Trans World Corporation Announces 2015 First Quarter Financial Results

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

First Quarter 2015 Financial Highlights versus First Quarter 2014

  • Net income increased 7.8% to $523,000;
  • Revenue increased 4.2% to $9.5 million;
  • Income before foreign income taxes increased 12.4% to $805,000; and
  • EBITDA increased 9.8% to $1.2 million.

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 first quarter ended March 31, 2015.

Mr. Rami Ramadan, Chief Executive Officer, commented, “TWC had a strong first quarter. We saw increases in net income, revenue and EBITDA for the three month period. During the first quarter, we launched a series of “weekend parties” at our casinos, utilizing social media as a cost efficient way to notify our patrons. These events have been met with an overwhelmingly favorable response from our guests and have contributed to double-digit increases in overall attendance at our casinos. We view this attendance increase as a positive indication of the ongoing advancements TWC is making in its efforts to increase revenues.

“Though we were pleased with our first quarter results, the Company’s total revenue for the first quarter would have been significantly higher had it not been negatively impacted by the rapid depreciation of the Czech koruna against the US dollar. Nevertheless, the substantial revenue improvement achieved in the first quarter of 2015 has partially offset the impact of the foreign exchange decline.”

2015 First Quarter

Net income increased to $523,000, or $0.06 per diluted share, for the first quarter of 2015 from $485,000, or $0.05 per diluted share, for the same prior year period. The negative effect of the foreign exchange fluctuations on net income was partially offset by the incremental income resulting from the substantial revenue increase the Company achieved in the quarter. The additional income earned from Hotel Columbus also contributed to a better net income.

Total revenue increased 4.2% to $9.5 million, compared with $9.1 million for the same quarter of the prior year, largely from the incremental revenue generated from Hotel Columbus.

The Company reported income before foreign income taxes of approximately $805,000, compared with $716,000 reported for the same quarter in 2014. TWC incurred foreign income taxes of $282,000, as compared with a foreign income tax expense of $231,000 for the first quarter of the prior year.

EBITDA in the first quarter 2015 rose 9.8% to $1.2 million, versus $1.1 million in the prior year’s quarter. 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 and cash equivalents of $6.3 million at March 31, 2015 compared with approximately $6.6 million at December 31, 2014.

Non-US 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 US GAAP. Management believes that these non-US GAAP financial measures reflect the results of our operations or financial condition in other ways, are common to the gaming 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 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.

Management presents, and uses for its own analysis, EBITDA as supplemental disclosure because management believes that it is widely used in the gaming and hotel 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 may include the need for debt service requirements.

The following defines the non-US 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-US GAAP financial measure to its most directly comparable US 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 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/q1-2015.

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 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, 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 STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME (LOSS)
Three Months Ended March 31, 2015 and 2014
(in thousands, except for share and per share data)
     
Three Months Ended March 31,
2015 2014
(Unaudited) (Unaudited)
 
REVENUES $ 9,502 $ 9,122
 
OPERATING EXPENSES:
Cost of revenues 4,932 4,986
Depreciation and amortization 395 403
Selling, general and administrative 3,339   3,015  
  8,666     8,404  
 
INCOME FROM OPERATIONS, before other expense
and foreign income taxes
 

836

   

718

 
 
OTHER EXPENSE:
Interest expense   (31 )   (2 )
 
 
INCOME BEFORE FOREIGN INCOME TAXES 805 716
 
FOREIGN INCOME TAXES   (282 )   (231 )
 
NET INCOME 523 485
 
Other comprehensive loss, foreign currency
translation adjustments, net of tax   (4,397 )   (46 )
 
COMPREHENSIVE INCOME (LOSS) $ (3,874 ) $ 439  
 
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic 8,821,205 8,809,894
Diluted   9,244,883     9,121,982  
 
EARNINGS PER COMMON SHARE:
Basic $ 0.06   $ 0.06  
Diluted $ 0.06   $ 0.05  
 
 
TRANS WORLD CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

March 31, 2015 and December 31, 2014

(in thousands, except for share data)

     
ASSETS
March 31, 2015 December 31, 2014
CURRENT ASSETS:
Cash and cash equivalents $ 6,321 $ 6,589
Prepaid expenses 346 239
Other current assets   588     525  
 
Total current assets   7,255     7,353  
 
PROPERTY AND EQUIPMENT, less accumulated depreciation
of $11,155 and $12,099, respectively   31,352     35,469  
 
OTHER ASSETS:
Goodwill 4,740 5,322
Deposits and other assets   1,195     1,343  
 
Total other assets   5,935     6,665  
 
TOTAL ASSETS $ 44,542   $ 49,487  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
CURRENT LIABILITIES:
Long-term debt, current maturities $ 209 $ 234
Capital lease, current portion 19 51
Accounts payable 620 1,018
Czech gaming tax accrual 1,636 1,795
Foreign income tax accrual 72 63
Accrued expenses and other current liabilities   2,077     2,358  
 
Total current liabilities   4,633     5,519  
 
LONG-TERM LIABILITIES:
Long-term debt, less current maturities 3,543 4,066
Capital lease, less current portion 15 24
Deferred foreign tax liability   265     298  
 
Total long-term liabilities   3,823     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 in 2014, issued and outstanding 9 9
Additional paid-in capital 53,268 52,888
Accumulated other comprehensive income (3,911 ) 486
Accumulated deficit   (13,280 )   (13,803 )
 
Total stockholders' equity   36,086     39,580  
 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 44,542   $ 49,487  
 

Reconciliation of Non-US GAAP Measures to US GAAP

The below table reconciles EBITDA, a non-US GAAP financial measure, to their most directly comparable US GAAP measure. The 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 Company believes that this non-US 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 “US GAAP,” they do enhance investors’ understanding of the Company’s business.

 
TRANS WORLD CORPORATION AND SUBSIDIARIES
EBITDA RECONCILIATION
Three Months Ended March 31, 2015 and 2014
(in thousands)
 
      Three Months Ended March 31,
2015   2014
(Unaudited) (Unaudited)
 
NET INCOME $ 523 $ 485
Add: Interest expense 31 2
Add: Income taxes 282 231
Add: Depreciation and amortization expense   395     403  
EBITDA $ 1,231   $ 1,121  
 
EBITDA margin (% of revenues) 13.0 % 12.3 %

Contacts

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

Contacts

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