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Iao Kun Group announces limited first quarter results29 May 2015(PRESS RELEASE) -- Iao Kun Group Holding Company Limited, which operates through its subsidiaries and related promotion entities that act as VIP room gaming promoters and a collaborator, today announced unaudited and unreviewed financial results for the first quarter ended March 31, 2015. All currency amounts are stated in United States dollars. Please refer to the Form 6-K that will be filed with the Securities and Exchange Commission in May 2015 for the full unaudited and unreviewed financial statements and related disclosures for the three months ended March 31, 2015. First Quarter 2015 and Subsequent Highlights -Rolling Chip Turnover (a metric used by casinos to measure the aggregate amount of players’ bets and overall volume of VIP gaming room business transacted, which is further defined below) for the three months ended March 31, 2015 was $2.2 billion, a decrease of 54 percent, compared to $4.8 billion for the three months ended March 31, 2014. -Net income, including the change in fair value of contingent consideration of $13.1 million related to the Bao Li Gaming and Oriental VIP Room acquisitions, was $17.1 million, or $0.28 per share (basic and diluted), for the first quarter of 2015, compared to net income of $3.2 million, or $0.05 per share (basic and diluted), for the same period of 2014. -Non-GAAP income, which is operating income before amortization of intangible assets and the change in fair value of contingent consideration related to the acquisitions of King’s Gaming, Bao Li Gaming and Oriental VIP Room, was $8.1 million, or $0.13 per share (basic and diluted), for the three months ended March 31, 2015, as compared to non-GAAP income of $17.9 million, or $0.29 per share (diluted), for the three months ended March 31, 2014. -In May 2015, IKGH announced it had completed the acquisition of profit interests in junket operator arrangements at the Crown Perth Casino and the Crown Melbourne Casino in Australia. -In May 2015, IKGH announced the promotions and appointments of new senior officers and directors. First Quarter 2015 Results For the three months ended March 31, 2015, IKGH recorded revenue of $41.7 million, a 48 percent decrease from the same period of 2014, primarily due to lower rolling chip turnover during the quarter, partially as a result of a win rate of 4.19 percent for the three months ended March 31, 2015 (above the statistical average win rate range), compared to a win rate of 3.60 percent for the three months ended March 31, 2014. The decrease in revenue was also due to (i) a decreasing trend of VIP baccarat, consistent with the overall decline of gaming revenue in Macau; and (ii) the economic downturn and the on-going anti-corruption campaign in mainland China, where the majority of IKGH’s VIP gaming patrons reside, as well as the continued tightening of government policies in mainland China. The increase in net income for the three months ended March 31, 2015 was primarily due to a net decrease in the contingent consideration liability for Bao Li Gaming and the Oriental VIP Room, due primarily to lower forecasted performance of the network of agents due to the overall decline of gaming revenue in Macau, and lower commissions expense as a result of lower Rolling Chip Turnover. IKGH also incurred lower selling, general and administrative expenses for the three months ended March 31, 2015, primarily due to the costs incurred in 2014 in connection with IKGH’s application to list on the Hong Kong Stock Exchange. IKGH does not anticipate additional listing costs. “Given the ongoing macro environment in Macau, we expect the overall VIP market will continue to be affected in the near-term, and as such we will continue to prudently manage our capital,” said Mr. Lam Man Pou, Chairman of IKGH. “To that end, we have been actively exploring alternatives to diversify our sources of revenue, and our recent acquisition of profit interests in junket operations at both the Crown Perth and Crown Melbourne Casinos allows us to begin bringing our VIP clients to Australia. This is our first step in expanding overseas and we remain committed to finding additional opportunities to further expand our presence and ultimately generating long-term value for our shareholders.” Outlook for 2015 For the first four months of 2015, IKGH’s Rolling Chip Turnover was US$2.70 billion (an average of $0.68 billion per month), down 58 percent period-over-period, compared to US$6.49 billion (an average of $1.62 billion per month) for the first four months of 2014. The Company is adjusting its 2015 Rolling Chip Turnover guidance for its five existing VIP rooms in Macau to between US$7.0 billion and US$8.5 billion, from a previous range of US$8.5 billion and US$10.0 billion. Conference Call and Replay Information IKGH will conduct a conference call to discuss the financial results today at 8:30 a.m. EDT/8:30 p.m. Macau. To participate, please dial one of the following numbers at least 10 minutes prior to the scheduled start of the call: 1-888-510-1786 (United States/Canada) 10-800-714-0940 (North China) 10-800-140-0915 (South China) 800-968-149 (Hong Kong) 800-101-1739 (Singapore) 0800-404-7655 (United Kingdom) 1-719-325-2315 (Other International) Interested parties may also access the live call on the Internet at www.ikghcl.com (select Events and Presentations). Following its completion, a replay of the call can be accessed on the Internet at the above link or for one week by calling either 1-877-870-5176 (U.S. callers) or 1-858-384-5517 (International callers) and providing conference ID 7915757. |