WPT Signs with Pokerstars, Announces First Quarter Finances
On Monday, World Poker Tour Enterprises, Inc. (WPTE) reported a smaller than expected loss in the first quarter of 2009. The televised poker-tournament production company reported a net loss of $521,000 in 2009 Q1, compared to a $2.3 million loss in the first quarter of 2008.
Revenues for the first quarter increased to $5.5 million, compared to $5.0 million in the first quarter of 2008, helped by a $512,000 increase in subscription site ClubWPT revenues. The site currently has 14,000 subscribers with an additional 1,000 consisting of trial memberships, an increase of about 2,000 subscribers from the end of 2008. Lower domestic revenues for its televised tournaments in the first quarter were mostly offset by an increase in foreign revenues from previous agreements done with PartyGaming for Seasons 4 through 6 of the WPT, along with Season 1 of the now-discontinued PPT (Professional Poker Tour).
Highlights for the first quarter included the WPT adding PokerStars.net as a sponsor for Season 7 of the World Poker Tour in Canada, Latin America, Italy, Germany and the Netherlands. Revenue from this agreement is expected to be realized later in 2009 and continuing into 2010. The company also announced five non-televised tournaments, which will be held in Venice, Barcelona, Slovakia, Cyprus and Morocco in 2009. WPTE is licensing its brand to online sites such as bwin and Chili Poker, who will be the primary sponsor at some of their locations.
The conference call also included the company's announcement that tWPT China operations were shut down in March while the search continues for an investor to acquire the assets of that business. WPT China lost $984,000 in the first quarter, compared to a $528,000 loss in the first quarter of 2008. An additional $139,000 in losses will be recorded in the second quarter as the company completes the Grand Final of the second series in the second series of Traktor Poker Tour in June. The future of that series remains in question.
Selling, general and administrative expenses decreased to $3.2 million in the quarter compared to $5.0 million in the first quarter of 2008. The company continued their downsizing of their Los Angeles operations, wrote off their remaining $1 million investment in Cecure Gaming in the first quarter, and executed a buyout of a personal services contract for their online gaming spokesperson in an ongoing effort to reduce expenses and improve cash flow.
Excluding the writeoff of WPTE��S investment in Cecure Gaming, income from continuing operations was $479,000, compared to a $2.3 million loss in the first quarter of 2008. In January, the company received a line of credit of $2.7 million from UBS, its broker of $3.9 million in auction rate securities to help provide liquidity until the broker satisfies a commitment to repurchase the portfolio between June 2010 and July 2012. This development helped improve cash flow from operating activities slightly in the quarter, compared to a $2.7 million cash outflow in the first quarter last year.
For the second quarter of 2009, the company expects to air 11 episodes of Season 7 of the World Poker Tour. Revenues are expected to be in the range of $4.0 to $4.3 million, with a small loss in the quarter expected.
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