Trans World Corporation Announces 2015 Third Quarter Financial Results

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

NEW YORK--()--Trans World Corporation (“TWC” or the “Company”) (OTCQB:TWOC), a premier owner and operator of casinos and hotels in Europe, today reported financial results for the quarter and nine months ended September 30, 2015.

The Company reported better quarterly and year-to-date revenues than last year, as a result of the addition of Hotel Columbus, located in Seligenstadt, Germany, in September 2014 and Hotel Freizeit Auefeld, in Hann. Münden, Germany, in June 2015.

Mr. Rami Ramadan, Chief Executive Officer, added, “Our operations continued to be successful, in large part due to the effectiveness of our internal promotional events, coupled with the high level of customer service provided at all of our units.”

2015 Third Quarter

Net income increased by 34.3% to approximately $1.2 million, or $0.13 per diluted share, from $868,000, or $0.10 per diluted share, for the same prior year quarter.

Total revenue increased by 8.7% to $10.5 million, compared with approximately $9.7 million for the same quarter of the prior year, largely from additional revenue from TWC’s new hotel properties.

The Company reported income before foreign income taxes of $1.5 million, compared with $1.1 million reported for the same quarter in 2014. TWC incurred foreign income taxes of $336,000, as compared with a foreign income tax expense of $269,000 for the third quarter of the prior year. The additional expense was due to a higher pre-tax income base.

EBITDA in the third quarter of 2015 rose by 34.0% to approximately $2.1 million, versus $1.5 million in the prior year’s comparable quarter. A table reconciling EBITDA, a non-US GAAP, or non-GAAP (Generally Accepted Accounting Principles) financial measure, to the appropriate GAAP measure is included with the Company’s financial information below.

2015 Year-to-date

Net income rose by 19.9% for the nine months ended September 30, 2015 to approximately $2.4 million, or $0.26 per diluted share, as compared with $2.0 million, or $0.22 per diluted share, for the first nine months of the prior year.

For the nine months ended September 30, 2015, total revenue was approximately $29.8 million, a 5.5% increase from $28.2 million for the same nine-month period of the prior year, primarily due to the $2.2 million generated from TWC’s hotel segment, which served to offset the negative impact of the appreciation of the US dollar against the Czech koruna and the euro.

The Company incurred a foreign income tax expense of $988,000 for the first nine months of 2015, as compared with $767,000 for the same period last year. As previously mentioned, the additional expense was due to a higher pre-tax income base.

EBITDA was approximately $4.9 million, an increase of 21.8% from approximately $4.0 million for the same nine-month period in 2014.

Balance Sheet Highlights

As of September 30, 2015, stockholders’ equity was $40.0 million, compared with approximately $39.6 million at December 31, 2014.

Non-GAAP Financial Measures

This press release may utilize a number of financial measures that are not used when preparing our financial statements in accordance with GAAP. Management believes that these non-GAAP financial measures reflect the results of our operations or financial condition in other ways, are common to the casino industry, and are commonly used by lending institutions and investors 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 lenders and 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 GAAP, they do enhance investors’ understanding of the Company’s business.

In short, these performance measurements give an analytical 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.

Management presents, and uses for its own analysis, EBITDA as a supplemental disclosure because management believes that it is widely used in the casino and hotel industry to measure performance and is one of 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 may include the need for debt service requirements.

The following defines the non-GAAP financial measures used in TWC’s press releases:

  • “Drop per head” is the per guest average dollar value of gaming chips purchased.
  • “EBITDA” is earnings before interest, taxes, depreciation and amortization.
  • “Live game attendance” is the number of patrons who played at 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 the table below to reconcile EBITDA, a non-GAAP financial measure to its most directly comparable GAAP measure.

For further information regarding our results of operations and financial condition for the year ended December 31, 2014, please refer to our Annual Report on Form 10-K as filed with the Securities and Exchange Commission.

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/q3-2015.

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 casino 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 casino 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, 2014. 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 INCOME STATEMENT
AND COMPREHENSIVE INCOME (LOSS)
Nine and Three Months Ended September 30, 2015 and 2014
(in thousands, except for share and per share data)
                         
Nine Months Ended September 30, Three Months Ended September 30,
  2015   2014   2015   2014
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
 
REVENUES $ 29,786 $ 28,227 $ 10,528 $ 9,687
 
COSTS AND EXPENSES:
Cost of revenues 15,392 15,134 5,449 5,118
Depreciation and amortization 1,345 1,218 504 402
Selling, general and administrative 9,671 9,094 3,004 3,021
               
  26,408   25,446   8,957   8,541
INCOME FROM OPERATIONS, before other
Income (expense) and foreign income taxes   3,378   2,781   1,571   1,146
 
OTHER INCOME (EXPENSE):
Interest expense (140) (13) (69) (9)
Other income 149
 
 
INCOME BEFORE FOREIGN INCOME TAXES   3,387   2,768   1,502   1,137
 
FOREIGN INCOME TAXES (988) (767) (336) (269)
 
NET INCOME   2,399   2,001   1,166   868
 
Other comprehensive income (loss), foreign currency
translation adjustments, net of tax of $0 (2,414) (3,629) 146 (3,230)
 
COMPREHENSIVE INCOME (LOSS) $ (15) $ (1,628) $ 1,312 $ (2,362)
 
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic 8,821,205 8,811,991 8,821,205 8,816,571
Diluted 9,258,313 9,116,988 9,257,917 9,124,206
 
EARNINGS PER COMMON SHARE:
Basic $ 0.27 $ 0.23 $ 0.13 $ 0.10
Diluted $ 0.26 $ 0.22 $ 0.13 $ 0.10
 
 
TRANS WORLD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, 2015 and December 31, 2014
(in thousands, except for share data)
               
 
ASSETS
  September 30, 2015       December 31, 2014
CURRENT ASSETS: (Unaudited)
Cash $ 8,297 $ 6,589
Prepaid expenses 421 239
Other current assets   604   525
 
Total current assets   9,322   7,353
 
PROPERTY AND EQUIPMENT   37,522   35,469
 
OTHER ASSETS:
Goodwill 5,129 5,322
Deposits and other assets   1,536   1,343
 
Total other assets   6,665   6,665
 
TOTAL ASSETS $ 53,509 $ 49,487
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
CURRENT LIABILITIES:
Long-term debt, current maturities $ 559 $ 234
Capital lease, current portion 26 51
Accounts payable 533 1,018
Czech gaming tax accrual 1,792 1,795
Foreign income tax accrual 293 63
Accrued expenses and other current liabilities   2,160   2,358
 
Total current liabilities   5,363   5,519
 
LONG-TERM LIABILITIES:
Long-term debt, less current maturities 7,851 4,066
Capital lease, less current portion 5 24
Deferred foreign tax liability   280   298
 
Total long-term liabilities   8,136   4,388
 
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,
8,821,205 shares in 2015 and 2014, issued and outstanding 9 9
Additional paid-in capital 53,333 52,888
Accumulated other comprehensive income (loss) (1,928) 486
Accumulated deficit   (11,404)   (13,803)
 
Total stockholders' equity   40,010   39,580
 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 53,509 $ 49,487
 

Reconciliation of Non-GAAP Measures to GAAP

The below table reconciles EBITDA, a non-GAAP financial measure, to their most directly comparable GAAP measure. The EBITDA performance measurement gives an analytical view of the Company’s operational earnings on a cash-basis, excluding the impact of debt obligations, foreign income taxes and (non-cash) depreciation and amortization. The Company believes that this 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. Based on management’s observations, it appears that, even though these measurements are not “GAAP,” they do enhance investors’ understanding of the Company’s business.

 
TRANS WORLD CORPORATION AND SUBSIDIARIES
EBITDA RECONCILIATION
Nine and Three Months Ended September 30, 2015 and 2014
(in thousands)
 
            Nine Months Ended September 30,       Three Months Ended September 30,
2015   2014 2015   2014
(unaudited) (unaudited) (unaudited) (unaudited)
NET INCOME $ 2,399 $ 2,001 $ 1,166 $ 868
Add back: Interest expense 140 13 69 9
Add back: Foreign income taxes 988 767 336 269
Add back: Depreciation and amortization expense   1,345   1,218   504   402
EBITDA $ 4,872 $ 3,999 $ 2,075 $ 1,548
 
 

Contacts

Trans World Corporation
Jill Yarussi, 212-983-3355
Manager of Communications
JYarussi@Transwc.com

Contacts

Trans World Corporation
Jill Yarussi, 212-983-3355
Manager of Communications
JYarussi@Transwc.com