Bingo.com, Ltd. (OTCBB: BNGOF), operator of the World's Largest Bingo Hall, today announced its financial results for the third quarter ended September 30, 2006. All amounts are presented in United States dollars and in accordance with United States Generally Accepted Accounting Principles.
"It was a challenging quarter for Bingo.com," said Tarrnie Williams, the Company's CEO. "We were unable to maintain our strong revenue growth due to unforeseen and persistent software problems combined with slower summer demand. Unfortunately, once the software problems had been corrected, it was too late in the quarter to attain the revenue growth previously enjoyed. As a result, given our pre-planned marketing expenses, we were regrettably unable to maintain profitability. Just as our cash business was starting to improve again, the quarter ended with the unfortunate passing of the United States Unlawful Internet Gambling Enforcement Act, thereby creating unplanned challenges for the Company and causing us to refocus on emerging markets."
"On the positive side," added Mr. Williams, "the Company, in the quarter, completed its market studies and initial preparations for Bingo.com's entry into the United Kingdom, thereby significantly shortening the time required to enter this growing market. Our planning, combined with the rapid disposition of our United States cash business, puts us in a strong position to return to profitability."
Bingo.com results of the third quarter of 2006 included:
- Completion of market studies for cash bingo expansion.
- Total revenue of $833,543, a decrease of $62,734 from the second quarter of 2006.
- Online gaming revenue of $821,893, a decrease of $61,234 from the second quarter of 2006.
- A net loss of $51,251 for the quarter.
Subsequent to the quarter ended September 30, 2006, the Company sold its US cash players for US$1.2 million in response to the United States Unlawful Internet Gambling Enforcement Act.
Of the $833,543 revenue for the quarter, gaming provided revenue of $821,893, a substantial increase from gaming revenue of $197,873 in the third quarter of 2005 and a decrease of 7% from gaming revenue of $883,127 in the second quarter of 2006. We recorded advertising revenue of $11,650 in the quarter ended September 30, 2006, a substantial decrease from advertising revenue of $267,860 in the third quarter of 2005 and a decrease of 11% from advertising revenue of $13,150 in the second quarter of 2006. This decrease is due to Managements decision to suspend the sale of advertising available to third parties in order to increase the number of players on our cash games, thereby increasing revenue. Total revenue increased to $833,543 for the quarter ended September 30, 2006, an increase of 79% from revenue of $465,733 for the same period in the prior year and a decrease of 7% from revenue of $896,277 in the second quarter of 2006. The increase in revenue over the third quarter of 2005, is due to an increase in the number of cash players playing at Bingo.com. The decrease in revenue compared to the second quarter of 2006, is due to a combination of a slow down in the summer months and gaming software problems experienced during the quarter.
Operating costs before interest, depreciation and amortization expenses increased to $614,802 in the third quarter of 2006, an increase of 4% over operating costs of $590,324 in the second quarter of 2006. The increase in operating expenses is due to an increase in costs in operating a call centre to handle the calls from our customers, a increase in the number of personnel and an increase in the rate of pay and an increase in the marketing of Bingo.com, especially a trial offline marketing campaign in the United States.
Net loss for the quarter ended September 30, 2006, amounted to ($51,251), a decrease compared to net income of $55,549 for the second quarter of 2006, and a decrease compared to net income of $46,965 in the third quarter in the prior year.
Bingo.com had cash of $780,859 and working capital of $743,557 at September 30, 2006. This compares to cash of $1,071,088 and working capital of $581,855 at December 31, 2005.
Bingo.com, Ltd. operates the popular web portal www.bingo.com offering free and cash games including multiplayer bingo, video poker, sweepstakes, slot machines, and more. With over 1,650,000 registered users and more than 800 new users everyday, www.bingo.com is one of the most recognized and most visited Bingo entertainment destinations on the web.
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 29, 2006, and the prospectus filed under Rule 424(b) of the Securities Act on March 9, 2005, 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.