By: Matt Rego
Trans World Corporation (OTCQB: TWOC) engages in the acquisition, development, and management of casino resorts and four-star hotels across Europe. The casino and hotel operator is seeing shares rally 20% during the early hours of trading on Tuesday, August 9, 2016. Over the past three months, Trans World Corporation (OTCQB: TWOC) has seen average daily volume of around 2,120 shares exchange hands. However, nearly 19,350 shares or dollar volume of around $87,075 has already exchanged hands during early trading on Tuesday.
The big news out today that is driving shares of Trans World Corporation (OTCQB: TWOC) comes after the casino and hotel operator released second quarter 2016 earnings. Trans World Corporation (OTCQB: TWOC) reported net income of $1.6 million or $0.17 per diluted share, on revenue of $13.4 million. During the second quarter of 2015, the company reported net income of $710,000 or $0.08 per diluted share, on revenue of $9.8 million. EBITDA of $3.2 million in Q2 2016 was double of EBITDA of Q2 2015, when company reported $1.6 million in EBITDA. Here is the press release detailing of Trans World Corporation (OTCQB: TWOC)’s earnings release:
Trans World Corporation (OTCQB: TWOC) Press Release:
NEW YORK–(BUSINESS WIRE)–Trans World Corporation (“TWC” or the “Company”) (TWOC), a premier owner and operator of casinos and hotels in Europe, today reported financial results for the second quarter ended June 30, 2016.
Mr. Rami Ramadan, Chief Executive Officer, remarked, “TWC achieved another good quarter, continuing the positive trend from the first quarter and last year. In the second quarter, we saw increases in drop per head, or increased player wagering, at all of our casinos, coupled with better win or hold percentage in live games. In addition to these increases, results were further boosted by higher attendance, as well as a surge in slot revenues, which, in aggregate, contributed to superior revenue, net income and EBITDA when compared with the same prior year second quarter. We credit the business improvement at our casinos to exceptional customer service and effective entertainment programs that we strive to provide to our guests. Our hotel segment, located in Germany, also did well in this quarter, besting prior year’s achievement in revenue per available room (RevPAR) by 10%.
“As mentioned in the first quarter of 2016, despite the fact that we’ve had substantial revenue improvement, the increase in gaming tax rates that became effective in 2016 negatively affected our earnings and profit margins, which would have been much higher in the absence of such tax increases.”
2016 Second Quarter
Net income increased to $1.6 million, or $0.17 per diluted share, for the second quarter of 2016 from $710,000, or $0.08 per diluted share, for the same prior year period. The net income increase was largely due to revenue improvement.
Total revenue increased by 37.0% to approximately $13.4 million, compared with approximately $9.8 million for the same prior year quarter. Also, we had a full quarter of revenue of Hotel Freizeit Auefeld in 2016, compared with just one-month of revenue from the same hotel last year, when it was acquired on June 1, 2016.
The Company reported income before foreign income taxes of approximately $2.5 million, compared with approximately $1.1 million reported for the second quarter in 2015. TWC incurred foreign income taxes of $845,000, as compared with a foreign income tax expense of $370,000 for the same quarter of the prior year.
EBITDA in the second quarter 2016 doubled to $3.2 million, versus approximately $1.6 million in the prior year’s comparable 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.
Net income increased to $2.6 million, or $0.28 per diluted share, for the six months ended June 30, 2016 from $1.2 million, or $0.13 per diluted share, for the same prior year period. The net income increase was largely due to revenue improvement.
Total revenue increased by 32.9% to $25.6 million, compared with approximately $19.3 million for the same prior year period. We also had six months of revenue from Hotel Freizeit Auefeld in 2016, compared with one-month of revenue from the same hotel last year.
The Company generated income before foreign income taxes of approximately $3.9 million, compared with approximately $1.9 million reported for the same six-month period in 2015. TWC incurred foreign income taxes of $1.3 million, as compared with a foreign income tax expense of $652,000 for the same period last year.
EBITDA reached $5.2 million, versus approximately $2.8 million in the prior year’s comparable six-month period. A table reconciling EBITDA, a non-GAAP financial measure, to the appropriate GAAP measure is included with the Company’s financial information below.
Balance Sheet Highlights
The Company’s stockholder equity at June 30, 2016, excluding the impact of accumulated other comprehensive income, like foreign exchange impact, increased by 7.3% from the stockholders’ equity balance at December 31, 2015.
Non-US GAAP Financial Measures
This press release utilizes EBITDA and other non-US GAAP financial measures during the earnings call and/or investor presentations. Our financial statements are prepared in accordance with US GAAP. Management believes that this non-US GAAP financial measure reflects the results of our operations or financial condition in other ways, are common to the gaming and hotel industries, 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 EBITDA is 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, taxes 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 industries 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 that may be used in TWC’s press releases and earning’s calls:
- “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, 2015, please refer to our Annual Report on Form 10-K as filed with the Securities and Exchange Commission today.
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/q2-2016.
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.