Last week, World Poker Tour Enterprises announced their first quarter 2009 financial results, which included surprises across the board for the company.
During the conference call reporting the first quarter results, WPT Enterprises President and CEO Steve Lipscomb stated, “During the first quarter of 2009, we made significant progress in our turnaround efforts to position the Company for future profitability. We signed our first international sponsor for Season Seven of the World Poker Tour television series, we signed marketing partnerships for non-televised WPT tour stops, we shut down the WPT China business and we reduced our ongoing costs. We also completed the initial airing of the 13 episodes we produced for our ClubWPT.com online subscription poker business. FSN began airing 26 all-new episodes of Season Seven of the World Poker Tour television series across the U. S. in January as a part of FSN’s Sunday sports block. FSN also agreed to air Season Eight of the World Poker Tour television series.”
Excluding a non-cash asset impairment charge of $1 million related to its investment in Cecure Gaming (a mobile gaming company) in the first quarter of 2009, WPT Enterprises was able to show a profit for the first quarter of the fiscal year. Income from WPT Enterprises’ continuing operations in the first quarter of 2009 was $479,000, compared to a $2.3 million loss in the first quarter of 2008. The Cecure Gaming charge was due to problems that Cecure continues to have during the ongoing worldwide financial crisis in obtaining capital to finance their business development.
There were several highlights for the company during the first three months of the 2009 fiscal year. WPT Enterprises was able to complete the production of Season Seven of the World Poker Tour, which will continue to be broadcast on Fox Sports Network through July of this year. Further good news for the company was the renewal of broadcast rights by FSN for the upcoming Season Eight – which WPT Enterprises has yet to announce a schedule for – and the signing of PokerStars to be the primary sponsor of the international broadcasts of the WPT in Canada, Europe, Mexico and South America for a reported $2.1 million.
WPT Enterprises pointed to the explosive growth of their subscription poker room ClubWPT.com as one of the drivers of their first quarter success. Overall revenues for the company in the first quarter of 2009 increased to $5.5 million – compared to $5.0 million in the first quarter of 2008 – partially due to the higher ClubWPT.com revenues. ClubWPT.com began operations in the first quarter of 2008 but showed significant revenue growth in the fourth quarter of 2008 due to the airing of ten one-hour “ClubWPT” episodes on FSN. “ClubWPT” featured online qualifiers that played on television for a winner take all $10,000 prize each episode.
One of the other surprises of the WPT Enterprises financial report was the discontinuation of their WPT China operations, which had previously been viewed as a potential growth area for the company. After finding that the cash needed to support the continued operation of WPT China was too steep, WPT Enterprises discontinued the operations of WPT China in March 2009. WPT China lost $984,000 in the first quarter of 2009, including a $211,000 shutdown provision, compared to a $528,000 loss in the first quarter of 2008. While WPT Enterprises has discontinued WPT China, they continue to seek investors willing to purchase the assets of the operation.
WPT Enterprises expects to have minute losses regarding the second quarter of 2009. Overall revenues are expected to be in the range of $4.0 – $4.3 million but, over the course of the coming fiscal year, WPT Enterprises expects to rebound with lower production costs of their television shows, lower administrative costs, the continued success of ClubWPT.com and the finalization of the shutdown of WPT China.
