Global Casinos Reports Third Quarter Financial Results
Global Casinos, Inc. (OTCBB: GBCS) today announced financial results for its third quarter and nine-month period ended March 31, 2010.
Third quarter net revenue was $1,493,000 compared with $1,584,000 in the third quarter last year. The decline was attributable to continued weak consumer spending and generally poor weather conditions, which hindered access to Colorado's mountain gaming communities from Global's core target markets located along the state's Front Range.
Global reduced third quarter casino operating expenses by 8%, or $119,000, and cut operating, general and administrative expenses by 26%, or $11,000, versus the third quarter last year. The Company also recorded an $890,000 non-cash impairment adjustment to the carrying value of goodwill associated with its Doc Holliday Casino, which was acquired in March 2008. Prior to the impairment adjustment, operating income would have been $66,000 versus operating income of $26,000 in the third quarter last year. Inclusive of the adjustment, the Company reported a loss from operations of $824,000. Details on the methodology of the impairment test are available in the Company's Form 10-Q filed with the Securities and Exchange Commission on May 21, 2010.
Third quarter net loss attributable to common shareholders was $866,000, or $0.14 per diluted share, versus a net loss attributable to common shareholders of $25,000, or less than $0.01 per diluted share, in the third quarter a year ago.
Cliff Neuman, president and CEO, "We have maintained tight control of our operating expenses and more than doubled our operating cash flow from that reported at the end of this year's six-month mark. Moreover, were it not for the non-recurring, non-cash charge associated with the impairment to goodwill, we would have achieved a profitable third quarter."
"We continue to make aesthetic upgrades to our Doc Holliday Casino in Central City and are working on cross marketing programs in conjunction with our successful Bull Durham Casino in nearby Blackhawk," Neuman added. "We continue to believe Global is well positioned to benefit from the onset of the summer season, as well as future improvements in the broader economy."
Year-to-date results
Through the first nine months of 2010, net revenue was $4,507,000 versus $4,764,000 in the same period last year. Prior to the impairment adjustment, Global would have reported an operating loss of $17,000 versus an operating loss of $49,000 at the nine-month mark of fiscal 2009. Including the adjustment, loss from operations was $907,000. Net loss attributable to common shareholders was $1,032,000, or $0.18 per diluted share, versus a net loss attributable to common shareholders of $175,000, or $0.04 per diluted share, in the same period last year.
GLOBAL CASINOS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
for the three months ended March 31, 2010 and 2009
2010 2009
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Revenues:
Casino $ 1,535,909 $ 1,627,142
Promotional allowances (42,861) (43,246)
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Net Revenues 1,493,048 1,583,896
Expenses:
Casino operations 1,395,044 1,514,393
Operating, general, and administrative 31,914 43,301
Impairment 890,000 -
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2,316,958 1,557,694
Income (loss) from operations (823,910) 26,202
Other income (expense):
Interest (28,498) (37,355)
Equity in earnings of Global Gaming
Technologies - (60)
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Income (loss) before provision for income taxes (852,408) (11,213)
Provision for income taxes - -
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Net income (loss) (852,408) (11,213)
Series D Preferred dividends (14,000) (14,000)
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Net income (loss) attributible to common
shareholders $ (866,408) $ (25,213)
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Earnings (loss) per common share:
Basic $ (0.14) $ (0.00)
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Diluted $ (0.14) $ (0.00)
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Weighted average shares outstanding:
Basic 6,344,655 5,955,215
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Diluted 6,344,655 5,955,215
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GLOBAL CASINOS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
for the nine months ended March 31, 2010 and 2009
2010 2009
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Revenues:
Casino $ 4,625,980 $ 4,884,500
Promotional allowances (119,071) (120,155)
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Net Revenues 4,506,909 4,764,345
Expenses:
Casino operations 4,291,959 4,588,744
Operating, general, and administrative 232,204 221,440
Loss on asset disposals - 2,743
Impairment 890,000 -
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5,414,163 4,812,927
Income (loss) from operations (907,254) (48,582)
Other income (expense):
Interest (125,041) (120,009)
Equity in earnings of Global Gaming
Technologies - (6,743)
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Income (loss) before provision for income taxes (1,032,295) (175,334)
Provision for income taxes - -
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Net income (loss) (1,032,295) (175,334)
Series D Preferred dividends (42,622) (42,622)
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Net income (loss) attributible to common
shareholders $ (1,074,917) $ (217,956)
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Earnings (loss) per common share:
Basic $ (0.18) $ (0.04)
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Diluted $ (0.18) $ (0.04)
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Weighted average shares outstanding:
Basic 6,131,041 5,935,507
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Diluted 6,131,041 5,935,507
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GLOBAL CASINOS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, June 30,
2010 2009
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ASSETS
Current Assets
Cash and cash equivalents $ 903,906 $ 1,378,074
Accrued gaming income 167,752 190,516
Inventory 21,464 19,309
Prepaid expenses and other current assets 112,431 100,791
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Total current assets 1,205,553 1,688,690
Land, building and improvements, and equipment:
Land 517,950 517,950
Building and improvements 4,128,021 4,121,308
Equipment 3,184,971 3,192,703
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Total land, building and improvements, and
equipment 7,830,942 7,831,961
Accumulated depreciation (4,696,045) (4,393,514)
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Land, building and improvements, and equipment,
net 3,134,897 3,438,447
Goodwill 1,008,496 1,898,496
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Total assets $ 5,348,946 $ 7,025,633
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable, trade $ 140,511 $ 140,541
Accounts payable, related parties 8,889 18,507
Accrued expenses 245,082 360,774
Accrued interest 4,309 6,720
Joint venture obligation 25,750 25,850
Current portion of long-term debt 966,568 2,038,068
Current portion of loan participation
obligations 26,531 -
Other 335,125 252,578
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Total current liabilities 1,752,765 2,843,038
Long-term debt, less current portion 167,403 -
Loan participation obligations, less current
portion 232,430 -
Commitments and contingencies
Stockholders' equity:
Preferred stock: 10,000,000 shares authorized
Series A - no dividends, $2.00 stated value,
non-voting, 2,000,000 shares authorized,
200,500 shares issued and outstanding 401,000 401,000
Series B - 8% cumulative, convertible, $10.00
stated value, non-voting, 400,000 shares
authorized, no shares issued and
outstanding - -
Series C - 7% cumulative, convertible, $1.20
stated value, voting 600,000 shares
authorized, no shares issued and outstanding - -
Series D - 8% cumulative, convertible, $1.00
stated value, non-voting 1,000,000 shares
authorized, 700,000 shares issued and
outstanding 700,000 700,000
Common stock - $0.05 par value; 50,000,000
shares authorized; 6,420,488 and 5,955,215
shares issued and outstanding 321,025 297,761
Additional paid-in capital 14,150,855 14,085,449
Accumulated deficit (12,376,532) (11,301,615)
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Total equity 3,196,348 4,182,595
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Total liabilities and stockholders' equity $ 5,348,946 $ 7,025,633
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