May 15, 2009
Bingo.com Announces First Quarter Results
ANGUILLA, B.W.I., May 15, 2009 / Bingo.com, Ltd. (OTC BB: BNGOF), operator of the popular online gaming community http://www.bingo.com, today announced its unaudited financial results for the first quarter ended March 31, 2009. All amounts are presented in United States dollars and in accordance with United States Generally Accepted Accounting Principles.
“We’ve had a very pleasing first quarter of 2009” said Tarrnie Williams, the Company’s CEO. “We are now operating from Malta and, therefore are now permitted to advertise our gaming products in the United Kingdom. In addition, the latest version of the Bingo.com website is our most popular yet, and has helped Bingo.com to reach the highest player acquisition levels we’ve ever recorded. We continue to focus on launching our products into new markets as well as expanding the features and games available to play on Bingo.com. We believe that as we add new features, new languages, and new currencies, and the international currency markets become more settled, that our revenues will increase and profitability will be achieved.”
Bingo.com highlights for the first quarter of 2009 included:
- First quarter gaming revenue of £894,738, an increase of 40% from gaming revenue of £636,884 for the first quarter of the prior year and an increase of 9% from gaming revenue of £819,953 in the fourth quarter of 2008 when measured in Pounds Sterling, our depositing currency.
- Net loss of $243,974 in the first quarter of 2009, a 37% improvement from net loss of $390,282 in the fourth quarter of 2008.
- Launched the Bingo.com website in Malta under a Maltese gaming license that is subject to regulation by the Malta Lotteries and Gaming Authority.
- Completion of a private placement of 3.5 million shares at $0.15 per share. Total proceeds of the offering were $525,000.
The Companies revenues are primarily received in Pounds Sterling whereas the majority of its fixed expenses are in both Canadian and United States Dollars. The large swings in the exchange rates of these currencies have negatively affected our operations.
Total revenue for the quarter ended December 31, 2008, was $1,324,630, a marginal decrease from revenue of $1,344,347 for the same period in the prior year and from revenue of $1,329,273 in the fourth quarter of 2008. Of the $1,324,630 revenue for the quarter, the gaming operations provided revenue of $1,284,732, a slight increase from gaming revenue of $1,260,470 in the first quarter of 2008 and a slight decrease from gaming revenue of $1,287,808 in the fourth quarter of 2008, when measured in US dollars, our reporting currency. While the Company experienced a strong growth in its player base during the quarter over the previous quarters, the weakness in the Pound Sterling compared to the US dollar neutralizes the gains. We earned advertising revenue of $39,898 in the quarter ended March 31, 2009, a decrease from advertising revenue of $83,877 in the first quarter of 2008 and a decrease from advertising revenue of $41,465 in the fourth quarter of 2008. This decrease in advertising is due to the slow down in advertising spend by our advertising customers.
Cost of revenue decreased to $870,349 during the quarter ended March 31, 2009, a decrease of 7% compared to costs of $938,964 for the first quarter of 2008 and a decrease of 5% over costs of $917,916 in the fourth quarter of 2008. The gross margin increased to 34% for the quarter ended March 31, 2009, compared to gross margin of 30% in the first quarter of 2008 and 31% gross margin in the fourth quarter of 2008. The decrease in cost of revenue for the quarter ended March 31, 2009, compared to the first and fourth quarter of 2008, is due to the weakness of the Pound Sterling in relation to the US Dollar. This decrease is despite an increase in deposit bonus if recorded in Pound Sterling terms. Cost of revenue consists of bonuses granted on deposits made by players, the cost of hosting the website, payment processing fees in relation to deposits from and withdrawals to our players, software license fees, and the domain name purchase payments. These deposits bonuses granted to our players encourages them to continue to play on our website. The awarding of deposit bonuses is required both to be competitive with other bingo-oriented websites and to build a large customer base as quickly as possible.
Operating costs before interest, depreciation and amortization expenses, including sales and marketing and general and administrative expenses decreased to $712,288 in the first quarter of 2009, an increase of 3% over operating expenses of $693,847 in the first quarter of 2008 and a decrease of 12% over operating costs of $809,977 in the fourth quarter of 2008. The decrease in operating expenses compared to the fourth quarter of 2008 is primarily due to the large foreign currency losses incurred in the fourth quarter of 2008 as a result of the weakness of the Pound Sterling and Canadian Dollar in relation to the US Dollar. In addition legal fees were incurred in the fourth quarter of 2008 for the application of the Maltese gaming license. The increase in Operating costs compared to the first quarter of 2008, is due to additional marketing expenses incurred to promote the website.
Sales and marketing expenses were $334,245 during the first quarter of 2009, an increase of 22% over sales and marketing expenses of $274,741 in the first quarter of 2008 and an increase of 3% over expenses of $323,905 during the fourth quarter of 2008. These costs include sign up bonuses and incentives, commissions, advertising, and other promotional expenses intended to increase our subscriber base and improve gaming revenue. The increase compared to the previous quarters is due to the increase in commission paid to affiliates to promote our site.
General and Administrative expenses consist of salaries, premises costs for our office, legal and professional fees, and other general corporate and office expenses. These expenses were $366,132 for the first quarter of 2009, a decrease of 11% from general and administrative expenses of $410,426, in the first quarter of 2008 and a decrease of 8% from expenses of $397,035 for the fourth quarter of 2008. These decreases were primarily a result of the currency fluctuations.
Net loss for the quarter ended March 31, 2009, amounted to $243,974, or $0.01 per share, a decrease of 7% compared to a net loss of $262,543 or $0.01 in the first quarter of the prior year and a decrease of 37% compared to a net loss of $390,282 or $0.01 per share for the fourth quarter of 2008. The decrease in net loss for the quarter ended March 31, 2009, compared to the first and fourth quarter of 2008, is due to lower expenses as a result of the weakness of the Pound Sterling and Canadian Dollar in relation to the US Dollar, especially in the fourth quarter of 2008, where large foreign exchange losses were incurred.
The Company has made a provision for the progressive jackpots on its slots games and for players float. We had cash of $805,392 and working capital of $676,832 before the provision for jackpots and players float of $251,404 at March 31, 2009. This compares to cash of $412,002 and working capital of $336,316 before the provision for jackpots and players float of $211,821 at December 31, 2008.
For full details of the Companies operations and financial results, please refer to the Securities and Exchange Commission website at www.sec.gov or the Bingo.com website at http://www.bingo.com.
Bingo.com, Ltd. (OTC BB: BNGOF) is the parent company of the Bingo.com group of companies which operates the popular online gaming community http://www.bingo.com. The Bingo.com group offers multiplayer bingo, slot machines, sweepstakes, and more. Players come together from around the world to chat, share, play and win at Bingo.com. With over 1,950,000 registered users http://www.bingo.com is one of the most recognized and most visited bingo entertainment destinations on the Internet.
The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. Certain information included in this press release (as well as information included in oral statements or other written statements made or to be made by the company) contains statements that are forward-looking, such as statements relating to anticipated future success of the company. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ materially from those expressed in any forward-looking statements made by or on behalf of the company. For a description of additional risks and uncertainties, please refer to the company’s filings with the Securities and Exchange Commission. Specifically, readers should read the Company’s Annual Report on Form 10-KSB, filed with the SEC on March 28, 2008, and the prospectus filed under Rule 424(b) of the Securities Act on March 9, 2005 and the SB2 filed July 17, 2007, for a more thorough discussion of the Company’s financial position and results of operations, together with a detailed discussion of the risk factors involved in an investment in Bingo.com, Ltd.
For more information contact:
- Henry Bromley
- (264) 461-2646