Trans World Corporation Announces 3rd Quarter 2009 Results

NEW YORK--()--Trans World Corporation (“TWC” or the “Company”) (OTC BB: TWOC), the owner and operator of casinos and a hotel in Europe, today announces net income of $552,000, or $0.06 per share, for the quarter ended September 30, 2009.

Results for the three-month period ended September 30, 2009

TWC’s net income for the third quarter 2009 was down from the same period in 2008, due to revenue-impacting factors, noted below, in addition to depreciation expenses related to the Hotel Savannah and the Spa, which did not exist a year ago. Net income decreased 47.2% in comparison to net income of $1,046,000, or $0.12 per share, posted for the same quarter in 2008. The quarterly per share calculation is based on fully-diluted shares of 8,907,773 and 8,905,606 for the respective periods in 2009 and 2008.

For the third quarter of 2009, the Company continued to produce strong growth in attendance, the principal business driver, which increased 6.8% and 10.6% for live games and slots respectively, when compared to the same prior year period. Despite this improvement, the Company’s total revenue dipped 7.3% to $8.7 million versus total revenue of $9.4 million generated for the same three months in 2008. The revenue decline was the result of a combination of an influx of younger players with less discretionary income, weaker hold percentages, and, for the first time, the impact of the global economic downturn which negatively influenced the drop per head (“DpH”) of its players, and consequently, affected the Company’s results. These negative trends were partially offset by the contribution of the Company’s newest operations, the Hotel Savannah and the Spa.

For the same quarter in 2009, the Company achieved an EBITDA (see TWC’s rationale for EBITDA usage below) of approximately $1.4 million versus an EBITDA of approximately $1.7 million for the comparable quarter in 2008, which represented a $302,000, or 17.9%, reduction and was partially due to the anticipated first year operating losses of the Hotel Savannah and the Spa.

Results for the nine-month period ended September 30, 2009

TWC generated net income of $2.0 million, or $0.23 per share, in the first nine months of 2009 versus net income of $2.4 million, or $0.27 per share, for the same period in 2008. The net income decline of 16.5% was primarily due to an increase in depreciation expenses. The per share calculation is based on fully-diluted shares of 8,905,939 for 2009 and 8,899,200 for 2008.

While live game and slot attendance increased 5.7% and 12.8%, respectively, for the nine months ended September 30, 2009 versus the same nine months a year ago, the average live game DpH declined and some of the casinos experienced weaker hold percentages, resulting in a revenue shortfall of approximately $2.2 million. Total revenue for the period was $25.3 million compared to $27.5 million for the same nine-month period in 2008. As discussed in the third quarter results above, the DpH decline was primarily the result of an influx of younger players and, more recently, the impact of the global economic downturn on the wager volume of our regular customers.

For the comparable first nine months of the year, the Company achieved an EBITDA of $4.2 million in 2009 versus an EBITDA of $4.1 million in 2008, a $90,000, or 2.2%, EBITDA improvement. The EBITDA growth demonstrated the Company’s ability to offset revenue shortfalls by implementing measures that align costs with business volume.

EBITDA rationale

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 highlights below. 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.

Conference Call

TWC will host a conference call to discuss the Company's financial results for the third quarter of 2009. The conference call will take place at 4:30 p.m. EST on Thursday, November 12, 2009. Anyone interested in participating should call 1-877-686-1429 if calling within the United States or 1-574-941-1461 if calling internationally, approximately 5 to 10 minutes prior to 4:30 p.m. Participants should ask for the Trans World Corporation 2009 Third Quarter Financial Results conference call. There will be a playback available until November 26, 2009. To listen to the playback, please call 1-800-642-1687 if calling within the United States or 1-706-645-9291 if calling internationally. Please use the pass code #40936953 for replay.

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.

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: The statements contained in this release which are not historical facts contain forward looking information with respect to plans, projections or the future performance of the Company, the occurrence of which involve certain risks and uncertainties detailed in the Company’s filings with the Securities and Exchange Commission.

TRANS WORLD CORPORATION AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(dollars in thousands, except for share data)
     
 
Selected Information from the Condensed Consolidated Statements of Operations (unaudited)
 
Nine Months Ended September 30, Three Months Ended September 30,
2009 2008 2009 2008
 
REVENUES $ 25,292 $ 27,535 $ 8,735 $ 9,423
 
COSTS AND EXPENSES:
Cost of revenues 13,645 15,211 4,999 5,152
Depreciation and amortization 1,615 1,129 626 411
Selling, general and administrative 7,427     8,193     2,347     2,579  
  22,687     24,533     7,972     8,142  
 
INCOME FROM OPERATIONS 2,605     3,002     763     1,281  
 
OTHER EXPENSE:
Interest expense, net (566 ) (559 ) (211 ) (234 )
Foreign exchange loss   -     (1 )   -     (1 )
  (566 )   (560 )   (211 )   (235 )
 
NET INCOME $ 2,039   $ 2,442   $ 552   $ 1,046  
 
Weighted Average Common Shares Outstanding:
Basic 8,869,806 8,848,914 8,871,640 8,855,320
Diluted   8,905,939     8,899,200     8,907,773     8,905,606  
 
Earnings Per Common Share:
Basic $ 0.23   $ 0.28   $ 0.06   $ 0.12  
Diluted $ 0.23   $ 0.27   $ 0.06   $ 0.12  
 
                 
 
Selected Balance Sheet Information
 
September 30, 2009 December 31, 2008
Unaudited
 
Total Current Assets $ 4,799 $ 5,155
Total Assets $ 56,317 $ 50,657
Total Current Liabilities $ 10,766 $ 8,635
Long-term Liabilities $ 7,523 $ 9,708
Total Stockholders' Equity $ 38,028 $ 32,314
 
                 
 
EBITDA Reconciliation
 
Three Months Ended September 30,
2009 2008 Variance $ Variance %
(unaudited) (unaudited)
 
NET INCOME $ 552 $ 1,046 $ (494 ) -47.2 %
Add: Interest expense, net 211 234 (23 ) -9.8 %
Add: Depreciation and amortization expense 626     411     215     52.3 %
EBITDA $ 1,389   $ 1,691   $ (302 )   -17.9 %
 
EBITDA margin (% of revenues) 15.9 % 17.9 % (2.00 ) ppts
 
 
Nine Months Ended September 30,
2009 2008 Variance $ Variance %
(unaudited) (unaudited)
 
NET INCOME $ 2,039 $ 2,442 $ (403 ) -16.5 %
Add: Interest expense, net 566 559 7 1.3 %
Add: Depreciation and amortization expense 1,615     1,129     486     43.0 %
EBITDA $ 4,220   $ 4,130   $ 90     2.2 %
 
EBITDA margin (% of revenues) 16.7 % 15.0 % 1.70 ppts

Contacts

Trans World Corporation
Jill Yarussi, 212-983-3355
Manager of Corporate Communications
Fax: 212-983-8129
jyarussi@transwc.com

Contacts

Trans World Corporation
Jill Yarussi, 212-983-3355
Manager of Corporate Communications
Fax: 212-983-8129
jyarussi@transwc.com