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Losses grow for WPT Enterprises
World Poker Tour Enterprises announced its first-quarter results for 2008 this week, reporting a larger net loss for the quarter than the company reported during the same period last year.
The company's net loss for the quarter is $2.8 million, or $0.14 per fully diluted share, compared to a net loss of $2.3 million, or $0.11 per fully diluted share, during the 2007 first quarter.
The loss came despite a 10% revenue increase in the first quarter of 2008. The company reported $5 million in revenue compared to $4.5 million in the same period in 2007.
World Poker Tour Enterprises credits hosting and sponsorship revenues, primarily driven by international TV sponsorship revenues it didn't have in 2007, for the increase.
International licensing revenues were up 69% to $800,000, compared to $500,000 in 2007. The increase was due to lower-than-expected third-party distribution costs.
However, domestic TV license revenues were $2.1 million during the 2008 first quarter, down from $2.4 million during that period in 2007. WPTE attributes the decrease to lower per-episode license fees under the GSN contract compared to the Travel Channel agreement.
Product licensing revenues also decreased from $900,000 in the first quarter of 2007 to $700,000 in 2008.
WPT Enterprises has been working to get its online poker site up and running again as well. In 2007, the site was operated by WagerWorks and was then switched to the CryptoLogic network. The result was a drop in revenue from $600,000 in the 2007 first quarter to $200,000 in the 2008 first quarter.
However, the company remains confident that its online gambling sector will improve and continue to play a big part in the future of the company.
"Our first quarter results reflect the delivery of seven Season VI episodes, increased international television and sponsorship revenues, and moderate progress in our online gaming and ClubWPT.com businesses," said Steve Lipscomb, WPT Enterprises president and CEO.
"The company is focused on capitalizing on our three primary growth initiatives: real-money online gaming, ClubWPT.com and WPT China. We are excited about our prospects in 2008 and are confident in our ability to continue to expand the World Poker Tour brand, both in the domestic and international markets, and execute our strategic plan."
The WPT Enterprise's work on those projects is part of what created the higher loss in the 2008 first quarter as well.
Selling, general and administrative expenses increased to $5.5 million from $5.3 million in 2007 during the first quarter, though the higher costs associated with implementing its plan for online gaming, ClubWPT.com and the WPT China were partly offset by a reduction in general and administrative expenses.
WPT Enterprises expects second-quarter revenues for 2008 to be in the range of $5.5 to $6 million. Its plans for the remainder of 2008 include delivering the remaining 11 episodes of the WPT Season 6, experiencing lower gross margins for domestic television revues, launching Season 2 of the WPT China National Traktor Poker Tour and more.