing operations decreased 10.2% to $8.2 million;
  • EBITDA from continuing operations decreased 38.4% to $860,000; and
  • Stockholders' equity per diluted share was $4.36, down from $4.56 at December 31, 2012.

First Quarter 2013 Operational Highlights versus First Quarter 2012

  • Severe winter contributed to an average of 34 days of curtailed business versus 11 days in 2012;
  • Live game attendance decreased 10.5%;
  • Slot game attendance increased 24.7%;
  • Live game drop per head increased 6.9%; and
  • Room occupancy at the Hotel Savannah improved by 6.8 percentage points.

NEW YORK--(BUSINESS WIRE)-- Trans World Corporation ("TWC" or the "Company") (OTC: TWOC), a premier owner and operator of casinos and a hotel in Europe, today reported financial results for the first quarter ended March 31, 2013.

Mr. Rami Ramadan, Chief Executive Officer, commented, "Our first quarter results reflected the negative impact of the severe winter weather that plagued Europe during the first part of the year. The economic loss was widespread and affected businesses throughout the continent. As a result of these conditions, roads were frequently unsafe or closed, and our customers were unable to visit our casinos, thereby contributing to the reduction in the overall gaming revenue for the quarter. However, despite this challenge, TWC reported a profitable quarter, due to our continued commitment to enhancing operations at each casino and at the hotel. Despite a challenging start, our outlook remains positive for the remainder of the year."

Financial and Operational Review

First quarter revenue from TWC's continuing operations was approximately $8.2 million, compared with approximately $9.2 million for the same quarter in the prior year.

In the first quarter, consolidated live game attendance decreased by 10.5%, as the majority of the Company's live game players were hampered by the inclement weather in their commute to TWC's casinos. As for the slot game attendance, despite the travel difficulties, the casinos experienced a 24.7% increase in slot attendance, and management believes that, given the growth trend in the Company's slot business, the slot game attendance would have been significantly higher without the setback due to the weather. The 6.9% increase in drop per head reflected a combination of pent-up demand, the success of the Company's promotional programs, including the Player Loyalty programs, and a general improvement in the quality of players. In addition, room occupancy at the Hotel Savannah improved by 6.8 percentage points and total hotel revenue improved by 5.8% compared with the first quarter of 2012, thanks to an increased demand for discounted room packages.

Income from continuing operations before income taxes for the first quarter of 2013 decreased to approximately $441,000, compared with approximately $877,000 for the same quarter in 2012, largely from the reduced revenue base, while income from continuing operations, after a provision for foreign income taxes of $173,000, was $268,000, or $0.03 per diluted share, compared with approximately $503,000, or $0.06 per diluted share, after a provision of $374,000 for foreign income taxes, for the same quarter of the prior year. The reduction in the provision for foreign income taxes was contributed by both a credit adjustment of $73,000 related to the actual 2012 foreign income tax filing and a lower taxable income base in the first quarter of 2013 versus the same prior year quarter.

As a result of lower revenues due to the severe winter, EBITDA from continuing operations in the first quarter fell from approximately $1.4 million in the prior-year to $860,000 for the first quarter of 2013. 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.

Balance Sheet Highlights

The Company had cash of approximately $5.5 million at March 31, 2013 compared with approximately $6.9 million at December 31, 2012. At March 31, 2013, stockholders' equity was approximately $39.5 million, or $4.36 per diluted share, down from approximately $41.2 million, or $4.56 per diluted share, at December 31, 2012. The reduction in stockholders' equity at March 31, 2013 was attributable to the strength of the US dollar versus the primary currency of our foreign subsidiaries.

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/q1-2013

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 Months Ended March 31, 2013 and 2012
(in thousands, except for share data)
   
Three Months Ended March 31,
20132012
(Unaudited)(Unaudited)
 
REVENUES$8,231$9,161
 
OPERATING EXPENSES:
Cost of revenues4,5965,193
Depreciation and amortization396444
Selling, general and administrative 2,775  2,571 
 7,767  8,208 
 

INCOME FROM CONTINUING OPERATIONS, before other income (expense)

and foreign income taxes

 464  953 
 
OTHER INCOME (EXPENSE):
Interest expense, net (23) (76)
 
 
INCOME FROM CONTINUING OPERATIONS, before income taxes441877
 
FOREIGN INCOME TAXES (173) (374)
 
INCOME FROM CONTINUING OPERATIONS268503
 
DISCONTINUED OPERATIONS, loss from operation of
discontinued Rozvadov Casino, net of tax   (145)
 
NET INCOME268358
 
Other comprehensive income (loss), foreign currency
translation adjustments, net of tax (2,168) 2,638 
 
TOTAL COMPREHENSIVE INCOME (LOSS)$(1,900)$2,996 
 
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic8,828,4838,871,635
Diluted 9,055,504  9,041,908 
 
EARNINGS PER COMMON SHARE:
From continuing operations:
Basic$0.03 $0.06 
Diluted$0.03 $0.06 
From discontinued operations:
Basic$- $(0.02)
Diluted$- $(0.02)
 
 
TRANS WORLD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, 2013 and December 31, 2012
(in thousands, except for share data)
  
ASSETS
March 31, 2013December 31, 2012
CURRENT ASSETS:(Unaudited)
Cash$5,460$6,887
Prepaid expenses458316
Notes receivable633663
Other current assets 332  262 
 
Total current assets 6,883  8,128 
 
PROPERTY AND EQUIPMENT, less accumulated depreciation
of $12,566 and $12,877, respectively 32,332  34,067 
 
OTHER ASSETS:
Goodwill6,0516,396
Deposits and other assets 2,289  2,439 
 
Total other assets 8,340  8,835 
 
$47,555 $51,030 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
CURRENT LIABILITIES:
Long-term debt, current maturities$1,339$1,836
Capital lease, current portion5355
Accounts payable289804
Interest payable1015
Czech gaming tax accrual1,5181,943
Foreign income tax accrual1,5391,480
Accrued expenses and other current liabilities 1,424  1,612 
 
Total current liabilities 6,172  7,745 
 
LONG-TERM LIABILITIES:
Long-term debt, less current maturities1,2641,376
Capital lease, less current portion113134
Deferred foreign tax liability 549  581 
 
Total long-term liabilities 1,926  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,
8,825,835 shares in 2013 and 8,836,735 shares in 2012, issued and outstanding99
Additional paid-in capital52,61752,454
Accumulated other comprehensive income5,3947,562
Accumulated deficit (18,563) (18,831)
 
Total stockholders' equity 39,457  41,194 
 
$47,555 $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 Months Ended March 31, 2013 and 2012

(in thousands)

   
Three Months Ended March 31,
2013 2012
(Unaudited)(Unaudited)
NET INCOME$268$358
Add back: loss from discontinued operations145
Add back: Interest expense, net2376
Add back: Foreign income taxes173374
Add back: Depreciation and amortization expense 396  444 
EBITDA$860 $1,397 
 
EBITDA margin (EBITDA / Revenues)10.4%15.2%



Trans World Corporation
www.transwc.com
Jill Yarussi, Manager of Communications, 212-983-3355
JYarussi@transwc.com
or
Investor Relations:
The Equity Group Inc.
www.theequitygroup.com
Adam Prior, Senior Vice President, 212-836-9606
APrior@equityny.com
or
Terry Downs, Associate, 212-836-9615
TDowns@equityny.com

KEYWORDS:   United States  Europe  North America  Czech Republic  New York

INDUSTRY KEYWORDS:

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